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Loans
 9 Months Ended
Sep. 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:
 September 30, 2023
(In thousands)Portfolio LoansAcquired Non-PCD LoansPCD LoansTotal
Construction and land development$474,788 $308,429 $10,519 $793,736 
Commercial real estate - owner occupied1,056,521 580,725 38,635 1,675,881 
Commercial real estate - non-owner occupied1,774,919 1,357,624 153,431 3,285,974 
Residential real estate1,693,169 703,628 22,106 2,418,903 
Commercial and financial1,187,340 340,412 56,298 1,584,050 
Consumer155,576 92,122 842 248,540 
PPP Loans809 3,293 — 4,102 
Totals$6,343,122 $3,386,233 $281,831 $10,011,186 
 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 September 30, 2023 included net deferred costs of $38.1 million. At December 31, 2022, the amortized cost basis included net deferred costs of $35.1 million. At September 30, 2023, the remaining fair value adjustments on acquired loans were $186.5 million, or 4.9% 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 $37.8 million and $28.2 million at September 30, 2023 and December 31, 2022, respectively.
The following tables present the status of net loan balances as of September 30, 2023 and December 31, 2022.
 September 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$474,783 $— $— $— $5 $474,788 
Commercial real estate - owner occupied1,055,457 66 — — 998 1,056,521 
Commercial real estate - non-owner occupied$1,771,201 $207 $— $— $3,511 $1,774,919 
Residential real estate1,675,299 10,279 738 — 6,853 1,693,169 
Commercial and financial1,178,839 1,168 141 31 7,161 1,187,340 
Consumer154,452 707 21 234 162 155,576 
PPP Loans809 — — — — 809 
Total Portfolio Loans$6,310,840 $12,427 $900 $265 $18,690 $6,343,122 
Acquired Non-PCD Loans
Construction and land development$305,822 $1,462 $994 $— $151 $308,429 
Commercial real estate - owner occupied578,177 74 — — 2,474 580,725 
Commercial real estate - non-owner occupied1,354,889 406 — — 2,329 1,357,624 
Residential real estate697,683 3,293 535 — 2,117 703,628 
Commercial and financial337,215 887 29 15 2,266 340,412 
Consumer78,887 6,274 3,361 2,415 1,185 92,122 
PPP Loans3,293 — — — — 3,293 
 Total Acquired Non-PCD Loans$3,355,966 $12,396 $4,919 $2,430 $10,522 $3,386,233 
PCD Loans
Construction and land development$10,519 $— $— $— $— $10,519 
Commercial real estate - owner occupied34,145 — — — 4,490 38,635 
Commercial real estate - non-owner occupied149,621 — — — 3,810 153,431 
Residential real estate18,864 573 1,571 — 1,098 22,106 
Commercial and financial53,403 — — — 2,895 56,298 
Consumer782 54 3 — 3 842 
Total PCD Loans$267,334 $627 $1,574 $— $12,296 $281,831 
Total Loans$9,934,140 $25,450 $7,393 $2,695 $41,508 $10,011,186 
 
 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 $0.4 million and $0.8 million in interest income on nonaccrual loans during the three and nine months ended September 30, 2023, respectively. The Company recognized $0.2 million and $1.4 million in interest income on nonaccrual loans during the three and nine months ended September 30, 2022, respectively.
