Allowance for Loan Losses, Allowance for Losses on Lending-Related Commitments and Impaired Loans

9 Months Ended

Sep. 30, 2013

Loans and Leases Receivable, Allowance [Abstract]

Allowance for Loan Losses, Allowance for Losses on Lending-Related Commitments and Impaired Loans

Allowance for Loan Losses, Allowance for Losses on Lending-Related Commitments and Impaired Loans

The tables below show the aging of the Company’s loan portfolio at September 30, 2013, December 31, 2012 and September 30, 2012:

As of September 30, 2013			90+ days and still accruing		60-89 days past due		30-59 days past due
(Dollars in thousands)	Nonaccrual								Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	15,283	$	190	$	3,585	$	15,261	$	1,688,232	$	1,722,551
Franchise	—		—		113		—		213,215		213,328
Mortgage warehouse lines of credit	—		—		—		—		71,383		71,383
Community Advantage—homeowners association	—		—		—		—		90,504		90,504
Aircraft	—		—		—		—		12,601		12,601
Asset-based lending	2,364		—		693		3,926		732,585		739,568
Tax exempt	—		—		—		—		148,103		148,103
Leases	—		—		—		—		101,654		101,654
Other	—		—		—		—		90		90
Purchased non-covered commercial (1)	—		265		—		1,642		7,432		9,339
Total commercial	17,647		455		4,391		20,829		3,065,799		3,109,121
Commercial real-estate:
Residential construction	2,049		3,120		1,595		261		33,305		40,330
Commercial construction	7,854		—		—		—		138,234		146,088
Land	4,216		—		—		4,082		100,953		109,251
Office	4,318		—		3,965		1,270		624,967		634,520
Industrial	8,184		—		—		2,419		614,409		625,012
Retail	11,259		—		271		7,422		593,263		612,215
Multi-family	2,603		—		—		4,332		543,690		550,625
Mixed use and other	12,240		269		2,761		15,371		1,339,029		1,369,670
Purchased non-covered commercial real-estate (1)	—		9,607		3,380		2,702		42,710		58,399
Total commercial real-estate	52,723		12,996		11,972		37,859		4,030,560		4,146,110
Home equity	10,926		—		2,436		5,887		717,371		736,620
Residential real estate	14,126		—		1,749		2,844		377,489		396,208
Purchased non-covered residential real estate (1)	—		447		289		34		729		1,499
Premium finance receivables
Commercial insurance loans	10,132		11,751		5,307		14,628		2,108,663		2,150,481
Life insurance loans	14		592		6,428		—		1,402,822		1,409,856
Purchased life insurance loans (1)	—		—		—		—		459,883		459,883
Indirect consumer	80		100		97		231		56,728		57,236
Consumer and other	1,591		—		319		445		111,491		113,846
Purchased non-covered consumer and other (1)	—		28		—		19		132		179
Total loans, net of unearned income, excluding covered loans	$	107,239	$	26,369	$	32,988	$	82,776	$	12,331,667	$	12,581,039
Covered loans	8,602		81,430		9,813		9,216		306,927		415,988
Total loans, net of unearned income	$	115,841	$	107,799	$	42,801	$	91,992	$	12,638,594	$	12,997,027

(1) Purchased loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30.Loan agings are based upon contractually required payments.

As of December 31, 2012			90+ days and still accruing		60-89 days past due		30-59 days past due
(Dollars in thousands)	Nonaccrual								Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	19,409	$	—	$	5,520	$	15,410	$	1,587,864	$	1,628,203
Franchise	1,792		—		—		—		194,603		196,395
Mortgage warehouse lines of credit	—		—		—		—		215,076		215,076
Community Advantage—homeowners association	—		—		—		—		81,496		81,496
Aircraft	—		—		148		—		17,216		17,364
Asset-based lending	536		—		1,126		6,622		564,154		572,438
Tax exempt	—		—		—		—		91,824		91,824
Leases	—		—		—		896		89,547		90,443
Other	—		—		—		—		16,549		16,549
Purchased non-covered commercial (1)	—		496		432		7		4,075		5,010
Total commercial	21,737		496		7,226		22,935		2,862,404		2,914,798
Commercial real-estate
Residential construction	3,110		—		4		41		37,246		40,401
Commercial construction	2,159		—		885		386		167,525		170,955
Land	11,299		—		632		9,014		113,252		134,197
Office	4,196		—		1,889		3,280		560,346		569,711
Industrial	2,089		—		6,042		4,512		565,294		577,937
Retail	7,792		—		1,372		998		558,734		568,896
Multi-family	2,586		—		3,949		1,040		389,116		396,691
Mixed use and other	16,742		—		6,660		13,349		1,312,503		1,349,254
Purchased non-covered commercial real-estate (1)	—		749		2,663		2,508		50,156		56,076
Total commercial real-estate	49,973		749		24,096		35,128		3,754,172		3,864,118
Home equity	13,423		100		1,592		5,043		768,316		788,474
Residential real-estate	11,728		—		2,763		8,250		343,616		366,357
Purchased non-covered residential real-estate (1)	—		—		200		—		656		856
Premium finance receivables
Commercial insurance loans	9,302		10,008		6,729		19,597		1,942,220		1,987,856
Life insurance loans	25		—		—		5,531		1,205,151		1,210,707
Purchased life insurance loans (1)	—		—		—		—		514,459		514,459
Indirect consumer	55		189		51		442		76,596		77,333
Consumer and other	1,511		32		167		433		99,010		101,153
Purchased non-covered consumer and other (1)	—		66		32		101		2,633		2,832
Total loans, net of unearned income, excluding covered loans	$	107,754	$	11,640	$	42,856	$	97,460	$	11,569,233	$	11,828,943
Covered loans	1,988		122,350		16,108		7,999		411,642		560,087
Total loans, net of unearned income	$	109,742	$	133,990	$	58,964	$	105,459	$	11,980,875	$	12,389,030

(1) Purchased loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30.Loan agings are based upon contractually required payments.

