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

12 Months Ended

Dec. 31, 2015

Loans and Leases Receivable, Allowance [Abstract]

Allowance for Credit Losses [Text Block]

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 December 31, 2015 and 2014:

As of December 31, 2015 (Dollars in thousands)	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	12,416	$	6	$	6,749	$	12,930	$	2,819,253	$	2,851,354
Franchise	—		—		—		—		245,228		245,228
Mortgage warehouse lines of credit	—		—		—		—		222,806		222,806
Community Advantage — homeowners association	—		—		—		—		130,986		130,986
Aircraft	288		—		—		—		5,039		5,327
Asset-based lending	8		—		3,864		1,844		736,968		742,684
Tax exempt	—		—		—		—		267,273		267,273
Leases	—		535		748		4,192		220,599		226,074
Other	—		—		—		—		3,588		3,588
PCI - commercial (1)	—		892		—		2,510		15,187		18,589
Total commercial	$	12,712	$	1,433	$	11,361	$	21,476	$	4,666,927	$	4,713,909
Commercial real estate:
Residential construction	$	273	$	—	$	—	$	45	$	70,063	$	70,381
Commercial construction	33		—		1,371		1,600		285,275		288,279
Land	1,751		—		—		120		76,546		78,417
Office	4,619		—		764		3,817		853,801		863,001
Industrial	9,564		—		1,868		1,009		715,207		727,648
Retail	1,760		—		442		2,310		863,887		868,399
Multi-family	1,954		—		597		6,568		733,230		742,349
Mixed use and other	6,691		—		6,723		7,215		1,712,187		1,732,816
PCI - commercial real estate (1)	—		22,111		4,662		16,559		114,667		157,999
Total commercial real estate	$	26,645	$	22,111	$	16,427	$	39,243	$	5,424,863	$	5,529,289
Home equity	6,848		—		1,889		5,517		770,421		784,675
Residential real estate	12,043		—		1,964		3,824		586,154		603,985
PCI - residential real estate (1)	—		488		202		79		2,697		3,466
Premium finance receivables
Commercial insurance loans	14,561		10,294		6,624		21,656		2,321,786		2,374,921
Life insurance loans	—		—		3,432		11,140		2,578,632		2,593,204
PCI - life insurance loans (1)	—		—		—		—		368,292		368,292
Consumer and other	263		211		204		1,187		144,511		146,376
Total loans, net of unearned income, excluding covered loans	$	73,072	$	34,537	$	42,103	$	104,122	$	16,864,283	$	17,118,117
Covered loans	5,878		7,335		703		5,774		128,983		148,673
Total loans, net of unearned income	$	78,950	$	41,872	$	42,806	$	109,896	$	16,993,266	$	17,266,790

(1) PCI 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. See Note 4 - Loans for further discussion of these purchased loans.

