10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________

FORM 10-Q

____________________________________________________

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2019

or

 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-16715

____________________________________________________

First Citizens BancShares Inc /DE/

(Exact name of Registrant as specified in its charter)

____________________________________________________

Delaware			56-1528994
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
4300 Six Forks Road	Raleigh	North Carolina	27609
(Address of principle executive offices)			(Zip code)
		(919)	716-7000
(Registrant’s telephone number, including area code)

____________________________________________________

Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, Par Value $1	FCNCA	Nasdaq Global Select Market

Securities Registered Pursuant to Section 12(g) of the Securities Exchange Act of 1934.

Class B Common Stock, Par Value $1

(Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.    Yes  ☒   No  ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the Registrant was required to submit and post such files)    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “larger accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Class A Common Stock—9,732,720 shares

Class B Common Stock—1,005,185 shares

(Number of shares outstanding, by class, as of October 31, 2019)

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Income (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)	6
	Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61
Item 4.	Controls and Procedures	61
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	61
Item 1A.	Risk Factors	61
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 6.	Exhibits	62

2

PART I 

Item 1. Financial Statements

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, unaudited)	September 30, 2019			December 31, 2018
Assets
Cash and due from banks	$	288,933		$	327,440
Overnight investments	949,899			797,406
Investment in marketable equity securities (cost of $87,588 at September 30, 2019 and $73,809 at December 31, 2018)	116,854			92,599
Investment securities available for sale (cost of $4,898,771 at September 30, 2019 and $4,607,117 at December 31, 2018)	4,904,883			4,557,110
Investment securities held to maturity (fair value of $2,217,800 at September 30, 2019 and $2,201,502 at December 31, 2018)	2,145,943			2,184,653
Loans held for sale	83,256			45,505
Loans and leases	27,196,511			25,523,276
Allowance for loan and lease losses	(226,825		)	(223,712		)
Net loans and leases	26,969,686			25,299,564
Premises and equipment	1,222,659			1,204,179
Other real estate owned	46,253			48,030
Income earned not collected	117,123			109,903
Goodwill	296,764			236,347
Other intangible assets	65,147			72,298
Other assets	540,924			433,595
Total assets	$	37,748,324		$	35,408,629
Liabilities
Deposits:
Noninterest-bearing	$	12,966,890		$	11,882,670
Interest-bearing	19,776,387			18,789,790
Total deposits	32,743,277			30,672,460
Securities sold under customer repurchase agreements	522,195			543,936
Federal Home Loan Bank borrowings	192,672			193,556
Subordinated debentures	149,051			140,741
Other borrowings	112,153			13,921
FDIC shared-loss payable	110,586			105,618
Other liabilities	349,908			249,443
Total liabilities	34,179,842			31,919,675
Shareholders’ equity
Common stock:
Class A - $1 par value (16,000,000 shares authorized; 9,878,820 and 10,623,220 shares issued and outstanding at September 30, 2019 and December 31, 2018 respectively)	9,879			10,623
Class B - $1 par value (2,000,000 shares authorized; 1,005,185 shares issued and outstanding at September 30, 2019 and December 31, 2018 respectively)	1,005			1,005
Preferred stock - $0.01 par value (10,000,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018)	—			—
Surplus	168,790			493,962
Retained earnings	3,560,580			3,218,551
Accumulated other comprehensive loss	(171,772		)	(235,187		)
Total shareholders’ equity	3,568,482			3,488,954
Total liabilities and shareholders’ equity	$	37,748,324		$	35,408,629

See accompanying Notes to Consolidated Financial Statements.

3

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Income

 

	Three months ended September 30					Nine months ended September 30
(Dollars in thousands, except per share data, unaudited)	2019			2018		2019		2018
Interest income
Loans and leases	$	315,012		$	272,215	$	909,167	$	785,283
Investment securities interest and dividend income	40,155			38,770		119,976		110,969
Overnight investments	7,151			4,721		20,820		15,932
Total interest income	362,318			315,706		1,049,963		912,184
Interest expense
Deposits	21,737			5,147		53,821		13,424
Securities sold under customer repurchase agreements	542			398		1,516		1,175
Federal Home Loan Bank borrowings	1,316			1,099		4,187		4,335
Subordinated debentures	1,774			1,561		5,398		4,655
Other borrowings	524			139		796		577
Total interest expense	25,893			8,344		65,718		24,166
Net interest income	336,425			307,362		984,245		888,018
Provision for loan and lease losses	6,766			840		23,714		16,883
Net interest income after provision for loan and lease losses	329,659			306,522		960,531		871,135
Noninterest income
Cardholder services, net	15,957			14,678		51,069		44,385
Merchant services, net	6,034			5,857		18,324		18,512
Service charges on deposit accounts	27,112			25,994		77,967		78,489
Wealth management services	25,212			24,459		74,786		73,543
Realized gains on investment securities available for sale, net	1,136			—		6,855		—
Marketable equity securities (losses) gains, net	(967		)	3,854		13,505		9,265
Other service charges and fees	8,237			7,651		23,823		22,887
Mortgage income	7,438			4,123		16,134		13,063
Insurance commissions	2,960			2,755		9,105		9,471
ATM income	1,635			1,919		4,771		6,307
Gain on extinguishment of debt	—			703		—		26,517
Other	6,176			2,538		15,129		15,703
Total noninterest income	100,930			94,531		311,468		318,142
Noninterest expense
Salaries and wages	137,841			133,867		406,788		392,911
Employee benefits	28,358			28,850		91,090		90,656
Occupancy expense	28,163			26,632		82,810		80,686
Equipment expense	28,770			25,880		83,999		76,021
Processing fees paid to third parties	7,250			7,297		20,980		23,383
FDIC insurance expense	2,440			5,186		7,857		16,411
Collection and foreclosure-related expenses	3,044			4,269		9,725		12,389
Merger-related expenses	3,892			1,126		9,695		4,136
Other	30,667			34,430		98,535		105,000
Total noninterest expense	270,425			267,537		811,479		801,593
Income before income taxes	160,164			133,516		460,520		387,684
Income taxes	35,385			16,198		105,023		76,844
Net income	$	124,779		$	117,318	$	355,497	$	310,840
Weighted average shares outstanding	11,060,462			11,971,460		11,286,984		11,997,281
Net income per share	$	11.27		$	9.80	$	31.50	$	25.91

See accompanying Notes to Consolidated Financial Statements.

4

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands, unaudited)	2019			2018			2019			2018
Net income	$	124,779		$	117,318		$	355,497		$	310,840
Other comprehensive income (loss)
Unrealized gains (losses) on securities available for sale:
Unrealized gains (losses) on securities available for sale arising during the period	3,932			(13,810		)	62,974			(9,656		)
Tax effect	(906		)	3,175			(14,485		)	2,221
Reclassification adjustment for realized gains on securities available for sale included in income before income taxes	(1,136		)	—			(6,855		)	—
Tax effect	262			—			1,577			—
Net unrealized gains (losses) on securities available for sale arising during the period	2,152			(10,635		)	43,211			(7,435		)
Unrealized losses on securities available for sale transferred to held to maturity:
Unrealized losses on securities available for sale transferred to held to maturity	—			—			—			(109,507		)
Tax effect	—			—			—			25,186
Reclassification adjustment for accretion of unrealized losses on securities available for sale transferred to held to maturity	6,095			6,502			18,004			10,975
Tax effect	(1,402		)	(1,495		)	(4,141		)	(2,523		)
Total change in unrealized losses on securities available for sale transferred to held to maturity, net of tax	4,693			5,007			13,863			(75,869		)
Change in pension obligation:
Amortization of actuarial losses and prior service cost	2,745			3,495			8,235			10,486
Tax effect	(631		)	(804		)	(1,894		)	(2,412		)
Total change in pension obligation, net of tax	2,114			2,691			6,341			8,074
Other comprehensive income (loss)	8,959			(2,937		)	63,415			(75,230		)
Total comprehensive income	$	133,738		$	114,381		$	418,912		$	235,610

See accompanying Notes to Consolidated Financial Statements.

5

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

	Three months ended September 30
(Dollars in thousands, unaudited)	Class A Common Stock			Class B Common Stock		Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at June 30, 2018	$	11,005		$	1,005	$	658,918		$	3,020,596		$	(244,638	)	$	3,446,886
Net income	—			—		—			117,318			—			117,318
Other comprehensive loss, net of tax	—			—		—			—			(2,937		)	(2,937		)
Repurchase of 125,000 shares of Class A common stock	(125		)	—		(57,961		)	—			—			(58,086		)
Cash dividends declared ($0.35 per share)
Class A common stock	—			—		—			(3,817		)	—			(3,817		)
Class B common stock	—			—		—			(351		)	—			(351		)
Balance at September 30, 2018	$	10,880		$	1,005	$	600,957		$	3,133,746		$	(247,575	)	$	3,499,013
Balance at June 30, 2019	$	10,175		$	1,005	$	303,880		$	3,440,284		$	(180,731	)	$	3,574,613
Net income	—			—		—			124,779			—			124,779
Other comprehensive income, net of tax	—			—		—			—			8,959			8,959
Repurchase of 295,900 shares of Class A common stock	(296		)	—		(135,090		)	—			—			(135,386		)
Cash dividends declared ($0.40 per share)
Class A common stock	—			—		—			(4,081		)	—			(4,081		)
Class B common stock	—			—		—			(402		)	—			(402		)
Balance at September 30, 2019	$	9,879		$	1,005	$	168,790		$	3,560,580		$	(171,772	)	$	3,568,482

	Nine months ended September 30
(Dollars in thousands, unaudited)	Class A Common Stock			Class B Common Stock		Surplus			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at December 31, 2017	$	11,005		$	1,005	$	658,918		$	2,785,430		$	(122,294	)	$	3,334,064
Cumulative effect of adoption of ASU 2016-01	—			—		—			18,715			(18,715		)	—
Cumulative effect of adoption of ASU 2018-02	—			—		—			31,336			(31,336		)	—
Net income	—			—		—			310,840			—			310,840
Other comprehensive loss, net of tax	—			—		—			—			(75,230		)	(75,230		)
Repurchase of 125,000 shares of Class A common stock	(125		)	—		(57,961		)	—			—			(58,086		)
Cash dividends declared ($1.05 per share)
Class A common stock	—			—		—			(11,520		)	—			(11,520		)
Class B common stock	—			—		—			(1,055		)	—			(1,055		)
Balance at September 30, 2018	$	10,880		$	1,005	$	600,957		$	3,133,746		$	(247,575	)	$	3,499,013
Balance at December 31, 2018	$	10,623		$	1,005	$	493,962		$	3,218,551		$	(235,187	)	$	3,488,954
Net income	—			—		—			355,497			—			355,497
Other comprehensive income, net of tax	—			—		—			—			63,415			63,415
Repurchase of 744,400 shares of Class A common stock	(744		)	—		(325,172		)	—			—			(325,916		)
Cash dividends declared ($1.20 per share)
Class A common stock	—			—		—			(12,262		)	—			(12,262		)
Class B common stock	—			—		—			(1,206		)	—			(1,206		)
Balance at September 30, 2019	$	9,879		$	1,005	$	168,790		$	3,560,580		$	(171,772	)	$	3,568,482

See accompanying Notes to Consolidated Financial Statements.

6

First Citizens BancShares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Nine months ended September 30
(Dollars in thousands, unaudited)	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	355,497		$	310,840
Adjustments to reconcile net income to cash provided by operating activities:
Provision for loan and lease losses	23,714			16,883
Deferred tax expense	43,939			13,642
Net change in current taxes	(33,433		)	(21,266		)
Depreciation	77,024			71,484
Net increase (decrease) in accrued interest payable	14,147			(1,552		)
Net increase in income earned not collected	(3,567		)	(7,650		)
Realized gains on investment securities available for sale, net	(6,855		)	—
Marketable equity securities gains, net	(13,505		)	(9,265		)
Gain on extinguishment of debt	—			(26,517		)
Origination of loans held for sale	(518,894		)	(456,193		)
Proceeds from sale of loans held for sale	490,261			468,705
Gain on sale of loans held for sale	(10,308		)	(8,640		)
Gain on sale of portfolio loans	(299		)	—
Net write-downs/losses on other real estate owned	1,924			3,156
Losses on premises and equipment	1,082			1,480
Net accretion of premiums and discounts	(29,737		)	(22,965		)
Amortization of intangible assets	17,934			17,580
Net change in FDIC payable for shared-loss agreements	4,968			3,234
Net change in mortgage servicing rights	(3,770		)	(4,026		)
Net change in other assets	1,454			34,851
Net change in other liabilities	(12,416		)	(53,708		)
Net cash provided by operating activities	399,160			330,073
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans outstanding	(629,705		)	(702,356		)
Purchases of investment securities available for sale	(3,706,949		)	(979,495		)
Purchases of investment securities held to maturity	(223,353		)	(68,699		)
Purchases of marketable equity securities	(23,238		)	(2,818		)
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity	305,479			196,146
Proceeds from maturities, calls, and principal repayments of investment securities available for sale	1,690,277			1,046,293
Proceeds from sales of investment securities available for sale	1,746,099			327,737
Proceeds from sales of marketable equity securities	12,739			9,503
Net (increase) decrease in overnight investments	(150,006		)	455,295
Proceeds from sales of portfolio loans	24,247			—
Proceeds from sales of other real estate owned	18,892			23,488
Proceeds from sales of premises and equipment	128			1,648
Purchases of premises and equipment	(89,219		)	(91,200		)
Business acquisitions, net of cash acquired	(73,792		)	(106,298		)
Net cash (used in) provided by investing activities	(1,098,401		)	109,244
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in time deposits	376,596			(218,826		)
Net increase in demand and other interest-bearing deposits	701,426			496,499
Net decrease in short-term borrowings	(138,741		)	(127,547		)
Repayment of long-term obligations	(43,545		)	(717,370		)
Origination of long-term obligations	100,000			125,000
Repurchase of common stock	(321,263		)	(58,086		)
Cash dividends paid	(13,739		)	(12,612		)
Net cash provided by (used in) financing activities	660,734			(512,942		)
Change in cash and due from banks	(38,507		)	(73,625		)
Cash and due from banks at beginning of period	327,440			336,150
Cash and due from banks at end of period	$	288,933		$	262,525
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to other real estate	$	13,242		$	17,013
Dividends declared but not paid	4,397			4,168
Net reclassification of portfolio loans to (from) loans held for sale	22,758			(2,016		)
Transfers of premises and equipment to other real estate	2,184			—
Transfer of investment securities available for sale to held to maturity	—			2,485,761
Unsettled common stock repurchases	4,653			—
Initial recognition of operating lease assets	70,652			—
Initial recognition of operating lease liabilities	71,793			—

See accompanying Notes to Consolidated Financial Statements.

7

First Citizens BancShares, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

NOTE A - ACCOUNTING POLICIES AND BASIS OF PRESENTATION

First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina.

General

These consolidated financial statements and notes thereto are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements included in BancShares' Annual Report on Form 10-K for the year ended December 31, 2018.

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported cash flows, shareholders' equity or net income.

During the third quarter of 2019, the Company identified items in the prior period related to unsettled investment activity that had been reported as cash flows from operating activities and should have been presented as investing activities. The Company corrected the previously presented cash flows for this activity and in doing so, decreased net cash flows from operating activities with an offsetting increase in net cash flows from investing activities. The Company has evaluated the effect of the incorrect presentation, both qualitatively and quantitatively, and concluded that it was immaterial.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. The estimates that BancShares considers significant are the allowance for loan and lease losses, fair value measurements, Federal Deposit Insurance Corporation (FDIC) shared-loss payable, pension plan assumptions, goodwill and other intangible assets, and income taxes.

Share Repurchases

During the third quarter of 2019, BancShares repurchased 295,900 shares of Class A common stock for $135.4 million at an average cost per share of $457.50. During the first nine months of 2019, BancShares repurchased a total of 744,400 shares of Class A common stock for $325.9 million at an average cost per share of $437.84. During the three and nine months ended September 30, 2018, BancShares repurchased a total of 125,000 shares of Class A common stock for $58.1 million at an average cost per share of $464.68. All Class A common stock repurchases completed in 2019 and 2018 were consummated under previously approved authorizations.

The shares repurchases in the third quarter of 2019 included 50,000 shares of Class A common stock purchased from Ella Ann Holding, as trustee of her revocable trust. Mrs. Holding is the widow of BancShares’ former Executive Vice Chairman, Frank B. Holding, and the mother of Frank B. Holding, Jr. and Hope H. Bryant, BancShares’ Chairman and Chief Executive Officer and Vice Chairman, respectively. Pursuant to the existing share purchase authorization, the board’s independent Audit Committee reviewed and approved the repurchase of up to 250,000 shares held by Mrs. Holding on or before April 30, 2020, pursuant to BancShares’ related person transaction policy.

Subsequent to quarter-end through October 31, 2019, BancShares repurchased an additional 146,100 shares of Class A common stock for $69.1 million at an average cost per share of $472.94, which included 50,000 shares repurchased from Mrs. Holding.

On October 29, 2019, the Board authorized share repurchases of up to 500,000 of BancShares' Class A common stock for the period November 1, 2019 through January 31, 2020. This authority will supersede all previously approved authorities.

8

Recently Adopted Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842)

This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The key difference between prior standards and this ASU is the requirement for lessees to recognize all lease contracts on their balance sheet. This ASU requires lessees to classify leases as either operating or finance leases, which are substantially similar to the previous operating and capital leases classifications. The distinction between these two classifications under the new standard does not relate to balance sheet treatment, but relates to treatment in the statements of income and cash flows. Lessor guidance remains largely unchanged with the exception of how a lessor determines the appropriate lease classification for each lease to better align the lessor guidance with revised lessee classification guidance.

We adopted this standard, as of January 1, 2019, using the effective date method that allows for entities to initially apply the new leases standard at the adoption date. In addition, we made several policy elections permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We determined that most renewal options would not be reasonably determinable in estimating the expected lease term.

We made the policy election available under Topic 842 to combine lease and non-lease components and applied this practical expedient to leases in effect prior to the date of adoption. We will continue to apply the practical expedient to all leases entered into going forward.

The adoption of the new standard had an impact on our Consolidated Balance Sheet as of January 1, 2019, with the recording of operating Right-of-Use (ROU) assets and operating lease liabilities of $70.7 million and $71.8 million, respectively. The operating lease liability included a $1.1 million fair value adjustment for leases assumed in the acquisition of HomeBancorp, Inc. (HomeBancorp). In addition, at the adoption date we had finance lease ROU assets and finance lease liabilities, previously classified as capital leases, of $9.1 million and $8.3 million, respectively.  The Company did not have a cumulative-effect adjustment to the opening balance of retained earnings at commencement. The Company has no related party lease agreements.  This ASU did not have a material impact on our Consolidated Statements of Income. See Note N in the Consolidated Financial Statements for additional disclosures.

FASB ASU 2018-15 - Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). This ASU requires entities to use the guidance in FASB ASC 350-40, Intangibles - Goodwill and Other - Internal Use Software, to determine whether to capitalize or expense implementation costs related to the service contract. This ASU also requires entities to (1) expense capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement (2) present the expense related to the capitalized implementation costs in the same line item on the income statement as fees associated with the hosting element of the arrangement (3) classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element (4) present the capitalized implementation costs in the same balance sheet line item that a prepayment for the fees associated with the hosting arrangement would be presented.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. BancShares adopted this standard effective July 1, 2019 on a prospective basis. As of September 30, 2019, $3.7 million of deferred implementation costs related to cloud computing arrangements were recorded in other assets. These costs are expensed over the fixed, noncancellable term of the arrangement and are recorded to processing fees paid to third parties, consistent with the line item of the income statement where fees paid for the associated hosted service are recorded.

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Recently Issued Accounting Pronouncements

FASB ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by eliminating the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and adding a requirement to disclose an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.

The amendments in this ASU are effective for public entities for fiscal years ending after December 15, 2020. Early adoption is permitted for all entities. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

This ASU modifies the disclosure requirements on fair value measurements by eliminating the requirements to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. This ASU also added specific disclosure requirements for fair value measurements for public business entities including the requirement to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2019, and all interim periods within those fiscal years. Early adoption is permitted upon issuance of the ASU. Entities are permitted to early adopt amendments that remove or modify disclosures and delay the adoption of the additional disclosures until their effective date. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

This ASU eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative test.

This ASU will be effective for BancShares' annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt the guidance for our annual impairment test in fiscal year 2020. BancShares does not anticipate any impact to our consolidated financial position or consolidated results of operations as a result of the adoption.

FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

This ASU introduces a new credit loss methodology which requires earlier recognition of credit losses, replacing multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The amendments in this ASU require loss estimates be determined over the lifetime of the asset and broaden the information that an entity must consider in developing its expected credit losses. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity's size, complexity and risk profile.

For BancShares, the standard will apply to loans, unfunded loan commitments and debt securities. A cross-functional team co-led by Corporate Finance and Risk Management is in place to implement the new standard. We have completed initial current expected credit losses (CECL) models and accounting interpretations. We continue to refine and test our models, estimation techniques, operational processes and controls to be used in preparing CECL loss estimates and related financial statement disclosures. We have also begun evaluating our debt securities portfolio to determine the impact of adoption of CECL. We expect a significant portion of our securities portfolio to have an expectation of zero losses and therefore have no initial impact at adoption.

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The CECL calculated losses on the loan portfolio are derived using estimated probability of default and loss given default models based on historical loss experience, borrower characteristics, forecasts of relevant economic conditions and other factors. Bancshares intends to use a two-year reasonable and supportable forecast period that incorporates one economic forecast, with a 12-month straight-line reversion period to historical averages. The outstanding loans are bifurcated between commercial and non-commercial portfolios and then further segmented into pools with similar risk characteristics. The commercial portfolio, comprising the majority of Bancshares’ total loans, primarily consists of loans with short contractual maturities that are expected to result in a reduction to the allowance for credit losses. This reduction is expected to be partially offset by an increase in the allowance for credit losses in the non-commercial portfolio given its longer contractual maturities. The Company is still evaluating the credit loss models for purchase credit impaired loans (PCI) to determine the appropriate amount required to be added to the allowance for credit losses.

BancShares continues to evaluate the impact of this standard on its consolidated financial statements but the total magnitude of this impact is still being finalized. The final impact will be dependent on, among other items, loan and debt security portfolio composition and credit quality at the adoption date, as well as economic conditions, financial models used and forecasts in place at that time. Based on current factors, the overall allowance for credit losses is expected to decrease in aggregate, but the magnitude of the change is not anticipated to be material in relation to total assets, retained earnings or regulatory capital.

The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. BancShares will adopt the guidance in the first quarter of 2020 using a modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.

NOTE B - BUSINESS COMBINATIONS

Community Financial Holding Co. Inc.

On September 24, 2019, FCB and Community Financial Holding Co. Inc. (Community Financial) entered into a definitive merger agreement for the acquisition by FCB of Duluth, Georgia-based Community Financial and its bank subsidiary, Gwinnett Community Bank. Under the terms of the agreement, total cash consideration of $2.3 million will paid to the shareholders of Community Financial. The transaction is anticipated to close during the first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. As of September 30, 2019, Community Financial reported $223.5 million in consolidated assets, $211.3 million in deposits and $147.0 million in loans.

Entegra Financial Corp.

On April 23, 2019, FCB and Entegra Financial Corp. (Entegra) entered into a definitive merger agreement for the acquisition by FCB of Franklin, North Carolina-based Entegra and its bank subsidiary, Entegra Bank. Under the terms of the agreement, cash consideration of $30.18 per share will be paid to the shareholders of Entegra for each share of common stock and for each restricted stock unit after conversion to common stock, and each option to purchase Entegra common stock will be canceled and each option holder will receive a cash payment. The total transaction value is estimated to be approximately $219.8 million. The transaction is anticipated to close during the fourth quarter of 2019 or first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. FCB will be required to divest certain branches or other assets and liabilities in order to obtain regulatory approval for the transactions contemplated by the merger agreement. Any divestiture plan is subject to approval by the Federal Reserve Board in conjunction with the Department of Justice and has not been finalized as of the date of this filing. As of September 30, 2019, Entegra Bank reported $1.70 billion in total assets, $1.28 billion in deposits and $1.09 billion in loans.

First South Bancorp, Inc.

On May 1, 2019, FCB completed the merger of Spartanburg, South Carolina-based First South Bancorp, Inc. (First South Bancorp) and its bank subsidiary, First South Bank. Under the terms of the agreement, cash consideration of $1.15 per share was paid to the shareholders of First South Bancorp for each share of common stock, totaling approximately $37.5 million. The merger allows FCB to expand its presence in South Carolina.

The First South Bancorp transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available.

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The fair value of the assets acquired was $239.2 million, including $162.8 million in non-purchased credit impaired (non-PCI) loans, $16.4 million in purchased credit impaired (PCI) loans and $2.3 million in a core deposit intangible. Liabilities assumed were $215.6 million, of which $207.6 million were deposits. As a result of the transaction, FCB recorded $13.9 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase.

Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans).

The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	37,486
Assets
Cash and due from banks	$	4,633
Overnight investments	3,188
Investment securities	23,512
Loans	179,243
Premises and equipment	4,944
Other real estate owned	1,567
Income earned not collected	604
Intangible assets	2,268
Other assets	19,192
Total assets acquired	239,151
Liabilities
Deposits	207,556
Borrowings	5,155
Other liabilities	2,850
Total liabilities assumed	$	215,561
Fair value of net assets acquired			23,590
Goodwill recorded for First South Bancorp			$	13,896

Merger-related expenses of $2.5 million and $3.9 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from First South Bancorp was approximately $4.0 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included.

Biscayne Bancshares, Inc.

On April 2, 2019, FCB completed the merger of Coconut Grove, Florida-based Biscayne Bancshares, Inc. (Biscayne Bancshares) and its bank subsidiary, Biscayne Bank. Under the terms of the agreement, cash consideration of $25.05 per share was paid to the shareholders of Biscayne Bancshares for each share of common stock, totaling approximately $118.9 million. The merger will allow FCB to expand its presence in Florida and enhance banking efforts in South Florida.

The Biscayne Bancshares transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available.

The fair value of the assets acquired was $1.03 billion, including $850.4 million in non-purchased credit impaired (non-PCI) loans, $13.0 million in purchased credit impaired (PCI) loans and $4.7 million in a core deposit intangible. Liabilities assumed were $956.8 million, of which $786.5 million were deposits. As a result of the transaction, FCB recorded $46.5 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase.

Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans).

