Loans and Allowance for Credit Losses | 4. Loans and Allowance for Credit Losses The Company generally makes loans in its market areas of south 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, Beaumont and Dallas; and Nashville, Tennessee. 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 $ 72.2 million and $67.7 million at March 31, 2020 and December 31, 2019, respectively. March 31, December 31, (in thousands) 2020 2019 Commercial non-real estate $ 9,321,340 $ 9,166,947 Commercial real estate - owner occupied 2,731,320 2,738,460 Total commercial and industrial 12,052,660 11,905,407 Commercial real estate - income producing 3,232,783 2,994,448 Construction and land development 1,098,726 1,157,451 Residential mortgages 2,979,985 2,990,631 Consumer 2,151,527 2,164,818 Total loans $ 21,515,681 $ 21,212,755 The following briefly describes the composition of each loan category. 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 a small amount of 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. 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 following tables show activity in the allowance for credit losses by portfolio class for the three months ended March 31, 2020 and 2019, as well as the corresponding recorded investment in loans at the end of each period. Effective January 1, 2020, the Company adopted the provisions of ASC 326 (CECL) using a modified prospective basis. The difference between the December 31, 2019 incurred allowance and the CECL allowance is reflected as a cumulative effect of change in accounting principle in the table below. For further discussion of the day one impact of the CECL adoption, refer to Note 15 – Recent Accounting Pronouncements. 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, 2020 Allowance for credit losses Allowance for loan losses: Beginning balance $ 106,432 $ 10,977 $ 117,409 $ 20,869 $ 9,350 $ 20,331 $ 23,292 $ 191,251 Cumulative effect of change in accounting principle (244 ) 14,877 14,633 7,287 7,478 12,921 7,092 49,411 Charge-offs (40,713 ) (514 ) (41,227 ) (830 ) — (141 ) (5,540 ) (47,738 ) Recoveries 2,226 81 2,307 7 234 212 1,214 3,974 Net provision for loan losses 119,297 23,414 142,711 37,627 16,761 14,877 17,129 229,105 Ending balance - allowance for loan losses $ 186,998 $ 48,835 $ 235,833 $ 64,960 $ 33,823 $ 48,200 $ 43,187 $ 426,003 Reserve for unfunded lending commitments: Beginning balance $ 3,974 $ — $ 3,974 $ — $ — $ — $ — $ 3,974 Cumulative effect of change in accounting principle 5,772 288 6,060 449 15,658 17 5,146 27,330 Provision for losses on unfunded commitments 5,182 289 5,471 280 13,205 — (1,268 ) 17,688 Ending balance - reserve for unfunded lending commitments 14,928 577 15,505 729 28,863 17 3,878 48,992 Total allowance for credit losses $ 201,926 $ 49,412 $ 251,338 $ 65,689 $ 62,686 $ 48,217 $ 47,065 $ 474,995 Allowance for loan losses: Individually evaluated $ 67,404 $ 102 $ 67,506 $ 458 $ 23 $ 312 $ 195 $ 68,494 Collectively evaluated 119,594 48,733 168,327 64,502 33,800 47,888 42,992 357,509 Allowance for loan losses $ 186,998 $ 48,835 $ 235,833 $ 64,960 $ 33,823 $ 48,200 $ 43,187 $ 426,003 Reserve for unfunded lending commitments: Individually evaluated $ 7,215 $ — $ 7,215 $ — $ — $ — $ — $ 7,215 Collectively evaluated 7,713 577 8,290 729 28,863 17 3,878 41,777 Reserve for unfunded lending commitments: $ 14,928 $ 577 $ 15,505 $ 729 $ 28,863 $ 17 $ 3,878 $ 48,992 Total allowance for credit losses $ 201,926 $ 49,412 $ 251,338 $ 65,689 $ 62,686 $ 48,217 $ 47,065 $ 474,995 Loans: Individually evaluated $ 253,790 $ 4,184 $ 257,974 $ 7,300 $ 3,350 $ 4,625 $ 1,280 $ 274,529 Collectively evaluated 9,067,550 2,727,136 11,794,686 3,225,483 1,095,376 2,975,360 2,150,247 21,241,152 Total loans $ 9,321,340 $ 2,731,320 $ 12,052,660 $ 3,232,783 $ 1,098,726 $ 2,979,985 $ 2,151,527 $ 21,515,681 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, 2019 Allowance for loan losses: Beginning balance $ 97,752 $ 13,757 $ 111,509 $ 17,638 $ 15,647 $ 23,782 $ 25,938 $ 194,514 Charge-offs (16,344 ) — (16,344 ) (10 ) — (406 ) (4,231 ) (20,991 ) Recoveries 1,926 17 1,943 2 11 162 1,004 3,122 Net provision for loan losses 14,186 33 14,219 3,173 (1,631 ) (3 ) 2,285 18,043 Ending balance $ 97,520 $ 13,807 $ 111,327 $ 20,803 $ 14,027 $ 23,535 $ 24,996 $ 194,688 Ending balance: Allowance: Individually evaluated for impairment $ 1,775 $ 205 $ 1,980 $ 143 $ 1 $ 219 $ 347 $ 2,690 Amounts related to purchased credit impaired loans 288 185 473 35 78 9,162 341 10,089 Collectively evaluated for impairment 95,457 13,417 108,874 20,625 13,948 14,154 24,308 181,909 Total allowance $ 97,520 $ 13,807 $ 111,327 $ 20,803 $ 14,027 $ 23,535 $ 24,996 $ 194,688 Loans: Individually evaluated for impairment $ 231,506 $ 16,974 $ 248,480 $ 2,668 $ 19 $ 5,397 $ 1,508 $ 258,072 Purchased credit impaired loans 6,445 5,472 11,917 4,267 2,897 102,199 3,615 124,895 Collectively evaluated for impairment 8,418,375 2,492,982 10,911,357 2,556,459 1,337,151 2,825,655 2,099,249 19,729,871 Total loans $ 8,656,326 $ 2,515,428 $ 11,171,754 $ 2,563,394 $ 1,340,067 $ 2,933,251 $ 2,104,372 $ 20,112,838 The calculation of the allowance for credit losses under CECL 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 increase in the allowance for credit losses for the three months ended March 31, 2020 reflects the impact of the unprecedented economic shutdown caused by the pandemic and the significant drop in oil prices. The allowance for credit losses was developed using multiple Moody’s macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. The Company weighted the baseline economic forecast 80% which includes a sharp recession in the first and second quarters of 2020, with a relatively quick recovery in the second half of 2020. The more severe downside scenarios S-3 and S-4 were weighted at 15% and 5%, respectively, to capture the risk a prolonged downturn might have on our markets, which is more heavily concentrated in tourism, oil and gas and certain areas of healthcare that are more severely impacted by the widespread shutdown and market turmoil. These downside scenarios include double-dip recessions with a more prolonged recovery, with the S-4 scenario having a more severe immediate impact and a longer, more gradual recovery compared to S-3. The degradation in economic conditions created the need for an increased allowance across all portfolios. See the detail of the individually evaluated allowance in the impaired loans section that follows. Impaired Loans The following table shows the composition of nonaccrual loans by portfolio class. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools with an accretable yield were considered to be performing. Such loans totaled $17.5 million at December 31, 2019. March 31, December 31, (in thousands) 2020 2019 Commercial non-real estate $ 175,166 $ 178,678 Commercial real estate - owner occupied 8,143 7,708 Total commercial and industrial 183,309 186,386 Commercial real estate - income producing 5,659 2,594 Construction and land development 4,321 1,217 Residential mortgages 42,866 39,262 Consumer 17,903 16,374 Total loans $ 254,058 $ 245,833 For the three months ended March 31, 2020 and 2019, the estimated amount of interest income that would have been recorded had the loans not been assigned nonaccrual status was $4.3 million and $2.9 million, respectively. Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of $117.9 million and $132.5 million at March 31, 2020 and December 31, 2019, respectively. Total TDRs, both accruing and nonaccruing, were $153.1 million at March 31, 2020 and $193.7 million at December 31, 2019. All TDRs are individually evaluated for credit loss. At March 31, 2020 and December 31, 2019 , the Company had unfunded commitments of $ 8.1 million and $ 2.4 million, respectively, to borrowers whose loan terms have been modified in a TDR . The tables below detail by portfolio class TDRs that were modified during the three months ended March 31, 2020 and 2019: Three Months Ended ($ in thousands) March 31, 2020 March 31, 2019 Pre- Modification