As of September 30, 2012			90+ days and still accruing		60-89 days past due		30-59 days past due
(Dollars in thousands)	Nonaccrual								Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	15,163	$	—	$	5,985	$	16,631	$	1,518,596	$	1,556,375
Franchise	1,792		—		—		—		177,914		179,706
Mortgage warehouse lines of credit	—		—		—		—		225,295		225,295
Community Advantage—homeowners association	—		—		—		—		73,881		73,881
Aircraft	428		—		—		150		20,866		21,444
Asset-based lending	328		—		1,211		5,556		525,966		533,061
Tax exempt	—		—		—		—		90,404		90,404
Leases	—		—		—		—		83,351		83,351
Other	—		—		—		—		1,576		1,576
Purchased non-covered commercial (1)	—		499		—		—		5,461		5,960
Total commercial	17,711		499		7,196		22,337		2,723,310		2,771,053
Commercial real-estate:
Residential construction	2,141		—		3,008		—		39,106		44,255
Commercial construction	3,315		—		163		13,072		152,993		169,543
Land	10,629		—		3,033		3,017		116,807		133,486
Office	6,185		—		5,717		7,237		565,182		584,321
Industrial	1,885		—		645		1,681		570,114		574,325
Retail	10,133		—		1,853		5,617		543,066		560,669
Multi-family	3,314		—		3,062		—		357,047		363,423
Mixed use and other	20,859		—		9,779		14,990		1,175,222		1,220,850
Purchased non-covered commercial real-estate (1)	—		1,066		150		389		47,235		48,840
Total commercial real-estate	58,461		1,066		27,410		46,003		3,566,772		3,699,712
Home equity	11,504		—		5,905		5,642		784,541		807,592
Residential real estate	15,393		—		3,281		2,637		354,711		376,022
Purchased non-covered residential real estate (1)	—		—		—		—		656		656
Premium finance receivables
Commercial insurance loans	7,488		5,533		5,881		14,369		1,949,674		1,982,945
Life insurance loans	29		—		—		—		1,128,559		1,128,588
Purchased life insurance loans (1)	—		—		—		—		537,032		537,032
Indirect consumer	72		215		74		344		76,673		77,378
Consumer and other	1,485		—		429		849		106,092		108,855
Purchased non-covered consumer and other (1)	—		—		—		—		67		67
Total loans, net of unearned income, excluding covered loans	$	112,143	$	7,313	$	50,176	$	92,181	$	11,228,087	$	11,489,900
Covered loans	910		129,257		6,521		14,571		506,266		657,525
Total loans, net of unearned income	$	113,053	$	136,570	$	56,697	$	106,752	$	11,734,353	$	12,147,425

(1) Purchased loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30.Loan agings are based upon contractually required payments.

Our ability to manage credit risk depends in large part on our ability to properly identify and manage problem loans. To do so, we operate a credit risk rating system under which our credit management personnel assign a credit risk rating (1 to 10 rating) to each loan at the time of origination and review loans on a regular basis.

Each loan officer is responsible for monitoring his or her loan portfolio, recommending a credit risk rating for each loan in his or her portfolio and ensuring the credit risk ratings are appropriate. These credit risk ratings are then ratified by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors including: a borrower’s financial strength, cash flow coverage, collateral protection and guarantees.

The Company’s Problem Loan Reporting system automatically includes all loans with credit risk ratings of 6 through 9. This system is designed to provide an on-going detailed tracking mechanism for each problem loan. Once management determines that a loan has deteriorated to a point where it has a credit risk rating of 6 or worse, the Company’s Managed Asset Division performs an overall credit and collateral review. As part of this review, all underlying collateral is identified and the valuation methodology is analyzed and tracked. As a result of this initial review by the Company’s Managed Asset Division, the credit risk rating is reviewed and a portion of the outstanding loan balance may be deemed uncollectible or an impairment reserve may be established. The Company’s impairment analysis utilizes an independent re-appraisal of the collateral (unless such a third-party evaluation is not possible due to the unique nature of the collateral, such as a closely-held business or thinly traded securities). In the case of commercial real-estate collateral, an independent third party appraisal is ordered by the Company’s Real Estate Services Group to determine if there has been any change in the underlying collateral value. These independent appraisals are reviewed by the Real Estate Services Group and sometimes by independent third party valuation experts and may be adjusted depending upon market conditions.