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The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	118,949
Assets
Cash and due from banks	$	78,010
Overnight investments	306
Investment securities held to maturity	34,539
Loans	863,384
Premises and equipment	1,533
Other real estate owned	2,046
Income earned not collected	3,049
Intangible assets	4,745
Other assets	41,572
Total assets acquired	1,029,184
Liabilities
Deposits	786,512
Borrowings	157,415
Other liabilities	12,829
Total liabilities assumed	$	956,756
Fair value of net assets acquired			72,428
Goodwill recorded for Biscayne Bancshares			$	46,521

Merger-related expenses of $0.6 million and $3.5 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from Biscayne Bancshares was approximately $22.6 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included.

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NOTE C - INVESTMENTS

The amortized cost and fair value of investment securities at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	748,206	$	1,114	$	2	$	749,318
Government agency	666,029		1,404		1,812		665,621
Mortgage-backed securities	3,329,593		10,369		7,343		3,332,619
Corporate bonds	154,943		2,707		325		157,325
Total investment securities available for sale	4,898,771		15,594		9,482		4,904,883
Investment in marketable equity securities	87,588		29,605		339		116,854
Investment securities held to maturity
Mortgage-backed securities	2,115,141		71,857		—		2,186,998
Other	30,802		—		—		30,802
Total investment securities held to maturity	2,145,943		71,857		—		2,217,800
Total investment securities	$	7,132,302	$	117,056	$	9,821	$	7,239,537
	December 31, 2018
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,249,243	$	633	$	2,166	$	1,247,710
Government agency	257,252		222		639		256,835
Mortgage-backed securities	2,956,793		5,309		52,763		2,909,339
Corporate bonds	143,829		261		864		143,226
Total investment securities available for sale	4,607,117		6,425		56,432		4,557,110
Investment in marketable equity securities	73,809		19,010		220		92,599
Investment securities held to maturity
Mortgage-backed securities	2,184,653		17,339		490		2,201,502
Total investment securities	$	6,865,579	$	42,774	$	57,142	$	6,851,211

Investments in mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in government agency securities represent securities issued by the United States Small Business Administration. Investments in corporate bonds and marketable equity securities represent positions in securities of other financial institutions. Other held to maturity investments include certificates of deposit with other financial institutions. BancShares also holds approximately 298,000 shares of Visa Class B common stock. BancShares' Visa Class B shares are not considered to have a readily determinable fair value and are included in the Consolidated Balance Sheet with no fair value.

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The following table provides the amortized cost and fair value by contractual maturity for investment securities available for sale and held to maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities and government agency securities are dependent on the repayments of the underlying loan balances. Repayments of certain corporate bonds are subject to call provisions that can be exercised by the issuer at their discretion.

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	748,206	$	749,318	$	1,049,253	$	1,047,380
One through five years	13,364		13,795		205,526		205,805
Five through 10 years	137,638		139,430		134,370		133,626
Over 10 years	3,941		4,100		3,923		4,125
Government agency	666,029		665,621		257,252		256,835
Mortgage-backed securities	3,329,593		3,332,619		2,956,793		2,909,339
Total investment securities available for sale	$	4,898,771	$	4,904,883	$	4,607,117	$	4,557,110
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less	30,552		30,552		—		—
One through five years	250		250		—		—
Mortgage-backed securities	2,115,141		2,186,998		2,184,653		2,201,502
Total investment securities held to maturity	$	2,145,943	$	2,217,800	$	2,184,653	$	2,201,502

There were gross gains of $1.3 million and $7.0 million on sales of investment securities available for sale for the three and nine months ended September 30, 2019, respectively. There were gross losses of $190.0 thousand on sales of investment securities available for sale during the three and nine month periods ended September 30, 2019. There were no gross gains or losses on sales of investment securities available for sale for the three and nine months ended September 30, 2018.

The following table provides the realized and unrealized gains and losses on marketable equity securities for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30					Nine months ended September 30
(Dollars in thousands)	2019			2018		2019		2018
Marketable equity securities (losses) gains, net	$	(967	)	$	3,854	$	13,505	$	9,265
Less net gains recognized on marketable equity securities sold	714			946		3,029		1,181
Unrealized (losses) gains recognized on marketable equity securities held	$	(1,681	)	$	2,908	$	10,476	$	8,084

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The following table provides information regarding securities with unrealized losses as of September 30, 2019 and December 31, 2018:

	September 30, 2019
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	49,867	$	2	$	—	$	—	$	49,867	$	2
Government agency	323,470		1,471		66,278		341		389,748		1,812
Mortgage-backed securities	1,413,342		4,165		477,249		3,178		1,890,591		7,343
Corporate bonds	31,168		203		6,563		122		37,731		325
Total	$	1,817,847	$	5,841	$	550,090	$	3,641	$	2,367,937	$	9,482
	December 31, 2018
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	248,983	$	113	$	848,622	$	2,053	$	1,097,605	$	2,166
Government agency	115,273		601		2,310		38		117,583		639
Mortgage-backed securities	262,204		2,387		1,940,695		50,376		2,202,899		52,763
Corporate bonds	79,066		842		5,000		22		84,066		864
Total	$	705,526	$	3,943	$	2,796,627	$	52,489	$	3,502,153	$	56,432
Investment securities held to maturity
Mortgage-backed securities	$	5,111	$	181	$	10,131	$	309	$	15,242	$	490

As of September 30, 2019, there were 108 investment securities available for sale that had continuous losses for more than 12 months of which 107 were government sponsored enterprise-issued mortgage-backed securities or government agency securities and one was a corporate bond.

None of the unrealized losses identified as of September 30, 2019 or December 31, 2018 relate to the marketability of the securities or the issuers' ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the debt securities were purchased. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Debt securities having an aggregate carrying value of $3.40 billion at September 30, 2019 and $4.03 billion at December 31, 2018 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

NOTE D - LOANS AND LEASES

BancShares' accounting methods for loans and leases differ depending on whether they are non-purchased credit impaired (Non-PCI) or purchased credit impaired (PCI). Loans that were originated by FCB, as well as loans that are performing under their contractual obligations at acquisition, are classified as Non-PCI. Loans that reflect credit deterioration since origination, such that it is probable at acquisition that FCB will be unable to collect all contractually required payments, are classified as PCI. Additionally, at the date of acquisition, all acquired loans are recorded at fair value with no corresponding allowance for loan and lease losses.

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Loans and leases outstanding included the following at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Non-PCI loans and leases:
Commercial:
Construction and land development	$	943,747	$	757,854
Commercial mortgage	11,453,353		10,717,234
Other commercial real estate	491,063		426,985
Commercial and industrial and leases	4,129,384		3,938,730
Other	301,791		296,424
Total commercial loans	17,319,338		16,137,227
Noncommercial:
Residential mortgage	4,869,562		4,265,687
Revolving mortgage	2,414,884		2,542,975
Construction and land development	321,903		257,030
Consumer	1,757,235		1,713,781
Total noncommercial loans	9,363,584		8,779,473
Total non-PCI loans and leases	26,682,922		24,916,700
PCI loans:
Total PCI loans	513,589		606,576
Total loans and leases	$	27,196,511	$	25,523,276

At September 30, 2019, $9.33 billion in non-PCI loans with a lendable collateral value of $6.54 billion were used to secure $181.7 million in Federal Home Loan Bank (FHLB) of Atlanta advances, resulting in additional borrowing capacity of $6.35 billion. At December 31, 2018, $9.12 billion in non-PCI loans with a lendable collateral value of $6.36 billion were used to secure $175.2 million in FHLB of Atlanta advances, resulting in additional borrowing capacity of $6.18 billion.

At September 30, 2019, $3.47 billion in non-PCI loans with a lendable collateral value of $2.78 billion were used to secure additional borrowing capacity at the Federal Reserve Bank (FRB). At December 31, 2018, $2.94 billion in non-PCI loans with a lendable collateral value of $2.19 billion were used to secure additional borrowing capacity at the FRB.

Certain residential real estate loans are originated to be sold to investors and are recorded in loans held for sale at fair value. In addition, we may change our strategy for certain portfolio loans and decide to sell them in the secondary market. At that time, portfolio loans are transferred to loans held for sale at fair value. Since December 31, 2018, $23.9 million in portfolio loans were transferred to held for sale and subsequently sold. Loans held for sale totaled $83.3 million and $45.5 million at September 30, 2019 and December 31, 2018, respectively.

Net deferred fees on non-PCI loans and leases, including unearned income as well as unamortized costs and fees, were $0.2 million and $0.1 million at September 30, 2019 and December 31, 2018, respectively. The net unamortized discount related to purchased non-PCI loans and leases was $32.2 million at September 30, 2019 and $33.3 million at December 31, 2018. During the three months ended September 30, 2019 and September 30, 2018, accretion income on purchased non-PCI loans and leases was $3.5 million and $2.9 million, respectively. During the nine months ended September 30, 2019 and September 30, 2018, accretion income on purchased non-PCI loans and leases was $10.0 million and $9.9 million, respectively.

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Credit quality indicators

Loans and leases are monitored for credit quality on a recurring basis. Commercial and noncommercial loans and leases have different credit quality indicators as a result of the unique characteristics of the loan segments being evaluated. The credit quality indicators for non-PCI and PCI commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. Commercial credit cards are included in the Commercial and industrial and leases segment, but are not specifically graded as with other commercial loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

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

Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather that it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.

Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at September 30, 2019 and December 31, 2018 relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage, lease financing and other commercial real estate loans.

The credit quality indicators for non-PCI and PCI noncommercial loans are based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases.

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Non-PCI loans and leases outstanding at September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	935,478	$	11,217,849	$	486,331	$	3,974,806	$	300,492	$	16,914,956
Special mention	2,295		111,617		3,191		51,355		599		169,057
Substandard	5,974		123,887		1,541		33,584		700		165,686
Doubtful	—		—		—		115		—		115
Ungraded	—		—		—		69,524		—		69,524
Total	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	17,319,338
	December 31, 2018
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	753,985	$	10,507,687	$	422,500	$	3,778,797	$	294,700	$	15,757,669
Special mention	1,369		114,219		3,193		54,814		1,105		174,700
Substandard	2,500		92,743		1,292		30,688		619		127,842
Doubtful	—		—		—		354		—		354
Ungraded	—		2,585		—		74,077		—		76,662
Total	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	16,137,227

	September 30, 2019
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,810,600	$	2,391,778	$	318,589	$	1,741,622	$	9,262,589
30-59 days past due	29,551		10,581		701		8,901		49,734
60-89 days past due	9,087		4,219		1,013		3,482		17,801
90 days or greater past due	20,324		8,306		1,600		3,230		33,460
Total	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	9,363,584
	December 31, 2018
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,214,783	$	2,514,269	$	254,837	$	1,696,321	$	8,680,210
30-59 days past due	28,239		12,585		581		10,035		51,440
60-89 days past due	7,357		4,490		21		3,904		15,772
90 days or greater past due	15,308		11,631		1,591		3,521		32,051
Total	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	8,779,473

19

PCI loans outstanding at September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI commercial Loans
Grade:
Pass	$	132,338	$	141,922
Special mention	43,535		48,475
Substandard	72,647		101,447
Doubtful	4,308		4,828
Total	$	252,828	$	296,672

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI noncommercial Loans
Current	$	234,494	$	268,280
30-59 days past due	8,613		11,155
60-89 days past due	5,573		7,708
90 days or greater past due	12,081		22,761
Total	$	260,761	$	309,904

20

The aging of the outstanding non-PCI loans and leases, by class, at September 30, 2019 and December 31, 2018 are provided in the tables below. Loans and leases past due 30 days or less are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	September 30, 2019
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	902	$	86	$	3,760	$	4,748	$	938,999	$	943,747
Commercial mortgage	22,270		2,386		10,737		35,393		11,417,960		11,453,353
Other commercial real estate	80		130		698		908		490,155		491,063
Commercial and industrial and leases	10,015		4,373		4,257		18,645		4,110,739		4,129,384
Other	61		211		13		285		301,506		301,791
Total commercial loans	33,328		7,186		19,465		59,979		17,259,359		17,319,338
Noncommercial:
Residential mortgage	29,551		9,087		20,324		58,962		4,810,600		4,869,562
Revolving mortgage	10,581		4,219		8,306		23,106		2,391,778		2,414,884
Construction and land development	701		1,013		1,600		3,314		318,589		321,903
Consumer	8,901		3,482		3,230		15,613		1,741,622		1,757,235
Total noncommercial loans	49,734		17,801		33,460		100,995		9,262,589		9,363,584
Total non-PCI loans and leases	$	83,062	$	24,987	$	52,925	$	160,974	$	26,521,948	$	26,682,922
	December 31, 2018
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	516	$	9	$	444	$	969	$	756,885	$	757,854
Commercial mortgage	14,200		2,066		3,237		19,503		10,697,731		10,717,234
Other commercial real estate	91		76		300		467		426,518		426,985
Commercial and industrial and leases	9,655		1,759		2,892		14,306		3,924,424		3,938,730
Other	285		—		89		374		296,050		296,424
Total commercial loans	24,747		3,910		6,962		35,619		16,101,608		16,137,227
Noncommercial:
Residential mortgage	28,239		7,357		15,308		50,904		4,214,783		4,265,687
Revolving mortgage	12,585		4,490		11,631		28,706		2,514,269		2,542,975
Construction and land development	581		21		1,591		2,193		254,837		257,030
Consumer	10,035		3,904		3,521		17,460		1,696,321		1,713,781
Total noncommercial loans	51,440		15,772		32,051		99,263		8,680,210		8,779,473
Total non-PCI loans and leases	$	76,187	$	19,682	$	39,013	$	134,882	$	24,781,818	$	24,916,700

21

The recorded investment, by class, in non-PCI loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Commercial:
Construction and land development	$	5,372	$	—	$	666	$	—
Commercial mortgage	24,993		796		12,594		—
Commercial and industrial and leases	6,630		1,099		4,624		808
Other commercial real estate	709		—		366		—
Other	121		—		279		—
Total commercial loans	37,825		1,895		18,529		808
Noncommercial:
Construction and land development	1,716		—		1,823		—
Residential mortgage	43,677		439		35,662		—
Revolving mortgage	22,748		—		25,563		—
Consumer	2,850		1,913		2,969		2,080
Total noncommercial loans	70,991		2,352		66,017		2,080
Total non-PCI loans and leases	$	108,816	$	4,247	$	84,546	$	2,888

Purchased non-PCI loans and leases

The following table relates to purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and provides the contractually required payments, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	1,078,854	$	175,465
Fair value at acquisition date	850,352		162,845

The recorded fair values of purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	15,647	$	8,663
Commercial mortgage	203,605		74,713
Other commercial real estate	98,107		7,509
Commercial and industrial and leases	28,135		40,208
Total commercial loans	345,494		131,093
Noncommercial:
Residential mortgage	405,419		24,641
Revolving mortgage	54,081		2,162
Construction and land development	31,668		3,552
Consumer	13,690		1,397
Total noncommercial loans	504,858		31,752
Total non-PCI loans	$	850,352	$	162,845

22

Purchased credit-impaired loans

The following table relates to PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and summarizes the contractually required payments, which include principal and interest, expected cash flows to be collected and the fair value of PCI loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	19,720	$	23,389
Contractual cash flows expected to be collected	16,815		21,392
Fair value at acquisition date	13,032		16,398

The recorded fair values of PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	—	$	1,233
Commercial mortgage	7,589		9,355
Commercial and industrial and leases	1,660		1,202
Total commercial loans	9,249		11,790
Noncommercial:
Residential mortgage	3,783		4,591
Construction and land development	—		17
Total noncommercial loans	3,783		4,608
Total PCI loans	$	13,032	$	16,398

The following table provides changes in the carrying value of all PCI loans during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	606,576		$	762,998
Fair value of acquired loans	29,430			15,555
Accretion	45,891			45,699
Payments received and other changes, net	(168,308		)	(186,234		)
Balance at September 30	$	513,589		$	638,018
Unpaid principal balance at September 30	$	724,745		$	999,926

The carrying value of PCI loans on the cost recovery method was $3.1 million and $3.3 million at September 30, 2019 and December 31, 2018, respectively. The cost recovery method is applied to loans when the timing of future cash flows cannot be reasonably estimated due to borrower nonperformance or uncertainty in the ultimate disposition of the asset. The recorded investment of PCI loans on nonaccrual status was $0.8 million and $1.3 million at September 30, 2019 and December 31, 2018, respectively. The remaining discount on PCI loans was $85.0 million and $95.5 million at September 30, 2019 and December 31, 2018, respectively.

During the three months ended September 30, 2019 and September 30, 2018, accretion income on PCI loans was $16.2 million and $13.5 million, respectively. During the nine months ended September 30, 2019 and September 30, 2018, accretion income on PCI loans was $45.9 million and $45.7 million, respectively.

For PCI loans, improved credit loss expectations generally result in the reclassification of nonaccretable difference to accretable yield. Changes in expected cash flow not related to credit improvements or deterioration do not affect the nonaccretable difference.

The following table documents changes to the amount of accretable yield for the first nine months of 2019 and 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	312,894		$	316,679
Additions from Biscayne Bancshares and First South Bancorp acquisitions	8,777			—
Additions from HomeBancorp acquisition	—			4,142
Accretion	(45,891		)	(45,699		)
Reclassifications from nonaccretable difference	6,156			5,866
Changes in expected cash flows that do not affect nonaccretable difference	(21,757		)	42,214
Balance at September 30	$	260,179		$	323,202

23

NOTE E - ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL)

Activity in the allowance for non-PCI loan and lease losses by class of loans is summarized as follows:

	Three months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Non-PCI Loans
Allowance for loan and lease losses:
Balance at July 1	$	31,944		$	48,962		$	2,342		$	56,901		$	2,183		$	16,932		$	21,121		$	2,750		$	35,105		$	218,240
Provision (credits)	208			(1,337		)	(90		)	4,714			54			1,024			(153		)	148			3,674			8,242
Charge-offs	(116		)	(1		)	—			(3,047		)	(42		)	(313		)	(534		)	—			(5,594		)	(9,647		)
Recoveries	52			226			—			611			20			68			201			—			1,945			3,123
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Three months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at July 1	$	23,664		$	44,465		$	3,823		$	61,311		$	4,691		$	17,802		$	21,886		$	4,027		$	30,773		$	212,442
Provision (credits)	8,702			(2,870		)	(1,219		)	(5,260		)	(2,404		)	(1,828		)	465			(1,203		)	7,971			2,354
Charge-offs	(35		)	(606		)	—			(2,106		)	(56		)	(360		)	(759		)	—			(5,525		)	(9,447		)
Recoveries	136			99			1			497			117			128			712			—			1,249			2,939
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288
	Nine months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	35,270		$	43,451		$	2,481		$	55,620		$	2,221		$	15,472		$	21,862		$	2,350		$	35,841		$	214,568
Provision (credits)	(3,217		)	4,748			(230		)	10,138			(618		)	2,903			(272		)	548			11,991			25,991
Charge-offs	(188		)	(851		)	—			(8,327		)	(73		)	(957		)	(1,990		)	—			(18,017		)	(30,403		)
Recoveries	223			502			1			1,748			685			293			1,035			—			5,315			9,802
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Nine months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	24,470		$	45,005		$	4,571		$	59,824		$	4,689		$	15,706		$	22,436		$	3,962		$	31,204		$	211,867
Provision (credits)	7,788			(3,369		)	(2,044		)	(907		)	(2,403		)	1,176			1,220			(1,046		)	15,468			15,883
Charge-offs	(43		)	(1,111		)	(69		)	(6,874		)	(98		)	(1,455		)	(2,778		)	(219		)	(16,092		)	(28,739		)
Recoveries	252			563			147			2,399			160			315			1,426			127			3,888			9,277
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288

24

The following tables present the allowance and recorded investment in loans and leases by class of loans, as well as the associated impairment method at September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	311	$	2,850	$	12	$	1,191	$	59	$	2,761	$	2,559	$	88	$	1,064	$	10,895
ALLL for loans and leases collectively evaluated for impairment	31,777		45,000		2,240		57,988		2,156		14,950		18,076		2,810		34,066		209,063
Total allowance for loan and lease losses	$	32,088	$	47,850	$	2,252	$	59,179	$	2,215	$	17,711	$	20,635	$	2,898	$	35,130	$	219,958
Loans and leases:
Loans and leases individually evaluated for impairment	$	5,713	$	64,380	$	1,171	$	12,262	$	261	$	54,311	$	28,730	$	3,088	$	3,208	$	173,124
Loans and leases collectively evaluated for impairment	938,034		11,388,973		489,892		4,117,122		301,530		4,815,251		2,386,154		318,815		1,754,027		26,509,798
Total loan and leases	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	26,682,922
	December 31, 2018
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	490	$	2,671	$	42	$	1,137	$	105	$	1,901	$	2,515	$	81	$	885	$	9,827
ALLL for loans and leases collectively evaluated for impairment	34,780		40,780		2,439		54,483		2,116		13,571		19,347		2,269		34,956		204,741
Total allowance for loan and lease losses	$	35,270	$	43,451	$	2,481	$	55,620	$	2,221	$	15,472	$	21,862	$	2,350	$	35,841	$	214,568
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,175	$	55,447	$	860	$	9,868	$	291	$	42,168	$	28,852	$	3,749	$	3,020	$	146,430
Loans and leases collectively evaluated for impairment	755,679		10,661,787		426,125		3,928,862		296,133		4,223,519		2,514,123		253,281		1,710,761		24,770,270
Total loan and leases	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	24,916,700

PCI allowance activity and balances for the three and nine months ended September 30, 2019 and September 30, 2018 is summarized as follows:

(Dollars in thousands)	Three months ended September 30, 2019			Three months ended September 30, 2018
PCI Loans
Allowance for loan losses:
Balance at July 1	$	8,343		$	12,423
(Credit) provision	(1,476		)	(1,514		)
Charge-offs	—			—
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909
	Nine months ended September 30, 2019			Nine months ended September 30, 2018
Balance at January 1	$	9,144		$	10,026
(Credit) provision	(2,277		)	1,000
Charge-offs	—			(117		)
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909

Recoveries related to PCI loans that have been previously charged-off and are not covered under loss share agreements are recorded as noninterest income rather than as an adjustment to the allowance for loan and lease losses.

25

The following table presents the PCI allowance and recorded investment in loans at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
ALLL for loans acquired with deteriorated credit quality	$	6,867	$	9,144
Loans acquired with deteriorated credit quality	513,589		606,576

At September 30, 2019 and December 31, 2018, $99.0 million and $186.6 million, respectively, of PCI loans experienced an adverse change in expected cash flows since the date of acquisition.

The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group:

	September 30, 2019
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	2,018	$	3,695	$	5,713	$	6,146	$	311
Commercial mortgage	35,222		29,158		64,380		69,172		2,850
Other commercial real estate	195		976		1,171		1,265		12
Commercial and industrial and leases	7,238		5,024		12,262		14,456		1,191
Other	198		63		261		280		59
Total commercial loans	44,871		38,916		83,787		91,319		4,423
Noncommercial:
Residential mortgage	44,009		10,302		54,311		58,515		2,761
Revolving mortgage	25,070		3,660		28,730		31,772		2,559
Construction and land development	1,676		1,412		3,088		3,381		88
Consumer	3,155		53		3,208		3,594		1,064
Total noncommercial loans	73,910		15,427		89,337		97,262		6,472
Total non-PCI impaired loans and leases	$	118,781	$	54,343	$	173,124	$	188,581	$	10,895
	December 31, 2018
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	1,897	$	278	$	2,175	$	2,606	$	490
Commercial mortgage	34,177		21,270		55,447		61,317		2,671
Other commercial real estate	243		617		860		946		42
Commercial and industrial and leases	7,153		2,715		9,868		14,695		1,137
Other	216		75		291		301		105
Total commercial loans	43,686		24,955		68,641		79,865		4,445
Noncommercial:
Residential mortgage	40,359		1,809		42,168		45,226		1,901
Revolving mortgage	25,751		3,101		28,852		31,371		2,515
Construction and land development	2,337		1,412		3,749		4,035		81
Consumer	2,940		80		3,020		3,405		885
Total noncommercial loans	71,387		6,402		77,789		84,037		5,382
Total non-PCI impaired loans and leases	$	115,073	$	31,357	$	146,430	$	163,902	$	9,827

Non-PCI impaired loans less than $500,000 that were collectively evaluated for impairment totaled $42.8 million and $47.1 million at September 30, 2019 and December 31, 2018, respectively.

26

The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019				Three months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	6,130	$	6	$	2,101	$	27
Commercial mortgage	70,351		551		63,752		583
Other commercial real estate	1,186		6		950		10
Commercial and industrial and leases	13,085		140		9,310		92
Other	298		2		205		1
Total commercial	91,050		705		76,318		713
Noncommercial:
Residential mortgage	56,029		346		42,601		330
Revolving mortgage	30,067		260		27,503		234
Construction and land development	3,124		25		3,190		42
Consumer	3,443		37		2,769		31
Total noncommercial	92,663		668		76,063		637
Total non-PCI impaired loans and leases	$	183,713	$	1,373	$	152,381	$	1,350
	Nine months ended September 30, 2019				Nine months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	3,460	$	40	$	1,580	$	55
Commercial mortgage	61,962		1,653		68,043		1,953
Other commercial real estate	797		20		1,336		33
Commercial and industrial and leases	11,478		353		9,500		269
Other	314		6		90		1
Total commercial	78,011		2,072		80,549		2,311
Noncommercial:
Residential mortgage	49,048		988		41,124		903
Revolving mortgage	29,477		763		26,228		657
Construction and land development	3,473		93		3,607		134
Consumer	3,152		97		2,644		87
Total noncommercial	85,150		1,941		73,603		1,781
Total non-PCI impaired loans and leases	$	163,161	$	4,013	$	154,152	$	4,092

Troubled Debt Restructurings

BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (TDRs). In general, the modification or restructuring of a loan is considered a TDR if, for economic reasons or legal reasons related to a borrower's financial difficulties, a concession is granted to the borrower that creditors would not otherwise consider. Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. The majority of TDRs are included in the special mention, substandard or doubtful credit quality indicators, which results in more elevated loss expectations when projecting the expected cash flows that are used to determine the allowance for loan losses associated with these loans. The lower the credit quality indicator, the lower the estimated expected cash flows and the greater the allowance recorded. All TDRs are individually evaluated for impairment through review of collateral values or analysis of cash flows at least annually.

