Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 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; and the metropolitan areas of Nashville, Tennessee and 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 $108.5 million and $100.2 million at June 30, 2023 and December 31, 2022, respectively. The following table presents loans, net of unearned income, by portfolio class at June 30, 2023 and December 31, 2022.

	June 30,		December 31,
($ in thousands)	2023		2022
Commercial non-real estate	$	10,113,932	$	10,146,453
Commercial real estate - owner occupied		3,058,829		3,033,058
Total commercial and industrial		13,172,761		13,179,511
Commercial real estate - income producing		3,762,428		3,560,991
Construction and land development		1,768,252		1,703,592
Residential mortgages		3,581,514		3,092,605
Consumer		1,504,931		1,577,347
Total loans	$	23,789,886	$	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 six months ended June 30, 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
	Six Months Ended June 30, 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		(7,503	)		—			(7,503	)		(73	)		(72	)		(28	)		(6,912	)		(14,588	)
Recoveries		2,694			350			3,044			10			6			480			1,953			5,493
Net provision for loan losses		4,543			(2,339	)		2,204			5,243			912			3,681			3,762			15,802
Ending balance - allowance for loan losses	$	96,195		$	46,295		$	142,490		$	77,141		$	31,344		$	36,597		$	26,924		$	314,496
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		12			27			39			28			(2,227	)		(8	)		19			(2,149	)
Ending balance - reserve for unfunded lending commitments		4,996			329			5,325			1,423			22,883			23			1,506			31,160
Total allowance for credit losses	$	101,191		$	46,624		$	147,815		$	78,564		$	54,227		$	36,620		$	28,430		$	345,656
Allowance for loan losses:
Individually evaluated	$	7,501		$	—		$	7,501		$	—		$	—		$	—		$	—		$	7,501
Collectively evaluated		88,694			46,295			134,989			77,141			31,344			36,597			26,924			306,995
Allowance for loan losses	$	96,195		$	46,295		$	142,490		$	77,141		$	31,344		$	36,597		$	26,924		$	314,496
Reserve for unfunded lending commitments:
Individually evaluated	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Collectively evaluated		4,996			329			5,325			1,423			22,883			23			1,506			31,160
Reserve for unfunded lending commitments:	$	4,996		$	329		$	5,325		$	1,423		$	22,883		$	23		$	1,506		$	31,160
Total allowance for credit losses	$	101,191		$	46,624		$	147,815		$	78,564		$	54,227		$	36,620		$	28,430		$	345,656
Loans:
Individually evaluated	$	35,697		$	675		$	36,372		$	—		$	—		$	1,135		$	—		$	37,507
Collectively evaluated		10,078,235			3,058,154			13,136,389			3,762,428			1,768,252			3,580,379			1,504,931			23,752,379
Total loans	$	10,113,932		$	3,058,829		$	13,172,761		$	3,762,428		$	1,768,252		$	3,581,514		$	1,504,931		$	23,789,886

In arriving at the June 30, 2023 allowance for credit losses, the Company weighted the June 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 June 2023 baseline scenario maintains a somewhat 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 1.6%, 1.4% and 2.4% in 2023, 2024 and 2025, respectively, and only a modest increase in unemployment, forecasted at 3.6%, 4.1% and 4.2% for 2023, 2024 and 2025, respectively. This forecast scenario assumes the 10-year U.S. treasury rate will peak in the second quarter of 2024, to approximately 4%. The baseline forecast also assumes 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 as more likely than the baseline at 60%. 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 third quarter of 2023 lasting three quarters, with the stock market contracting 22%. The S-2 scenario includes forecasted annual GDP growth of 1.2%, 0.3% and 3.0% in 2023, 2024 and 2025, respectively, and unemployment of 4.2%, 6.1% and 4.6% 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. The modest increase in the allowance for the six months ended June

30, 2023 considers continued loan growth, higher individually evaluated loan reserves on our nonaccrual portfolio and a relatively stable economic outlook, with some modest shifts between portfolios and a marginally lower reserve coverage to total loans.

