The Company generally makes loans in its market areas of south 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,

Beaumont and Dallas; and Nashville, Tennessee. 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 $72.2 million and $67.7 million at March 31, 2020 and December 31, 2019, respectively.

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 credit losses by portfolio class for the three months ended March 31, 2020 and 2019, as well as the corresponding recorded investment in loans at the end of each period. Effective January 1, 2020, the Company adopted the provisions of ASC 326 (CECL) using a modified prospective basis. The difference between the December 31, 2019 incurred allowance and the CECL allowance is reflected as a cumulative effect of change in accounting principle in the table below. For further discussion of the day one impact of the CECL adoption, refer to Note 15 – Recent Accounting Pronouncements.

				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, 2020
Allowance for credit losses
Allowance for loan losses:
Beginning balance	$	106,432		$	10,977		$	117,409		$	20,869		$	9,350	$	20,331		$	23,292		$	191,251
Cumulative effect of change in accounting principle		(244	)		14,877			14,633			7,287			7,478		12,921			7,092			49,411
Charge-offs		(40,713	)		(514	)		(41,227	)		(830	)		—		(141	)		(5,540	)		(47,738	)
Recoveries		2,226			81			2,307			7			234		212			1,214			3,974
Net provision for loan losses		119,297			23,414			142,711			37,627			16,761		14,877			17,129			229,105
Ending balance - allowance for loan losses	$	186,998		$	48,835		$	235,833		$	64,960		$	33,823	$	48,200		$	43,187		$	426,003
Reserve for unfunded lending commitments:
Beginning balance	$	3,974		$	—		$	3,974		$	—		$	—	$	—		$	—		$	3,974
Cumulative effect of change in accounting principle		5,772			288			6,060			449			15,658		17			5,146			27,330
Provision for losses on unfunded commitments		5,182			289			5,471			280			13,205		—			(1,268	)		17,688
Ending balance - reserve for unfunded lending commitments		14,928			577			15,505			729			28,863		17			3,878			48,992
Total allowance for credit losses	$	201,926		$	49,412		$	251,338		$	65,689		$	62,686	$	48,217		$	47,065		$	474,995

Allowance for loan losses:
Individually evaluated	$	67,404		$	102		$	67,506		$	458		$	23	$	312		$	195		$	68,494
Collectively evaluated		119,594			48,733			168,327			64,502			33,800		47,888			42,992			357,509
Allowance for loan losses	$	186,998		$	48,835		$	235,833		$	64,960		$	33,823	$	48,200		$	43,187		$	426,003
Reserve for unfunded lending commitments:
Individually evaluated	$	7,215		$	—		$	7,215		$	—		$	—	$	—		$	—		$	7,215
Collectively evaluated		7,713			577			8,290			729			28,863		17			3,878			41,777
Reserve for unfunded lending commitments:	$	14,928		$	577		$	15,505		$	729		$	28,863	$	17		$	3,878		$	48,992
Total allowance for credit losses	$	201,926		$	49,412		$	251,338		$	65,689		$	62,686	$	48,217		$	47,065		$	474,995
Loans:
Individually evaluated	$	253,790		$	4,184		$	257,974		$	7,300		$	3,350	$	4,625		$	1,280		$	274,529
Collectively evaluated		9,067,550			2,727,136			11,794,686			3,225,483			1,095,376		2,975,360			2,150,247			21,241,152
Total loans	$	9,321,340		$	2,731,320		$	12,052,660		$	3,232,783		$	1,098,726	$	2,979,985		$	2,151,527		$	21,515,681


				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, 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		(16,344	)		—		(16,344	)		(10	)		—			(406	)		(4,231	)		(20,991	)
Recoveries		1,926			17		1,943			2			11			162			1,004			3,122
Net provision for loan losses		14,186			33		14,219			3,173			(1,631	)		(3	)		2,285			18,043
Ending balance	$	97,520		$	13,807	$	111,327		$	20,803		$	14,027		$	23,535		$	24,996		$	194,688
Ending balance:
Allowance:
Individually evaluated for impairment	$	1,775		$	205	$	1,980		$	143		$	1		$	219		$	347		$	2,690
Amounts related to purchased credit impaired loans		288			185		473			35			78			9,162			341			10,089
Collectively evaluated for impairment		95,457			13,417		108,874			20,625			13,948			14,154			24,308			181,909
Total allowance	$	97,520		$	13,807	$	111,327		$	20,803		$	14,027		$	23,535		$	24,996		$	194,688
Loans:
Individually evaluated for impairment	$	231,506		$	16,974	$	248,480		$	2,668		$	19		$	5,397		$	1,508		$	258,072
Purchased credit impaired loans		6,445			5,472		11,917			4,267			2,897			102,199			3,615			124,895
Collectively evaluated for impairment		8,418,375			2,492,982		10,911,357			2,556,459			1,337,151			2,825,655			2,099,249			19,729,871
Total loans	$	8,656,326		$	2,515,428	$	11,171,754		$	2,563,394		$	1,340,067		$	2,933,251		$	2,104,372		$	20,112,838

The calculation of the allowance for credit losses under CECL 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 increase in the allowance for credit losses for the three months ended March 31, 2020 reflects the impact of the unprecedented economic shutdown caused by the pandemic and the significant drop in oil prices. The allowance for credit losses was developed using multiple Moody’s macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. The Company weighted the baseline economic forecast 80% which includes a sharp recession in the first and second quarters of 2020, with a relatively quick recovery in the second half of 2020. The more severe downside scenarios S-3 and S-4 were weighted at 15% and 5%, respectively, to capture the risk a prolonged downturn might have on our markets, which is more heavily concentrated in tourism, oil and gas and certain areas of healthcare that are more severely impacted by the widespread shutdown and market turmoil. These downside scenarios include double-dip recessions with a more prolonged recovery, with the S-4 scenario having a more severe immediate impact and a longer, more gradual recovery compared to S-3. The degradation in economic conditions created the need for an increased allowance across all portfolios. See the detail of the individually evaluated allowance in the impaired loans section that follows.

The following table shows the composition of nonaccrual loans by portfolio class. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools with an accretable yield were considered to be performing. Such loans totaled $17.5 million at December 31, 2019.

For the three months ended March 31, 2020 and 2019, the estimated amount of interest income that would have been recorded had the loans not been assigned nonaccrual status was $4.3 million and $2.9 million, respectively.

Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of $117.9 million and $132.5 million at March 31, 2020 and December 31, 2019, respectively. Total TDRs, both accruing and nonaccruing, were $153.1 million at March 31, 2020 and $193.7 million at December 31, 2019. All TDRs are individually evaluated for credit loss. At March 31, 2020 and

December 31, 2019, the Company had unfunded commitments of $8.1 million and $2.4 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 months ended March 31, 2020 and 2019:

	Three Months Ended
($ in thousands)	March 31, 2020						March 31, 2019
			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		1	$	395	$	395		7	$	13,803	$	13,803
Commercial real estate - owner occupied		—		—		—		1		167		167
Total commercial and industrial		1		395		395		8		13,970		13,970
Commercial real estate - income producing		—		—		—		—		—		—
Construction and land development		—		—		—		—		—		—
Residential mortgages		1		256		256		5		1,264		1,264
Consumer		3		34		34		2		46		46
Total loans		5	$	685	$	685		15	$	15,280	$	15,280

The TDRs modified during the three months ended March 31, 2020 reflected in the table above include $0.3 million of loans with extended amortization terms or other payment concessions and $0.4 million with significant covenant waivers. The TDRs modified during the three months ended March 31, 2019 include $0.1 million of loans with extended amortization terms or other payment concessions, $8.8 million with significant covenant waivers and $6.4 million with other modifications.

There were no defaults on loans during the three months ended March 31, 2020 or 2019 that had been modified in a TDR during the prior twelve months.

The tables below present loans that are individually evaluated disaggregated by portfolio class at March 31, 2020 and December 31, 2019. Loans individually evaluated include nonaccrual loans, TDRs and other loans that do not share common characteristics with loans evaluated on a collective basis that have aggregate relationship balances of $1 million or more.

The tables below present the average balances and interest income for individually evaluated loans for the three months ended March 31, 2020 and 2019. Interest income recognized represents interest on accruing loans modified in a TDR.

The TDR disclosure above does not include loans modified under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) signed into law on March 27, 2020, which allows financial institutions to exclude eligible modifications from TDR reporting. Eligible modification must be (1) related to COVID-19, (2) executed on a loan that was not more than 30 days past due as of December 31, 2019 and (3) executed between March 1, 2020 and the earlier of 60 days after the date of the termination of the national emergency or December 31, 2020. As of March 31, 2020, there were 1,618 customers with loans totaling $839.4 million with payment deferral modifications of principal, interest or both that are eligible to be excluded from TDR reporting requirements. These loans are also excluded from reporting in the aging analysis that follows as delinquency is tracked under the modified terms.

The tables below present the aging analysis of past due loans by portfolio class at March 31, 2020 and December 31, 2019. Prior to the adoption of CECL, purchased credit impaired loans accounted for in pools under ASC 310-30 with an accretable yield were considered to be current in the table below as of December 31, 2019. These loans totaled $6.1 million for 30-59 days past due, $2.0 million for 60-89 days past due and $8.3 million for both greater than 90 days past due and greater than 90 days past due and still accruing at December 31, 2019.

March 31, 2020	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	$	23,478	$	7,629	$	116,763	$	147,870	$	9,173,470	$	9,321,340	$	6,832
Commercial real estate - owner occupied		5,294		803		11,298		17,395		2,713,925		2,731,320		4,747
Total commercial and industrial		28,772		8,432		128,061		165,265		11,887,395		12,052,660		11,579
Commercial real estate - income producing		8,727		80		9,430		18,237		3,214,546		3,232,783		4,221
Construction and land development		6,289		344		4,406		11,039		1,087,687		1,098,726		667
Residential mortgages		46,695		1,305		23,484		71,484		2,908,501		2,979,985		64
Consumer		24,002		7,870		9,451		41,323		2,110,204		2,151,527		1,259
Total	$	114,485	$	18,031	$	174,832	$	307,348	$	21,208,333	$	21,515,681	$	17,790

