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Loans

6 Months Ended

Jun. 30, 2020

Note 6 — Loans

The following is a summary of total loans:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2020		2019		2019
Loans:
Commercial non-owner occupied real estate:
Construction and land development	$	1,999,062	$	1,017,261	$	957,346
Commercial non-owner occupied		6,021,317		2,323,967		2,398,249
Total commercial non-owner occupied real estate		8,020,379		3,341,228		3,355,595
Consumer real estate:
Consumer owner occupied		4,421,247		2,706,960		2,762,266
Home equity loans		1,378,406		758,020		778,234
Total consumer real estate		5,799,653		3,464,980		3,540,500
Commercial owner occupied real estate		4,762,520		2,158,701		2,047,933
Commercial and industrial		5,341,363		1,386,327		1,271,464
Other income producing property		650,237		346,554		367,353
Consumer		916,623		663,422		641,746
Other loans		8,372		13,892		1,601
Total loans		25,499,147		11,375,104		11,226,192
Less allowance for credit losses		(434,608)		(61,991)		(58,213)
Loans, net	$	25,064,539	$	11,313,113	$	11,167,979

In accordance with the adoption of ASU 2016-13, the above table reflects the loan portfolio at the amortized cost basis for the current period June 30, 2020, to include net deferred cost of $64.7 million and unamortized discount total related to loans acquired of $160.8 million. Accrued interest receivable (AIR) of $94.5 million is accounted for separately and reported in other assets. The allowance for credit losses in the comparative periods includes the day 2 valuation allowance on the acquired credit impaired loans, which was $5.1 million at December 31, 2019 and $4.6 million at June 30, 2019.

The comparative periods in the above table reflect the loan portfolio prior to the adoption of ASU 2016-13. Prior periods were reported as shown in the below tables, with the acquired loans being net of unearned income and of related discounts, which includes the credit discount on the acquired credit impaired loans.

The following is a summary of non-acquired loans for comparative periods, prior to the adoption of ASU 2016-13:


	December 31,		June 30,
(Dollars in thousands)	2019		2019
Non-acquired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	968,360	$	879,724
Commercial non-owner occupied		1,811,138		1,723,640
Total commercial non-owner occupied real estate		2,779,498		2,603,364
Consumer real estate:
Consumer owner occupied		2,118,839		2,079,949
Home equity loans		518,628		514,242
Total consumer real estate		2,637,467		2,594,191
Commercial owner occupied real estate		1,784,017		1,589,987
Commercial and industrial		1,280,859		1,114,513
Other income producing property		218,617		214,203
Consumer		538,481		503,468
Other loans		13,892		1,601
Total non-acquired loans		9,252,831		8,621,327
Less allowance for loan losses		(56,927)		(53,590)
Non-acquired loans, net	$	9,195,904	$	8,567,737

The following is a summary of acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, net of related discount, for comparative periods, prior to the adoption of ASU 2016-13:


	December 31,		June 30,
(Dollars in thousands)	2019		2019
Acquired non-credit impaired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	33,569	$	60,391
Commercial non-owner occupied		447,441		595,367
Total commercial non-owner occupied real estate		481,010		655,758
Consumer real estate:
Consumer owner occupied		496,431		577,284
Home equity loans		188,732		208,777
Total consumer real estate		685,163		786,061
Commercial owner occupied real estate		307,193		376,187
Commercial and industrial		101,880		151,579
Other income producing property		95,697		111,006
Consumer		89,484		99,690
Acquired non-credit impaired loans	$	1,760,427	$	2,180,281

The unamortized discount related to the acquired non-credit impaired loans totaled $20.3 million and $26.9 million at December 31, 2019, and June 30, 2019, respectively.

In accordance with FASB ASC Topic 310-30, we aggregated acquired loans that have common risk characteristics into pools of loan categories as described in the table below. The following is a summary of acquired credit impaired loans accounted for under FASB ASC Topic 310-30 (identified as credit impaired at the time of acquisition), net of related discount, for comparative periods, prior to the adoption of ASU 2016-13:


	December 31,		June 30,
(Dollars in thousands)	2019		2019
Acquired credit impaired loans:
Commercial real estate	$	130,938	$	164,540
Commercial real estate—construction and development		25,032		27,014
Residential real estate		163,359		184,208
Consumer		35,488		38,624
Commercial and industrial		7,029		10,198
Acquired credit impaired loans		361,846		424,584
Less allowance for loan losses		(5,064)		(4,623)
Acquired credit impaired loans, net	$	356,782	$	419,961

As part of the ongoing monitoring of the credit quality of our loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the level of classified loans, (ii) net charge-offs, (iii) non-performing loans (see details below), and (iv) the general economic conditions of the markets that we serve.

