Loans

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Loans

Loans

The period end loan composition was as follows.

	June 30, 2016		December 31, 2015
	($ in Thousands)
Commercial and industrial	$	6,701,986	$	6,190,683
Commercial real estate — owner occupied	921,736		918,212
Commercial and business lending	7,623,722		7,108,895
Commercial real estate — investor	3,495,791		3,234,266
Real estate construction	1,285,573		1,162,145
Commercial real estate lending	4,781,364		4,396,411
Total commercial	12,405,086		11,505,306
Residential mortgage	6,035,720		5,783,267
Home equity	968,771		1,005,802
Other consumer	405,709		419,968
Total consumer	7,410,200		7,209,037
Total loans	$	19,815,286	$	18,714,343

The following table presents commercial and consumer loans by credit quality indicator at June 30, 2016.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	5,910,730	$	217,999	$	379,818	$	193,439	$	6,701,986
Commercial real estate - owner occupied	826,327		40,103		45,671		9,635		921,736
Commercial and business lending	6,737,057		258,102		425,489		203,074		7,623,722
Commercial real estate - investor	3,436,680		22,502		25,081		11,528		3,495,791
Real estate construction	1,281,526		973		2,117		957		1,285,573
Commercial real estate lending	4,718,206		23,475		27,198		12,485		4,781,364
Total commercial	11,455,263		281,577		452,687		215,559		12,405,086
Residential mortgage	5,975,297		4,170		3,953		52,300		6,035,720
Home equity	952,727		1,587		94		14,363		968,771
Other consumer	404,894		435		—		380		405,709
Total consumer	7,332,918		6,192		4,047		67,043		7,410,200
Total	$	18,788,181	$	287,769	$	456,734	$	282,602	$	19,815,286

The following table presents commercial and consumer loans by credit quality indicator at December 31, 2015.

	Pass		Special Mention		Potential Problem		Nonaccrual		Total
	($ in Thousands)
Commercial and industrial	$	5,522,809	$	341,169	$	233,130	$	93,575	$	6,190,683
Commercial real estate - owner occupied	835,572		38,885		35,706		8,049		918,212
Commercial and business lending	6,358,381		380,054		268,836		101,624		7,108,895
Commercial real estate - investor	3,153,703		45,976		25,944		8,643		3,234,266
Real estate construction	1,157,034		252		3,919		940		1,162,145
Commercial real estate lending	4,310,737		46,228		29,863		9,583		4,396,411
Total commercial	10,669,118		426,282		298,699		111,207		11,505,306
Residential mortgage	5,727,437		1,552		2,796		51,482		5,783,267
Home equity	988,574		1,762		222		15,244		1,005,802
Other consumer	419,087		556		—		325		419,968
Total consumer	7,135,098		3,870		3,018		67,051		7,209,037
Total	$	17,804,216	$	430,152	$	301,717	$	178,258	$	18,714,343

Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate allowance for loan losses, allowance for unfunded commitments, nonaccrual, and charge off policies.

For commercial loans, management has determined the pass credit quality indicator to include credits that exhibit acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits that are performing in accordance with the original contractual terms. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that deserve management’s attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, that may jeopardize liquidation of the debt and are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Lastly, management considers a loan to be impaired when it is probable that the Corporation will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that commercial and consumer loan relationships that have nonaccrual status or have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. Commercial loans classified as special mention, potential problem, and nonaccrual loans are reviewed at a minimum on a quarterly basis, while pass rated credits are reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

The following table presents loans by past due status at June 30, 2016.

	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due (a)		Nonaccrual (b)		Total
	($ in Thousands)
Commercial and industrial	$	6,506,175	$	1,755	$	369	$	248	$	193,439	$	6,701,986
Commercial real estate - owner occupied	911,908		193		—		—		9,635		921,736
Commercial and business lending	7,418,083		1,948		369		248		203,074		7,623,722
Commercial real estate - investor	3,481,548		2,715		—		—		11,528		3,495,791
Real estate construction	1,284,092		427		97		—		957		1,285,573
Commercial real estate lending	4,765,640		3,142		97		—		12,485		4,781,364
Total commercial	12,183,723		5,090		466		248		215,559		12,405,086
Residential mortgage	5,976,038		7,040		342		—		52,300		6,035,720
Home equity	946,678		6,150		1,580		—		14,363		968,771
Other consumer	402,188		1,313		582		1,246		380		405,709
Total consumer	7,324,904		14,503		2,504		1,246		67,043		7,410,200
Total	$	19,508,627	$	19,593	$	2,970	$	1,494	$	282,602	$	19,815,286

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $1 million at June 30, 2016 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$236 million or 84% were current with respect to payment at June 30, 2016.

