Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Loans and Allowance for Credit Losses

3. Loans and Allowance for Credit Losses

The Company generally makes loans in its market areas of south and central Mississippi; southern and central Alabama; northwest, central and south Louisiana; the northern, central and panhandle regions of Florida; certain areas of east and northeast Texas, including Houston, Dallas, Austin, and San Antonio; Nashville, Tennessee; and the metropolitan area of Atlanta, Georgia.

Loans, net of unearned income, by portfolio are presented at amortized cost basis in the table below. Amortized cost does not include accrued interest, which is reflected in the accrued interest line item in the Consolidated Balance Sheets, totaling $107.9 million and $100.2 million at March 31, 2023 and December 31, 2022, respectively. The following table presents loans, net of unearned income, by portfolio class at March 31, 2023 and December 31, 2022.

	March 31,		December 31,
($ in thousands)	2023		2022
Commercial non-real estate	$	10,013,482	$	10,146,453
Commercial real estate - owner occupied		3,050,748		3,033,058
Total commercial and industrial		13,064,230		13,179,511
Commercial real estate - income producing		3,758,455		3,560,991
Construction and land development		1,726,916		1,703,592
Residential mortgages		3,329,793		3,092,605
Consumer		1,525,129		1,577,347
Total loans	$	23,404,523	$	23,114,046

The following briefly describes the composition of each loan category and portfolio class.

Commercial and industrial

Commercial and industrial loans are made available to businesses for working capital (including financing of inventory and receivables), business expansion, to facilitate the acquisition of a business, and the purchase of equipment and machinery, including equipment leasing. These loans are primarily made based on the identified cash flows of the borrower and, when secured, have the added strength of the underlying collateral.

Commercial non-real estate loans may be secured by the assets being financed or other tangible or intangible business assets such as accounts receivable, inventory, ownership, enterprise value or commodity interests, and may incorporate a personal or corporate guarantee; however, some short-term loans may be made on an unsecured basis, including a small portfolio of corporate credit cards, generally issued as a part of overall customer relationships.

Commercial real estate – owner occupied loans consist of commercial mortgages on properties where repayment is generally dependent on the cash flow from the ongoing operations and activities of the borrower. Like commercial non-real estate, these loans are primarily made based on the identified cash flows of the borrower, but also have the added strength of the value of underlying real estate collateral.

Commercial real estate – income producing

Commercial real estate – income producing loans consist of loans secured by commercial mortgages on properties where the loan is made to real estate developers or investors and repayment is dependent on the sale, refinance, or income generated from the operation of the property. Properties financed include retail, office, multifamily, senior housing, hotel/motel, skilled nursing facilities and other commercial properties.

Construction and land development

Construction and land development loans are made to facilitate the acquisition, development, improvement and construction of both commercial and residential-purpose properties. Such loans are made to builders and investors where repayment is expected to be made from the sale, refinance or operation of the property or to businesses to be used in their business operations. This portfolio also includes residential construction loans and loans secured by raw land not yet under development.

Residential mortgages

Residential mortgages consist of closed-end loans secured by first liens on 1- 4 family residential properties. The portfolio includes both fixed and adjustable rate loans, although most longer-term, fixed rate loans originated are sold in the secondary mortgage market.

Consumer

Consumer loans include second lien mortgage home loans, home equity lines of credit and nonresidential consumer purpose loans. Nonresidential consumer loans include both direct and indirect loans. Direct nonresidential consumer loans are made to finance the purchase of personal property, including automobiles, recreational vehicles and boats, and for other personal purposes (secured and unsecured), and deposit account secured loans. Indirect nonresidential consumer loans include automobile financing provided to the consumer through an agreement with automobile dealerships, though the Company is no longer engaged in this type of lending and the remaining portfolio is in runoff. Consumer loans also include a small portfolio of credit card receivables issued on the basis of applications received through referrals from the Bank’s branches, online and other marketing efforts.

Allowance for Credit Losses

The calculation of the allowance for credit losses is performed using two primary approaches: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated. The allowance for credit losses was developed using multiple Moody’s Analytics (“Moody’s") macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. The following tables present activity in the allowance for credit losses (ACL) by portfolio class for the three months ended March 31, 2023 and 2022, as well as the corresponding recorded investment in loans at the end of each period.

