ALLOWANCE FOR LOAN AND LEASE LOSSES

6 Months Ended

Jun. 30, 2017

ALLOWANCE FOR LOAN AND LEASE LOSSES

NOTE 7 – ALLOWANCE FOR LOAN AND LEASE LOSSES

The changes in the allowance for loan and lease losses were as follows:
	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
(In thousands)
Quarter ended June 30, 2017
Allowance for loan and lease losses:
Beginning balance	$	35,775	$	68,468	$	45,970	$	3,886	$	49,132	$	203,231
Charge-offs		(6,967)		(30,495)		(6,378)		(595)		(11,053)		(55,488)
Recoveries		891		78		4,624		133		1,920		7,646
Provision (release)		10,888		525		(2,134)		312		8,505		18,096
Ending balance	$	40,587	$	38,576	$	42,082	$	3,736	$	48,504	$	173,485
Ending balance: specific reserve for impaired loans	$	13,786	$	8,330	$	10,788	$	2,374	$	5,516	$	40,794
Ending balance: purchased credit-impaired loans (1)	$	9,074	$	372	$	-	$	-	$	-	$	9,446
Ending balance: general allowance	$	17,727	$	29,874	$	31,294	$	1,362	$	42,988	$	123,245
Loans held for investment:
Ending balance	$	3,282,307	$	1,611,730	$	2,116,756	$	122,093	$	1,728,290	$	8,861,176
Ending balance: impaired loans	$	428,711	$	140,621	$	74,902	$	50,557	$	40,834	$	735,625
Ending balance: purchased credit-impaired loans	$	156,202	$	4,166	$	-	$	-	$	-	$	160,368
Ending balance: loans with general allowance	$	2,697,394	$	1,466,943	$	2,041,854	$	71,536	$	1,687,456	$	7,965,183
	Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
(In thousands)
Six-Month Period Ended June 30, 2017
Allowance for loan and lease losses:
Beginning balance	$	33,980	$	57,261	$	61,953	$	2,562	$	49,847	$	205,603
Charge-offs		(15,192)		(31,857)		(18,430)		(658)		(22,245)		(88,382)
Recoveries		1,640		108		5,499		578		4,901		12,726
Provision (release)		20,159		13,064		(6,940)		1,254		16,001		43,538
Ending balance	$	40,587	$	38,576	$	42,082	$	3,736	$	48,504	$	173,485
Ending balance: specific reserve for impaired loans	$	13,786	$	8,330	$	10,788	$	2,374	$	5,516	$	40,794
Ending balance: purchased credit-impaired loans (1)	$	9,074	$	372	$	-	$	-	$	-	$	9,446
Ending balance: general allowance	$	17,727	$	29,874	$	31,294	$	1,362	$	42,988	$	123,245
Loans held for investment:
Ending balance	$	3,282,307	$	1,611,730	$	2,116,756	$	122,093	$	1,728,290	$	8,861,176
Ending balance: impaired loans	$	428,711	$	140,621	$	74,902	$	50,557	$	40,834	$	735,625
Ending balance: purchased credit-impaired loans	$	156,202	$	4,166	$	-	$	-	$	-	$	160,368
Ending balance: loans with general allowance	$	2,697,394	$	1,466,943	$	2,041,854	$	71,536	$	1,687,456	$	7,965,183

		Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
(In thousands)
Quarter ended June 30, 2016
Allowance for loan and lease losses:
Beginning balance		$	38,548	$	68,744	$	71,098	$	3,013	$	56,722	$	238,125
Charge-offs			(11,532)		(1,437)		(1,914)		(513)		(12,970)		(28,366)
Recoveries			841		33		676		144		2,015		3,709
Provision (release)			11,098		2,459		(71)		103		7,397		20,986
Ending balance		$	38,955	$	69,799	$	69,789	$	2,747	$	53,164	$	234,454
Ending balance: specific reserve for impaired loans		$	11,972	$	40,071	$	27,750	$	1,114	$	5,465	$	86,372
Ending balance: purchased credit-impaired loans (1)		$	6,638	$	219	$	-	$	-	$	-	$	6,857
Ending balance: general allowance		$	20,345	$	29,509	$	42,039	$	1,633	$	47,699	$	141,225
Loans held for investment:
Ending balance		$	3,323,844	$	1,523,676	$	2,133,623	$	137,406	$	1,752,198	$	8,870,747
Ending balance: impaired loans		$	452,280	$	211,348	$	197,368	$	49,216	$	43,562	$	953,774
Ending balance: purchased credit-impaired loans		$	166,556	$	3,134	$	-	$	-	$	-	$	169,690
Ending balance: loans with general allowance		$	2,705,008	$	1,309,194	$	1,936,255	$	88,190	$	1,708,636	$	7,747,283
		Residential Mortgage Loans		Commercial Mortgage Loans		Commercial & Industrial Loans		Construction Loans		Consumer Loans		Total
(In thousands)
Six-Month Period Ended June 30, 2016
Allowance for loan and lease losses:
Beginning balance		$	39,570	$	68,211	$	68,768	$	3,519	$	60,642	$	240,710
Charge-offs			(18,838)		(2,012)		(5,673)		(604)		(27,774)		(54,901)
Recoveries			1,187		79		956		161		4,223		6,606
Provision (release)			17,036		3,521		5,738		(329)		16,073		42,039
Ending balance		$	38,955	$	69,799	$	69,789	$	2,747	$	53,164	$	234,454
Ending balance: specific reserve for impaired loans		$	11,972	$	40,071	$	27,750	$	1,114	$	5,465	$	86,372
Ending balance: purchased credit-impaired loans (1)		$	6,638	$	219	$	-	$	-	$	-	$	6,857
Ending balance: general allowance		$	20,345	$	29,509	$	42,039	$	1,633	$	47,699	$	141,225
Loans held for investment:
Ending balance		$	3,323,844	$	1,523,676	$	2,133,623	$	137,406	$	1,752,198	$	8,870,747
Ending balance: impaired loans		$	452,280	$	211,348	$	197,368	$	49,216	$	43,562	$	953,774
Ending balance: purchased credit-impaired loans		$	166,556	$	3,134	$	-	$	-	$	-	$	169,690
Ending balance: loans with general allowance		$	2,705,008	$	1,309,194	$	1,936,255	$	88,190	$	1,708,636	$	7,747,283
(1)	Refer to Note 6- Loans Held For Investment-PCI Loans for a detail of changes in the allowance for loan losses related to PCI loans.

As of June 30, 2017, the Corporation maintained a $0.7 million reserve for unfunded loan commitments (December 31, 2016 - $1.6 million) mainly related to outstanding commitments on floor plan revolving lines of credit. 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 statement of financial condition and any change to the reserve is included as part of other non-interest expenses in the consolidated statements of income.