Through the credit risk rating process, loans are reviewed to determine if they are performing in accordance with the original contractual terms. If the borrower has failed to comply with the original contractual terms, further action may be required by the Company, including a downgrade in the credit risk rating, movement to non-accrual status, a charge-off or the establishment of a specific impairment reserve. If we determine that a loan amount, or portion thereof, is uncollectible, the loan’s credit risk rating is immediately downgraded to an 8 or 9 and the uncollectible amount is charged-off. Any loan that has a partial charge-off continues to be assigned a credit risk rating of an 8 or 9 for the duration of time that a balance remains outstanding. The Company undertakes a thorough and ongoing analysis to determine if additional impairment and/or charge-offs are appropriate and to begin a workout plan for the credit to minimize actual losses.

If, based on current information and events, it is probable that the Company will be unable to collect all amounts due to it according to the contractual terms of the loan agreement, a specific impairment reserve is established. In determining the appropriate charge-off for collateral-dependent loans, the Company considers the results of appraisals for the associated collateral.

Non-performing loans include all non-accrual loans (8 and 9 risk ratings) as well as loans 90 days past due and still accruing interest, excluding loans acquired with evidence of credit quality deterioration since origination. The remainder of the portfolio is considered performing under the contractual terms of the loan agreement. The following table presents the recorded investment based on performance of loans by class, excluding covered loans, per the most recent analysis at September 30, 2013, December 31, 2012 and September 30, 2012:

	Performing						Non-performing						Total
(Dollars in thousands)	September 30, 2013		December 31, 2012		September 30, 2012		September 30, 2013		December 31, 2012		September 30, 2012		September 30, 2013		December 31, 2012		September 30, 2012
Loan Balances:
Commercial
Commercial and industrial	$	1,707,078	$	1,608,794	$	1,541,212	$	15,473	$	19,409	$	15,163	$	1,722,551	$	1,628,203	$	1,556,375
Franchise	213,328		194,603		177,914		—		1,792		1,792		213,328		196,395		179,706
Mortgage warehouse lines of credit	71,383		215,076		225,295		—		—		—		71,383		215,076		225,295
Community Advantage—homeowners association	90,504		81,496		73,881		—		—		—		90,504		81,496		73,881
Aircraft	12,601		17,364		21,016		—		—		428		12,601		17,364		21,444
Asset-based lending	737,204		571,902		532,733		2,364		536		328		739,568		572,438		533,061
Tax exempt	148,103		91,824		90,404		—		—		—		148,103		91,824		90,404
Leases	101,654		90,443		83,351		—		—		—		101,654		90,443		83,351
Other	90		16,549		1,576		—		—		—		90		16,549		1,576
Purchased non-covered commercial (1)	9,339		5,010		5,960		—		—		—		9,339		5,010		5,960
Total commercial	3,091,284		2,893,061		2,753,342		17,837		21,737		17,711		3,109,121		2,914,798		2,771,053
Commercial real-estate
Residential construction	35,161		37,291		42,114		5,169		3,110		2,141		40,330		40,401		44,255
Commercial construction	138,234		168,796		166,228		7,854		2,159		3,315		146,088		170,955		169,543
Land	105,035		122,898		122,857		4,216		11,299		10,629		109,251		134,197		133,486
Office	630,202		565,515		578,136		4,318		4,196		6,185		634,520		569,711		584,321
Industrial	616,828		575,848		572,440		8,184		2,089		1,885		625,012		577,937		574,325
Retail	600,956		561,104		550,536		11,259		7,792		10,133		612,215		568,896		560,669
Multi-family	548,022		394,105		360,109		2,603		2,586		3,314		550,625		396,691		363,423
Mixed use and other	1,357,161		1,332,512		1,199,991		12,509		16,742		20,859		1,369,670		1,349,254		1,220,850
Purchased non-covered commercial real-estate(1)	58,399		56,076		48,840		—		—		—		58,399		56,076		48,840
Total commercial real-estate	4,089,998		3,814,145		3,641,251		56,112		49,973		58,461		4,146,110		3,864,118		3,699,712
Home equity	725,694		774,951		796,088		10,926		13,523		11,504		736,620		788,474		807,592
Residential real-estate	382,082		354,629		360,629		14,126		11,728		15,393		396,208		366,357		376,022
Purchased non-covered residential real-estate (1)	1,499		856		656		—		—		—		1,499		856		656
Premium finance receivables
Commercial insurance loans	2,128,598		1,968,546		1,969,924		21,883		19,310		13,021		2,150,481		1,987,856		1,982,945
Life insurance loans	1,409,250		1,210,682		1,128,559		606		25		29		1,409,856		1,210,707		1,128,588
Purchased life insurance loans (1)	459,883		514,459		537,032		—		—		—		459,883		514,459		537,032
Indirect consumer	57,056		77,089		77,091		180		244		287		57,236		77,333		77,378
Consumer and other	112,255		99,610		107,370		1,591		1,543		1,485		113,846		101,153		108,855
Purchased non-covered consumer and other(1)	179		2,832		67		—		—		—		179		2,832		67
Total loans, net of unearned income, excluding covered loans	$	12,457,778	$	11,710,860	$	11,372,009	$	123,261	$	118,083	$	117,891	$	12,581,039	$	11,828,943	$	11,489,900

(1) Purchased loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30. See Note 6 - Loans for further discussion of these purchased loans.