				Commercial			Total			Commercial
	Commercial			real estate-			commercial			real estate-		Construction
	non-real			owner			and			income		and land			Residential
($ in thousands)	estate			occupied			industrial			producing		development			mortgages			Consumer			Total
	Three Months Ended March 31, 2023
Allowance for credit losses
Allowance for loan losses:
Beginning balance	$	96,461		$	48,284		$	144,745		$	71,961	$	30,498		$	32,464		$	28,121		$	307,789
Charge-offs		(4,528	)		—			(4,528	)		—		(61	)		(20	)		(3,363	)		(7,972	)
Recoveries		1,033			195			1,228			—		6			181			838			2,253
Net provision for loan losses		(320	)		(813	)		(1,133	)		4,231		459			1,916			1,842			7,315
Ending balance - allowance for loan losses	$	92,646		$	47,666		$	140,312		$	76,192	$	30,902		$	34,541		$	27,438		$	309,385
Reserve for unfunded lending commitments:
Beginning balance	$	4,984		$	302		$	5,286		$	1,395	$	25,110		$	31		$	1,487		$	33,309
Provision for losses on unfunded commitments		(191	)		22			(169	)		493		(1,487	)		(14	)		(118	)		(1,295	)
Ending balance - reserve for unfunded lending commitments		4,793			324			5,117			1,888		23,623			17			1,369			32,014
Total allowance for credit losses	$	97,439		$	47,990		$	145,429		$	78,080	$	54,525		$	34,558		$	28,807		$	341,399
Allowance for loan losses:
Individually evaluated	$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	—
Collectively evaluated		92,646			47,666			140,312			76,192		30,902			34,541			27,438			309,385
Allowance for loan losses	$	92,646		$	47,666		$	140,312		$	76,192	$	30,902		$	34,541		$	27,438		$	309,385
Reserve for unfunded lending commitments:
Individually evaluated	$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	—
Collectively evaluated		4,793			324			5,117			1,888		23,623			17			1,369			32,014
Reserve for unfunded lending commitments:	$	4,793		$	324		$	5,117		$	1,888	$	23,623		$	17		$	1,369		$	32,014
Total allowance for credit losses	$	97,439		$	47,990		$	145,429		$	78,080	$	54,525		$	34,558		$	28,807		$	341,399
Loans:
Individually evaluated	$	10,273		$	684		$	10,957		$	1,120	$	—		$	1,135		$	—		$	13,212
Collectively evaluated		10,003,209			3,050,064			13,053,273			3,757,335		1,726,916			3,328,658			1,525,129			23,391,311
Total loans	$	10,013,482		$	3,050,748		$	13,064,230		$	3,758,455	$	1,726,916		$	3,329,793		$	1,525,129		$	23,404,523

In arriving at the March 31, 2023 allowance for credit losses, the Company weighted the March 2023 baseline economic forecast, which Moody’s defines as the “most likely outcome” based on current conditions and its view of where the economy is headed, with a 40% probability. The March 2023 baseline scenario maintains a generally optimistic outlook in its assumptions surrounding the drivers of economic growth, including its expectations of the effectiveness of the Federal Reserve's monetary policy in easing inflationary conditions, though at a slower pace than previously forecasted. The baseline forecast includes sustained economic growth with forecasted annual GDP growth of 1.9% for both 2023 and 2024, and 2.7% for 2025, and only a modest increase in unemployment, forecasted at 3.5% for 2023, 3.9% for 2024, and 4.0% for 2025. Under the baseline forecast, the recent bank failures are not considered symptomatic of a serious broader problem and do not weaken the financial system or the economy. Management determined that assumptions provided for in the downside slower near-term growth/mild recessionary scenario (S-2) were also reasonably possible and weighted that scenario at 50%, and further weighted the (S-3) moderate recessionary scenario at 10% due to additional downside risk. The S-2 scenario assumes that interest rates remain elevated, global supply chain issues keep inflation elevated and the recent bank failures reduce consumer confidence and cause banks to tighten lending standards. This leads to a mild recession that starts in the second quarter of 2023 lasting three quarters, with a peak to trough decline of 1.3% resulting in forecasted annual GDP growth of only 0.9% for 2023, 0.3% for 2024, and 3.2% for 2025; and unemployment of 4.8% in 2023, 5.8% in 2024, and 4.2% in 2025. The S-3 scenario assumes a more severe recession with annual GDP growth of 0.3% in 2023, a decline of 0.3% in 2024, and then back to growth of 2.6% in 2025; and unemployment of 5.6%, 7.6%, and 6.3% in 2023, 2024, and 2025, respectively.

