Loans and Allowance for Credit Losses | 3. Loans and Allowance for Credit Losses The Company generally makes loans in its market areas of south and central Mississippi; southern and central Alabama; northwest, central and south Louisiana; the northern, central and panhandle regions of Florida; certain areas of east and northeast Texas, including Houston, Dallas, Austin, and San Antonio; Nashville, Tennessee; and the metropolitan area of Atlanta, Georgia. Loans, net of unearned income, by portfolio are presented at amortized cost basis in the table below. Amortized cost does not include accrued interest, which is reflected in the accrued interest line item in the Consolidated Balance Sheets, totaling $ 107.9 million and $ 100.2 million at March 31, 2023 and December 31, 2022, respectively. The following table presents loans, net of unearned income, by portfolio class at March 31, 2023 and December 31, 2022. March 31, December 31, ($ in thousands) 2023 2022 Commercial non-real estate $ 10,013,482 $ 10,146,453 Commercial real estate - owner occupied 3,050,748 3,033,058 Total commercial and industrial 13,064,230 13,179,511 Commercial real estate - income producing 3,758,455 3,560,991 Construction and land development 1,726,916 1,703,592 Residential mortgages 3,329,793 3,092,605 Consumer 1,525,129 1,577,347 Total loans $ 23,404,523 $ 23,114,046 The following briefly describes the composition of each loan category and portfolio class. Commercial and industrial Commercial and industrial loans are made available to businesses for working capital (including financing of inventory and receivables), business expansion, to facilitate the acquisition of a business, and the purchase of equipment and machinery, including equipment leasing. These loans are primarily made based on the identified cash flows of the borrower and, when secured, have the added strength of the underlying collateral. Commercial non-real estate loans may be secured by the assets being financed or other tangible or intangible business assets such as accounts receivable, inventory, ownership, enterprise value or commodity interests, and may incorporate a personal or corporate guarantee; however, some short-term loans may be made on an unsecured basis, including a small portfolio of corporate credit cards, generally issued as a part of overall customer relationships. Commercial real estate – owner occupied loans consist of commercial mortgages on properties where repayment is generally dependent on the cash flow from the ongoing operations and activities of the borrower. Like commercial non-real estate, these loans are primarily made based on the identified cash flows of the borrower, but also have the added strength of the value of underlying real estate collateral. Commercial real estate – income producing Commercial real estate – income producing loans consist of loans secured by commercial mortgages on properties where the loan is made to real estate developers or investors and repayment is dependent on the sale, refinance, or income generated from the operation of the property. Properties financed include retail, office, multifamily, senior housing, hotel/motel, skilled nursing facilities and other commercial properties. Construction and land development Construction and land development loans are made to facilitate the acquisition, development, improvement and construction of both commercial and residential-purpose properties. Such loans are made to builders and investors where repayment is expected to be made from the sale, refinance or operation of the property or to businesses to be used in their business operations. This portfolio also includes residential construction loans and loans secured by raw land not yet under development. Residential mortgages Residential mortgages consist of closed-end loans secured by first liens on 1- 4 family residential properties. The