LOANS AND ALLOWANCE FOR LOAN LOSSES | 3. LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES The information included below reflects the impact of the CARES Act, as amended by the CAA, and the Joint Guidance. See Note 1 āSummary of Significant Accounting Policiesā in the Companyās 2020 Form 10-K for information about COVID-19 and related legislative and regulatory developments. ā The Companyās loans are stated at their face amount, net of deferred fees and costs, and consist of the following at June 30, 2021 and December 31, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā June 30, 2021 December 31, 2020 Construction and Land Development ā $ 838,722 ā $ 925,798 Commercial Real Estate - Owner Occupied ā 2,069,658 ā 2,128,909 Commercial Real Estate - Non-Owner Occupied ā 3,712,607 ā 3,657,562 Multifamily Real Estate ā 860,081 ā 814,745 Commercial & Industrial (1) ā 2,990,622 ā 3,263,460 Residential 1-4 Family - Commercial ā 637,485 ā 671,949 Residential 1-4 Family - Consumer ā 823,355 ā 822,866 Residential 1-4 Family - Revolving ā 559,014 ā 596,996 Auto ā 411,073 ā 401,324 Consumer ā 195,036 ā 247,730 Other Commercial (2) ā 600,276 ā 489,975 Total loans held for investment, net of deferred fees and costs (3) ā ā 13,697,929 ā ā 14,021,314 Allowance for loan and lease losses ā ā (118,261) ā ā (160,540) Total loans held for investment, net ā $ 13,579,668 ā $ 13,860,774 (1) Commercial & industrial loans include approximately $842.0 million and $1.2 billion in loans from the PPP at June 30, 2021 and December 31, 2020, respectively. ā (2) Other commercial loans include approximately $17.4 million and $11.3 million in loans from the PPP at June 30, 2021 and December 31, 2020, respectively. ā (3) Total loans include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $73.7 million and $69.7 million as of June 30, 2021 and December 31, 2020, respectively. The following table shows the aging of the Companyās loan portfolio, by class, at June 30, 2021 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Greater than ā ā ā ā ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā 90 Days and ā ā ā ā ā ā ā ā ā Current ā Past Due ā Past Due ā still Accruing ā Nonaccrual ā Total Loans ā Construction and Land Development ā $ 834,743 ā $ 798 ā $ 310 ā $ 186 ā $ 2,685 ā $ 838,722 ā Commercial Real Estate - Owner Occupied ā 2,056,955 ā 1,450 ā 2,008 ā 2,276 ā 6,969 ā 2,069,658 ā Commercial Real Estate - Non-Owner Occupied ā 3,707,175 ā 1,501 ā 78 ā 827 ā 3,026 ā 3,712,607 ā Multifamily Real Estate ā 859,812 ā 156 ā ā ā ā ā 113 ā 860,081 ā Commercial & Industrial ā 2,984,945 ā 948 ā 1,733 ā 1,088 ā 1,908 ā 2,990,622 ā Residential 1-4 Family - Commercial ā 631,251 ā 710 ā 565 ā 759 ā 4,200 ā 637,485 ā Residential 1-4 Family - Consumer ā 805,385 ā 764 ā 992 ā 2,725 ā 13,489 ā 823,355 ā Residential 1-4 Family - Revolving ā 553,130 ā 919 ā 678 ā 561 ā 3,726 ā 559,014 ā Auto ā 409,228 ā 1,333 ā 165 ā 168 ā 179 ā 411,073 ā Consumer ā 193,934 ā 545 ā 297 ā 156 ā 104 ā 195,036 ā Other Commercial ā ā 599,901 ā ā 375 ā ā ā ā ā ā ā ā ā ā ā 600,276 ā Total loans held for investment ā $ 13,636,459 ā $ 9,499 ā $ 6,826 ā $ 8,746 ā $ 36,399 ā $ 13,697,929 ā % of total loans ā ā 99.55 % ā 0.07 % ā 0.05 % ā 0.06 % ā 0.27 % ā 100.00 % ā The following table shows the aging of the Companyās loan portfolio, by class, at December 31, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Greater than ā ā ā ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā 90 Days and ā ā ā ā ā ā ā ā Current ā Past Due ā Past Due ā still Accruing ā Nonaccrual ā Total Loans Construction and Land Development ā $ 920,276 ā $ 1,903 ā $ 547 ā $ ā ā $ 3,072 ā $ 925,798 ā Commercial Real Estate - Owner Occupied ā 2,114,804 ā 1,870 ā 1,380 ā 3,727 ā 7,128 ā 2,128,909 ā Commercial Real Estate - Non-Owner Occupied