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Loans
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Loans Loans
Loans held for investment are categorized into the following segments:
•Construction and land development: Loans are extended to both commercial and consumer customers which are collateralized by and for the purpose of funding land development and construction projects, including 1-4 family residential construction, multi-family property and non-farm residential property where the primary source of repayment is from proceeds of the sale, refinancing or permanent financing of the property.
•Commercial real estate - owner occupied: Loans are extended to commercial customers for the purpose of acquiring real estate to be occupied by the borrower's business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property.
•Commercial real estate - non-owner occupied: Loans are extended to commercial customers for the purpose of acquiring commercial property where occupancy by the borrower is not their primary intent. These loans are viewed primarily as cash flow loans, collateralized by the subject property, and the repayment of these loans is largely dependent on rental income from the successful operation of the property.
•Residential real estate: Loans are extended to consumer customers and collateralized primarily by 1-4 family residential properties and include fixed and variable rate mortgages, home equity mortgages, and home equity lines of credit. Loans are primarily written based on conventional loan agency guidelines, including loans that exceed agency value limitations. Sources of repayment are largely dependent on the occupant of the residential property.
•Commercial and financial: Loans are extended to commercial customers. The purpose of the loans can be working capital, physical asset expansion, asset acquisition or other business purposes. Loans may be collateralized by assets owned by the borrower or the borrower's business. Commercial loans are based primarily on the historical and projected cash flow of the borrower's business and secondarily on the capacity of credit enhancements, guarantees and underlying collateral provided by the borrower.
•Consumer: Loans are extended to consumer customers. The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized.
The following tables present net loan balances by segment as of:
 June 30, 2023
(In thousands)Portfolio LoansAcquired Non-PCD LoansPCD LoansTotal
Construction and land development$424,964 $347,876 $21,531 $794,371 
Commercial real estate - owner occupied1,026,700 594,211 48,458 1,669,369 
Commercial real estate - non-owner occupied1,818,307 1,381,801 170,103 3,370,211 
Residential real estate1,674,505 691,863 29,984 2,396,352 
Commercial and financial1,152,360 376,571 81,964 1,610,895 
Consumer166,250 103,667 2,165 272,082 
PPP Loans958 3,681 — 4,639 
Totals$6,264,044 $3,499,670 $354,205 $10,117,919 
 December 31, 2022
(In thousands)Portfolio LoansAcquired Non-PCD LoansPCD LoansTotal
Construction and land development$364,900 $201,333 $21,100 $587,332 
Commercial real estate - owner occupied995,154 451,202 31,946 1,478,302 
Commercial real estate - non-owner occupied1,695,411 767,138 127,225 2,589,774 
Residential real estate1,558,643 271,378 19,482 1,849,503 
Commercial and financial1,151,273 182,124 15,238 1,348,636 
Consumer177,338 89,458 19,791 286,587 
PPP Loans1,474 3,116 — 4,590 
Totals$5,944,193 $1,965,749 $234,782 $8,144,724 
The amortized cost basis of loans at June 30, 2023 included net deferred costs of $37.6 million. At December 31, 2022, the amortized cost basis included net deferred costs of $35.1 million. At June 30, 2023, the remaining fair value adjustments on acquired loans were $201.8 million, or 5.0% of the outstanding acquired loan balances, compared to $97.7 million, or 4.3% of the acquired loan balances at December 31, 2022. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis.
Accrued interest receivable is included within Other Assets and was $36.2 million and $28.2 million at June 30, 2023 and December 31, 2022, respectively.
The following tables present the status of net loan balances as of June 30, 2023 and December 31, 2022.
