Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Tables)

9 Months Ended

Sep. 30, 2014

Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

Summary of loans

Loans and Leases

	September 30,			December 31,
(in thousands) (1)	2014			2013
Commercial	$	8,612,691		$	7,562,300
Commercial real estate mortgages	3,565,188			3,223,001
Residential mortgages	5,023,213			4,554,311
Real estate construction	585,232			367,004
Home equity loans and lines of credit	759,258			709,344
Installment	178,803			151,955
Lease financing	623,603			602,523
Loans and leases, excluding covered loans	19,347,988			17,170,438
Less: Allowance for loan and lease losses	(312,703		)	(302,584		)
Loans and leases, excluding covered loans, net	19,035,285			16,867,854
Covered loans	552,715			716,911
Less: Allowance for loan losses	(9,368		)	(15,922		)
Covered loans, net	543,347			700,989
Total loans and leases	$	19,900,703		$	17,887,349
Total loans and leases, net	$	19,578,632		$	17,568,843

(1) Commercial loans as of December 31, 2013 have been corrected to include $158.2 million of loans that were previously reported as lease financing.

Summary of major categories of covered loans

	September 30,			December 31,
(in thousands)	2014			2013
Commercial	$	2,273		$	10,009
Commercial real estate mortgages	522,883			666,628
Residential mortgages	5,203			4,976
Real estate construction	19,016			31,184
Home equity loans and lines of credit	3,089			3,695
Installment	251			419
Covered loans	552,715			716,911
Less: Allowance for loan losses	(9,368		)	(15,922		)
Covered loans, net	$	543,347		$	700,989

Schedule of information on covered loans and loss-sharing terms by acquired entity

(in thousands)	Imperial Capital Bank		1st Pacific Bank		Sun West Bank		Nevada Commerce Bank		Total
Covered loans as of:
September 30, 2014	$	492,445	$	24,748	$	13,025	$	22,497	$	552,715
December 31, 2013	630,754		40,110		18,761		27,286		716,911
As of September 30, 2014:
FDIC indemnification asset	$	51,074	$	2,431	$	3,105	$	3,307	$	59,917
FDIC clawback liability	—		12,240		2,131		153		14,524
Expiration date of FDIC loss sharing:
Commercial (1)	12/31/2016		6/30/2015		6/30/2015		6/30/2016
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021
Termination date of FDIC loss-sharing agreements:
Commercial (1)	12/19/2017		5/8/2018		5/29/2018		6/30/2019
Residential	12/31/2019		5/31/2020		5/31/2020		4/30/2021

(1) The Company is subject to sharing 80 percent of its recoveries with the FDIC up to the last day of the quarter in which the termination dates of the commercial loss-sharing agreements occur.

Summary of accretable yield for acquired impaired loans

	For the nine months ended September 30,
(in thousands)	2014			2013
Balance, beginning of period	$	219,018		$	295,813
Accretion	(36,067		)	(49,395		)
Reclassifications from nonaccretable difference	25,636			26,990
Disposals and other	(28,628		)	(40,959		)
Balance, end of period	$	179,959		$	232,449

