Loans

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Loans

Loans

The following table shows the Company’s loan portfolio by category as of the dates shown:

	September 30,			December 31,			September 30,
(Dollars in thousands)	2024			2023			2023
Balance:
Commercial	$	15,247,693		$	12,832,053		$	12,725,473
Commercial real estate	12,793,417			11,344,164			10,946,180
Home equity	427,043			343,976			343,258
Residential real estate	3,388,038			2,769,666			2,707,603
Premium finance receivables—property & casualty	7,131,681			6,903,529			6,722,747
Premium finance receivables—life insurance	7,996,899			7,877,943			7,931,808
Consumer and other	82,676			60,500			68,963
Total loans, net of unearned income	$	47,067,447		$	42,131,831		$	41,446,032
Mix:
Commercial	33		%	30		%	31		%
Commercial real estate	27			27			26
Home equity	1			1			1
Residential real estate	7			7			7
Premium finance receivables—property & casualty	15			16			16
Premium finance receivables—life insurance	17			19			19
Consumer and other	0			0			0
Total loans, net of unearned income	100		%	100		%	100		%

The Company’s loan portfolio is generally comprised of loans to consumers and small to medium-sized businesses, which, for the commercial and commercial real estate portfolios, are located primarily within the geographic market areas that the banks serve. Various niche lending businesses, including franchise lending and insurance agency lending, operate on a national level. The premium finance receivables portfolios are made to customers throughout the United States and Canada. The Company strives to maintain a loan portfolio that is diverse in terms of loan type, industry, borrower, and geographic concentrations. Such diversification reduces the exposure to economic downturns that may occur in different segments of the economy or in different industries.

Certain premium finance receivables are recorded net of unearned income. The unearned income portions of such premium finance receivables were $266.1 million at September 30, 2024, $285.4 million at December 31, 2023 and $264.5 million at September 30, 2023.

Total loans, excluding purchased credit deteriorated (“PCD”) loans, include net deferred loan fees and costs and fair value purchase accounting adjustments totaling $79.4 million at September 30, 2024, $84.2 million at December 31, 2023 and $67.6 million at September 30, 2023.

It is the policy of the Company to review each prospective credit in order to determine the appropriateness and, when required, the adequacy of security or collateral necessary to obtain when making a loan. The type of collateral, when required, will vary from liquid assets to real estate. The Company seeks to ensure access to collateral, in the event of default, through adherence to state lending laws and the Company’s credit monitoring procedures.

Acquired Loan Information — PCD Loans

As part of the Company’s prior acquisitions, the Company acquired loans that were classified as PCD based upon various factors as of the acquisition date, including internal risk rating methodologies and prior performance under the acquiree. The following table provides estimated details as of the date of acquisition on PCD loans acquired in 2024:

(In thousands)	Macatawa
Contractually required payments (unpaid principal balance)	$	169,472
Allowance for credit losses	(3,004)
Discount, net of any premium	(4,529)
Purchase price of PCD loans acquired	$	161,939