While economic uncertainty continues, including the possibility of a recession in the near-term, the credit loss outlook on the loan portfolio as a whole has not changed materially since year-end. Positive economic indicators of growth within the Company's footprint, relatively stable asset quality metrics and modest credit losses in recent periods led to relatively flat reserves for the three months ended March 31, 2023.

				Commercial			Total			Commercial
	Commercial			real estate-			commercial			real estate-			Construction
	non-real			owner			and			income			and land			Residential
($ in thousands)	estate			occupied			industrial			producing			development			mortgages			Consumer			Total
	Three Months Ended March 31, 2022
Allowance for credit losses
Allowance for loan losses:
Beginning balance	$	95,888		$	53,433		$	149,321		$	108,058		$	22,102		$	30,623		$	31,961		$	342,065
Charge-offs		(2,659	)		—			(2,659	)		(4	)		—			(42	)		(2,680	)		(5,385	)
Recoveries		2,142			389			2,531			878			68			61			1,528			5,066
Net provision for loan losses		(8,072	)		(5,361	)		(13,433	)		(3,565	)		(1,082	)		(4,307	)		(1,516	)		(23,903	)
Ending balance - allowance for loan losses	$	87,299		$	48,461		$	135,760		$	105,367		$	21,088		$	26,335		$	29,293		$	317,843
Reserve for unfunded lending commitments:
Beginning balance	$	4,522		$	323		$	4,845		$	1,694		$	21,907		$	22		$	866		$	29,334
Provision for losses on unfunded commitments		(246	)		108			(138	)		453			474			(3	)		590			1,376
Ending balance - reserve for unfunded lending commitments		4,276			431			4,707			2,147			22,381			19			1,456			30,710
Total allowance for credit losses	$	91,575		$	48,892		$	140,467		$	107,514		$	43,469		$	26,354		$	30,749		$	348,553
Allowance for loan losses:
Individually evaluated	$	112		$	32		$	144		$	20		$	20		$	408		$	174		$	766
Collectively evaluated		87,187			48,429			135,616			105,347			21,068			25,927			29,119			317,077
Allowance for loan losses	$	87,299		$	48,461		$	135,760		$	105,367		$	21,088		$	26,335		$	29,293		$	317,843
Reserve for unfunded lending commitments:
Individually evaluated	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Collectively evaluated		4,276			431			4,707			2,147			22,381			19			1,456			30,710
Reserve for unfunded lending commitments:	$	4,276		$	431		$	4,707		$	2,147		$	22,381		$	19		$	1,456		$	30,710
Total allowance for credit losses	$	91,575		$	48,892		$	140,467		$	107,514		$	43,469		$	26,354		$	30,749		$	348,553
Loans:
Individually evaluated	$	1,742		$	951		$	2,693		$	1,309		$	122		$	4,534		$	929		$	9,587
Collectively evaluated		9,582,738			2,867,282			12,450,020			3,561,990			1,286,533			2,458,366			1,556,845			21,313,754
Total loans	$	9,584,480		$	2,868,233		$	12,452,713		$	3,563,299		$	1,286,655		$	2,462,900		$	1,557,774		$	21,323,341

The release of credit reserves across all portfolios during the three months ended March 31, 2022 reflected positive economic indicators in our market, continued improvement in our asset quality metrics, and a sustained period of minimal credit losses. In arriving at the allowance for credit losses at March 31, 2022, the Company weighted the baseline economic forecast at 40% and the downside slower near-term growth scenario S-2 at 60%.