We utilize a risk grading matrix to assign a risk grade to each commercial loan. Classified loans are assessed at a minimum every six months. A description of the general characteristics of the risk grades is as follows:

●

Pass—These loans range from minimal credit risk to average, however, still acceptable credit risk.

●

Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

●

Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

●

Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.

The following table presents the credit risk profile by risk grade of commercial loans by origination year:


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of June 30, 2020	2020	2019	2018	2017	2016	Prior	Revolving	Total
Construction and land development
Risk rating:
Pass	$ 199,936	$ 510,803	$ 279,428	$ 103,847	$ 57,641	$ 69,826	$ 34,926	$ 1,256,407
Special mention	2,257	2,873	1,180	1,659	4,442	24,916	-	37,327
Substandard	956	1,276	847	1,994	640	6,054	-	11,767
Doubtful	-	-	-	-	-	9	-	9
Total Construction and land development	$ 203,149	$ 514,952	$ 281,455	$ 107,500	$ 62,723	$ 100,805	$ 34,926	$ 1,305,510

Commercial non-owner occupied
Risk rating:
Pass	$ 475,488	$ 1,245,957	$ 960,265	$ 846,420	$ 798,704	$ 1,434,433	$ 69,448	$ 5,830,715
Special mention	18,033	19,105	13,728	13,909	23,116	58,534	-	146,425
Substandard	544	490	891	4,013	748	37,491	-	44,177
Doubtful	-	-	-	-	-	-	-	-
Total Commercial non-owner occupied	$ 494,065	$ 1,265,552	$ 974,884	$ 864,342	$ 822,568	$ 1,530,458	$ 69,448	$ 6,021,317

Commercial Owner Occupied
Risk rating:
Pass	$ 389,994	$ 963,362	$ 772,833	$ 655,842	$ 515,748	$ 1,237,377	$ 36,912	$ 4,572,068
Special mention	4,321	4,748	11,088	11,847	16,454	47,071	75	$ 95,604
Substandard	1,082	8,507	3,602	18,947	9,584	52,617	504	$ 94,843
Doubtful	-	-	-	-	-	5	-	$ 5
Total commercial owner occupied	$ 395,397	$ 976,617	$ 787,523	$ 686,636	$ 541,786	$ 1,337,070	$ 37,491	$ 4,762,520

Commercial and industrial
Risk rating:
Pass	$ 2,728,441	$ 682,631	$ 544,702	$ 373,812	$ 250,446	$ 438,143	$ 245,202	$ 5,263,377
Special mention	4,131	7,403	2,294	7,046	2,481	25,136	5,546	54,037
Substandard	510	915	6,093	4,885	2,644	6,685	2,206	23,938
Doubtful	-	-	1	3	2	4	1	11
Total commercial and industrial	$ 2,733,082	$ 690,949	$ 553,090	$ 385,746	$ 255,573	$ 469,968	$ 252,955	$ 5,341,363

Other income producing property
Risk rating:
Pass	$ 64,034	$ 89,123	$ 86,317	$ 72,317	$ 78,294	$ 161,177	$ 6,595	$ 557,857
Special mention	2,007	2,289	1,646	438	1,001	13,529	100	21,010
Substandard	835	951	704	1,542	1,803	13,507	47	19,389
Doubtful	-	-	-	-	-	7	-	7
Total other income producing property	$ 66,876	$ 92,363	$ 88,667	$ 74,297	$ 81,098	$ 188,220	$ 6,742	$ 598,263

Consumer owner occupied
Risk rating:
Pass	$ 3,217	$ 5,495	$ 660	$ 422	$ 1,597	$ 5,216	$ 15,729	$ 32,336
Special mention	23	4,070	253	65	-	177	353	$ 4,941
Substandard	128	391	143	90	8	349	-	$ 1,109
Doubtful	-	-	-	1	-	-	-	$ 1
Total Consumer owner occupied	$ 3,368	$ 9,956	$ 1,056	$ 578	$ 1,605	$ 5,742	$ 16,082	$ 38,387

Other loans
Risk rating:
Pass	$ 8,372	$ -	$ -	$ -	$ -	$ -	$ -	$ 8,372
Special mention	-	-	-	-	-	-	-	-
Substandard	-	-	-	-	-	-	-	-
Doubtful	-	-	-	-	-	-	-	-
Total other loans	$ 8,372	$ -	$ -	$ -	$ -	$ -	$ -	$ 8,372