Summary of allowance for loan and lease losses on non-covered loans

(in thousands)	Commercial (1)			Commercial Real Estate Mortgages			Residential Mortgages			Real Estate Construction			Home Equity Loans and Lines of Credit			Installment			Qualitative			Total
Three months ended September 30, 2014
Allowance for loan and lease losses:
Beginning balance	$	126,279		$	50,651		$	10,296		$	7,191		$	6,575		$	2,284		$	108,000		$	311,276
Charge-offs	(3,773		)	—			—			—			—			(76		)	—			(3,849		)
Recoveries	6,202			225			33			7,729			52			158			—			14,399
Net recoveries	2,429			225			33			7,729			52			82			—			10,550
(Reversal of) provision for credit losses	(5,762		)	113			1,138			(6,175		)	401			18			2,267			(8,000		)
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(1,123		)	(1,123		)
Ending balance	$	122,946		$	50,989		$	11,467		$	8,745		$	7,028		$	2,384		$	109,144		$	312,703
Nine months ended September 30, 2014
Allowance for loan and lease losses:
Beginning balance	$	117,103		$	50,678		$	11,540		$	6,351		$	6,677		$	1,842		$	108,393		$	302,584
Charge-offs	(18,594		)	(5		)	(482		)	—			(165		)	(264		)	—			(19,510		)
Recoveries	15,437			352			258			12,804			254			1,490			—			30,595
Net (charge-offs) recoveries	(3,157		)	347			(224		)	12,804			89			1,226			—			11,085
(Reversal of) provision for credit losses	(353		)	(36		)	151			(10,410		)	262			(684		)	2,070			(9,000		)
Transfers from (to) reserve for off-balance sheet credit commitments	9,353			—			—			—			—			—			(1,319		)	8,034
Ending balance	$	122,946		$	50,989		$	11,467		$	8,745		$	7,028		$	2,384		$	109,144		$	312,703
Ending balance of allowance:
Individually evaluated for impairment	$	1,304		$	291		$	—		$	—		$	—		$	—		$	—		$	1,595
Collectively evaluated for impairment	121,642			50,698			11,467			8,745			7,028			2,384			109,144			311,108
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	9,236,294		$	3,565,188		$	5,023,213		$	585,232		$	759,258		$	178,803		$	—		$	19,347,988
Individually evaluated for impairment	16,316			25,551			7,785			6,610			2,313			—			—			58,575
Collectively evaluated for impairment	9,219,978			3,539,637			5,015,428			578,622			756,945			178,803			—			19,289,413

(1) Includes lease financing loans.

(in thousands)	Commercial (1)			Commercial Real Estate Mortgages			Residential Mortgages			Real Estate Construction			Home Equity Loans and Lines of Credit			Installment			Qualitative			Total
Three months ended September 30, 2013
Allowance for loan and lease losses:
Beginning balance	$	116,619		$	53,339		$	8,004		$	8,335		$	5,400		$	1,355		$	96,862		$	289,914
Charge-offs	(488		)	(1,270		)	—			—			(225		)	(18		)	—			(2,001		)
Recoveries	4,863			686			40			2,945			31			218			—			8,783
Net recoveries (charge-offs)	4,375			(584		)	40			2,945			(194		)	200			—			6,782
(Reversal of) provision for credit losses	(14,173		)	(2,829		)	5,070			(1,589		)	3,092			317			10,112			—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(749		)	(749		)
Ending balance	$	106,821		$	49,926		$	13,114		$	9,691		$	8,298		$	1,872		$	106,225		$	295,947
Nine months ended September 30, 2013
Allowance for loan and lease losses:
Beginning balance	$	104,731		$	48,901		$	10,558		$	11,784		$	7,283		$	1,858		$	92,773		$	277,888
Charge-offs	(4,719		)	(1,315		)	(106		)	(100		)	(500		)	(370		)	—			(7,110		)
Recoveries	14,122			1,768			115			8,393			569			1,238			—			26,205
Net recoveries	9,403			453			9			8,293			69			868			—			19,095
(Reversal of) provision for credit losses	(7,313		)	572			2,547			(10,386		)	946			(854		)	14,488			—
Transfers to reserve for off-balance sheet credit commitments	—			—			—			—			—			—			(1,036		)	(1,036		)
Ending balance	$	106,821		$	49,926		$	13,114		$	9,691		$	8,298		$	1,872		$	106,225		$	295,947
Ending balance of allowance:
Individually evaluated for impairment	$	344		$	602		$	232		$	—		$	—		$	—		$	—		$	1,178
Collectively evaluated for impairment	106,477			49,324			12,882			9,691			8,298			1,872			106,225			294,769
Loans and leases, excluding covered loans
Ending balance of loans and leases:
Loans and leases, excluding covered loans	$	7,856,244		$	3,077,183		$	4,418,231		$	380,489		$	681,879		$	152,107		$	—		$	16,566,133
Individually evaluated for impairment	32,727			38,546			6,767			30,190			2,350			—			—			110,580
Collectively evaluated for impairment	7,823,517			3,038,637			4,411,464			350,299			679,529			152,107			—			16,455,553

(1) Includes lease financing loans.