Nonaccrual loans and certain reportable modified loan disclosures

The following table shows the composition of nonaccrual loans and those without an allowance for loan loss, by portfolio class.

		March 31, 2023						December 31, 2022
($ in thousands)		Total nonaccrual			Nonaccrual without allowance for loan loss			Total nonaccrual			Nonaccrual without allowance for loan loss
Commercial non-real estate	$		13,302	$		10,273	$		4,020	$		941
Commercial real estate - owner occupied			2,393			684			1,461			692
Total commercial and industrial			15,695			10,957			5,481			1,633
Commercial real estate - income producing			1,501			1,120			1,240			1,174
Construction and land development			340			—			309			—
Residential mortgages			30,111			1,135			25,269			1,884
Consumer			6,697			—			6,692			—
Total loans	$		54,344	$		13,212	$		38,991			4,691

As a part of our loss mitigation efforts, we may provide modifications to borrowers experiencing financial difficulty to improve long-term collectability of the loans and to avoid the need for repossession or foreclosure of collateral. As described in Note 1 – Accounting Policy, accounting and reporting requirements changed related to such modifications effective January 1, 2023, impacting the comparability between periods of the disclosures that follow.

Nonaccrual loans include reportable nonaccruing modified loans to borrowers experiencing financial difficulty (“MEFDs”) totaling $1.6 million at March 31, 2023 and loans modified in troubled debt restructurings (“TDRs”) totaling $2.6 million at December 31, 2022. Total reportable MEFDs, both accruing and nonaccruing, were $1.6 million at March 31, 2023 and total TDRs were $4.5

million at December 31, 2022. At March 31, 2023 and December 31, 2022, the Company had no unfunded commitments to borrowers whose loan terms have been modified as a reportable MEFD or TDR, respectively.

The table below provides detail by portfolio class for reportable MEFDs entered into during the three months ended March 31, 2023.

	March 31, 2023
($ in thousands)	Balance		Percentage of portfolio class
Commercial non-real estate	$	934		0.01	%
Commercial real estate - owner occupied		684		0.02	%
Total commercial and industrial		1,618		0.01	%
Commercial real estate - income producing		—		—
Construction and land development		—		—
Residential mortgages		—		—
Consumer		—		—
Total reportable modified loans	$	1,618		0.01	%

Reportable modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2023 consisted of term extensions ranging from 9 months to 5 years. As of March 31, 2023, all reportable MEFDs entered into during the three months ended March 31, 2023 had a payment status of current. There were no post modification payment defaults within the three month period ended March 31, 2023. A payment default occurs if the loan is either 90 days or more delinquent or has been charged off as of the end of the period presented.

During the three months ended March 31, 2022, two residential mortgage loans with pre and post modification balances of $0.1 million and two consumer loans with pre and post modification balances totaling $0.1 million were classified as TDRs. The TDRs modified during the three months ended March 31, 2022, included $0.1 million of loans with interest rate reduction and $0.1 million with other modifications. Two commercial non-real estate loans totaling $3.1 million that defaulted during the three months period ended March 31, 2022 had been modified in a TDR during the twelve months prior to default.

Aging Analysis

The tables below present the aging analysis of past due loans by portfolio class at March 31, 2023 and December 31, 2022.

March 31, 2023	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
($ in thousands)
Commercial non-real estate	$	31,691	$	17,026	$	11,029	$	59,746	$	9,953,736	$	10,013,482	$	8,492
Commercial real estate - owner occupied		2,670		2,029		2,567		7,266		3,043,482		3,050,748		1,399
Total commercial and industrial		34,361		19,055		13,596		67,012		12,997,218		13,064,230		9,891
Commercial real estate - income producing		175		—		2,653		2,828		3,755,627		3,758,455		1,214
Construction and land development		2,304		359		217		2,880		1,724,036		1,726,916		126
Residential mortgages		29,903		8,055		13,684		51,642		3,278,151		3,329,793		167
Consumer		6,590		4,506		4,695		15,791		1,509,338		1,525,129		1,757
Total	$	73,333	$	31,975	$	34,845	$	140,153	$	23,264,370	$	23,404,523	$	13,155