Total Commercial Loans
Risk rating:
Pass	$ 3,869,482	$ 3,497,371	$ 2,644,205	$ 2,052,660	$ 1,702,430	$ 3,346,172	$ 408,812	$ 17,521,132
Special mention	30,772	40,488	30,189	34,964	47,494	169,363	6,074	359,344
Substandard	4,055	12,530	12,280	31,471	15,427	116,703	2,757	195,223
Doubtful	-	-	1	4	2	25	1	33
Total Commercial Loans	$ 3,904,309	$ 3,550,389	$ 2,686,675	$ 2,119,099	$ 1,765,353	$ 3,632,263	$ 417,644	$ 18,075,732

For the consumer segment, delinquency of a loan is determined by past due status. Consumer loans are automatically placed on nonaccrual status once the loan is 90 days past due. The following table presents the credit risk profile by past due status of consumer loans by origination year:


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of June 30, 2020	2020	2019	2018	2017	2016	Prior	Revolving	Total
Consumer owner occupied
Days past due:
Current	$ 432,211	$ 693,736	$ 716,053	$ 652,993	$ 501,874	$ 1,360,705	$ -	$ 4,357,572
30 days past due	116	614	519	852	-	5,381	-	7,482
60 days past due	1,874	399	1,147	-	6	2,184	-	5,610
90 days past due	524	952	418	513	405	9,384	-	12,196
Total Consumer owner occupied	$ 434,725	$ 695,701	$ 718,137	$ 654,358	$ 502,285	$ 1,377,654	$ -	$ 4,382,860

Home equity loans
Days past due:
Current	$ 3,390	$ 7,482	$ 11,064	$ 2,981	$ 995	$ 35,243	$ 1,304,946	$ 1,366,101
30 days past due	88	50	-	52	-	325	2,405	2,920
60 days past due	-	91	161	10	-	202	989	1,453
90 days past due	-	68	-	137	316	3,073	4,338	7,932
Total Home equity loans	$ 3,478	$ 7,691	$ 11,225	$ 3,180	$ 1,311	$ 38,843	$ 1,312,678	$ 1,378,406

Consumer
Days past due:
Current	$ 162,479	$ 257,578	$ 149,477	$ 83,299	$ 53,149	$ 194,897	$ 9,965	$ 910,844
30 days past due	57	186	262	227	46	991	16	1,785
60 days past due	29	165	75	42	47	912	8	1,278
90 days past due	162	239	335	257	66	1,657	-	2,716
Total consumer	$ 162,727	$ 258,168	$ 150,149	$ 83,825	$ 53,308	$ 198,457	$ 9,989	$ 916,623

Construction and land development
Days past due:
Current	$ 128,584	$ 358,469	$ 125,820	$ 32,759	$ 10,547	$ 36,800	$ -	$ 692,979
30 days past due	-	-	-	-	-	24	-	24
60 days past due	-	-	150	125	-		-	275
90 days past due	-	-	-	-	-	274	-	274
Total Construction and land development	$ 128,584	$ 358,469	$ 125,970	$ 32,884	$ 10,547	$ 37,098	$ -	$ 693,552

Other income producing property
Days past due:
Current	$ 2,837	$ 1,802	$ 2,686	$ 4,502	$ 3,928	$ 36,205	-	$ 51,960
30 days past due	-	-	-	-	-	14	-	14
60 days past due	-	-	-	-	-	-	-	-
90 days past due	-	-	-	-	-	-	-	-
Total other income producing property	$ 2,837	$ 1,802	$ 2,686	$ 4,502	$ 3,928	$ 36,219	$ -	$ 51,974

Total Consumer Loans
Days past due:
Current	$ 729,501	$ 1,319,067	$ 1,005,100	$ 776,534	$ 570,493	$ 1,663,850	$ 1,314,911	$ 7,379,456
30 days past due	261	850	781	1,131	46	6,735	2,421	12,225
60 days past due	1,903	655	1,533	177	53	3,298	997	8,616
90 days past due	686	1,259	753	907	787	14,388	4,338	23,118
Total Consumer Loans	$ 732,351	$ 1,321,831	$ 1,008,167	$ 778,749	$ 571,379	$ 1,688,271	$ 1,322,667	$ 7,423,415


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of June 30, 2020	2020	2019	2018	2017	2016	Prior	Revolving	Total
Total Loans	$ 4,636,660	$ 4,872,220	$ 3,694,842	$ 2,897,848	$ 2,336,732	$ 5,320,534	$ 1,740,311	$ 25,499,147

The following table presents the credit risk profile by risk grade of commercial loans for non-acquired loans, for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


