Loans and Allowance for Loan Losses | Note 6 — Loans and Allowance for Loan Losses The following is a summary of non-acquired loans: March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 Non-acquired loans: Commercial non-owner occupied real estate: Construction and land development $ 646,544 $ 580,464 $ 447,197 Commercial non-owner occupied 803,998 714,715 525,637 Total commercial non-owner occupied real estate 1,450,542 1,295,179 972,834 Consumer real estate: Consumer owner occupied 1,252,650 1,197,621 1,060,554 Home equity loans 396,806 383,218 325,962 Total consumer real estate 1,649,456 1,580,839 1,386,516 Commercial owner occupied real estate 1,200,004 1,177,745 1,060,513 Commercial and industrial 725,974 671,398 553,527 Other income producing property 182,416 178,238 175,217 Consumer 340,292 324,238 247,502 Other loans 15,623 13,404 76,559 Total non-acquired loans 5,564,307 5,241,041 4,472,668 Less allowance for loan losses (38,449) (36,960) (35,115) Non-acquired loans, net $ 5,525,858 $ 5,204,081 $ 4,437,553 The following is a summary of acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, net of related discount: March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 FASB ASC Topic 310-20 acquired loans: Commercial non-owner occupied real estate: Construction and land development $ 141,897 $ 10,090 $ 13,024 Commercial non-owner occupied 217,850 34,628 36,530 Total commercial non-owner occupied real estate 359,747 44,718 49,554 Consumer real estate: Consumer owner occupied 550,578 408,270 494,472 Home equity loans 186,411 160,879 184,388 Total consumer real estate 736,989 569,149 678,860 Commercial owner occupied real estate 238,612 27,195 37,356 Commercial and industrial 136,309 13,641 21,109 Other income producing property 92,044 39,342 49,123 Consumer 151,941 142,654 163,236 Total FASB ASC Topic 310-20 acquired loans $ 1,715,642 $ 836,699 $ 999,238 The unamortized discount related to the acquired non-credit impaired loans totaled $26.2 million, $11.6 million, and $15.2 million at March 31, 2017, December 31, 2016, and March 31, 2016, respectively. In accordance with FASB ASC Topic 310-30, the Company aggregated acquired loans that have common risk characteristics into pools of loan categories as described in the table below. The following is a summary of acquired credit impaired loans accounted for under FASB ASC Topic 310-30 (identified as credit impaired at the time of acquisition), net of related discount: March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 FASB ASC Topic 310-30 acquired loans: Commercial loans greater than or equal to $1 million-CBT $ 8,594 $ 8,617 $ 12,445 Commercial real estate 214,562 210,204 237,393 Commercial real estate—construction and development 57,343 44,373 51,379 Residential real estate 266,484 258,100 298,537 Consumer 58,688 59,300 67,612 Commercial and industrial 26,225 25,347 28,948 Total FASB ASC Topic 310-30 acquired loans 631,896 605,941 696,314 Less allowance for loan losses (4,556) (3,395) (3,877) FASB ASC Topic 310-30 acquired loans, net $ 627,340 $ 602,546 $ 692,437 Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting fair values of FASB ASC Topic 310-30 acquired loans impaired and non-impaired at the acquisition date for Southeastern Financial (January 3, 2017) are as follows: January 3, 2017 Loans Loans Impaired Not Impaired (Dollars in thousands) at Acquisition at Acquisition Total Contractual principal and interest $ 73,365 $ — $ 73,365 Non-accretable difference (12,912) — (12,912) Cash flows expected to be collected 60,453 — 60,453 Accretable difference (4,603) — (4,603) Carrying value $ 55,850 $ — $ 55,850 The table above excludes $991.5 million ($1.01 billion in contractual principal less a $18.8 million fair value adjustment) in acquired loans at fair value that were identified as either performing with no discount related to the credit or as revolving lines of credit (commercial or consumer) as of the acquisition date and will be accounted for under FASB ASC Topic 310-20. Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting carrying values of acquired credit impaired loans as of March 31, 2017, December 31, 2016 and March 31, 2016 are as follows: March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 Contractual principal and interest $ 812,892 $ 778,822 $ 912,010 Non-accretable difference (31,273) (17,502) (26,833) Cash flows expected to be collected 781,619 761,320 885,177 Accretable yield (149,723) (155,379) (188,863) Carrying value $ 631,896 $ 605,941 $ 696,314 Allowance for acquired loan losses $ (4,556) $ (3,395) $ (3,877) Income on acquired credit impaired loans that are not impaired at the acquisition date is recognized in the same manner as loans impaired at the acquisition date. A portion of the fair value discount on acquired non-impaired loans has been ascribed as an accretable difference that is accreted into interest income over the estimated remaining life of the loans. The remaining nonaccretable difference represents cash flows not expected to be collected. The following are changes in the carrying value of acquired credit impaired loans: Three Months Ended March 31, (Dollars in thousands) 2017 2016 Balance at beginning of period $ 602,546 $ 733,870 Fair value of acquired loans 55,850 — Net reductions for payments, foreclosures, and accretion (29,895) (41,262) Change in the allowance for loan losses on acquired loans (1,161) (171) Balance at end of period, net of allowance for loan losses on acquired loans $ 627,340 $ 692,437 The table below reflects refined accretable yield balance for acquired credit impaired loans: Three Months Ended March 31, (Dollars in thousands) 2017 2016 Balance at beginning of period $ 155,379 $ 201,538 Addition from the Southeastern acquisition 4,603 — Accretion (15,214) (20,310) Reclass of nonaccretable difference due to improvement in expected cash flows 5,062 7,270 Other changes, net (107) 365 Balance at end of period $ 149,723 $ 188,863 In the first quarter of 2017, the accretable yield balance declined by $15.2 million as loan accretion (income) was recognized. This was partially offset by improved expected cash flows of $5.1 million. Our loan loss policy adheres to generally accepted accounting principles in the United States as well as interagency guidance. The allowance for loan losses is based upon estimates made by management. We maintain an allowance for loan losses at a level that we believe is appropriate to cover estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated credit losses inherent in the remainder of our loan portfolio. Arriving at the allowance involves a high degree of management judgment and results in a range of estimated losses. We regularly evaluate the adequacy of the allowance through our internal risk rating system, outside credit review, and regulatory agency examinations to assess the quality of the loan portfolio and identify problem loans. The evaluation process also includes our analysis of current economic conditions, composition of the loan portfolio, past due and nonaccrual loans, concentrations of credit, lending policies and procedures, and historical loan loss experience. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on, among other factors, changes in economic conditions in our markets. In addition, regulatory agencies, as an integral part of their examination process, periodically review our allowances for losses on loans. These agencies may require management to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these and other factors, it is possible that the allowances for losses on loans may change. The provision for loan losses is charged to expense in an amount necessary to maintain the allowance at an appropriate level. The allowance for loan losses on non‑acquired loans consists of general and specific reserves. The general reserves are determined by applying loss percentages to the portfolio that are based on historical loss experience for each class of loans and management’s evaluation and “risk grading” of the loan portfolio. Additionally, the general economic and business conditions affecting key lending areas, credit quality trends, collateral values, loan volumes and concentrations, seasoning of the loan portfolio, the findings of internal and external credit reviews and results from external bank regulatory examinations are