December 31, 2022	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total Loans		Recorded investment > 90 days and still accruing
($ in thousands)
Commercial non-real estate	$	4,050	$	21,329	$	3,418	$	28,797	$	10,117,656	$	10,146,453	$	996
Commercial real estate - owner occupied		19,069		3,346		1,894		24,309		3,008,749		3,033,058		1,623
Total commercial and industrial		23,119		24,675		5,312		53,106		13,126,405		13,179,511		2,619
Commercial real estate - income producing		879		—		1,174		2,053		3,558,938		3,560,991		—
Construction and land development		4,029		242		133		4,404		1,699,188		1,703,592		54
Residential mortgages		28,208		11,056		17,346		56,610		3,035,995		3,092,605		293
Consumer		8,845		2,806		4,407		16,058		1,561,289		1,577,347		1,619
Total	$	65,080	$	38,779	$	28,372	$	132,231	$	22,981,815	$	23,114,046	$	4,585

Credit Quality Indicators

The following tables present the credit quality indicators by segment and portfolio class of loans at March 31, 2023 and December 31, 2022. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process.

	March 31, 2023
($ in thousands)	Commercial non-real estate		Commercial real estate - owner- occupied		Total commercial and industrial		Commercial real estate - income producing		Construction and land development		Total commercial
Grade:
Pass	$	9,511,047	$	2,937,286	$	12,448,333	$	3,633,440	$	1,716,329	$	17,798,102
Pass-Watch		277,067		52,691		329,758		116,360		9,860		455,978
Special Mention		54,998		7,552		62,550		1,534		191		64,275
Substandard		170,370		53,219		223,589		7,121		536		231,246
Doubtful		—		—		—		—		—		—
Total	$	10,013,482	$	3,050,748	$	13,064,230	$	3,758,455	$	1,726,916	$	18,549,601

	December 31, 2022
($ in thousands)	Commercial non-real estate		Commercial real estate - owner- occupied		Total commercial and industrial		Commercial real estate - income producing		Construction and land development		Total commercial
Grade:
Pass	$	9,641,117	$	2,912,057	$	12,553,174	$	3,440,648	$	1,690,756	$	17,684,578
Pass-Watch		284,843		49,093		333,936		111,587		12,097		457,620
Special Mention		79,980		6,267		86,247		3,810		196		90,253
Substandard		140,513		65,641		206,154		4,946		543		211,643
Doubtful		—		—		—		—		—		—
Total	$	10,146,453	$	3,033,058	$	13,179,511	$	3,560,991	$	1,703,592	$	18,444,094

	March 31, 2023						December 31, 2022
($ in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	3,299,682	$	1,518,431	$	4,818,113	$	3,066,319	$	1,570,186	$	4,636,505
Nonperforming		30,111		6,698		36,809		26,286		7,161		33,447
Total	$	3,329,793	$	1,525,129	$	4,854,922	$	3,092,605	$	1,577,347	$	4,669,952

Below are the definitions of the Company’s internally assigned grades:

Commercial:

•Pass – loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.

•Pass-Watch – credits in this category are of sufficient risk to cause concern. This category is reserved for credits that display negative performance trends. The “Watch” grade should be regarded as a transition category.

•Special Mention – a criticized asset category defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the institution’s credit position. Special mention credits are not considered part of the classified credit categories and do not expose the institution to sufficient risk to warrant adverse classification.

•Substandard – an asset that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

•Doubtful – an asset that has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

•Loss – credits classified as Loss are considered uncollectable and are charged off promptly once so classified.

Residential and Consumer:

•Performing – accruing loans.

•Nonperforming – loans for which there are good reasons to doubt that payments will be made in full. Nonperforming loans include all loans with nonaccrual status and, prior to January 1, 2023, all loans that were modified in a troubled debt restructuring.

Vintage Analysis

The following tables present credit quality disclosures of amortized cost by portfolio class and vintage for term loans and by revolving and revolving converted to amortizing at March 31, 2023 and December 31, 2022. The Company defines vintage as the later of origination, renewal or modification date. The gross charge-offs presented in the table are for the three months ended March 31, 2023.