	Construction & Development				Commercial Non-owner Occupied				Commercial Owner Occupied
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
(Dollars in thousands)	2019		2019		2019		2019		2019		2019
Pass	$	959,206	$	871,393	$	1,787,306	$	1,714,606	$	1,754,801	$	1,561,594
Special mention		7,095		5,948		22,410		7,557		19,742		16,310
Substandard		2,059		2,383		1,422		1,477		9,474		12,083
Doubtful		—		—		—		—		—		—
	$	968,360	$	879,724	$	1,811,138	$	1,723,640	$	1,784,017	$	1,589,987


	Commercial & Industrial				Other Income Producing Property				Commercial Total
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2019		2019		2019		2019		2019
Pass	$	1,256,465	$	1,090,519	$	213,291	$	208,598	$	5,971,069	$	5,446,710
Special mention		16,055		16,279		3,966		4,376		69,268		50,470
Substandard		8,339		7,715		1,360		1,229		22,654		24,887
Doubtful		—		—		—		—		—		—
	$	1,280,859	$	1,114,513	$	218,617	$	214,203	$	6,062,991	$	5,522,067

The following table presents the credit risk profile by risk grade of consumer loans for non-acquired loans, for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


	Consumer Owner Occupied				Home Equity				Consumer
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
(Dollars in thousands)	2019		2019		2019		2019		2019		2019
Pass	$	2,094,080	$	2,052,808	$	508,054	$	502,305	$	536,002	$	501,474
Special mention		9,585		9,936		4,490		5,731		487		443
Substandard		15,174		17,205		6,084		6,206		1,992		1,551
Doubtful		—		—		—		—		—		—
	$	2,118,839	$	2,079,949	$	518,628	$	514,242	$	538,481	$	503,468


	Other				Consumer Total
	December 31, 2019		June 30, 2019		December 31, 2019		June 30, 2019
Pass	$	13,892	$	1,601	$	3,152,028	$	3,058,188
Special mention		—		—		14,562		16,110
Substandard		—		—		23,250		24,962
Doubtful		—		—		—		—
	$	13,892	$	1,601	$	3,189,840	$	3,099,260

The following table presents the credit risk profile by risk grade of total non-acquired loans for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


	Total Non-acquired Loans
	December 31,		June 30,
(Dollars in thousands)	2019		2019
Pass	$	9,123,097	$	8,504,898
Special mention		83,830		66,580
Substandard		45,904		49,849
Doubtful		—		—
	$	9,252,831	$	8,621,327

The following table presents the credit risk profile by risk grade of commercial loans for acquired non-credit impaired loans for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


					Commercial Non-owner
	Construction & Development				Occupied				Commercial Owner Occupied
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
(Dollars in thousands)	2019		2019		2019		2019		2019		2019
Pass	$	31,690	$	58,165	$	432,710	$	583,416	$	300,678	$	359,783
Special mention		966		821		14,162		5,753		3,092		12,841
Substandard		913		1,405		569		6,198		3,423		3,563
Doubtful		—		—		—		—		—		—
	$	33,569	$	60,391	$	447,441	$	595,367	$	307,193	$	376,187


					Other Income Producing
	Commercial & Industrial				Property				Commercial Total
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2019		2019		2019		2019		2019
Pass	$	97,092	$	145,733	$	87,892	$	103,325	$	950,062	$	1,250,422
Special mention		2,948		2,616		5,837		6,140		27,005		28,171
Substandard		1,840		3,230		1,968		1,541		8,713		15,937
Doubtful		—		—		—		—		—		—
	$	101,880	$	151,579	$	95,697	$	111,006	$	985,780	$	1,294,530

The following table presents the credit risk profile by risk grade of consumer loans for acquired non-credit impaired loans for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


	Consumer Owner Occupied				Home Equity				Consumer
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
(Dollars in thousands)	2019		2019		2019		2019		2019		2019
Pass	$	486,433	$	566,433	$	174,912	$	196,254	$	86,535	$	96,766
Special mention		6,434		6,749		5,679		5,459		654		637
Substandard		3,564		4,102		8,141		7,064		2,295		2,287
Doubtful		—		—		—		—		—		—
	$	496,431	$	577,284	$	188,732	$	208,777	$	89,484	$	99,690


	Consumer Total
	December 31,		June 30,
	2019		2019
Pass	$	747,880	$	859,453
Special mention		12,767		12,845
Substandard		14,000		13,453
Doubtful		—		—
	$	774,647	$	885,751

The following table presents the credit risk profile by risk grade of total acquired non-credit impaired loans for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


