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Allowance For Loan Losses
 9 Months Ended
Sep. 30, 2017
Receivables [Abstract]  
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES

The Company maintains an allowance for loan losses for estimated credit losses in its HFI loan portfolio. The allowance is adjusted through a provision for credit losses, which is charged against current period earnings, and reduced by any charge-offs for losses, net of recoveries.

The Company maintains a separate reserve for credit losses on off-balance sheet commitments, which is reported in Other Liabilities. Off-balance sheet credit exposures include items such as unfunded loan commitments, issued standby letters of credit and deferred purchase agreements. The Company’s methodology for assessing the appropriateness of this reserve is similar to the allowance process for outstanding loans.
Allowance for Loan Losses and Recorded Investment in Loans (dollars in millions)
 
 
 
 
 
 
 
Commercial
Banking
 
Consumer
Banking
 
Total
Quarter Ended September 30, 2017
 
 
 
 
 
Balance - June 30, 2017
$
397.7

 
$
28.3

 
$
426.0

Provision for credit losses
11.1

 
19.0

 
30.1

Other(1)
4.8

 
0.3

 
5.1

Gross charge-offs(2)
(27.7
)
 
(20.5
)
 
(48.2
)
Recoveries
6.0

 
0.5

 
6.5

Balance - September 30, 2017
$
391.9

 
$
27.6

 
$
419.5

Nine Months Ended September 30, 2017
 
 
 
 
 
Balance - December 31, 2016
$
408.4

 
$
24.2

 
$
432.6

Provision for credit losses
60.1

 
24.1

 
84.2

Other(1)
(0.5
)
 
0.1

 
(0.4
)
Gross charge-offs(2)
(92.4
)
 
(22.0
)
 
(114.4
)
Recoveries
16.3

 
1.2

 
17.5

Balance - September 30, 2017
$
391.9

 
$
27.6

 
$
419.5

Allowance balance at September 30, 2017
 

 
   
 
   
Loans individually evaluated for impairment
$
35.6

 
$
—

 
$
35.6

Loans collectively evaluated for impairment
347.0

 
16.1

 
363.1

Loans acquired with deteriorated credit quality(3)
9.3

 
11.5

 
20.8

Allowance for loan losses
$
391.9

 
$
27.6

 
$
419.5

Other reserves(1)
$
44.2

 
$
—

 
$
44.2

Loans at September 30, 2017
 

 
   
 
   
Loans individually evaluated for impairment
$
246.2

 
$
—

 
$
246.2

Loans collectively evaluated for impairment
22,380.6

 
3,832.1

 
26,212.7

Loans acquired with deteriorated credit quality(3)
65.8

 
1,980.6

 
2,046.4

Ending balance
$
22,692.6

 
$
5,812.7

 
$
28,505.3

Percent of loans to total loans
79.6
%
 
20.4
%
 
100
%
Allowance for Loan Losses and Recorded Investment in Loans (continued) (dollars in millions)

 
Commercial
Banking
 
Consumer
Banking
 
Total
Quarter Ended September 30, 2016
 
 
 
 
 
Balance - June 30, 2016
$
376.9

 
$
16.2

 
$
393.1

Provision for credit losses
43.6

 
1.5

 
45.1

Other(1)
(1.8
)
 
(0.1
)
 
(1.9
)
Gross charge-offs(2)
(27.7
)
 
(0.7
)
 
(28.4
)
Recoveries
6.2

 
0.9

 
7.1

Balance - September 30, 2016
$
397.2

 
$
17.8

 
$
415.0

Nine Months Ended September 30, 2016
 
 
 
 
 
Balance - December 31, 2015
$
336.7

 
$
10.3

 
$
347.0

Provision for credit losses
152.2

 
5.7

 
157.9

Other(1)
(3.4
)
 
1.1

 
(2.3
)
Gross charge-offs(2)
(101.8
)
 
(1.9
)
 
(103.7
)
Recoveries
13.5

 
2.6

 
16.1

Balance - September 30, 2016
$
397.2

 
$
17.8

 
$
415.0

Allowance balance at September 30, 2016
 
 
 
 
 
Loans individually evaluated for impairment
$
33.8

 
$
—

 
$
33.8

Loans collectively evaluated for impairment
357.7

 
16.3

 
374.0

Loans acquired with deteriorated credit quality(3)
5.7

 
1.5

 
7.2

Allowance for loan losses
$
397.2

 
$
17.8

 
$
415.0

Other reserves(1)
$
47.4

 
$
0.2

 
$
47.6

Loans at September 30, 2016
 
 
 
 
 
Loans individually evaluated for impairment
$
217.6

 
$
—

 
$
217.6

Loans collectively evaluated for impairment
22,442.2

 
4,816.8

 
27,259.0

Loans acquired with deteriorated credit quality(3)
121.1

 
2,299.3

 
2,420.4

Ending balance
$
22,780.9

 
$
7,116.1

 
$
29,897.0

Percentage of loans to total loans
76.2
%
 
23.8
%
 
100
%
(1) 
“Other reserves” represents additional credit loss reserves for unfunded lending commitments, letters of credit and for deferred purchase agreements, all of which is recorded in Other liabilities. “Other” also includes changes relating to loans that were charged off and reimbursed by the FDIC under the indemnification provided by the FDIC, sales and foreign currency translations.
(2) 
Gross charge-offs of amounts specifically reserved in prior periods that were charged directly to the Allowance for loan losses included $7.7 million and $39.3 million for the quarter and nine months ended September 30, 2017, respectively, and $4.0 million and $27.0 million for the quarter and nine months ended September 30, 2016, respectively. The charge-offs related to Commercial Banking for all periods. Gross charge-offs in Consumer Banking for the quarter and nine month ended September 30, 2017 included $19.7 million related to reverse mortgage loans transferred from AHFI to AHFS.
(3) 
Represents loans considered impaired as part of the OneWest transaction and are accounted for under the guidance in ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality).