Loans and Allowance for Credit Losses

9 Months Ended

Sep. 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 $118.9 million and $100.2 million at September 30, 2023 and December 31, 2022, respectively. The following table presents loans, net of unearned income, by portfolio class at September 30, 2023 and December 31, 2022.

	September 30,		December 31,
($ in thousands)	2023		2022
Commercial non-real estate	$	10,075,585	$	10,146,453
Commercial real estate - owner occupied		3,081,327		3,033,058
Total commercial and industrial		13,156,912		13,179,511
Commercial real estate - income producing		4,027,553		3,560,991
Construction and land development		1,614,846		1,703,592
Residential mortgages		3,721,106		3,092,605
Consumer		1,463,262		1,577,347
Total loans	$	23,983,679	$	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.

LIBOR Transition

Effective July 1, 2023, the London Interbank Offered Rate (“LIBOR”) is no longer a representative rate for the overnight, one-month, three-month, six-month, and twelve-month settings. The Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), signed into law in March of 2022, offers a federal solution for transitioning legacy instruments that lack sufficient provisions addressing LIBOR’s cessation by outlining a uniform process to govern the transition from LIBOR to a replacement rate. The Federal Reserve Bank Board, authorized under the LIBOR Act to issue appropriate and necessary regulations to administer and carry out the purposes of the Act, issued final regulations which became effective on February 27, 2023. Under the LIBOR Act and the related regulations, the Chicago Mercantile Exchange Term Secured Overnight Financing Rate (“CME Term SOFR”) plus a tenor spread adjustment was designated as the replacement reference rate for instruments that previously referenced LIBOR.

Effective July 3, 2023, approximately $3.1 billion of variable rate loans tied to LIBOR were transitioned in accordance with the statutory framework established by the Federal Reserve, with the transition rate to be utilized upon the next reset period, in a manner that is consistent with industry practice. The transition did not have a material financial impact on the Company’s operating results for the three or nine months ended September 30, 2023.

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 nine months ended September 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
	Nine Months Ended September 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		(44,837	)		—			(44,837	)		(73	)		(72	)		(53	)		(10,787	)		(55,822	)
Recoveries		4,419			447			4,866			12			10			888			2,701			8,477
Net provision for loan losses		43,622			(7,152	)		36,470			2,441			(2,213	)		3,563			5,586			45,847
Ending balance - allowance for loan losses	$	99,665		$	41,579		$	141,244		$	74,341		$	28,223		$	36,862		$	25,621		$	306,291
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		270			10			280			39			(3,874	)		4			(145	)		(3,696	)
Ending balance - reserve for unfunded lending commitments		5,254			312			5,566			1,434			21,236			35			1,342			29,613
Total allowance for credit losses	$	104,919		$	41,891		$	146,810		$	75,775		$	49,459		$	36,897		$	26,963		$	335,904
Allowance for loan losses:
Individually evaluated	$	1,666		$	—		$	1,666		$	—		$	—		$	—		$	—		$	1,666
Collectively evaluated		97,999			41,579			139,578			74,341			28,223			36,862			25,621			304,625
Allowance for loan losses	$	99,665		$	41,579		$	141,244		$	74,341		$	28,223		$	36,862		$	25,621		$	306,291
Reserve for unfunded lending commitments:
Individually evaluated	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Collectively evaluated		5,254			312			5,566			1,434			21,236			35			1,342			29,613
Reserve for unfunded lending commitments:	$	5,254		$	312		$	5,566		$	1,434		$	21,236		$	35		$	1,342		$	29,613
Total allowance for credit losses	$	104,919		$	41,891		$	146,810		$	75,775		$	49,459		$	36,897		$	26,963		$	335,904
Loans:
Individually evaluated	$	17,658		$	—		$	17,658		$	—		$	—		$	—		$	—		$	17,658
Collectively evaluated		10,057,927			3,081,327			13,139,254			4,027,553			1,614,846			3,721,106			1,463,262			23,966,021
Total loans	$	10,075,585		$	3,081,327		$	13,156,912		$	4,027,553		$	1,614,846		$	3,721,106		$	1,463,262		$	23,983,679

In arriving at the September 30, 2023 allowance for credit losses, the Company weighted the September 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 September 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. The baseline forecast assumes the Federal Funds rate has reached its terminal value in the rate hiking cycle, with rate cuts expected to begin in June 2024. This forecast includes sustained economic growth with forecasted annual GDP growth of 2.1%, 1.4% and 1.9% in 2023, 2024 and 2025, respectively, and only a modest increase in unemployment, forecasted at 3.7%, 4.1% and 4.2% for 2023, 2024 and 2025, respectively. This forecast scenario also assumes the 10-year U.S. treasury rate reached its recent high in the second quarter of 2023, and will continue to ease slightly through 2025. 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 geopolitical conflict creates longer and wider supply chain disruption, keeps inflation elevated and assumes the disruption in the financial sector results in broader tightening of credit standards. This leads to a mild recession that starts in the fourth quarter of 2023 lasting three quarters, with the stock market contracting 22%. The S-2 scenario includes forecasted annual GDP growth of 2.1% in 2023, but contracts to negative 0.2% in 2024 before returning to 2.5% in 2025. Unemployment is forecasted to increase from current levels to 3.9%, 6.1% and 4.9% 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 decline in the allowance for credit loss for the nine months ended September 30, 2023 reflects a relatively stable economic outlook, with shifts between portfolios and a relatively modest decline in 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
	Nine Months Ended September 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		(6,366	)		(946	)		(7,312	)		(1,066	)		(3	)		(102	)		(9,464	)		(17,947	)
Recoveries		9,460			606			10,066			878			132			1,463			4,479			17,018
Net provision for loan losses		(4,176	)		(5,076	)		(9,252	)		(30,458	)		4,516			(1,037	)		1,211			(35,020	)
Ending balance - allowance for loan losses	$	94,806		$	48,017		$	142,823		$	77,412		$	26,747		$	30,947		$	28,187		$	306,116
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		238			10			248			(205	)		3,602			(5	)		494			4,134
Ending balance - reserve for unfunded lending commitments		4,760			333			5,093			1,489			25,509			17			1,360			33,468
Total allowance for credit losses	$	99,566		$	48,350		$	147,916		$	78,901		$	52,256		$	30,964		$	29,547		$	339,584
Allowance for loan losses:
Individually evaluated	$	71		$	31		$	102		$	17		$	19		$	276		$	102		$	516
Collectively evaluated		94,735			47,986			142,721			77,395			26,728			30,671			28,085			305,600
Allowance for loan losses	$	94,806		$	48,017		$	142,823		$	77,412		$	26,747		$	30,947		$	28,187		$	306,116
Reserve for unfunded lending commitments:
Individually evaluated	$	3		$	—		$	3		$	—		$	—		$	—		$	—		$	3
Collectively evaluated		4,757			333			5,090			1,489			25,509			17			1,360			33,465
Reserve for unfunded lending commitments:	$	4,760		$	333		$	5,093		$	1,489		$	25,509		$	17		$	1,360		$	33,468
Total allowance for credit losses	$	99,566		$	48,350		$	147,916		$	78,901		$	52,256		$	30,964		$	29,547		$	339,584
Loans:
Individually evaluated	$	1,282		$	929		$	2,211		$	1,270		$	118		$	3,680		$	527		$	7,806
Collectively evaluated		9,904,145			3,032,204			12,936,349			3,685,270			1,541,139			2,840,043			1,574,978			22,577,779
Total loans	$	9,905,427		$	3,033,133		$	12,938,560		$	3,686,540		$	1,541,257		$	2,843,723		$	1,575,505		$	22,585,585

The release of credit reserves across most portfolios during the nine months ended September 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 September 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.

		September 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	$		22,108	$		15,413	$		4,020	$		941
Commercial real estate - owner occupied			2,432			—			1,461			692
Total commercial and industrial			24,540			15,413			5,481			1,633
Commercial real estate - income producing			344			—			1,240			1,174
Construction and land development			742			—			309			—
Residential mortgages			26,905			—			25,269			1,884
Consumer			7,800			—			6,692			—
Total loans	$		60,331	$		15,413	$		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 $20 thousand at September 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 $28.9 million at September 30, 2023 and total TDRs were $4.5 million at December 31, 2022. At September 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 nine months ended September 30, 2023. Modified facilities are reflected only once in each table based on the type of modification or combinaion of modification.

	Three Months Ended September 30, 2023
	Term extension					Payment delay				Term extensions and payment delay					Other(1)
($ in thousands)	Balance		Percentage of portfolio			Balance		Percentage of portfolio		Balance		Percentage of portfolio			Balance		Percentage of portfolio
Commercial non-real estate	$	5,873		0.06	%	$	—		—	$	4,431		0.04	%	$	—		—
Commercial real estate - owner occupied		—		—			—		—		17,035		0.55	%		—		—
Total commercial and industrial		5,873		0.04	%		—		—		21,466		0.16	%				—
Commercial real estate - income producing		—		—			—		—		—		—			—		—
Construction and land development		86		0.01	%		—		—		—		—			—		—
Residential mortgages		120		0.00	%		—		—		—		—			66		0.00	%
Consumer		62		0.00	%		—		—		—		—			—		—
Total reportable modified loans	$	6,141		0.03	%	$	—		—	$	21,466		0.09	%	$	66		0.00	%

(1) Includes interest rate reduction and other than insignificant payment delays.

	Nine Months Ended September 30, 2023
	Term extension					Payment delay					Term extensions and payment delay					Other(1)
($ in thousands)	Balance		Percentage of portfolio			Balance		Percentage of portfolio			Balance		Percentage of portfolio			Balance		Percentage of portfolio
Commercial non-real estate	$	6,969		0.07	%	$	100		0.00	%	$	4,431		0.04	%	$	—		—
Commercial real estate - owner occupied		—		—			—		—			17,035		0.55	%		—		—
Total commercial and industrial		6,969		0.05	%		100		0.00	%		21,466		0.16	%		—		—
Commercial real estate - income producing		—		—			—		—			—		—			—		—
Construction and land development		86		0.01	%		—		—			—		—			—		—
Residential mortgages		120		0.00	%		—		—			—		—			66		0.00	%
Consumer		62		0.00	%		—		—			—		—			—		—
Total reportable modified loans	$	7,237		0.03	%	$	100		0.00	%	$	21,466		0.09	%	$	66		0.00	%

(1) Includes interest rate reduction and other than insignificant payment delays.

Reportable modifications to borrowers experiencing financial difficulty during the both the three and nine months ended September 30, 2023 consisted of weighted average term extensions totaling approximately eight months for commercial, fifteen years for residential mortgage and five years for consumer. The weighted average term of other than insignificant payment delays was four months. Reported term extensions and payment delays are considered more than insignificant if they exceeded six months when considering other modifications made in the past twelve months.

The table below presents the aging analysis of reportable modifications to borrowers experiencing financial difficulty by portfolio class at September 30, 2023.

September 30, 2023	30-59 days past due		60-89 days past due		Greater than 90 days past due		Total past due		Current		Total reportable modified Loans
(in thousands)
Commercial non-real estate	$	4,718	$	—	$	—	$	4,718	$	6,782	$	11,500
Commercial real estate - owner occupied		—		—		—		—		17,035		17,035
Total commercial and industrial		4,718		—		—		4,718		23,817		28,535
Commercial real estate - income producing		—		—		—		—		—		—
Construction and land development		—		—		—		—		86		86
Residential mortgages		—		—		20		20		166		186
Consumer		—		—		—		—		62		62
Total reportable modified loans	$	4,718	$	—	$	20	$	4,738	$	24,131	$	28,869

There was one residential mortgage loan totaling $20 thousand with a reportable interest rate reduction and a term extension modification that had a post modification payment default during the three and nine month periods ended September 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.

Aging Analysis

The tables below present the aging analysis of past due loans by portfolio class at September 30, 2023 and December 31, 2022.

September 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	$	20,712	$	12,881	$	13,522	$	47,115	$	10,028,470	$	10,075,585	$	1,476
Commercial real estate - owner occupied		2,642		1,860		2,324		6,826		3,074,501		3,081,327		1,037
Total commercial and industrial		23,354		14,741		15,846		53,941		13,102,971		13,156,912		2,513
Commercial real estate - income producing		224		300		19,428		19,952		4,007,601		4,027,553		19,139
Construction and land development		947		150		148		1,245		1,613,601		1,614,846		67
Residential mortgages		9,419		8,834		17,878		36,131		3,684,975		3,721,106		85
Consumer		12,504		3,612		6,029		22,145		1,441,117		1,463,262		2,366
Total	$	46,448	$	27,637	$	59,329	$	133,414	$	23,850,265	$	23,983,679	$	24,170

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 September 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.

	September 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	$	9,680,970	$	2,983,077	$	12,664,047	$	3,862,680	$	1,600,484	$	18,127,211
Pass-Watch		183,257		63,261		246,518		137,577		12,888		396,983
Special Mention		50,128		8,512		58,640		2,258		702		61,600
Substandard		161,230		26,477		187,707		25,038		772		213,517
Doubtful		—		—		—		—		—		—
Total	$	10,075,585	$	3,081,327	$	13,156,912	$	4,027,553	$	1,614,846	$	18,799,311

	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

	September 30, 2023						December 31, 2022
($ in thousands)	Residential mortgage		Consumer		Total		Residential mortgage		Consumer		Total
Performing	$	3,694,201	$	1,455,462	$	5,149,663	$	3,066,319	$	1,570,186	$	4,636,505
Nonperforming		26,905		7,800		34,705		26,286		7,161		33,447
Total	$	3,721,106	$	1,463,262	$	5,184,368	$	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 September 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 nine months ended September 30, 2023.

	Term Loans														Revolving Loans
September 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	$	1,316,709	$	1,938,055	$	1,205,406	$	545,552	$	435,870	$	966,469	$	3,184,264	$	88,645	$	9,680,970
Pass-Watch		19,835		47,472		13,054		3,820		9,284		9,771		76,764		3,257		183,257
Special Mention		649		9,324		14,251		5,553		—		866		12,342		7,143		50,128
Substandard		37,553		39,124		8,327		8,971		4,256		11,236		45,698		6,065		161,230
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	1,374,746	$	2,033,975	$	1,241,038	$	563,896	$	449,410	$	988,342	$	3,319,068	$	105,110	$	10,075,585
Gross Charge-offs	$	7,019	$	872	$	468	$	21,109	$	81	$	250	$	12,299	$	2,739	$	44,837
Commercial Real Estate - Owner Occupied:
Pass	$	299,428	$	681,918	$	605,725	$	509,454	$	302,742	$	538,751	$	31,599	$	13,460	$	2,983,077
Pass-Watch		18,697		3,547		6,788		2,803		9,007		21,563		856		—		63,261
Special Mention		563		—		2,047		656		—		4,748		498		—		8,512
Substandard		557		7,621		633		5,239		4,616		6,607		1,204		—		26,477
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	319,245	$	693,086	$	615,193	$	518,152	$	316,365	$	571,669	$	34,157	$	13,460	$	3,081,327
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Income Producing:
Pass	$	359,078	$	926,189	$	1,031,726	$	683,720	$	349,978	$	396,668	$	65,636	$	49,685	$	3,862,680
Pass-Watch		3,084		35,676		338		57,931		23,951		16,034		263		300		137,577
Special Mention		159		—		—		354		—		1,745		—		—		2,258
Substandard		20,780		1,931		289		1,245		—		793		—		—		25,038
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	383,101	$	963,796	$	1,032,353	$	743,250	$	373,929	$	415,240	$	65,899	$	49,985	$	4,027,553
Gross Charge-offs	$	73	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	73
Construction and Land Development:
Pass	$	310,519	$	744,624	$	334,025	$	59,938	$	5,875	$	20,227	$	119,833	$	5,443	$	1,600,484
Pass-Watch		8,429		2,011		1,409		93		648		212		86		—		12,888
Special Mention		702		—		—		—		—		—		—		—		702
Substandard		—		88		67		—		10		312		295		—		772
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	319,650	$	746,723	$	335,501	$	60,031	$	6,533	$	20,751	$	120,214	$	5,443	$	1,614,846
Gross Charge-offs	$	—	$	7	$	54	$	—	$	—	$	11	$	—	$	—	$	72
Residential Mortgage:
Performing	$	389,320	$	791,881	$	917,332	$	496,414	$	178,861	$	916,803	$	3,590	$	—	$	3,694,201
Nonperforming		461		2,202		2,417		755		1,323		19,747		—		—		26,905
Total	$	389,781	$	794,083	$	919,749	$	497,169	$	180,184	$	936,550	$	3,590	$	—	$	3,721,106
Gross Charge-offs	$	—	$	—	$	—	$	—	$	—	$	53	$	—	$	—	$	53
Consumer Loans:
Performing	$	63,967	$	66,584	$	41,713	$	31,708	$	37,837	$	47,188	$	1,148,476	$	17,989	$	1,455,462
Nonperforming		195		132		311		569		448		3,206		337		2,602		7,800
Total	$	64,162	$	66,716	$	42,024	$	32,277	$	38,285	$	50,394	$	1,148,813	$	20,591	$	1,463,262
Gross Charge-offs	$	289	$	1,641	$	967	$	144	$	415	$	568	$	5,543	$	1,220	$	10,787

	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 September 30, 2023 and December 31, 2022 were $5.4 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 $1.4 million at September 30, 2023 and $0.4 million at December 31, 2022.

Loans Held for Sale

Loans held for sale totaled $15.9 million and $26.4 million at September 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 September 30, 2023, residential mortgage loans carried at the fair value option totaled $13.3 million with an unpaid principal balance of $13.1 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.