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The following table provides a summary of total TDRs by accrual status. Total TDRs included $17.4 million and $18.2 million of PCI TDRs at September 30, 2019 and December 31, 2018, respectively:

	September 30, 2019						December 31, 2018
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans:
Construction and land development	$	518	$	1,109	$	1,627	$	1,946	$	352	$	2,298
Commercial mortgage	50,206		7,064		57,270		53,270		7,795		61,065
Other commercial real estate	474		—		474		851		9		860
Commercial and industrial and leases	10,161		2,180		12,341		7,986		2,060		10,046
Other	153		107		260		118		173		291
Total commercial loans	61,512		10,460		71,972		64,171		10,389		74,560
Noncommercial:
Residential mortgage	37,798		16,439		54,237		37,903		9,621		47,524
Revolving mortgage	20,968		7,839		28,807		20,492		8,196		28,688
Construction and land development	1,570		1,518		3,088		2,227		110		2,337
Consumer	2,566		642		3,208		2,300		721		3,021
Total noncommercial loans	62,902		26,438		89,340		62,922		18,648		81,570
Total loans	$	124,414	$	36,898	$	161,312	$	127,093	$	29,037	$	156,130

The following table provides the types of modifications designated as TDRs during the three and nine months ended September 30, 2019 and September 30, 2018, as well as a summary of loans that were modified as a TDR during the twelve month periods ended September 30, 2019 and September 30, 2018 that subsequently defaulted during the three and nine months ended September 30, 2019 and September 30, 2018. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended September 30, 2019						Three months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	2	$	1,221	—	$	—	1	$	300	—	$	—
Loan term extension	5	2,473		—	—		9	2,565		2	327
Below market interest rate	80	4,460		34	2,034		56	7,109		32	2,832
Discharged from bankruptcy	55	6,097		25	2,002		38	1,833		16	607
Total restructurings	142	$	14,251	59	$	4,036	104	$	11,807	50	$	3,766
	Nine months ended September 30, 2019						Nine months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	6	$	3,209	2	$	2,064	3	$	1,136	2	$	836
Loan term extension	13	3,870		4	514		32	4,414		9	943
Below market interest rate	205	14,968		86	5,977		211	24,245		82	6,098
Discharged from bankruptcy	157	13,499		72	5,421		139	7,360		69	3,595
Total restructurings	381	$	35,546	164	$	13,976	385	$	37,155	162	$	11,472

For the three and nine months ended September 30, 2019 and September 30, 2018, the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different.

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NOTE F - OTHER REAL ESTATE OWNED (OREO)

The following table explains changes in OREO during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	48,030
Additions	15,426
Acquired in business combination	3,613
Sales	(17,595		)
Write-downs/losses	(3,221		)
Balance at September 30, 2019	$	46,253
Balance at December 31, 2017	$	51,097
Additions	17,013
Acquired in business combination	2,135
Sales	(23,488		)
Write-downs/losses	(3,156		)
Balance at September 30, 2018	$	43,601

At September 30, 2019 and December 31, 2018, BancShares had $16.4 million and $17.2 million, respectively, of foreclosed residential real estate property in OREO. The recorded investment in consumer mortgage loans collateralized by residential real estate property in the process of foreclosure was $21.1 million and $22.0 million at September 30, 2019 and December 31, 2018, respectively.

NOTE G - FDIC SHARED-LOSS PAYABLE

As of September 30, 2019, Bancshares has outstanding shared-loss agreements related to two FDIC-assisted transactions. These agreements include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability). The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition and is recorded in the Consolidated Balance Sheets FDIC shared-loss payable. The clawback liability payment dates are March 2020 and March 2021.

As of September 30, 2019 shared-loss protection remains from FDIC transactions for single family residential loans acquired in the amount of $47.3 million.

The following table provides changes in the FDIC shared-loss payable since December 31, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	105,618
Accretion	4,968
Balance at September 30, 2019	$	110,586

NOTE H - SERVICING RIGHTS

Mortgage Servicing Rights

Our portfolio of residential mortgage loans serviced for third parties was $3.06 billion and $2.95 billion as of September 30, 2019 and December 31, 2018, respectively. These loans are originated by BancShares and sold to third parties on a non-recourse basis with servicing rights retained. The retained servicing rights were recorded as a servicing asset and are reported in other intangible assets on the Consolidated Balance Sheets, and the associated amortization expense and any valuation allowance recognized was included as a reduction of mortgage income in the Consolidated Statements of Income. Mortgage servicing rights are initially recorded at fair value and then carried at the lower of amortized cost or fair value.

Contractually specified mortgage servicing fees, late fees and ancillary fees earned for the three months ended September 30, 2019 and 2018 were $1.9 million and are reported in mortgage income in the Consolidated Statements of Income. For the nine months ended September 30, 2019 and 2018, contractually specified mortgage servicing fees, late fees, and ancillary fees earned were $5.8 million and $5.6 million, respectively.

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The following table explains changes in the servicing asset during the three and nine months ended September 30, 2019 and 2018:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Beginning balance	$	20,665		$	21,657		$	21,396		$	21,945
Servicing rights originated	1,532			1,396			3,943			4,026
Amortization	(1,581		)	(1,420		)	(4,595		)	(4,338		)
Valuation allowance (increase) decrease	(45		)	—			(173		)	—
Ending balance	$	20,571		$	21,633		$	20,571		$	21,633

BancShares recorded valuation allowance provision expense of $45.0 thousand and $173.0 thousand for the three and nine months ended September 30, 2019, respectively. There was no provision expense or release recorded for the the three and nine months ended September 30, 2018. Mortgage servicing rights valuations are performed using a pooling methodology where loans with similar risk characteristics are grouped together and evaluated using discounted cash flows to estimate the present value of future earnings. Key economic assumptions used to value mortgage servicing rights were as follows:

	September 30, 2019			December 31, 2018
Discount rate - conventional fixed loans	8.67		%	9.69		%
Discount rate - all loans excluding conventional fixed loans	9.67		%	10.69		%
Weighted average constant prepayment rate	14.15		%	9.26		%
Weighted average cost to service a loan	$	87.09		$	87.52

The fair value of mortgage servicing rights is sensitive to changes in assumptions and is determined by estimating the present value of the asset's future cash flows by utilizing discount rates, prepayment rates, and other inputs. The discount rate is based on the 10-year U.S. Treasury rate plus a risk premium of 700 basis points for conventional fixed loans and 800 basis points for all other loans. The prepayment rate is derived from the Public Securities Association Standard Prepayment model. Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity. This results in a decrease in fair value. The average cost to service a loan is based on the number of loans serviced and the total cost to service the loans.

Other Servicing Rights

Other servicing rights were acquired as part of a business combination and relate to the sale of the guaranteed portion of government guaranteed loans with servicing retained. The amount of the other servicing rights were $1.9 million and $2.7 million at September 30, 2019 and December 31, 2018, respectively.

NOTE I - REPURCHASE AGREEMENTS

BancShares utilizes securities sold under customer repurchase agreements to facilitate the needs of customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security, and which obligates BancShares to repurchase the security, with interest, at an agreed upon date, repurchase price, and interest rate. These agreements are recorded at the amount of cash received in connection with the transaction and are reflected as securities sold under customer repurchase agreements on the Consolidated Balance Sheets. The remaining contractual maturity of the $522.2 million and $543.9 million securities sold under repurchase agreements at September 30, 2019 and December 31, 2018, respectively, was overnight and continuous.

Repurchase agreements require BancShares to maintain collateral to support the outstanding obligations. BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents and consist of U.S. Treasury and mortgage-backed securities.

At September 30, 2019, the carrying value of investment securities pledged as collateral under repurchase agreements was $541.6 million, including investment securities available for sale of $305.2 million and investment securities held to maturity of $236.4 million. At December 31, 2018, the carrying value of investment securities pledged as collateral under repurchase agreements was $598.6 million, all of which were investment securities available for sale.

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NOTE J - ESTIMATED FAIR VALUES

Fair value estimates are intended to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Where there is no active market for a financial instrument, BancShares has made estimates using discounted cash flows or other valuation techniques. Inputs used in these valuation techniques are subjective in nature, involve uncertainties and require significant judgment and therefore can only be derived within a range of precision. Accordingly, the derived fair value estimates presented below are not necessarily indicative of the amounts BancShares would realize in a current market exchange.

ASC 820, Fair Value Measurements and Disclosures, indicates that assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the highest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows:

• Level 1 values are based on quoted prices for identical instruments in active markets.

• Level 2 values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 values are derived from valuation techniques in which one or more significant inputs or assumptions are not observable in the market. These unobservable inputs and assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques.

BancShares' management reviews any changes to its valuation methodologies to ensure they are appropriate and supportable, and refines valuation methodologies as more market-based data becomes available. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period.

The methodologies used to estimate the fair value of financial assets and financial liabilities are discussed below:

Investment securities available for sale and held to maturity. The fair value of U.S. Treasury, government agency and mortgage-backed securities is generally estimated using a third party pricing service. The third party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models that use a variety of inputs, such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. Corporate bonds held by BancShares are generally measured at fair value based on indicative bids from broker-dealers and are not directly observable. These securities are considered Level 3.

Investment in marketable equity securities. Equity securities are measured at fair value using observable closing prices and the valuation also considers the amount of market activity by examining the trade volume of each security. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market.

Loans held for sale. Management elects the fair value option on certain residential real estate loans that are originated to be sold to investors. The loans are carried at fair value based on quoted market prices for similar types of loans. Accordingly, the inputs used to calculate fair value of originated residential real estate loans held for sale are classified as Level 2 inputs. Portfolio loans that are subsequently transferred to held for sale to be sold in the secondary market are carried at fair value when a firm commitment from a counterparty exists. The fair value of the transferred portfolio loans is based on the quoted prices and is considered a Level 1 input.

Net loans and leases (PCI and Non-PCI). Fair value is estimated based on discounted future cash flows using the current interest rates at which loans with similar terms would be made to borrowers of similar credit quality. The inputs used in the fair value measurements for loans and leases are considered Level 3 inputs.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares believes its investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs.

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Mortgage and other servicing rights. Mortgage and other servicing rights are carried at the lower of amortized cost or market value and are, therefore, carried at fair value only when fair value is less than the amortized cost. The fair value of mortgage and other servicing rights is performed using a pooling methodology. Similar loans are pooled together and a model that relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for mortgage and other servicing rights are considered Level 3 inputs.

Deposits. For non-time deposits, carrying value is a reasonable estimate of fair value. The fair value of time deposits is estimated by discounting future cash flows using the interest rates currently offered for deposits of similar remaining maturities. The inputs used in the fair value measurement for deposits are considered Level 2 inputs.    

Borrowings. For borrowings, the fair values are determined based on recent trades or sales of the actual security if available. Otherwise, fair values are estimated by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, subordinated debentures, and other borrowings are considered Level 2 inputs.

Payable to the FDIC for shared-loss agreements. The fair value of the payable to the FDIC for shared-loss agreements is determined based on expected payments to the FDIC in accordance with the shared-loss agreements. Cash flows are discounted using current discount rates to reflect the timing of the estimated amounts due to the FDIC. The inputs used in the fair value measurement for the payable to the FDIC are considered Level 3 inputs.

Off-balance-sheet commitments and contingencies. Carrying amounts are reasonable estimates of the fair values for such financial instruments. Carrying amounts include unamortized fee income and, in some cases, reserves for any credit losses from those financial instruments. These amounts are not material to BancShares' financial position.

 For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of September 30, 2019 and December 31, 2018. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified on the fair value hierarchy as Level 1. Overnight investments, income earned not collected, securities sold under customer repurchase agreements, and accrued interest payable are considered Level 2.

The table presents the carrying values and estimated fair values for financial instruments as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019				December 31, 2018
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	288,933	$	288,933	$	327,440	$	327,440
Overnight investments	949,899		949,899		797,406		797,406
Investment in marketable equity securities	116,854		116,854		92,599		92,599
Investment securities available for sale	4,904,883		4,904,883		4,557,110		4,557,110
Investment securities held to maturity	2,145,943		2,217,800		2,184,653		2,201,502
Loans held for sale	83,256		83,256		45,505		45,505
Net loans and leases	26,969,686		27,301,164		25,299,564		24,845,060
Income earned not collected	117,123		117,123		109,903		109,903
Federal Home Loan Bank stock	25,355		25,355		25,304		25,304
Mortgage and other servicing rights	22,431		24,823		24,066		27,435
Deposits	32,743,277		32,739,923		30,672,460		30,623,214
Securities sold under customer repurchase agreements	522,195		522,195		543,936		543,936
Federal Home Loan Bank borrowings	192,672		199,098		193,556		195,374
Subordinated debentures	149,051		156,566		140,741		151,670
Other borrowings	112,153		117,630		13,921		13,985
FDIC shared-loss payable	110,586		113,309		105,618		105,846
Accrued interest payable	17,859		17,859		3,712		3,712

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Among BancShares' assets and liabilities, investment securities available for sale, marketable equity securities and loans held for sale are reported at their fair values on a recurring basis. For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	749,318	$	—	$	749,318	$	—
Government agency	665,621		—		665,621		—
Mortgage-backed securities	3,332,619		—		3,332,619		—
Corporate bonds	157,325		—		—		157,325
Total investment securities available for sale	$	4,904,883	$	—	$	4,747,558	$	157,325
Marketable equity securities	$	116,854	$	29,241	$	87,613	$	—
Loans held for sale	$	83,256	$	—	$	83,256	$	—
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,247,710	$	—	$	1,247,710	$	—
Government agency	256,835		—		256,835		—
Mortgage-backed securities	2,909,339		—		2,909,339		—
Corporate bonds	143,226		—		—		143,226
Total investment securities available for sale	$	4,557,110	$	—	$	4,413,884	$	143,226
Marketable equity securities	$	92,599	$	17,887	$	74,712	$	—
Loans held for sale	$	45,505	$	—	$	45,505	$	—

During the three and nine months ended September 30, 2019, there were no transfers between levels. For the three months ended September 30, 2018, there were no transfers between levels and for the nine ended September 30, 2018, there were transfers from Level 2 to Level 3 of $65.3 million for corporate bonds available for sale. The transfers were due to a lack of observable inputs and trade activity for those securities.

The following tables summarize activity for Level 3 assets:

	Nine months ended September 30, 2019
(Dollars in thousands)	Corporate bonds
Balance at January 1, 2019	$	143,226
Amounts included in net income	123
Unrealized net gains included in other comprehensive income	2,985
Purchases	11,991
Balance at September 30, 2019	$	157,325

The following table presents quantitative information about Level 3 fair value measurements for fair value on a recurring basis at September 30, 2019:

(Dollars in thousands)			September 30, 2019
Level 3 assets	Valuation technique	Significant unobservable input	Fair Value
Corporate bonds	Indicative bid provided by broker	Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer	$	157,325

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Fair Value Option

BancShares has elected the fair value option for residential real estate loans originated to be sold. This election reduces certain timing differences in the Consolidated Statement of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value were recorded as a component of mortgage income and included a gain of $583 thousand and a loss of $773 thousand for the three months ended September 30, 2019 and September 30, 2018, respectively. The changes in fair value included a gain of $750 thousand and a loss of $528 thousand for nine months ended September 30, 2019 and September 30, 2018, respectively.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate originated for sale measured at fair value as of September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	83,256	$	81,073	$	2,183
	December 31, 2018
	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	45,505	$	44,073	$	1,432

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of September 30, 2019 or December 31, 2018.

We may be required to measure certain financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower of amortized cost or fair value accounting or write-downs of individual assets due to impairment.

Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Expected cash flows are determined using expected payment information at the individual loan level, discounted using the effective interest rate. The effective interest rate for the majority of impaired loans generally ranges between 3% and 7%.

OREO acquired or written down within the previous 12 months is deemed to be at fair value. Asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals ordered to ensure the reported values reflect the most current information.

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	118,658	$	—	$	—	$	118,658
Other real estate remeasured during the previous 12 months	36,670		—		—		36,670
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	105,994	$	—	$	—	$	105,994
Other real estate remeasured during the previous 12 months	35,344		—		—		35,344

No financial liabilities were carried at fair value on a nonrecurring basis as of September 30, 2019 and December 31, 2018.

34

NOTE K - EMPLOYEE BENEFIT PLANS

BancShares sponsors noncontributory defined benefit pension plans for its qualifying employees (BancShares Plan) and former First Citizens Bancorporation, Inc. employees (Bancorporation Plan). The service cost component of net periodic benefit cost is included in salaries and wages while all other non-service cost components are included in other noninterest expense.

BancShares Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	2,628		$	3,396		$	7,886		$	10,187
Interest cost	7,557			7,093			22,669			21,281
Expected return on assets	(12,876		)	(11,966		)	(38,629		)	(35,899		)
Amortization of prior service cost	15			19			43			59
Amortization of net actuarial loss	2,099			3,398			6,297			10,192
Net periodic (benefit) cost	$	(577	)	$	1,940		$	(1,734	)	$	5,820

Bancorporation Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	563		$	643		$	1,689		$	1,929
Interest cost	1,759			1,588			5,276			4,767
Expected return on assets	(2,771		)	(3,106		)	(8,314		)	(9,322		)
Amortization of net actuarial loss	631			78			1,895			235
Net periodic cost (benefit)	$	182		$	(797	)	$	546		$	(2,391	)

No discretionary contributions were made during the three or nine months ended September 30, 2019 to the BancShares pension plan. Discretionary contributions of $3.5 million were made during the three and nine months ended September 30, 2019 to the Bancorporation pension plan. Management evaluates the need for its pension plan contributions on a periodic basis based upon numerous factors including, but not limited to, the funded status of the plans, returns on plan assets, discount rates and the current economic environment.

NOTE L - COMMITMENTS AND CONTINGENCIES

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve elements of credit, interest rate or liquidity risk.

Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires that collateral be pledged to secure the commitment, including cash deposits, securities and other assets.

Standby letters of credit are commitments guaranteeing performance of a customer to a third party. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as that involved in extending loans to clients and, therefore, these letters of credit are collateralized when necessary.

The following table presents the commitments to extend credit and standby letters of credit as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Unused commitments to extend credit	$	10,509,643	$	10,054,712
Standby letters of credit	92,585		96,467

35

BancShares and FCB have investments in qualified affordable housing projects primarily for the purposes of fulfilling Community Reinvestment Act requirements and obtaining tax credits. Affordable housing project investments were $165.7 million and $147.3 million as of September 30, 2019 and December 31, 2018, respectively, and were recorded in other assets on the Consolidated Balance Sheets. Unfunded commitments to fund future investments in affordable housing projects totaled $75.7 million and $68.0 million as of September 30, 2019 and December 31, 2018, respectively and were recorded within other liabilities.

BancShares and various subsidiaries have been named as defendants in legal actions arising from their normal business activities in which damages in various amounts were claimed. BancShares has also been exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed in the various merger transactions. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements.

NOTE M - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) included the following as of September 30, 2019 and December 31, 2018:

	September 30, 2019									December 31, 2018
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities available for sale	$	6,112		$	1,406		$	4,706		$	(50,007	)	$	(11,502	)	$	(38,505	)
Unrealized losses on securities available for sale transferred to held to maturity	(74,397		)	(17,111		)	(57,286		)	(92,401		)	(21,252		)	(71,149		)
Defined benefit pension items	(154,795		)	(35,603		)	(119,192		)	(163,030		)	(37,497		)	(125,533		)
Total	$	(223,080	)	$	(51,308	)	$	(171,772	)	$	(305,438	)	$	(70,251	)	$	(235,187	)

36

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	2,554		$	(61,979	)	$	(121,306	)	$	(180,731	)
Net unrealized gains arising during period	3,026			—			—			3,026
Amounts reclassified from accumulated other comprehensive loss	(874		)	4,693			2,114			5,933
Net current period other comprehensive income	2,152			4,693			2,114			8,959
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Three months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(57,496	)	$	(80,876	)	$	(106,266	)	$	(244,638	)
Net unrealized losses arising during period	(10,635		)	—			—			(10,635		)
Amounts reclassified from accumulated other comprehensive loss	—			5,007			2,691			7,698
Net current period other comprehensive (loss) income	(10,635		)	5,007			2,691			(2,937		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)
	Nine months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(38,505	)	$	(71,149	)	$	(125,533	)	$	(235,187	)
Net unrealized gains arising during period	48,489			—			—			48,489
Amounts reclassified from accumulated other comprehensive loss	(5,278		)	13,863			6,341			14,926
Net current period other comprehensive income	43,211			13,863			6,341			63,415
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Nine months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(30,945	)	$	—		$	(91,349	)	$	(122,294	)
Cumulative effect adjustments(2)	(29,751		)	—			(20,300		)	(50,051		)
Adjusted beginning balance	(60,696		)	—			(111,649		)	(172,345		)
Net unrealized losses arising during period	(7,435		)	(84,321		)	—			(91,756		)
Amounts reclassified from accumulated other comprehensive loss	—			8,452			8,074			16,526
Net current period other comprehensive (loss) income	(7,435		)	(75,869		)	8,074			(75,230		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)

⁽¹⁾ All amounts are net of tax. Amounts in parentheses indicate debits.

⁽²⁾ Cumulative adjustments for adoption of ASU 2018-02 of $31.3 million and ASU 2016-01 of $18.7 million.

37

The following table presents the amounts reclassified from accumulated other comprehensive income (loss) and the line item affected in the statement where net income is presented for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)          Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	1,136		Realized gains on investment securities available for sale, net
	(262		)	Income taxes
	$	874
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,095	)	Net interest income
	1,402			Income taxes
	$	(4,693	)
Amortization of defined benefit pension items
Prior service costs	$	(15	)	Salaries and wages
Actuarial losses	(2,730		)	Other
	(2,745		)	Income before income taxes
	631			Income taxes
	$	(2,114	)
Total reclassifications for the period	$	(5,933	)
	Three months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,502	)	Net interest income
	1,495			Income taxes
	$	(5,007	)
Amortization of defined benefit pension items
Prior service costs	$	(19	)	Salaries and wages
Actuarial losses	(3,476		)	Other
	(3,495		)	Income before income taxes
	804			Income taxes
	$	(2,691	)
Total reclassifications for the period	$	(7,698	)
(1) Amounts in parentheses indicate debits to income.

38

	Nine months ended September 30, 2019
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	6,855		Realized gains on investment securities available for sale, net
	(1,577		)	Income taxes
	$	5,278
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(18,004	)	Net interest income
	4,141			Income taxes
	$	(13,863	)
Amortization of defined benefit pension items
Prior service costs	$	(43	)	Salaries and wages
Actuarial losses	(8,192		)	Other
	(8,235		)	Income before income taxes
	1,894			Income taxes
	$	(6,341	)
Total reclassifications for the period	$	(14,926	)
	Nine months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(10,975	)	Net interest income
	2,523			Income taxes
	$	(8,452	)
Amortization of defined benefit pension items
Prior service costs	$	(59	)	Salaries and wages
Actuarial losses	(10,427		)	Other
	(10,486		)	Income before income taxes
	2,412			Income taxes
	$	(8,074	)
Total reclassifications for the period	$	(16,526	)

⁽¹⁾ Amounts in parentheses indicate debits to income.

39

NOTE N - LEASES

BancShares leases certain branch locations, administrative offices and equipment. Operating lease ROU assets are included in other assets and the associated lease obligations are included in other liabilities on the Consolidated Balance Sheets. Finance leases are included in premises and equipment and other borrowings on the Consolidated Balance Sheets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets; we instead recognize lease expense for these leases on a straight-line basis over the lease term.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our corresponding obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating and finance lease ROU asset also includes initial direct costs and pre-paid lease payments made, excluding lease incentives. As most of our leases do not provide an implicit rate, BancShares uses its incremental borrowing rate, based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using secured rates for new FHLB advances under similar terms as the lease at inception. We utilize the implicit or incremental borrowing rate at the effective date of a modification not accounted for as a separate contract or a change in the lease terms to determine the present value of lease payments. BancShares used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 25 years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in calculating the value of the ROU and lease liability. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

We determine if an arrangement is a lease at inception and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have no related party lease agreements. As of September 30, 2019, there were no leases that have not yet commenced that would have a material impact on our Consolidated Financial Statements.

The following table presents lease assets and liabilities as of September 30, 2019:

(Dollars in thousands)	Classification	September 30, 2019
Assets:
Operating	Other assets	$	79,857
Finance	Premises and equipment	9,402
Total leased assets		$	89,259
Liabilities:
Operating	Other liabilities	$	79,234
Finance	Other borrowings	8,610
Total lease liabilities		$	87,844

The following table presents lease costs for the three and nine months ended September 30, 2019. Variable lease cost primarily represents variable payments such as common area maintenance and utilities that are recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments that are adjusted periodically for inflation. While lease liabilities are not remeasured as a result of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.

(Dollars in thousands)	Classification	Three months ended September 30, 2019			Nine months ended September 30, 2019
Lease cost:
Operating lease cost (1)	Occupancy expense	$	5,273		$	12,059
Finance lease cost:
Amortization of leased assets	Equipment expense	541			1,434
Interest on lease liabilities	Interest expense - Other borrowings	93			220
Variable lease cost	Occupancy expense	527			1,779
Sublease income	Occupancy expense	(86		)	(303		)
Net lease cost		$	6,348		$	15,189
(1) Operating lease cost includes short-term lease cost, which is immaterial.

40

The following table presents lease liability maturities in the next five years and thereafter:

(Dollars in thousands)	Operating Leases		Finance Leases		Total
2019 (1)	$	3,617	$	435	$	4,052
2020	14,052		2,142		16,194
2021	12,546		2,159		14,705
2022	11,142		1,876		13,018
2023	9,258		993		10,251
Thereafter	43,841		1,683		45,524
Total lease payments	$	94,456	$	9,288	$	103,744
Less: Interest	15,222		678		15,900
Present value of lease liabilities	$	79,234	$	8,610	$	87,844
(1) Represents the lease liability payments that will be made for the period October 1, 2019 through December 31, 2019.

The following table presents the remaining weighted average lease terms and discount rates as of September 30, 2019:

Weighted average remaining lease term (years):	September 30, 2019
Operating	10.3
Finance	4.9
Weighted average discount rate:
Operating	3.22	%
Finance	3.07

The following table presents supplemental cash flow information related to leases for the nine months ended September 30, 2019:

(Dollars in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,579
Operating cash flows from finance leases	220
Financing cash flows from finance leases	1,111
Right-of-use assets obtained in exchange for new operating lease liabilities	17,762
Right-of-use assets obtained in exchange for new finance lease liabilities	1,886

41

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis (MD&A) of earnings and related financial data are presented to assist in understanding the financial condition and results of operations of First Citizens BancShares, Inc. and Subsidiaries (BancShares). This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes presented within this report along with our financial statements and related MD&A of financial condition and results of operations included in our 2018 Annual Report on Form 10-K. Intercompany accounts and transactions have been eliminated. Although certain amounts for prior years have been reclassified to conform to statement presentations for 2019, the reclassifications had no effect on shareholders’ equity or net income as previously reported. Unless otherwise noted, the terms “we,” “us” and “BancShares” refer to the consolidated financial position and consolidated results of operations for BancShares.

EXECUTIVE OVERVIEW

BancShares conducts its banking operations through its wholly-owned subsidiary First-Citizens Bank & Trust Company (FCB), a state-chartered bank organized under the laws of the state of North Carolina.

