The Company generally makes loans in its market areas of south Mississippi, southern and central Alabama, northwest, central and south Louisiana, East Texas, the northern, central, and panhandle regions of Florida, and Nashville, Tennessee. Loans, net of unearned income, by portfolio are presented in the table below.

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 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 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 a small amount of residential construction loans and loans secured by raw land not yet under development.

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 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. 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.

The following tables show activity in the allowance for loan losses by portfolio class for the nine months ended September 30, 2019 and 2018, 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, 2019
Allowance for loan losses:
Beginning balance	$	97,752		$	13,757		$	111,509		$	17,638		$	15,647		$	23,782		$	25,938		$	194,514
Charge-offs		(33,382	)		(137	)		(33,519	)		(10	)		(7	)		(660	)		(13,169	)		(47,365	)
Recoveries		5,662			284			5,946			518			108			433			2,866			9,871
Net provision for loan losses		29,267			545			29,812			7,604			(5,982	)		(2,076	)		9,194			38,552
Ending balance	$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Ending balance:
Allowance:
Individually evaluated for impairment	$	11,535		$	57		$	11,592		$	49		$	29		$	183		$	365		$	12,218
Amounts related to purchased credit impaired loans		135			172			307			40			144			8,032			300			8,823
Collectively evaluated for impairment		87,629			14,220			101,849			25,661			9,593			13,264			24,164			174,531
Total allowance	$	99,299		$	14,449		$	113,748		$	25,750		$	9,766		$	21,479		$	24,829		$	195,572
Loans:
Individually evaluated for impairment	$	201,979		$	11,109		$	213,088		$	2,781		$	3,385		$	4,301		$	1,583		$	225,138
Purchased credit impaired loans		33,040			45,124			78,164			27,281			23,431			93,450			6,294			228,620
Collectively evaluated for impairment		8,657,985			2,678,146			11,336,131			3,030,506			1,163,902			2,907,207			2,144,448			20,582,194
Total loans	$	8,893,004		$	2,734,379		$	11,627,383		$	3,060,568		$	1,190,718		$	3,004,958		$	2,152,325		$	21,035,952

				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, 2018
Allowance for loan losses:
Beginning balance	$	127,918		$	12,962		$	140,880		$	13,709		$	7,372		$	24,844		$	30,503		$	217,308
Charge-offs		(15,401	)		(7,330	)		(22,731	)		(1,633	)		(265	)		(585	)		(18,599	)		(43,813	)
Recoveries		13,234			282			13,516			221			68			1,854			4,028			19,687
Net provision for loan losses		(5,073	)		7,203			2,130			6,288			6,248			(1,803	)		15,153			28,016
Reduction as a result of sale of subsidiary		—			—			—			—			—			—			(6,648	)		(6,648	)
Ending balance	$	120,678		$	13,117		$	133,795		$	18,585		$	13,423		$	24,310		$	24,437		$	214,550
Ending balance:
Allowance:
Individually evaluated for impairment	$	23,101		$	225		$	23,326		$	285		$	1		$	163		$	131		$	23,906
Amounts related to purchased credit impaired loans		327			403		$	730			45			91			10,109			433			11,408
Collectively evaluated for impairment		97,250			12,489		$	109,739			18,255			13,331			14,038			23,873			179,236
Total allowance	$	120,678		$	13,117		$	133,795		$	18,585		$	13,423		$	24,310		$	24,437		$	214,550
Loans:
Individually evaluated for impairment	$	275,966		$	22,437		$	298,403		$	4,615		$	112		$	3,061		$	890		$	307,081
Purchased credit impaired loans		7,907			7,113		$	15,020			3,790			4,232			107,535			4,458			135,035
Collectively evaluated for impairment		8,155,011			2,270,721		$	10,425,732			2,303,294			1,519,075			2,736,320			2,117,180			19,101,601
Total loans	$	8,438,884		$	2,300,271		$	10,739,155		$	2,311,699		$	1,523,419		$	2,846,916		$	2,122,528		$	19,543,717

The following table shows the composition of nonaccrual loans by portfolio class. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be performing and are excluded from the table.

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of $101.1 million and $85.5 million at September 30, 2019 and December 31, 2018, respectively. Total TDRs, both accruing and nonaccruing, were $162.0 million at September 30, 2019 and $224.6 million at December 31, 2018. All TDRs are individually evaluated for impairment. At September 30, 2019 and December 31, 2018, the Company had unfunded commitments of $2.0 million and $2.1 million, respectively, to borrowers whose loan terms have been modified in a TDR.

The tables below detail by portfolio class TDRs that were modified during the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended
($ in thousands)	September 30, 2019						September 30, 2018
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
	Number		Outstanding		Outstanding		Number		Outstanding		Outstanding
	of		Recorded		Recorded		of		Recorded		Recorded
Troubled Debt Restructurings:	Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial non-real estate		2	$	13,083	$	6,271		11	$	23,347	$	23,347
Commercial real estate - owner occupied		—		—		—		1		229		229
Total commercial and industrial		2		13,083		6,271		12		23,576		23,576
Commercial real estate - income producing		1		123		123		—		—		—
Construction and land development		3		323		323		—		—		—
Residential mortgages		3		297		297		8		930		930
Consumer		4		70		70		6		89		89
Total loans		13	$	13,896	$	7,084		26	$	24,595	$	24,595

	Nine Months Ended
($ in thousands)	September 30, 2019						September 30, 2018
Troubled Debt Restructurings:	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial non-real estate		10	$	27,220	$	20,408		29	$	85,306	$	85,306
Commercial real estate - owner occupied		1		167		167		2		6,138		6,138
Total commercial and industrial		11		27,387		20,575		31		91,444		91,444
Commercial real estate - income producing		1		123		123		1		1,564		1,564
Construction and land development		3		323		323		—		—		—
Residential mortgages		10		2,199		2,199		11		1,048		1,048
Consumer		6		116		116		7		311		311
Total loans		31	$	30,148	$	23,336		50	$	94,367	$	94,367

The TDRs modified during the nine months ended September 30, 2019 reflected in the table above include $0.6 million of loans with extended amortization terms or other payment concessions, $22.1 million with significant covenant waivers and $7.4 million with other modifications. In addition, the Company received approximately $6.8 million of equity securities of one commercial non-real estate borrower in satisfaction of a portion of its debt. The TDRs modified during the nine months ended September 30, 2018 include $50.7 million of loans with extended amortization terms or other payment concessions, $14.6 million with significant covenant waivers and $29.1 million with other modifications.

There were no defaults on loans during the three and nine months ended September 30, 2019 or 2018 that had been modified in a TDR during the prior twelve months.

The tables below present loans that are individually evaluated for impairment disaggregated by portfolio class at September 30, 2019 and December 31, 2018. Loans individually evaluated for impairment include TDRs and loans that are determined to be impaired and have aggregate relationship balances of $1 million or more.

	September 30, 2019
(in thousands)	Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance
Commercial non-real estate	$	161,275	$	40,704	$	239,506	$	11,535
Commercial real estate - owner occupied		9,183		1,926		15,087		57
Total commercial and industrial		170,458		42,630		254,593		11,592
Commercial real estate - income producing		1,222		1,559		3,793		49
Construction and land development		3,121		264		4,123		29
Residential mortgages		2,665		1,636		4,831		183
Consumer		494		1,089		1,864		365
Total loans	$	177,960	$	47,178	$	269,204	$	12,218

	December 31, 2018
(in thousands)	Recorded investment without an allowance		Recorded investment with an allowance		Unpaid principal balance		Related allowance
Commercial non-real estate	$	144,625	$	94,759	$	273,290	$	3,636
Commercial real estate - owner occupied		13,027		8,639		25,888		607
Total commercial and industrial		157,652		103,398		299,178		4,243
Commercial real estate - income producing		1,138		1,563		3,428		210
Construction and land development		100		21		121		1
Residential mortgages		2,058		1,818		4,421		444
Consumer		279		728		1,253		216
Total loans	$	161,227	$	107,528	$	308,401	$	5,114

The tables below present the average balances and interest income for total impaired loans for the three and nine months ended September 30, 2019 and 2018. Interest income recognized represents interest on accruing loans modified in a TDR.

	Three Months Ended
	September 30, 2019				September 30, 2018
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial non-real estate	$	213,291	$	1,062	$	283,519	$	2,275
Commercial real estate - owner occupied		14,439		45		24,702		90
Total commercial and industrial		227,730		1,107		308,221		2,365
Commercial real estate - income producing		2,331		7		6,718		15
Construction and land development		1,702		2		113		—
Residential mortgages		4,195		2		3,397		4
Consumer		1,552		21		745		10
Total loans	$	237,510	$	1,139	$	319,194	$	2,394

	Nine Months Ended
	September 30, 2019				September 30, 2018
(in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial non-real estate	$	225,597	$	4,202	$	295,636	$	5,863
Commercial real estate - owner occupied		17,044		196		26,416		258
Total commercial and industrial		242,641		4,398		322,052		6,121
Commercial real estate - income producing		2,430		21		10,988		64
Construction and land development		597		2		155		—
Residential mortgages		4,525		9		6,307		14
Consumer		1,442		55		769		28
Total loans	$	251,635	$	4,485	$	340,271	$	6,227

The tables below present the age analysis of past due loans by portfolio class at September 30, 2019 and December 31, 2018. Purchased credit impaired loans accounted for in pools with an accretable yield are considered to be current.

September 30, 2019	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	$	29,770	$	19,786	$	56,767	$	106,323	$	8,786,681	$	8,893,004	$	2,928
Commercial real estate - owner occupied		5,222		909		14,635	$	20,766		2,713,613		2,734,379		2,837
Total commercial and industrial		34,992		20,695		71,402		127,089		11,500,294		11,627,383		5,765
Commercial real estate - income producing		817		473		2,751		4,041		3,056,527		3,060,568		—
Construction and land development		550		77		1,076		1,703		1,189,015		1,190,718		644
Residential mortgages		5,650		11,140		21,964		38,754		2,966,204		3,004,958		576
Consumer		14,598		4,730		9,434		28,762		2,123,563		2,152,325		887
Total	$	56,607	$	37,115	$	106,627	$	200,349	$	20,835,603	$	21,035,952	$	7,872

December 31, 2018	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	$	12,257	$	3,895	$	77,551	$	93,703	$	8,526,898		8,620,601	$	10,823
Commercial real estate - owner occupied		2,394		1,570		14,542		18,506		2,439,242		2,457,748		380
Total commercial and industrial		14,651		5,465		92,093		112,209		10,966,140		11,078,349		11,203
Commercial real estate - income producing		2,371		772		5,495		8,638		2,333,141		2,341,779		1,844
Construction and land development		7,397		1,129		2,165		10,691		1,537,644		1,548,335		644
Residential mortgages		32,869		14,706		23,175		70,750		2,839,331		2,910,081		—
Consumer		20,402		4,695		9,665		34,762		2,113,105		2,147,867		618
Total	$	77,690	$	26,767	$	132,593	$	237,050	$	19,789,361	$	20,026,411	$	14,309

The following tables present the credit quality indicators by segments and portfolio class of loans at September 30, 2019 and December 31, 2018.

	September 30, 2019
(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	$	8,193,707	$	2,498,260	$	10,691,967	$	2,941,146	$	1,149,268	$	14,782,381
Pass-Watch		209,523		132,611		342,134		64,280		30,455	$	436,869
Special Mention		84,741		18,697		103,438		15,409		81	$	118,928
Substandard		405,025		84,811		489,836		39,733		10,914	$	540,483
Doubtful		8		—		8		—		—	$	8
Total	$	8,893,004	$	2,734,379	$	11,627,383	$	3,060,568	$	1,190,718	$	15,878,669

	December 31, 2018
(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	$	7,875,588	$	2,274,211	$	10,149,799		2,265,087	$	1,487,599	$	13,902,485
Pass-Watch		260,510		84,271		344,781		46,535		49,099		440,415
Special Mention		75,752		23,149		98,901		5,510		816		105,227
Substandard		408,751		76,117		484,868		24,647		10,821		520,336
Doubtful		—		—		—		—		—		—
Total	$	8,620,601	$	2,457,748	$	11,078,349	$	2,341,779	$	1,548,335	$	14,968,463

Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the nine months ended September 30, 2019 and the year ended December 31, 2018.

Included in loans are $8.9 million and $7.1 million of consumer loans secured by single family residential real estate that are in process of foreclosure as of September 30, 2019 and December 31, 2018, respectively. Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $2.7 million and $1.8 million of foreclosed single family residential properties in other real estate owned at September 30, 2019 and December 31, 2018, respectively.