 June 30, 2023
(In thousands)CurrentAccruing
30-59 Days
Past Due		Accruing
60-89 Days
Past Due		Accruing
Greater
Than
90 Days		NonaccrualTotal
Portfolio Loans      
Construction and land development$424,834 $124 $— $— $6 $424,964 
Commercial real estate - owner occupied1,025,697 — — — 1,003 1,026,700 
Commercial real estate - non-owner occupied$1,814,323 $354 $— $— $3,630 $1,818,307 
Residential real estate1,660,568 7,108 451 1 6,377 1,674,505 
Commercial and financial1,144,831 1,351 235 131 5,812 1,152,360 
Consumer163,848 1,568 224 291 319 166,250 
PPP Loans904 — — 54 — 958 
Total Portfolio Loans$6,235,005 $10,505 $910 $477 $17,147 $6,264,044 
Acquired Non-PCD Loans
Construction and land development$347,590 $90 $— $162 $34 $347,876 
Commercial real estate - owner occupied593,508 398 — — 305 594,211 
Commercial real estate - non-owner occupied1,379,727 67 — — 2,007 1,381,801 
Residential real estate686,338 3,493 315 — 1,717 691,863 
Commercial and financial375,198 46 69 — 1,258 376,571 
Consumer93,926 5,825 2,057 803 1,056 103,667 
PPP Loans3,625 35 — 21 — 3,681 
 Total Acquired Non-PCD Loans$3,479,912 $9,954 $2,441 $986 $6,377 $3,499,670 
PCD Loans
Construction and land development$21,325 $— $— $— $206 $21,531 
Commercial real estate - owner occupied43,870 — — — 4,588 48,458 
Commercial real estate - non-owner occupied166,846 — 224 — 3,033 170,103 
Residential real estate28,504 193 730 — 557 29,984 
Commercial and financial65,559 6 — — 16,399 81,964 
Consumer2,057 32 57 — 19 2,165 
Total PCD Loans$328,161 $231 $1,011 $— $24,802 $354,205 
Total Loans$10,043,078 $20,690 $4,362 $1,463 $48,326 $10,117,919 
 
 December 31, 2022
(In thousands)CurrentAccruing
30-59 Days
Past Due		Accruing
60-89 Days
Past Due		Accruing
Greater
Than
90 Days		NonaccrualTotal
Portfolio Loans      
Construction and land development$364,841 $— $— $— $59 $364,900 
Commercial real estate - owner occupied993,690 — 67 440 957 995,154 
Commercial real estate - non-owner occupied1,695,381 — — — 30 1,695,411 
Residential real estate1,550,040 1,172 147 — 7,284 1,558,643 
Commercial and financial1,142,536 1,032 476 — 7,229 1,151,273 
Consumer176,444 550 252 1 91 177,338 
PPP Loans1,099 33 — 342 — 1,474 
 Total Portfolio Loans$5,924,031 $2,787 $942 $783 $15,650 $5,944,193 
Acquired Non-PCD Loans
Construction and land development$201,263 $— $— $— $70 $201,333 
Commercial real estate - owner occupied450,109 796 297 — — 451,202 
Commercial real estate - non-owner occupied765,633 162 — — 1,343 767,138 
Residential real estate270,215 577 — — 586 271,378 
Commercial and financial180,837 790 87 — 410 182,124 
Consumer87,317 779 616 525 221 89,458 
PPP Loans3,116 — — — — 3,116 
 Total Acquired Non-PCD Loans$1,958,490 $3,104 $1,000 $525 $2,630 $1,965,749 
PCD Loans
Construction and land development$20,680 $— $— $— $420 $21,100 
Commercial real estate - owner occupied30,517 23 23 — 1,383 31,946 
Commercial real estate - non-owner occupied124,115 — — — 3,110 127,225 
Residential real estate17,885 10 — — 1,587 19,482 
Commercial and financial11,201 4 — — 4,033 15,238 
Consumer17,884 1,001 336 540 30 19,791 
 Total PCD Loans$222,282 $1,038 $359 $540 $10,563 $234,782 
Total Loans$8,104,803 $6,929 $2,301 $1,848 $28,843 $8,144,724 
All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is reduced to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured. The Company recognized $0.3 million and $0.4 million in interest income on nonaccrual loans during the three months ended June 30, 2023 and 2022, respectively. The Company recognized $0.4 million and $1.2 million in interest income on nonaccrual loans during each of the six months ended June 30, 2023 and 2022, respectively.
The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:
June 30, 2023
(In thousands)Nonaccrual Loans With No Related AllowanceNonaccrual Loans With an AllowanceTotal Nonaccrual LoansAllowance for Credit Losses
Construction and land development$40 $206 $246 $107 
Commercial real estate - owner occupied5,383 513 5,896 15 
Commercial real estate - non-owner occupied7,484 1,186 8,670 318 
Residential real estate7,550 1,101 8,651 22 
Commercial and financial6,832 16,637 23,469 14,449 
Consumer144 1,250 1,394 1,222 
Totals $27,433 $20,893 $48,326 $16,133 
December 31, 2022
(In thousands)Nonaccrual Loans With No Related AllowanceNonaccrual Loans With an AllowanceTotal Nonaccrual LoansAllowance for Credit Losses
Construction and land development$615 $— $615 $— 
Commercial real estate - owner occupied957 1,641 2,597 41 
Commercial real estate - non-owner occupied3,347 837 4,184 230 
Residential real estate8,072 1,036 9,109 58 
Commercial and financial4,724 6,891 11,615 2,319 
Consumer40 683 723 257 
Totals$17,755 $11,088 $28,843 $2,905 
Collateral-Dependent Loans
Loans are considered collateral-dependent when the repayment, based on the Company's assessment as of the reporting date, is expected to be provided substantially through the operation or sale of the underlying collateral and there are no other available and reliable sources of repayment. The following table presents collateral-dependent loans as of:
(In thousands)June 30, 2023December 31, 2022
Construction and land development$430 $59 
Commercial real estate - owner occupied6,261 2,733 
Commercial real estate - non-owner occupied6,283 1,698 
Residential real estate 11,895 11,333 
Commercial and financial40,087 10,448 
Consumer2,598 426 
Totals $67,554 $26,697 
Loans by Risk Rating
The Company utilizes an internal asset classification system as a means of identifying problem and potential problem loans. The following classifications are used to categorize loans under the internal classification system:
•Pass: Loans that are not problem loans or potential problem loans are considered to be pass-rated.
•Special Mention: Loans that do not currently expose the Company to sufficient risk to warrant classification in the Substandard or Doubtful categories, but possess weaknesses that deserve management's close attention are deemed to be Special Mention.
•Substandard: Loans with the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
•Substandard Impaired: Loans typically placed on nonaccrual and considered to be collateral-dependent.
•Doubtful: Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The principal balance of loans classified as doubtful are likely to be charged off.
The following tables present the risk rating of loans and year-to-date gross charge offs by year of origination as of:
June 30, 2023
(In thousands)20232022202120202019PriorRevolvingTotal
Construction and Land Development
Risk Ratings:
Pass$30,200 $265,371 $170,788 $36,370 $25,881 $27,596 $226,567 $782,773 
Special Mention— 1,250 — — — 396 — 1,646 
Substandard— — 9,685 — — — — 9,685 
Substandard Impaired — — — — — 61 206 267 
Doubtful— — — — — — — — 
Total$30,200 $266,621 $180,473 $36,370 $25,881 $28,053 $226,773 $794,371 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Commercial real estate - owner occupied
Risk Ratings:
Pass$57,149 $273,495 $298,639 $175,708 $191,891 $608,264 $29,902 $1,635,048 
Special Mention— — 2,168 — 4,866 6,674 101 13,809 