A summary of activity in the allowance for credit losses by loan portfolio (excluding covered loans) for the three and nine months ended September 30, 2013 and 2012 is as follows:

Three months ended September 30, 2013				Commercial Real-estate						Residential Real-estate			Premium Finance Receivable			Indirect Consumer			Consumer and Other			Total, Excluding Covered Loans
(Dollars in thousands)	Commercial						Home Equity
Allowance for credit losses
Allowance for loan losses at beginning of period	$	28,737		$	51,950		$	14,205		$	4,825		$	5,268		$	263		$	1,594		$	106,842
Other adjustments	(15		)	(193		)	—			(4		)	7			—			—			(205		)
Reclassification from (to) allowance for unfunded lending-related commitments	—			284			—			—			—			—			—			284
Charge-offs	(3,281		)	(6,982		)	(711		)	(328		)	(1,297		)	(23		)	(193		)	(12,815		)
Recoveries	756			272			43			64			316			12			39			1,502
Provision for credit losses	2,044			5,488			1,824			700			1,193			(51		)	382			11,580
Allowance for loan losses at period end	$	28,241		$	50,819		$	15,361		$	5,257		$	5,487		$	201		$	1,822		$	107,188
Allowance for unfunded lending-related commitments at period end	$	—		$	1,267		$	—		$	—		$	—		$	—		$	—		$	1,267
Allowance for credit losses at period end	$	28,241		$	52,086		$	15,361		$	5,257		$	5,487		$	201		$	1,822		$	108,455
Individually evaluated for impairment	5,498			5,892			2,447			886			—			—			252			14,975
Collectively evaluated for impairment	22,636			46,080			12,914			4,371			5,487			201			1,570			93,259
Loans acquired with deteriorated credit quality	107			114			—			—			—			—			—			221
Loans at period end
Individually evaluated for impairment	$	24,688		$	124,401		$	11,152		$	16,746		$	—		$	79		$	1,695		$	178,761
Collectively evaluated for impairment	3,075,094			3,963,310			725,468			379,462			3,560,337			57,157			112,151			11,872,979
Loans acquired with deteriorated credit quality	9,339			58,399			—			1,499			459,883			—			179			529,299

Three months ended September 30, 2012				Commercial Real-estate						Residential Real-estate			Premium Finance Receivable			Indirect Consumer			Consumer and Other			Total, Excluding Covered Loans
(Dollars in thousands)	Commercial						Home Equity
Allowance for credit losses
Allowance for loan losses at beginning of period	$	26,983		$	53,801		$	13,878		$	6,724		$	8,522		$	640		$	1,372		$	111,920
Other adjustments	(138		)	(304		)	(2		)	(90		)	—			—			—			(534		)
Reclassification from (to) allowance for unfunded lending-related commitments	—			626			—			—			—			—			—			626
Charge-offs	(3,315		)	(17,000		)	(1,543		)	(1,027		)	(886		)	(73		)	(93		)	(23,937		)
Recoveries	349			5,352			52			8			206			25			28			6,020
Provision for credit losses	3,862			12,610			1,215			1,938			(955		)	(323		)	(155		)	18,192
Allowance for loan losses at period end	$	27,741		$	55,085		$	13,600		$	7,553		$	6,887		$	269		$	1,152		$	112,287
Allowance for unfunded lending-related commitments at period end	$	—		$	12,627		$	—		$	—		$	—		$	—		$	—		$	12,627
Allowance for credit losses at period end	$	27,741		$	67,712		$	13,600		$	7,553		$	6,887		$	269		$	1,152		$	124,914
Individually evaluated for impairment	$	3,168		$	21,998		$	3,011		$	3,244		$	—		$	1		$	480		$	31,902
Collectively evaluated for impairment	$	24,573		$	45,714		$	10,589		$	4,306		$	6,887		$	268		$	672		$	93,009
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	3		$	—		$	—		$	—		$	3
Loans at period end
Individually evaluated for impairment	$	38,838		$	160,711		$	13,118		$	18,696		$	—		$	69		$	1,582		$	233,014
Collectively evaluated for impairment	2,726,255			3,490,161			794,474			357,326			3,111,533			77,309			107,273			10,664,331
Loans acquired with deteriorated credit quality	5,960			48,840			—			656			537,032			—			67			592,555

Nine Months Ended September 30, 2013				Commercial Real-estate			Home  Equity			Residential Real-estate			Premium Finance Receivable			Indirect Consumer			Consumer and Other			Total, Excluding Covered  Loans
(Dollars in thousands)	Commercial
Allowance for credit losses
Allowance for loan losses at beginning of period	$	28,794		$	52,135		$	12,734		$	5,560		$	6,096		$	267		$	1,765		$	107,351
Other adjustments	(19		)	(621		)	—			(98		)	(5		)	—			—			(743		)
Reclassification from (to) allowance for unfunded lending-related commitments	—			136			—			—			—			—			—			136
Charge-offs	(8,914		)	(25,228		)	(4,893		)	(2,573		)	(3,671		)	(71		)	(402		)	(45,752		)
Recoveries	1,319			1,224			376			87			889			44			177			4,116
Provision for credit losses	7,061			23,173			7,144			2,281			2,178			(39		)	282			42,080
Allowance for loan losses at period end	$	28,241		$	50,819		$	15,361		$	5,257		$	5,487		$	201		$	1,822		$	107,188
Allowance for unfunded lending-related commitments at period end	$	—		$	1,267		$	—		$	—		$	—		$	—		$	—		$	1,267
Allowance for credit losses at period end	$	28,241		$	52,086		$	15,361		$	5,257		$	5,487		$	201		$	1,822		$	108,455

Nine months ended September 30, 2012				Commercial Real-estate			Home  Equity			Residential Real-estate			Premium Finance Receivable			Indirect Consumer			Consumer and Other			Total, Excluding Covered  Loans
(Dollars in thousands)	Commercial
Allowance for credit losses
Allowance for loan losses at beginning of period	$	31,237		$	56,405		$	7,712		$	5,028		$	7,214		$	645		$	2,140		$	110,381
Other adjustments	(142		)	(787		)	(4		)	(111		)	—			—			—			(1,044		)
Reclassification from (to) allowance for unfunded lending-related commitments	45			908			—			—			—			—			—			953
Charge-offs	(12,623		)	(34,455		)	(5,865		)	(1,590		)	(2,483		)	(157		)	(454		)	(57,627		)
Recoveries	852			5,657			385			13			675			76			226			7,884
Provision for credit losses	8,372			27,357			11,372			4,213			1,481			(295		)	(760		)	51,740
Allowance for loan losses at period end	$	27,741		$	55,085		$	13,600		$	7,553		$	6,887		$	269		$	1,152		$	112,287
Allowance for unfunded lending-related commitments at period end	$	—		$	12,627		$	—		$	—		$	—		$	—		$	—		$	12,627
Allowance for credit losses at period end	$	27,741		$	67,712		$	13,600		$	7,553		$	6,887		$	269		$	1,152		$	124,914

A summary of activity in the allowance for covered loan losses for the three and nine months ended September 30, 2013 and 2012 is as follows:

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2013			2012			2013			2012
Balance at beginning of period	$	14,429		$	20,560		$	13,454		$	12,977
Provision for covered loan losses before benefit attributable to FDIC loss share agreements	(2,331		)	3,096			515			25,916
Benefit attributable to FDIC loss share agreements	1,865			(2,489		)	(412		)	(20,766		)
Net provision for covered loan losses	(466		)	607			103			5,150
(Decrease) increase in FDIC indemnification asset	(1,865		)	2,489			412			20,766
Loans charged-off	(3,237		)	(1,736		)	(8,294		)	(17,052		)
Recoveries of loans charged-off	4,063			6			7,249			85
Net recoveries (charge-offs)	826			(1,730		)	(1,045		)	(16,967		)
Balance at end of period	$	12,924		$	21,926		$	12,924		$	21,926

In conjunction with FDIC-assisted transactions, the Company entered into loss share agreements with the FDIC. Additional expected losses, to the extent such expected losses result in the recognition of an allowance for loan losses, will increase the FDIC indemnification asset. The allowance for loan losses for loans acquired in FDIC-assisted transactions is determined without giving consideration to the amounts recoverable through loss share agreements (since the loss share agreements are separately accounted for and thus presented “gross” on the balance sheet). On the Consolidated Statements of Income, the provision for credit losses related to covered loans is reported net of changes in the amount recoverable under the loss share agreements. Reductions to expected losses, to the extent such reductions to expected losses are the result of an improvement to the actual or expected cash flows from the covered assets, will reduce the FDIC indemnification asset. Additions to expected losses will require an increase to the allowance for loan losses, and a corresponding increase to the FDIC indemnification asset. See “FDIC-Assisted Transactions” within Note 3 – Business Combinations for more detail.

Impaired Loans

A summary of impaired loans, including troubled debt restructurings ("TDRs"), is as follows:

	September 30,		December 31,		September 30,
(Dollars in thousands)	2013		2012		2012
Impaired loans (included in non-performing and restructured loans):
Impaired loans with an allowance for loan loss required (1)	$	99,437	$	89,983	$	120,060
Impaired loans with no allowance for loan loss required	76,861		114,562		112,954
Total impaired loans (2)	$	176,298	$	204,545	$	233,014
Allowance for loan losses related to impaired loans	$	14,329	$	13,575	$	19,818
Troubled debt restructurings	$	115,003	$	126,473	$	147,196

(1) These impaired loans require an allowance for loan losses because the estimated fair value of the loans or related collateral is less than the recorded investment in the loans.

(2) Impaired loans are considered by the Company to be non-accrual loans, TDRs or loans with principal and/or interest at risk, even if theloan is current with all payments of principal and interest.

The following tables present impaired loans evaluated for impairment by loan class for the periods ended as follows:

							For the Nine Months Ended
	As of September 30, 2013						September 30, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)
Impaired loans with a related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	10,599	$	12,226	$	3,915	$	11,155	$	558
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	2,287		2,296		1,549		2,299		86
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	377		377		49		379		19
Commercial construction	9,577		9,577		103		10,051		284
Land	12,161		15,486		947		12,321		445
Office	7,322		7,376		111		7,426		207
Industrial	3,352		3,417		177		3,402		124
Retail	18,583		18,662		1,942		18,859		564
Multi-family	3,715		4,188		260		3,809		143
Mixed use and other	19,451		19,711		1,721		18,569		669
Home equity	5,347		5,559		2,447		5,468		187
Residential real-estate	5,999		6,533		856		5,418		170
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	—		—		—		—		—
Consumer and other	667		668		252		661		25
Impaired loans with no related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	10,858	$	15,320	$	—	$	13,841	$	683
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	76		1,416		—		87		57
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	3,267		3,426		—		3,954		122
Commercial construction	8,705		13,939		—		10,899		564
Land	4,980		6,094		—		3,869		181
Office	7,329		9,324		—		8,242		358
Industrial	7,668		7,833		—		7,772		357
Retail	6,230		6,549		—		6,270		257
Multi-family	1,149		2,983		—		1,868		115
Mixed use and other	9,205		11,256		—		8,181		362
Home equity	5,805		7,215		—		5,568		221
Residential real-estate	10,482		12,841		—		9,805		292
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	79		88		—		70		7
Consumer and other	1,028		1,564		—		1,058		72
Total loans, net of unearned income, excluding covered loans	$	176,298	$	205,924	$	14,329	$	181,301	$	7,129

							For the Twelve Months Ended
	As of December 31, 2012						December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)
Impaired loans with a related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	11,010	$	12,562	$	1,982	$	13,312	$	881
Franchise	1,792		1,792		1,259		1,792		122
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	511		511		55		484		26
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	2,007		2,007		389		2,007		98
Commercial construction	1,865		1,865		70		1,865		78
Land	12,184		12,860		1,414		12,673		483
Office	5,829		5,887		622		5,936		246
Industrial	1,150		1,200		224		1,208		75
Retail	13,240		13,314		343		13,230		584
Multi-family	3,954		3,954		348		3,972		157
Mixed use and other	22,249		23,166		2,989		23,185		1,165
Home equity	7,270		7,313		2,569		7,282		271
Residential real-estate	6,420		6,931		1,169		6,424		226
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	—		—		—		—		—
Consumer and other	502		502		142		502		26
Impaired loans with no related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	20,270	$	27,574	$	—	$	23,877	$	1,259
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	25		1,362		—		252		76
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	4,085		4,440		—		4,507		143
Commercial construction	12,263		13,395		—		13,635		540
Land	12,163		17,141		—		14,646		906
Office	8,939		9,521		—		9,432		437
Industrial	3,598		3,776		—		3,741		181
Retail	18,073		18,997		—		19,067		892
Multi-family	2,817		4,494		—		4,120		222
Mixed use and other	15,462		17,210		—		16,122		912
Home equity	7,320		8,758		—		8,164		376
Residential real-estate	8,390		9,189		—		9,069		337
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	53		61		—		65		6
Consumer and other	1,104		1,558		—		1,507		94
Total loans, net of unearned income, excluding covered loans	$	204,545	$	231,340	$	13,575	$	222,076	$	10,819

							For the Nine Months Ended
	As of September 30, 2012						September 30, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)
Impaired loans with a related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	11,271	$	13,484	$	2,615	$	13,623	$	670
Franchise	1,792		1,792		386		1,792		91
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	428		428		95		428		22
Asset-based lending	306		1,624		72		558		67
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	2,637		2,712		540		2,637		102
Commercial construction	4,184		4,184		743		4,160		153
Land	13,689		15,459		1,576		13,986		460
Office	7,366		9,851		802		7,998		355
Industrial	752		804		295		778		34
Retail	17,933		18,060		1,257		18,024		626
Multi-family	5,588		5,588		859		5,598		213
Mixed use and other	30,921		32,005		3,842		31,582		1,145
Home equity	8,254		8,923		3,011		8,572		352
Residential real-estate	13,578		14,220		3,244		13,507		448
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	12		13		1		13		1
Consumer and other	1,349		1,349		480		1,351		64
Impaired loans with no related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	25,019	$	28,581	$	—	$	27,829	$	1,076
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	22		57		—		81		5
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real-estate
Residential construction	3,603		3,719		—		4,389		134
Commercial construction	9,868		10,466		—		10,937		332
Land	13,330		17,331		—		15,866		648
Office	9,463		10,368		—		9,627		339
Industrial	3,080		3,164		—		3,115		107
Retail	16,610		16,876		—		17,070		613
Multi-family	1,926		2,672		—		2,371		87
Mixed use and other	19,761		21,819		—		20,970		861
Home equity	4,864		5,494		—		4,931		162
Residential real-estate	5,118		5,374		—		5,392		118
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
Purchased life insurance	—		—		—		—		—
Indirect consumer	57		71		—		67		5
Consumer and other	233		237		—		248		11
Total loans, net of unearned income, excluding covered loans	$	233,014	$	256,725	$	19,818	$	247,500	$	9,301

TDRs

At September 30, 2013, the Company had $115.0 million in loans modified in TDRs. The $115.0 million in TDRs represents 161 credits in which economic concessions were granted to certain borrowers to better align the terms of their loans with their current ability to pay.

The Company’s approach to restructuring loans, excluding those acquired with evidence of credit quality deterioration since origination, is built on its credit risk rating system which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms.

