Allowance for Loan Losses | Allowance for Loan Losses The analyses by loan segment of the changes in the allowance for loan losses for the three and nine month periods ended September 30, 2020 and 2019, and its allocation by impairment methodology and the related investment in loans, net as of September 30, 2020 and 2019 are summarized in the following tables: Three Months Ended September 30, 2020 (in thousands) Real Estate Commercial Financial Consumer Total Balances at beginning of the period $ 54,498 $ 57,579 $ — $ 7,575 $ 119,652 Provision for loan losses 1,259 11,048 — 5,693 18,000 Loans charged-off Domestic — (20,910) — (135) (21,045) International — — — (4) (4) Recoveries — 123 — 93 216 Balances at end of the period $ 55,757 $ 47,840 $ — $ 13,222 $ 116,819 Nine Months Ended September 30, 2020 (in thousands) Real Estate Commercial Financial Consumer Total Balances at beginning of the period $ 25,040 $ 22,482 $ 42 $ 4,659 $ 52,223 Provision for (reversal of) loan losses 30,717 49,120 (42) 8,825 88,620 Loans charged-off Domestic — (24,086) — (401) (24,487) International — (34) — (262) (296) Recoveries — 358 — 401 759 Balances at end of the period $ 55,757 $ 47,840 $ — $ 13,222 $ 116,819 September 30, 2020 (in thousands) Real Estate Commercial Financial Consumer Total Allowance for loan losses by impairment methodology: Individually evaluated $ 2,450 $ 23,154 $ — $ 947 $ 26,551 Collectively evaluated 53,307 24,686 — 12,275 90,268 $ 55,757 $ 47,840 $ — $ 13,222 $ 116,819 Investment in loans, net of unearned income: Individually evaluated $ 9,772 $ 68,964 $ — $ 8,005 $ 86,741 Collectively evaluated 2,950,354 2,215,505 16,623 655,394 5,837,876 $ 2,960,126 $ 2,284,469 $ 16,623 $ 663,399 $ 5,924,617 Three Months Ended September 30, 2019 (in thousands) Real Estate Commercial Financial Consumer Total Balances at beginning of the period $ 21,900 $ 25,824 $ 60 $ 9,620 $ 57,404 Provision for (reversal of) loan losses 487 (388) (2) (1,597) (1,500) Loans charged-off Domestic — (907) — (98) (1,005) International — — — (1,661) (1,661) Recoveries — 190 — 212 402 Balances at end of the period $ 22,387 $ 24,719 $ 58 $ 6,476 $ 53,640 Nine Months Ended September 30, 2019 (in thousands) Real Estate Commercial Financial Consumer Total Balances at beginning of the period $ 22,778 $ 30,018 $ 445 $ 8,521 $ 61,762 (Reversal of) provision for loan losses (391) (3,065) (387) 993 (2,850) Loans charged-off Domestic — (2,773) — (504) (3,277) International — (61) — (2,961) (3,022) Recoveries — 600 — 427 1,027 Balances at end of the period $ 22,387 $ 24,719 $ 58 $ 6,476 $ 53,640 September 30, 2019 (in thousands) Real Estate Commercial Financial Consumer Total Allowance for loan losses by impairment methodology: Individually evaluated $ 397 $ 1,722 $ — $ 1,185 $ 3,304 Collectively evaluated 21,990 22,997 58 5,291 50,336 $ 22,387 $ 24,719 $ 58 $ 6,476 $ 53,640 Investment in loans, net of unearned income: Individually evaluated $ 1,936 $ 19,234 $ — $ 6,007 $ 27,177 Collectively evaluated 3,137,980 2,036,150 24,815 525,669 5,724,614 $ 3,139,916 $ 2,055,384 $ 24,815 $ 531,676 $ 5,751,791 The following is a summary of the recorded investment amount of loan sales by portfolio segment: Three Months Ended September 30,(in thousands) Real Estate Commercial Financial Consumer Total 2020 $ — $ — $ — $ 1,891 $ 1,891 2019 $ — $ 43,190 $ — $ 2,148 $ 45,338 Nine Months Ended September 30,(in thousands) Real Estate Commercial Financial Consumer Total 2020 $ — $ 11,901 $ — $ 5,225 $ 17,126 2019 $ 23,475 $ 229,310 $ — $ 6,969 $ 259,754 The following is a summary of impaired loans as of September 30, 2020 and December 31, 2019: September 30, 2020 Recorded Investment (in thousands) With a Valuation Allowance Without a Valuation Allowance Total Year Average (1) Total Unpaid Principal Balance Valuation Allowance Real estate loans Commercial real estate Non-owner occupied $ 8,289 $ — $ 8,289 $ 5,147 $ 8,296 $ 2,450 Multi-family residential — 1,484 1,484 371 1,477 — Land development and construction — — — — — — 8,289 1,484 9,773 5,518 9,773 2,450 Single-family residential 5,246 6,085 11,331 8,093 11,462 913 Owner occupied 658 13,881 14,539 13,610 14,372 221 14,193 21,450 35,643 27,221 35,607 3,584 Commercial loans 33,975 17,020 50,995 29,588 72,777 22,933 Consumer loans and overdrafts 95 8 103 264 100 34 $ 48,263 $ 38,478 $ 86,741 $ 57,073 $ 108,484 $ 26,551 _______________ (1) Average using trailing four quarter balances. December 31, 2019 Recorded Investment (in thousands) With a Valuation Allowance Without a Valuation Allowance Total Year Average (1) Total Unpaid Principal Balance Valuation Allowance Real estate loans Commercial real estate Non-owner occupied $ 1,936 $ — $ 1,936 $ 1,459 $ 1,936 $ 1,161 Multi-family residential — — — 342 — — Land development and construction loans — — — — — — 1,936 — 1,936 1,801 1,936 1,161 Single-family residential 4,739 729 5,468 5,564 5,598 946 Owner occupied 6,169 7,906 14,075 9,548 13,974 501 12,844 8,635 21,479 16,913 21,508 2,608 Commercial loans 8,415 13 8,428 8,552 8,476 1,288 Consumer loans and overdrafts 395 9 404 153 402 378 $ 21,654 $ 8,657 $ 30,311 $ 25,618 $ 30,386 $ 4,274 _______________ (1) Average using trailing four quarter balances. The following table shows information about loans modified in troubled debt restructurings (“TDRs’’) as of September 30, 2020 and December 31, 2019: As of September 30, 2020 As of December 31, 2019 (in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Real estate loans Commercial real estate Non-owner occupied 1 $ 1,798 1 $ 1,936 Single-family residential 2 270 4 438 Owner occupied 4 6,918 4 6,580 7 8,986 9 8,954 Commercial loans 8 881 2 2,682 Consumer loans and overdrafts 1 8 1 9 Total (1) 16 $ 9,875 12 $ 11,645 _________________ (1) As of September 30, 2020 and December 31, 2019, include $7.0 million and $9.8 million, respectively, related to a multiple loan relationship with a South Florida customer, including CRE, owner occupied and commercial loans. This TDR consisted of extending repayment terms and adjusting future periodic payments which resulted in no additional reserves at the time of its modification. Four residential loans totaling $2.0 million and $2.2 million at September 30, 2020 and December 31, 2019, respectively, included in this loan relationship, were not modified. During the first nine months of 2020, the company charged off $1.9 million against the allowance for loan losses associated with this commercial loan relationship. The Company believes the specific reserves associated with this loan relationship, which total $1.1 million at September 30, 2020, are adequate to cover probable losses given updated collateral values, current facts and circumstances. The following table shows information about new loans modifications considered TDRs during the three and nine month periods ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Number of Contracts Recorded Investment Number of Contracts Recorded Investment Real estate loans Commercial real estate Non-owner occupied — $ — 1 $ 1,936 — $ — 1 $ 1,936 Single-family residential — — — — — — 1 187 Owner occupied 1 820 2 4,891 1 820 2 4,891 1 820 3 6,827 1 820 4 7,014 Commercial loans 6 190 1 2,708 6 190 1 2,708 Total (1) 7 $ 1,010 4 $ 9,535 7 $ 1,010 5 $ 9,722 __________________ (1) During the first nine months of 2020, TDR loans modified that subsequently defaulted within the 12 month of restructuring consisted of a $7.0 million multiple loan relationship with a South Florida customer, including CRE, owner occupied and commercial loans. This TDR consisted of extending repayment terms and adjusting future periodic payments which resulted in no additional reserves at the time of its modification. Loans by Credit Quality Indicators Loans by credit quality indicators as of September 30, 2020 and December 31, 2019 are summarized in the following tables: September 30, 2020 Credit Risk Rating Nonclassified Classified (in thousands) Pass Special Mention Substandard Doubtful Loss Total Real estate loans Commercial real estate Non-owner occupied $ 1,771,416 $ 16,780 $ 7,236 $ 1,798 $ — $ 1,797,230 Multi-family residential 851,675 — 1,484 — — 853,159 Land development and construction loans 327,983 7,201 — — — 335,184 2,951,074 23,981 8,720 1,798 — 2,985,573 Single-family residential 586,208 — 11,072 — — 597,280 Owner occupied 888,747 34,556 14,643 — — 937,946 4,426,029 58,537 34,435 1,798 — 4,520,799 Commercial loans 1,118,851 27,111 37,338 13,856 — 1,197,156 Loans to financial institutions and acceptances 16,623 — — — — 16,623 Consumer loans and overdrafts 189,928 — 111 — — 190,039 $ 5,751,431 $ 85,648 $ 71,884 $ 15,654 $ — $ 5,924,617 December 31, 2019 Credit Risk Rating Nonclassified Classified (in thousands) Pass Special Mention Substandard Doubtful Loss Total Real estate loans Commercial real estate Non-owner occupied $ 1,879,780 $ 9,324 $ 762 $ 1,936 $ — $ 1,891,802 Multi-family residential 801,626 — — — — 801,626 Land development and construction loans 268,733 9,955 — — — 278,688 2,950,139 19,279 762 1,936 — 2,972,116 Single-family residential 531,811 — 7,291 — — 539,102 Owner occupied 871,682 8,138 14,240 — — 894,060 4,353,632 27,417 22,293 1,936 — 4,405,278 Commercial loans 1,217,399 5,569 8,406 2,669 — 1,234,043 Loans to financial institutions and acceptances 16,552 — — — — 16,552 Consumer loans and overdrafts 88,042 — 67 357 — 88,466 $ 5,675,625 $ 32,986 $ 30,766 $ 4,962 $ — $ 5,744,339 |