Summary of activity in the reserve for off-balance sheet credit commitments

	For the three months ended September 30,				For the nine months ended September 30,
(in thousands)	2014		2013		2014			2013
Balance, beginning of period	$	24,787	$	25,124	$	33,944		$	24,837
Transfers from (to) allowance for loan and lease losses	1,123		749		(8,034		)	1,036
Balance, end of period	$	25,910	$	25,873	$	25,910		$	25,873

Schedule of impaired loans, excluding covered loans

			Unpaid				For the three months ended September 30, 2014				For the nine months ended September 30, 2014
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
September 30, 2014
With no related allowance recorded:
Commercial	$	6,653	$	6,684	$	—	$	6,817	$	38	$	10,653	$	205
Commercial real estate mortgages	20,347		22,698		—		24,290		219		29,478		903
Residential mortgages:
Fixed	2,015		2,254		—		3,406		10		3,459		30
Variable	5,770		5,885		—		3,784		40		3,997		68
Total residential mortgages	7,785		8,139		—		7,190		50		7,456		98
Real estate construction:
Construction	—		—		—		—		—		2,742		76
Land	6,610		8,758		—		9,728		35		11,593		104
Total real estate construction	6,610		8,758		—		9,728		35		14,335		180
Home equity loans and lines of credit	2,313		3,375		—		2,874		—		2,881		—
Installment:
Consumer	—		—		—		—		1		4		1
Total installment	—		—		—		—		1		4		1
Total with no related allowance	$	43,708	$	49,654	$	—	$	50,899	$	343	$	64,807	$	1,387
With an allowance recorded:
Commercial	$	9,663	$	12,134	$	1,304	$	15,957	$	—	$	15,869	$	—
Commercial real estate mortgages	5,204		5,557		291		5,214		73		5,293		191
Residential mortgages:
Variable	—		—		—		2,000		—		1,419		11
Total residential mortgages	—		—		—		2,000		—		1,419		11
Installment:
Consumer	—		—		—		25		—		12		1
Total installment	—		—		—		25		—		12		1
Total with an allowance	$	14,867	$	17,691	$	1,595	$	23,196	$	73	$	22,593	$	203
Total impaired loans by type:
Commercial	$	16,316	$	18,818	$	1,304	$	22,774	$	38	$	26,522	$	205
Commercial real estate mortgages	25,551		28,255		291		29,504		292		34,771		1,094
Residential mortgages	7,785		8,139		—		9,190		50		8,875		109
Real estate construction	6,610		8,758		—		9,728		35		14,335		180
Home equity loans and lines of credit	2,313		3,375		—		2,874		—		2,881		—
Installment	—		—		—		25		1		16		2
Total impaired loans	$	58,575	$	67,345	$	1,595	$	74,095	$	416	$	87,400	$	1,590

(in thousands)	Recorded Investment		Unpaid Contractual Principal Balance		Related Allowance
Year ended December 31, 2013
With no related allowance recorded:
Commercial	$	17,721	$	18,041	$	—
Commercial real estate mortgages	32,770		37,555		—
Residential mortgages:
Fixed	2,135		2,295		—
Variable	5,402		5,783		—
Total residential mortgages	7,537		8,078		—
Real estate construction:
Construction	5,485		6,766		—
Land	13,612		26,928		—
Total real estate construction	19,097		33,694		—
Home equity loans and lines of credit	2,329		3,375		—
Installment:
Consumer	16		24		—
Total installment	16		24		—
Total with no related allowance	$	79,470	$	100,767	$	—
With an allowance recorded:
Commercial	$	14,136	$	18,156	$	1,961
Commercial real estate mortgages	5,384		5,764		586
Residential mortgages:
Variable	1,674		1,687		478
Total residential mortgages	1,674		1,687		478
Total with an allowance	$	21,194	$	25,607	$	3,025
Total impaired loans by type:
Commercial	$	31,857	$	36,197	$	1,961
Commercial real estate mortgages	38,154		43,319		586
Residential mortgages	9,211		9,765		478
Real estate construction	19,097		33,694		—
Home equity loans and lines of credit	2,329		3,375		—
Installment	16		24		—
Total impaired loans	$	100,664	$	126,374	$	3,025