A modification of a loan, excluding those acquired with evidence of credit quality deterioration since origination, with an existing credit risk rating of six or worse or a modification of any other credit which will result in a restructured credit risk rating of six or worse, must be reviewed for possible TDR classification. In that event, our Managed Assets Division conducts an overall credit and collateral review. A modification of these loans is considered to be a TDR if both (1) the borrower is experiencing financial difficulty and (2) for economic or legal reasons, the bank grants a concession to a borrower that it would not otherwise consider. The modification of a loan, excluding those acquired with evidence of credit quality deterioration since origination, where the credit risk rating is five or better both before and after such modification is not considered to be a TDR. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is five or better are not experiencing financial difficulties and therefore, are not considered TDRs.

TDRs are reviewed at the time of modification and on a quarterly basis to determine if a specific reserve is needed. The carrying amount of the loan is compared to the expected payments to be received, discounted at the loan’s original rate, or for collateral dependent loans, to the fair value of the collateral. Any shortfall is recorded as a specific reserve.

All credits determined to be a TDR will continue to be classified as a TDR in all subsequent periods, unless the borrower has been in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) and the modified interest rate represented a market rate at the time of a restructuring. The Managed Assets Division, in consultation with the respective loan officer, determines whether the modified interest rate represented a current market rate at the time of restructuring. Using knowledge of current market conditions and rates, competitive pricing on recent loan originations, and an assessment of various characteristics of the modified loan (including collateral position and payment history), an appropriate market rate for a new borrower with similar risk is determined. If the modified interest rate meets or exceeds this market rate for a new borrower with similar risk, the modified interest rate represents a market rate at the time of restructuring. Additionally, before removing a loan from TDR classification, a review of the current or previously measured impairment on the loan and any concerns related to future performance by the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations under the loans based on a credit review by the Managed Assets Division, the TDR classification is not removed from the loan. Loans classified as TDRs that are re-modified subsequent to the initial determination will continue to be classified as TDRs following the re-modification, unless the requirements for removal from TDR classification discussed above are satisfied at the time of the re-modification.

TDRs are reviewed at the time of the modification and on a quarterly basis to determine if a specific reserve is necessary. The carrying amount of the loan is compared to the expected payments to be received, discounted at the loan's original rate, or for collateral dependent loans, to the fair value of the collateral. Any shortfall is recorded as a specific reserve. The Company, in accordance with ASC 310-10, continues to individually measure impairment of these loans after the TDR classification is removed.

Each TDR was reviewed for impairment at September 30, 2013 and approximately $4.4 million of impairment was present and appropriately reserved for through the Company’s normal reserving methodology in the Company’s allowance for loan losses. For TDRs in which impairment is calculated by the present value of future cash flows, the Company records interest income representing the decrease in impairment resulting from the passage of time during the respective period, which differs from interest income from contractually required interest on these specific loans.  During the three months ended September 30, 2013 and 2012, the Company recorded $205,000 and $534,000, respectively, in interest income representing this decrease in impairment. During the nine months ended September 30, 2013 and 2012, the Company recorded $727,000 and $1.0 million, respectively, in interest income representing this decrease in impairment.

The tables below present a summary of the post-modification balance of loans restructured during the three and nine months ended September 30, 2013 and 2012, respectively, which represent TDRs:

Three months ended September 30, 2013 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to  Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—
Commercial real-estate
Residential construction	—	—			—		—	—		—	—		—	—
Commercial construction	—	—		—	—		—	—		—	—		—	—
Land	1	2,352		1	2,352		—	—		—	—		—	—
Office	1	556		1	556		1	556		—	—		—	—
Industrial	—	—		—	—		—	—		—	—		—	—
Retail	—	—		—	—		—	—		—	—		—	—
Multi-family	—	—		—	—		—	—		—	—		—	—
Mixed use and other	1	95		1	95		—	—		—	—		—	—
Residential real estate and other	1	1,000		1	1,000		—	—		—	—		1	1,000
Total loans	4	$	4,003	4	$	4,003	1	$	556	—	$	—	1	$	1,000

(1) TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above.

(2) Balances represent the recorded investment in the loan at the time of the restructuring.

Three months ended September 30, 2012 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to  Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	3	$	442	2	$	275	1	$	225	1	$	167	—	$	—
Commercial real-estate
Residential construction	1	496		1	496		1	496		1	496		—	—
Commercial construction	—	—		—	—		—	—		—	—		—	—
Land	—	—		—	—		—	—		—	—		—	—
Office	—	—		—	—		—	—		—	—		—	—
Industrial	—	—		—	—		—	—		—	—		—	—
Retail	2	4,653		2	4,653		—	—		2	4,654		—	—
Multi-family	1	380		—	—		1	380		1	380		—	—
Mixed use and other	7	3,108		2	858		5	2,250		5	2,699		—	—
Residential real estate and other	4	437		3	308		3	357		1	79		—	—
Total loans	18	$	9,516	10	$	6,590	11	$	3,708	11	$	8,475	—	$	—

(1) TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above.

(2) Balances represent the recorded investment in the loan at the time of the restructuring.

During the three months ended September 30, 2013, 4 loans totaling $4.0 million were determined to be TDRs, compared to 18 loans totaling $9.5 million in the same period of 2012. Of these loans extended at below market terms, the weighted average extension had a term of approximately 26 months during the three months ended September 30, 2013 compared to 8 months for the same period of 2012. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 150 basis points and 293 basis points during the three months ending September 30, 2013 and 2012, respectively. No loans were modified to interest-only payment terms during the third quarter of 2013 compared to 11 loans totaling $8.5 million in the same period of 2012. Interest-only payment terms were approximately nine months during the three months ending September 30, 2012. Additionally, $1.0 million in principal balances were forgiven in the third quarter of 2013 compared to no principal balances forgiven during the same period of 2012.