	Total Acquired
	Non-credit Impaired Loans
	December 31,		June 30,
(Dollars in thousands)	2019		2019
Pass	$	1,697,942	$	2,109,875
Special mention		39,772		41,016
Substandard		22,713		29,390
Doubtful		—		—
	$	1,760,427	$	2,180,281

The following table presents the credit risk profile by risk grade of acquired credit impaired loans (identified as credit-impaired at the time of acquisition), net of the related discount for comparative periods, prior to the adoption of ASU 2016-13, under the incurred loss model:


					Commercial Real Estate—
					Construction and
	Commercial Real Estate				Development
	December 31,		June 30,		December 31,		June 30,
(Dollars in thousands)	2019		2019		2019		2019
Pass	$	108,762	$	132,852	$	17,756	$	18,665
Special mention		6,465		13,811		2,904		3,181
Substandard		15,711		17,877		4,372		5,168
Doubtful		—		—		—		—
	$	130,938	$	164,540	$	25,032	$	27,014


	Residential Real Estate				Consumer				Commercial & Industrial
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2019		2019		2019		2019		2019
Pass	$	82,203	$	93,303	$	4,483	$	4,896	$	5,160	$	6,389
Special mention		35,968		39,020		12,658		13,250		286		508
Substandard		45,188		51,885		18,347		20,478		1,583		3,301
Doubtful		—		—		—		—		—		—
	$	163,359	$	184,208	$	35,488	$	38,624	$	7,029	$	10,198


	Total Acquired
	Credit Impaired Loans
	December 31,		June 30,
	2019		2019
Pass	$	218,364	$	256,105
Special mention		58,281		69,770
Substandard		85,201		98,709
Doubtful		—		—
	$	361,846	$	424,584

The risk grading of acquired credit impaired loans is determined utilizing a loan’s contractual balance, while the amount recorded in the financial statements and reflected above is the carrying value.

The following table presents an aging analysis of past due accruing loans, segregated by class:

30 - 59 Days

60 - 89 Days

90+ Days

Total

(Dollars in thousands)

Past Due

Current

Non-Accruing

Loans

June 30, 2020

Commercial real estate:

Construction and land development

1,516

928

—

2,444

1,993,651

2,967

1,999,062

Commercial non-owner occupied

1,027

750

—

1,777

6,009,897

9,643

6,021,317

Commercial owner occupied

3,477

411

3,904

4,722,026

36,590

4,762,520

Consumer real estate:

Consumer owner occupied

6,982

4,677

310

11,969

4,371,397

37,881

4,421,247

Home equity loans

2,500

1,414

—

3,914

1,361,489

13,003

1,378,406

Commercial and industrial

9,070

3,703

1,107

13,880

5,320,273

7,210

5,341,363

Other income producing property

1,047

275

1,360

640,932

7,945

650,237

Consumer

1,524

895

—

2,419

907,633

6,571

916,623

Other loans

—

8,347

—

8,372

27,159

13,062

1,471

41,692

25,335,645

121,810

25,499,147

The following table presents an aging analysis of past due accruing loans, segregated by class for non-acquired loans, for comparative periods, prior to the adoption of ASU 2016-13:


	30 - 59 Days		60 - 89 Days		90+ Days		Total						Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Non-Accruing		Loans
December 31, 2019
Commercial real estate:
Construction and land development	$	321	$	34	$	—	$	355	$	967,511	$	494	$	968,360
Commercial non-owner occupied		114		—		—		114		1,810,264		760		1,811,138
Commercial owner occupied		3,218		553		—		3,771		1,776,764		3,482		1,784,017
Consumer real estate:
Consumer owner occupied		752		—		—		752		2,110,719		7,368		2,118,839
Home equity loans		1,343		39		—		1,382		515,673		1,573		518,628
Commercial and industrial		2,097		100		110		2,307		1,272,360		6,192		1,280,859
Other income producing property		208		—		404		612		217,159		846		218,617
Consumer		690		201		—		891		536,003		1,587		538,481
Other loans		25		3		—		28		13,864				13,892
	$	8,768	$	930	$	514	$	10,212	$	9,220,317	$	22,302	$	9,252,831
June 30, 2019
Commercial real estate:
Construction and land development	$	630	$	54	$	265	$	949	$	878,229	$	546	$	879,724
Commercial non-owner occupied		—		—		—		—		1,723,125		515		1,723,640
Commercial owner occupied		1,474		2,583		—		4,057		1,582,471		3,459		1,589,987
Consumer real estate:
Consumer owner occupied		497		114		—		611		2,072,464		6,874		2,079,949
Home equity loans		370		136		—		506		511,886		1,850		514,242
Commercial and industrial		1,003		365		10		1,378		1,112,815		320		1,114,513
Other income producing property		674		514		—		1,188		212,606		409		214,203
Consumer		593		240		—		833		501,283		1,352		503,468
Other loans		—		—		—		—		1,601		—		1,601
	$	5,241	$	4,006	$	275	$	9,522	$	8,596,480	$	15,325	$	8,621,327