portfolio includes both fixed and adjustable rate loans, although most longer-term, fixed rate loans originated are sold in the secondary mortgage market. Consumer Consumer loans include second lien mortgage home loans, home equity lines of credit and nonresidential consumer purpose loans. Nonresidential consumer loans include both direct and indirect loans. Direct nonresidential consumer loans are made to finance the purchase of personal property, including automobiles, recreational vehicles and boats, and for other personal purposes (secured and unsecured), and deposit account secured loans. Indirect nonresidential consumer loans include automobile financing provided to the consumer through an agreement with automobile dealerships, though the Company is no longer engaged in this type of lending and the remaining portfolio is in runoff. Consumer loans also include a small portfolio of credit card receivables issued on the basis of applications received through referrals from the Bank’s branches, online and other marketing efforts. Allowance for Credit Losses The calculation of the allowance for credit losses is performed using two primary approaches: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated. The allowance for credit losses was developed using multiple Moody’s Analytics (“Moody’s") macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. The following tables present activity in the allowance for credit losses (ACL) by portfolio class for the three months ended March 31, 2023 and 2022, as well as the corresponding recorded investment in loans at the end of each period. Commercial Total Commercial Commercial real estate- commercial real estate- Construction non-real owner and income and land Residential ($ in thousands) estate occupied industrial producing development mortgages Consumer Total Three Months Ended March 31, 2023 Allowance for credit losses Allowance for loan losses: Beginning balance $ 96,461 $ 48,284 $ 144,745 $ 71,961 $ 30,498 $ 32,464 $ 28,121 $ 307,789 Charge-offs ( 4,528 ) — ( 4,528 ) — ( 61 ) ( 20 ) ( 3,363 ) ( 7,972 ) Recoveries 1,033 195 1,228 — 6 181 838 2,253 Net provision for loan losses ( 320 ) ( 813 ) ( 1,133 ) 4,231 459 1,916 1,842 7,315 Ending balance - allowance for loan losses $ 92,646 $ 47,666 $ 140,312 $ 76,192 $ 30,902 $ 34,541 $ 27,438 $ 309,385 Reserve for unfunded lending commitments: Beginning balance $ 4,984 $ 302 $ 5,286 $ 1,395 $ 25,110 $ 31 $ 1,487 $ 33,309 Provision for losses on unfunded commitments ( 191 ) 22 ( 169 ) 493 ( 1,487 ) ( 14 ) ( 118 ) ( 1,295 ) Ending balance - reserve for unfunded lending commitments 4,793 324 5,117 1,888 23,623 17 1,369 32,014 Total allowance for credit losses $ 97,439 $ 47,990 $ 145,429 $ 78,080 $ 54,525 $ 34,558 $ 28,807 $ 341,399 Allowance for loan losses: Individually evaluated $ — $ — $ — $ — $ — $ — $ — $ — Collectively evaluated 92,646 47,666 140,312 76,192 30,902 34,541 27,438 309,385 Allowance for loan losses $ 92,646 $ 47,666 $ 140,312 $ 76,192 $ 30,902 $ 34,541 $ 27,438 $ 309,385 Reserve for unfunded lending commitments: Individually evaluated $ — $ — $ — $ — $ — $ — $ — $ — Collectively evaluated 4,793 324 5,117 1,888 23,623 17 1,369 32,014 Reserve for unfunded lending commitments: $ 4,793 $ 324 $ 5,117 $ 1,888 $ 23,623 $ 17 $ 1,369 $ 32,014 Total allowance for credit losses $ 97,439 $ 47,990 $ 145,429 $ 78,080 $ 54,525 $ 34,558 $ 28,807 $ 341,399 Loans: Individually evaluated $ 10,273 $ 684 $ 10,957 $ 1,120 $ — $ 1,135 $ — $ 13,212 Collectively evaluated 10,003,209 3,050,064 13,053,273 3,757,335 1,726,916 3,328,658 1,525,129 23,391,311 Total loans $ 10,013,482 $ 3,050,748 $ 13,064,230 $ 3,758,455 $ 1,726,916 $ 3,329,793 $ 1,525,129 $ 23,404,523 In arriving at the March 31, 2023 allowance for credit losses, the Company weighted the March 2023 baseline economic forecast, which Moody’s defines as the “most likely outcome” based on current