ā 3,651,232 ā 2,144 ā 1,721 ā 148 ā 2,317 ā 3,657,562 ā Multifamily Real Estate ā 814,095 ā 617 ā ā ā ā ā 33 ā 814,745 ā Commercial & Industrial ā 3,257,201 ā 1,848 ā 1,190 ā 1,114 ā 2,107 ā 3,263,460 ā Residential 1-4 Family - Commercial ā 657,351 ā 2,227 ā 818 ā 1,560 ā 9,993 ā 671,949 ā Residential 1-4 Family - Consumer ā 792,852 ā 10,182 ā 1,533 ā 5,699 ā 12,600 ā 822,866 ā Residential 1-4 Family - Revolving ā 587,522 ā 2,975 ā 1,044 ā 826 ā 4,629 ā 596,996 ā Auto ā 398,206 ā 2,076 ā 376 ā 166 ā 500 ā 401,324 ā Consumer ā 245,551 ā 1,166 ā 550 ā 394 ā 69 ā 247,730 ā Other Commercial ā ā 489,959 ā ā 16 ā ā ā ā ā ā ā ā ā ā ā 489,975 ā Total loans held for investment ā $ 13,929,049 ā $ 27,024 ā $ 9,159 ā $ 13,634 ā $ 42,448 ā $ 14,021,314 ā % of total loans ā ā 99.34 % ā 0.19 % ā 0.07 % ā 0.10 % ā 0.30 % ā 100.00 % ā ā The following table shows the Companyās amortized cost basis of loans on nonaccrual status as of January 1, 2021, as well as amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of June 30, 2021 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nonaccrual ā ā ā ā ā ā ā ā January 1, 2021 ā June 30, 2021 ā Nonaccrual With No ALLL ā 90 Days and still Accruing Construction and Land Development ā $ 3,072 ā $ 2,685 ā $ 1,985 ā $ 186 Commercial Real Estate - Owner Occupied ā ā 7,128 ā ā 6,969 ā ā 1,994 ā ā 2,276 Commercial Real Estate - Non-Owner Occupied ā ā 2,317 ā ā 3,026 ā ā ā ā ā 827 Multifamily Real Estate ā ā 33 ā ā 113 ā ā ā ā ā ā Commercial & Industrial ā ā 2,107 ā ā 1,908 ā ā 1 ā ā 1,088 Residential 1-4 Family - Commercial ā ā 9,993 ā ā 4,200 ā ā 1,736 ā ā 759 Residential 1-4 Family - Consumer ā ā 12,600 ā ā 13,489 ā ā 1,069 ā ā 2,725 Residential 1-4 Family - Revolving ā ā 4,629 ā ā 3,726 ā ā 60 ā ā 561 Auto ā ā 500 ā ā 179 ā ā ā ā ā 168 Consumer ā ā 69 ā ā 104 ā ā ā ā ā 156 Total loans held for investment ā $ 42,448 ā $ 36,399 ā $ 6,845 ā $ 8,746 ā ā The following table shows the Companyās amortized cost basis of loans on nonaccrual status as of January 1, 2020, as well as amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nonaccrual ā ā ā ā ā ā ā ā January 1, 2020 ā December 31, 2020 ā Nonaccrual With No ALLL ā 90 Days and still Accruing Construction and Land Development ā $ 4,060 ā $ 3,072 ā $ 1,985 ā $ ā Commercial Real Estate - Owner Occupied ā ā 13,889 ā ā 7,128 ā ā 1,994 ā ā 3,727 Commercial Real Estate - Non-Owner Occupied ā ā 1,368 ā ā 2,317 ā ā ā ā ā 148 Multifamily Real Estate ā ā ā ā ā 33 ā ā ā ā ā ā Commercial & Industrial ā ā 3,037 ā ā 2,107 ā ā 1 ā ā 1,114 Residential 1-4 Family - Commercial ā ā 6,492 ā ā 9,993 ā ā 6,388 ā ā 1,560 Residential 1-4 Family - Consumer ā ā 13,117 ā ā 12,600 ā ā 1,069 ā ā 5,699 Residential 1-4 Family - Revolving ā ā 2,490 ā ā 4,629 ā ā 60 ā ā 826 Auto ā ā 565 ā ā 500 ā ā ā ā ā 166 Consumer ā ā 88 ā ā 69 ā ā ā ā ā 394 Other Commercial ā ā 98 ā ā ā ā ā ā ā ā ā Total loans held for investment ā $ 45,204 ā $ 42,448 ā $ 11,497 ā $ 13,634 ā There was no interest income recognized on nonaccrual loans during the three and six months ended June 30, 2021 and 2020. See Note 1 āSummary of Significant Accounting Policiesā in the Companyās 2020 Form 10-K for additional information on the Companyās policies for nonaccrual loans. ā ā Troubled Debt Restructurings ā As of June 30, 2021, the Company has TDRs totaling $19.3 million with an estimated $800,000 of allowance for those loans for the current period. As of December 31, 2020, the Company had TDRs totaling $20.6 million with an estimated $1.6 million of allowance for those loans. A modification of a loanās terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrowerās financial difficulties. All loans that are considered to be TDRs are evaluated for credit losses in accordance with the Companyās ALLL methodology. For the three and six months ended