Loans and leases and the allowance for credit losses (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Current, Past Due and Nonaccrual Loans

A summary of current, past due and nonaccrual loans as of March 31, 2019 and December 31, 2018 follows:

	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More (a)		Accruing Loans Acquired at a Discount Past Due 90 days or More (b)		Purchased Impaired (c)		Nonaccrual		Total
	(In thousands)
March 31, 2019
Commercial, financial, leasing, etc.	$	22,701,500		141,555		1,047		283		—		245,819	$	23,090,204
Real estate:
Commercial		25,441,419		159,209		7,394		158		10,305		207,709		25,826,194
Residential builder and developer		1,738,846		2,190		—		—		549		4,392		1,745,977
Other commercial construction		7,036,036		31,152		31,032		—		640		19,899		7,118,759
Residential		13,337,558		406,106		199,940		6,425		187,631		210,266		14,347,926
Residential — limited documentation		2,186,132		71,354		—		—		79,658		84,863		2,422,007
Consumer:
Home equity lines and loans		4,634,634		31,145		—		4,871		—		69,245		4,739,895
Recreational finance		4,295,732		22,549		—		235		—		10,972		4,329,488
Automobile		3,619,015		62,846		—		—		—		21,209		3,703,070
Other		1,257,839		14,420		4,844		32,023		—		7,237		1,316,363
Total	$	86,248,711		942,526		244,257		43,995		278,783		881,611	$	88,639,883

December 31, 2018
Commercial, financial, leasing, etc.	$	22,701,020		39,798		2,567		168		—		234,423	$	22,977,976
Real estate:
Commercial		25,250,983		134,474		11,457		10		9,769		203,672		25,610,365
Residential builder and developer		1,665,178		20,333		—		—		—		4,798		1,690,309
Other commercial construction		6,982,077		43,615		14,344		—		641		22,205		7,062,882
Residential		13,591,790		404,808		189,682		6,650		203,044		233,352		14,629,326
Residential — limited documentation		2,278,040		72,544		—		—		89,851		84,685		2,525,120
Consumer:
Home equity lines and loans		4,758,513		25,416		—		5,033		—		71,292		4,860,254
Recreational finance		4,085,781		29,947		—		235		—		11,199		4,127,162
Automobile		3,555,757		79,804		—		—		—		23,359		3,658,920
Other		1,271,811		15,598		4,477		27,654		—		4,623		1,324,163
Total	$	86,140,950		866,337		222,527		39,750		303,305		893,608	$	88,466,477

(a)	Excludes loans acquired at a discount.

(b)	Loans acquired at a discount that were recorded at fair value at acquisition date. This category does not include purchased impaired loans that are presented separately.

(c)	Accruing loans acquired at a discount that were impaired at acquisition date and recorded at fair value.

Outstanding Principal Balance and Carrying Amount of Loans and Included in Consolidated Balance Sheet

The outstanding principal balance and the carrying amount of loans acquired at a discount that were recorded at fair value at the acquisition date and included in the consolidated balance sheet were as follows:

	March 31,		December 31,
	2019		2018
	(In thousands)

Outstanding principal balance	$	960,990	$	1,016,785
Carrying amount:
Commercial, financial, leasing, etc.		25,060		27,073
Commercial real estate		125,310		135,047
Residential real estate		442,260		473,511
Consumer		93,486		91,860
	$	686,116	$	727,491

Summary of Changes in Accretable Yield for Acquired Loans

A summary of changes in the accretable yield for loans acquired at a discount for the three months ended March 31, 2019 and 2018 follows:

	Three Months Ended March 31
	2019						2018
	Purchased			Other			Purchased			Other
	Impaired			Acquired			Impaired			Acquired
	(In thousands)

Balance at beginning of period	$	147,210		$	96,907		$	157,918		$	133,162
Interest income		(18,082	)		(9,717	)		(9,819	)		(15,112	)
Reclassifications from nonaccretable balance		11,189			4,865			908			207
Other (a)		—			1,632			—			(73	)
Balance at end of period	$	140,317		$	93,687		$	149,007		$	118,184

(a)	Other changes in expected cash flows including changes in interest rates and prepayment assumptions.

Changes in Allowance for Credit Losses

Changes in the allowance for credit losses for the three months ended March 31, 2019 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated			Total
	(In thousands)

Beginning balance	$	330,055			341,655			69,125			200,564			78,045		$	1,019,444
Provision for credit losses		6,271			(4,203	)		(2,447	)		22,883			(504	)		22,000
Net charge-offs
Charge-offs		(8,500	)		(283	)		(3,372	)		(32,945	)		—			(45,100	)
Recoveries		7,794			826			1,830			12,543			—			22,993
Net (charge-offs) recoveries		(706	)		543			(1,542	)		(20,402	)		—			(22,107	)
Ending balance	$	335,620			337,995			65,136			203,045			77,541		$	1,019,337

Changes in the allowance for credit losses for the three months ended March 31, 2018 were as follows:

	Commercial, Financial,			Real Estate
	Leasing, etc.			Commercial			Residential			Consumer			Unallocated		Total
	(In thousands)

Beginning balance	$	328,599			374,085			65,405			170,809			78,300	$	1,017,198
Provision for credit losses		7,230			(5,225	)		10,486			29,814			695		43,000
Net charge-offs
Charge-offs		(14,581	)		(1,366	)		(4,354	)		(36,451	)		—		(56,752	)
Recoveries		4,823			223			1,510			9,669			—		16,225
Net (charge-offs) recoveries		(9,758	)		(1,143	)		(2,844	)		(26,782	)		—		(40,527	)
Ending balance	$	326,071			367,717			73,047			173,841			78,995	$	1,019,671

Impaired Loans and Leases

Information with respect to loans and leases that were considered impaired as of March 31, 2019 and December 31, 2018 and for the three-month periods ended March 31, 2019 and 2018 follows.

	March 31, 2019						December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With an allowance recorded:
Commercial, financial, leasing, etc.	$	201,337		220,116		50,192		153,478		175,549		46,034
Real estate:
Commercial		102,247		119,062		10,449		110,253		125,117		11,937
Residential builder and developer		6,805		7,399		327		5,981		6,557		462
Other commercial construction		10,696		13,624		703		10,563		11,113		640
Residential		121,351		142,872		5,291		124,974		147,817		5,402
Residential — limited documentation		71,113		86,276		3,000		74,156		90,066		3,000
Consumer:
Home equity lines and loans		47,363		52,583		9,025		47,982		53,248		9,135
Recreational finance		5,539		5,740		1,147		6,138		9,163		1,261
Automobile		3,522		3,603		729		3,527		3,599		729
Other		5,612		11,902		1,128		5,203		8,380		1,046
		575,585		663,177		81,991		542,255		630,609		79,646
With no related allowance recorded:
Commercial, financial, leasing, etc.		91,355		97,342		—		105,507		136,128		—
Real estate:
Commercial		125,289		138,095		—		113,376		124,657		—
Residential builder and developer		2,756		2,781		—		2,593		2,602		—
Other commercial construction		9,203		9,432		—		11,710		11,880		—
Residential		19,535		25,771		—		15,379		20,496		—
Residential — limited documentation		6,145		10,434		—		5,631		9,796		—
		254,283		283,855		—		254,196		305,559		—
Total:
Commercial, financial, leasing, etc.		292,692		317,458		50,192		258,985		311,677		46,034
Real estate:
Commercial		227,536		257,157		10,449		223,629		249,774		11,937
Residential builder and developer		9,561		10,180		327		8,574		9,159		462
Other commercial construction		19,899		23,056		703		22,273		22,993		640
Residential		140,886		168,643		5,291		140,353		168,313		5,402
Residential — limited documentation		77,258		96,710		3,000		79,787		99,862		3,000
Consumer:
Home equity lines and loans		47,363		52,583		9,025		47,982		53,248		9,135
Recreational finance		5,539		5,740		1,147		6,138		9,163		1,261
Automobile		3,522		3,603		729		3,527		3,599		729
Other		5,612		11,902		1,128		5,203		8,380		1,046
Total	$	829,868		947,032		81,991		796,451		936,168		79,646

Interest Income Recognized on Impaired Loans

	Three Months Ended March 31, 2019						Three Months Ended March 31, 2018
			Interest Income Recognized						Interest Income Recognized
	Average Recorded Investment		Total		Cash Basis		Average Recorded Investment		Total		Cash Basis
	(In thousands)

Commercial, financial, leasing, etc.	$	265,248		3,038		3,038		272,172		783		783
Real estate:
Commercial		225,374		1,091		1,091		181,846		3,147		3,147
Residential builder and developer		8,875		115		115		9,840		1,682		1,682
Other commercial construction		20,398		564		564		10,102		6		6
Residential		140,403		2,022		666		121,209		1,902		902
Residential — limited documentation		78,238		1,353		208		85,595		1,728		696
Consumer:
Home equity lines and loans		47,556		416		62		48,797		414		86
Recreational finance		6,023		142		4		1,458		63		2
Automobile		3,530		54		19		13,125		224		15
Other		5,218		122		4		1,661		22		1
Total	$	800,863		8,917		5,771		745,805		9,971		7,320

Summary of Loan Grades

The following table summarizes the loan grades applied to the various classes of the Company’s commercial loans and commercial real estate loans.