			Unpaid				For the three months ended September 30, 2013				For the nine months ended September 30, 2013
(in thousands)	Recorded Investment		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
September 30, 2013
With no related allowance recorded:
Commercial	$	25,233	$	25,488	$	—	$	26,255	$	593	$	22,584	$	1,440
Commercial real estate mortgages	33,133		37,754		—		29,977		440		33,060		1,102
Residential mortgages:
Fixed	2,031		2,155		—		2,019		33		2,860		75
Variable	3,062		3,418		—		3,670		47		4,062		116
Total residential mortgages	5,093		5,573		—		5,689		80		6,922		191
Real estate construction:
Construction	16,259		21,064		—		16,262		233		17,904		791
Land	13,931		27,092		—		14,056		224		16,506		511
Total real estate construction	30,190		48,156		—		30,318		457		34,410		1,302
Home equity loans and lines of credit	2,350		3,375		—		2,803		47		2,827		81
Installment:
Consumer	—		—		—		—		—		112		—
Total installment	—		—		—		—		—		112		—
Total with no related allowance	$	95,999	$	120,346	$	—	$	95,042	$	1,617	$	99,915	$	4,116
With an allowance recorded:
Commercial	$	7,494	$	9,168	$	344	$	7,567	$	156	$	7,556	$	513
Commercial real estate mortgages	5,413		5,810		602		10,262		45		11,018		361
Residential mortgages:
Fixed	—		—		—		—		—		116		—
Variable	1,674		1,688		232		1,684		14		842		55
Total residential mortgages	1,674		1,688		232		1,684		14		958		55
Real estate construction:
Land	—		—		—		—		—		3,213		213
Total real estate construction	—		—		—		—		—		3,213		213
Home equity loans and lines of credit	—		—		—		—		—		225		—
Total with an allowance	$	14,581	$	16,666	$	1,178	$	19,513	$	215	$	22,970	$	1,142
Total impaired loans by type:
Commercial	$	32,727	$	34,656	$	344	$	33,822	$	749	$	30,140	$	1,953
Commercial real estate mortgages	38,546		43,564		602		40,239		485		44,078		1,463
Residential mortgages	6,767		7,261		232		7,373		94		7,880		246
Real estate construction	30,190		48,156		—		30,318		457		37,623		1,515
Home equity loans and lines of credit	2,350		3,375		—		2,803		47		3,052		81
Installment	—		—		—		—		—		112		—
Total impaired loans	$	110,580	$	137,012	$	1,178	$	114,555	$	1,832	$	122,885	$	5,258

Schedule of troubled debt restructured loans

The following table provides a summary of loans modified in a troubled debt restructuring during the three months ended September 30, 2013:

(in thousands)	Number of Contracts	Pre-Modification Outstanding Principal		Period-End Outstanding Principal		Financial Effects (1)
Three months ended September 30, 2013
Commercial	2	$	7,575	$	7,486	$	344
Total troubled debt restructured loans	2	$	7,575	$	7,486	$	344

(1) Financial effects are comprised of charge-offs and specific reserves recognized on TDR loans at modification date.

The following table provides a summary of loans modified in a troubled debt restructuring during the nine months ended September 30, 2014 and 2013:

(in thousands)	Number of Contracts	Pre-Modification Outstanding Principal		Period-End Outstanding Principal		Financial Effects (1)
Nine months ended September 30, 2014
Commercial	2	$	4,098	$	3,799	$	—
Residential mortgages:
Variable	2	4,676		4,647		5
Installment:
Consumer	1	50		—		50
Total troubled debt restructured loans	5	$	8,824	$	8,446	$	55
Nine months ended September 30, 2013
Commercial	12	$	16,258	$	13,624	$	344
Commercial real estate mortgages	1	547		533		—
Home equity loans and lines of credit	1	345		—		—
Total troubled debt restructured loans	14	$	17,150	$	14,157	$	344

(1) Financial effects are comprised of charge-offs and specific reserves recognized on TDR loans at modification date.

Schedule of troubled debt restructured loans that have subsequently defaulted

	For nine months ended September 30, 2013
(in thousands)	Number of Contracts	Period-End Outstanding Principal		Period-End Specific Reserve
Commercial	4	$	896	$	—
Real estate construction:
Land	1	7,244		—
Home equity loans and lines of credit	1	139		—
Total loans that subsequently defaulted	6	$	8,279	$	—

Summary of past due loans, excluding covered loans, based upon the length of time the loans have been past due