As of December 31, 2014 (Dollars in thousands)	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Loan Balances:
Commercial
Commercial and industrial	$	9,132	$	474	$	3,161	$	7,492	$	2,194,221	$	2,214,480
Franchise	—		—		308		1,219		250,673		252,200
Mortgage warehouse lines of credit	—		—		—		—		139,003		139,003
Community Advantage — homeowners association	—		—		—		—		106,364		106,364
Aircraft	—		—		—		—		8,065		8,065
Asset-based lending	25		—		1,375		2,394		802,608		806,402
Tax exempt	—		—		—		—		217,487		217,487
Leases	—		—		77		315		159,744		160,136
Other	—		—		—		—		11,034		11,034
PCI - commercial (1)	—		365		202		138		8,518		9,223
Total commercial	$	9,157	$	839	$	5,123	$	11,558	$	3,897,717	$	3,924,394
Commercial real estate
Residential construction	$	—	$	—	$	250	$	76	$	38,370	$	38,696
Commercial construction	230		—		—		2,023		185,513		187,766
Land	2,656		—		—		2,395		86,779		91,830
Office	7,288		—		2,621		1,374		694,149		705,432
Industrial	2,392		—		—		3,758		617,820		623,970
Retail	4,152		—		116		3,301		723,919		731,488
Multi-family	249		—		249		1,921		603,323		605,742
Mixed use and other	9,638		—		2,603		9,023		1,443,853		1,465,117
PCI - commercial real estate (1)	—		10,976		6,393		4,016		34,327		55,712
Total commercial real estate	$	26,605	$	10,976	$	12,232	$	27,887	$	4,428,053	$	4,505,753
Home equity	6,174		—		983		3,513		705,623		716,293
Residential real estate	15,502		—		267		6,315		459,224		481,308
PCI - residential real estate (1)	—		549		—		—		1,685		2,234
Premium finance receivables
Commercial insurance loans	12,705		7,665		5,995		17,328		2,307,140		2,350,833
Life insurance loans	—		—		13,084		339		1,870,669		1,884,092
PCI - life insurance loans (1)	—		—		—		—		393,479		393,479
Consumer and other	277		119		293		838		149,485		151,012
Total loans, net of unearned income, excluding covered loans	$	70,420	$	20,148	$	37,977	$	67,778	$	14,213,075	$	14,409,398
Covered loans	7,290		17,839		1,304		4,835		195,441		226,709
Total loans, net of unearned income	$	77,710	$	37,987	$	39,281	$	72,613	$	14,408,516	$	14,636,107

(1) PCI 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. See Note 4 - Loans for further discussion of these purchased loans.

Our ability to manage credit risk depends in large part on our ability to properly identify and manage problem loans. To do so, the Company operates 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 PCI and covered loans. 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 December 31, 2015 and 2014:

	Performing				Non-performing				Total
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
(Dollars in thousands)	2015		2014		2015		2014		2015		2014
Loan Balances:
Commercial
Commercial and industrial	$	2,838,932	$	2,204,874	$	12,422	$	9,606	$	2,851,354	$	2,214,480
Franchise	245,228		252,200		—		—		245,228		252,200
Mortgage warehouse lines of credit	222,806		139,003		—		—		222,806		139,003
Community Advantage—homeowners association	130,986		106,364		—		—		130,986		106,364
Aircraft	5,039		8,065		288		—		5,327		8,065
Asset-based lending	742,676		806,377		8		25		742,684		806,402
Tax exempt	267,273		217,487		—		—		267,273		217,487
Leases	225,539		160,136		535		—		226,074		160,136
Other	3,588		11,034		—		—		3,588		11,034
PCI - commercial (1)	18,589		9,223		—		—		18,589		9,223
Total commercial	$	4,700,656	$	3,914,763	$	13,253	$	9,631	$	4,713,909	$	3,924,394
Commercial real estate
Residential construction	$	70,108	$	38,696	$	273	$	—	$	70,381	$	38,696
Commercial construction	288,246		187,536		33		230		288,279		187,766
Land	76,666		89,174		1,751		2,656		78,417		91,830
Office	858,382		698,144		4,619		7,288		863,001		705,432
Industrial	718,084		621,578		9,564		2,392		727,648		623,970
Retail	866,639		727,336		1,760		4,152		868,399		731,488
Multi-family	740,395		605,493		1,954		249		742,349		605,742
Mixed use and other	1,726,125		1,455,479		6,691		9,638		1,732,816		1,465,117
PCI - commercial real estate (1)	157,999		55,712		—		—		157,999		55,712
Total commercial real estate	$	5,502,644	$	4,479,148	$	26,645	$	26,605	$	5,529,289	$	4,505,753
Home equity	777,827		710,119		6,848		6,174		784,675		716,293
Residential real estate	591,942		465,806		12,043		15,502		603,985		481,308
PCI - residential real estate (1)	3,466		2,234		—		—		3,466		2,234
Premium finance receivables
Commercial insurance loans	2,350,066		2,330,463		24,855		20,370		2,374,921		2,350,833
Life insurance loans	2,593,204		1,884,092		—		—		2,593,204		1,884,092
PCI - life insurance loans (1)	368,292		393,479		—		—		368,292		393,479
Consumer and other	145,963		150,617		413		395		146,376		151,012
Total loans, net of unearned income, excluding covered loans	$	17,034,060	$	14,330,721	$	84,057	$	78,677	$	17,118,117	$	14,409,398

(1) PCI loans represent loans acquired with evidence of credit quality deterioration since origination, in accordance with ASC 310-30. See Note 4 - Loans for further discussion of these purchased loans.