The following table presents loans by past due status at December 31, 2015.

	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due (a)		Nonaccrual (b)		Total
	($ in Thousands)
Commercial and industrial	$	6,095,848	$	602	$	409	$	249	$	93,575	$	6,190,683
Commercial real estate - owner occupied	903,021		7,142		—		—		8,049		918,212
Commercial and business lending	6,998,869		7,744		409		249		101,624		7,108,895
Commercial real estate - investor	3,225,332		291		—		—		8,643		3,234,266
Real estate construction	1,160,909		270		26		—		940		1,162,145
Commercial real estate lending	4,386,241		561		26		—		9,583		4,396,411
Total commercial	11,385,110		8,305		435		249		111,207		11,505,306
Residential mortgage	5,726,855		4,491		439		—		51,482		5,783,267
Home equity	982,639		6,190		1,729		—		15,244		1,005,802
Other consumer	416,374		1,195		675		1,399		325		419,968
Total consumer	7,125,868		11,876		2,843		1,399		67,051		7,209,037
Total	$	18,510,978	$	20,181	$	3,278	$	1,648	$	178,258	$	18,714,343

(a) The recorded investment in loans past due 90 days or more and still accruing totaled $2 million at December 31, 2015 (the same as the reported balances for the accruing loans noted above).

(b) Of the total nonaccrual loans,$124 million or 69% were current with respect to payment at December 31, 2015.

The following table presents impaired loans at June 30, 2016.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	30,866	$	31,402	$	675	$	30,915	$	443
Commercial real estate — owner occupied	10,746		10,917		622		10,904		189
Commercial and business lending	41,612		42,319		1,297		41,819		632
Commercial real estate — investor	21,983		22,782		694		22,387		943
Real estate construction	1,329		1,801		530		1,356		34
Commercial real estate lending	23,312		24,583		1,224		23,743		977
Total commercial	64,924		66,902		2,521		65,562		1,609
Residential mortgage	64,547		69,517		11,684		65,674		1,151
Home equity	20,668		22,613		9,741		21,092		535
Other consumer	1,286		1,346		254		1,316		18
Total consumer	86,501		93,476		21,679		88,082		1,704
Total loans	$	151,425	$	160,378	$	24,200	$	153,644	$	3,313
Loans with no related allowance
Commercial and industrial	$	191,752	$	212,763	$	—	$	193,553	$	348
Commercial real estate — owner occupied	6,398		8,854		—		6,580		—
Commercial and business lending	198,150		221,617		—		200,133		348
Commercial real estate — investor	9,736		10,032		—		9,809		—
Real estate construction	—		—		—		—		—
Commercial real estate lending	9,736		10,032		—		9,809		—
Total commercial	207,886		231,649		—		209,942		348
Residential mortgage	6,067		6,331		—		6,138		96
Home equity	650		651		—		652		20
Other consumer	—		—		—		—		—
Total consumer	6,717		6,982		—		6,790		116
Total loans	$	214,603	$	238,631	$	—	$	216,732	$	464
Total
Commercial and industrial	$	222,618	$	244,165	$	675	$	224,468	$	791
Commercial real estate — owner occupied	17,144		19,771		622		17,484		189
Commercial and business lending	239,762		263,936		1,297		241,952		980
Commercial real estate — investor	31,719		32,814		694		32,196		943
Real estate construction	1,329		1,801		530		1,356		34
Commercial real estate lending	33,048		34,615		1,224		33,552		977
Total commercial	272,810		298,551		2,521		275,504		1,957
Residential mortgage	70,614		75,848		11,684		71,812		1,247
Home equity	21,318		23,264		9,741		21,744		555
Other consumer	1,286		1,346		254		1,316		18
Total consumer	93,218		100,458		21,679		94,872		1,820
Total loans(a)	$	366,028	$	399,009	$	24,200	$	370,376	$	3,777

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 86% of the unpaid principal balance at June 30, 2016.

The following table presents impaired loans at December 31, 2015.