The following tables present net balances of loans on nonaccrual status and the related allowance for credit losses, if any, as of:
September 30, 2023
(In thousands)Nonaccrual Loans With No Related AllowanceNonaccrual Loans With an AllowanceTotal Nonaccrual LoansAllowance for Credit Losses
Construction and land development$— $156 $156 $71 
Commercial real estate - owner occupied1,908 6,054 7,962 320 
Commercial real estate - non-owner occupied6,868 2,782 9,650 728 
Residential real estate1,810 8,258 10,068 179 
Commercial and financial3,347 8,975 12,322 4,610 
Consumer— 1,350 1,350 195 
Totals $13,933 $27,575 $41,508 $6,103 
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. In the third quarter of 2023, $19.9 million of loans moved from individually evaluated to collectively evaluated as a result of a change in methodology for evaluating loans individually.These loans are no longer reflected as collateral-dependent loans. The following table presents collateral-dependent loans as of:
(In thousands)September 30, 2023December 31, 2022
Construction and land development$— $59 
Commercial real estate - owner occupied— 2,733 
Commercial real estate - non-owner occupied8,519 1,698 
Residential real estate 818 11,333 
Commercial and financial2,147 10,448 
Consumer— 426 
Totals $11,484 $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 is 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:
September 30, 2023
(In thousands)20232022202120202019PriorRevolvingTotal
Construction and Land Development
Risk Ratings:
Pass$58,254 $290,673 $134,906 $28,682 $23,102 $29,307 $216,059 $780,983 
Special Mention— 1,214 794 — — 394 200 2,602 
Substandard— — 9,975 — — — — 9,975 
Substandard Impaired — — — — — 57 119 176 
Doubtful— — — — — — — — 
Total$58,254 $291,887 $145,675 $28,682 $23,102 $29,758 $216,378 $793,736 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Commercial real estate - owner occupied
Risk Ratings:
Pass$99,731 $259,947 $300,315 $169,143 $186,034 $569,304 $49,385 $1,633,859 
Special Mention— — 350 — 871 9,252 — 10,473 
Substandard— 2,775 — 6,377 6,868 7,501 66 23,587 
Substandard Impaired — 848 36 664 295 6,119 — 7,962 
Doubtful— — — — — — — — 
Total$99,731 $263,570 $300,701 $176,184 $194,068 $592,176 $49,451 $1,675,881 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Commercial real estate - non-owner occupied
Risk Ratings:
Pass$151,486 $842,420 $653,228 $291,699 $396,142 $865,181 $37,285 $3,237,441 
Special Mention— — 2,108 — — 13,992 — 16,100 
Substandard— — 189 8,383 8,456 5,754 242 23,024 
Substandard Impaired — — — 1,066 1,849 6,494 — 9,409 
Doubtful— — — — — — — — 
Total$151,486 $842,420 $655,525 $301,148 $406,447 $891,421 $37,527 $3,285,974 
Gross Charge Offs$— $— $— $— $— $— $109 $109 
Residential real estate
Risk Ratings:
Pass$149,010 $439,061 $646,121 $164,118 $98,896 $424,737 $475,311 $2,397,254 
Special Mention3 33 70 — 1,267 769 5,467 7,609 
Substandard— — — — — — 768 768 
September 30, 2023
(In thousands)20232022202120202019PriorRevolvingTotal
Substandard Impaired — — 861 126 315 9,516 2,454 13,272 
Doubtful— — — — — — — — 
Total$149,013 $439,094 $647,052 $164,244 $100,478 $435,022 $484,000 $2,418,903 
Gross Charge Offs$— $— $— $— $— $159 $153 $312 
Commercial and financial
Risk Ratings:
Pass$232,472 $377,084 $354,060 $139,626 $70,860 $94,921 $246,568 $1,515,591 
Special Mention129 3,545 1,086 1,002 461 3,583 2,842 12,648 
Substandard— 7,860 20,895 4,942 5,558 2,448 1,786 43,489 
Substandard Impaired 139 — 2,481 338 776 7,327 1,261 12,322 
Doubtful— — — — — — — — 
Total$232,740 $388,489 $378,522 $145,908 $77,655 $108,279 $252,457 $1,584,050 
Gross Charge Offs$206 $117 $109 $1,484 $265 $12,584 $418 $15,183 
Consumer
Risk Ratings:
Pass$28,535 $59,686 $48,611 $20,742 $21,552 $20,634 $40,713 $240,473 
Special Mention— 1,935 1,170 79 25 6 751 3,966 
Substandard— — — — — — — — 
Substandard Impaired — 1,840 1,594 178 65 329 95 4,101 
Doubtful— — — — — — — — 
Total$28,535 $63,461 $51,375 $20,999 $21,642 $20,969 $41,559 $248,540 
Gross Charge Offs$9 $927 $2,146 $291 $138 $214 $139 $3,864 
Paycheck Protection Program
Risk Ratings:
Pass$— $— $1,957 $2,145 $— $— $— $4,102 
Substandard— — — — — — — — 
Substandard Impaired— — — — — — — — 
Total$— $— $1,957 $2,145 $— $— $— $4,102 
Gross Charge Offs$— $— $— $— $— $— $— $— 
Consolidated
Risk Ratings:
Pass$719,488 $2,268,871 $2,139,198 $816,155 $796,586 $2,004,084 $1,065,321 $9,809,703 
Special Mention132 6,727 5,578 1,081 2,624 27,996 9,260 53,398 
Substandard— 10,635 31,059 19,702 20,882 15,703 2,862 100,843 
Substandard Impaired 139 2,688 4,972 2,372 3,300 29,842 3,929 47,242 
Doubtful— — — — — — — — 
Total$719,759 $2,288,921 $2,180,807 $839,310 $823,392 $2,077,625 $1,081,372 $10,011,186 
Gross Charge Offs$215 $1,044 $2,255 $1,775 $403 $12,957 $819 $19,468 
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 $722,206 $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 $752,699 $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 September 30, 2023, the Company had eight loans classified as TBMs totaling $2.2 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.