BancShares’ earnings and cash flows are primarily derived from our commercial and retail banking activities. We gather deposits from retail and commercial customers and also secure funding through various non-deposit sources. We invest the liquidity generated from these funding sources in interest-earning assets, including loans and leases, investment securities and overnight investments. We also invest in bank premises, hardware, software, furniture and equipment used to conduct our commercial and retail banking business. We provide treasury services products, cardholder and merchant services, wealth management services and various other products and services typically offered by commercial banks. The fees and service charges generated from these products and services are primary sources of noninterest income which is an essential component of our total revenue.

We are focused on expanding our position in legacy and target markets through organic growth and strategic acquisitions. We believe that our franchise is positioned for continued growth as a result of our client centric banking principles, disciplined lending standards, and our people. Management's primary focus is on loan and yield growth, deposit cost, and net interest margin. Management drives to this goal by focusing on core customer deposits and loans in the targeted interest rate risk profile. Additionally, our initiatives focus on growth of noninterest income sources, control of noninterest expenses, optimization of our branch network, and further enhancements to our technology and delivery channels. Refer to our Form 10-K for the year ended December 31, 2018 for further discussion of our strategy.

Significant Events in 2019

On September 24, 2019, FCB entered into a definitive merger agreement for the acquisition of Duluth, Georgia-based Community Financial Holding Co. Inc. and its bank subsidiary, Gwinnett Community Bank, into FCB.

On April 23, 2019, FCB entered into a definitive merger agreement for the acquisition of Franklin, North Carolina-based Entegra Financial Corp. and its bank subsidiary, Entegra Bank, into FCB.

On May 1, 2019, FCB completed the merger of Spartanburg, South Carolina-based First South Bancorp and its bank subsidiary, First South Bank, into FCB.

On April 2, 2019, FCB completed the merger of Coconut Grove, Florida-based Biscayne Bancshares and its bank subsidiary, Biscayne Bank, into FCB.

RECENT ECONOMIC AND INDUSTRY DEVELOPMENTS

Various external factors influence the focus of our business efforts and the results of our operations can change significantly based on those external factors. Based on the latest real gross domestic product (GDP) information available, the Bureau of Economic Analysis' revised estimate of second quarter of 2019 GDP growth was 2.0%, down from 3.1% GDP growth in the first quarter of 2019. The estimated real GDP deceleration in the second quarter primarily reflected downturns in inventory investment, exports and nonresidential fixed investment. These movements were partly offset by accelerations in personal consumption expenditures and federal government spending.

The United States (U.S.) unemployment rate declined from 3.7% in June 2019 to 3.5% in September 2019. According to the U.S. Department of Labor, the U.S. economy added approximately 470,000 new nonfarm payroll jobs during the third quarter of 2019. The U.S. housing market remains stable as a result of strong, but weakening, housing demand fueled by low mortgage interest rates, economic growth and job creation.

During the latter half of 2019, the Federal Reserve’s Federal Open Market Committee (FOMC) lowered the federal funds rate by 75 basis points to a target range of 1.50% to 1.75%. The FOMC cited the implications of global economic developments, muted inflation pressures as well as weakened business investment and exports for its actions. The FOMC also indicated that the U.S. labor market remains strong and economic activity rose at a moderate rate. In determining the timing and size of future adjustments to the target range for the federal funds rates, the FOMC indicated it will assess realized and expected economic conditions relative to its objectives of maximum employment and 2.0% inflation.

42

FINANCIAL PERFORMANCE SUMMARY

Third Quarter Highlights

• Net income for the third quarter of 2019 totaled $124.8 million, an increase of $7.5 million, or 6.4% compared to the same quarter in 2018. Earnings per share increased $1.47, or 15.0%, to $11.27 in the third quarter of 2019, from $9.80 per share during the same period in 2018.

• Net interest income totaled $336.4 million for the third quarter of 2019, an increase of $29.1 million, or 9.5% compared to the same quarter in 2018. The taxable-equivalent net interest margin (NIM) was 3.80% for the third quarter of 2019, up from 3.73% for the third quarter in 2018.

• Noninterest income for the third quarter of 2019 totaled $100.9 million, an increase of $6.4 million, or 6.8% compared to the same quarter of 2018.

• Return on average assets for the third quarter of 2019 was 1.32%, down 1 basis point compared to the third quarter of 2018. Return on average equity for the third quarter of 2019 was 13.83%, up 42 basis points over the third quarter of 2018.

• Total loans grew to $27.20 billion, an increase of $468.3 million, or 7.0% on an annualized basis, since June 30, 2019. The net charge-off ratio was 0.10% for the third quarter of 2019, unchanged for the same quarter in 2018.

• Total deposits grew to $32.74 billion, an increase of $23.6 million, or 0.3% on an annualized basis, since June 30, 2019.

• BancShares repurchased 295,900 shares of its Class A common stock during the third quarter of 2019 totaling $135.4 million. At September 30, 2019, BancShares remained well capitalized with a total risk-based capital ratio of 13.1%, Tier 1 risk-based capital and common equity Tier 1 ratios of 11.8% and a leverage ratio of 9.2%.

Year to Date Highlights

• Net income for the nine months ended September 30, 2019 totaled $355.5 million, an increase of $44.7 million, or 14.4% compared to the same period of 2018. Earnings per share increased $5.59, or 21.6%, to $31.50 for the nine months ended September 30, 2019, from $25.91 per share during the same period in 2018.

• Net interest income for the nine months ended September 30, 2019, was $984.2 million, an increase of $96.2 million, or 10.8% compared to the same period of 2018. The taxable-equivalent NIM was 3.83% for the nine months ended September 30, 2019, up 18 basis points from 3.65% during the same period of 2018.

• Return on average assets for the nine months ended September 30, 2019 was 1.29%, up 9 basis points over the same period in 2018. Return on average equity for the nine months ended September 30, 2019 was 13.41%, up 119 basis points over the same period in 2018.

• Total loans grew to $27.20 billion, an increase of $1.67 billion since December 31, 2018. The growth from recent acquisitions totaled $1.02 billion, while the remaining $657.3 million, or 3.4% on an annualized basis, was due to organic growth. The net charge-off ratio was 0.10% for the nine months ended September 30, 2019, a 1 basis point decrease compared to the same period of 2018.

• Total deposits grew to $32.74 billion, an increase of $2.07 billion since December 31, 2018. The growth from recent acquisitions totaled $1.02 billion, while the remaining $1.05 billion, or 4.6% on an annualized basis, was due to organic growth.

• BancShares repurchased 744,400 shares of its Class A common stock during the nine months ended September 30, 2019 totaling $325.9 million.

43

Table 1

SELECTED QUARTERLY DATA

	2019									2018						Nine months ended September 30
	Third			Second			First			Fourth			Third
(Dollars in thousands, except share data)	Quarter			Quarter			Quarter			Quarter			Quarter			2019			2018
SUMMARY OF OPERATIONS
Interest income	$	362,318		$	350,721		$	336,924		$	333,573		$	315,706		$	1,049,963		$	912,184
Interest expense	25,893			23,373			16,452			12,691			8,344			65,718			24,166
Net interest income	336,425			327,348			320,472			320,882			307,362			984,245			888,018
Provision for loan and lease losses	6,766			5,198			11,750			11,585			840			23,714			16,883
Net interest income after provision for loan and lease losses	329,659			322,150			308,722			309,297			306,522			960,531			871,135
Noninterest income	100,930			106,875			103,663			82,007			94,531			311,468			318,142
Noninterest expense	270,425			273,397			267,657			275,378			267,537			811,479			801,593
Income before income taxes	160,164			155,628			144,728			115,926			133,516			460,520			387,684
Income taxes	35,385			36,269			33,369			26,453			16,198			105,023			76,844
Net income	$	124,779		$	119,359		$	111,359		$	89,473		$	117,318		$	355,497		$	310,840
Net interest income, taxable equivalent	$	337,322		$	328,201		$	321,372		$	321,804		$	308,207		$	986,896		$	890,476
PER SHARE DATA
Net income	$	11.27		$	10.56		$	9.67		$	7.62		$	9.80		$	31.50		$	25.91
Cash dividends	0.40			0.40			0.40			0.40			0.35			1.20			1.05
Market price at period end (Class A)	471.55			450.27			407.20			377.05			452.28			471.55			452.28
Book value at period-end	327.86			319.74			309.46			300.04			294.40			327.86			294.40
SELECTED QUARTERLY AVERAGE BALANCES
Total assets (1)	$	37,618,836		$	37,049,030		$	35,625,885		$	35,625,500		$	34,937,175		$	36,770,191		$	34,628,652
Investment securities	6,956,981			6,803,570			6,790,671			7,025,889			7,129,089			6,851,348			7,091,456
Loans and leases (2)	26,977,476			26,597,242			25,515,988			25,343,813			24,698,799			26,368,922			24,193,870
Interest-earning assets	35,293,979			34,674,842			33,432,162			33,500,732			32,886,276			34,473,814			32,627,578
Deposits	32,647,264			32,100,210			30,802,567			30,835,157			30,237,329			31,856,771			29,939,492
Interest-bearing liabilities	20,551,393			20,397,445			19,655,434			19,282,749			18,783,160			20,204,705			18,899,001
Securities sold under customer repurchase agreements	533,371			556,374			538,162			572,442			547,385			542,618			549,863
Other short-term borrowings	23,236			40,513			—			53,552			43,720			21,335			60,417
Long-term borrowings	384,047			371,843			344,225			319,410			261,821			366,850			299,232
Shareholders' equity	$	3,580,235		$	3,546,041		$	3,509,746		$	3,491,914		$	3,470,368		$	3,545,418		$	3,401,450
Shares outstanding	11,060,462			11,286,520			11,519,008			11,763,832			11,971,460			11,286,984			11,997,281
SELECTED QUARTER-END BALANCES
Total assets (1)	$	37,748,324		$	37,655,094		$	35,961,670		$	35,408,629		$	34,954,659		$	37,748,324		$	34,954,659
Investment securities	7,167,680			6,695,578			6,914,513			6,834,362			7,040,674			7,167,680			7,040,674
Loans and leases	27,196,511			26,728,237			25,463,785			25,523,276			24,886,347			27,196,511			24,886,347
Deposits	32,743,277			32,719,671			31,198,093			30,672,460			30,163,537			32,743,277			30,163,537
Securities sold under customer repurchase agreements	522,195			544,527			508,508			543,936			567,438			522,195			567,438
Long-term borrowings	453,876			369,854			341,108			348,218			417,798			453,876			417,798
Shareholders' equity	$	3,568,482		$	3,574,613		$	3,523,309		$	3,488,954		$	3,499,013		$	3,568,482		$	3,499,013
Shares outstanding	10,884,005			11,179,905			11,385,405			11,628,405			11,885,405			10,884,005			11,885,405
SELECTED RATIOS AND OTHER DATA
Rate of return on average assets (annualized)	1.32		%	1.29		%	1.27		%	1.00		%	1.33		%	1.29		%	1.20		%
Rate of return on average shareholders' equity (annualized)	13.83			13.50			12.86			10.17			13.41			13.41			12.22
Net yield on interest-earning assets (taxable equivalent)	3.80			3.79			3.89			3.82			3.73			3.83			3.65
Net charge-offs (annualized) to average loans and leases	0.10			0.11			0.11			0.11			0.10			0.10			0.11
Allowance for loan and lease losses to total loans and leases:
PCI	1.34			1.51			1.61			1.51			1.71			1.34			1.71
Non-PCI	0.82			0.83			0.88			0.86			0.86			0.82			0.86
Total	0.83			0.85			0.90			0.88			0.88			0.83			0.88
Ratio of total nonperforming assets to total loans, leases and other real estate owned	0.57			0.57			0.53			0.52			0.52			0.57			0.52
Tier 1 risk-based capital ratio	11.80			12.03			12.69			12.67			13.23			11.80			13.23
Common equity Tier 1 ratio	11.80			12.03			12.69			12.67			13.23			11.80			13.23
Total risk-based capital ratio	13.09			13.34			14.02			13.99			14.57			13.09			14.57
Leverage capital ratio	9.18			9.35			9.80			9.77			10.11			9.18			10.11
Dividend payout ratio	3.55			3.79			4.14			5.25			3.57			3.81			4.05
Average loans and leases to average deposits	82.63			82.86			82.84			82.19			81.68			82.77			80.81

⁽¹⁾ We adopted ASC Topic 842 and utilized the effective date method. We did not restate selected financial data for the quarters prior to 2019 presented above.

⁽²⁾ Average loan and lease balances include PCI loans, non-PCI loans and leases, loans held for sale and nonaccrual loans and leases.

44

BUSINESS COMBINATIONS

Community Financial Holding Co. Inc.

On September 24, 2019, FCB and Community Financial Holding Co. Inc. (Community Financial) entered into a definitive merger agreement for the acquisition by FCB of Duluth, Georgia-based Community Financial and its bank subsidiary, Gwinnett Community Bank. Under the terms of the agreement, total cash consideration of $2.3 million will paid to the shareholders of Community Financial. The transaction is expected to close during the first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. As of September 30, 2019, Community Financial reported $223.5 million in consolidated assets, $211.3 million in deposits and $147.0 million in gross loans.

Entegra Financial Corp.

On April 23, 2019, FCB and Entegra Financial Corp. (Entegra) entered into a definitive merger agreement for the acquisition by FCB of Franklin, North Carolina-based Entegra and its bank subsidiary, Entegra Bank. Under the terms of the agreement, cash consideration of $30.18 per share will be paid to the shareholders of Entegra for each share of common stock and for each restricted stock unit after conversion to common stock, and each outstanding option to purchase Entegra common stock will be canceled and each option holder will receive a cash payment. The total transaction value is anticipated to be approximately $219.8 million. The transaction is anticipated to close during the fourth quarter of 2019 or first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. FCB will be required to divest certain branches or other assets and liabilities in order to obtain regulatory approval for the transactions contemplated by the merger agreement. Any divestiture plan is subject to approval by the Federal Reserve Board in conjunction with the Department of Justice and has not been finalized as of the date of this filing. As of September 30, 2019, Entegra Bank reported $1.70 billion in total assets, $1.28 billion in deposits and $1.09 billion in loans.

First South Bancorp, Inc.

On May 1, 2019, FCB completed the merger of Spartanburg, South Carolina-based First South Bancorp and its bank subsidiary, First South Bank. Under the terms of the agreement, cash consideration of $1.15 for each share of common stock was paid to the shareholders of First South Bancorp, totaling approximately $37.5 million. The merger allows FCB to expand its presence and enhance banking efforts in South Carolina. The merger contributed $253.0 million in consolidated assets, which included $179.2 million in loans and $207.6 million in deposits as of the merger date.

Biscayne Bancshares, Inc.

On April 2, 2019, FCB completed the merger of Coconut Grove, Florida-based Biscayne Bancshares, Inc. (Biscayne Bancshares) and its bank subsidiary, Biscayne Bank. Under the terms of the agreement, cash consideration of $25.05 for each share of common stock was paid to the shareholders of Biscayne Bancshares, totaling approximately $118.9 million. The merger allows FCB to expand its presence in Florida and enhance banking efforts in South Florida. The merger contributed $1.08 billion in consolidated assets, which included $863.4 million in loans, and $786.5 million in deposits as of the merger date.

See Note B in the Consolidated Financial Statements for additional disclosures regarding the above business combinations.

FDIC-Assisted Transactions

As of September 30, 2019, BancShares had completed fourteen FDIC-assisted transactions. Nine of the fourteen FDIC-assisted transactions included shared-loss agreements which, for their terms, protect us from a substantial portion of the credit and asset quality risk we would otherwise incur. As of September 30, 2019, shared-loss protection remains for single family residential loans acquired in the amount of $47.3 million.

The shared-loss agreements for two of the FDIC-assisted transactions include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability). As of September 30, 2019 and December 31, 2018, the estimated clawback liability was $110.6 million and $105.6 million, respectively. The clawback liability payment dates are March 2020 and March 2021.

45

Table 2

CONSOLIDATED QUARTER-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS

	Three months ended
	September 30, 2019							September 30, 2018
				Interest							Interest
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Loans and leases	$	26,977,476		$	315,621	4.65	%	$	24,698,799		$	272,868	4.39	%
Investment securities:
U. S. Treasury	834,577			5,262		2.50		1,504,594			7,104		1.87
Government agency	628,322			4,742		3.02		129,634			840		2.59
Mortgage-backed securities	5,195,711			27,891		2.15		5,266,282			29,160		2.21
Corporate bonds	149,888			1,912		5.10		121,855			1,609		5.28
State, county and municipal	—			—		—		—			—		—
Other investments	148,483			636		1.70		106,724			249		0.93
Total investment securities	6,956,981			40,443		2.32		7,129,089			38,962		2.18
Overnight investments	1,359,522			7,151		2.09		1,058,388			4,721		1.77
Total interest-earning assets	35,293,979			363,215		4.09		32,886,276			316,551		3.83
Cash and due from banks	256,379							268,307
Premises and equipment	1,224,118							1,169,440
Allowance for loan and lease losses	(227,707		)					(225,627		)
Other real estate owned	46,131							45,037
Other assets	1,025,936							793,742
Total assets	$	37,618,836						$	34,937,175
Liabilities
Interest-bearing deposits:
Checking with interest	$	5,328,855		$	500	0.04	%	$	5,177,349		$	319	0.02	%
Savings	2,636,583			528		0.08		2,506,421			210		0.03
Money market accounts	8,121,643			7,619		0.37		7,878,484			2,455		0.12
Time deposits	3,523,658			13,090		1.47		2,367,980			2,163		0.36
Total interest-bearing deposits	19,610,739			21,737		0.44		17,930,234			5,147		0.11
Securities sold under customer repurchase agreements	533,371			542		0.40		547,385			398		0.29
Other short-term borrowings	23,236			203		3.50		43,720			287		2.57
Long-term borrowings	384,047			3,411		3.51		261,821			2,512		3.77
Total interest-bearing liabilities	20,551,393			25,893		0.50		18,783,160			8,344		0.18
Noninterest-bearing deposits	13,036,525							12,307,095
Other liabilities	450,683							376,552
Shareholders' equity	3,580,235							3,470,368
Total liabilities and shareholders' equity	$	37,618,836						$	34,937,175
Interest rate spread						3.59	%						3.65	%
Net interest income and net yield on interest-earning assets				$	337,322	3.80	%				$	308,207	3.73	%

Loans and leases include PCI loans, non-PCI loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming statutory federal income tax rate of 21.0%, as well as state income tax rate of 3.4%, for both the three months ended September 30, 2019 and September 30, 2018. The taxable-equivalent adjustment was $897 and $845 for the three months ended September 30, 2019 and September 30, 2018, respectively.

46

Table 3

CONSOLIDATED YEAR-TO-DATE AVERAGE TAXABLE-EQUIVALENT BALANCE SHEETS

	Nine months ended
	September 30, 2019							September 30, 2018
				Interest							Interest
	Average			Income/		Yield/		Average			Income/		Yield/
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Loans and leases	$	26,368,922		$	910,993	4.62	%	$	24,193,870		$	787,198	4.35	%
Investment securities:
U. S. Treasury	1,062,901			18,529		2.33		1,534,720			21,016		1.83
Government agency	434,097			10,084		3.10		76,829			1,408		2.44
Mortgage-backed securities	5,075,959			84,855		2.23		5,277,376			84,438		2.13
Corporate bonds	147,579			5,780		5.22		94,293			3,917		5.54
State, county and municipal	111			1		1.81		254			8		4.07
Other investments	130,701			1,551		1.59		107,984			725		0.90
Total investment securities	6,851,348			120,800		2.35		7,091,456			111,512		2.10
Overnight investments	1,253,544			20,820		2.22		1,342,252			15,932		1.59
Total interest-earning assets	34,473,814			1,052,613		4.08		32,627,578			914,642		3.75
Cash and due from banks	277,736							281,146
Premises and equipment	1,214,960							1,158,443
Allowance for loan and lease losses	(227,081		)					(223,835		)
Other real estate owned	46,488							47,408
Other assets	984,274							737,912
Total assets	$	36,770,191						$	34,628,652
Liabilities
Interest-bearing deposits:
Checking with interest	$	5,311,205		$	1,291	0.03	%	$	5,166,255		$	926	0.02	%
Savings	2,606,781			1,260		0.06		2,451,667			575		0.03
Money market accounts	8,107,148			19,415		0.32		8,001,430			6,329		0.11
Time deposits	3,248,768			31,854		1.31		2,370,137			5,594		0.32
Total interest-bearing deposits	19,273,902			53,820		0.37		17,989,489			13,424		0.10
Securities sold under customer repurchase agreements	542,618			1,516		0.37		549,863			1,319		0.32
Other short-term borrowings	21,335			481		2.99		60,417			1,621		3.55
Long-term borrowings	366,850			9,900		3.56		299,232			7,802		3.44
Total interest-bearing liabilities	20,204,705			65,717		0.43		18,899,001			24,166		0.17
Noninterest-bearing deposits	12,582,869							11,950,003
Other liabilities	437,199							378,198
Shareholders' equity	3,545,418							3,401,450
Total liabilities and shareholders' equity	$	36,770,191						$	34,628,652
Interest rate spread						3.65	%						3.58	%
Net interest income and net yield on interest-earning assets				$	986,896	3.83	%				$	890,476	3.65	%

Loans and leases include PCI loans, non-PCI loans, nonaccrual loans and loans held for sale. Yields related to loans, leases and securities exempt from both federal and state income taxes, federal income taxes only, or state income taxes only are stated on a taxable-equivalent basis assuming statutory federal income tax rate of 21.0%, as well as state income tax rate of 3.4%, for both the nine months ended September 30, 2019 and September 30, 2018. The taxable-equivalent adjustment was $2,651 and $2,458 for the nine months ended September 30, 2019 and September 30, 2018, respectively.

47

Table 4

CHANGES IN CONSOLIDATED TAXABLE EQUIVALENT NET INTEREST INCOME

	Three months ended September 30, 2019									Nine months ended September 30, 2019
	Change from prior year period due to:									Change from prior year period due to:
(Dollars in thousands)	Volume(1)			Yield/Rate(1)			Total Change			Volume(1)			Yield/Rate(1)			Total Change
Assets
Loans and leases	$	22,560		$	20,193		$	42,753		$	62,481		$	61,314		$	123,795
Investment securities:
U. S. Treasury	(3,163		)	1,321			(1,842		)	(6,461		)	3,974			(2,487		)
Government agency	3,232			670			3,902			6,550			2,126			8,676
Mortgage-backed securities	(531		)	(738		)	(1,269		)	(2,639		)	3,056			417
Corporate bonds	370			(67		)	303			2,214			(351		)	1,863
State, county and municipal	—			—			—			(4		)	(3		)	(7		)
Other investments	94			293			387			149			677			826
Total investment securities	2			1,479			1,481			(191		)	9,479			9,288
Overnight investments	1,349			1,081			2,430			(1,048		)	5,936			4,888
Total interest-earning assets	$	23,911		$	22,753		$	46,664		$	61,242		$	76,729		$	137,971
Liabilities
Interest-bearing deposits:
Checking with interest	$	9		$	172		$	181		$	26		$	339		$	365
Savings	11			307			318			36			649			685
Money market accounts	76			5,088			5,164			84			13,002			13,086
Time deposits	1,056			9,871			10,927			2,074			24,186			26,260
Total interest-bearing deposits	1,152			15,438			16,590			2,220			38,176			40,396
Securities sold under customer repurchase agreements	(10		)	154			144			(17		)	214			197
Other short-term borrowings	(133		)	49			(84		)	(1,038		)	(102		)	(1,140		)
Long-term borrowings	1,161			(262		)	899			1,740			358			2,098
Total interest-bearing liabilities	2,170			15,379			17,549			2,905			38,646			41,551
Change in net interest income	$	21,741		$	7,374		$	29,115		$	58,337		$	38,083		$	96,420
(1) The rate/volume variance is allocated proportionally between the changes in volume and rate.

RESULTS OF OPERATIONS

Net Interest Income and Margin (Taxable-Equivalent Basis)

Third Quarter 2019 compared to Third Quarter 2018

Net interest income for the third quarter of 2019 totaled $336.4 million, an increase of $29.1 million, or 9.5%, compared to the third quarter of 2018. The taxable-equivalent NIM was 3.80% in the third quarter of 2019, an increase of 7 basis points from the same quarter in the prior year.

Average interest-earning assets increased by $2.41 billion to $35.29 billion, compared to the third quarter of 2018. The primary drivers for this change were higher average loan balances which increased $2.28 billion, primarily due to contributions from recent acquisitions and organic loan growth, particularly within the commercial and residential mortgage portfolios, and higher average overnight investments of $301.1 million. Offsetting these increases was a decline in average investment securities of $172.1 million. The yield on interest-earning assets increased by 26 basis points to 4.09% when compared to the third quarter of 2018. The yield on loans and leases increased to 4.65%, or by 26 basis points, primarily due to higher yields on commercial and residential loans. The yield on overnight investments and investment securities increased by 32 basis points and 14 basis points, respectively. Higher federal funds rates was the primary driver for the yield increase on overnight investments, while the higher yield on government agency and U.S. Treasury securities was the primary driver of the investment securities yield improvement.

Average interest-bearing liabilities increased by $1.77 billion to $20.55 billion, compared to the third quarter of 2018. This increase was primarily due to an increase in average interest-bearing deposit balances of $1.68 billion driven by contributions from recent acquisitions and organic deposit growth, as well as an increase in average long-term borrowings of $122.2 million. Rates on interest-bearing liabilities increased by 33 basis points to 0.50%, primarily due to increased rates paid on time deposits and money market accounts.

48

Nine Months of 2019 compared to Nine Months of 2018

Net interest income for the nine months ended September 30, 2019, was $984.2 million, an increase of $96.2 million, or 10.8%, compared to the same period of 2018. The taxable-equivalent NIM was 3.83% for the nine months ended September 30, 2019, an increase of 18 basis points from the same period of 2018.

Average year-to-date interest-earning assets for the nine months ended September 30, 2019, increased by $1.85 billion to $34.47 billion, compared to the same period in 2018. This increase was primarily due to a $2.18 billion increase in average outstanding loans due the impact of recent acquisitions and organic loan growth, particularly within the commercial and residential mortgage portfolios. These increases were partially offset by declines in average investment securities of $240.1 million and average overnight investments of $88.7 million. The yield on interest-earning assets increased by 33 basis points to 4.08% for the nine months ended September 30, 2019, compared to the same period in 2018. The yield on loans and leases increased by 27 basis points primarily due to an increase in yields on commercial and residential loans. The yield on overnight investments and the investment securities portfolio increased by 63 basis points and 25 basis points, respectively. Higher federal funds rates was the primary driver for the yield increase on overnight investments, while the higher yields on mortgage-backed securities, government agency securities, and U.S. Treasury securities were the primary drivers of the investment securities yield improvement.