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	($ in Thousands)
Loans with a related allowance
Commercial and industrial	$	57,785	$	59,409	$	8,162	$	46,833	$	855
Commercial real estate — owner occupied	9,705		9,804		448		10,087		412
Commercial and business lending	67,490		69,213		8,610		56,920		1,267
Commercial real estate — investor	27,822		29,444		1,831		28,278		1,914
Real estate construction	1,450		2,154		453		1,667		66
Commercial real estate lending	29,272		31,598		2,284		29,945		1,980
Total commercial	96,762		100,811		10,894		86,865		3,247
Residential mortgage	66,590		71,084		12,462		68,183		2,374
Home equity	21,769		23,989		10,118		22,624		1,147
Other consumer	1,154		1,225		195		1,199		30
Total consumer	89,513		96,298		22,775		92,006		3,551
Total loans	$	186,275	$	197,109	$	33,669	$	178,871	$	6,798
Loans with no related allowance
Commercial and industrial	$	65,083	$	72,259	$	—	$	79,573	$	1,657
Commercial real estate — owner occupied	6,221		6,648		—		6,534		15
Commercial and business lending	71,304		78,907		—		86,107		1,672
Commercial real estate — investor	2,736		2,840		—		2,763		90
Real estate construction	—		—		—		—		—
Commercial real estate lending	2,736		2,840		—		2,763		90
Total commercial	74,040		81,747		—		88,870		1,762
Residential mortgage	4,762		5,033		—		4,726		126
Home equity	544		544		—		544		30
Other consumer	—		—		—		—		—
Total consumer	5,306		5,577		—		5,270		156
Total loans	$	79,346	$	87,324	$	—	$	94,140	$	1,918
Total
Commercial and industrial	$	122,868	$	131,668	$	8,162	$	126,406	$	2,512
Commercial real estate — owner occupied	15,926		16,452		448		16,621		427
Commercial and business lending	138,794		148,120		8,610		143,027		2,939
Commercial real estate — investor	30,558		32,284		1,831		31,041		2,004
Real estate construction	1,450		2,154		453		1,667		66
Commercial real estate lending	32,008		34,438		2,284		32,708		2,070
Total commercial	170,802		182,558		10,894		175,735		5,009
Residential mortgage	71,352		76,117		12,462		72,909		2,500
Home equity	22,313		24,533		10,118		23,168		1,177
Other consumer	1,154		1,225		195		1,199		30
Total consumer	94,819		101,875		22,775		97,276		3,707
Total loans(a)	$	265,621	$	284,433	$	33,669	$	273,011	$	8,716

(a) The net recorded investment (defined as recorded investment, net of the related allowance) of the impaired loans represented 82% of the unpaid principal balance at December 31, 2015.

Troubled Debt Restructurings (“Restructured Loans”):

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. See Note 1 “Summary of Significant Accounting Policies," in the Corporation’s 2015 Annual Report on Form 10-K for the Corporation's accounting policy for troubled debt restructurings. The Corporation had a recorded investment of $8 million in loans modified in troubled debt restructurings for the six months ended June 30, 2016, of which approximately $3 million was in accrual status and $5 million was in nonaccrual pending a sustained period of repayment. The following table presents nonaccrual and performing restructured loans by loan portfolio.

	June 30, 2016				December 31, 2015
	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)
	($ in Thousands)
Commercial and industrial	$	29,179	$	2,536	$	29,293	$	1,714
Commercial real estate — owner occupied	7,509		2,620		7,877		2,703
Commercial real estate — investor	20,191		957		21,915		3,936
Real estate construction	372		94		510		177
Residential mortgage	18,314		24,479		19,870		24,592
Home equity	6,955		4,127		7,069		4,522
Other consumer	906		28		829		40
Total	$	83,426	$	34,841	$	87,363	$	37,684

(a) Nonaccrual restructured loans have been included within nonaccrual loans.

The following table provides the number of loans modified in a troubled debt restructuring by loan portfolio during the six months ended June 30, 2016 and 2015, and the recorded investment and unpaid principal balance as of June 30, 2016 and 2015.

	Six Months Ended June 30, 2016					Six Months Ended June 30, 2015
	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)
	($ in Thousands)
Commercial and industrial	11	$	2,608	$	2,676	6	$	1,847	$	2,296
Commercial real estate — owner occupied	1	120		126		5	3,506		3,636
Commercial real estate — investor	—	—		—		1	2,237		2,237
Real estate construction	—	—		—		1	6		6
Residential mortgage	48	3,942		4,171		52	5,249		5,380
Home equity	37	1,433		1,554		49	1,897		1,898
Total	97	$	8,103	$	8,527	114	$	14,742	$	15,453

(a) Represents post-modification outstanding recorded investment.

(b) Represents pre-modification outstanding recorded investment.

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the six months ended June 30, 2016, restructured loan modifications of commercial and industrial, commercial real estate, and real estate construction loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of home equity and residential mortgage loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the six months ended June 30, 2016.

The following table provides the number of loans modified in a troubled debt restructuring during the previous twelve months which subsequently defaulted during the six months ended June 30, 2016 and 2015, as well as the recorded investment in these restructured loans as of June 30, 2016 and 2015.

