Allowance | NOTE E - ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL) Activity in the allowance for non-PCI loan and lease losses by class of loans is summarized as follows: Three months ended June 30, 2019 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Non-PCI Loans Allowance for loan and lease losses: Balance at April 1 $ 37,476 $ 45,281 $ 2,399 $ 57,025 $ 2,167 $ 16,987 $ 21,495 $ 2,473 $ 34,492 $ 219,795 Provision (credits) (5,544 ) 3,714 (57 ) 2,699 (174 ) 371 (328 ) 277 4,877 5,835 Charge-offs (28 ) (89 ) — (3,422 ) (31 ) (478 ) (493 ) — (6,061 ) (10,602 ) Recoveries 40 56 — 599 221 52 447 — 1,797 3,212 Balance at June 30 $ 31,944 $ 48,962 $ 2,342 $ 56,901 $ 2,183 $ 16,932 $ 21,121 $ 2,750 $ 35,105 $ 218,240 Three months ended June 30, 2018 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Balance at April 1 $ 26,718 $ 43,833 $ 3,423 $ 59,317 $ 4,842 $ 16,489 $ 22,104 $ 3,913 $ 30,181 $ 210,820 Provision (credits) (3,139 ) 866 468 3,791 (114 ) 1,492 289 50 4,574 8,277 Charge-offs (8 ) (459 ) (69 ) (2,439 ) (38 ) (289 ) (1,027 ) (37 ) (5,312 ) (9,678 ) Recoveries 93 225 1 642 1 110 520 101 1,330 3,023 Balance at June 30 $ 23,664 $ 44,465 $ 3,823 $ 61,311 $ 4,691 $ 17,802 $ 21,886 $ 4,027 $ 30,773 $ 212,442 Six months ended June 30, 2019 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Balance at January 1 $ 35,270 $ 43,451 $ 2,481 $ 55,620 $ 2,221 $ 15,472 $ 21,862 $ 2,350 $ 35,841 $ 214,568 Provision (credits) (3,425 ) 6,085 (140 ) 5,424 (672 ) 1,879 (119 ) 400 8,317 17,749 Charge-offs (72 ) (850 ) — (5,280 ) (31 ) (644 ) (1,456 ) — (12,423 ) (20,756 ) Recoveries 171 276 1 1,137 665 225 834 — 3,370 6,679 Balance at June 30 $ 31,944 $ 48,962 $ 2,342 $ 56,901 $ 2,183 $ 16,932 $ 21,121 $ 2,750 $ 35,105 $ 218,240 Six months ended June 30, 2018 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Balance at January 1 $ 24,470 $ 45,005 $ 4,571 $ 59,824 $ 4,689 $ 15,706 $ 22,436 $ 3,962 $ 31,204 $ 211,867 Provision (credits) (914 ) (499 ) (825 ) 4,353 — 3,004 755 157 7,497 13,528 Charge-offs (8 ) (505 ) (69 ) (4,768 ) (41 ) (1,095 ) (2,019 ) (219 ) (10,567 ) (19,291 ) Recoveries 116 464 146 1,902 43 187 714 127 2,639 6,338 Balance at June 30 $ 23,664 $ 44,465 $ 3,823 $ 61,311 $ 4,691 $ 17,802 $ 21,886 $ 4,027 $ 30,773 $ 212,442 The following tables present the allowance and recorded investment in loans and leases by class of loans, as well as the associated impairment method at June 30, 2019 and December 31, 2018 : June 30, 2019 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Non-PCI Loans Allowance for loan and lease losses: ALLL for loans and leases individually evaluated for impairment $ 196 $ 3,042 $ 11 $ 1,422 $ 104 $ 2,566 $ 2,704 $ 82 $ 971 $ 11,098 ALLL for loans and leases collectively evaluated for impairment 31,748 45,920 2,331 55,479 2,079 14,366 18,417 2,668 34,134 207,142 Total allowance for loan and lease losses $ 31,944 $ 48,962 $ 2,342 $ 56,901 $ 2,183 $ 16,932 $ 21,121 $ 2,750 $ 35,105 $ 218,240 Loans and leases: Loans and leases individually evaluated for impairment $ 2,078 $ 62,270 $ 506 $ 12,161 $ 315 $ 53,137 $ 30,040 $ 3,059 $ 3,107 $ 166,673 Loans and leases collectively evaluated for impairment 717,456 11,274,414 506,254 3,968,343 301,031 4,737,499 2,440,613 312,012 1,752,495 26,010,117 Total loan and leases $ 719,534 $ 11,336,684 $ 506,760 $ 3,980,504 $ 301,346 $ 4,790,636 $ 2,470,653 $ 315,071 $ 1,755,602 $ 26,176,790 December 31, 2018 (Dollars in thousands) Construction Commercial Other Commercial Other Residential Revolving Construction Consumer Total Non-PCI Loans Allowance for loan and lease losses: ALLL for loans and leases individually evaluated for impairment $ 490 $ 2,671 $ 42 $ 1,137 $ 105 $ 1,901 $ 2,515 $ 81 $ 885 $ 9,827 ALLL for loans and leases collectively evaluated for impairment 34,780 40,780 2,439 54,483 2,116 13,571 19,347 2,269 34,956 204,741 Total allowance for loan and lease losses $ 35,270 $ 43,451 $ 2,481 $ 55,620 $ 2,221 $ 15,472 $ 21,862 $ 2,350 $ 35,841 $ 214,568 Loans and leases: Loans and leases individually evaluated for impairment $ 2,175 $ 55,447 $ 860 $ 9,868 $ 291 $ 42,168 $ 28,852 $ 3,749 $ 3,020 $ 146,430 Loans and leases collectively evaluated for impairment 755,679 10,661,787 426,125 