conditions and its view of where the economy is headed, with a 40 % probability. The March 2023 baseline scenario maintains a generally optimistic outlook in its assumptions surrounding the drivers of economic growth, including its expectations of the effectiveness of the Federal Reserve's monetary policy in easing inflationary conditions, though at a slower pace than previously forecasted. The baseline forecast includes sustained economic growth with forecasted annual GDP growth of 1.9 % for both 2023 and 2024, and 2.7 % for 2025, and only a modest increase in unemployment, forecasted at 3.5 % for 2023, 3.9 % for 2024, and 4.0 % for 2025. Under the baseline forecast, the recent bank failures are not considered symptomatic of a serious broader problem and do not weaken the financial system or the economy. Management determined that assumptions provided for in the downside slower near-term growth/mild recessionary scenario (S-2) were also reasonably possible and weighted that scenario at 50 %, and further weighted the (S-3) moderate recessionary scenario at 10 % due to additional downside risk. The S-2 scenario assumes that interest rates remain elevated, global supply chain issues keep inflation elevated and the recent bank failures reduce consumer confidence and cause banks to tighten lending standards. This leads to a mild recession that starts in the second quarter of 2023 lasting three quarters, with a peak to trough decline of 1.3 % resulting in forecasted annual GDP growth of only 0.9 % for 2023, 0.3 % for 2024, and 3.2 % for 2025; and unemployment of 4.8 % in 2023, 5.8 % in 2024, and 4.2% in 2025. The S-3 scenario assumes a more severe recession with annual GDP growth of 0.3 % in 2023, a decline of 0.3 % in 2024, and then back to growth of 2.6 % in 2025; and unemployment of 5.6 %, 7.6 %, and 6.3 % in 2023, 2024, and 2025, respectively. While economic uncertainty continues, including the possibility of a recession in the near-term, the credit loss outlook on the loan portfolio as a whole has not changed materially since year-end. Positive economic indicators of growth within the Company's footprint, relatively stable asset quality metrics and modest credit losses in recent periods led to relatively flat reserves for the three months ended March 31, 2023. Commercial Total Commercial Commercial real estate- commercial real estate- Construction non-real owner and income and land Residential ($ in thousands) estate occupied industrial producing development mortgages Consumer Total Three Months Ended March 31, 2022 Allowance for credit losses Allowance for loan losses: Beginning balance $ 95,888 $ 53,433 $ 149,321 $ 108,058 $ 22,102 $ 30,623 $ 31,961 $ 342,065 Charge-offs ( 2,659 ) — ( 2,659 ) ( 4 ) — ( 42 ) ( 2,680 ) ( 5,385 ) Recoveries 2,142 389 2,531 878 68 61 1,528 5,066 Net provision for loan losses ( 8,072 ) ( 5,361 ) ( 13,433 ) ( 3,565 ) ( 1,082 ) ( 4,307 ) ( 1,516 ) ( 23,903 ) Ending balance - allowance for loan losses $ 87,299 $ 48,461 $ 135,760 $ 105,367 $ 21,088 $ 26,335 $ 29,293 $ 317,843 Reserve for unfunded lending commitments: Beginning balance $ 4,522 $ 323 $ 4,845 $ 1,694 $ 21,907 $ 22 $ 866 $ 29,334 Provision for losses on unfunded commitments ( 246 ) 108 ( 138 ) 453 474 ( 3 ) 590 1,376 Ending balance - reserve for unfunded lending commitments 4,276 431 4,707 2,147 22,381 19 1,456 30,710 Total allowance for credit losses $ 91,575 $ 48,892 $ 140,467 $ 107,514 $ 43,469 $ 26,354 $ 30,749 $ 348,553 Allowance for loan losses: Individually evaluated $ 112 $ 32 $ 144 $ 20 $ 20 $ 408 $ 174 $ 766 Collectively evaluated 87,187 48,429 135,616 105,347 21,068 25,927 29,119 317,077 Allowance for loan losses $ 87,299 $ 48,461 $ 135,760 $ 105,367 $ 21,088 $ 26,335 $ 29,293 $ 317,843 Reserve for unfunded lending commitments: Individually evaluated $ — $ — $ — $ — $ — $ — $ — $ — Collectively evaluated 4,276 431 4,707 2,147 22,381 19 