	Term Loans														Revolving Loans
March 31, 2023	Amortized Cost Basis by Origination Year												Revolving		Converted to
($ in thousands)	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
Commercial Non-Real Estate:
Pass	$	443,067	$	2,385,284	$	1,362,105	$	592,762	$	505,331	$	958,298	$	3,214,349	$	49,851	$	9,511,047
Pass-Watch		18,434		54,455		32,893		30,343		7,487		58,113		73,146		2,196		277,067
Special Mention		32,611		5,560		522		1,837		4,198		1,145		8,984		141		54,998
Substandard		21,424		21,686		14,027		30,909		21,450		12,123		47,928		823		170,370
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Non- Real Estate	$	515,536	$	2,466,985	$	1,409,547	$	655,851	$	538,466	$	1,029,679	$	3,344,407	$	53,011	$	10,013,482
Gross Charge-offs	$	—	$	309	$	170	$	463	$	12	$	33	$	2,993	$	548	$	4,528
Commercial Real Estate - Owner Occupied:
Pass	$	86,006	$	643,498	$	641,601	$	526,654	$	315,352	$	677,090	$	34,237	$	12,848	$	2,937,286
Pass-Watch		1,985		8,785		4,558		3,668		15,513		17,228		954		—		52,691
Special Mention		—		46		—		543		603		6,360		—		—		7,552
Substandard		18,506		6,957		680		7,453		4,734		13,889		1,000		—		53,219
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Owner Occupied	$	106,497	$	659,286	$	646,839	$	538,318	$	336,202	$	714,567	$	36,191	$	12,848	$	3,050,748
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Income Producing:
Pass	$	122,528	$	887,881	$	889,960	$	705,277	$	398,028	$	514,955	$	114,746	$	65	$	3,633,440
Pass-Watch		18,723		1,191		37		59,847		22,922		13,238		402		—		116,360
Special Mention		985		—		—		178		—		371		—		—		1,534
Substandard		3,535		397		319		1,214		8		1,648		—		—		7,121
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Income Producing	$	145,771	$	889,469	$	890,316	$	766,516	$	420,958	$	530,212	$	115,148	$	65	$	3,758,455
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and Land Development:
Pass	$	155,497	$	748,153	$	545,932	$	103,183	$	7,786	$	24,241	$	126,158	$	5,379	$	1,716,329
Pass-Watch		2,408		3,185		2,670		96		522		611		368		—		9,860
Special Mention		—		—		—		—		191		—		—		—		191
Substandard		—		51		51		—		11		423		—		—		536
Doubtful		—		—		—		—		—		—		—		—		—
Total Construction and Land Development	$	157,905	$	751,389	$	548,653	$	103,279	$	8,510	$	25,275	$	126,526	$	5,379	$	1,726,916
Gross Charge-offs	$	—	$	7	$	54	$	—	$	—	$	—	$	—	$	—	$	61
Residential Mortgage:
Performing	$	173,196	$	628,643	$	800,082	$	516,534	$	187,232	$	990,957	$	3,038		—	$	3,299,682
Nonperforming		70		2,452		3,052		338		1,610		22,589		—		—		30,111
Total Residential Mortgage	$	173,266	$	631,095	$	803,134	$	516,872	$	188,842	$	1,013,546	$	3,038	$	—	$	3,329,793
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	20	$	—	$	—	$	20
Consumer Loans:
Performing	$	31,666	$	83,306	$	53,900	$	40,880	$	53,213	$	69,745	$	1,182,108	$	3,613	$	1,518,431
Nonperforming		32		172		362		573		610		4,081		162		706		6,698
Total Consumer	$	31,698	$	83,478	$	54,262	$	41,453	$	53,823	$	73,826	$	1,182,270	$	4,319	$	1,525,129
Gross Charge-offs	$	—	$	294	$	329	$	43	$	152	$	236	$	2,013	$	296	$	3,363