3,928,862 296,133 4,223,519 2,514,123 253,281 1,710,761 24,770,270 Total loan and leases $ 757,854 $ 10,717,234 $ 426,985 $ 3,938,730 $ 296,424 $ 4,265,687 $ 2,542,975 $ 257,030 $ 1,713,781 $ 24,916,700 PCI allowance activity and balances for the three and six months ended June 30, 2019 and June 30, 2018 is summarized as follows: (Dollars in thousands) Three months ended June 30, 2019 Three months ended June 30, 2018 PCI Loans Allowance for loan losses: Balance at April 1 $ 8,980 $ 12,296 (Credit) provision (637 ) 161 Charge-offs — (34 ) Recoveries — — Balance at June 30 $ 8,343 $ 12,423 Six months ended June 30, 2019 Six months ended June 30, 2018 Balance at January 1 $ 9,144 $ 10,026 (Credit) provision (801 ) 2,515 Charge-offs — (118 ) Recoveries — — Balance at June 30 $ 8,343 $ 12,423 The following table presents the PCI allowance and recorded investment in loans at June 30, 2019 and December 31, 2018 : (Dollars in thousands) June 30, 2019 December 31, 2018 ALLL for loans acquired with deteriorated credit quality $ 8,343 $ 9,144 Loans acquired with deteriorated credit quality 551,447 606,576 At June 30, 2019 and December 31, 2018 , $163.9 million and $186.6 million , respectively, in PCI loans experienced an adverse change in expected cash flows since the date of acquisition. The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group: June 30, 2019 (Dollars in thousands) With a With no Total Unpaid Related Non-PCI impaired loans and leases: Commercial: Construction and land development $ 463 $ 1,615 $ 2,078 $ 2,490 $ 196 Commercial mortgage 38,793 23,477 62,270 68,477 3,042 Other commercial real estate 197 309 506 595 11 Commercial and industrial and leases 8,155 4,006 12,161 17,333 1,422 Other 249 66 315 336 104 Total commercial loans 47,857 29,473 77,330 89,231 4,775 Noncommercial: Residential mortgage 43,349 9,788 53,137 56,860 2,566 Revolving mortgage 26,104 3,936 30,040 33,135 2,704 Construction and land development 1,647 1,412 3,059 3,353 82 Consumer 3,039 68 3,107 3,476 971 Total noncommercial loans 74,139 15,204 89,343 96,824 6,323 Total non-PCI impaired loans and leases $ 121,996 $ 44,677 $ 166,673 $ 186,055 $ 11,098 December 31, 2018 (Dollars in thousands) With a With no Total Unpaid Related Non-PCI impaired loans and leases: Commercial: Construction and land development $ 1,897 $ 278 $ 2,175 $ 2,606 $ 490 Commercial mortgage 34,177 21,270 55,447 61,317 2,671 Other commercial real estate 243 617 860 946 42 Commercial and industrial and leases 7,153 2,715 9,868 14,695 1,137 Other 216 75 291 301 105 Total commercial loans 43,686 24,955 68,641 79,865 4,445 Noncommercial: Residential mortgage 40,359 1,809 42,168 45,226 1,901 Revolving mortgage 25,751 3,101 28,852 31,371 2,515 Construction and land development 2,337 1,412 3,749 4,035 81 Consumer 2,940 80 3,020 3,405 885 Total noncommercial loans 71,387 6,402 77,789 84,037 5,382 Total non-PCI impaired loans and leases $ 115,073 $ 31,357 $ 146,430 $ 163,902 $ 9,827 Non-PCI impaired loans less than $500,000 that were collectively evaluated for impairment totaled $39.9 million and $47.1 million at June 30, 2019 and December 31, 2018 , respectively. The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2019 and June 30, 2018 : Three months ended June 30, 2019 Three months ended June 30, 2018 (Dollars in thousands) Average Interest income recognized Average Interest income recognized Non-PCI impaired loans and leases: Commercial: Construction and land development $ 2,102 $ 6 $ 1,485 $ 17 Commercial mortgage 58,906 538 68,113 659 Other commercial real estate 519 6 1,345 12 Commercial and industrial and leases 11,348 113 9,427 90 Other 328 2 67 — Total commercial 73,203 665 80,437 778 Noncommercial: Residential mortgage 48,490 317 42,046 298 Revolving mortgage 29,623 256 26,388 222 Construction and land development 3,547 32 3,526 44 Consumer 3,014 31 2,654 28 Total noncommercial 84,674 636 74,614 592 Total non-PCI impaired loans and leases $ 157,877 $ 1,301 $ 155,051 $ 1,370 Six months ended June 30, 2019 Six months ended June 30, 2018 (Dollars in thousands) Average Interest income recognized Average Interest income recognized Non-PCI impaired loans and leases: Commercial: Construction and land development $ 