Substandard— 688 — 7,075 2,584 7,357 — 17,704 
Substandard Impaired — — — — 317 2,491 — 2,808 
Doubtful— — — — — — — — 
Total$57,149 $274,183 $300,807 $182,783 $199,658 $624,786 $30,003 $1,669,369 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Commercial real estate - non-owner occupied
Risk Ratings:
Pass$150,604 $835,973 $649,707 $299,717 $411,735 $914,410 $46,412 $3,308,558 
Special Mention— 161 1,089 7,957 12,324 13,924 — 35,455 
Substandard— — 190 6,085 2,982 8,270 248 17,775 
Substandard Impaired — — — 1,068 1,849 5,506 — 8,423 
Doubtful— — — — — — — — 
Total$150,604 $836,134 $650,986 $314,827 $428,890 $942,110 $46,660 $3,370,211 
Gross Charge Offs$— $— $— $— $— $— $109 $109 
Residential real estate
Risk Ratings:
Pass$120,812 $424,322 $641,362 $167,176 $99,298 $445,280 $479,136 $2,377,386 
Special Mention— — — — 82 1,057 5,574 6,713 
Substandard— — — — — 31 357 388 
June 30, 2023
(In thousands)20232022202120202019PriorRevolvingTotal
Substandard Impaired — — 846 173 461 9,308 1,077 11,865 
Doubtful— — — — — — — — 
Total$120,812 $424,322 $642,208 $167,349 $99,841 $455,676 $486,144 $2,396,352 
Gross Charge Offs$— $— $— $— $— $159 $109 $268 
Commercial and financial
Risk Ratings:
Pass$176,563 $391,471 $376,754 $147,594 $82,400 $103,176 $254,426 $1,532,384 
Special Mention134 5,738 6,217 1,063 494 3,563 4,479 21,688 
Substandard— 1,571 16,343 5,142 5,433 4,744 2,011 35,244 
Substandard Impaired — 4 2,533 252 800 17,898 92 21,579 
Doubtful— — — — — — — — 
Total$176,697 $398,784 $401,847 $154,051 $89,127 $129,381 $261,008 $1,610,895 
Gross Charge Offs$— $115 $109 $1,484 $265 $1,196 $200 $3,369 
Consumer
Risk Ratings:
Pass$14,874 $81,377 $55,690 $22,334 $24,501 $23,240 $45,045 $267,061 
Special Mention— 1,097 870 77 220 — 85 2,349 
Substandard— — — — — — 74 74 
Substandard Impaired — 577 1,094 62 70 533 262 2,598 
Doubtful— — — — — — — — 
Total$14,874 $83,051 $57,654 $22,473 $24,791 $23,773 $45,466 $272,082 
Gross Charge Offs$— $557 $1,575 $277 $51 $22 $117 $2,599 
Paycheck Protection Program
Risk Ratings:
Pass$— $— $2,211 $2,428 $— $— $— $4,639 
Substandard— — — — — — — — 
Substandard Impaired— — — — — — — — 
Total$— $— $2,211 $2,428 $— $— $— $4,639 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Consolidated
Risk Ratings:
Pass$550,202 $2,272,009 $2,195,151 $851,327 $835,706 $2,121,966 $1,081,488 $9,907,849 
Special Mention134 8,246 10,344 9,097 17,986 25,614 10,239 81,660 
Substandard— 2,259 26,218 18,302 10,999 20,402 2,690 80,870 
Substandard Impaired — 581 4,473 1,555 3,497 35,797 1,637 47,540 
Doubtful— — — — — — — — 
Total$550,336 $2,283,095 $2,236,186 $880,281 $868,188 $2,203,779 $1,096,054 $10,117,919 
Gross Charge Offs$— $672 $1,684 $1,761 $316 $1,377 $535 $6,345 
December 31, 2022
(In thousands)20222021202020192018PriorRevolvingTotal
Construction and Land Development
Risk Ratings:
Pass$223,204 $209,738 $18,239 $24,600 $12,783 $19,022 $50,960 $558,546 
Special Mention14,523 452 — 3,153 — — 15 18,143 
Substandard— 9,227 — — 959 — — 10,186 
Substandard Impaired — 52 — — — 405 — 457 
Doubtful— — — — — — — — 
Total$237,727 $219,469 $18,239 $27,753 $13,742 $19,427 $50,975 $587,332 
Commercial real estate - owner occupied
Risk Ratings:
Pass$215,453 $251,638 $180,081 $185,286 $121,568 $467,963 $32,253 $1,454,242 
Special Mention694 — 2,363 4,403 2,548 2,869 — 12,877 
Substandard— — 667 2,625 573 4,444 — 8,309 