June 30, 2021 and June 30, 2020, the recorded investment in TDRs prior to modifications was not materially impacted by the modifications. ā The following table provides a summary, by class, of TDRs that continue to accrue interest under the terms of the applicable restructuring agreement, which are considered to be performing, and TDRs that have been placed on nonaccrual status, which are considered to be nonperforming, as of June 30, 2021 and December 31, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2021 ā December 31, 2020 ā No. of Recorded Outstanding No. of Recorded Outstanding ā ā Loans ā Investment ā Commitment ā Loans ā Investment ā Commitment Performing ā ā ā ā Construction and Land Development 4 ā $ 208 ā $ ā 4 ā $ 215 ā $ ā Commercial Real Estate - Owner Occupied 4 ā 1,009 ā ā 6 ā 2,033 ā 176 Commercial Real Estate - Non-Owner Occupied 1 ā 1,089 ā ā 1 ā 1,089 ā ā Commercial & Industrial 2 ā 434 ā ā 4 ā 727 ā ā Residential 1-4 Family - Commercial ā ā ā ā ā 3 ā 245 ā ā Residential 1-4 Family - Consumer 80 ā 9,641 ā ā 77 ā 8,943 ā ā Residential 1-4 Family - Revolving 3 ā 271 ā 3 3 ā 277 ā ā Consumer 3 ā 26 ā ā 3 ā 22 ā ā Other Commercial ā 1 ā ā 375 ā ā ā ā 1 ā ā 410 ā ā ā Total performing 98 ā $ 13,053 ā $ 3 102 ā $ 13,961 ā $ 176 Nonperforming ā ā ā ā Commercial Real Estate - Owner Occupied 2 ā $ 832 ā $ ā 1 ā $ 20 ā $ ā Commercial Real Estate - Non-Owner Occupied ā 1 ā ā 123 ā ā ā ā 1 ā ā 134 ā ā ā Commercial & Industrial 4 ā 402 ā ā 3 ā 237 ā ā Residential 1-4 Family - Commercial 3 ā 399 ā ā 4 ā 1,296 ā ā Residential 1-4 Family - Consumer 24 ā 4,373 ā ā 23 ā 4,865 ā ā Residential 1-4 Family - Revolving 3 ā 102 ā ā 3 ā 103 ā ā Total nonperforming 37 ā $ 6,231 ā $ ā 35 ā $ 6,655 ā $ ā Total performing and nonperforming 135 ā $ 19,284 ā $ 3 137 ā $ 20,616 ā $ 176 ā The Company considers a default of a TDR to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the three and six months ended June 30, 2021 and 2020, the Company did not have any material loans that went into default that had been restructured in the twelve-month period prior to the time of default. ā The following table shows, by class and modification type, TDRs that occurred during the three and six months ended June 30, 2021 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2021 ā Six Months Ended June 30, 2021 ā ā Recorded ā Recorded ā ā No. of ā Investment at ā No. of ā Investment at ā ā Loans ā Period End ā Loans ā Period End Modified to interest only, at a market rate ā ā Total interest only at market rate of interest ā ā $ ā ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā Term modification, at a market rate ā ā Residential 1-4 Family - Consumer ā ā $ ā 2 ā $ 104 Total loan term extended at a market rate ā ā $ ā 2 ā $ 104 ā ā ā ā ā ā ā ā ā ā ā Term modification, below market rate ā ā Residential 1-4 Family - Consumer 3 ā $ 1,382 11 ā $ 1,824 Consumer ā ā ā 1 ā 15 Total loan term extended at a below market rate 3 ā $ 1,382 12 ā $ 1,839 ā ā ā ā ā ā ā ā ā ā ā Interest rate modification, below market rate ā ā Residential 1-4 Family - Commercial ā ā $ ā 1 ā $ 45 Total interest only at below market rate of interest ā ā $ ā 1 ā $ 45 ā ā ā ā ā ā ā ā ā ā ā Total 3 ā $ 1,382 15 ā $ 1,988 ā The following table shows, by class and modification type, TDRs that occurred during the three and six months ended June 30, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2020 ā Six Months Ended June 30, 2020 ā ā Recorded ā Recorded ā ā No. of ā Investment at ā No. of ā Investment at ā ā Loans ā Period End ā Loans ā Period End Modified to interest only, at a market rate ā ā Total interest only at market rate of interest ā ā $ ā ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā Term modification, at a market rate ā ā Commercial & Industrial 4 ā $ 353 4 ā $ 353 Residential 