Average year-to-date interest-bearing liabilities for the nine months ended September 30, 2019 increased by $1.31 billion to $20.20 billion, compared to the same period in 2018. This increase was primarily due to a $1.28 billion increase in average interest-bearing deposit balances driven by the impact of recent acquisitions, as well as organic growth, primarily in time deposits and money market accounts. The rate paid on interest-bearing liabilities increased by 26 basis points to 0.43% for the nine months ended September 30, 2019 compared to same period in 2018. The rate paid on interest-bearing deposits increased by 27 basis points due primarily to increased rates on time deposits and money market accounts. Rates on long-term borrowings increased by 12 basis points due to higher rates on borrowings assumed in recent acquisitions.

Although net interest margin has expanded in recent periods, management does not believe this trend will continue as new loan yields are declining due to changes in forward rate expectations and increased competition. This trend will likely result in margin compression for the remainder of 2019.

Provision for Loan and Lease Losses

BancShares recorded net provision expense of $6.8 million and $23.7 million for the three and nine months ended September 30, 2019 as compared to $0.8 million and $16.9 million, respectively, for the same periods in 2018. The fluctuations in provision expense were primarily due to methodology enhancements adopted in 2018 driven by sustained improvements in credit quality, as well as variances in loan growth between the periods and changes in portfolio composition and credit quality.

Noninterest Income

Table 5

NONINTEREST INCOME

	Three months ended						Nine months ended
(Dollars in thousands)	September 30, 2019			September 30, 2018			September 30, 2019		September 30, 2018
Cardholder services, net	$	15,957		$	14,678		$	51,069	$	44,385
Merchant services, net	6,034			5,857			18,324		18,512
Service charges on deposit accounts	27,112			25,994			77,967		78,489
Wealth management services	25,212			24,459			74,786		73,543
Realized gains on investment securities available for sale, net	1,136			—			6,855		—
Marketable equity securities (losses) gains, net	(967		)	3,854			13,505		9,265
Other service charges and fees	8,237			7,651			23,823		22,887
Mortgage income	7,438			4,123			16,134		13,063
Insurance commissions	2,960			2,755			9,105		9,471
ATM income	1,635			1,919			4,771		6,307
Gain on extinguishment of debt	—			703			—		26,517
Recoveries of PCI loans previously charged off	5,611			2,751			13,824		13,582
Other	565			(213		)	1,305		2,121
Total noninterest income	$	100,930		$	94,531		$	311,468	$	318,142

Noninterest income is an essential component of our total revenue and is critical to our ability to sustain adequate profitability levels. The primary sources of noninterest income consist of fees and service charges generated from deposit accounts, cardholder and merchant services, wealth management services, and mortgage lending and servicing.

49

Noninterest income for the third quarter of 2019 was $100.9 million, compared to $94.5 million for the same period of 2018, an increase of $6.4 million, or 6.8%. The most significant components of the change were as follows:

• Mortgage income increased by $3.3 million driven by increased refinance activity as mortgage rates declined.

• Recoveries on PCI loans previously charged off increased by $2.9 million.

• Income from cardholder services increased by $1.3 million due to higher interchange rates and transaction volumes, as well as cost savings achieved by converting to a new processor.

• Service charges on deposits accounts increased $1.1 million due to increase in volume.

• Realized gains on investment securities available for sale were $1.1 million for the third quarter of 2019, while no gains were recognized in the third quarter of 2018.

• Fair value adjustments on marketable equity securities declined by $4.8 million.

Noninterest income was $311.5 million for the first nine months of 2019, compared to $318.1 million for the same period of 2018, a decrease of $6.7 million, or 1.23%. The most significant components of the change were as follows:

• A $25.8 million gain on the extinguishment of debt was recognized 2018, while no gains were recognized in 2019. The gain was primarily due to the extinguishment of eight Federal Home Loan Bank debt obligations totaling $675.0 million.

• Realized gains on investment securities available for sale were $6.9 million in 2019; no gains were recognized in 2018.

• Income from cardholder services increased by $6.7 million due to higher transaction volumes and interchange rates, as well as cost savings achieved by converting to a new processor.

• Fair value adjustments on marketable equity securities increased by $4.2 million.

• Mortgage income increased by $3.1 million driven by increased refinance activity as mortgage rates declined.

• Service charges on deposit accounts and ATM income declined by $2.1 million due to reductions in acquired deposit balances and the temporary suspension of ATM fees at certain acquired locations.

Noninterest Expense

Table 6

NONINTEREST EXPENSE

	Three months ended				Nine months ended
(Dollars in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Salaries and wages	$	137,841	$	133,867	$	406,788	$	392,911
Employee benefits	28,358		28,850		91,090		90,656
Occupancy expense	28,163		26,632		82,810		80,686
Equipment expense	28,770		25,880		83,999		76,021
Processing fees paid to third parties	7,250		7,297		20,980		23,383
FDIC insurance expense	2,440		5,186		7,857		16,411
Collection and foreclosure-related expenses	3,044		4,269		9,725		12,389
Merger-related expenses	3,892		1,126		9,695		4,136
Telecommunications expense	2,391		2,832		6,825		8,176
Consultant expense	2,764		3,101		9,284		9,107
Advertising expense	2,937		2,713		8,431		7,806
Core deposit intangible amortization	4,049		4,366		12,529		12,876
Other	18,526		21,418		61,466		67,035
Total noninterest expense	$	270,425	$	267,537	$	811,479	$	801,593

50

The primary components of noninterest expense are salaries and related employee benefits, occupancy and equipment expense.

Noninterest expense was $270.4 million during the third quarter of 2019, compared to $267.5 million for the same period in 2018, an increase of $2.9 million, or 1.1%. The most significant components of the change were as follows:

• Personnel expense increased $3.5 million primarily due to an increase in salaries and wages as a result of merit increases and increased headcount from recent acquisitions.

• Equipment expense increased by $2.9 million primarily due to hardware and software additions.

• Merger-related expenses increased by $2.8 million primarily due to an increase in acquisition activity.

• Other noninterest expense decreased by $2.9 million primarily due to recoveries of previously recorded legal fees.

• FDIC insurance expense decreased $2.7 million primarily due to the discontinuation of the Deposit Insurance Fund surcharge on large banks.

Noninterest expense was $811.5 million for the first nine months of 2019, compared to $801.6 million for the same period in 2018, an increase of $9.9 million, or 1.2%. The most significant components of the change were as follows:

• Personnel expense increased by $14.3 million primarily due to an increase in salaries and wages as a result of merit increases and increased headcount from recent acquisitions.

• Equipment expense increased by $8.0 million primarily due to hardware and software additions.

• Merger-related expense increased by $5.6 million primarily due to an increase in acquisition activity.

• FDIC insurance expense decreased by $8.6 million primarily due to the discontinuation of the Deposit Insurance Fund surcharge on large banks.

• Other noninterest expense decreased by $5.6 million primarily due to a reduction in legal fees, in part due to recoveries of previously recorded expenses.

• Collection and foreclosure-related expense decreased by $2.7 million primarily due to reductions in the write downs of bank-owned properties.

• Processing fees paid to third parties decreased by $2.4 million primarily due to cost savings associated with the operational conversions of previously completed acquisitions.

Income Taxes

Income tax expense was $35.4 million and $16.2 million for the third quarter of 2019 and third quarter of 2018, respectively, representing effective tax rates of 22.1% and 12.1% during the periods. Income tax expense was $105.0 million and $76.8 million for the nine months ended September 30, 2019 and September 30, 2018, respectively, representing effective tax rates of 22.8% and 19.8% for the nine months periods.

The effective tax rate for the third quarter of 2019 was impacted by the 2018 tax return true-ups, while the effective rate decrease for the third quarter of the prior year was primarily due a $15.7 million income tax benefit to update the deferred tax asset revaluation resulting from the Tax Act.

We monitor and evaluate the potential impact of current events on the estimates used to establish income tax expenses and income tax liabilities. On a periodic basis, we evaluate our income tax positions based on current tax law, positions taken by various tax auditors within the jurisdictions where BancShares is required to file income tax returns, as well as potential or pending audits or assessments by tax auditors.

INTEREST-EARNING ASSETS

Interest-earning assets include investment securities, loans and leases, and overnight investments, all of which reflect varying interest rates based on the risk level and repricing characteristics of the underlying asset. Riskier investments typically carry a higher interest rate but expose us to higher levels of market risk. We strive to maintain a high level of interest-earning assets relative to total assets, while keeping non-earning assets at a minimum.

Interest-earning assets totaled $35.40 billion and $33.20 billion at September 30, 2019 and December 31, 2018, respectively. The $2.20 billion increase was primarily composed of a $1.67 billion increase in loans and leases, a $333.3 million increase in investment securities and a $152.5 million increase in overnight investments.

Investment Securities

The primary objective of the investment portfolio is to generate incremental income by deploying excess funds into securities that have minimal liquidity and credit risk, and low to moderate interest rate risk. Other objectives include acting as a stable source of

51

liquidity, serving as a tool for asset and liability management and maintaining an interest rate risk profile compatible with BancShares' objectives. Additionally, purchases of equities and corporate bonds in other financial institutions have been made largely under a long-term earnings optimization strategy. Changes in the total balance of our investment securities portfolio result from trends in balance sheet funding and market performance. Generally, when inflows arising from deposit and treasury services products exceed loan and lease demand, we invest excess funds into the securities portfolio or into overnight investments. Conversely, when loan demand exceeds growth in deposits and short-term borrowings, we allow any overnight investments to decline and use proceeds from maturing securities and prepayments to fund loan demand. See Note C in the Consolidated Financial Statements for additional disclosures regarding investment securities.

Investment securities totaled $7.17 billion at September 30, 2019, an increase of $333.3 million compared to December 31, 2018. The increase in the portfolio was primarily attributable to investment securities purchases of $3.95 billion partially offset by maturities/paydowns of $2.00 billion and sales of $1.76 billion.

As of September 30, 2019, investment securities available for sale had a net pre-tax unrealized gain of $6.1 million, compared to a net pre-tax unrealized loss of $50.0 million as of December 31, 2018. After evaluating the available for sale securities with unrealized losses, management concluded that the unrealized losses relate to changes in interest rates relative to when the securities were purchased, and therefore, no other than temporary impairment existed as of September 30, 2019. Available for sale securities are reported at fair value and unrealized gains and losses were included as a component of AOCI, net of deferred taxes.

Table 7

INVESTMENT SECURITIES

	September 30, 2019						December 31, 2018
(Dollars in thousands)	Composition(1)		Cost		Fair value		Composition(1)		Cost		Fair value
Investment securities available for sale
U.S. Treasury	10.4	%	$	748,206	$	749,318	18.2	%	$	1,249,243	$	1,247,710
Government agency	9.2		666,029		665,621		3.7		257,252		256,835
Mortgage-backed securities	46.0		3,329,593		3,332,619		42.5		2,956,793		2,909,339
Corporate bonds	2.2		154,943		157,325		2.1		143,829		143,226
Total investment securities available for sale	67.8		4,898,771		4,904,883		66.5		4,607,117		4,557,110
Investment in marketable equity securities	1.6		87,588		116,854		1.4		73,809		92,599
Investment securities held to maturity
Mortgage-backed securities	30.2		2,115,141		2,186,998		32.1		2,184,653		2,201,502
Other	0.4		30,802		30,802		—		—		—
Total investment securities held to maturity	30.6		2,145,943		2,217,800		32.1		2,184,653		2,201,502
Total investment securities	100.0	%	$	7,132,302	$	7,239,537	100.0	%	$	6,865,579	$	6,851,211
(1) Calculated as a percent of the total fair value of investment securities.

Loans and Leases

Loans and leases were $27.20 billion at September 30, 2019, a net increase of $1.67 billion, representing annualized growth of 9.5% since December 31, 2018. This increase was driven by a $1.77 billion net increase in the non-PCI portfolio, partially offset by a $93.0 million decline in the PCI loan portfolio. The net increase in the non-PCI portfolio was due to $989.9 million in loans acquired from Biscayne Bancshares and First South Bancorp, as well as organic growth primarily in the commercial mortgage and residential mortgage portfolios. PCI loans from acquisitions prior to 2019 decreased $119.0 million, offset by $26.0 million of additional PCI loans from Biscayne Bancshares and First South Bancorp. Excluding 2019 acquired loans, total loans grew by 3.4% on an annualized basis.

BancShares reports non-PCI and PCI loan portfolios separately, and the non-PCI portfolio is further divided into commercial and non-commercial. Non-PCI loans and leases at September 30, 2019 were $26.68 billion, representing 98.1% of total loans and leases, compared to $24.92 billion or 97.6% at December 31, 2018. PCI loans at September 30, 2019 were $513.6 million, representing 1.9% of total loans and leases, compared to $606.6 million or 2.4% at December 31, 2018.

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The discount related to acquired non-PCI loans and leases at September 30, 2019 and December 31, 2018 was $32.2 million and $33.3 million, respectively. The discount related to PCI loans at September 30, 2019 and December 31, 2018 was $85.0 million and $95.5 million, respectively.

Table 8

LOANS AND LEASES

(Dollars in thousands)	September 30, 2019			December 31, 2018
Non-PCI loans and leases:
Commercial:
Construction and land development	$	943,747		$	757,854
Commercial mortgage	11,453,353			10,717,234
Other commercial real estate	491,063			426,985
Commercial and industrial and leases	4,129,384			3,938,730
Other	301,791			296,424
Total commercial loans	17,319,338			16,137,227
Noncommercial:
Residential mortgage	4,869,562			4,265,687
Revolving mortgage	2,414,884			2,542,975
Construction and land development	321,903			257,030
Consumer	1,757,235			1,713,781
Total noncommercial loans	9,363,584			8,779,473
Total non-PCI loans and leases	$	26,682,922		$	24,916,700
Total PCI loans	513,589			606,576
Total loans and leases	27,196,511			25,523,276
Less allowance for loan and lease losses	(226,825		)	(223,712		)
Net loans and leases	$	26,969,686		$	25,299,564

ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL)

The ALLL was $226.8 million at September 30, 2019, representing an increase of $3.1 million since December 31, 2018. The ALLL as a percentage of total loans and leases was 0.83% at September 30, 2019, compared to 0.88% December 31, 2018.

At September 30, 2019, the ALLL allocated to total non-PCI loans and leases was $220.0 million, or 0.82% of non-PCI loans and leases, compared to $214.6 million, or 0.86%, at December 31, 2018. The decrease of 4 basis points since December 31, 2018 was primarily due to changes in portfolio mix and sustained credit quality in the Construction and Land Development portfolio, partially offset by credit quality declines in other portfolios and increases in specific reserves.

At September 30, 2019, the ALLL for PCI loans totaled $6.9 million compared to $9.1 million at December 31, 2018. The decrease was primarily due to continued PCI loan portfolio run-off and improving cash flow estimates.

Net charge-offs for non-PCI loans and leases were $6.5 million during the third quarter of 2019, and the third quarter of 2018. On an annualized basis, total net charge-offs as a percentage of total average loans and leases was 0.10% for both the third quarter of 2019 and 2018. The net charge-off ratio was and 0.11% and 0.10% for the nine months ended September 30, 2019 and 2018, respectively.

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Table 9

ALLOWANCE FOR LOAN AND LEASE LOSSES

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Allowance for loan and lease losses at beginning of period	$	226,583		$	224,865		$	223,712		$	221,893
Non-PCI provision for loan and lease losses	8,242			2,354			25,991			15,883
PCI (credit) provision for loan losses	(1,476		)	(1,514		)	(2,277		)	1,000
Non-PCI Charge-offs:
Commercial:
Construction and land development	(116		)	(35		)	(188		)	(43		)
Commercial mortgage	(1		)	(606		)	(851		)	(1,111		)
Other commercial real estate	—			—			—			(69		)
Commercial and industrial and leases	(3,047		)	(2,106		)	(8,327		)	(6,874		)
Other	(42		)	(56		)	(73		)	(98		)
Total commercial	(3,206		)	(2,803		)	(9,439		)	(8,195		)
Noncommercial:
Residential mortgage	(313		)	(360		)	(957		)	(1,455		)
Revolving mortgage	(534		)	(759		)	(1,990		)	(2,778		)
Construction and land development	—			—			—			(219		)
Consumer	(5,594		)	(5,525		)	(18,017		)	(16,092		)
Total noncommercial	(6,441		)	(6,644		)	(20,964		)	(20,544		)
Total non-PCI charge-offs	(9,647		)	(9,447		)	(30,403		)	(28,739		)
Non-PCI Recoveries:
Commercial:
Construction and land development	52			136			223			252
Commercial mortgage	226			99			502			563
Other commercial real estate	—			1			1			147
Commercial and industrial and leases	611			497			1,748			2,399
Other	20			117			685			160
Total commercial	909			850			3,159			3,521
Noncommercial:
Residential mortgage	68			128			293			315
Revolving mortgage	201			712			1,035			1,426
Construction and land development	—			—			—			127
Consumer	1,945			1,249			5,315			3,888
Total noncommercial	2,214			2,089			6,643			5,756
Total non-PCI recoveries	3,123			2,939			9,802			9,277
Non-PCI loans and leases charged off, net	(6,524		)	(6,508		)	(20,601		)	(19,462		)
PCI loans charged off, net	—			—			—			(117		)
Allowance for loan and lease losses at end of period	$	226,825		$	219,197		$	226,825		$	219,197
Reserve for unfunded commitments	$	1,097		$	1,089		$	1,097		$	1,089

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Table 10

ALLOWANCE FOR LOAN AND LEASE LOSSES RATIOS

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Average loans and leases:
PCI	$	530,390		$	652,983		$	551,065		$	689,482
Non-PCI	26,379,156			24,045,816			25,762,098			23,504,388
Loans and leases at period-end:
PCI	513,589			638,018			513,589			638,018
Non-PCI	26,682,922			24,248,329			26,682,922			24,248,329
Allowance for loan and lease losses allocated to loans and leases:
PCI	6,867			10,909			6,867			10,909
Non-PCI	219,958			208,288			219,958			208,288
Total	$	226,825		$	219,197		$	226,825		$	219,197
Net charge-offs (annualized) to average loans and leases:
PCI	—		%	—		%	—		%	0.02		%
Non-PCI	0.10			0.11			0.11			0.11
Total	0.10			0.10			0.10			0.11
ALLL to total loans and leases:
PCI	1.34			1.71			1.34			1.71
Non-PCI	0.82			0.86			0.82			0.86
Total	0.83			0.88			0.83			0.88

NONPERFORMING ASSETS

Nonperforming assets include nonaccrual loans and leases and other real estate owned (OREO). At September 30, 2019, BancShares’ nonperforming assets totaled $155.9 million, an increase of $22.0 million since December 31, 2018.

Nonaccrual loans and leases at September 30, 2019 were $109.6 million, reflecting an increase of $23.8 million since December 31, 2018. The increase was primarily due to new nonaccrual loans within the commercial mortgage portfolio. Despite this increase, the credit quality of the portfolio remains in line with our risk tolerances and management has not identified significant increases in portfolio risk. At September 30, 2019, OREO totaled $46.3 million, representing a decline of $1.8 million since December 31, 2018 as sales and write-downs of assets outpaced additions.

Table 11

NONPERFORMING ASSETS

	2019									2018
	Third			Second			First			Fourth			Third
(Dollars in thousands)	Quarter			Quarter			Quarter			Quarter			Quarter
Nonaccrual loans and leases:
Non-PCI	$	108,816		$	100,701		$	88,958		$	84,546		$	85,419
PCI	829			4,274			1,667			1,276			1,530
Other real estate owned	46,253			46,236			43,306			48,030			43,601
Total nonperforming assets	$	155,898		$	151,211		$	133,931		$	133,852		$	130,550
Accruing loans and leases 90 days or more past due
Non-PCI	$	4,247		$	3,468		$	3,493		$	2,888		$	2,640
PCI	23,287			29,319			33,981			37,020			38,073
Ratio of total nonperforming assets to total loans, leases and other real estate owned	0.57		%	0.57		%	0.53		%	0.52		%	0.52		%

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TROUBLED DEBT RESTRUCTURINGS (TDRs)

We selectively agree to modify existing loan terms to provide relief to customers who are experiencing financial difficulties or other circumstances that could affect their ability to meet debt obligations. Typical modifications include short-term deferral of interest or modification of payment terms. TDRs that were not accruing interest at the time of restructure are included as nonperforming loans. TDRs that were accruing at the time of restructure and continue to perform based on the restructured terms are considered performing loans. Loans acquired under ASC 310-30 (PCI Loans), excluding pooled loans, are not initially considered to be TDRs, but can be classified as such if a modification is made subsequent to acquisition. Subsequent modification of a PCI loan accounted for in a pool that would otherwise meet the definition of a TDR is not reported, or accounted for, as a TDR since pooled PCI loans are excluded from the scope of TDR accounting.

Table 12

TROUBLED DEBT RESTRUCTURINGS

(Dollars in thousands)	September 30, 2019		December 31, 2018
Accruing TDRs:
Non-PCI	$	107,070	$	108,992
PCI	17,346		18,101
Total accruing TDRs	124,414		127,093
Nonaccruing TDRs:
Non-PCI	36,846		28,918
PCI	54		119
Total nonaccruing TDRs	36,898		29,037
All TDRs:
Non-PCI	143,916		137,910
PCI	17,400		18,220
Total TDRs	$	161,312	$	156,130

INTEREST-BEARING LIABILITIES

Interest-bearing liabilities include interest-bearing deposits, securities sold under customer repurchase agreements, FHLB borrowings, subordinated debentures, and other borrowings. Interest-bearing liabilities totaled $20.75 billion at September 30, 2019, compared to $19.68 billion at December 31, 2018. The $1.07 billion increase was due an increase in interest-bearing deposits of $986.6 million and an increase in other borrowings of $98.2 million, partially offset by a decrease in customer repurchase agreements of $21.7 million.

Deposits

Due to our focus on maintaining a strong liquidity position, core deposit retention remains a key business objective. We believe that traditional bank deposit products remain an attractive option for many customers but, as economic conditions improve, we recognize that our liquidity position could be adversely affected as bank deposits are withdrawn and invested elsewhere. Our ability to fund future loan growth is significantly dependent on our success at retaining existing deposits and generating new deposits at a reasonable cost.

At September 30, 2019, total deposits were $32.74 billion, an increase of $2.07 billion, representing annualized growth of 9.0% since December 31, 2018. Excluding acquired deposits totaling $1.02 billion, deposits increased $1.05 billion, or by 4.6% annualized, over the same time period. This organic growth was primarily the result of increases in demand and time deposit accounts partially offset by a decline in money markets.

Table 13

DEPOSITS

(Dollars in thousands)	September 30, 2019		December 31, 2018
Demand	$	12,966,890	$	11,882,670
Checking with interest	5,488,182		5,338,511
Money market	8,093,306		8,194,818
Savings	2,626,182		2,499,750
Time	3,568,717		2,756,711
Total deposits	$	32,743,277	$	30,672,460

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Borrowings

At September 30, 2019, total borrowings were $976.1 million compared to $892.2 million at December 31, 2018. The $83.9 million increase from December 31, 2018 was primarily due to an increase in other borrowings of $98.2 million related to a new term loan in the third quarter of 2019.

Table 14

BORROWINGS

(Dollars in thousands)	September 30, 2019		December 31, 2018
Securities sold under customer repurchase agreements	$	522,195	$	543,936
Federal Home Loan Bank borrowings	192,672		193,556
Subordinated debentures
SCB Capital Trust I	9,730		9,701
FCB/SC Capital Trust II	17,499		17,401
FCB/NC Capital Trust III	88,145		88,145
Capital Trust debentures assumed in acquisitions	—		4,124
Other subordinated debentures	33,677		21,370
Total subordinated debentures	149,051		140,741
Other borrowings	112,153		13,921
Total borrowings	$	976,071	$	892,154

BancShares owns five special purpose entities – FCB/NC Capital Trust III, FCB/SC Capital Trust II, SCB Capital Trust I, CCBI Capital Trust I, and FSBS Capital Trust I (the Trusts), which mature in 2036, 2034, 2034, 2036, and 2034, respectively. Subordinated debentures included junior subordinated debentures representing obligations to the Trusts, which may be redeemed at par in whole or in part at any time. BancShares has guaranteed all obligations of the Trusts.

During the nine months ended September 30, 2019, FCB redeemed, in whole, all obligations related to CCBI Capital Trust I and FSBS Capital Trust I.

SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY

The table below shows activities that caused the change in outstanding Class A common stock over the past five quarters.

During the third quarter of 2019, BancShares repurchased 295,900 shares of Class A common stock for $135.4 million at an average cost per share of $457.50. During the first nine months of 2019, BancShares repurchased a total of 744,400 shares of Class A common stock for $325.9 million at an average cost per share of $437.84. During the three and nine months ended September 30, 2018, BancShares repurchased a total of 125,000 shares of Class A common stock for $58.1 million at an average cost per share of $464.68. All Class A common stock repurchases completed in 2019 and 2018 were consummated under previously approved authorizations.

Subsequent to quarter-end through October 31, 2019, BancShares repurchased an additional 146,100 shares of Class A common stock for $69.1 million at an average cost per share of $472.94.

Table 15

CHANGES IN SHARES OF CLASS A COMMON STOCK OUTSTANDING

	2019						2018
	Third		Second		First		Fourth		Third
(in thousands)	Quarter		Quarter		Quarter		Quarter		Quarter
Class A shares outstanding at beginning of period	10,175		10,380		10,623		10,880		11,005
Repurchases	(296	)	(205	)	(243	)	(257	)	(125	)
Class A shares outstanding at end of period	9,879		10,175		10,380		10,623		10,880

We are committed to effectively managing our capital to protect our depositors, creditors and shareholders. We continually monitor the capital levels and ratios for BancShares and FCB to ensure they exceed the minimum requirements imposed by regulatory authorities and to ensure they are appropriate given growth projections, risk profile and potential changes in the regulatory or external environment. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our consolidated financial statements.

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In accordance with accounting principles generally accepted in the United States of America (GAAP), the unrealized gains and losses on certain assets and liabilities, net of deferred taxes, are included in accumulated other comprehensive loss within shareholders' equity. These amounts are excluded from shareholders' equity in the calculation of our capital ratios under current regulatory guidelines.