Post- Modification Pre- Modification Post- Modification Number Outstanding Outstanding Number Outstanding Outstanding of Recorded Recorded of Recorded Recorded Troubled Debt Restructurings: Contracts Investment Investment Contracts Investment Investment Commercial non-real estate 1 $ 395 $ 395 7 $ 13,803 $ 13,803 Commercial real estate - owner occupied — — — 1 167 167 Total commercial and industrial 1 395 395 8 13,970 13,970 Commercial real estate - income producing — — — — — — Construction and land development — — — — — — Residential mortgages 1 256 256 5 1,264 1,264 Consumer 3 34 34 2 46 46 Total loans 5 $ 685 $ 685 15 $ 15,280 $ 15,280 The TDRs modified during the three months ended March 31, 2020 reflected in the table above include $0.3 million of loans with extended amortization terms or other payment concessions and $0.4 million with significant covenant waivers. The TDRs modified during the three months ended March 31, 2019 include $0.1 million of loans with extended amortization terms or other payment concessions, $8.8 million with significant covenant waivers and $6.4 million with other modifications. There were no defaults on loans during the three months ended March 31, 2020 or 2019 that had been modified in a TDR during the prior twelve months. The tables below present loans that are individually evaluated disaggregated by portfolio class at March 31, 2020 and December 31, 2019. Loans individually evaluated include nonaccrual loans, TDRs and other loans that do not share common characteristics with loans evaluated on a collective basis that have aggregate relationship balances of $1 million or more. March 31, 2020 (in thousands) Recorded investment without an allowance Recorded investment with an allowance Unpaid principal balance Related allowance Commercial non-real estate $ 34,003 $ 219,787 $ 316,651 $ 67,404 Commercial real estate - owner occupied 1,608 2,576 6,954 102 Total commercial and industrial 35,611 222,363 323,605 67,506 Commercial real estate - income producing 2,407 4,893 8,136 458 Construction and land development 3,192 158 3,949 23 Residential mortgages 2,598 2,027 5,160 312 Consumer 136 1,144 1,668 195 Total loans $ 43,944 $ 230,585 $ 342,518 $ 68,494 December 31, 2019 (in thousands) Recorded investment without an allowance Recorded investment with an allowance Unpaid principal balance Related allowance Commercial non-real estate $ 134,191 $ 98,247 $ 270,078 $ 21,733 Commercial real estate - owner occupied 2,665 1,716 7,793 104 Total commercial and industrial 136,856 99,963 277,871 21,837 Commercial real estate - income producing 373 1,525 1,959 18 Construction and land development — 277 322 21 Residential mortgages 3,383 1,791 5,709 217 Consumer 479 1,004 1,906 292 Total loans $ 141,091 $ 104,560 $ 287,767 $ 22,385 The tables below present the average balances and interest income for individually evaluated loans for the three months ended March 31, 2020 and 201 9 . Interest income recognized represents interest on accruing loans modified in a TDR. Three Months Ended March 31, 2020 March 31, 2019 (in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial non-real estate $ 243,114 $ 522 $ 235,445 $ 1,696 Commercial real estate - owner occupied 4,283 — 19,320 80 Total commercial and industrial 247,397 522 254,765 1,776 Commercial real estate - income producing 4,599 6 2,685 7 Construction and land development 1,814 2 70 — Residential mortgages 4,900 4 4,637 5 Consumer 1,382 23 1,258 16 Total loans $ 260,092 $ 557 $ 263,415 $ 1,804 The TDR disclosure above does not include loans modified under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) signed into law on March 27, 2020, which allows financial institutions to exclude eligible modifications from TDR reporting. Eligible modification must be (1) related to COVID-19, (2) executed on a loan that was not more than 30 days past due as of December 31, 2019 and (3) executed between March 1, 2020 and the earlier of 60 days after the date of the termination of the national emergency or December 31, 2020. As of March 31, 2020, there were 1,618 customers with loans totaling $839.4 million with payment deferral modifications of principal, interest or both that are eligible to be excluded from TDR reporting requirements. These loans are also excluded from reporting in the aging analysis that follows as delinquency is tracked under the modified terms. Aging Analysis The tables below present the aging analysis of past due loans by portfolio class at March 31, 2020 and December 31, 2019. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools under ASC 310-30 with an accretable yield were considered to be current in the table below as of December 31, 2019. These loans totaled $6.1 million for 30-59 days past due, $2.0 million for 60-89 days past due and $8.3 March 31, 2020 30-59 days past due 60-89 days past due Greater than 90 days past due Total past due Current Total Loans Recorded investment > 90 days and still accruing (in thousands) Commercial non-real estate $ 23,478 $ 7,629 $ 116,763 $ 147,870 $ 9,173,470 $ 9,321,340 $ 6,832 Commercial real estate - owner occupied 5,294 803 11,298 17,395 2,713,925 2,731,320 4,747 Total commercial and industrial 28,772 8,432 128,061 165,265 11,887,395 12,052,660 11,579 Commercial real estate - income producing 8,727 80 9,430 18,237 3,214,546 3,232,783 4,221 Construction and land development 6,289 344 4,406 11,039 1,087,687 1,098,726 667 Residential mortgages 46,695 1,305 23,484 71,484 2,908,501 2,979,985 64 Consumer 24,002 7,870 9,451 41,323 2,110,204 2,151,527 1,259 Total $ 114,485 $ 18,031 $ 174,832 $ 307,348 $ 21,208,333 $ 21,515,681 $ 17,790 December 31, 2019 30-59 days past due 60-89 days past due Greater than 90 days past due Total past due Current Total Loans Recorded investment > 90 days and still accruing (in thousands) Commercial non-real estate $ 20,893 $ 13,445 $ 100,806 $ 135,144 $ 9,031,803 9,166,947 $ 1,537 Commercial real estate - owner occupied 4,862 556 7,268 12,686 2,725,774 2,738,460 830 Total commercial and industrial 25,755 14,001 108,074 147,830 11,757,577 11,905,407 2,367 Commercial real estate - income producing 738 703 2,910 4,351 2,990,097 2,994,448 450 Construction and land development 5,747 680 2,480 8,907 1,148,544 1,157,451 2,042 Residential mortgages 32,867 8,584 23,577 65,028 2,925,603 2,990,631 85 Consumer 18,586 6,215 9,901 34,702 2,130,116 2,164,818 1,638 Total $ 83,693 $ 30,183 $ 146,942 $ 260,818 $ 20,951,937 $ 21,212,755 $ 6,582 Credit Quality Indicators The following tables present the credit quality indicators by segments and portfolio class of loans at March 31, 2020 and December 31, 2019. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often looks at portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach. As a result, several loans were downgraded to pass-watch at March 31, 2020 to reflect the potential risk from the economic downturn caused by the pandemic and other environmental factors. In alignment with regulatory guidance, the Company has been working with its customers to manage through this period of severe uncertainty and economic stress. The Company expects that further risk rating adjustments will likely be required in the future to account for stresses on individual accounts. March 31, 2020 (in thousands) Commercial non-real estate Commercial real estate - owner- occupied Total commercial and industrial Commercial real estate - income producing Construction and land development Total commercial Grade: Pass $ 8,391,474 $ 2,533,020 $ 10,924,494 $ 3,119,828 $ 1,064,747 $ 15,109,069 Pass-Watch 507,455 136,808 644,263 75,823 24,883 744,969 Special Mention 61,397 11,677 73,074 11,330 970 85,374 Substandard 346,065 49,815 395,880 25,802 8,126 429,808 Doubtful 14,949 — 14,949 — — 14,949 Total $ 9,321,340 $ 2,731,320 $ 12,052,660 $ 3,232,783 $ 1,098,726 $ 16,384,169 December 31, 2019 (in thousands) Commercial non-real estate Commercial real estate - owner- occupied Total commercial and industrial Commercial real estate - income producing Construction and land development