1-4 Family - Consumer 3 ā 326 3 ā 326 Consumer 1 ā 10 1 ā 10 Total loan term extended at a market rate 8 ā $ 689 8 ā $ 689 ā ā ā ā ā ā ā ā ā ā ā Term modification, below market rate ā ā Construction and Land Development ā ā ā $ ā ā 1 ā $ 35 Residential 1-4 Family - Consumer 3 ā 172 13 ā 1,937 Residential 1-4 Family - Revolving ā 1 ā ā 52 ā 1 ā ā 52 Total loan term extended at a below market rate 4 ā $ 224 15 ā $ 2,024 ā ā ā ā ā ā ā ā ā ā ā Interest rate modification, below market rate ā ā Total interest only at below market rate of interest ā ā $ ā ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā Total 12 ā $ 913 23 ā $ 2,713 ā ā Allowance for Loan and Lease Losses ā ALLL on the loan portfolio is a material estimate for the Company. The Company estimates its ALLL on its loan portfolio on a quarterly basis. The Company models the ALLL using two primary segments, Commercial and Consumer. Each loan segment is further disaggregated into classes based on similar risk characteristics. The Company has identified the following classes within each loan segment: ā Commercial : Construction and Land Development, Commercial Real Estate ā Owner Occupied, Commercial Real Estate ā Non-Owner Occupied, Multifamily Real Estate, Commercial & Industrial, Residential 1-4 Family ā Commercial, and Other Commercial ā Consumer : Residential 1-4 Family ā Consumer, Residential 1-4 Family ā Revolving, Auto, and Consumer The following tables show the ALLL activity by loan segment for the three and six months ended June 30, 2021 and 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2021 ā Six Months Ended June 30, 2021 ā ā Commercial ā Consumer ā Total ā Commercial ā Consumer ā Total Balance at beginning of period ā $ 106,432 ā $ 36,479 ā $ 142,911 ā $ 117,403 ā $ 43,137 ā $ 160,540 Loans charged-off ā (891) ā (1,054) ā (1,945) ā (2,865) ā (2,721) ā (5,586) Recoveries credited to allowance ā 1,042 ā 834 ā 1,876 ā 2,648 ā 1,697 ā 4,345 Provision charged to operations ā (16,746) ā (7,835) ā (24,581) ā (27,349) ā (13,689) ā (41,038) Balance at end of period ā $ 89,837 ā $ 28,424 ā $ 118,261 ā $ 89,837 ā $ 28,424 ā $ 118,261 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2020 ā Six Months Ended June 30, 2020 ā ā Commercial ā Consumer ā Total ā Commercial ā Consumer ā Total Balance at beginning of period ā $ 77,843 ā $ 63,200 ā $ 141,043 ā $ 30,941 ā $ 11,353 ā $ 42,294 Impact of ASC 326 adoption on non-PCD loans ā ā ā ā ā ā ā 4,432 ā 40,666 ā 45,098 Impact of ASC 326 adoption on PCD loans ā ā ā ā ā ā ā 1,752 ā 634 ā 2,386 Impact of adopting ASC 326 ā ā ā ā ā ā ā 6,184 ā 41,300 ā 47,484 Loans charged-off ā (1,590) ā (3,087) ā (4,677) ā (4,558) ā (7,270) ā (11,828) Recoveries credited to allowance ā 708 ā 703 ā 1,411 ā 1,862 ā 1,709 ā 3,571 Provision charged to operations ā 34,993 ā (2,793) ā 32,200 ā 77,525 ā 10,931 ā 88,456 Balance at end of period ā $ 111,954 ā $ 58,023 ā $ 169,977 ā $ 111,954 ā $ 58,023 ā $ 169,977 ā ā Credit Quality Indicators ā Credit quality indicators are utilized to help estimate the collectability of each loan class within the Commercial and Consumer loan segments. For classes of loans within the Commercial segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is risk rating categories of Pass, Watch, Special Mention, Substandard, and Doubtful. For classes of loans within the Consumer segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is delinquency bands of Current, 30-59, 60-89, 90+, and Nonaccrual. While other credit quality indicators are evaluated and analyzed as part of the Companyās credit risk management activities, these indicators are primarily used in estimating the ALLL. The Company evaluates the credit risk of its loan portfolio on at least a quarterly basis. ā Commercial Loans ā The Company uses a risk rating system as the primary credit quality indicator for classes of loans within the Commercial segment. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for credit loss. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows: ā Pass is determined by the following criteria: ā Risk rated 0 loans have little or no risk and are with General Obligation Municipal Borrowers; ā Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents; ā Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety; ā Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment; ā Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan. ā Watch is determined by the following criteria: ā Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrowerās ability to repay; ā Special Mention is determined by the following criteria: ā Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Companyās credit position. ā Substandard is determined by the following criteria: ā Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected. ā Doubtful is determined by the following criteria: ā Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; ā Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. ā ā The table below details the amortized cost of the classes of loans within the Commercial segment by risk level and year of origination as of June 30, 2021 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2021 ā ā ā Term Loans Amortized Cost Basis by Origination Year ā ā ā ā ā ā ā ā 2021 ā 2020 ā 2019 ā 2018 ā 2017 ā Prior ā Revolving Loans ā Total Construction and Land Development ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 169,737 ā $ 284,804 ā $ 136,881 ā $ 79,204 ā $ 19,754 ā $ 54,558 ā $ 14,405 ā $ 759,343 Watch ā ā 2,991 ā ā 3,168 ā ā 27,862 ā ā 1,201 ā ā 339 ā ā 6,870 ā ā ā ā ā 42,431 Special Mention ā ā ā ā ā ā ā ā 629 ā ā 132 ā ā ā ā ā 1,102 ā ā ā ā ā 1,863 Substandard ā ā ā ā ā ā ā ā 524 ā ā 29,101 ā ā 7 ā ā 5,453 ā ā ā ā ā 35,085 Total Construction and Land Development ā $ 172,728 ā $ 287,972 ā $ 165,896 ā $ 109,638 ā $ 20,100 ā $ 67,983 ā $ 14,405 ā $ 838,722 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial Real Estate - Owner Occupied ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 107,413 ā $ 282,904 ā $ 318,170 ā $ 275,683 ā $ 214,996 ā $ 634,229 ā $ 24,428 ā $ 1,857,823 Watch ā ā 113 ā ā 13,848 ā ā 16,318 ā ā 16,499 ā ā 14,099 ā ā 47,956 ā ā 675 ā ā 109,508 Special Mention ā ā ā ā ā 960 ā ā 29,741 ā ā 1,493 ā ā 1,121 ā ā 38,305 ā ā 2,157 ā ā 73,777 Substandard ā ā ā ā ā ā ā ā 4,906 ā ā 1,711 ā ā 1,974 ā ā 19,159 ā ā 800 ā ā 28,550 Total Commercial Real Estate - Owner Occupied ā $ 107,526 ā $ 297,712 ā $ 369,135 ā $ 295,386 ā $ 232,190 ā $ 739,649 ā $ 28,060 ā $ 2,069,658 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial Real Estate - Non-Owner Occupied ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 225,833 ā $ 436,594 ā $ 457,142 ā $ 373,263 ā $ 390,212 ā $ 1,096,953 ā $ 53,293 ā $ 3,033,290 Watch ā ā 12,557 ā ā 8,991 ā ā 104,690 ā ā 65,828 ā ā 39,917 ā ā 205,843 ā ā 384 ā ā 438,210 Special Mention ā ā ā ā ā 693 ā ā 70,587 ā ā 42,248 ā ā 18,436 ā ā 42,236 ā ā 218 ā ā 174,418 Substandard ā ā ā ā ā 11,245 ā ā ā ā ā 13,170 ā ā 9,318 ā ā 32,956 ā ā ā ā ā 66,689 Total Commercial Real Estate - Non-Owner Occupied ā $ 238,390 ā $ 457,523 ā $ 632,419 ā $ 494,509 ā $ 457,883 ā $ 1,377,988 ā $ 53,895 ā $ 3,712,607 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial & Industrial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 735,552 ā $ 814,028 ā $ 302,050 ā $ 161,183 ā $ 49,690 ā $ 187,496 ā $ 610,304 ā $ 2,860,303 Watch ā ā 193 ā ā 12,537 ā ā 24,828 ā ā 19,606 ā ā 5,032 ā ā 5,377 ā ā 24,102 ā ā 91,675 Special Mention ā ā 637 ā ā 1,205 ā ā 5,865 ā ā 3,388 ā ā 975 ā ā 1,573 ā ā 11,454 ā ā 25,097 Substandard ā ā ā ā ā 56 ā ā 4,602 ā ā 1,216 ā ā 274 ā ā 2,223 ā ā 5,176 ā ā 13,547 Total