The following table presents an aging analysis of past due accruing loans, segregated by class for acquired non-credit impaired loans, for comparative periods, prior to the adoption of ASU 2016-13:


	30 - 59 Days		60 - 89 Days		90+ Days		Total						Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Non-Accruing		Loans
December 31, 2019
Commercial real estate:
Construction and land development	$	20	$	—	$	92	$	112	$	32,758	$	699	$	33,569
Commercial non-owner occupied		144		1,146		76		1,366		445,682		393		447,441
Commercial owner occupied		890		702		—		1,592		304,698		903		307,193
Consumer real estate:
Consumer owner occupied		637		24		59		720		493,361		2,350		496,431
Home equity loans		232		55		—		287		185,378		3,067		188,732
Commercial and industrial		93		204		—		297		100,861		722		101,880
Other income producing property		378		4,309		48		4,735		89,861		1,101		95,697
Consumer		364		191		—		555		87,325		1,604		89,484
	$	2,758	$	6,631	$	275	$	9,664	$	1,739,924	$	10,839	$	1,760,427
June 30, 2019
Commercial real estate:
Construction and land development	$	169	$	169	$	—	$	338	$	58,846	$	1,207	$	60,391
Commercial non-owner occupied		640		—		—		640		594,450		277		595,367
Commercial owner occupied		933		366		—		1,299		373,780		1,108		376,187
Consumer real estate:
Consumer owner occupied		970		—		—		970		574,615		1,699		577,284
Home equity loans		878		216		—		1,094		204,660		3,023		208,777
Commercial and industrial		1,266		1,543		—		2,809		147,806		964		151,579
Other income producing property		897		10		37		944		109,834		228		111,006
Consumer		393		139		—		532		97,716		1,442		99,690
	$	6,146	$	2,443	$	37	$	8,626	$	2,161,707	$	9,948	$	2,180,281

The following table presents an aging analysis of past due accruing loans, segregated by class for acquired credit impaired loans, for comparative periods, prior to the adoption of ASU 2016-13:


	30 - 59 Days		60 - 89 Days		90+ Days		Total				Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans
December 31, 2019
Commercial real estate	$	2,283	$	—	$	2,659	$	4,942	$	125,996	$	130,938
Commercial real estate—construction and development		—		—		393		393		24,639		25,032
Residential real estate		2,838		976		5,571		9,385		153,974		163,359
Consumer		820		283		534		1,637		33,851		35,488
Commercial and industrial		118		910		75		1,103		5,926		7,029
	$	6,059	$	2,169	$	9,232	$	17,460	$	344,386	$	361,846
June 30, 2019
Commercial real estate	$	883	$	244	$	4,263	$	5,390	$	159,150	$	164,540
Commercial real estate—construction and development		126		—		152		278		26,736		27,014
Residential real estate		3,011		2,101		4,302		9,414		174,794		184,208
Consumer		567		174		664		1,405		37,219		38,624
Commercial and industrial		49		—		80		129		10,069		10,198
	$	4,636	$	2,519	$	9,461	$	16,616	$	407,968	$	424,584

The following is a summary of information pertaining to nonaccrual loans by class, including restructured loans:

December 31,

June 30,

Greater than

Non-accrual

(Dollars in thousands)

2019

2020

90 Days Accruing⁽¹⁾

with no allowance⁽¹⁾

Commercial non-owner occupied real estate:

Construction and land development

1,193

2,967

—

1,803

Commercial non-owner occupied

1,154

9,643

—

5,351

Total commercial non-owner occupied real estate

2,347

12,610

—

7,154

Consumer real estate:

Consumer owner occupied

9,718

37,881

310

20,224

Home equity loans

4,640

13,003

—

5,596

Total consumer real estate

14,358

50,884

310

25,820

Commercial owner occupied real estate

4,385

36,590

17,096

Commercial and industrial

6,913

7,210

1,107

5,154

Other income producing property

1,947

7,945

5,305

Consumer

3,191

6,571

—

1,072

Total loans on nonaccrual status

33,141

121,810

1,471

61,601

(1)

– Greater than 90 days accruing and non-accrual with no allowance loans at June 30, 2020.