December 31, 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	$	20,893	$	13,445	$	100,806	$	135,144	$	9,031,803		9,166,947	$	1,537
Commercial real estate - owner occupied		4,862		556		7,268		12,686		2,725,774		2,738,460		830
Total commercial and industrial		25,755		14,001		108,074		147,830		11,757,577		11,905,407		2,367
Commercial real estate - income producing		738		703		2,910		4,351		2,990,097		2,994,448		450
Construction and land development		5,747		680		2,480		8,907		1,148,544		1,157,451		2,042
Residential mortgages		32,867		8,584		23,577		65,028		2,925,603		2,990,631		85
Consumer		18,586		6,215		9,901		34,702		2,130,116		2,164,818		1,638
Total	$	83,693	$	30,183	$	146,942	$	260,818	$	20,951,937	$	21,212,755	$	6,582

The following tables present the credit quality indicators by segments and portfolio class of loans at March 31, 2020 and December 31, 2019. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often looks at portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach. As a result, several loans were downgraded to pass-watch at March 31, 2020 to reflect the potential risk from the economic downturn caused by the pandemic and other environmental factors. In alignment with regulatory guidance, the Company has been working with its customers to manage through this period of severe uncertainty and economic stress. The Company expects that further risk rating adjustments will likely be required in the future to account for stresses on individual accounts.

	March 31, 2020
(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	$	8,391,474	$	2,533,020	$	10,924,494	$	3,119,828	$	1,064,747	$	15,109,069
Pass-Watch		507,455		136,808		644,263		75,823		24,883		744,969
Special Mention		61,397		11,677		73,074		11,330		970		85,374
Substandard		346,065		49,815		395,880		25,802		8,126		429,808
Doubtful		14,949		—		14,949		—		—		14,949
Total	$	9,321,340	$	2,731,320	$	12,052,660	$	3,232,783	$	1,098,726	$	16,384,169

	December 31, 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	$	8,492,113	$	2,517,448	$	11,009,561		2,883,553	$	1,120,997	$	15,014,111
Pass-Watch		220,850		146,266		367,116		69,765		25,621		462,502
Special Mention		71,654		14,651		86,305		14,995		283		101,583
Substandard		382,330		60,095		442,425		26,135		10,550		479,110
Doubtful		—		—		—		—		—		—
Total	$	9,166,947	$	2,738,460	$	11,905,407	$	2,994,448	$	1,157,451	$	16,057,306

The following tables further disaggregates credit quality disclosures by amortized cost by class and vintage for term loans and by revolving and revolving converted to amortizing as of March 31, 2020. We define vintage as the later of origination, renewal or restructure date.

	Term Loans
	Amortized Cost Basis by Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Commercial Loans:
Pass		$	1,200,289	$	3,482,650	$	2,316,675	$	1,817,884	$	1,268,500	$	1,815,527	$	3,166,739	$	40,805	$	15,109,069
Pass-Watch			45,483		89,492		50,169		73,719		45,264		45,098		393,676		2,068		744,969
Special Mention			1,106		2,754		11,838		26,324		699		20,130		21,204		1,319		85,374
Substandard			25,939		58,802		86,630		30,860		30,772		49,519		127,734		19,552		429,808
Doubtful			—		—		12,980		—		—		—		1,969		—		14,949
Loss			—		—		—		—		—		—		—		—		—
Total Commercial Loans		$	1,272,817	$	3,633,698	$	2,478,292	$	1,948,787	$	1,345,235	$	1,930,274	$	3,711,322	$	63,744	$	16,384,169
Consumer Loans:
Performing		$	172,403	$	528,274	$	577,525	$	771,724	$	622,557	$	1,096,363	$	1,295,598	$	4,256		5,068,700
Nonperforming			547		2,521		3,962		6,800		4,114		41,575		1,817		1,476		62,812
Total Consumer Loans		$	172,950	$	530,795	$	581,487	$	778,524	$	626,671	$	1,137,938	$	1,297,415	$	5,732	$	5,131,512

Under the transition provisions for prospective application of CECL, the Company has classified all loans previously accounted for as purchased credit impaired under ASC 310-30 to be classified as purchased credit deteriorated. The prospective application resulted in

an increase of $19.8 million to the amortized cost basis of the financial asset and the allowance for credit losses at the date of adoption, representing the remaining credit portion of the purchased discount. The Company elected not to maintain pools of loans accounted for under Subtopic 310-30 with the adoption of CECL. The remaining noncredit discount was allocated to the individual loans and will be accreted to interest income using the interest method based on the effective interest rate. Changes in the carrying amount of purchased credit impaired loans and related accretable yield are presented in the following table for the year ended December 31, 2019.

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 December 31, 2019 was $8.6 million of consumer loans secured by single family residential real estate that were in process of foreclosure. In light of the economic conditions stemming from the pandemic, the Company placed all active foreclosures on hold and suspended the filing of new foreclosures. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $5.6 million and $6.3 million of foreclosed single family residential properties in other real estate owned at March 31, 2020 and December 31, 2019, respectively.