Commercial & Industrial ā $ 736,382 ā $ 827,826 ā $ 337,345 ā $ 185,393 ā $ 55,971 ā $ 196,669 ā $ 651,036 ā $ 2,990,622 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Multifamily Real Estate ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 36,278 ā $ 142,330 ā $ 131,106 ā $ 145,985 ā $ 101,098 ā $ 259,262 ā $ 7,236 ā $ 823,295 Watch ā ā ā ā ā ā ā ā 4,367 ā ā 465 ā ā ā ā ā 24,438 ā ā 42 ā ā 29,312 Special Mention ā ā ā ā ā 2,273 ā ā 634 ā ā 4,361 ā ā ā ā ā 93 ā ā ā ā ā 7,361 Substandard ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 113 ā ā ā ā ā 113 Total Multifamily Real Estate ā $ 36,278 ā $ 144,603 ā $ 136,107 ā $ 150,811 ā $ 101,098 ā $ 283,906 ā $ 7,278 ā $ 860,081 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Residential 1-4 Family - Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 56,120 ā $ 100,940 ā $ 75,069 ā $ 54,133 ā $ 66,745 ā $ 236,341 ā $ 1,233 ā $ 590,581 Watch ā ā ā ā ā 2,153 ā ā 3,813 ā ā 8,760 ā ā 3,667 ā ā 9,597 ā ā 195 ā ā 28,185 Special Mention ā ā 163 ā ā ā ā ā ā ā ā 450 ā ā 426 ā ā 6,124 ā ā ā ā ā 7,163 Substandard ā ā ā ā ā ā ā ā 3,484 ā ā 773 ā ā 1,390 ā ā 5,421 ā ā 488 ā ā 11,556 Total Residential 1-4 Family - Commercial ā $ 56,283 ā $ 103,093 ā $ 82,366 ā $ 64,116 ā $ 72,228 ā $ 257,483 ā $ 1,916 ā $ 637,485 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Other Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 147,863 ā $ 206,752 ā $ 108,972 ā $ 6,247 ā $ 26,650 ā $ 53,072 ā $ 16,252 ā $ 565,808 Watch ā ā ā ā ā ā ā ā ā ā ā 597 ā ā 1,273 ā ā 5,071 ā ā 800 ā ā 7,741 Special Mention ā ā ā ā ā ā ā ā ā ā ā ā ā ā 4 ā ā 204 ā ā 26,144 ā ā 26,352 Substandard ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 375 ā ā ā ā ā 375 Total Other Commercial ā $ 147,863 ā $ 206,752 ā $ 108,972 ā $ 6,844 ā $ 27,927 ā $ 58,722 ā $ 43,196 ā $ 600,276 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 1,478,796 ā $ 2,268,352 ā $ 1,529,390 ā $ 1,095,698 ā $ 869,145 ā $ 2,521,911 ā $ 727,151 ā $ 10,490,443 Watch ā ā 15,854 ā ā 40,697 ā ā 181,878 ā ā 112,956 ā ā 64,327 ā ā 305,152 ā ā 26,198 ā ā 747,062 Special Mention ā ā 800 ā ā 5,131 ā ā 107,456 ā ā 52,072 ā ā 20,962 ā ā 89,637 ā ā 39,973 ā ā 316,031 Substandard ā ā ā ā ā 11,301 ā ā 13,516 ā ā 45,971 ā ā 12,963 ā ā 65,700 ā ā 6,464 ā ā 155,915 Total Commercial ā $ 1,495,450 ā $ 2,325,481 ā $ 1,832,240 ā $ 1,306,697 ā $ 967,397 ā $ 2,982,400 ā $ 799,786 ā $ 11,709,451 ā The table below details the amortized cost of the classes of loans within the Commercial segment by risk level and year of origination as of December 31, 2020 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā Term Loans Amortized Cost Basis by Origination Year ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2020 ā 2019 ā 2018 ā 2017 ā 2016 ā Prior ā Revolving Loans ā Total Construction and Land Development ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 316,585 ā $ 277,142 ā $ 116,800 ā $ 24,770 ā $ 42,970 ā $ 54,023 ā $ 23,324 ā $ 855,614 Watch ā ā 1,873 ā ā 18,181 ā ā 8,434 ā ā 344 ā ā 2,355 ā ā 6,372 ā ā 412 ā ā 37,971 Special Mention ā ā ā ā ā 5,532 ā ā 135 ā ā ā ā ā ā ā ā 2,655 ā ā ā ā ā 8,322 Substandard ā ā ā ā ā ā ā ā 17,780 ā ā 64 ā ā 2,037 ā ā 4,010 ā ā ā ā ā 23,891 Total Construction and Land Development ā $ 318,458 ā $ 300,855 ā $ 143,149 ā $ 25,178 ā $ 47,362 ā $ 67,060 ā $ 23,736 ā $ 925,798 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial Real Estate - Owner Occupied ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 286,522 ā $ 375,541 ā $ 300,583 ā $ 233,359 ā $ 128,261 ā $ 570,361 ā $ 18,838 ā $ 1,913,465 Watch ā ā 1,942 ā ā 14,611 ā ā 22,224 ā ā 15,623 ā ā 24,979 ā ā 41,361 ā ā 1,648 ā ā 122,388 Special Mention ā ā 988 ā ā 6,052 ā ā 5,749 ā ā 4,198 ā ā 9,907 ā ā 30,455 ā ā 1,121 ā ā 58,470 Substandard ā ā ā ā ā 4,858 ā ā 5,159 ā ā 914 ā ā 1,555 