Nine months ended September 30, 2013 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to  Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	6	$	708	5	$	573	4	$	553	2	$	185	—	$	—
Commercial real-estate
Residential construction	—	—		—	—		—	—		—	—		—	—
Commercial construction	3	6,120		3	6,120		—	—		3	6,120		—	—
Land	3	2,639		3	2,639		2	287		—	—		1	73
Office	4	4,021		4	4,021		1	556		—	—		—	—
Industrial	1	949		1	949		1	949		—	—		—	—
Retail	1	200		1	200		1	200		—	—		—	—
Multi-family	1	705		1	705		1	705		—	—		—	—
Mixed use and other	3	3,628		3	3,628		2	3,533		—	—		—	—
Residential real estate and other	8	1,778		4	1,095		6	762		2	234		1	1,000
Total loans	30	$	20,748	25	$	19,930	18	$	7,545	7	$	6,539	2	$	1,073

(1) TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above.

(2) Balances represent the recorded investment in the loan at the time of the restructuring.

Nine months ended September 30, 2012 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to  Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	16	$	13,325	9	$	2,617	9	$	12,705	7	$	10,579	2	$	1,486
Commercial real-estate
Residential construction	3	2,147		3	2,147		1	496		1	496		—	—
Commercial construction	2	622		2	622		2	622		2	622		—	—
Land	17	31,836		17	31,836		14	30,561		13	26,511		—	—
Office	—	—		—	—		—	—		—	—		—	—
Industrial	—	—		—	—		—	—		—	—		—	—
Retail	7	13,286		7	13,286		5	8,633		6	12,897		—	—
Multi-family	1	380		—	—		1	380		1	380		—	—
Mixed use and other	13	6,745		8	4,495		9	5,680		8	3,974		—	—
Residential real estate and other	9	1,512		7	1,264		5	504		3	924		1	29
Total loans	68	$	69,853	53	$	56,267	46	$	59,581	41	$	56,383	3	$	1,515

(1) TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above.

(2) Balances represent the recorded investment in the loan at the time of the restructuring.

During the nine months ended September 30, 2013, 30 loans totaling $20.7 million were determined to be TDRs, compared to 68 loans totaling $69.9 million in the same period of 2012. Of these loans extended at below market terms, the weighted average extension had a term of approximately 19 months during the nine months ended September 30, 2013 compared to eight months for the same period of 2012. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 199 basis points and 151 basis points during the nine months ending September 30, 2013 and 2012, respectively. Interest-only payment terms were approximately eleven months and five months during the nine months ending September 30, 2013 and 2012, respectively. Additionally, $1.0 million in balances were forgiven in the first nine months of 2013 compared to $420,000 balances forgiven during the same period of 2012.

The following table presents a summary of all loans restructured in TDRs during the twelve months ended September 30, 2013 and 2012, and such loans which were in payment default under the restructured terms during the respective periods below:

(Dollars in thousands)	As of September 30, 2013			Three Months Ended September 30, 2013			Nine Months Ended  September 30, 2013
	Total (1)(3)			Payments in Default  (2)(3)			Payments in Default  (2)(3)
	Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	8	$	1,694	1	$	161	2	$	181
Commercial real-estate
Residential construction	—	—		—	—		—	—
Commercial construction	3	6,120		—	—		—	—
Land	3	2,639		1	215		1	215
Office	4	4,021		1	1,648		1	1,648
Industrial	2	1,676		1	727		1	727
Retail	2	431		—	—		—	—
Multi-family	1	705		—	—		1	705
Mixed use and other	5	4,217		1	95		2	368
Residential real estate and other	9	1,904		1	126		1	126
Total loans	37	$	23,407	6	$	2,972	9	$	3,970

(1) Total TDRs represent all loans restructured in TDRs during the previous twelve months from the date indicated.

(2) TDRs considered to be in payment default are over 30 days past-due subsequent to the restructuring.

(3) Balances represent the recorded investment in the loan at the time of the restructuring.

(Dollars in thousands)	As of September 30, 2012			Three Months Ended September 30, 2012			Nine Months Ended  September 30, 2012
	Total (1)(3)			Payments in Default  (2)(3)			Payments in Default  (2)(3)
	Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	21	$	15,161	3	$	351	3	$	351
Commercial real-estate
Residential construction	4	3,252		—	—		—	—
Commercial construction	7	3,360		5	2,740		5	2,740
Land	21	37,860		1	651		2	1,925
Office	2	4,795		—	—		—	—
Industrial	2	1,313		1	990		1	990
Retail	15	28,097		—	—		1	1,605
Multi-family	6	4,247		1	264		1	264
Mixed use and other	27	12,342		2	914		5	3,197
Residential real estate and other	16	3,977		5	1,931		6	2,379
Total loans	121	$	114,404	18	$	7,841	24	$	13,451

(1) Total TDRs represent all loans restructured in TDRs during the previous twelve months from the date indicated.

(2) TDRs considered to be in payment default are over 30 days past-due subsequent to the restructuring.

(3) Balances represent the recorded investment in the loan at the time of the restructuring.