There is no interest income recognized during the period on nonaccrual loans. The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Loans on nonaccrual status in which there is no allowance assigned are individually evaluated loans that do not carry a specific reserve. See Note 2 – Summary of Significant Accounting Policies for further detailed on individually evaluated loans. The increase in the nonaccrual balance in the above schedule, compared to December 31, 2019, is mostly due to the addition of nonaccrual loans of $69.3 million through the merger with CSFL. The increase was also partially due to the addition of $21.0 million of PCD loans, formerly accounted for as credit impaired loans, prior to the adoption of ASU 2016-13. These loans were previously excluded from nonaccrual loans. The adoption of CECL resulted in the discontinuation of the pool-level accounting for acquired credit impaired loans and replaced it with loan-level evaluation for nonaccrual status.

The following is a summary of information pertaining to non-acquired nonaccrual loans by class, including restructured loans, for comparative periods, prior to the adoption of ASU 2016-13:


	December 31,		June 30,
(Dollars in thousands)	2019		2019
Commercial non-owner occupied real estate:
Construction and land development	$	363	$	299
Commercial non-owner occupied		732		481
Total commercial non-owner occupied real estate		1,095		780
Consumer real estate:
Consumer owner occupied		7,202		6,688
Home equity loans		1,468		1,740
Total consumer real estate		8,670		8,428
Commercial owner occupied real estate		3,482		3,459
Commercial and industrial		4,092		285
Other income producing property		798		351
Consumer		1,587		1,351
Restructured loans		2,578		671
Total loans on nonaccrual status	$	22,302	$	15,325

The following is a summary of information pertaining to acquired non-credit impaired nonaccrual loans by class, including restructured loans, for comparative periods, prior to the adoption of ASU 2016-13:


	December 31,		June 30,
(Dollars in thousands)	2019		2019
Commercial non-owner occupied real estate:
Construction and land development	$	699	$	1,207
Commercial non-owner occupied		393		277
Total commercial non-owner occupied real estate		1,092		1,484
Consumer real estate:
Consumer owner occupied		2,350		1,699
Home equity loans		3,067		3,023
Total consumer real estate		5,417		4,722
Commercial owner occupied real estate		903		1,108
Commercial and industrial		722		964
Other income producing property		1,101		228
Consumer		1,604		1,442
Total loans on nonaccrual status	$	10,839	$	9,948

The following is a summary of collateral dependent loans, by type of collateral, and the extent to which they are collateralized during the period:


	December 31,		Collateral			June 30,		Collateral
(Dollars in thousands)	2019		Coverage		%	2020		Coverage		%
Commercial non-owner occupied
Warehouse	$	—	$	—		$	861	$	861	100%
Church		245		846	345%		—		—
Office		1,045		1,800	172%		3,079		3,113	101%
Other		398		648	163%		—		—
Retail		299		1,269	424%		—		—
Commercial owner occupied real estate
Church		—		—			1,986		1,540	78%
Industrial		738		1,103	149%		—		—
Office		1,076		1,485	138%		—		—
Retail		—		—			4,508		2,751	61%
Other		3,303		7,285	221%		4,545		3,652	80%
Consumer owner occupied							4,520		7,911	175%
Other		5,413		9,286	172%		362		362	100%
Home equity loans
Other		1,768		2,679	152%		1,178		1,546	131%
Commercial and industrial
Industrial		291		702	241%		—		—
Other		3,696		8,442	228%		1,270		2,791	220%
Other income producing property
Agriculture/farmland		—		—			1,200		834	70%
Other		3,212		10,186	317%		685		4,130	603%
Consumer
Other		363		525	145%		—		—
Total collateral dependent loans	$	21,847	$	46,256		$	24,194	$	29,491

The Bank designates individually evaluated loans (excluding TDRs) on non-accrual with a net book balance exceeding the designated threshold, or greater, as collateral dependent loans. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining ACL. Under ASC 326-20-35-6, the Bank has adopted the collateral maintenance practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for selling costs and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The significant changes above in collateral percentage are due to appraisal value updates or changes in the number of loans within the asset class and collateral type. Overall collateral dependent loans increased by $2.3 million in the second quarter of 2020. This increase was due to the addition of $17.6 million in collateral dependent loans in the second quarter of 2020, due to the merger with CSFL. This increase was mostly offset by a reduction of $11.1 million in legacy SSB collateral dependent loans from March 31, 2020 due to a change in limits for the evaluation for loans individually evaluated from $500,000 to $1.0 million in the second quarter of 2020.

