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ALLOWANCE FOR LOAN AND LEASE LOSSES
 12 Months Ended
Dec. 31, 2014
ALLOWANCE FOR LOAN AND LEASE LOSSES [Text Block]
  The changes in the allowance for loan and lease losses were as follows:
                   
                   
  Residential Commercial Commercial and Construction Consumer  
 Year Ended December 31, 2014Mortgage Loans Mortgage Loans Industrial Loans Loans Loans Total
  (In thousands)
 Allowance for loan and lease losses:                  
 Beginning balance$ 33,110 $ 73,138 $ 85,295 $ 35,814 $ 58,501 $ 285,858
  Charge-offs  (24,345)   (25,807)   (61,935)   (11,533)   (76,696)   (200,316)
  Recoveries  1,049   10,639   3,680   6,049   5,906   27,323
  Provision (release)  17,487   (7,076)   36,681   (17,508)   79,946   109,530
 Ending balance$ 27,301 $ 50,894 $ 63,721 $ 12,822 $ 67,657 $ 222,395
 Ending balance: specific reserve for impaired loans$ 10,854 $ 14,289 $ 21,314 $ 2,577 $ 6,171 $ 55,205
 Ending balance: purchased credit-impaired loans$ - $ - $ - $ - $ - $ -
 Ending balance: general allowance$ 16,447 $ 36,605 $ 42,407 $ 10,245 $ 61,486 $ 167,190
 Loans held for investment:                 
  Ending balance$ 3,011,187 $ 1,665,787 $ 2,479,437 $ 123,480 $ 1,982,545 $ 9,262,436
  Ending balance: impaired loans$ 424,244 $ 210,738 $ 236,371 $ 39,467 $ 34,587 $ 945,407
  Ending balance: purchased credit-impaired                 
  loans$ 98,494 $ 3,393 $ - $ - $ 717 $ 102,604
  Ending balance: loans with general                  
  allowance$ 2,488,449 $ 1,451,656 $ 2,243,066 $ 84,013 $ 1,947,241 $ 8,214,425
                   

                   
  Residential Commercial Commercial and Construction Consumer  
Year Ended December 31, 2013Mortgage Loans Mortgage Loans Industrial Loans Loans Loans Total
  (In thousands)
Allowance for loan and lease losses:                  
Beginning balance$ 68,354 $ 97,692 $ 146,900 $ 61,600 $ 60,868 $ 435,414
Charge-offs  (30,192)   (27,400)   (65,171)   (30,539)   (63,108)   (216,410)
Charge-offs related to bulk sales  (98,972)   (40,057)   (44,678)   (12,784)   -   (196,491)
Recoveries  1,165   4,855   4,636   2,076   6,862   19,594
Provision  92,755   27,357   53,048   16,712   53,879   243,751
Reclassification (1)  -   10,691   (9,440)   (1,251)   -   -
Ending balance$ 33,110 $ 73,138 $ 85,295 $ 35,814 $ 58,501 $ 285,858
Ending balance: specific reserve for impaired loans$ 18,125 $ 32,189 $ 26,686 $ 22,144 $ 3,457 $ 102,601
Ending balance: purchased credit-impaired loans$ - $ - $ - $ - $ - $ -
Ending balance: general allowance$ 14,985 $ 40,949 $ 58,609 $ 13,670 $ 55,044 $ 183,257
Loans held for investment:                 
Ending balance$ 2,549,008 $ 1,823,608 $ 3,028,322 $ 168,713 $ 2,066,519 $ 9,636,170
Ending balance: impaired loans$ 410,994 $ 219,372 $ 187,104 $ 72,717 $ 28,925 $ 919,112
Ending balance: purchased credit-impaired                 
loans$ - $ - $ - $ - $ 4,791 $ 4,791
Ending balance: loans with general allowance$ 2,138,014 $ 1,604,236 $ 2,841,218 $ 95,996 $ 2,032,803 $ 8,712,267
                   
(1)During the second quarter of 2013, after a comprehensive review of substantially all of the loans in our commercial portfolios, the classification of certain loans was revised to more accurately depict the nature of the underlying loans. This reclassification resulted in a net increase of $269.0 million in commercial mortgage loans, since the principal source of repayment for such loans is derived primarily from the operation of the underlying real estate, with a corresponding decrease of $246.8 million in commercial and industrial loans and a $22.2 million decrease in construction loans. The Corporation evaluated the impact of this reclassification on the provision for loan losses and determined that the effect of this adjustment was not material to any previously reported results.
                   

Refer to Note 1, Nature of Business and Summary of Significant Accounting Policies – Allowance for loans and lease losses, for additional information about certain enhancements to the general allowance estimation process for commercial and consumer loans made in 2014.

 

The bulk sale of approximately $217.7 million of adversely classified assets, mainly commercial loans, completed in the first quarter of 2013 resulted in charge-offs of approximately $98.5 million. In determining the historical loss rate for the computation of the general reserve for commercial loans, the Corporation includes the portion of these charge-offs that was related to the acceleration of previously reserved credit losses amounting to approximately $39.9 million.  The Corporation considered that the portion not deemed to be credit-related was not indicative of the ultimate losses that may have occurred had the assets been resolved on an individual basis, over time and not in a steeply discounted bulk sale. A transaction, such as this one, entered into to expedite the reduction of non-performing and adversely classified assets, can result in charge-offs that are not reflective of true credit-related charge-off-history since there is a component related to the discounted value realized on a bulk sale basis. Accordingly, the Corporation concluded that it is reasonable to exclude the component related to the discounted value from its historical charge-off analysis used in estimating its allowance for loan losses.

 

As of December 31, 2014, the Corporation maintained a $0.2 million reserve for unfunded loan commitments mainly related to outstanding construction and commercial and industrial loan commitments. The reserve for unfunded loan commitments is an estimate of the losses inherent in off-balance sheet loan commitments to borrowers that are experiencing financial difficulties at the balance sheet date. It is calculated by multiplying an estimated loss factor by an estimated probability of funding, and then by the period-end amounts for unfunded commitments. The reserve for unfunded loan commitments is included as part of accounts payable and other liabilities in the consolidated statements of financial condition.