A summary of the activity in the allowance for credit losses by loan portfolio (excluding covered loans) for the years ended December 31, 2015 and 2014 is as follows:

Year Ended  December 31, 2015 (Dollars in thousands)	Commercial			Commercial Real Estate			Home Equity			Residential Real Estate			Premium Finance Receivable			Consumer and Other			Total, Excluding Covered  Loans
Allowance for credit losses
Allowance for loan losses at beginning of period	$	31,699		$	35,533		$	12,500		$	4,218		$	6,513		$	1,242		$	91,705
Other adjustments	(51		)	(419		)	—			(125		)	(142		)	—			(737		)
Reclassification to/from allowance for unfunded lending-related commitments	—			(138		)	—			—			—			—			(138		)
Charge-offs	(4,253		)	(6,543		)	(4,227		)	(2,903		)	(7,060		)	(521		)	(25,507		)
Recoveries	1,432			2,840			312			283			1,304			159			6,330
Provision for credit losses	7,308			12,485			3,427			3,261			6,618			648			33,747
Allowance for loan losses at period end	$	36,135		$	43,758		$	12,012		$	4,734		$	7,233		$	1,528		$	105,400
Allowance for unfunded lending-related commitments at period end	—			949			—			—			—			—			949
Allowance for credit losses at period end	$	36,135		$	44,707		$	12,012		$	4,734		$	7,233		$	1,528		$	106,349
Individually evaluated for impairment	2,026			3,733			333			316			—			10			6,418
Collectively evaluated for impairment	34,025			40,625			11,679			4,416			7,233			1,518			99,496
Loans acquired with deteriorated credit quality	84			349			—			2			—			—			435
Loans at period end
Individually evaluated for impairment	$	18,789		$	59,871		$	6,847		$	16,522		$	—		$	392		$	102,421
Collectively evaluated for impairment	4,676,531			5,311,419			777,828			587,463			4,968,125			144,640			16,466,006
Loans acquired with deteriorated credit quality	18,589			157,999			—			3,466			368,292			1,344			549,690

Year Ended  December 31, 2014 (Dollars in thousands)	Commercial			Commercial Real Estate			Home Equity			Residential Real Estate			Premium Finance Receivable			Consumer and Other			Total, Excluding Covered  Loans
Allowance for credit losses
Allowance for loan losses at beginning of period	$	23,092		$	48,658		$	12,611		$	5,108		$	5,583		$	1,870		$	96,922
Other adjustments	(83		)	(665		)	(3		)	(9		)	(64		)	—			(824		)
Reclassification to/from allowance for unfunded lending-related commitments	—			(56		)	—			—			—			—			(56		)
Charge-offs	(4,153		)	(15,788		)	(3,895		)	(1,750		)	(5,726		)	(792		)	(32,104		)
Recoveries	1,198			1,334			535			335			1,150			326			4,878
Provision for credit losses	11,645			2,050			3,252			534			5,570			(162		)	22,889
Allowance for loan losses at period end	$	31,699		$	35,533		$	12,500		$	4,218		$	6,513		$	1,242		$	91,705
Allowance for unfunded lending-related commitments at period end	—			775			—			—			—			—			775
Allowance for credit losses at period end	$	31,699		$	36,308		$	12,500		$	4,218		$	6,513		$	1,242		$	92,480
Individually evaluated for impairment	1,936			3,260			475			632			—			26			6,329
Collectively evaluated for impairment	29,763			32,960			12,025			3,482			6,513			1,197			85,940
Loans acquired with deteriorated credit quality	—			88			—			104			—			19			211
Loans at period end
Individually evaluated for impairment	$	16,326		$	87,225		$	6,399		$	18,365		$	—		$	372		$	128,687
Collectively evaluated for impairment	3,898,845			4,362,816			709,894			462,943			4,234,925			150,640			13,820,063
Loans acquired with deteriorated credit quality	9,223			55,712			—			2,234			393,479			—			460,648