In the course of resolving delinquent loans, the Bank may choose to restructure the contractual terms of certain loans. Any loans that are modified are reviewed by the Bank to determine if a TDR, sometimes referred to herein as a restructured loan, has occurred. The Bank designates loan modifications as TDRs when it grants a concession to a borrower that it would not otherwise consider due to the borrower experiencing financial difficulty (FASB ASC Topic 310-40). The concessions granted on TDRs generally include terms to reduce the interest rate, extend the term of the debt obligation, or modify the payment structure on the debt obligation. See Note 2 – Summary of Significant Accounting Policies for how such modifications are factored into the determination of the ACL.

Loans on nonaccrual status at the date of modification are initially classified as nonaccrual TDRs. Loans on accruing status at the date of concession are initially classified as accruing TDRs if the note is reasonably assured of repayment and performance is expected in accordance with its modified terms. Such loans may be designated as nonaccrual loans subsequent to the concession date if reasonable doubt exists as to the collection of interest or principal under the restructuring agreement. Nonaccrual TDRs are returned to accruing status when there is economic substance to the restructuring, there is documented credit evaluation of the borrower’s financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum of six months). In prior periods our TDR levels were deemed to be immaterial, therefore no comparative data is shown.

The Company elected the accounting policy in the CARES Act to not apply TDR accounting to loans modified for borrowers impacted by the COVID-19 pandemic. Details in regards to the Company’s implemented loan modification programs in response to the COVID-19 pandemic under the CARES Act is disclosed under the Note 2 – Summary of Significant Accounting Policies.

The following table presents loans designated as TDRs segregated by class and type of concession that were restructured during the three and six months ended June 30, 2020.


	Three Months Ended June 30,
	2020
		Pre-Modification	Post-Modification
	Number	Amortized	Amortized
(Dollars in thousands)	of loans	Cost	Cost
Interest rate modification
Construction and land development	--	$ --	$ --
Commercial non-owner occupied	--	--	--
Commercial owner occupied	1	1,215	1,215
Consumer owner occupied	--	--	--
Home equity loans	--	--	--
Commercial and industrial	--	--	--
Other income producing property	--	--	--
Consumer	--	--	--
Other loans	--	--	--
Total interest rate modifications	1	$ 1,215	$ 1,215
Term modification
Construction and land development	--	$ --	$ --
Commercial non-owner occupied	--	--	--
Commercial owner occupied	--	--	--
Consumer owner occupied	3	475	475
Home equity loans	--	--	--
Commercial and industrial	--	--	--
Other income producing property	--	--	--
Consumer	--	--	--
Other loans	--	--	--
Total term modifications	3	$ 475	$ 475
	4	$ 1,690	$ 1,690


	Six Months Ended June 30,
	2020
		Pre-Modification	Post-Modification
	Number	Amortized	Amortized
(Dollars in thousands)	of loans	Cost	Cost
Interest rate modification
Construction and land development	2	$ 102	$ 102
Commercial non-owner occupied	--	--	--
Commercial owner occupied	1	1,215	1,215
Consumer owner occupied	1	29	29
Home equity loans	--	--	--
Commercial and industrial	6	652	652
Other income producing property	1	340	340
Consumer	--	--	--
Other loans	--	--	--
Total interest rate modifications	11	$ 2,338	$ 2,338
Term modification
Construction and land development	-	$ --	$ --
Commercial non-owner occupied	--	--	--
Commercial owner occupied	--	--	--
Consumer owner occupied	4	527	527
Home equity loans	1	51	51
Commercial and industrial	1	276	276
Other income producing property	--	--	--
Consumer	--	--	--
Other loans	--	--	--
Total term modifications	6	$ 854	$ 854
	17	$ 3,192	$ 3,192

At June 30, 2020, the balance of accruing TDRs was $11.9 million. The Company had $1.0 million remaining availability under commitments to lend additional funds on restructured loans at June 30, 2020. The amount of specific reserve associated with restructured loans was $925,000 at June 30, 2020.

The following table presents the changes in status of loans restructured within the previous 12 months as of June 30, 2020 by type of concession. The subsequent default in this case had no impact on the expected credit losses.


	Paying Under
	Restructured Terms		Converted to Nonaccrual		Foreclosures and Defaults
	Number	Amortized	Number	Amortized	Number	Amortized
(Dollars in thousands)	of Loans	Cost	of Loans	Cost	of Loans	Cost
Interest rate modification	14	$ 2,625	--	$ --	--	$ --
Term modification	9	995	--	--	1	276
	23	$ 3,620	--	$ --	1	$ 276