Substandard Impaired — — — 311 294 2,269 — 2,874 
Doubtful— — — — — — — — 
Total$216,147 $251,638 $183,111 $192,625 $124,983 $477,545 $32,253 $1,478,302 
Commercial real estate - non-owner occupied
Risk Ratings:
Pass$593,364 $530,462 $231,693 $331,173 $228,077 $575,656 $35,326 $2,525,751 
Special Mention— 16,257 735 5,438 — 4,975 — 27,405 
Substandard— 192 19,315 — 5,515 7,412 — 32,434 
Substandard Impaired — — 1,044 1,849 30 1,261 — 4,184 
Doubtful— — — — — — — — 
Total$593,364 $546,911 $252,787 $338,460 $233,622 $589,304 $35,326 $2,589,774 
Residential real estate
Risk Ratings:
Pass$270,054 $552,950 $121,879 $77,100 $97,900 $292,867 $423,764 $1,836,514 
Special Mention— — 50 — 25 269 884 1,228 
Substandard— — — — — 343 85 428 
Substandard Impaired — — 133 32 83 9,515 1,570 11,333 
Doubtful— — — — — — — — 
Total$270,054 $552,950 $122,062 $77,132 $98,008 $302,994 $426,303 $1,849,503 
Commercial and financial
Risk Ratings:
Pass$359,833 $320,307 $140,450 $77,562 $57,924 $58,648 $292,818 $1,307,542 
Special Mention1,244 423 106 474 195 259 2,998 5,699 
Substandard— 67 942 6,304 1,603 1,683 13,114 23,713 
Substandard Impaired 5 58 5,109 147 3,642 2,545 176 11,682 
Doubtful— — — — — — — — 
Total$361,082 $320,855 $146,607 $84,487 $63,364 $63,135 $309,106 $1,348,636 
Consumer
Risk Ratings:
Pass$93,012 $77,889 $27,982 $28,772 $11,690 $16,480 $29,725 $285,550 
Special Mention— — — 250 2 134 30 416 
Substandard— — 11 — — 191 — 202 
Substandard Impaired — — 18 55 36 103 207 419 
Doubtful— — — — — — — — 
Total$93,012 $77,889 $28,011 $29,077 $11,728 $16,908 $29,962 $286,587 
Paycheck Protection Program
Risk Ratings:
Pass$— $2,708 $1,882 $— $— $— $— $4,590 
December 31, 2022
(In thousands)20222021202020192018PriorRevolvingTotal
Substandard$— $— $— $— $— $— $— $— 
Substandard Impaired$— $— $— $— $— $— $— $— 
Total$— $2,708 $1,882 $— $— $— $— $4,590 
Consolidated
Risk Ratings:
Pass$1,754,920 $1,945,692 $720,324 $724,493 $529,942 $1,430,636 $864,846 $7,972,735 
Special Mention16,461 17,132 3,254 13,718 2,770 8,506 3,927 65,768 
Substandard— 9,486 20,935 8,929 8,650 14,073 13,199 75,272 
Substandard Impaired 5 110 6,304 2,394 4,085 16,098 1,953 30,949 
Doubtful— — — — — — — — 
Total$1,771,386 $1,972,420 $750,817 $749,534 $545,447 $1,469,313 $883,925 $8,144,724 
Troubled Borrower Modifications

On January 1, 2023, the Company adopted ASU 2022-02 which includes disclosure requirements related to certain modifications of loans to borrowers experiencing financial difficulty, which the Company refers to as troubled borrower modifications (“TBMs”). TBMs are typically in the form of an interest rate reduction, an extension of the amortization period and/or converting the loan to interest only for a limited period of time. In addition to the change in payment terms, the Company seeks to obtain additional collateral and/or guarantors to provide additional support for the loan. The Company does not typically provide forgiveness of principal as a modification.
As of June 30, 2023, the Company had five loans classified as TBMs totaling $0.9 million, which is considered immaterial. To the extent there are additional modifications in subsequent periods, the Company will disclose additional information about the nature of the modifications, the financial effect of the modifications and payment defaults of TBMs in the 12 months prior to default, among any other relevant disclosures.