			Real Estate
	Commercial,				Residential		Other
	Financial,				Builder and		Commercial
	Leasing, etc.		Commercial		Developer		Construction
	(In thousands)
March 31, 2019
Pass	$	21,734,455		24,686,100		1,535,068		6,870,882
Criticized accrual		1,109,930		932,385		206,517		227,978
Criticized nonaccrual		245,819		207,709		4,392		19,899
Total	$	23,090,204		25,826,194		1,745,977		7,118,759
December 31, 2018
Pass	$	21,693,705		24,539,706		1,546,002		6,890,562
Criticized accrual		1,049,848		866,987		139,509		150,115
Criticized nonaccrual		234,423		203,672		4,798		22,205
Total	$	22,977,976		25,610,365		1,690,309		7,062,882

Allocation of Allowance for Credit Losses on Basis of Company's Impairment Methodology

The allocation of the allowance for credit losses summarized on the basis of the Company’s impairment methodology was as follows:

	Commercial, Financial,		Real Estate
	Leasing, etc.		Commercial		Residential		Consumer		Total
	(In thousands)
March 31, 2019
Individually evaluated for impairment	$	50,192		11,479		8,291		12,029	$	81,991
Collectively evaluated for impairment		285,428		326,516		47,028		191,016		849,988
Purchased impaired		—		—		9,817		—		9,817
Allocated	$	335,620		337,995		65,136		203,045		941,796
Unallocated										77,541
Total									$	1,019,337
December 31, 2018
Individually evaluated for impairment	$	46,034		13,039		8,402		12,171	$	79,646
Collectively evaluated for impairment		284,021		328,616		48,326		188,393		849,356
Purchased impaired		—		—		12,397		—		12,397
Allocated	$	330,055		341,655		69,125		200,564		941,399
Unallocated										78,045
Total									$	1,019,444

Recorded Investment in Loans and Leases on Basis of Company's Impairment Methodology

The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology was as follows:

	Commercial, Financial,		Real Estate
	Leasing, etc.		Commercial		Residential		Consumer		Total
	(In thousands)
March 31, 2019
Individually evaluated for impairment	$	292,692		256,996		218,144		62,036	$	829,868
Collectively evaluated for impairment		22,797,512		34,422,440		16,284,500		14,026,780		87,531,232
Purchased impaired		—		11,494		267,289		—		278,783
Total	$	23,090,204		34,690,930		16,769,933		14,088,816	$	88,639,883
December 31, 2018
Individually evaluated for impairment	$	258,985		254,476		220,140		62,850	$	796,451
Collectively evaluated for impairment		22,718,991		34,098,670		16,641,411		13,907,649		87,366,721
Purchased impaired		—		10,410		292,895		—		303,305
Total	$	22,977,976		34,363,556		17,154,446		13,970,499	$	88,466,477

Loan Modification Activities that were Considered Troubled Debt Restructurings

The table that follows summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the three-month periods ended March 31, 2019 and 2018:

					Post-modification (a)
	Number		Pre- modification Recorded Investment		Principal Deferral		Interest Rate Reduction		Combination of Concession Types		Total
Three Months Ended March 31, 2019	(Dollars in thousands)

Commercial, financial, leasing, etc.	65		$	30,615	$	6,474	$	—	$	24,270	$	30,744
Real estate:
Commercial		15		9,241		987		—		7,967		8,954
Residential builder and developer		2		1,330		1,068		—		—		1,068
Other commercial construction		1		418		—		—		366		366
Residential		17		3,816		1,751		—		2,273		4,024
Residential — limited documentation		1		236		239		—		—		239
Consumer:
Home equity lines and loans		7		476		37		—		454		491
Recreational finance		4		88		88		—		—		88
Automobile		20		317		280		—		37		317
Total		132	$	46,537	$	10,924	$	—	$	35,367	$	46,291

Three Months Ended March 31, 2018

Commercial, financial, leasing, etc.		56	$	47,994	$	35,673	$	624	$	13,047	$	49,344
Real estate:
Commercial		20		6,780		5,824		—		927		6,751
Other commercial construction		1		752		746		—		—		746
Residential		47		12,636		6,945		—		6,902		13,847
Residential — limited documentation		2		295		267		—		118		385
Consumer:
Home equity lines and loans		14		1,348		4		—		1,348		1,352
Recreational finance		2		49		49		—		—		49
Automobile		8		148		148		—		—		148
Total		150	$	70,002	$	49,656	$	624	$	22,342	$	72,622

(a)	Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

Summary of Lease Financing Receivables

A summary of lease financing receivables follows:

	March 31,			December 31,
	2019			2018
	(In thousands)
Commercial leases:
Direct financings:
Lease payments receivable	$	1,140,794		$	1,155,464
Estimated residual value of leased assets		82,686			85,169
Unearned income		(106,797	)		(110,458	)
Investment in direct financings		1,116,683			1,130,175
Leveraged leases:
Lease payments receivable		82,841			85,007
Estimated residual value of leased assets		81,261			81,261
Unearned income		(33,273	)		(33,717	)
Investment in leveraged leases		130,829			132,551
Total investment in leases	$	1,247,512		$	1,262,726
Deferred taxes payable arising from leveraged leases	$	73,808		$	74,995

Minimum Future Lease Payments to be Received from Lease Financings

At March 31, 2019, the minimum future lease payments to be received from lease financings were as follows:

	(In thousands)
Twelve-month period ending March 31:
2020	$	322,403
2021		302,912
2022		220,516
2023		148,313
2024		84,610
Later years		144,881
	$	1,223,635