Total commercial Grade: Pass $ 8,492,113 $ 2,517,448 $ 11,009,561 2,883,553 $ 1,120,997 $ 15,014,111 Pass-Watch 220,850 146,266 367,116 69,765 25,621 462,502 Special Mention 71,654 14,651 86,305 14,995 283 101,583 Substandard 382,330 60,095 442,425 26,135 10,550 479,110 Doubtful — — — — — — Total $ 9,166,947 $ 2,738,460 $ 11,905,407 $ 2,994,448 $ 1,157,451 $ 16,057,306 March 31, 2020 December 31, 2019 (in thousands) Residential mortgage Consumer Total Residential mortgage Consumer Total Performing $ 2,936,218 $ 2,132,482 $ 5,068,700 $ 2,950,854 $ 2,147,312 $ 5,098,166 Nonperforming 43,767 19,045 62,812 39,777 17,506 57,283 Total $ 2,979,985 $ 2,151,527 $ 5,131,512 $ 2,990,631 $ 2,164,818 $ 5,155,449 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 that have not been modified in a troubled debt restructuring. • Nonperforming – loans for which there are good reasons to doubt that payments will be made in full. All loans with nonaccrual status and all loans that have been modified in a troubled debt restructuring are classified as nonperforming. Vintage Analysis The following tables further disaggregates credit quality disclosures by amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing as of March 31, 2020. We define vintage as the later of origination, renewal or restructure date. Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Loans Total Commercial Loans: Pass $ 1,200,289 $ 3,482,650 $ 2,316,675 $ 1,817,884 $ 1,268,500 $ 1,815,527 $ 3,166,739 $ 40,805 $ 15,109,069 Pass-Watch 45,483 89,492 50,169 73,719 45,264 45,098 393,676 2,068 744,969 Special Mention 1,106 2,754 11,838 26,324 699 20,130 21,204 1,319 85,374 Substandard 25,939 58,802 86,630 30,860 30,772 49,519 127,734 19,552 429,808 Doubtful — — 12,980 — — — 1,969 — 14,949 Loss — — — — — — — — — Total Commercial Loans $ 1,272,817 $ 3,633,698 $ 2,478,292 $ 1,948,787 $ 1,345,235 $ 1,930,274 $ 3,711,322 $ 63,744 $ 16,384,169 Consumer Loans: Performing $ 172,403 $ 528,274 $ 577,525 $ 771,724 $ 622,557 $ 1,096,363 $ 1,295,598 $ 4,256 5,068,700 Nonperforming 547 2,521 3,962 6,800 4,114 41,575 1,817 1,476 62,812 Total Consumer Loans $ 172,950 $ 530,795 $ 581,487 $ 778,524 $ 626,671 $ 1,137,938 $ 1,297,415 $ 5,732 $ 5,131,512 Purchased Credit Impaired Loans Under the transition provisions for prospective application of CECL, the Company has classified all loans previously accounted for as purchased credit impaired under ASC 310-30 to be classified as purchased credit deteriorated. The prospective application resulted in an increase of $19.8 million to the amortized cost basis of the financial asset and the allowance for credit losses at the date of adoption, representing the remaining credit portion of the purchased discount. The Company elected not to maintain pools of loans accounted for under Subtopic 310-30 with the adoption of CECL. The remaining noncredit discount was allocated to the individual loans and will be accreted to interest income using the interest method based on the effective interest rate. Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the year ended December 31, 2019. December 31, 2019 (in thousands) Carrying Amount of Loans Accretable Yield Balance at beginning of period $ 129,596 $ 37,294 Additions 120,562 6,246 Payments received, net (48,076 ) (4,601 ) Accretion 13,163 (13,163 ) Decrease in expected cash flows based on actual cash flows and changes in cash flow assumptions — 4,170 Balance at end of period $ 215,245 $ 29,946 . 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 December 31, 2019 was $8.6 million of consumer loans secured by single family residential real estate that were in process of foreclosure. In light of the economic conditions stemming from the pandemic, the Company placed all active foreclosures on hold and suspended the filing of new foreclosures. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $5.6 million and $6.3 million of foreclosed single family residential properties in other real estate owned at March 31, 2020 and December 31, 2019, respectively. |