A summary of activity in the allowance for covered loan losses for the years ended December 31, 2015 and 2014 is as follows:

	Years Ended
	December 31,			December 31,
(Dollars in thousands)	2015			2014
Balance at beginning of period	$	2,131		$	10,092
Provision for covered loan losses before benefit attributable to FDIC loss share agreements	(5,350		)	(11,762		)
Benefit attributable to FDIC loss share agreements	4,545			9,410
Net provision for covered loan losses	$	(805	)	$	(2,352	)
(Decrease) increase in FDIC indemnification asset	(4,545		)	(9,410		)
Loans charged-off	(827		)	(5,521		)
Recoveries of loans charged-off	7,072			9,322
Net recoveries (charge-offs)	$	6,245		$	3,801
Balance at end of period	$	3,026		$	2,131

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 loss share asset or reduce any FDIC loss share liability. 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 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 loss share asset or increase any FDIC loss share liability. Additions to expected losses will require an increase to the allowance for loan losses, and a corresponding increase to the FDIC loss share asset or reduction to any FDIC loss share liability. See "FDIC-Assisted Transactions" within Note 7 - Business Combinations for more detail.

Impaired Loans

A summary of impaired loans, including TDRs, at December 31, 2015 and 2014 is as follows:

(Dollars in thousands)	2015		2014
Impaired loans (included in non-performing and restructured loans):
Impaired loans with an allowance for loan loss required (1)	$	49,961	$	69,487
Impaired loans with no allowance for loan loss required	51,294		57,925
Total impaired loans (2)	$	101,255	$	127,412
Allowance for loan losses related to impaired loans	$	6,380	$	6,270
TDRs	51,853		82,275
Reduction of interest income from non-accrual loans	3,006		2,222
Interest income recognized on impaired loans	6,198		7,190

(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 the loan is current with all payments of principal and interest.

The following tables present impaired loans evaluated for impairment by loan class as of December 31, 2015 and 2014:

	As of						For the Year Ended
December 31, 2015 (Dollars in thousands)	Recorded Investment		Unpaid  Principal Balance		Related Allowance		Average  Recorded Investment		Interest Income Recognized
Impaired loans with a related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	9,754	$	12,498	$	2,012	$	10,123	$	792
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	—		—		—		—		—
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real estate
Residential construction	—		—		—		—		—
Commercial construction	—		—		—		—		—
Land	4,929		8,711		41		5,127		547
Office	5,050		6,051		632		5,394		314
Industrial	8,413		9,105		1,943		10,590		565
Retail	8,527		9,230		343		8,596		386
Multi-family	370		370		202		372		25
Mixed use and other	7,590		7,708		570		7,681		328
Home equity	423		435		333		351		16
Residential real estate	4,710		4,799		294		4,618		182
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
PCI - life insurance	—		—		—		—		—
Consumer and other	195		220		10		216		12
Impaired loans with no related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	8,274	$	9,537	$	—	$	9,510	$	494
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	288		378		—		375		27
Asset-based lending	8		1,570		—		5		88
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real estate
Residential construction	2,296		2,296		—		2,300		112
Commercial construction	32		33		—		16		1
Land	888		2,373		—		929		90
Office	3,500		4,484		—		3,613		237
Industrial	2,217		2,426		—		2,286		188
Retail	2,757		2,925		—		2,897		129
Multi-family	2,344		2,807		—		2,390		117
Mixed use and other	10,510		14,060		—		11,939		624
Home equity	6,424		7,987		—		5,738		288
Residential real estate	11,559		13,979		—		11,903		624
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
PCI - life insurance	—		—		—		—		—
Consumer and other	197		267		—		201		12
Total loans, net of unearned income, excluding covered loans	$	101,255	$	124,249	$	6,380	$	107,170	$	6,198