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and Accruing		Nonaccrual		Total Past Due and Nonaccrual Loans		Current		Total Loans and Leases
September 30, 2014
Commercial	$	4,017	$	2,971	$	—	$	14,578	$	21,566	$	8,591,125	$	8,612,691
Commercial real estate mortgages	265		501		—		3,691		4,457		3,560,731		3,565,188
Residential mortgages:
Fixed	—		3,625		6,145		3,911		13,681		1,410,232		1,423,913
Variable	—		5,259		—		2,257		7,516		3,591,784		3,599,300
Total residential mortgages	—		8,884		6,145		6,168		21,197		5,002,016		5,023,213
Real estate construction:
Construction	—		—		—		—		—		565,507		565,507
Land	—		—		—		6,598		6,598		13,127		19,725
Total real estate construction	—		—		—		6,598		6,598		578,634		585,232
Home equity loans and lines of credit	100		1,972		387		4,776		7,235		752,023		759,258
Installment:
Commercial	—		—		—		—		—		303		303
Consumer	280		85		292		42		699		177,801		178,500
Total installment	280		85		292		42		699		178,104		178,803
Lease financing	63		18		—		66		147		623,456		623,603
Total	$	4,725	$	14,431	$	6,824	$	35,919	$	61,899	$	19,286,089	$	19,347,988

(in thousands) (1)	30-59 Days  Past Due		60-89 Days  Past Due		Greater  Than 90  Days and  Accruing		Nonaccrual		Total Past  Due and  Nonaccrual  Loans		Current		Total Loans and Leases
December 31, 2013
Commercial	$	6,582	$	362	$	—	$	14,248	$	21,192	$	7,541,108	$	7,562,300
Commercial real estate mortgages	1,197		1,633		—		18,449		21,279		3,201,722		3,223,001
Residential mortgages:
Fixed	—		—		379		3,789		4,168		1,436,283		1,440,451
Variable	—		—		—		7,872		7,872		3,105,988		3,113,860
Total residential mortgages	—		—		379		11,661		12,040		4,542,271		4,554,311
Real estate construction:
Construction	—		—		—		5,467		5,467		332,131		337,598
Land	—		797		—		13,600		14,397		15,009		29,406
Total real estate construction	—		797		—		19,067		19,864		347,140		367,004
Home equity loans and lines of credit	—		—		74		5,144		5,218		704,126		709,344
Installment:
Commercial	1		—		—		—		1		361		362
Consumer	10		7		—		32		49		151,544		151,593
Total installment	11		7		—		32		50		151,905		151,955
Lease financing	401		126		—		50		577		601,946		602,523
Total	$	8,191	$	2,925	$	453	$	68,651	$	80,220	$	17,090,218	$	17,170,438

(1) Commercial loans as of December 31, 2013 have been corrected to include $158.2 million of loans that were previously reported as lease financing.

Summary of the loan and lease portfolio, excluding covered loans, by loan type and credit quality classification

	September 30, 2014						December 31, 2013
(in thousands) (1)	Nonclassified		Classified		Total		Nonclassified		Classified		Total
Commercial	$	8,533,130	$	79,561	$	8,612,691	$	7,416,487	$	145,813	$	7,562,300
Commercial real estate mortgages	3,524,848		40,340		3,565,188		3,139,707		83,294		3,223,001
Residential mortgages:
Fixed	1,396,708		27,205		1,423,913		1,425,087		15,364		1,440,451
Variable	3,567,505		31,795		3,599,300		3,087,636		26,224		3,113,860
Total residential mortgages	4,964,213		59,000		5,023,213		4,512,723		41,588		4,554,311
Real estate construction:
Construction	565,507		—		565,507		332,131		5,467		337,598
Land	13,127		6,598		19,725		15,522		13,884		29,406
Total real estate construction	578,634		6,598		585,232		347,653		19,351		367,004
Home equity loans and lines of credit	728,078		31,180		759,258		687,732		21,612		709,344
Installment:
Commercial	303		—		303		362		—		362
Consumer	177,407		1,093		178,500		151,468		125		151,593
Total installment	177,710		1,093		178,803		151,830		125		151,955
Lease financing	619,664		3,939		623,603		598,821		3,702		602,523
Total	$	19,126,277	$	221,711	$	19,347,988	$	16,854,953	$	315,485	$	17,170,438

(1) Commercial loans as of December 31, 2013 have been corrected to include $158.2 million of loans that were previously reported as lease financing.

Summary of the allowance for loan losses on covered loans

	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2014			2013			2014			2013
Balance, beginning of period	$	9,103		$	24,414		$	15,922		$	44,781
Provision for losses	589			2,496			3,783			461
Reduction in allowance due to loan removals	(324		)	(1,028		)	(10,337		)	(19,360		)
Balance, end of period	$	9,368		$	25,882		$	9,368		$	25,882