Table 16

ANALYSIS OF CAPITAL ADEQUACY

	Requirements to be well-capitalized		September 30, 2019				December 31, 2018
(Dollars in thousands)			Amount		Ratio		Amount		Ratio
BancShares
Risk-based capital ratios
Tier 1 risk-based capital	8.00	%	$	3,424,657	11.80	%	$	3,463,307	12.67	%
Common equity Tier 1	6.50		3,424,657		11.80		3,463,307		12.67
Total risk-based capital	10.00		3,799,579		13.09		3,826,626		13.99
Tier 1 leverage ratio	5.00		3,424,657		9.18		3,463,307		9.77
FCB
Risk-based capital ratios
Tier 1 risk-based capital	8.00	%	$	3,504,390	12.09	%	$	3,315,742	12.17	%
Common equity Tier 1	6.50		3,504,390		12.09		3,315,742		12.17
Total risk-based capital	10.00		3,774,812		13.03		3,574,561		13.12
Tier 1 leverage ratio	5.00		3,504,390		9.42		3,315,742		9.39

As of September 30, 2019, BancShares and FCB continued to exceed minimum capital standards and remained well-capitalized under Basel III guidelines. Trust preferred capital securities continue to be a component of total risk-based capital.

The capital conservation buffer introduced under Basel III became fully phased in at January 1, 2019 at 2.50%. BancShares and FCB had capital conservation buffers of 5.09% and 5.03%, respectively, at September 30, 2019, which exceeded the 2.50% requirement and, therefore, result in no limit on distributions.

RISK MANAGEMENT

Risk is inherent in any business. BancShares has defined a moderate risk appetite, a conservative approach to risk taking, with a philosophy that does not preclude higher risk business activities balanced with acceptable returns while meeting regulatory objectives. Through the comprehensive Enterprise Risk Management Framework and Risk Appetite Framework, senior management has primary responsibility for day-to-day management of the risks we face with accountability of and support from all associates. Senior management applies various strategies to reduce the risks to which BancShares activities may be exposed, with effective challenge and oversight by management committees. In addition, the Board of Directors strives to ensure that the business culture is integrated with the enterprise risk management program and that policies, procedures and metrics for identifying, assessing, measuring, monitoring and managing risk are part of the decision-making process. The Board of Directors’ role in risk oversight is an integral part of our overall Enterprise Risk Management Framework and Risk Appetite Framework.  The Board of Directors administers its risk oversight function primarily through the Board Risk Committee.

The Board Risk Committee structure is designed to allow for information flow, effective challenge and timely escalation of risk-related issues. The Board Risk Committee is directed to monitor and advise the Board of Directors regarding risk exposures, including credit, market, capital, liquidity, operational, compliance, strategic and reputational risks; review, approve, and monitor adherence to the risk appetite and supporting risk tolerance levels via a series of established metrics; and evaluate, monitor and oversee the adequacy and effectiveness of the Risk Management Framework and Risk Appetite Framework. The Board Risk Committee also reviews: reports of examination by and communications from regulatory agencies; the results of internal and third party testing and qualitative and quantitative assessments related to risk management; and any other matters within the scope of the Committee’s oversight responsibilities. The Board Risk Committee monitors management's response to certain risk-related regulatory and audit issues. In addition, the Board Risk Committee may coordinate with the Audit Committee and the Compensation, Nominations and Governance Committee for the review of financial statements and related risks, information security and other areas of joint responsibility.

In combination with other risk management and monitoring practices, enterprise-wide stress testing activities are part of the Risk Management Framework and conducted within a defined framework. Stress tests are performed for various risks to ensure the financial institution can support continued operations during stressed periods.

58

Credit risk management

Credit risk is the risk of not collecting payments pursuant to the contractual terms of loans, leases and certain investment securities. Loans and leases we originate are underwritten in accordance with our credit policies and procedures and are subject to periodic ongoing reviews. Acquired loans, regardless of whether PCI or non-PCI, are recorded at fair value as of the acquisition date and are subject to periodic reviews to identify any further credit deterioration. Our independent credit review function conducts risk reviews and analyses of both originated and acquired loans to ensure compliance with credit policies and to monitor asset quality trends and borrower financial strength. These reviews include portfolio analysis by geographic location, industry, collateral type and product. We strive to identify potential problem loans as early as possible, to record charge-offs or write-downs as appropriate and to maintain an adequate ALLL that accounts for losses that are inherent in the loan and lease portfolio.

Interest rate risk management

Interest rate risk (IRR) results principally from: assets and liabilities maturing or repricing at different points in time, assets and liabilities repricing at the same point in time but in different amounts, and short-term and long-term interest rates changing in different magnitudes.

We assess our short-term IRR by forecasting net interest income over 24 months under various interest rate scenarios and comparing those results to forecasted net interest income, assuming stable rates. IRR scenarios modeled, include, but are not limited to, immediate, parallel rate shocks, interest rate ramps, changes in the shape of the yield curve and changes in the relationships of our rates to market rates. While market interest rates peaked in November 2018, interest-bearing deposit rates have continued to see upward pressure due to rate specials and acquisitions. Despite this trend, overall rates remain relatively low and, as such, it is unlikely these rates will decline materially from current levels. Additionally, our projections incorporate assumptions of customer migration from low rate deposit instruments to intermediate term fixed rate instruments as rates rise.

Table 17 provides the impact on net interest income over 24 months resulting from various instantaneous interest rate shock scenarios as of September 30, 2019 and December 31, 2018.

Table 17

NET INTEREST INCOME SENSITIVITY ANALYSIS

	Estimated percentage increase (decrease) in net interest income
Change in interest rate (basis points)	September 30, 2019		December 31, 2018
-100	(10.53	)%	(10.67	)%
+100	4.23		2.38
+200	5.93		1.66

Net interest income sensitivity metrics at September 30, 2019 compared to December 31, 2018 were primarily affected by a reduction in both the number of offerings and promotional rates paid on time deposits. Additionally, as market interest rates have continued to fall throughout 2019, prepayment speeds have increased leading to an increase in loan interest income under positive rate shocks.

Long-term interest rate risk exposure is measured using the economic value of equity (EVE) sensitivity analysis to study the impact of long-term cash flows on earnings and capital. EVE represents the difference between the sum of the present value of all asset cash flows and the sum of the present value of the liability cash flows. EVE sensitivity analysis involves discounting cash flows of balance sheet items under different interest rate scenarios. Cash flows will vary by interest rate scenario, resulting in variations in EVE. The base-case measurement and its sensitivity to shifts in the yield curve allow management to measure longer-term repricing and option risk in the balance sheet.

Table 18 table presents the EVE profile as of September 30, 2019 and December 31, 2018.

Table 18

ECONOMIC VALUE OF EQUITY MODELING ANALYSIS

	Estimated percentage increase (decrease) in EVE
Change in interest rate (basis points)	September 30, 2019		December 31, 2018
-100	(12.32	)%	(15.14	)%
+100	3.57		3.34
+200	0.96		1.40

The economic value of equity metrics at September 30, 2019 compared to December 31, 2018 were primarily affected by strong growth in non-interest demand deposits coupled with an increase in interest-earning cash balances.

We do not typically utilize interest rate swaps, floors, collars or other derivative financial instruments to hedge our overall balance sheet interest rate sensitivity and risk.

59

Liquidity risk management

Liquidity risk is the risk that an institution will be unable to generate or obtain sufficient cash or its equivalents on a cost-effective basis to meet commitments as they fall due. The most common sources of liquidity risk arise from mismatches in the timing and value of on-balance sheet and off-balance sheet cash inflows and outflows. In general, on-balance sheet mismatches generate liquidity risk when the effective maturity of assets exceeds the effective maturity of liabilities. A commonly cited example of a balance sheet liquidity mismatch is when long-term loans (assets) are funded with short-term borrowings (liabilities). Other forms of liquidity risk include market constraints on the ability to convert assets into cash at expected levels, an inability to access funding sources at sufficient levels at a reasonable cost, and changes in economic conditions or exposure to credit, market, operational, legal and reputation risks that can affect an institution’s liquidity risk profile.

We utilize various limit-based measures to monitor, measure and control three different categories of liquidity risk:

• Tactical - Measures the risk of a negative cash flow position whereby cash outflows exceed cash inflows over a short-term horizon out to nine weeks;

• Structural - Measures the amount by which illiquid assets are supported by long-term funding; and

• Contingent - Measures the risk of having insufficient liquidity sources to support cash needs under potential future stressed market conditions or having an inability to access wholesale funding sources in a timely and cost effective manner.

We aim to maintain a diverse mix of liquidity sources to support the liquidity management function, while aiming to avoid funding concentrations by diversifying our external funding with respect to maturities, counterparties and nature. Our primary source of liquidity is our retail deposit book due to the generally stable balances and low cost it offers. Additional sources include cash in excess of our reserve requirement at the Federal Reserve Bank, and various other corresponding bank accounts and unencumbered securities, which totaled $4.05 billion at September 30, 2019 compared to $3.11 billion at December 31, 2018. Another source of available funds was advances from the FHLB of Atlanta and Chicago. Outstanding FHLB advances were $192.7 million as of September 30, 2019, and we had sufficient collateral pledged to secure $6.35 billion of additional borrowings from the FHLB of Atlanta and Chicago. Also, at September 30, 2019, $3.47 billion in non-PCI loans with a lendable collateral value of $2.78 billion were used to create additional borrowing capacity at the Federal Reserve Bank. We also maintain Federal Funds lines and other credit lines, which had $615.0 million of available capacity at September 30, 2019.

CRITICAL ACCOUNTING ESTIMATES

There have been no significant changes in our Critical Accounting Estimates as described in our 2018 Annual Report on Form 10‑K.

FORWARD-LOOKING STATEMENTS

Statements in this Report and Exhibits relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, expectations or beliefs about future events or results and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include, but are not limited to, factors discussed in our Annual Report on Form 10-K and in other documents filed by us from time to time with the Securities and Exchange Commission.

Forward-looking statements may be identified by terms such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “forecasts,” “projects,” “potential” or “continue,” or similar terms or the negative of these terms, or other statements concerning opinions or judgments of BancShares’ management about future events.

Factors that could influence the accuracy of those forward-looking statements include, but are not limited to, the financial success or changing strategies of our customers, customer acceptance of our services, products and fee structure, the competitive nature of the financial services industry, our ability to compete effectively against other financial institutions in our banking markets, actions of government regulators, the level of market interest rates and our ability to manage our interest rate risk, changes in general economic conditions that affect our loan and lease portfolio, the abilities of our borrowers to repay their loans and leases, the values of real estate and other collateral, the impact of the acquisitions, the risks discussed in Part II, Item 1A. Risk Factors and other developments or changes in our business that we do not expect.

Actual results may differ materially from those expressed in or implied by any forward-looking statements. Except to the extent required by applicable law or regulation, BancShares undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

60

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential economic loss resulting from changes in market prices and interest rates. This risk can either result in diminished current fair values of financial instruments or reduced net interest income in future periods. As of September 30, 2019, BancShares’ market risk profile has not changed significantly from December 31, 2018 as discussed in the Form 10-K. Changes in fair value that result from movement in market rates cannot be predicted with any degree of certainty. Therefore, the impact that future changes in market rates will have on the fair values of financial instruments is uncertain.

Item 4.    Controls and Procedures

BancShares' management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of BancShares' disclosure controls and procedures as of the end of the period covered by this Quarterly Report, in accordance with Rule 13a-15 of the Securities Exchange Act of 1934 (Exchange Act). Based upon that evaluation, as of the end of the period covered by this report, the Chief Executive Officer and the Chief Financial Officer concluded that BancShares' disclosure controls and procedures were effective to provide reasonable assurance that it is able to record, process, summarize and report in a timely manner the information required to be disclosed in the reports it files under the Exchange Act.

No changes in BancShares' internal control over financial reporting occurred during the third quarter of 2019 that have materially affected, or are reasonably likely to materially affect, BancShares' internal control over financial reporting.

PART II

Item 1. Legal Proceedings

BancShares and various subsidiaries have been named as defendants in various legal actions arising from our normal business activities in which damages in various amounts were claimed. Although the amount of any ultimate liability with respect to those matters cannot be determined, in the opinion of management, no legal actions currently exist that are expected to have a material effect on BancShares’ consolidated financial statements. Additional information relating to legal proceedings is set forth in Note L of BancShares' Notes to Unaudited Consolidated Financial Statements.

Item 1A. Risk Factors

There have been no material changes from risk factors described in our annual Form 10-K for the year ended December 31, 2018. The risks described may not be the only risks facing us. Additional risks and uncertainties not currently known to us or that are currently considered to not be material also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Information concerning BancShares' repurchases of outstanding common stock during the three month period ended September 30, 2019, is included in the following table:

Class A common stock	Total Number of Class A Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
Purchases from July 1, 2019 to July 31, 2019	59,600	$	456.09	59,600	740,400
Purchases from August 1, 2019 to August 31, 2019	100,300	442.12		100,300	640,100
Purchases from September 1, 2019 to September 30, 2019	136,000	469.45		136,000	504,100
Total	295,900	$	457.50	295,900	504,100

In April 2019, the Board authorized the repurchase of up to 800,000 of BancShares' Class A common stock for the period July 1, 2019 through June 30, 2020. This authorization was effective July 1, 2019 and supersedes the previous authorization approved in October 2018. In October 2019, the Board authorized the repurchase of up to 500,000 shares of BancShares' Class A common stock for the period November 1, 2019 through January 31, 2020. This authorization supersedes all previously approved authorities.

Subsequent to quarter-end and through October 31, 2019, BancShares repurchased an additional 146,100 shares of Class A common stock for $69.1 million at an average cost per share of $472.94.

61

Item 6. Exhibits

31.1	Certification of Chief Executive Officer (filed herewith)
31.2	Certification of Chief Financial Officer (filed herewith)
32.1	Certification of Chief Executive Officer (filed herewith)
32.2	Certification of Chief Financial Officer (filed herewith)
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

62

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

Date:	November 5, 2019		FIRST CITIZENS BANCSHARES, INC.
			(Registrant)
		By:	/s/ CRAIG L. NIX
			Craig L. Nix
			Chief Financial Officer

63

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Frank B. Holding, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Citizens BancShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2019

/s/ Frank B. Holding, Jr.

Frank B. Holding, Jr.

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Craig L. Nix, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Citizens BancShares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2019

/s/ Craig L. Nix

Craig L. Nix

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

The undersigned hereby certifies that (i) the Form 10-Q filed by First Citizens BancShares, Inc. (the “Issuer”) for the period ended September 30, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

November 5, 2019

/s/ Frank B. Holding, Jr.

Frank B. Holding, Jr.

Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

The undersigned hereby certifies that (i) the Form 10-Q filed by First Citizens BancShares, Inc. (the “Issuer”) for the period ended September 30, 2019, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in that report fairly presents, in all material respects, the financial condition and results of operations of the Issuer on the dates and for the periods presented therein.

November 5, 2019

/s/ Craig L. Nix

Craig L. Nix

Chief Financial Officer

XML

Accumulated Other Comprehensive Income (Loss) (Components of AOCI) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive loss		$ 5,933	$ 7,698	$ 14,926	$ 16,526
Net current period other comprehensive income		8,959	(2,937)	63,415	(75,230)
Unrealized Losses on Investment Securities Available for Sale
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	[1]	2,554	(57,496)	(38,505)	(30,945)
Cumulative effect of new accounting principle in period of adoption	[1],[2]					$ (29,751)
Adjusted beginning balance	[1]					(60,696)
Net unrealized gains arising during period	[1]	3,026	(10,635)	48,489	(7,435)
Amounts reclassified from accumulated other comprehensive loss	[1]	(874)	0	(5,278)	0
Net current period other comprehensive income	[1]	2,152	(10,635)	43,211	(7,435)
Ending balance	[1]	4,706	(68,131)	4,706	(68,131)
Unrealized Losses On Securities Available For Sale Transferred To Held To Maturity
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	[1]	(61,979)	(80,876)	(71,149)	0
Cumulative effect of new accounting principle in period of adoption	[1],[2]					0
Adjusted beginning balance	[1]					0
Net unrealized gains arising during period	[1]	0	0	0	(84,321)
Amounts reclassified from accumulated other comprehensive loss	[1]	4,693	5,007	13,863	8,452
Net current period other comprehensive income	[1]	4,693	5,007	13,863	(75,869)
Ending balance	[1]	(57,286)	(75,869)	(57,286)	(75,869)
Defined Benefit Pension Items
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	[1]	(121,306)	(106,266)	(125,533)	(91,349)
Cumulative effect of new accounting principle in period of adoption	[1],[2]					(20,300)
Adjusted beginning balance	[1]					(111,649)
Net unrealized gains arising during period	[1]	0	0	0	0
Amounts reclassified from accumulated other comprehensive loss	[1]	2,114	2,691	6,341	8,074
Net current period other comprehensive income	[1]	2,114	2,691	6,341	8,074
Ending balance	[1]	(119,192)	(103,575)	(119,192)	(103,575)
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		(180,731)	(244,638)	(235,187)	(122,294)
Cumulative effect of new accounting principle in period of adoption	[2]					(50,051)
Adjusted beginning balance						$ (172,345)
Net unrealized gains arising during period		3,026	(10,635)	48,489	(91,756)
Amounts reclassified from accumulated other comprehensive loss		5,933	7,698	14,926	16,526
Net current period other comprehensive income		8,959	(2,937)	63,415	(75,230)
Ending balance		$ (171,772)	$ (247,575)	$ (171,772)	$ (247,575)

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

[2] ⁽²⁾ Cumulative adjustments for adoption of ASU 2018-02 of $31.3 million and ASU 2016-01 of $18.7 million.

XML

Employee Benefit Plans (Components Of Pension Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
BancShares Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 2,628	$ 3,396	$ 7,886	$ 10,187
Interest cost	7,557	7,093	22,669	21,281
Expected return on assets	(12,876)	(11,966)	(38,629)	(35,899)
Amortization of prior service cost	15	19	43	59
Amortization of net actuarial loss	2,099	3,398	6,297	10,192
Total pension expense	(577)	1,940	(1,734)	5,820
Bancorporation Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	563	643	1,689	1,929
Interest cost	1,759	1,588	5,276	4,767
Expected return on assets	(2,771)	(3,106)	(8,314)	(9,322)
Amortization of net actuarial loss	631	78	1,895	235
Total pension expense	$ 182	$ (797)	$ 546	$ (2,391)

XML

Leases (Remaining Weighted Average Lease Terms and Discounts Rates) (Details)	Sep. 30, 2019
Leases [Abstract]
Weighted average remaining lease term, operating	10 years 3 months 18 days
Weighted average remaining lease term, finance	4 years 10 months 24 days
Weighted average discount rate, operating	3.22%
Weighted average discount rate, finance	3.07%

XML

FDIC Shared-Loss Receivable (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
FDIC Shared-Loss Receivable [Abstract]
Loans and Leases Receivable, Gross, Carrying Amount, Covered	$ 47,300
FDIC shared-loss payable	$ 110,586	$ 105,618

XML

Loans and Leases (Changes In Carrying Amount Of Accretable Yield) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Accretable yield	$ 260,179	$ 323,202	$ 260,179	$ 323,202	$ 312,894	$ 316,679
Accretion	$ (16,200)	$ (13,500)	(45,891)	(45,699)
Reclassifications from nonaccretable difference			6,156	5,866
Changes in expected cash flows that do not affect nonaccretable difference			(21,757)	42,214
2019 Acquisitions
Business Acquisition [Line Items]
Additions from acquisitions			$ 8,777	0
HomeBancorp Inc.
Business Acquisition [Line Items]
Additions from acquisitions				$ 4,142

XML

Allowance for Loan and Lease Losses (Allocation of Allowance for Loan and Lease Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 161,312		$ 161,312		$ 156,130
Unpaid principal balance	724,745	$ 999,926	724,745	$ 999,926
Loans and Leases Receivable, Net Amount	26,969,686		26,969,686		25,299,564
Non-PCI impaired loans less than $500,000 collectively evaluated	42,800		42,800		47,100
Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	71,972		71,972		74,560
Commercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,627		1,627		2,298
Commercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	57,270		57,270		61,065
Commercial | Other commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	474		474		860
Commercial | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,341		12,341		10,046
Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	260		260		291
Noncommercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	89,340		89,340		81,570
Noncommercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,088		3,088		2,337
Noncommercial | Consumer and Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,208		3,208		3,021
Noncommercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	54,237		54,237		47,524
Noncommercial | Revolving mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	28,807		28,807		28,688
PCI Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	17,400		17,400		18,200
Acquired loans which have adverse change in expected cash flows	99,000		99,000		186,600
Provision for Loan, Lease, and Other Losses	(1,476)	(1,514)	(2,277)	1,000
Financing Receivable, Allowance for Credit Losses, Write-downs	0	0	0	(117)
Recoveries	0	0	0	0
Non-PCI Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	188,581		188,581		163,902
ALLL for loans and leases individually evaluated for impairment	10,895		10,895		9,827
Impaired Financing Receivable, with Related Allowance, Recorded Investment	118,781		118,781		115,073
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	54,343		54,343		31,357
Financing Receivable, Individually Evaluated for Impairment	173,124		173,124		146,430
Average balance	183,713	152,381	163,161	154,152
Interest income recognized	1,373	1,350	4,013	4,092
Provision for Loan, Lease, and Other Losses	8,242	2,354	25,991	15,883
Financing Receivable, Allowance for Credit Losses, Write-downs	(9,647)	(9,447)	(30,403)	(28,739)
Recoveries	3,123	2,939	9,802	9,277
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	209,063		209,063		204,741
Financing Receivable, Collectively Evaluated for Impairment	26,509,798		26,509,798		24,770,270
Loans and Leases Receivable, Net Amount	26,682,922		26,682,922		24,916,700
Non-PCI Loans | Commercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	91,319		91,319		79,865
ALLL for loans and leases individually evaluated for impairment	4,423		4,423		4,445
Impaired Financing Receivable, with Related Allowance, Recorded Investment	44,871		44,871		43,686
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	38,916		38,916		24,955
Financing Receivable, Individually Evaluated for Impairment	83,787		83,787		68,641
Average balance	91,050	76,318	78,011	80,549
Interest income recognized	705	713	2,072	2,311
Non-PCI Loans | Commercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	6,146		6,146		2,606
ALLL for loans and leases individually evaluated for impairment	311		311		490
Impaired Financing Receivable, with Related Allowance, Recorded Investment	2,018		2,018		1,897
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	3,695		3,695		278
Financing Receivable, Individually Evaluated for Impairment	5,713		5,713		2,175
Average balance	6,130	2,101	3,460	1,580
Interest income recognized	6	27	40	55
Provision for Loan, Lease, and Other Losses	208	8,702	(3,217)	7,788
Financing Receivable, Allowance for Credit Losses, Write-downs	(116)	(35)	(188)	(43)
Recoveries	52	136	223	252
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	31,777		31,777		34,780
Financing Receivable, Collectively Evaluated for Impairment	938,034		938,034		755,679
Loans and Leases Receivable, Net Amount	943,747		943,747		757,854
Non-PCI Loans | Commercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	69,172		69,172		61,317
ALLL for loans and leases individually evaluated for impairment	2,850		2,850		2,671
Impaired Financing Receivable, with Related Allowance, Recorded Investment	35,222		35,222		34,177
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	29,158		29,158		21,270
Financing Receivable, Individually Evaluated for Impairment	64,380		64,380		55,447
Average balance	70,351	63,752	61,962	68,043
Interest income recognized	551	583	1,653	1,953
Provision for Loan, Lease, and Other Losses	(1,337)	(2,870)	4,748	(3,369)
Financing Receivable, Allowance for Credit Losses, Write-downs	(1)	(606)	(851)	(1,111)
Recoveries	226	99	502	563
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	45,000		45,000		40,780
Financing Receivable, Collectively Evaluated for Impairment	11,388,973		11,388,973		10,661,787
Loans and Leases Receivable, Net Amount	11,453,353		11,453,353		10,717,234
Non-PCI Loans | Commercial | Other commercial real estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	1,265		1,265		946
ALLL for loans and leases individually evaluated for impairment	12		12		42
Impaired Financing Receivable, with Related Allowance, Recorded Investment	195		195		243
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	976		976		617
Financing Receivable, Individually Evaluated for Impairment	1,171		1,171		860
Average balance	1,186	950	797	1,336
Interest income recognized	6	10	20	33
Provision for Loan, Lease, and Other Losses	(90)	(1,219)	(230)	(2,044)
Financing Receivable, Allowance for Credit Losses, Write-downs	0	0	0	(69)
Recoveries	0	1	1	147
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	2,240		2,240		2,439
Financing Receivable, Collectively Evaluated for Impairment	489,892		489,892		426,125
Loans and Leases Receivable, Net Amount	491,063		491,063		426,985
Non-PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	14,456		14,456		14,695
ALLL for loans and leases individually evaluated for impairment	1,191		1,191		1,137
Impaired Financing Receivable, with Related Allowance, Recorded Investment	7,238		7,238		7,153
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	5,024		5,024		2,715
Financing Receivable, Individually Evaluated for Impairment	12,262		12,262		9,868
Average balance	13,085	9,310	11,478	9,500
Interest income recognized	140	92	353	269
Provision for Loan, Lease, and Other Losses	4,714	(5,260)	10,138	(907)
Financing Receivable, Allowance for Credit Losses, Write-downs	(3,047)	(2,106)	(8,327)	(6,874)
Recoveries	611	497	1,748	2,399
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	57,988		57,988		54,483
Financing Receivable, Collectively Evaluated for Impairment	4,117,122		4,117,122		3,928,862
Loans and Leases Receivable, Net Amount	4,129,384		4,129,384		3,938,730
Non-PCI Loans | Commercial | Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	280		280		301
ALLL for loans and leases individually evaluated for impairment	59		59		105
Impaired Financing Receivable, with Related Allowance, Recorded Investment	198		198		216
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	63		63		75
Financing Receivable, Individually Evaluated for Impairment	261		261		291
Average balance	298	205	314	90
Interest income recognized	2	1	6	1
Provision for Loan, Lease, and Other Losses	54	(2,404)	(618)	(2,403)
Financing Receivable, Allowance for Credit Losses, Write-downs	(42)	(56)	(73)	(98)
Recoveries	20	117	685	160
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	2,156		2,156		2,116
Financing Receivable, Collectively Evaluated for Impairment	301,530		301,530		296,133
Loans and Leases Receivable, Net Amount	301,791		301,791		296,424
Non-PCI Loans | Noncommercial
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	97,262		97,262		84,037
ALLL for loans and leases individually evaluated for impairment	6,472		6,472		5,382
Impaired Financing Receivable, with Related Allowance, Recorded Investment	73,910		73,910		71,387
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	15,427		15,427		6,402
Financing Receivable, Individually Evaluated for Impairment	89,337		89,337		77,789
Average balance	92,663	76,063	85,150	73,603
Interest income recognized	668	637	1,941	1,781
Non-PCI Loans | Noncommercial | Construction and land development
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	3,381		3,381		4,035
ALLL for loans and leases individually evaluated for impairment	88		88		81
Impaired Financing Receivable, with Related Allowance, Recorded Investment	1,676		1,676		2,337
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	1,412		1,412		1,412
Financing Receivable, Individually Evaluated for Impairment	3,088		3,088		3,749
Average balance	3,124	3,190	3,473	3,607
Interest income recognized	25	42	93	134
Provision for Loan, Lease, and Other Losses	148	(1,203)	548	(1,046)
Financing Receivable, Allowance for Credit Losses, Write-downs	0	0	0	(219)
Recoveries	0	0	0	127
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	2,810		2,810		2,269
Financing Receivable, Collectively Evaluated for Impairment	318,815		318,815		253,281
Loans and Leases Receivable, Net Amount	321,903		321,903		257,030
Non-PCI Loans | Noncommercial | Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	58,515		58,515		45,226
ALLL for loans and leases individually evaluated for impairment	2,761		2,761		1,901
Impaired Financing Receivable, with Related Allowance, Recorded Investment	44,009		44,009		40,359
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	10,302		10,302		1,809
Financing Receivable, Individually Evaluated for Impairment	54,311		54,311		42,168
Average balance	56,029	42,601	49,048	41,124
Interest income recognized	346	330	988	903
Provision for Loan, Lease, and Other Losses	1,024	(1,828)	2,903	1,176
Financing Receivable, Allowance for Credit Losses, Write-downs	(313)	(360)	(957)	(1,455)
Recoveries	68	128	293	315
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	14,950		14,950		13,571
Financing Receivable, Collectively Evaluated for Impairment	4,815,251		4,815,251		4,223,519
Loans and Leases Receivable, Net Amount	4,869,562		4,869,562		4,265,687
Non-PCI Loans | Noncommercial | Revolving mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	31,772		31,772		31,371
ALLL for loans and leases individually evaluated for impairment	2,559		2,559		2,515
Impaired Financing Receivable, with Related Allowance, Recorded Investment	25,070		25,070		25,751
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	3,660		3,660		3,101
Financing Receivable, Individually Evaluated for Impairment	28,730		28,730		28,852
Average balance	30,067	27,503	29,477	26,228
Interest income recognized	260	234	763	657
Provision for Loan, Lease, and Other Losses	(153)	465	(272)	1,220
Financing Receivable, Allowance for Credit Losses, Write-downs	(534)	(759)	(1,990)	(2,778)
Recoveries	201	712	1,035	1,426
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	18,076		18,076		19,347
Financing Receivable, Collectively Evaluated for Impairment	2,386,154		2,386,154		2,514,123
Loans and Leases Receivable, Net Amount	2,414,884		2,414,884		2,542,975
Non-PCI Loans | Noncommercial | Consumer
Financing Receivable, Allowance for Credit Losses [Line Items]
Unpaid principal balance	3,594		3,594		3,405
ALLL for loans and leases individually evaluated for impairment	1,064		1,064		885
Impaired Financing Receivable, with Related Allowance, Recorded Investment	3,155		3,155		2,940
Impaired Financing Receivable, with No Related Allowance, Recorded Investment	53		53		80
Financing Receivable, Individually Evaluated for Impairment	3,208		3,208		3,020
Average balance	3,443	2,769	3,152	2,644
Interest income recognized	37	31	97	87
Provision for Loan, Lease, and Other Losses	3,674	7,971	11,991	15,468
Financing Receivable, Allowance for Credit Losses, Write-downs	(5,594)	(5,525)	(18,017)	(16,092)
Recoveries	1,945	$ 1,249	5,315	$ 3,888
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	34,066		34,066		34,956
Financing Receivable, Collectively Evaluated for Impairment	1,754,027		1,754,027		1,710,761
Loans and Leases Receivable, Net Amount	$ 1,757,235		$ 1,757,235		$ 1,713,781