				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
	Six Months Ended June 30, 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		(3,747	)		(857	)		(4,604	)		(1,066	)		(3	)		(60	)		(5,627	)		(11,360	)
Recoveries		6,603			491			7,094			878			126			527			3,102			11,727
Net provision for loan losses		(5,925	)		(3,452	)		(9,377	)		(24,919	)		2,478			(2,506	)		67			(34,257	)
Ending balance - allowance for loan losses	$	92,819		$	49,615		$	142,434		$	82,951		$	24,703		$	28,584		$	29,503		$	308,175
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		51			40			91			(274	)		1,598			2			552			1,969
Ending balance - reserve for unfunded lending commitments		4,573			363			4,936			1,420			23,505			24			1,418			31,303
Total allowance for credit losses	$	97,392		$	49,978		$	147,370		$	84,371		$	48,208		$	28,608		$	30,921		$	339,478
Allowance for loan losses:
Individually evaluated	$	76		$	31		$	107		$	18		$	19		$	322		$	170		$	636
Collectively evaluated		92,743			49,584			142,327			82,933			24,684			28,262			29,333			307,539
Allowance for loan losses	$	92,819		$	49,615		$	142,434		$	82,951		$	24,703		$	28,584		$	29,503		$	308,175
Reserve for unfunded lending commitments:
Individually evaluated	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Collectively evaluated		4,573			363			4,936			1,420			23,505			24			1,418			31,303
Reserve for unfunded lending commitments:	$	4,573		$	363		$	4,936		$	1,420		$	23,505		$	24		$	1,418		$	31,303
Total allowance for credit losses	$	97,392		$	49,978		$	147,370		$	84,371		$	48,208		$	28,608		$	30,921		$	339,478
Loans:
Individually evaluated	$	1,559		$	937		$	2,496		$	1,289		$	120		$	3,991		$	905		$	8,801
Collectively evaluated		9,643,533			2,963,537			12,607,070			3,639,954			1,408,607			2,611,816			1,569,820			21,837,267
Total loans	$	9,645,092		$	2,964,474		$	12,609,566		$	3,641,243		$	1,408,727		$	2,615,807		$	1,570,725		$	21,846,068

The release of credit reserves across most portfolios during the six months ended June 30, 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 June 30, 2022, the Company weighted the baseline economic forecast at 25% and the downside slower near-term growth scenario S-2 at 75%.

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.

		June 30, 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	$		40,268	$		10,256	$		4,020	$		941
Commercial real estate - owner occupied			2,295			675			1,461			692
Total commercial and industrial			42,563			10,931			5,481			1,633
Commercial real estate - income producing			356			—			1,240			1,174
Construction and land development			370			—			309			—
Residential mortgages			27,458			1,135			25,269			1,884
Consumer			7,473			—			6,692			—
Total loans	$		78,220	$		12,066	$		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 June 30, 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 $2.6 million at June 30, 2023 and total TDRs were $4.5 million at

December 31, 2022. At June 30, 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 tables below provides detail by portfolio class for reportable MEFDs entered into during the three and six months ended June 30, 2023.

	Three Months Ended June 30, 2023
	Term extension					Payment delay					Term extensions and payment delay
($ in thousands)	Balance		Percentage of portfolio			Balance		Percentage of portfolio			Balance		Percentage of portfolio
Commercial non-real estate	$	900		0.01	%	$	100		0.00	%	$	907		0.01	%
Commercial real estate - owner occupied		—		—			—		—			675		0.02	%
Total commercial and industrial		900		0.01	%		100		0.00	%		1,582		0.01	%
Commercial real estate - income producing		—		—			—		—			—		—
Construction and land development		—		—			—		—			—		—
Residential mortgages		—		—			—		—			—		—
Consumer		—		—			—		—			—		—
Total reportable modified loans	$	900		0.00	%	$	100		0.00	%	$	1,582		0.01	%

	Six Months Ended June 30, 2023
	Term extension					Payment delay					Term extensions and payment delay
($ in thousands)	Balance		Percentage of portfolio			Balance		Percentage of portfolio			Balance		Percentage of portfolio
Commercial non-real estate	$	909		0.01	%	$	100		0.00	%	$	907		0.01	%
Commercial real estate - owner occupied		—		—			—		—			675		0.02	%
Total commercial and industrial		909		0.01	%		100		0.00	%		1,582		0.01	%
Commercial real estate - income producing		—		—			—		—			—		—
Construction and land development		—		—			—		—			—		—
Residential mortgages		—		—			—		—			—		—
Consumer		—		—			—		—			—		—
Total reportable modified loans	$	909		0.00	%	$	100		0.00	%	$	1,582		0.01	%

Reportable modifications to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023 consisted of term extensions ranging from three months to four months and one month to five years, respectively; and payment delays of four to six months for both periods. The reported term extensions and payment delays were considered more than insignificant as they exceeded six months when considering other modifications made in the past twelve months. As of June 30, 2023, all reportable MEFDs had a payment status of current. There were no post modification payment defaults within the three or six months period ended June 30, 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 June 30, 2022 one residential mortgage loan and one consumer loan with pre and post modification balances totaling less than $0.1 million were classified as TDRs. During the six months ended June 30, 2022, three residential mortgage loans and three consumer loans with pre and post modification balances totaling $0.2 million were classified as TDRs. The TDRs modified during the six months ended June 30, 2022, included $0.1 million of loans with interest rate reduction and $0.1 million with other modifications. Three commercial non-real estate loans totaling $3.1 million that defaulted during the six months period ended June 30, 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 June 30, 2023 and December 31, 2022.

June 30, 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	$	26,086	$	15,244	$	29,531	$	70,861	$	10,043,071	$	10,113,932	$	742
Commercial real estate - owner occupied		2,448		21,404		3,332		27,184		3,031,645		3,058,829		2,966
Total commercial and industrial		28,534		36,648		32,863		98,045		13,074,716		13,172,761		3,708
Commercial real estate - income producing		18,104		172		1,535		19,811		3,742,617		3,762,428		1,237
Construction and land development		666		375		184		1,225		1,767,027		1,768,252		53
Residential mortgages		6,046		9,231		19,920		35,197		3,546,317		3,581,514		1,538
Consumer		9,797		3,036		4,462		17,295		1,487,636		1,504,931		1,016
Total	$	63,147	$	49,462	$	58,964	$	171,573	$	23,618,313	$	23,789,886	$	7,552

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 June 30, 2023 and December 31, 2022. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process.

	June 30, 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	$	9,641,587	$	2,944,869	$	12,586,456	$	3,637,979	$	1,757,523	$	17,981,958
Pass-Watch		254,542		55,424		309,966		100,027		9,280		419,273
Special Mention		49,664		5,575		55,239		18,422		890		74,551
Substandard		168,139		52,961		221,100		6,000		559		227,659
Doubtful		—		—		—		—		—		—
Total	$	10,113,932	$	3,058,829	$	13,172,761	$	3,762,428	$	1,768,252	$	18,703,441

	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

	June 30, 2023						December 31, 2022
($ in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	3,554,056	$	1,497,458	$	5,051,514	$	3,066,319	$	1,570,186	$	4,636,505
Nonperforming		27,458		7,473		34,931		26,286		7,161		33,447
Total	$	3,581,514	$	1,504,931	$	5,086,445	$	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 that 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 June 30, 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 six months ended June 30, 2023.

	Term Loans														Revolving Loans
June 30, 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	$	933,613	$	2,143,997	$	1,279,430	$	574,614	$	459,156	$	984,492	$	3,189,964	$	76,321	$	9,641,587
Pass-Watch		25,996		43,916		31,946		8,621		5,795		50,105		76,553		11,610		254,542
Special Mention		374		9,178		13,290		1,494		3,503		928		15,551		5,346		49,664
Substandard		25,344		16,040		13,076		29,987		20,553		11,815		46,867		4,457		168,139
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	985,327	$	2,213,131	$	1,337,742	$	614,716	$	489,007	$	1,047,340	$	3,328,935	$	97,734	$	10,113,932
Gross Charge-offs	$	123	$	765	$	365	$	560	$	52	$	75	$	4,401	$	1,162	$	7,503
Commercial Real Estate - Owner Occupied:
Pass	$	202,261	$	669,168	$	622,617	$	521,183	$	301,412	$	584,480	$	31,077	$	12,671	$	2,944,869
Pass-Watch		3,561		7,360		4,715		2,850		18,987		17,091		860		—		55,424
Special Mention		574		—		—		665		—		3,961		375		—		5,575
Substandard		18,630		7,127		636		7,364		4,663		13,337		1,204		—		52,961
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	225,026	$	683,655	$	627,968	$	532,062	$	325,062	$	618,869	$	33,516	$	12,671	$	3,058,829
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Income Producing:
Pass	$	257,809	$	885,797	$	921,288	$	672,062	$	369,717	$	416,420	$	64,297	$	50,589	$	3,637,979
Pass-Watch		12,061		2,308		347		59,456		22,591		2,564		300		400		100,027
Special Mention		18,054		—		—		—		—		368		—		—		18,422
Substandard		3,652		378		298		1,237		8		427		—		—		6,000
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	291,576	$	888,483	$	921,933	$	732,755	$	392,316	$	419,779	$	64,597	$	50,989	$	3,762,428
Gross Charge-offs	$	73	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	73
Construction and Land Development:
Pass	$	225,757	$	837,674	$	461,103	$	89,496	$	6,823	$	22,374	$	109,044	$	5,252	$	1,757,523
Pass-Watch		4,967		1,343		1,455		95		480		556		384		—		9,280
Special Mention		703		—		—		—		187		—		—		—		890
Substandard		—		51		46		—		11		451		—		—		559
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	231,427	$	839,068	$	462,604	$	89,591	$	7,501	$	23,381	$	109,428	$	5,252	$	1,768,252
Gross Charge-offs	$	—	$	7	$	54	$	—	$	—	$	11	$	—	$	—	$	72
Residential Mortgage:
Performing	$	339,250	$	695,785	$	870,203	$	508,117	$	184,657	$	952,450	$	3,594		—	$	3,554,056
Nonperforming		84		1,789		3,592		104		1,407		20,482		—		—		27,458
Total	$	339,334	$	697,574	$	873,795	$	508,221	$	186,064	$	972,932	$	3,594	$	—	$	3,581,514
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	28	$	—	$	—	$	28
Consumer Loans:
Performing	$	49,014	$	74,332	$	47,360	$	36,171	$	44,841	$	57,928	$	1,180,993	$	6,819	$	1,497,458
Nonperforming		71		183		337		575		542		3,987		341		1,437		7,473
Total	$	49,085	$	74,515	$	47,697	$	36,746	$	45,383	$	61,915	$	1,181,334	$	8,256	$	1,504,931
Gross Charge-offs	$	85	$	980	$	650	$	68	$	314	$	394	$	3,694	$	727	$	6,912

	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	$	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	$	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	$	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	$	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	$	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	$	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 June 30, 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 foreclosed single family residential properties in other real estate owned totaling $1.3 million at June 30, 2023 and $0.4 million at December 31, 2022.

Loans Held for Sale

Loans held for sale totaled $55.9 million and $26.4 million at June 30, 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 June 30, 2023, residential mortgage loans carried at the fair value option totaled $24.2 million with an unpaid principal balance of $23.8 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.