included in this evaluation. Currently, these adjustments are applied to the non‑acquired loan portfolio when estimating the level of reserve required. The specific reserves are determined on a loan‑by‑loan basis based on management’s evaluation of our exposure for each credit, given the current payment status of the loan and the value of any underlying collateral. These are loans classified by management as doubtful or substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. Generally, the need for specific reserve is evaluated on impaired loans, and once a specific reserve is established for a loan, a charge off of that amount occurs in the quarter subsequent to the establishment of the specific reserve. Loans that are determined to be impaired are provided a specific reserve, if necessary, and are excluded from the calculation of the general reserves. Beginning with the First Financial Holdings, Inc. (“FFHI”) acquisition in 2013, the Company segregates the acquired loan portfolio into performing loans (“non‑credit impaired) and purchased credit impaired loans. The performing loans and revolving type loans are accounted for under FASB ASC 310‑20, with each loan being accounted for individually. The allowance for loan losses on these loans will be measured and recorded consistent with non‑acquired loans. The acquired credit impaired loans will follow the description in the next paragraph. In determining the acquisition date fair value of purchased loans, and in subsequent accounting, the Company generally aggregates purchased loans into pools of loans with common risk characteristics. Expected cash flows at the acquisition date in excess of the fair value of loans are recorded as interest income over the life of the loans using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are reclassified from the non‑accretable difference to accretable yield and recognized as interest income prospectively. Decreases in expected cash flows after the acquisition date are recognized by recording an allowance for loan losses. Management analyzes the acquired loan pools using various assessments of risk to determine an expected loss. The expected loss is derived based upon a loss given default based upon the collateral type and/or detailed review by loan officers and the probability of default that is determined based upon historical data at the loan level. All acquired loans managed by Special Asset Management are reviewed quarterly and assigned a loss given default. Acquired loans not managed by Special Asset Management are reviewed twice a year in a similar method to the Company’s originated portfolio of loans which follow review thresholds based on risk rating categories. In the fourth quarter of 2015, the Company modified its methodology to a more granular approach in determining loss given default on substandard loans with a net book balance between $100,000 and $500,000 by adjusting the loss given default to 90% of the most current collateral valuation based on appraised value. Substandard loans greater than $500,000 were individually assigned loss given defaults each quarter. Trends are reviewed in terms of accrual status, past due status, and weighted‑average grade of the loans within each of the accounting pools. In addition, the relationship between the change in the unpaid principal balance and change in the mark is assessed to correlate the directional consistency of the expected loss for each pool. Prior to the termination of our loss share agreements in June 2016, offsetting the impact of the provision established for acquired loans covered under FDIC loss share agreements, the receivable from the FDIC was adjusted to reflect the indemnified portion of the post‑acquisition exposure with a corresponding credit to the provision for loan losses. On June 23, 2016, the Bank entered into an early termination agreement with the FDIC with respect to all of its outstanding loss share agreements. The loss share agreements were entered into with the FDIC in 2009, 2010, 2011 and 2012 either by the Bank or by First Federal Bank, acquired by the Bank in July of 2013. As a result of the termination agreement, all assets previously