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule Of Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) included the following as of September 30, 2019 and December 31, 2018:

	September 30, 2019									December 31, 2018
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities available for sale	$	6,112		$	1,406		$	4,706		$	(50,007	)	$	(11,502	)	$	(38,505	)
Unrealized losses on securities available for sale transferred to held to maturity	(74,397		)	(17,111		)	(57,286		)	(92,401		)	(21,252		)	(71,149		)
Defined benefit pension items	(154,795		)	(35,603		)	(119,192		)	(163,030		)	(37,497		)	(125,533		)
Total	$	(223,080	)	$	(51,308	)	$	(171,772	)	$	(305,438	)	$	(70,251	)	$	(235,187	)

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	2,554		$	(61,979	)	$	(121,306	)	$	(180,731	)
Net unrealized gains arising during period	3,026			—			—			3,026
Amounts reclassified from accumulated other comprehensive loss	(874		)	4,693			2,114			5,933
Net current period other comprehensive income	2,152			4,693			2,114			8,959
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Three months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(57,496	)	$	(80,876	)	$	(106,266	)	$	(244,638	)
Net unrealized losses arising during period	(10,635		)	—			—			(10,635		)
Amounts reclassified from accumulated other comprehensive loss	—			5,007			2,691			7,698
Net current period other comprehensive (loss) income	(10,635		)	5,007			2,691			(2,937		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)
	Nine months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(38,505	)	$	(71,149	)	$	(125,533	)	$	(235,187	)
Net unrealized gains arising during period	48,489			—			—			48,489
Amounts reclassified from accumulated other comprehensive loss	(5,278		)	13,863			6,341			14,926
Net current period other comprehensive income	43,211			13,863			6,341			63,415
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Nine months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(30,945	)	$	—		$	(91,349	)	$	(122,294	)
Cumulative effect adjustments(2)	(29,751		)	—			(20,300		)	(50,051		)
Adjusted beginning balance	(60,696		)	—			(111,649		)	(172,345		)
Net unrealized losses arising during period	(7,435		)	(84,321		)	—			(91,756		)
Amounts reclassified from accumulated other comprehensive loss	—			8,452			8,074			16,526
Net current period other comprehensive (loss) income	(7,435		)	(75,869		)	8,074			(75,230		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)

⁽¹⁾ All amounts are net of tax. Amounts in parentheses indicate debits.

⁽²⁾ Cumulative adjustments for adoption of ASU 2018-02 of $31.3 million and ASU 2016-01 of $18.7 million.

Reclassification out of Accumulated Other Comprehensive Income

The following table presents the amounts reclassified from accumulated other comprehensive income (loss) and the line item affected in the statement where net income is presented for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)          Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	1,136		Realized gains on investment securities available for sale, net
	(262		)	Income taxes
	$	874
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,095	)	Net interest income
	1,402			Income taxes
	$	(4,693	)
Amortization of defined benefit pension items
Prior service costs	$	(15	)	Salaries and wages
Actuarial losses	(2,730		)	Other
	(2,745		)	Income before income taxes
	631			Income taxes
	$	(2,114	)
Total reclassifications for the period	$	(5,933	)
	Three months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,502	)	Net interest income
	1,495			Income taxes
	$	(5,007	)
Amortization of defined benefit pension items
Prior service costs	$	(19	)	Salaries and wages
Actuarial losses	(3,476		)	Other
	(3,495		)	Income before income taxes
	804			Income taxes
	$	(2,691	)
Total reclassifications for the period	$	(7,698	)
(1) Amounts in parentheses indicate debits to income.

	Nine months ended September 30, 2019
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	6,855		Realized gains on investment securities available for sale, net
	(1,577		)	Income taxes
	$	5,278
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(18,004	)	Net interest income
	4,141			Income taxes
	$	(13,863	)
Amortization of defined benefit pension items
Prior service costs	$	(43	)	Salaries and wages
Actuarial losses	(8,192		)	Other
	(8,235		)	Income before income taxes
	1,894			Income taxes
	$	(6,341	)
Total reclassifications for the period	$	(14,926	)
	Nine months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(10,975	)	Net interest income
	2,523			Income taxes
	$	(8,452	)
Amortization of defined benefit pension items
Prior service costs	$	(59	)	Salaries and wages
Actuarial losses	(10,427		)	Other
	(10,486		)	Income before income taxes
	2,412			Income taxes
	$	(8,074	)
Total reclassifications for the period	$	(16,526	)

⁽¹⁾ Amounts in parentheses indicate debits to income.

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Mortgage Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2019

Mortgage Servicing Rights [Abstract]

Mortgage servicing rights

The following table explains changes in the servicing asset during the three and nine months ended September 30, 2019 and 2018:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Beginning balance	$	20,665		$	21,657		$	21,396		$	21,945
Servicing rights originated	1,532			1,396			3,943			4,026
Amortization	(1,581		)	(1,420		)	(4,595		)	(4,338		)
Valuation allowance (increase) decrease	(45		)	—			(173		)	—
Ending balance	$	20,571		$	21,633		$	20,571		$	21,633

Mortgage servicing rights economic assumptions

Mortgage servicing rights valuations are performed using a pooling methodology where loans with similar risk characteristics are grouped together and evaluated using discounted cash flows to estimate the present value of future earnings. Key economic assumptions used to value mortgage servicing rights were as follows:

	September 30, 2019			December 31, 2018
Discount rate - conventional fixed loans	8.67		%	9.69		%
Discount rate - all loans excluding conventional fixed loans	9.67		%	10.69		%
Weighted average constant prepayment rate	14.15		%	9.26		%
Weighted average cost to service a loan	$	87.09		$	87.52

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Business Combinations - Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands	May 01, 2019	Apr. 02, 2019	Sep. 30, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill recorded for First South Bancorp			$ 296,764	$ 236,347
First South Bancorp
Business Acquisition [Line Items]
Purchase price	$ 37,486
Cash and due from banks	4,633
Overnight investments	3,188
Investment securities	23,512
Loans	179,243
Premises and equipment	4,944
Other real estate owned	1,567
Income earned not collected	604
Intangible assets	2,268
Other assets	19,192
Total assets acquired	239,151
Deposits	207,556
Borrowings	5,155
Other liabilities	2,850
Total liabilities assumed	215,561
Fair value of net assets acquired	23,590
Goodwill recorded for First South Bancorp	$ 13,896
Biscayne Bancshares
Business Acquisition [Line Items]
Purchase price		$ 118,949
Cash and due from banks		78,010
Overnight investments		306
Investment securities		34,539
Loans		863,384
Premises and equipment		1,533
Other real estate owned		2,046
Income earned not collected		3,049
Intangible assets		4,745
Other assets		41,572
Total assets acquired		1,029,184
Deposits		786,512
Borrowings		157,415
Other liabilities		12,829
Total liabilities assumed		956,756
Fair value of net assets acquired		72,428
Goodwill recorded for First South Bancorp		$ 46,521

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Allowance for Loan and Lease Losses

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Allowance

NOTE E - ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL)

Activity in the allowance for non-PCI loan and lease losses by class of loans is summarized as follows:

	Three months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Non-PCI Loans
Allowance for loan and lease losses:
Balance at July 1	$	31,944		$	48,962		$	2,342		$	56,901		$	2,183		$	16,932		$	21,121		$	2,750		$	35,105		$	218,240
Provision (credits)	208			(1,337		)	(90		)	4,714			54			1,024			(153		)	148			3,674			8,242
Charge-offs	(116		)	(1		)	—			(3,047		)	(42		)	(313		)	(534		)	—			(5,594		)	(9,647		)
Recoveries	52			226			—			611			20			68			201			—			1,945			3,123
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Three months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at July 1	$	23,664		$	44,465		$	3,823		$	61,311		$	4,691		$	17,802		$	21,886		$	4,027		$	30,773		$	212,442
Provision (credits)	8,702			(2,870		)	(1,219		)	(5,260		)	(2,404		)	(1,828		)	465			(1,203		)	7,971			2,354
Charge-offs	(35		)	(606		)	—			(2,106		)	(56		)	(360		)	(759		)	—			(5,525		)	(9,447		)
Recoveries	136			99			1			497			117			128			712			—			1,249			2,939
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288
	Nine months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	35,270		$	43,451		$	2,481		$	55,620		$	2,221		$	15,472		$	21,862		$	2,350		$	35,841		$	214,568
Provision (credits)	(3,217		)	4,748			(230		)	10,138			(618		)	2,903			(272		)	548			11,991			25,991
Charge-offs	(188		)	(851		)	—			(8,327		)	(73		)	(957		)	(1,990		)	—			(18,017		)	(30,403		)
Recoveries	223			502			1			1,748			685			293			1,035			—			5,315			9,802
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Nine months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	24,470		$	45,005		$	4,571		$	59,824		$	4,689		$	15,706		$	22,436		$	3,962		$	31,204		$	211,867
Provision (credits)	7,788			(3,369		)	(2,044		)	(907		)	(2,403		)	1,176			1,220			(1,046		)	15,468			15,883
Charge-offs	(43		)	(1,111		)	(69		)	(6,874		)	(98		)	(1,455		)	(2,778		)	(219		)	(16,092		)	(28,739		)
Recoveries	252			563			147			2,399			160			315			1,426			127			3,888			9,277
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288

The following tables present the allowance and recorded investment in loans and leases by class of loans, as well as the associated impairment method at September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	311	$	2,850	$	12	$	1,191	$	59	$	2,761	$	2,559	$	88	$	1,064	$	10,895
ALLL for loans and leases collectively evaluated for impairment	31,777		45,000		2,240		57,988		2,156		14,950		18,076		2,810		34,066		209,063
Total allowance for loan and lease losses	$	32,088	$	47,850	$	2,252	$	59,179	$	2,215	$	17,711	$	20,635	$	2,898	$	35,130	$	219,958
Loans and leases:
Loans and leases individually evaluated for impairment	$	5,713	$	64,380	$	1,171	$	12,262	$	261	$	54,311	$	28,730	$	3,088	$	3,208	$	173,124
Loans and leases collectively evaluated for impairment	938,034		11,388,973		489,892		4,117,122		301,530		4,815,251		2,386,154		318,815		1,754,027		26,509,798
Total loan and leases	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	26,682,922
	December 31, 2018
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	490	$	2,671	$	42	$	1,137	$	105	$	1,901	$	2,515	$	81	$	885	$	9,827
ALLL for loans and leases collectively evaluated for impairment	34,780		40,780		2,439		54,483		2,116		13,571		19,347		2,269		34,956		204,741
Total allowance for loan and lease losses	$	35,270	$	43,451	$	2,481	$	55,620	$	2,221	$	15,472	$	21,862	$	2,350	$	35,841	$	214,568
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,175	$	55,447	$	860	$	9,868	$	291	$	42,168	$	28,852	$	3,749	$	3,020	$	146,430
Loans and leases collectively evaluated for impairment	755,679		10,661,787		426,125		3,928,862		296,133		4,223,519		2,514,123		253,281		1,710,761		24,770,270
Total loan and leases	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	24,916,700

PCI allowance activity and balances for the three and nine months ended September 30, 2019 and September 30, 2018 is summarized as follows:

(Dollars in thousands)	Three months ended September 30, 2019			Three months ended September 30, 2018
PCI Loans
Allowance for loan losses:
Balance at July 1	$	8,343		$	12,423
(Credit) provision	(1,476		)	(1,514		)
Charge-offs	—			—
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909
	Nine months ended September 30, 2019			Nine months ended September 30, 2018
Balance at January 1	$	9,144		$	10,026
(Credit) provision	(2,277		)	1,000
Charge-offs	—			(117		)
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909

Recoveries related to PCI loans that have been previously charged-off and are not covered under loss share agreements are recorded as noninterest income rather than as an adjustment to the allowance for loan and lease losses.

The following table presents the PCI allowance and recorded investment in loans at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
ALLL for loans acquired with deteriorated credit quality	$	6,867	$	9,144
Loans acquired with deteriorated credit quality	513,589		606,576

At September 30, 2019 and December 31, 2018, $99.0 million and $186.6 million, respectively, of PCI loans experienced an adverse change in expected cash flows since the date of acquisition.

The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group:

	September 30, 2019
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	2,018	$	3,695	$	5,713	$	6,146	$	311
Commercial mortgage	35,222		29,158		64,380		69,172		2,850
Other commercial real estate	195		976		1,171		1,265		12
Commercial and industrial and leases	7,238		5,024		12,262		14,456		1,191
Other	198		63		261		280		59
Total commercial loans	44,871		38,916		83,787		91,319		4,423
Noncommercial:
Residential mortgage	44,009		10,302		54,311		58,515		2,761
Revolving mortgage	25,070		3,660		28,730		31,772		2,559
Construction and land development	1,676		1,412		3,088		3,381		88
Consumer	3,155		53		3,208		3,594		1,064
Total noncommercial loans	73,910		15,427		89,337		97,262		6,472
Total non-PCI impaired loans and leases	$	118,781	$	54,343	$	173,124	$	188,581	$	10,895
	December 31, 2018
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	1,897	$	278	$	2,175	$	2,606	$	490
Commercial mortgage	34,177		21,270		55,447		61,317		2,671
Other commercial real estate	243		617		860		946		42
Commercial and industrial and leases	7,153		2,715		9,868		14,695		1,137
Other	216		75		291		301		105
Total commercial loans	43,686		24,955		68,641		79,865		4,445
Noncommercial:
Residential mortgage	40,359		1,809		42,168		45,226		1,901
Revolving mortgage	25,751		3,101		28,852		31,371		2,515
Construction and land development	2,337		1,412		3,749		4,035		81
Consumer	2,940		80		3,020		3,405		885
Total noncommercial loans	71,387		6,402		77,789		84,037		5,382
Total non-PCI impaired loans and leases	$	115,073	$	31,357	$	146,430	$	163,902	$	9,827

Non-PCI impaired loans less than $500,000 that were collectively evaluated for impairment totaled $42.8 million and $47.1 million at September 30, 2019 and December 31, 2018, respectively.

The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019				Three months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	6,130	$	6	$	2,101	$	27
Commercial mortgage	70,351		551		63,752		583
Other commercial real estate	1,186		6		950		10
Commercial and industrial and leases	13,085		140		9,310		92
Other	298		2		205		1
Total commercial	91,050		705		76,318		713
Noncommercial:
Residential mortgage	56,029		346		42,601		330
Revolving mortgage	30,067		260		27,503		234
Construction and land development	3,124		25		3,190		42
Consumer	3,443		37		2,769		31
Total noncommercial	92,663		668		76,063		637
Total non-PCI impaired loans and leases	$	183,713	$	1,373	$	152,381	$	1,350
	Nine months ended September 30, 2019				Nine months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	3,460	$	40	$	1,580	$	55
Commercial mortgage	61,962		1,653		68,043		1,953
Other commercial real estate	797		20		1,336		33
Commercial and industrial and leases	11,478		353		9,500		269
Other	314		6		90		1
Total commercial	78,011		2,072		80,549		2,311
Noncommercial:
Residential mortgage	49,048		988		41,124		903
Revolving mortgage	29,477		763		26,228		657
Construction and land development	3,473		93		3,607		134
Consumer	3,152		97		2,644		87
Total noncommercial	85,150		1,941		73,603		1,781
Total non-PCI impaired loans and leases	$	163,161	$	4,013	$	154,152	$	4,092

Troubled Debt Restructurings

BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (TDRs). In general, the modification or restructuring of a loan is considered a TDR if, for economic reasons or legal reasons related to a borrower's financial difficulties, a concession is granted to the borrower that creditors would not otherwise consider. Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. The majority of TDRs are included in the special mention, substandard or doubtful credit quality indicators, which results in more elevated loss expectations when projecting the expected cash flows that are used to determine the allowance for loan losses associated with these loans. The lower the credit quality indicator, the lower the estimated expected cash flows and the greater the allowance recorded. All TDRs are individually evaluated for impairment through review of collateral values or analysis of cash flows at least annually.

The following table provides a summary of total TDRs by accrual status. Total TDRs included $17.4 million and $18.2 million of PCI TDRs at September 30, 2019 and December 31, 2018, respectively:

	September 30, 2019						December 31, 2018
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans:
Construction and land development	$	518	$	1,109	$	1,627	$	1,946	$	352	$	2,298
Commercial mortgage	50,206		7,064		57,270		53,270		7,795		61,065
Other commercial real estate	474		—		474		851		9		860
Commercial and industrial and leases	10,161		2,180		12,341		7,986		2,060		10,046
Other	153		107		260		118		173		291
Total commercial loans	61,512		10,460		71,972		64,171		10,389		74,560
Noncommercial:
Residential mortgage	37,798		16,439		54,237		37,903		9,621		47,524
Revolving mortgage	20,968		7,839		28,807		20,492		8,196		28,688
Construction and land development	1,570		1,518		3,088		2,227		110		2,337
Consumer	2,566		642		3,208		2,300		721		3,021
Total noncommercial loans	62,902		26,438		89,340		62,922		18,648		81,570
Total loans	$	124,414	$	36,898	$	161,312	$	127,093	$	29,037	$	156,130

The following table provides the types of modifications designated as TDRs during the three and nine months ended September 30, 2019 and September 30, 2018, as well as a summary of loans that were modified as a TDR during the twelve month periods ended September 30, 2019 and September 30, 2018 that subsequently defaulted during the three and nine months ended September 30, 2019 and September 30, 2018. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended September 30, 2019						Three months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	2	$	1,221	—	$	—	1	$	300	—	$	—
Loan term extension	5	2,473		—	—		9	2,565		2	327
Below market interest rate	80	4,460		34	2,034		56	7,109		32	2,832
Discharged from bankruptcy	55	6,097		25	2,002		38	1,833		16	607
Total restructurings	142	$	14,251	59	$	4,036	104	$	11,807	50	$	3,766
	Nine months ended September 30, 2019						Nine months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	6	$	3,209	2	$	2,064	3	$	1,136	2	$	836
Loan term extension	13	3,870		4	514		32	4,414		9	943
Below market interest rate	205	14,968		86	5,977		211	24,245		82	6,098
Discharged from bankruptcy	157	13,499		72	5,421		139	7,360		69	3,595
Total restructurings	381	$	35,546	164	$	13,976	385	$	37,155	162	$	11,472

For the three and nine months ended September 30, 2019 and September 30, 2018, the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different.

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Repurchase Agreements

9 Months Ended

Sep. 30, 2019

Repurchase Agreements [Abstract]

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

REPURCHASE AGREEMENTS

BancShares utilizes securities sold under customer repurchase agreements to facilitate the needs of customers and secure wholesale funding needs. Repurchase agreements are transactions whereby BancShares offers to sell to a counterparty an undivided interest in an eligible security, and which obligates BancShares to repurchase the security, with interest, at an agreed upon date, repurchase price, and interest rate. These agreements are recorded at the amount of cash received in connection with the transaction and are reflected as securities sold under customer repurchase agreements on the Consolidated Balance Sheets. The remaining contractual maturity of the $522.2 million and $543.9 million securities sold under repurchase agreements at September 30, 2019 and December 31, 2018, respectively, was overnight and continuous.

Repurchase agreements require BancShares to maintain collateral to support the outstanding obligations. BancShares monitors collateral levels on a continuous basis and maintains records of each transaction specifically describing the applicable security and the counterparty’s interest in that security, and segregates the security from general assets in accordance with regulations governing custodial holdings of securities. The primary risk with repurchase agreements is market risk associated with the investments securing the transactions, as additional collateral may be required based on fair value changes of the underlying investments. Securities pledged as collateral under repurchase agreements are maintained with safekeeping agents and consist of U.S. Treasury and mortgage-backed securities.

At September 30, 2019, the carrying value of investment securities pledged as collateral under repurchase agreements was $541.6 million, including investment securities available for sale of $305.2 million and investment securities held to maturity of $236.4 million. At December 31, 2018, the carrying value of investment securities pledged as collateral under repurchase agreements was $598.6 million, all of which were investment securities available for sale.

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FDIC Shared-Loss Receivable (Tables)

9 Months Ended

Sep. 30, 2019

FDIC Shared-Loss Receivable [Abstract]

Changes In Payable to FDIC

The following table provides changes in the FDIC shared-loss payable since December 31, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	105,618
Accretion	4,968
Balance at September 30, 2019	$	110,586

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) included the following as of September 30, 2019 and December 31, 2018:

	September 30, 2019									December 31, 2018
(Dollars in thousands)	Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax			Accumulated other comprehensive income (loss)			Deferred tax expense (benefit)			Accumulated other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities available for sale	$	6,112		$	1,406		$	4,706		$	(50,007	)	$	(11,502	)	$	(38,505	)
Unrealized losses on securities available for sale transferred to held to maturity	(74,397		)	(17,111		)	(57,286		)	(92,401		)	(21,252		)	(71,149		)
Defined benefit pension items	(154,795		)	(35,603		)	(119,192		)	(163,030		)	(37,497		)	(125,533		)
Total	$	(223,080	)	$	(51,308	)	$	(171,772	)	$	(305,438	)	$	(70,251	)	$	(235,187	)

The following table highlights changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	2,554		$	(61,979	)	$	(121,306	)	$	(180,731	)
Net unrealized gains arising during period	3,026			—			—			3,026
Amounts reclassified from accumulated other comprehensive loss	(874		)	4,693			2,114			5,933
Net current period other comprehensive income	2,152			4,693			2,114			8,959
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Three months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(57,496	)	$	(80,876	)	$	(106,266	)	$	(244,638	)
Net unrealized losses arising during period	(10,635		)	—			—			(10,635		)
Amounts reclassified from accumulated other comprehensive loss	—			5,007			2,691			7,698
Net current period other comprehensive (loss) income	(10,635		)	5,007			2,691			(2,937		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)
	Nine months ended September 30, 2019
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(38,505	)	$	(71,149	)	$	(125,533	)	$	(235,187	)
Net unrealized gains arising during period	48,489			—			—			48,489
Amounts reclassified from accumulated other comprehensive loss	(5,278		)	13,863			6,341			14,926
Net current period other comprehensive income	43,211			13,863			6,341			63,415
Ending balance	$	4,706		$	(57,286	)	$	(119,192	)	$	(171,772	)
	Nine months ended September 30, 2018
(Dollars in thousands)	Unrealized gains (losses) on securities available for sale(1)			Unrealized losses on securities available for sale transferred to held to maturity(1)			Defined benefit pension items(1)			Total
Beginning balance	$	(30,945	)	$	—		$	(91,349	)	$	(122,294	)
Cumulative effect adjustments(2)	(29,751		)	—			(20,300		)	(50,051		)
Adjusted beginning balance	(60,696		)	—			(111,649		)	(172,345		)
Net unrealized losses arising during period	(7,435		)	(84,321		)	—			(91,756		)
Amounts reclassified from accumulated other comprehensive loss	—			8,452			8,074			16,526
Net current period other comprehensive (loss) income	(7,435		)	(75,869		)	8,074			(75,230		)
Ending balance	$	(68,131	)	$	(75,869	)	$	(103,575	)	$	(247,575	)

⁽¹⁾ All amounts are net of tax. Amounts in parentheses indicate debits.

⁽²⁾ Cumulative adjustments for adoption of ASU 2018-02 of $31.3 million and ASU 2016-01 of $18.7 million.