1,456 30,710 Reserve for unfunded lending commitments: $ 4,276 $ 431 $ 4,707 $ 2,147 $ 22,381 $ 19 $ 1,456 $ 30,710 Total allowance for credit losses $ 91,575 $ 48,892 $ 140,467 $ 107,514 $ 43,469 $ 26,354 $ 30,749 $ 348,553 Loans: Individually evaluated $ 1,742 $ 951 $ 2,693 $ 1,309 $ 122 $ 4,534 $ 929 $ 9,587 Collectively evaluated 9,582,738 2,867,282 12,450,020 3,561,990 1,286,533 2,458,366 1,556,845 21,313,754 Total loans $ 9,584,480 $ 2,868,233 $ 12,452,713 $ 3,563,299 $ 1,286,655 $ 2,462,900 $ 1,557,774 $ 21,323,341 The release of credit reserves across all portfolios during the three months ended March 31, 2022 reflected positive economic indicators in our market, continued improvement in our asset quality metrics, and a sustained period of minimal credit losses. In arriving at the allowance for credit losses at March 31, 2022, the Company weighted the baseline economic forecast at 40 % and the downside slower near-term growth scenario S-2 at 60 %. Nonaccrual loans and certain reportable modified loan disclosures The following table shows the composition of nonaccrual loans and those without an allowance for loan loss, by portfolio class. March 31, 2023 December 31, 2022 ($ in thousands) Total nonaccrual Nonaccrual without allowance for loan loss Total nonaccrual Nonaccrual without allowance for loan loss Commercial non-real estate $ 13,302 $ 10,273 $ 4,020 $ 941 Commercial real estate - owner occupied 2,393 684 1,461 692 Total commercial and industrial 15,695 10,957 5,481 1,633 Commercial real estate - income producing 1,501 1,120 1,240 1,174 Construction and land development 340 — 309 — Residential mortgages 30,111 1,135 25,269 1,884 Consumer 6,697 — 6,692 — Total loans $ 54,344 $ 13,212 $ 38,991 4,691 As a part of our loss mitigation efforts, we may provide modifications to borrowers experiencing financial difficulty to improve long-term collectability of the loans and to avoid the need for repossession or foreclosure of collateral. As described in Note 1 – Accounting Policy, accounting and reporting requirements changed related to such modifications effective January 1, 2023, impacting the comparability between periods of the disclosures that follow. Nonaccrual loans include reportable nonaccruing modified loans to borrowers experiencing financial difficulty (“MEFDs”) totaling $ 1.6 million at March 31, 2023 and loans modified in troubled debt restructurings (“TDRs”) totaling $ 2.6 million at December 31, 2022. Total reportable MEFDs, both accruing and nonaccruing, were $ 1.6 million at March 31, 2023 and total TDRs were $ 4.5 million at December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had no unfunded commitments to borrowers whose loan terms have been modified as a reportable MEFD or TDR, respectively. The table below provides detail by portfolio class for reportable MEFDs entered into during the three months ended March 31, 2023. March 31, 2023 ($ in thousands) Balance Percentage of portfolio class Commercial non-real estate $ 934 0.01 % Commercial real estate - owner occupied 684 0.02 % Total commercial and industrial 1,618 0.01 % Commercial real estate - income producing — — Construction and land development — — Residential mortgages — — Consumer — — Total reportable modified loans $ 1,618 0.01 % Reportable modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2023 consisted of term extensions ran ging from 9 months to 5 years. As of March 31, 2023, all reportable MEFDs entered into during the three months ended March 31, 2023 had a payment status of current. There were no post modification payment defaults within the three month period ended March 31, 2023. A payment default occurs if the loan is either 90 days or more delinquent or has been charged off as of the end of the period presented. During the three months ended March 31, 2022, two residential mortgage loans with pre and post modification balances