2,125 $ 34 $ 1,320 $ 28 Commercial mortgage 57,768 1,102 70,190 1,370 Other commercial real estate 602 14 1,529 23 Commercial and industrial and leases 10,674 213 9,594 177 Other 322 4 34 — Total commercial 71,491 1,367 82,667 1,598 Noncommercial: Residential mortgage 45,558 642 40,385 573 Revolving mortgage 29,183 503 25,590 423 Construction and land development 3,647 68 3,815 92 Consumer 3,007 60 2,581 56 Total noncommercial 81,395 1,273 72,371 1,144 Total non-PCI impaired loans and leases $ 152,886 $ 2,640 $ 155,038 $ 2,742 Troubled Debt Restructurings BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (TDRs). In general, the modification or restructuring of a loan is considered a TDR if, for economic reasons or legal reasons related to a borrower's financial difficulties, a concession is granted to the borrower that creditors would not otherwise consider. Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. The majority of TDRs are included in the special mention, substandard or doubtful credit quality indicators, which results in more elevated loss expectations when projecting the expected cash flows that are used to determine the allowance for loan losses associated with these loans. The lower the credit quality indicator, the lower the estimated expected cash flows and the greater the allowance recorded. All TDRs are individually evaluated for impairment through review of collateral values or analysis of cash flows at least annually. The following table provides a summary of total TDRs by accrual status. Total TDRs included $18.0 million and $18.2 million of PCI TDRs at June 30, 2019 and December 31, 2018 , respectively: June 30, 2019 December 31, 2018 (Dollars in thousands) Accruing Nonaccruing Total Accruing Nonaccruing Total Commercial loans: Construction and land development $ 567 $ 1,626 $ 2,193 $ 1,946 $ 352 $ 2,298 Commercial mortgage 51,374 7,886 59,260 53,270 7,795 61,065 Other commercial real estate 506 — 506 851 9 860 Commercial and industrial and leases 9,851 2,345 12,196 7,986 2,060 10,046 Other 107 208 315 118 173 291 Total commercial loans 62,405 12,065 74,470 64,171 10,389 74,560 Noncommercial: Residential mortgage 36,260 17,839 54,099 37,903 9,621 47,524 Revolving mortgage 21,203 8,919 30,122 20,492 8,196 28,688 Construction and land development 1,495 1,565 3,060 2,227 110 2,337 Consumer 2,437 669 3,106 2,300 721 3,021 Total noncommercial loans 61,395 28,992 90,387 62,922 18,648 81,570 Total loans $ 123,800 $ 41,057 $ 164,857 $ 127,093 $ 29,037 $ 156,130 The following table provides the types of TDRs made during the three and six months ended June 30, 2019 and June 30, 2018 , as well as a summary of loans that were modified as a TDR during the twelve month periods ended June 30, 2019 and June 30, 2018 that subsequently defaulted during the three and six months ended June 30, 2019 and June 30, 2018 . BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first. Three months ended June 30, 2019 Three months ended June 30, 2018 All restructurings Restructurings with payment default All restructurings Restructurings with payment default (Dollars in thousands) Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Loans and leases Interest only 4 $ 4,343 — $ — 1 $ 154 2 $ 821 Loan term extension 4 998 2 183 10 936 7 341 Below market interest rate 67 6,979 30 2,612 53 9,525 33 1,702 Discharged from bankruptcy 40 5,054 30 3,106 37 2,472 24 1,490 Total restructurings 115 $ 17,374 62 $ 5,901 101 $ 13,087 66 $ 4,354 Six months ended June 30, 2019 Six months ended June 30, 2018 All restructurings Restructurings with payment default All restructurings Restructurings with payment default (Dollars in thousands) Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Number of Loans Recorded investment at period end Loans and leases Interest only 4 $ 4,343 2 $ 3,203 2 $ 821 2 $ 821 Loan term extension 8 1,437 4 534 17 1,658 8 638 Below market interest rate 125 11,063 61 4,645 139 15,873 64 3,385 Discharged from bankruptcy 102 7,679 53 3,948 91 5,595 55 4,338 Total restructurings 239 $ 24,522 120 $ 12,330 249 $ 23,947 129 $ 9,182 For the three and six months ended June 30, 2019 and June 30, 2018 , the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different. |