	Term Loans														Revolving Loans
December 31, 2022	Amortized Cost Basis by Origination Year												Revolving		Converted to
($ in thousands)	2022		2021		2020		2019		2018		Prior		Loans		Term Loans		Total
Commercial Non-Real Estate:
Pass	$	2,600,656	$	1,450,689	$	679,355	$	569,842	$	267,025	$	763,122	$	3,193,769	$	116,659	$	9,641,117
Pass-Watch		68,307		38,949		31,841		11,757		8,237		49,577		66,339		9,836		284,843
Special Mention		30,276		13,625		2,443		4,406		322		1,654		25,184		2,070		79,980
Substandard		29,667		13,807		11,766		21,667		12,792		1,250		39,213		10,351		140,513
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Non- Real Estate	$	2,728,906	$	1,517,070	$	725,405	$	607,672	$	288,376	$	815,603	$	3,324,505	$	138,916	$	10,146,453
Commercial Real Estate - Owner Occupied:
Pass	$	630,121	$	650,742	$	537,849	$	328,364	$	265,437	$	447,707	$	46,730	$	5,107	$	2,912,057
Pass-Watch		7,129		5,299		3,743		13,301		10,872		7,706		893		150		49,093
Special Mention		—		—		544		822		1,231		3,670		—		—		6,267
Substandard		19,899		547		6,715		7,663		7,543		21,465		1,000		809		65,641
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Owner Occupied	$	657,149	$	656,588	$	548,851	$	350,150	$	285,083	$	480,548	$	48,623	$	6,066	$	3,033,058
Commercial Real Estate - Income Producing:
Pass	$	894,522	$	795,378	$	660,235	$	420,435	$	232,145	$	317,446	$	113,487	$	7,000	$	3,440,648
Pass-Watch		1,027		18,070		58,256		20,865		12,066		836		467		—		111,587
Special Mention		235		—		708		2,325		166		376		—		—		3,810
Substandard		415		—		2,785		8		1,240		498		—		—		4,946
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Income Producing	$	896,199	$	813,448	$	721,984	$	443,633	$	245,617	$	319,156	$	113,954	$	7,000	$	3,560,991
Construction and Land Development:
Pass	$	663,735	$	711,731	$	148,579	$	9,198	$	15,360	$	10,854	$	128,842	$	2,457	$	1,690,756
Pass-Watch		8,233		1,944		643		559		199		450		69		—		12,097
Special Mention		—		—		—		196		—		—		—		—		196
Substandard		35		55		—		12		61		380		—		—		543
Doubtful		—		—		—		—		—		—		—		—		—
Total Construction and Land Development	$	672,003	$	713,730	$	149,222	$	9,965	$	15,620	$	11,684	$	128,911	$	2,457	$	1,703,592
Residential Mortgage:
Performing	$	631,339	$	694,104	$	518,705	$	192,431	$	107,675	$	918,918	$	3,147	$	—	$	3,066,319
Nonperforming		1,058		2,434		716		1,196		2,080		18,802		—		—		26,286
Total Residential Mortgage	$	632,397	$	696,538	$	519,421	$	193,627	$	109,755	$	937,720	$	3,147	$	—	$	3,092,605
Consumer Loans:
Performing	$	103,742	$	58,248	$	45,641	$	62,715	$	41,559	$	40,489	$	1,212,958	$	4,834	$	1,570,186
Nonperforming		193		198		228		758		381		3,341		459		1,603		7,161
Total Consumer	$	103,935	$	58,446	$	45,869	$	63,473	$	41,940	$	43,830	$	1,213,417	$	6,437	$	1,577,347

Residential Mortgage Loans in Process of Foreclosure

Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. Included in loans at March 31, 2023 and December 31, 2022 were $3.8 million and $4.9 million, respectively, of consumer loans secured by single family residential real estate that were in process of foreclosure. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $0.4 million of foreclosed single family residential properties in other real estate owned at both March 31, 2023 and December 31, 2022.

Loans Held for Sale

Loans held for sale totaled $23.4 million and $26.4 million at March 31, 2023 and December 31, 2022, respectively. Loans held for sale is composed primarily of residential mortgage loans originated for sale in the secondary market. At March 31, 2023, residential mortgage loans carried at the fair value option totaled $14.9 million with an unpaid principal balance of $14.6 million. At December 31, 2022, residential mortgage loans carried at the fair value option totaled $10.8 million with an unpaid principal balance of $10.6 million. All other loans held for sale are carried at the lower of cost or market.