of $ 0.1 million and two consumer loans with pre and post modification balances totaling $ 0.1 million were classified as TDRs. The TDRs modified during the three months ended March 31, 2022, included $ 0.1 million of loans with interest rate reduction and $ 0.1 million with other modifications. Two commercial non-real estate loans totaling $ 3.1 million that defaulted during the three months period ended March 31, 2022 had been modified in a TDR during the twelve months prior to default. Aging Analysis The tables below present the aging analysis of past due loans by portfolio class at March 31, 2023 and December 31, 2022. March 31, 2023 30-59 60-89 Greater Total Current Total Recorded ($ in thousands) Commercial non-real estate $ 31,691 $ 17,026 $ 11,029 $ 59,746 $ 9,953,736 $ 10,013,482 $ 8,492 Commercial real estate - owner occupied 2,670 2,029 2,567 7,266 3,043,482 3,050,748 1,399 Total commercial and industrial 34,361 19,055 13,596 67,012 12,997,218 13,064,230 9,891 Commercial real estate - income producing 175 — 2,653 2,828 3,755,627 3,758,455 1,214 Construction and land development 2,304 359 217 2,880 1,724,036 1,726,916 126 Residential mortgages 29,903 8,055 13,684 51,642 3,278,151 3,329,793 167 Consumer 6,590 4,506 4,695 15,791 1,509,338 1,525,129 1,757 Total $ 73,333 $ 31,975 $ 34,845 $ 140,153 $ 23,264,370 $ 23,404,523 $ 13,155 December 31, 2022 30-59 60-89 Greater Total Current Total Recorded ($ in thousands) Commercial non-real estate $ 4,050 $ 21,329 $ 3,418 $ 28,797 $ 10,117,656 $ 10,146,453 $ 996 Commercial real estate - owner occupied 19,069 3,346 1,894 24,309 3,008,749 3,033,058 1,623 Total commercial and industrial 23,119 24,675 5,312 53,106 13,126,405 13,179,511 2,619 Commercial real estate - income producing 879 — 1,174 2,053 3,558,938 3,560,991 — Construction and land development 4,029 242 133 4,404 1,699,188 1,703,592 54 Residential mortgages 28,208 11,056 17,346 56,610 3,035,995 3,092,605 293 Consumer 8,845 2,806 4,407 16,058 1,561,289 1,577,347 1,619 Total $ 65,080 $ 38,779 $ 28,372 $ 132,231 $ 22,981,815 $ 23,114,046 $ 4,585 Credit Quality Indicators The following tables present the credit quality indicators by segment and portfolio class of loans at March 31, 2023 and December 31, 2022. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. March 31, 2023 ($ in thousands) Commercial Commercial Total Commercial Construction Total Grade: Pass $ 9,511,047 $ 2,937,286 $ 12,448,333 $ 3,633,440 $ 1,716,329 $ 17,798,102 Pass-Watch 277,067 52,691 329,758 116,360 9,860 455,978 Special Mention 54,998 7,552 62,550 1,534 191 64,275 Substandard 170,370 53,219 223,589 7,121 536 231,246 Doubtful — — — — — — Total $ 10,013,482 $ 3,050,748 $ 13,064,230 $ 3,758,455 $ 1,726,916 $ 18,549,601 December 31, 2022 ($ in thousands) Commercial Commercial Total Commercial Construction Total Grade: Pass $ 9,641,117 $ 2,912,057 $ 12,553,174 $ 3,440,648 $ 1,690,756 $ 17,684,578 Pass-Watch 284,843 49,093 333,936 111,587 12,097 457,620 Special Mention 79,980 6,267 86,247 3,810 196 90,253 Substandard 140,513 65,641 206,154 4,946 543 211,643 Doubtful — — — — — — Total $ 10,146,453 $ 3,033,058 $ 13,179,511 $ 3,560,991 $ 1,703,592 $ 18,444,094 March 31, 2023 December 31, 2022 ($ in thousands) Residential Consumer Total Residential Consumer Total Performing $ 3,299,682 $ 1,518,431 $ 4,818,113 $ 3,066,319 $ 1,570,186 $ 4,636,505 Nonperforming 30,111 6,698 36,809 26,286 7,161 33,447 Total $ 3,329,793 $ 1,525,129 $ 4,854,922 $ 3,092,605 $ 1,577,347 $ 4,669,952 Below are the definitions of the Company’s internally assigned grades: Commercial: • Pass – loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk. • Pass-Watch – credits in this category are of sufficient risk to cause concern. This category is reserved for credits that display negative performance trends. The “Watch” grade should be regarded as a transition category. • Special Mention – a