	As of						For the Year Ended
December 31, 2014 (Dollars in thousands)	Recorded Investment		Unpaid  Principal Balance		Related Allowance		Average  Recorded Investment		Interest Income Recognized
Impaired loans with a related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	9,989	$	10,785	$	1,915	$	10,784	$	539
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	—		—		—		—		—
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real estate
Residential construction	—		—		—		—		—
Commercial construction	—		—		—		—		—
Land	5,011		8,626		43		5,933		544
Office	11,038		12,863		305		11,567		576
Industrial	195		277		15		214		13
Retail	11,045		14,566		487		12,116		606
Multi-family	2,808		3,321		158		2,839		145
Mixed use and other	21,777		24,076		2,240		21,483		1,017
Home equity	1,946		2,055		475		1,995		80
Residential real estate	5,467		5,600		606		5,399		241
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
PCI - life insurance	—		—		—		—		—
Consumer and other	211		213		26		214		10
Impaired loans with no related ASC 310 allowance recorded
Commercial
Commercial and industrial	$	5,797	$	8,862	$	—	$	6,664	$	595
Franchise	—		—		—		—		—
Mortgage warehouse lines of credit	—		—		—		—		—
Community Advantage—homeowners association	—		—		—		—		—
Aircraft	—		—		—		—		—
Asset-based lending	25		1,952		—		87		100
Tax exempt	—		—		—		—		—
Leases	—		—		—		—		—
Other	—		—		—		—		—
Commercial real estate
Residential construction	—		—		—		—		—
Commercial construction	2,875		3,085		—		3,183		151
Land	10,210		10,941		—		10,268		430
Office	4,132		5,020		—		4,445		216
Industrial	4,160		4,498		—		3,807		286
Retail	5,487		7,470		—		6,915		330
Multi-family	—		—		—		—		—
Mixed use and other	7,985		8,804		—		9,533		449
Home equity	4,453		6,172		—		4,666		256
Residential real estate	12,640		14,334		—		12,682		595
Premium finance receivables
Commercial insurance	—		—		—		—		—
Life insurance	—		—		—		—		—
PCI - life insurance	—		—		—		—		—
Consumer and other	161		222		—		173		11
Total loans, net of unearned income, excluding covered loans	$	127,412	$	153,742	$	6,270	$	134,967	$	7,190

Average recorded investment in impaired loans for the years ended December 31, 2015, 2014, and 2013 were $107.2 million, $135.0 million, and $170.7 million, respectively. Interest income recognized on impaired loans was $6.2 million, $7.2 million, and $8.9 million for the years ended December 31, 2015, 2014, and 2013, respectively.

TDRs

At December 31, 2015, the Company had $51.9 million in loans modified in TDRs. The $51.9 million in TDRs represents 102 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 PCI loans, 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 PCI loans, with an existing credit risk rating of 6 or worse or a modification of any other credit, which will result in a restructured credit risk rating of 6 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 PCI loans, where the credit risk rating is 5 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 5 or better are not experiencing financial difficulties and therefore, are not considered TDRs.

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 current interest rate represents a market rate at the time of 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.

TDRs are reviewed at the time of 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 December 31, 2015 and approximately $1.8 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. For the year ended December 31, 2015 and 2014, the Company recorded $573,000 and $724,000, respectively, in interest income representing this decrease in impairment.

TDRs may arise in which, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to OREO, which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. Excluding covered OREO, at December 31, 2015, the Company had $14.2 million of foreclosed residential real estate properties included within OREO.