	Six Months Ended June 30, 2016			Six Months Ended June 30, 2015
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	($ in Thousands)
Commercial and industrial	—	$	—	1	$	43
Commercial real estate — owner occupied	2	168		1	297
Residential mortgage	25	2,407		29	2,230
Home equity	11	164		22	1,001
Total	38	$	2,739	53	$	3,571

All loans modified in a troubled debt restructuring are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, is considered in the determination of an appropriate level of the allowance for loan losses.

A summary of the changes in the allowance for loan losses by portfolio segment for the six months ended June 30, 2016, was as follows.

$ in Thousands	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2015	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Charge offs	(37,522		)	(106		)	(887		)	(330		)	(2,334		)	(2,702		)	(1,985		)	(45,866		)
Recoveries	4,022			43			1,566			83			345			1,873			450			8,382
Net charge offs	(33,500		)	(63		)	679			(247		)	(1,989		)	(829		)	(1,535		)	(37,484		)
Provision for loan losses	38,128			(2,767		)	(2,666		)	(3,679		)	1,624			(1,224		)	1,584			31,000
June 30, 2016	$	134,587		$	15,850		$	41,031		$	21,340		$	27,896		$	21,502		$	5,574		$	267,780
Allowance for loan losses:
Individually evaluated for impairment	$	—		$	165		$	45		$	—		$	14		$	—		$	—		$	224
Collectively evaluated for impairment	134,587			15,685			40,986			21,340			27,882			21,502			5,574			267,556
Total allowance for loan losses	$	134,587		$	15,850		$	41,031		$	21,340		$	27,896		$	21,502		$	5,574		$	267,780
Loans:
Individually evaluated for impairment	$	191,752		$	7,790		$	10,036		$	—		$	6,800		$	650		$	—		$	217,028
Collectively evaluated for impairment	6,510,234			913,946			3,485,755			1,285,573			6,028,920			968,121			405,709			19,598,258
Total loans	$	6,701,986		$	921,736		$	3,495,791		$	1,285,573		$	6,035,720		$	968,771		$	405,709		$	19,815,286

The allowance for credit losses is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the allowance for loan losses represents management’s estimate of an amount appropriate to provide for probable credit losses in the loan portfolio at the balance sheet date. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in accrued expenses and other liabilities on the consolidated balance sheets. See Note 12 for additional information on the allowance for unfunded commitments.

For comparison purposes, a summary of the changes in the allowance for loan losses by portfolio segment for the year ended December 31, 2015, was as follows.

$ in Thousands	Commercial and industrial			Commercial real estate - owner occupied			Commercial real estate - investor			Real estate construction			Residential mortgage			Home equity			Other consumer			Total
December 31, 2014	$	117,635		$	16,510		$	46,333		$	20,999		$	31,926		$	26,464		$	6,435		$	266,302
Charge offs	(27,687		)	(2,645		)	(4,645		)	(750		)	(5,636		)	(7,048		)	(3,869		)	(52,280		)
Recoveries	9,821			921			4,157			2,268			1,077			3,233			765			22,242
Net charge offs	(17,866		)	(1,724		)	(488		)	1,518			(4,559		)	(3,815		)	(3,104		)	(30,038		)
Provision for loan losses	30,190			3,894			(2,827		)	2,749			894			906			2,194			38,000
December 31, 2015	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Allowance for loan losses:
Individually evaluated for impairment	$	7,522		$	—		$	229		$	—		$	166		$	46		$	—		$	7,963
Collectively evaluated for impairment	122,437			18,680			42,789			25,266			28,095			23,509			5,525			266,301
Total allowance for loan losses	$	129,959		$	18,680		$	43,018		$	25,266		$	28,261		$	23,555		$	5,525		$	274,264
Loans:
Individually evaluated for impairment	$	91,569		$	6,221		$	5,460		$	—		$	6,956		$	1,281		$	—		$	111,487
Collectively evaluated for impairment	6,099,114			911,991			3,228,806			1,162,145			5,776,311			1,004,521			419,968			18,602,856
Total loans	$	6,190,683		$	918,212		$	3,234,266		$	1,162,145		$	5,783,267		$	1,005,802		$	419,968		$	18,714,343

A summary of the changes in the allowance for unfunded commitments was as follows.

	Six Months Ended June 30, 2016		Year Ended December 31, 2015
	($ in Thousands)
Allowance for Unfunded Commitments:
Balance at beginning of period	$	24,400	$	24,900
Provision for unfunded commitments	3,000		(500		)
Balance at end of period	$	27,400	$	24,400