classified as covered became uncovered effective June 23, 2016, and as a result the Bank will now recognize the full amount of future charge-offs, recoveries, gains, losses, and expenses related to these previously covered assets, as the FDIC will no longer share in these amounts. An aggregated analysis of the changes in allowance for loan losses is as follows: Non-acquired Acquired Non-Credit Acquired Credit (Dollars in thousands) Loans Impaired Loans Impaired Loans Total Three Months Ended March 31, 2017: Balance at beginning of period $ 36,960 $ — $ 3,395 $ 40,355 Loans charged-off (1,297) (389) — (1,686) Recoveries of loans previously charged off (1) 669 63 — 732 Net charge-offs (628) (326) — (954) Provision for loan losses charged to operations 2,117 326 1,264 3,707 Provision for loan losses recorded through the FDIC loss share receivable — — — — Reduction due to loan removals — — (103) (103) Balance at end of period $ 38,449 $ — $ 4,556 $ 43,005 Three Months Ended March 31, 2016: Balance at beginning of period $ 34,090 $ — $ 3,706 $ 37,796 Loans charged-off (1,719) (297) — (2,016) Recoveries of loans previously charged off (1) 764 91 — 855 Net charge-offs (955) (206) — (1,161) Provision for loan losses charged to operations 1,980 206 371 2,557 Provision for loan losses recorded through the FDIC loss share receivable — — (23) (23) Reduction due to loan removals — — (177) (177) Balance at end of period $ 35,115 $ — $ 3,877 $ 38,992 (1) – Recoveries related to acquired credit impaired loans are recorded through other noninterest income on the consolidated statement of income and do not run through the allowance for loan losses. The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for non-acquired loans: Construction Commercial Commercial Consumer Other Income & Land Non-owner Owner Owner Home Commercial Producing Other (Dollars in thousands) Development Occupied Occupied Occupied Equity & Industrial Property Consumer Loans Total Three Months Ended March 31, 2017 Allowance for loan losses: Balance, December 31, 2016 $ 4,091 $ 4,980 $ 8,022 $ 7,820 $ 3,211 $ 4,842 $ 1,542 $ 2,350 $ 102 $ 36,960 Charge-offs (405) — — (123) (34) (22) — (713) — (1,297) Recoveries 154 41 7 49 74 90 43 211 — 669 Provision (benefit) 809 443 (135) 362 205 214 (240) 595 (136) 2,117 Balance, March 31, 2017 $ 4,649 $ 5,464 $ 7,894 $ 8,108 $ 3,456 $ 5,124 $ 1,345 $ 2,443 $ (34) $ 38,449 Loans individually evaluated for impairment $ 459 $ 158 $ 60 $ 68 $ 297 $ 387 $ 224 $ 5 $ — $ 1,658 Loans collectively evaluated for impairment $ 4,190 $ 5,306 $ 7,834 $ 8,040 $ 3,159 $ 4,737 $ 1,121 $ 2,438 $ (34) $ 36,791 Loans: Loans individually evaluated for impairment $ 9,286 $ 775 $ 6,251 $ 4,712 $ 2,432 $ 1,270 $ 2,408 $ 189 $ — $ 27,323 Loans collectively evaluated for impairment 637,258 803,223 1,193,753 1,247,938 394,374 724,704 180,008 340,103 15,623 5,536,984 Total non-acquired loans $ 646,544 $ 803,998 $ 1,200,004 $ 1,252,650 $ 396,806 $ 725,974 $ 182,416 $ 340,292 $ 15,623 $ 5,564,307 Three Months Ended March 31, 2016 Allowance for loan losses: Balance , December 31, 2015 $ 4,116 $ 3,568 $ 8,341 $ 7,212 $ 2,929 $ 3,974 $ 1,963 $ 1,694 $ 293 $ 34,090 Charge-offs — — (42) — (443) (307) — (927) — (1,719) Recoveries 165 16 7 81 88 48 4 355 — 764 Provision (benefit) 201 339 (127) 52 523 236 (165) 663 258 1,980 Balance, March 31, 2016 $ 4,482 $ 3,923 $ 8,179 $ 7,345 $ 3,097 $ 3,951 $ 1,802 $ 1,785 $ 551 $ 35,115 Loans individually evaluated for impairment $ 843 $ 22 $ 148 $ 148 $ 79 $ 17 $ 414 $ 4 $ 24 $ 1,699 Loans collectively evaluated for impairment $ 3,639 $ 3,901 $ 8,031 $ 7,197 $ 3,018 $ 3,934 $ 1,388 $ 1,781 $ 527 $ 33,416 Loans: Loans individually evaluated for impairment $ 6,271 $ 1,135 $ 7,701 $ 7,643 $ 3,182 $ 877 $ 5,394 $ 142 $ 846 $ 33,191 Loans collectively evaluated for impairment 440,926 524,502 1,052,812 1,052,911 322,780 552,650 169,823 247,360 75,713 4,439,477 Total non-acquired loans $ 447,197 $ 525,637 $ 1,060,513 $ 1,060,554 $ 325,962 $ 553,527 $ 175,217 $ 247,502 $ 76,559 $ 4,472,668 The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired non-credit impaired loans: Construction Commercial Commercial Consumer Other Income & Land Non-owner Owner Owner Home Commercial Producing (Dollars in thousands) Development Occupied Occupied Occupied Equity & Industrial Property Consumer Total Three Months Ended March 31, 2017 Allowance for loan losses: Balance at beginning of period $ — $ — $ — $ — $ — $ — $ — $ — $ — Charge-offs — — — (313) — (2) — (74) (389) Recoveries 1 — — 39 9 1 1 12 63 Provision (benefit) (1) — — 274 (9) 1 (1) 62 326 Balance, March 31, 2017 $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans: Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 141,897 217,850 238,612 550,578 186,411 136,309 92,044 151,941 1,715,642 Total acquired non-credit impaired loans $ 141,897 $ 217,850 $ 238,612 $ 550,578 $ 186,411 $ 136,309 $ 92,044 $ 151,941 $ 1,715,642 Three Months Ended March 31, 2016 Allowance for loan losses: Balance at beginning of period $ — $ — $ — $ — $ — $ — $ — $ — $ — Charge-offs — — — — (144) (3) — (150) (297) Recoveries 1 — — 3 85 1 — 1 91 Provision (benefit) (1) — — (3) 59 2 — 149 206 Balance, March 31, 2016 $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans: Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 13,024 36,530 37,356 494,472 184,388 21,109 49,123 163,236 999,238 Total acquired non-credit impaired loans $ 13,024 $ 36,530 $ 37,356 $ 494,472 $ 184,388 $ 21,109 $ 49,123 $ 163,236 $ 999,238 The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired credit impaired loans: Commercial Commercial Loans Greater Real Estate- Than or Equal Commercial Construction and Residential Commercial (Dollars in thousands) to $1 Million-CBT Real Estate Development Real Estate Consumer and Industrial Single Pay Total Three Months Ended March 31, 2017 Allowance for loan losses: Balance, December 31, 2016 $ — $ $ $ $ $ $ — $ Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements — 291 (3) 187 — 1,264 Benefit attributable to FDIC loss share agreements — — — — — — — — Total provision (benefit) for loan losses charged to operations — 291 (3) 187 — 1,264 Provision for loan losses recorded through the FDIC loss share receivable — — — — — — — — Reduction due to loan removals — — Balance, March 31, 2017 $ — $ $ $ $ $ $ — $ Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ $ $ $ $ $ — $ Loans:* Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment — Total acquired credit impaired loans $ $ $ $ $ $ $ — $ Three Months Ended March 31, 2016 Allowance for loan losses: Balance , December 31, 2015 $ — $ 56 $ 177 $ 2,986 $ 313 $ 174 $ — $ 3,706 Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements — 1 — (15) 317 45 — 348 Benefit attributable to FDIC loss share agreements — — — 23 — — — 23 Total provision (benefit) for loan losses charged to operations — 1 — 8 317 45 — 371 Provision for loan losses recorded through the FDIC loss share receivable — — — (23) — — — (23) Reduction due to loan removals — (11) (23) (108) (24) (11) — (177) Balance, March 31, 2016 $ — $ 46 $ 154 $ 2,863 $ 606 $ 208 $ — $ 3,877 Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ 46 $ 154 $ 2,863 $ 606 $ 208 $ — $ 3,877 Loans:* Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 12,445 237,393 51,379 298,537 67,612 28,948 — 696,314 Total acquired credit impaired loans $ 12,445 $ 237,393 $ 51,379 $ 298,537 $ 67,612 $ 28,948 $ — $ 696,314 *— The carrying value of acquired credit impaired loans includes a non accretable difference which is primarily associated with the assessment of credit quality of acquired loans. As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the level of classified loans, (ii) net charge-offs, (iii) non-performing loans (see details below), and (iv) the general economic conditions of the markets that we serve. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of the risk grades is as follows: · Pass—These loans range from minimal credit risk to average, however, still acceptable credit risk. · Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date. · Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. · Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable. The following table presents the credit risk profile by risk grade of commercial loans for non-acquired loans: Construction & Development Commercial Non-owner Occupied Commercial Owner Occupied March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 633,953 $ 567,398 $ 430,533 $ 790,687 $ 701,150 $ 507,432 $ 1,167,531 $ 1,149,417 $ 1,022,325 Special mention 8,868 8,421 10,496 11,233 11,434 16,013 20,277 22,133 27,310 Substandard 3,723 4,645 6,168 2,078 2,131 2,192 12,196 6,195 10,878 Doubtful — — — — — — — — — $ 646,544 $ 580,464 $ 447,197 $ 803,998 $ 714,715 $ 525,637 $ 1,200,004 $ 1,177,745 $ 1,060,513 Commercial & Industrial Other Income Producing Property Commercial Total March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 703,747 $ 655,157 $ 545,628 $ 174,321 $ 167,025 $ 159,766 $ 3,470,239 $ 3,240,147 $ 2,665,684 Special mention 16,746 14,325 6,285 6,176 9,280 10,729 63,300 65,593 70,833 Substandard 5,481 1,916 1,614 1,919 1,933 4,722 25,397 16,820 25,574 Doubtful — — — — — — — — — $ 725,974 $ 671,398 $ 553,527 $ 182,416 $ 178,238 $ 175,217 $ 3,558,936 $ 3,322,560 $ 2,762,091 The following table presents the credit risk profile by risk grade of consumer loans for non-acquired loans: Consumer Owner Occupied Home Equity Consumer March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 1,225,556 $ 1,167,768 $ 1,028,864 $ 382,387 $ 368,655 $ 311,541 $ 338,473 $ 322,654 $ 245,775 Special mention 13,903 15,283 17,489 7,597 8,145 7,908 625 468 744 Substandard 13,191 14,570 14,201 6,822 6,418 6,513 1,194 1,116 983 Doubtful — — — — — — — — — $ 1,252,650 $ 1,197,621 $ 1,060,554 $ 396,806 $ 383,218 $ 325,962 $ 340,292 $ 324,238 $ 247,502 Other Consumer Total March 31, 2017 December 31, 2016 March 31, 2016 March 31, 2017 December 31, 2016 March 31, 2016 Pass $ 15,623 $ 13,404 $ 76,559 $ 1,962,039 $ 1,872,481 $ 1,662,739 Special mention — — — 22,125 23,896 26,141 Substandard — — — 21,207 22,104 21,697 Doubtful — — — — — — $ 15,623 $ 13,404 $ 76,559 $ 2,005,371 $ 1,918,481 $ 1,710,577 The following table presents the credit risk profile by risk grade of total non-acquired loans: Total Non-acquired Loans March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 Pass $ 5,432,278 $ 5,112,628 $ 4,328,423 Special mention 85,425 89,489 96,974 Substandard 46,604 38,924 47,271 Doubtful — — — $ 5,564,307 $ 5,241,041 $ 4,472,668 The following table presents the credit risk profile by risk grade of commercial loans for acquired non-credit impaired loans: Commercial Non-owner Construction & Development Occupied Commercial Owner Occupied March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 139,748 $ 8,997 $ 11,954 $ 213,827 $ 28,368 $ 30,212 $ 233,397 $ 26,920 $ 36,817 Special mention 1,316 253 208 3,937 6,171 381 5,057 — 320 Substandard 833 840 862 86 89 5,937 158 275 219 Doubtful — — — — — — — — — $ 141,897 $ 10,090 $ 13,024 $ 217,850 $ 34,628 $ 36,530 $ 238,612 $ 27,195 $ 37,356 Other Income Producing Commercial & Industrial Property Commercial Total March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 132,474 $ 13,475 $ 20,203 $ 89,596 $ 38,361 $ 47,938 $ 809,042 $ 116,121 $ 147,124 Special mention 3,787 117 151 1,741 273 426 15,838 6,814 1,486 Substandard 48 49 755 707 708 759 1,832 1,961 8,532 Doubtful — — — — — — — — — $ 136,309 $ 13,641 $ 21,109 $ 92,044 $ 39,342 $ 49,123 $ 826,712 $ 124,896 $ 157,142 The following table presents the credit risk profile by risk grade of consumer loans for acquired non-credit impaired loans: Consumer Owner Occupied Home Equity Consumer March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 546,049 $ 404,761 $ 491,423 $ 176,678 $ 151,752 $ 173,764 $ 148,798 $ 139,686 $ 160,247 Special mention 2,623 1,326 418 4,700 4,113 4,010 1,243 1,102 609 Substandard 1,906 2,183 2,631 5,033 5,014 6,614 1,900 1,866 2,380 Doubtful — — — — — — — — — $ 550,578 $ 408,270 $ 494,472 $ 186,411 $ 160,879 $ 184,388 $ 151,941 $ 142,654 $ 163,236 Consumer Total March 31, December 31, March 31, 2017 2016 2016 Pass $ 871,525 $ 696,199 $ 825,434 Special mention 8,566 6,541 5,037 Substandard 8,839 9,063 11,625 Doubtful — — — $ 888,930 $ 711,803 $ 842,096 The following table presents the credit risk profile by risk grade of total acquired non-credit impaired loans: Total Acquired Non-credit Impaired Loans March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 