ā ā 21,101 ā ā 999 ā ā 34,586 Total Commercial Real Estate - Owner Occupied ā $ 289,452 ā $ 401,062 ā $ 333,715 ā $ 254,094 ā $ 164,702 ā $ 663,278 ā $ 22,606 ā $ 2,128,909 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial Real Estate - Non-Owner Occupied ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 381,849 ā $ 455,427 ā $ 433,183 ā $ 403,677 ā $ 336,630 ā $ 850,035 ā $ 30,421 ā $ 2,891,222 Watch ā ā 28,354 ā ā 142,279 ā ā 76,838 ā ā 59,451 ā ā 79,533 ā ā 224,944 ā ā 16,870 ā ā 628,269 Special Mention ā ā 702 ā ā 11,072 ā ā 34,905 ā ā 18,073 ā ā 40,771 ā ā 11,211 ā ā 723 ā ā 117,457 Substandard ā ā 246 ā ā ā ā ā 13,357 ā ā ā ā ā 25 ā ā 6,986 ā ā ā ā ā 20,614 Total Commercial Real Estate - Non-Owner Occupied ā $ 411,151 ā $ 608,778 ā $ 558,283 ā $ 481,201 ā $ 456,959 ā $ 1,093,176 ā $ 48,014 ā $ 3,657,562 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Commercial & Industrial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 1,730,876 ā $ 350,618 ā $ 199,489 ā $ 67,035 ā $ 71,799 ā $ 140,461 ā $ 590,701 ā $ 3,150,979 Watch ā ā 4,872 ā ā 32,028 ā ā 13,073 ā ā 6,500 ā ā 3,182 ā ā 4,906 ā ā 19,972 ā ā 84,533 Special Mention ā ā 1,009 ā ā 2,178 ā ā 3,890 ā ā 1,150 ā ā 724 ā ā 1,234 ā ā 4,755 ā ā 14,940 Substandard ā ā 534 ā ā 4,269 ā ā 1,274 ā ā 309 ā ā 560 ā ā 2,676 ā ā 3,386 ā ā 13,008 Total Commercial & Industrial ā $ 1,737,291 ā $ 389,093 ā $ 217,726 ā $ 74,994 ā $ 76,265 ā $ 149,277 ā $ 618,814 ā $ 3,263,460 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Multifamily Real Estate ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 144,805 ā $ 85,740 ā $ 150,724 ā $ 117,881 ā $ 67,984 ā $ 231,113 ā $ 2,311 ā $ 800,558 Watch ā ā ā ā ā 5,074 ā ā 475 ā ā ā ā ā 617 ā ā 560 ā ā ā ā ā 6,726 Special Mention ā ā 2,280 ā ā ā ā ā 4,388 ā ā ā ā ā ā ā ā 760 ā ā ā ā ā 7,428 Substandard ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 33 ā ā ā ā ā 33 Total Multifamily Real Estate ā $ 147,085 ā $ 90,814 ā $ 155,587 ā $ 117,881 ā $ 68,601 ā $ 232,466 ā $ 2,311 ā $ 814,745 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Residential 1-4 Family - Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 104,630 ā $ 89,332 ā $ 70,310 ā $ 79,156 ā $ 68,915 ā $ 201,492 ā $ 2,236 ā $ 616,071 Watch ā ā 666 ā ā 6,665 ā ā 8,252 ā ā 4,141 ā ā 4,067 ā ā 9,307 ā ā 195 ā ā 33,293 Special Mention ā ā ā ā ā ā ā ā 601 ā ā 663 ā ā 468 ā ā 5,923 ā ā ā ā ā 7,655 Substandard ā ā 644 ā ā 793 ā ā 4,913 ā ā 1,995 ā ā 986 ā ā 5,111 ā ā 488 ā ā 14,930 Total Residential 1-4 Family - Commercial ā $ 105,940 ā $ 96,790 ā $ 84,076 ā $ 85,955 ā $ 74,436 ā $ 221,833 ā $ 2,919 ā $ 671,949 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Other Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 223,490 ā $ 112,045 ā $ 9,549 ā $ 30,314 ā $ 16,494 ā $ 42,158 ā $ 44,180 ā $ 478,230 Watch ā ā ā ā ā ā ā ā 613 ā ā 1,299 ā ā 1,189 ā ā 3,934 ā ā ā ā ā 7,035 Special Mention ā ā 10 ā ā ā ā ā ā ā ā 7 ā ā ā ā ā 4,591 ā ā 102 ā ā 4,710 Total Other Commercial ā $ 223,500 ā $ 112,045 ā $ 10,162 ā $ 31,620 ā $ 17,683 ā $ 50,683 ā $ 44,282 ā $ 489,975 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Commercial ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā $ 3,188,757 ā $ 1,745,845 ā $ 1,280,638 ā $ 956,192 ā $ 733,053 ā $ 2,089,643 ā $ 712,011 ā $ 10,706,139 Watch ā ā 37,707 ā ā 218,838 ā ā 129,909 ā ā 87,358 ā ā 115,922 ā ā 291,384 ā ā 39,097 ā ā 920,215 Special Mention ā ā 4,989 ā ā 24,834 ā ā 49,668 ā ā 24,091 ā ā 51,870 ā ā 56,829 ā ā 6,701 ā ā 218,982 Substandard ā ā 1,424 ā ā 9,920 ā ā 42,483 ā ā 3,282 ā ā 5,163 ā ā 39,917 ā ā 4,873 ā ā 107,062 Total Commercial ā $ 3,232,877 ā $ 1,999,437 ā $ 1,502,698 ā $ 1,070,923 ā $ 906,008 ā $ 2,477,773 ā $ 762,682 ā $ 11,952,398 ā Consumer Loans ā For Consumer loans, the Company evaluates credit quality based on the delinquency