The tables below present a summary of the post-modification balance of loans restructured during the years ended December 31, 2015, 2014, and 2013, which represent TDRs:

Year ended  December 31, 2015	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt (2)
(Dollars in thousands)	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—
Commercial real estate
Commercial construction	—	—		—	—		—	—		—	—		—	—
Land	—	—		—	—		—	—		—	—		—	—
Office	—	—		—	—		—	—		—	—		—	—
Industrial	1	169		1	169		—	—		1	169		—	—
Retail	—	—		—	—		—	—		—	—		—	—
Multi-family	—	—		—	—		—	—		—	—		—	—
Mixed use and other	2	201		2	201		—	—		2	201		—	—
Residential real estate and other	9	1,664		9	1,664		5	674		1	50		—	—
Total loans	12	$	2,034	12	$	2,034	5	$	674	4	$	420	—	$	—
Year ended December 31, 2014	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt (2)
(Dollars in thousands)	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	2	$	1,549	1	$	88	1	$	1,461	2	$	1,549	—	$	—
Commercial real estate
Commercial construction	—	—		—	—		—	—		—	—		—	—
Land	—	—		—	—		—	—		—	—		—	—
Office	2	1,510		2	1,510		—	—		—	—		—	—
Industrial	2	1,763		2	1,763		1	685		1	1,078		—	—
Retail	1	202		1	202		—	—		—	—		—	—
Multi-family	1	181		—	—		1	181		—	—		—	—
Mixed use and other	7	4,926		3	2,837		7	4,926		1	1,273		—	—
Residential real estate and other	6	1,836		5	1,625		4	1,138		1	220		—	—
Total loans	21	$	11,967	14	$	8,025	14	$	8,391	5	$	4,120	—	$	—

Year ended December 31, 2013	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt (2)
(Dollars in thousands)	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
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	6	5,042		6	5,042		5	4,947		1	932		—	—
Residential real estate and other	10	2,296		6	1,613		7	931		2	234		1	1,000
Total loans	35	$	22,680	30	$	21,862	22	$	9,128	8	$	7,471	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.

During the year ended December 31, 2015, $2.0 million, or 12 loans, were determined to be TDRs, compared to $12.0 million, or 21 loans, and $22.7 million, or 35 loans, in the years ended 2014 and 2013, respectively. Of these loans extended at below market terms, the weighted average extension had a term of approximately 45 months in 2015 compared to 19 months in 2014 and 18 months in 2013. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 358 basis points, 170 basis points and 184 basis points during the years ended December 31, 2015, 2014, and 2013, respectively. Interest-only payment terms were approximately 17 months during the year ended 2015 compared to seven months and 11 months for the years ended 2014 and 2013, respectively. Additionally, no principal balances were forgiven during 2015 and 2014, compared to $1.0 million forgiven during 2013.

The tables below present a summary of all loans restructured in TDRs during the years ended December 31, 2015, 2014, and 2013, and such loans which were in payment default under the restructured terms during the respective periods:

	Year Ended December 31, 2015						Year Ended December 31, 2014						Year Ended December 31, 2013
	Total (1)(3)			Payments in Default  (2)(3)			Total (1)(3)			Payments in Default  (2)(3)			Total (1)(3)			Payments in Default  (2)(3)
(Dollars in thousands)	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial and industrial	—	$	—	—	$	—	2	$	1,549	1	$	88	6	$	708	1	$	20
Commercial real-estate
Commercial construction	—	—		—	—		—	—		—	—		3	6,120		—	—
Land	—	—		—	—		—	—		—	—		3	2,639		1	215
Office	—	—		—	—		2	1,510		—	—		4	4,021		1	1,648
Industrial	1	169		—	—		2	1,763		1	1,078		1	949		—	—
Retail	—	—		—	—		1	202		—	—		1	200		—	—
Multi-family	—	—		—	—		1	181		1	181		1	705		1	705
Mixed use and other	2	201		2	201		7	4,926		2	569		6	5,042		1	95
Residential real estate and other	9	1,664		4	568		6	1,836		1	211		10	2,296		—	—
Total loans	12	$	2,034	6	$	769	21	$	11,967	6	$	2,127	35	$	22,680	5	$	2,683

(1) Total TDRs represent all loans restructured in TDRs during the year 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.