Pass $ 1,680,567 $ 812,320 $ 972,558 Special mention 24,404 13,355 6,523 Substandard 10,671 11,024 20,157 Doubtful — — — $ 1,715,642 $ 836,699 $ 999,238 The following table presents the credit risk profile by risk grade of acquired credit impaired loans (identified as credit-impaired at the time of acquisition), net of the related discount (this table should be read in conjunction with the allowance for acquired credit impaired loan losses table found on page 24): Commercial Loans Greater Commercial Real Estate— Than or Equal to Construction and $1 million-CBT Commercial Real Estate Development March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, (Dollars in thousands) 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 8,274 $ 8,297 $ 11,065 $ 162,349 $ 162,870 $ 169,991 $ 28,157 $ 21,150 $ 24,856 Special mention — — 1,016 24,412 26,238 32,536 15,117 12,643 13,856 Substandard 320 320 364 27,801 21,096 34,866 14,069 10,580 12,580 Doubtful — — — — — — — — 87 $ 8,594 $ 8,617 $ 12,445 $ 214,562 $ 210,204 $ 237,393 $ 57,343 $ 44,373 $ 51,379 Residential Real Estate Consumer Commercial & Industrial March 31, December 31, March 31, March 31, December 31, March 31, March 31, December 31, March 31, 2017 2016 2016 2017 2016 2016 2017 2016 2016 Pass $ 142,847 $ 138,343 $ 157,534 $ 9,704 $ 8,513 $ 10,228 $ 16,869 $ 17,371 $ 20,422 Special mention 53,539 52,546 60,922 19,124 19,685 22,417 4,645 4,614 2,561 Substandard 70,098 67,211 80,081 29,860 31,102 34,967 4,711 3,362 5,965 Doubtful — — — — — — — — — $ 266,484 $ 258,100 $ 298,537 $ 58,688 $ 59,300 $ 67,612 $ 26,225 $ 25,347 $ 28,948 Total Acquired Credit Impaired Loans March 31, December 31, March 31, 2017 2016 2016 Pass $ 368,200 $ 356,544 $ 394,096 Special mention 116,837 115,726 133,308 Substandard 146,859 133,671 168,823 Doubtful — — 87 $ 631,896 $ 605,941 $ 696,314 The risk grading of acquired credit impaired loans is determined utilizing a loan’s contractual balance, while the amount recorded in the financial statements and reflected above is the carrying value. In an FDIC-assisted acquisition, covered acquired loans are initially recorded at their fair value, including a credit discount due to the high concentration of substandard and doubtful loans. Note that all covered acquired loans are now uncovered due to the early termination agreement with the FDIC on June 23, 2016. The following table presents an aging analysis of past due loans, segregated by class for non-acquired loans: 30 - 59 Days 60 - 89 Days 90+ Days Total Total (Dollars in thousands) Past Due Past Due Past Due Past Due Current Loans March 31, 2017 Commercial real estate: Construction and land development $ 345 $ 100 $ 471 $ 916 $ 645,628 $ 646,544 Commercial non-owner occupied 759 664 304 1,727 802,271 803,998 Commercial owner occupied 1,811 1,988 1,375 5,174 1,194,830 1,200,004 Consumer real estate: Consumer owner occupied 1,076 31 993 2,100 1,250,550 1,252,650 Home equity loans 434 341 1,404 2,179 394,627 396,806 Commercial and industrial 366 159 174 699 725,275 725,974 Other income producing property 310 104 190 604 181,812 182,416 Consumer 273 114 527 914 339,378 340,292 Other loans — — — — 15,623 15,623 $ 5,374 $ 3,501 $ 5,438 $ 14,313 $ 5,549,994 $ 5,564,307 December 31, 2016 Commercial real estate: Construction and land development $ 256 $ 313 $ 1,026 $ 1,595 $ 578,869 $ 580,464 Commercial non-owner occupied 647 232 137 1,016 713,699 714,715 Commercial owner occupied 1,272 957 1,478 3,707 1,174,038 1,177,745 Consumer real estate: Consumer owner occupied 1,473 246 1,454 3,173 1,194,448 1,197,621 Home equity loans 566 889 838 2,293 380,925 383,218 Commercial and industrial 1,033 216 345 1,594 669,804 671,398 Other income producing property 310 94 147 551 177,687 178,238 Consumer 666 355 395 1,416 322,822 324,238 Other loans — — — — 13,404 13,404 $ 6,223 $ 3,302 $ 5,820 $ 15,345 $ 5,225,696 $ 5,241,041 March 31, 2016 Commercial real estate: Construction and land development $ 476 $ 213 $ 995 $ 1,684 $ 445,513 $ 447,197 Commercial non-owner occupied 45 27 137 209 525,428 525,637 Commercial owner occupied 1,153 738 1,255 3,146
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