status of the loan. The following table details the amortized cost of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of June 30, 2021 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2021 ā ā ā Term Loans Amortized Cost Basis by Origination Year ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2021 ā 2020 ā 2019 ā 2018 ā 2017 ā Prior ā Revolving Loans ā Total Residential 1-4 Family - Consumer ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Current ā $ 129,493 ā $ 198,964 ā $ 68,060 ā $ 45,005 ā $ 55,929 ā $ 307,923 ā $ 11 ā $ 805,385 30-59 Days Past Due ā ā ā ā ā ā ā ā 89 ā ā ā ā ā 44 ā ā 631 ā ā ā ā ā 764 60-89 Days Past Due ā ā ā ā ā ā ā ā 117 ā ā ā ā ā 307 ā ā 568 ā ā ā ā ā 992 90+ Days Past Due ā ā ā ā ā 161 ā ā 194 ā ā 20 ā ā ā ā ā 2,350 ā ā ā ā ā 2,725 Nonaccrual ā ā ā ā ā ā ā ā 85 ā ā 908 ā ā 887 ā ā 11,609 ā ā ā ā ā 13,489 Total Residential 1-4 Family - Consumer ā $ 129,493 ā $ 199,125 ā $ 68,545 ā $ 45,933 ā $ 57,167 ā $ 323,081 ā $ 11 ā $ 823,355 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Residential 1-4 Family - Revolving ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Current ā $ 2,639 ā $ 10,741 ā $ 2,660 ā $ 1,256 ā $ ā ā $ 486 ā $ 535,348 ā $ 553,130 30-59 Days Past Due ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 919 ā ā 919 60-89 Days Past Due ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 678 ā ā 678 90+ Days Past Due ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 561 ā ā 561 Nonaccrual ā ā ā ā ā 73 ā ā ā ā ā 20 ā ā ā ā ā 227 ā ā 3,406 ā ā 3,726 Total Residential 1-4 Family - Revolving ā $ 2,639 ā $ 10,814 ā $ 2,660 ā $ 1,276 ā $ ā ā $ 713 ā $ 540,912 ā $ 559,014 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Consumer ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Current ā $ 6,922 ā $ 20,354 ā $ 50,736 ā $ 46,063 ā $ 16,716 ā $ 19,881 ā $ 33,262 ā $ 193,934 30-59 Days Past Due ā ā ā ā ā 21 ā ā 104 ā ā 154 ā ā 51 ā ā 201 ā ā 14 ā ā 545 60-89 Days Past Due ā ā ā ā ā 9 ā ā 148 ā ā 65 ā ā 28 ā ā 31 ā ā 16 ā ā 297 90+ Days Past Due ā ā ā ā ā ā ā ā 21 ā ā 126 ā ā 7 ā ā 1 ā ā 1 ā ā 156 Nonaccrual ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 104 ā ā ā ā ā 104 Total Consumer ā $ 6,922 ā $ 20,384 ā $ 51,009 ā $ 46,408 ā $ 16,802 ā $ 20,218 ā $ 33,293 ā $ 195,036 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Auto ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Current ā $ 85,151 ā $ 151,237 ā $ 92,687 ā $ 42,811 ā $ 23,624 ā $ 13,718 ā $ ā ā $ 409,228 30-59 Days Past Due ā ā 30 ā ā 419 ā ā 387 ā ā 184 ā ā 166 ā ā 147 ā ā ā ā ā 1,333 60-89 Days Past Due ā ā 50 ā ā 19 ā ā 26 ā ā 52 ā ā 10 ā ā 8 ā ā ā ā ā 165 90+ Days Past Due ā ā ā ā ā 3 ā ā 132 ā ā ā ā ā 18 ā ā 15 ā ā ā ā ā 168 Nonaccrual ā ā ā ā ā 28 ā ā 27 ā ā 30 ā ā 32 ā ā 62 ā ā ā ā ā 179 Total Auto ā $ 85,231 ā $ 151,706 ā $ 93,259 ā $ 43,077 ā $ 23,850 ā $ 13,950 ā $ ā ā $ 411,073 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total Consumer ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Current ā $ 224,205 ā $ 381,296 ā $ 214,143 ā $ 135,135 ā $ 96,269 ā $ 342,008 ā $ 568,621 ā $ 1,961,677 30-59 Days Past Due ā ā 30 ā ā 440 ā ā 580 ā ā 338 ā ā 261 ā ā 979 ā ā 933 ā ā 3,561 60-89 Days Past Due ā ā 50 ā ā 28 ā ā 291 ā ā 117 ā ā 345 ā ā 607 ā ā 694 ā ā 2,132 90+ Days Past Due ā ā ā ā ā 164 ā ā 347 ā ā 146 ā ā 25 ā ā 2,366 ā ā 562 ā ā 3,610 Nonaccrual ā ā ā ā ā 101 ā ā 112 ā ā 958 ā ā 919 ā ā 12,002 ā ā 3,406 ā ā 17,498 Total Consumer ā $ 224,285 ā $ 382,029 ā $ 215,473 ā $ 136,694 ā $ 97,819 ā $ 357,962 ā $ 574,216 ā $ 1,988,478 ā The Company did not have any material revolving loans convert to term during the six months ended June 30, 2021. ā The following table details the amortized cost of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of December 31, 2020 (dollars in thousands): ā |