criticized asset category defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the institution’s credit position. Special mention credits are not considered part of the classified credit categories and do not expose the institution to sufficient risk to warrant adverse classification. • Substandard – an asset that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. • Doubtful – an asset that has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. • Loss – credits classified as Loss are considered uncollectable and are charged off promptly once so classified. Residential and Consumer: • Performing – accruing loans. • Nonperforming – loans for which there are good reasons to doubt that payments will be made in full. Nonperforming loans include all loans with nonaccrual status and, prior to January 1, 2023, all loans that were modified in a troubled debt restructuring. Vintage Analysis The following tables present credit quality disclosures of amortized cost by portfolio class and vintage for term loans and by revolving and revolving converted to amortizing at March 31, 2023 and December 31, 2022. The Company defines vintage as the later of origination, renewal or modification date. The gross charge-offs presented in the table are for the three months ended March 31, 2023. Term Loans Revolving Loans March 31, 2023 Amortized Cost Basis by Origination Year Revolving Converted to ($ in thousands) 2023 2022 2021 2020 2019 Prior Loans Term Loans Total Commercial Non-Real Estate: Pass $ 443,067 $ 2,385,284 $ 1,362,105 $ 592,762 $ 505,331 $ 958,298 $ 3,214,349 $ 49,851 $ 9,511,047 Pass-Watch 18,434 54,455 32,893 30,343 7,487 58,113 73,146 2,196 277,067 Special Mention 32,611 5,560 522 1,837 4,198 1,145 8,984 141 54,998 Substandard 21,424 21,686 14,027 30,909 21,450 12,123 47,928 823 170,370 Doubtful — — — — — — — — — Total Commercial Non- $ 515,536 $ 2,466,985 $ 1,409,547 $ 655,851 $ 538,466 $ 1,029,679 $ 3,344,407 $ 53,011 $ 10,013,482 Gross Charge-offs $ — $ 309 $ 170 $ 463 $ 12 $ 33 $ 2,993 $ 548 $ 4,528 Commercial Real Estate - Owner Occupied: Pass $ 86,006 $ 643,498 $ 641,601 $ 526,654 $ 315,352 $ 677,090 $ 34,237 $ 12,848 $ 2,937,286 Pass-Watch 1,985 8,785 4,558 3,668 15,513 17,228 954 — 52,691 Special Mention — 46 — 543 603 6,360 — — 7,552 Substandard 18,506 6,957 680 7,453 4,734 13,889 1,000 — 53,219 Doubtful — — — — — — — — — Total Commercial Real $ 106,497 $ 659,286 $ 646,839 $ 538,318 $ 336,202 $ 714,567 $ 36,191 $ 12,848 $ 3,050,748 Gross Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial Real Estate - Income Producing: Pass $ 122,528 $ 887,881 $ 889,960 $ 705,277 $ 398,028 $ 514,955 $ 114,746 $ 65 $ 3,633,440 Pass-Watch 18,723 1,191 37 59,847 22,922 13,238 402 — 116,360 Special Mention 985 — — 178 — 371 — — 1,534 Substandard 3,535 397 319 1,214 8 1,648 — — 7,121 Doubtful — — — — — — — — — Total Commercial Real $ 145,771 $ 889,469 $ 890,316 $ 766,516 $ 420,958 $ 530,212 $ 115,148 $ 65 $ 3,758,455 Gross Charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Construction and Land Development: Pass $ 155,497 $ 748,153 $ 545,932 $ 103,183 $ 7,786 $ 24,241 $ 126,158 $ 5,379 $ 1,716,329 Pass-Watch 2,408 3,185 2,670 96 522 611 368 — 9,860 Special Mention — — — — 191 — — — 191 Substandard — 51 51 — 11 423 — — 536 Doubtful — — — — — — — — — Total Construction and $ 157,905 $ 751,389 $ 548,653 $ 103,279 $ 8,510 $ 25,275 $ 126,526 $ 5,379 $ 1,726,916 Gross Charge-offs $ — $ 7 $ 54 $ — $ — $ — $ — $ — $ 61 Residential Mortgage: Performing $ 173,196 $ 628,643 $ 800,082 $ 516,534 $ 187,232 $ 990,957 $ 3,038 — $ 3,299,682 Nonperforming 70 2,452 3,052 338 1,610 22,589 — — 30,111 Total Residential Mortgage $ 173,266 $ 631,095 $ 803,134 $ 516,872 $ 188,842 $ 1,013,546 $ 3,038 $ — $ 3,329,793 Gross Charge-offs $ — $ — $ — $ — $ — $ 20 $ — $ — $ 20 Consumer Loans: Performing $ 31,666 $ 83,306 $ 53,900 $ 40,880 $ 53,213 $ 69,745 $ 1,182,108 $ 3,613 $ 1,518,431 Nonperforming 32 172 362 573 610 4,081 162 706 6,698 Total Consumer $ 31,698 $ 83,478 $ 54,262 $ 41,453 $ 53,823 $ 73,826 $ 1,182,270 $ 4,319 $ 1,525,129 Gross Charge-offs $ — $ 294 $ 329 $ 43 $ 152 $ 236 $ 2,013 $ 296 $ 3,363 Term Loans Revolving Loans December 31, 2022 Amortized Cost Basis by Origination Year Revolving Converted to ($ in thousands) 2022 2021 2020 2019 2018 Prior Loans Term Loans Total Commercial Non-Real Estate: Pass $ 2,600,656 $ 1,450,689 $ 679,355 $ 569,842 $ 267,025 $ 763,122 $ 3,193,769 $ 116,659 $ 9,641,117 Pass-Watch 68,307 38,949 31,841 11,757 8,237 49,577 66,339 9,836 284,843 Special Mention 30,276 13,625 2,443 4,406 322 1,654 25,184 2,070 79,980 Substandard 29,667 13,807 11,766 21,667 12,792 1,250 39,213 10,351 140,513 Doubtful — — — — — — — — — Total Commercial Non- $ 2,728,906 $ 1,517,070 $ 725,405 $ 607,672 $ 288,376 $ 815,603 $ 3,324,505 $ 138,916 $ 10,146,453 Commercial Real Estate - Owner Occupied: Pass $ 630,121 $ 650,742 $ 537,849 $ 328,364 $ 265,437 $ 447,707 $ 46,730 $ 5,107 $ 2,912,057 Pass-Watch 7,129 5,299 3,743 13,301 10,872 7,706 893 150 49,093 Special Mention — — 544 822 1,231 3,670 — — 6,267 Substandard 19,899 547 6,715 7,663 7,543 21,465 1,000 809 65,641 Doubtful — — — — — — — — — Total Commercial Real $ 657,149 $ 656,588 $ 548,851 $ 350,150 $ 285,083 $ 480,548 $ 48,623 $ 6,066 $ 3,033,058 Commercial Real Estate - Income Producing: Pass $ 894,522 $ 795,378 $ 660,235 $ 420,435 $ 232,145 $ 317,446 $ 113,487 $ 7,000 $ 3,440,648 Pass-Watch 1,027 18,070 58,256 20,865 12,066 836 467 — 111,587 Special Mention 235 — 708 2,325 166 376 — — 3,810 Substandard 415 — 2,785 8 1,240 498 — — 4,946 Doubtful — — — — — — — — — Total Commercial Real $ 896,199 $ 813,448 $ 721,984 $ 443,633 $ 245,617 $ 319,156 $ 113,954 $ 7,000 $ 3,560,991 Construction and Land Development: Pass $ 663,735 $ 711,731 $ 148,579 $ 9,198 $ 15,360 $ 10,854 $ 128,842 $ 2,457 $ 1,690,756 Pass-Watch 8,233 1,944 643 559 199 450 69 — 12,097 Special Mention — — — 196 — — — — 196 Substandard 35 55 — 12 61 380 — — 543 Doubtful — — — — — — — — — Total Construction and $ 672,003 $ 713,730 $ 149,222 $ 9,965 $ 15,620 $ 11,684 $ 128,911 $ 2,457 $ 1,703,592 Residential Mortgage: Performing $ 631,339 $ 694,104 $ 518,705 $ 192,431 $ 107,675 $ 918,918 $ 3,147 $ — $ 3,066,319 Nonperforming 1,058 2,434 716 1,196 2,080 18,802 — — 26,286 Total Residential $ 632,397 $ 696,538 $ 519,421 $ 193,627 $ 109,755 $ 937,720 $ 3,147 $ — $ 3,092,605 Consumer Loans: Performing $ 103,742 $ 58,248 $ 45,641 $ 62,715 $ 41,559 $ 40,489 $ 1,212,958 $ 4,834 $ 1,570,186 Nonperforming 193 198 228 758 381 3,341 459 1,603 7,161 Total Consumer $ 103,935 $ 58,446 $ 45,869 $ 63,473 $ 41,940 $ 43,830 $ 1,213,417 $ 6,437 $ 1,577,347 Residential Mortgage Loans in Process of Foreclosure Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. Included in loans at March 31, 2023 and December 31, 2022 were $ 3.8 million and $ 4.9 million, respectively, of consumer loans secured by single family residential real estate that were in process of foreclosure. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $ 0.4 million of foreclosed single family residential properties in other real estate owned at both March 31, 2023 and December 31, 2022. Loans Held for Sale Loans held for sale totaled $ 23.4 million and $ 26.4 million at March 31, 2023 and December 31, 2022, respectively. Loans held for sale is composed primarily of residential mortgage loans originated for sale in the secondary market. At March 31, 2023, residential mortgage loans carried at the fair value option totaled $ 14.9 million with an unpaid principal balance of $ 14.6 million. At December 31, 2022, residential mortgage loans carried at the fair value option totaled $ 10.8 million with an unpaid principal balance of $ 10.6 million. All other loans held for sale are carried at the lower of cost or market. |