The following table presents the amounts reclassified from accumulated other comprehensive income (loss) and the line item affected in the statement where net income is presented for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019
(Dollars in thousands)          Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	1,136		Realized gains on investment securities available for sale, net
	(262		)	Income taxes
	$	874
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,095	)	Net interest income
	1,402			Income taxes
	$	(4,693	)
Amortization of defined benefit pension items
Prior service costs	$	(15	)	Salaries and wages
Actuarial losses	(2,730		)	Other
	(2,745		)	Income before income taxes
	631			Income taxes
	$	(2,114	)
Total reclassifications for the period	$	(5,933	)
	Three months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(6,502	)	Net interest income
	1,495			Income taxes
	$	(5,007	)
Amortization of defined benefit pension items
Prior service costs	$	(19	)	Salaries and wages
Actuarial losses	(3,476		)	Other
	(3,495		)	Income before income taxes
	804			Income taxes
	$	(2,691	)
Total reclassifications for the period	$	(7,698	)
(1) Amounts in parentheses indicate debits to income.

	Nine months ended September 30, 2019
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Unrealized gains on securities available for sale	$	6,855		Realized gains on investment securities available for sale, net
	(1,577		)	Income taxes
	$	5,278
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(18,004	)	Net interest income
	4,141			Income taxes
	$	(13,863	)
Amortization of defined benefit pension items
Prior service costs	$	(43	)	Salaries and wages
Actuarial losses	(8,192		)	Other
	(8,235		)	Income before income taxes
	1,894			Income taxes
	$	(6,341	)
Total reclassifications for the period	$	(14,926	)
	Nine months ended September 30, 2018
Details about accumulated other comprehensive income (loss)	Amounts reclassified from accumulated other comprehensive income (loss)(1)			Affected line item in the statement where net income is presented
Amortization of unrealized losses on securities available for sale transferred to held to maturity	$	(10,975	)	Net interest income
	2,523			Income taxes
	$	(8,452	)
Amortization of defined benefit pension items
Prior service costs	$	(59	)	Salaries and wages
Actuarial losses	(10,427		)	Other
	(10,486		)	Income before income taxes
	2,412			Income taxes
	$	(8,074	)
Total reclassifications for the period	$	(16,526	)

⁽¹⁾ Amounts in parentheses indicate debits to income.

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Investments (Tables)

9 Months Ended

Sep. 30, 2019

Investments [Abstract]

Aggregate Values And Unrealized Gains And Losses Of Investment Securities

The amortized cost and fair value of investment securities at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	748,206	$	1,114	$	2	$	749,318
Government agency	666,029		1,404		1,812		665,621
Mortgage-backed securities	3,329,593		10,369		7,343		3,332,619
Corporate bonds	154,943		2,707		325		157,325
Total investment securities available for sale	4,898,771		15,594		9,482		4,904,883
Investment in marketable equity securities	87,588		29,605		339		116,854
Investment securities held to maturity
Mortgage-backed securities	2,115,141		71,857		—		2,186,998
Other	30,802		—		—		30,802
Total investment securities held to maturity	2,145,943		71,857		—		2,217,800
Total investment securities	$	7,132,302	$	117,056	$	9,821	$	7,239,537
	December 31, 2018
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,249,243	$	633	$	2,166	$	1,247,710
Government agency	257,252		222		639		256,835
Mortgage-backed securities	2,956,793		5,309		52,763		2,909,339
Corporate bonds	143,829		261		864		143,226
Total investment securities available for sale	4,607,117		6,425		56,432		4,557,110
Investment in marketable equity securities	73,809		19,010		220		92,599
Investment securities held to maturity
Mortgage-backed securities	2,184,653		17,339		490		2,201,502
Total investment securities	$	6,865,579	$	42,774	$	57,142	$	6,851,211

Investment Securities Maturity Information

The following table provides the amortized cost and fair value by contractual maturity for investment securities available for sale and held to maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities and government agency securities are dependent on the repayments of the underlying loan balances. Repayments of certain corporate bonds are subject to call provisions that can be exercised by the issuer at their discretion.

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	748,206	$	749,318	$	1,049,253	$	1,047,380
One through five years	13,364		13,795		205,526		205,805
Five through 10 years	137,638		139,430		134,370		133,626
Over 10 years	3,941		4,100		3,923		4,125
Government agency	666,029		665,621		257,252		256,835
Mortgage-backed securities	3,329,593		3,332,619		2,956,793		2,909,339
Total investment securities available for sale	$	4,898,771	$	4,904,883	$	4,607,117	$	4,557,110
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less	30,552		30,552		—		—
One through five years	250		250		—		—
Mortgage-backed securities	2,115,141		2,186,998		2,184,653		2,201,502
Total investment securities held to maturity	$	2,145,943	$	2,217,800	$	2,184,653	$	2,201,502

Marketable Securities Gains (Losses)

The following table provides the realized and unrealized gains and losses on marketable equity securities for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30					Nine months ended September 30
(Dollars in thousands)	2019			2018		2019		2018
Marketable equity securities (losses) gains, net	$	(967	)	$	3,854	$	13,505	$	9,265
Less net gains recognized on marketable equity securities sold	714			946		3,029		1,181
Unrealized (losses) gains recognized on marketable equity securities held	$	(1,681	)	$	2,908	$	10,476	$	8,084

Investment Securities With Unrealized Losses

The following table provides information regarding securities with unrealized losses as of September 30, 2019 and December 31, 2018:

	September 30, 2019
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	49,867	$	2	$	—	$	—	$	49,867	$	2
Government agency	323,470		1,471		66,278		341		389,748		1,812
Mortgage-backed securities	1,413,342		4,165		477,249		3,178		1,890,591		7,343
Corporate bonds	31,168		203		6,563		122		37,731		325
Total	$	1,817,847	$	5,841	$	550,090	$	3,641	$	2,367,937	$	9,482
	December 31, 2018
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	248,983	$	113	$	848,622	$	2,053	$	1,097,605	$	2,166
Government agency	115,273		601		2,310		38		117,583		639
Mortgage-backed securities	262,204		2,387		1,940,695		50,376		2,202,899		52,763
Corporate bonds	79,066		842		5,000		22		84,066		864
Total	$	705,526	$	3,943	$	2,796,627	$	52,489	$	3,502,153	$	56,432
Investment securities held to maturity
Mortgage-backed securities	$	5,111	$	181	$	10,131	$	309	$	15,242	$	490

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Mortgage Servicing Rights (Economic Assumptions) (Details) - $ / loans	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Servicing Asset Key Economic Assumptions [Line Items]
Weighted average constant prepayment rate	14.15%	9.26%
Weighted average cost to service a loan	87.09	87.52
Fixed Rate Residential Mortgage
Servicing Asset Key Economic Assumptions [Line Items]
Discount rate	8.67%	9.69%
All Loans and Leases, Excluding Conventional Fixed Loans
Servicing Asset Key Economic Assumptions [Line Items]
Discount rate	9.67%	10.69%

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Estimated Fair Values (Assets And Liabilities Carried At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 4,904,883	$ 4,557,110
Investment in marketable equity securities	116,854	92,599
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	4,904,883	4,557,110
Investment in marketable equity securities	116,854
Loans held for sale	83,256	45,505
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Investment in marketable equity securities	29,241
Loans held for sale	0	0
Fair Value, Measurements, Recurring | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	4,747,558	4,413,884
Investment in marketable equity securities	87,613
Loans held for sale	83,256	45,505
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	157,325	143,226
Investment in marketable equity securities	0
Loans held for sale	0	0
Fair Value, Measurements, Recurring | U.S. Treasury
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	749,318	1,247,710
Fair Value, Measurements, Recurring | U.S. Treasury | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | U.S. Treasury | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	749,318	1,247,710
Fair Value, Measurements, Recurring | U.S. Treasury | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	665,621	256,835
Fair Value, Measurements, Recurring | Agency Securities | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Agency Securities | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	665,621	256,835
Fair Value, Measurements, Recurring | Agency Securities | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	3,332,619	2,909,339
Fair Value, Measurements, Recurring | Mortgage-backed securities | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Mortgage-backed securities | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	3,332,619	2,909,339
Fair Value, Measurements, Recurring | Mortgage-backed securities | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Equity Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		92,599
Fair Value, Measurements, Recurring | Equity Securities | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		17,887
Fair Value, Measurements, Recurring | Equity Securities | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		74,712
Fair Value, Measurements, Recurring | Equity Securities | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		0
Fair Value, Measurements, Recurring | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	157,325	143,226
Fair Value, Measurements, Recurring | Corporate Bonds | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Corporate Bonds | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Fair Value, Measurements, Recurring | Corporate Bonds | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 157,325	$ 143,226

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Loans and Leases (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Apr. 02, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Purchase Discount Remaining	$ 32,200		$ 32,200			$ 33,300
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	6,540,000		6,540,000			6,360,000
Advances from Federal Home Loan Banks						175,200
Federal Home Loan Bank Advances, Current Borrowing Capacity	6,350,000		6,350,000			6,180,000
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums	200		200			100
Loans and Leases Receivable, Gross, Carrying Amount, Covered	47,300		47,300
Federal Reserve Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	2,780,000		2,780,000			2,190,000
Reclassification of portfolio loans to (from) loans held for sale			(23,900)
Loans held for sale	83,256		83,256			45,505
Proceeds from sales of portfolio loans			24,247	$ 0
Accretion	16,200	$ 13,500	45,891	45,699
Goodwill recorded for First South Bancorp	296,764		296,764			236,347
Non-PCI Loans
Financing Receivable, Recorded Investment [Line Items]
Nonaccruing	108,816		108,816			84,546
Remaining discount	85,000		85,000			95,500
Accretion Income	3,500	$ 2,900	10,000	$ 9,900
PCI Loans
Financing Receivable, Recorded Investment [Line Items]
Nonaccruing	800		800			1,300
Biscayne Bancshares
Financing Receivable, Recorded Investment [Line Items]
Assets					$ 1,029,184
Intangible assets					4,745
Liabilities assumed					956,756
Deposits					786,512
Goodwill recorded for First South Bancorp					$ 46,521
Biscayne Bancshares | Non-PCI Loans
Financing Receivable, Recorded Investment [Line Items]
Loans acquired	850,352		850,352
Biscayne Bancshares | PCI Loans
Financing Receivable, Recorded Investment [Line Items]
Loans acquired	13,032		13,032
Federal Home Loan Bank of Atlanta
Financing Receivable, Recorded Investment [Line Items]
Advances from Federal Home Loan Banks	181,700		181,700
Loans Pledged as Collateral	9,330,000		9,330,000			9,120,000
Federal Reserve Bank
Financing Receivable, Recorded Investment [Line Items]
Loans Pledged as Collateral	$ 3,470,000		$ 3,470,000			$ 2,940,000

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Investments (Maturity Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Investment securities available for sale
Total investment securities available for sale, cost	$ 4,898,771	$ 4,607,117
Total investment securities available for sale, fair value	4,904,883	4,557,110
Investment securities held to maturity
Maturing in one year or less, cost	30,552	0
Maturing in one year or less, fair value	30,552	0
Maturing in one through five years, cost	250	0
Maturing in one through five years, fair value	250	0
Investment securities held to maturity	2,145,943	2,184,653
Fair Value	2,217,800	2,201,502
Debt Securities
Investment securities available for sale
Maturing in one year or less, cost	748,206	1,049,253
Maturing in one through five years, cost	13,364	205,526
Maturing in five through ten years, cost	137,638	134,370
Maturing in over ten years, cost	3,941	3,923
Maturing in one year or less, fair value	749,318	1,047,380
Maturing in one through five years, fair value	13,795	205,805
Maturing in five through ten yeas, fair value	139,430	133,626
Maturing in over ten years, fair value	4,100	4,125
Agency Securities
Investment securities available for sale
Total investment securities available for sale, cost	666,029	257,252
Total investment securities available for sale, fair value	665,621	256,835
Mortgage-backed securities
Investment securities available for sale
Total investment securities available for sale, cost	3,329,593	2,956,793
Total investment securities available for sale, fair value	3,332,619	2,909,339
Investment securities held to maturity
Investment securities held to maturity	2,115,141	2,184,653
Mortgage-backed securities	2,186,998	2,201,502
Fair Value	$ 2,186,998	$ 2,201,502

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Loans and Leases (Recorded Investment, By Class, In Loans And Leases On Nonaccrual Status And Loans And Leases Greater Than 90 Days Past Due And Still Accruing) (Details) - Non-PCI Loans - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	$ 108,816	$ 84,546
Loans and leases greater than 90 days and accruing	4,247	2,888
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	37,825	18,529
Loans and leases greater than 90 days and accruing	1,895	808
Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	5,372	666
Loans and leases greater than 90 days and accruing	0	0
Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	24,993	12,594
Loans and leases greater than 90 days and accruing	796	0
Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	709	366
Loans and leases greater than 90 days and accruing	0	0
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	6,630	4,624
Loans and leases greater than 90 days and accruing	1,099	808
Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	121	279
Loans and leases greater than 90 days and accruing	0	0
Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	70,991	66,017
Loans and leases greater than 90 days and accruing	2,352	2,080
Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	1,716	1,823
Loans and leases greater than 90 days and accruing	0	0
Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	43,677	35,662
Loans and leases greater than 90 days and accruing	439	0
Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	22,748	25,563
Loans and leases greater than 90 days and accruing	0	0
Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccruing	2,850	2,969
Loans and leases greater than 90 days and accruing	$ 1,913	$ 2,080

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Consolidated Statements of Changes In Shareholders' Equity - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Surplus	Surplus Class A Common Stock	Retained Earnings	Retained Earnings Class A Common Stock	Retained Earnings Class B Common Stock	Accumulated Other Comprehensive (Loss) Income	Financial Instruments ASU cumulative effect adjustment Retained Earnings	Financial Instruments ASU cumulative effect adjustment Accumulated Other Comprehensive (Loss) Income	Income tax ASU cumulative effect adjustment Retained Earnings	Income tax ASU cumulative effect adjustment Accumulated Other Comprehensive (Loss) Income
Beginning balance, shareholders' equity at Dec. 31, 2017	$ 3,334,064			$ 11,005	$ 1,005	$ 658,918		$ 2,785,430			$ (122,294)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	310,840							310,840
Other comprehensive income (loss), net of tax	(75,230)										(75,230)
Stock repurchased during period	(58,086)			(125)			$ (57,961)
Cash dividends		$ (11,520)	$ (1,055)						$ (11,520)	$ (1,055)
Ending balance, shareholders' equity at Sep. 30, 2018	3,499,013			10,880	1,005	600,957		3,133,746			(247,575)
Beginning balance, shareholders' equity at Jun. 30, 2018	3,446,886			11,005	1,005	658,918		3,020,596			(244,638)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	117,318							117,318
Other comprehensive income (loss), net of tax	(2,937)										(2,937)
Stock repurchased during period	(58,086)			(125)			(57,961)	0
Cash dividends		(3,817)	(351)						(3,817)	(351)
Ending balance, shareholders' equity at Sep. 30, 2018	3,499,013			10,880	1,005	600,957		3,133,746			(247,575)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of new accounting principle in period of adoption												$ 18,715	$ (18,715)	$ 31,336	$ (31,336)
Beginning balance, shareholders' equity at Dec. 31, 2018	3,488,954			10,623	1,005	493,962		3,218,551			(235,187)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	355,497
Other comprehensive income (loss), net of tax	63,415										63,415
Stock repurchased during period	(325,900)	(325,916)		(744)			(325,172)
Cash dividends		(12,262)	(1,206)						(12,262)	(1,206)
Ending balance, shareholders' equity at Sep. 30, 2019	3,568,482			9,879	1,005	168,790		3,560,580			(171,772)
Beginning balance, shareholders' equity at Jun. 30, 2019	3,574,613			10,175	1,005	303,880		3,440,284			(180,731)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	124,779							124,779
Other comprehensive income (loss), net of tax	8,959										8,959
Stock repurchased during period	(135,400)	(135,386)		(296)			$ (135,090)
Cash dividends		$ (4,081)	$ (402)						$ (4,081)	$ (402)
Ending balance, shareholders' equity at Sep. 30, 2019	$ 3,568,482			$ 9,879	$ 1,005	$ 168,790		$ 3,560,580			$ (171,772)

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 288,933	$ 327,440
Overnight investments	949,899	797,406
Investment in marketable equity securities	116,854	92,599
Investment securities available for sale	4,904,883	4,557,110
Investment securities held to maturity	2,145,943	2,184,653
Loans held for sale	83,256	45,505
Loans and leases	27,196,511	25,523,276
Allowance for loan and lease losses	(226,825)	(223,712)
Net loans and leases	26,969,686	25,299,564
Premises and equipment	1,222,659	1,204,179
Other real estate owned	46,253	48,030
Income earned not collected	117,123	109,903
Goodwill recorded for First South Bancorp	296,764	236,347
Other intangible assets	65,147	72,298
Other assets	540,924	433,595
Total assets	37,748,324	35,408,629
Deposits [Abstract]
Noninterest-bearing deposits	12,966,890	11,882,670
Interest-bearing deposits	19,776,387	18,789,790
Total deposits	32,743,277	30,672,460
Securities sold under customer repurchase agreements	522,195	543,936
Federal Home Loan Bank borrowings	192,672	193,556
Subordinated Debt	149,051	140,741
Long-term obligations	112,153	13,921
FDIC shared-loss payable	110,586	105,618
Other liabilities	349,908	249,443
Total liabilities	34,179,842	31,919,675
Shareholders' Equity
Preferred stock	0	0
Surplus	168,790	493,962
Retained earnings	3,560,580	3,218,551
Accumulated other comprehensive loss	(171,772)	(235,187)
Total shareholders' equity	3,568,482	3,488,954
Total liabilities and shareholders' equity	37,748,324	35,408,629
Class A Common Stock
Shareholders' Equity
Common stock	9,879	10,623
Class B Common Stock
Shareholders' Equity
Common stock	$ 1,005	$ 1,005

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

To meet the financing needs of its customers, BancShares and its subsidiaries have financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve elements of credit, interest rate or liquidity risk.

Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. Established credit standards control the credit risk exposure associated with these commitments. In some cases, BancShares requires that collateral be pledged to secure the commitment, including cash deposits, securities and other assets.

Standby letters of credit are commitments guaranteeing performance of a customer to a third party. Those commitments are primarily issued to support public and private borrowing arrangements. To mitigate its risk, BancShares’ credit policies govern the issuance of standby letters of credit. The credit risk related to the issuance of these letters of credit is essentially the same as that involved in extending loans to clients and, therefore, these letters of credit are collateralized when necessary.

The following table presents the commitments to extend credit and standby letters of credit as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Unused commitments to extend credit	$	10,509,643	$	10,054,712
Standby letters of credit	92,585		96,467

BancShares and FCB have investments in qualified affordable housing projects primarily for the purposes of fulfilling Community Reinvestment Act requirements and obtaining tax credits. Affordable housing project investments were $165.7 million and $147.3 million as of September 30, 2019 and December 31, 2018, respectively, and were recorded in other assets on the Consolidated Balance Sheets. Unfunded commitments to fund future investments in affordable housing projects totaled $75.7 million and $68.0 million as of September 30, 2019 and December 31, 2018, respectively and were recorded within other liabilities.

BancShares and various subsidiaries have been named as defendants in legal actions arising from their normal business activities in which damages in various amounts were claimed. BancShares has also been exposed to litigation risk relating to the prior business activities of banks from which assets were acquired and liabilities assumed in the various merger transactions. Although the amount of any ultimate liability with respect to such matters cannot be determined, in the opinion of management, any such liability will not have a material effect on BancShares’ consolidated financial statements.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Schedule of assets acquired and liabilities assumed

The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	37,486
Assets
Cash and due from banks	$	4,633
Overnight investments	3,188
Investment securities	23,512
Loans	179,243
Premises and equipment	4,944
Other real estate owned	1,567
Income earned not collected	604
Intangible assets	2,268
Other assets	19,192
Total assets acquired	239,151
Liabilities
Deposits	207,556
Borrowings	5,155
Other liabilities	2,850
Total liabilities assumed	$	215,561
Fair value of net assets acquired			23,590
Goodwill recorded for First South Bancorp			$	13,896

The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	118,949
Assets
Cash and due from banks	$	78,010
Overnight investments	306
Investment securities held to maturity	34,539
Loans	863,384
Premises and equipment	1,533
Other real estate owned	2,046
Income earned not collected	3,049
Intangible assets	4,745
Other assets	41,572
Total assets acquired	1,029,184
Liabilities
Deposits	786,512
Borrowings	157,415
Other liabilities	12,829
Total liabilities assumed	$	956,756
Fair value of net assets acquired			72,428
Goodwill recorded for Biscayne Bancshares			$	46,521

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Other Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Changes in other real estate owned

The following table explains changes in OREO during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	48,030
Additions	15,426
Acquired in business combination	3,613
Sales	(17,595		)
Write-downs/losses	(3,221		)
Balance at September 30, 2019	$	46,253
Balance at December 31, 2017	$	51,097
Additions	17,013
Acquired in business combination	2,135
Sales	(23,488		)
Write-downs/losses	(3,156		)
Balance at September 30, 2018	$	43,601

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Mortgage Servicing Rights (Valuation allowance) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Valuation Allowance for Impairment of Recognized Servicing Assets [Line Items]
Valuation allowance provision (reversal)	$ (45,000.0)	$ 0	$ (173,000)	$ 0

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Estimated Fair Values (Estimated Fair Values For Certain Financial Assets And Financial Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	$ 288,933		$ 327,440
Overnight investments	949,899		797,406
Investment securities held to maturity	2,145,943		2,184,653
Investment in marketable equity securities	116,854		92,599
Loans held for sale	83,256		45,505
Loans and Leases Receivable, Net Amount	26,969,686		25,299,564
Income earned not collected	117,123		109,903
Mortgage servicing rights	20,571	$ 20,665	21,396	$ 21,633	$ 21,657	$ 21,945
Deposits	32,743,277		30,672,460
Securities sold under customer repurchase agreements	522,195		543,936
Federal Home Loan Bank borrowings	192,672		193,556
FDIC shared-loss payable	110,586		105,618
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	288,933		327,440
Overnight investments	949,899		797,406
Debt Securities, Available-for-sale	4,904,883		4,557,110
Investment securities held to maturity	2,145,943		2,184,653
Investment in marketable equity securities	116,854		92,599
Loans held for sale	83,256		45,505
Loans and Leases Receivable, Net Amount	26,969,686		25,299,564
Income earned not collected	117,123		109,903
Stock issued by Federal Home Loan Bank	25,355		25,304
Mortgage servicing rights	22,431		24,066
Deposits	32,743,277		30,672,460
Securities sold under customer repurchase agreements	522,195		543,936
Federal Home Loan Bank borrowings	192,672		193,556
Short-term borrowings	149,051		140,741
Long-term obligations	112,153		13,921
FDIC shared-loss payable	110,586		105,618
Accrued interest payable	17,859		3,712
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	288,933		327,440
Overnight investments	949,899		797,406
Debt Securities, Available-for-sale	4,904,883		4,557,110
Investment securities held to maturity	2,217,800		2,201,502
Investment in marketable equity securities	116,854		92,599
Loans held for sale	83,256		45,505
Loans and Leases Receivable, Net Amount	27,301,164		24,845,060
Income earned not collected	117,123		109,903
Stock issued by Federal Home Loan Bank	25,355		25,304
Mortgage servicing rights	24,823		27,435
Deposits	32,739,923		30,623,214
Securities sold under customer repurchase agreements	522,195		543,936
Federal Home Loan Bank borrowings	199,098		195,374
Short-term borrowings	156,566		151,670
Long-term obligations	117,630		13,985
FDIC shared-loss payable	113,309		105,846
Accrued interest payable	$ 17,859		$ 3,712

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Loans and Leases (Purchases Loans and Leases) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Contractually required payments	$ 1,078,854
Loans acquired	850,352
Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Contractually required payments	175,465
Loans acquired	162,845
PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Contractually required payments	19,720
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contractual Cash Flows Expected To Be Collected	16,815
Loans acquired	13,032
PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Contractually required payments	23,389
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contractual Cash Flows Expected To Be Collected	21,392
Loans acquired	16,398
Commercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	345,494
Commercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	131,093
Commercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	9,249
Commercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	11,790
Noncommercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	504,858
Noncommercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	31,752
Noncommercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	3,783
Noncommercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	4,608
Construction and land development | Commercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	15,647
Construction and land development | Commercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	8,663
Construction and land development | Commercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	0
Construction and land development | Commercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	1,233
Construction and land development | Noncommercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	31,668
Construction and land development | Noncommercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	3,552
Construction and land development | Noncommercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	0
Construction and land development | Noncommercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	17
Mortgage | Commercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	203,605
Mortgage | Commercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	74,713
Mortgage | Commercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	7,589
Mortgage | Commercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	9,355
Mortgage | Noncommercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	405,419
Mortgage | Noncommercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	24,641
Mortgage | Noncommercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	3,783
Mortgage | Noncommercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	4,591
Other commercial real estate | Commercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	98,107
Other commercial real estate | Commercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	7,509
Commercial and industrial | Commercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	28,135
Commercial and industrial | Commercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	40,208
Commercial and industrial | Commercial | PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	1,660
Commercial and industrial | Commercial | PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	1,202
Revolving mortgage | Noncommercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	54,081
Revolving mortgage | Noncommercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	2,162
Consumer | Noncommercial | Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired	13,690
Consumer | Noncommercial | Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired	$ 1,397

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Consolidated Statements of Changes In Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock repurchased during period (in shares)	295,900	125,000	744,400	125,000
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 0.40	$ 0.35	$ 1.20	$ 1.05
Common Stock | Class A Common Stock
Stock repurchased during period (in shares)	205,500	0	448,500	0

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shared authorized	16,000,000	16,000,000
Common stock, shares issued	9,878,820	10,623,220
Common stock, shares outstanding	9,878,820	10,623,220
Class B Common Stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shared authorized	2,000,000	2,000,000
Common stock, shares issued	1,005,185	1,005,185
Common stock, shares outstanding	1,005,185	1,005,185

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Loans and Leases (Loans and Leases Outstanding) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Loans and leases, not acquired in a transfer accounted for as debt securities	$ 26,682,922	$ 24,916,700
PCI loans	513,589	606,576	$ 638,018	$ 762,998
Total loans and leases	27,196,511	25,523,276
Commercial
Loans and leases, not acquired in a transfer accounted for as debt securities	17,319,338	16,137,227
PCI loans	252,828	296,672
Commercial | Construction and land development
Loans and leases, not acquired in a transfer accounted for as debt securities	943,747	757,854
Commercial | Mortgage
Loans and leases, not acquired in a transfer accounted for as debt securities	11,453,353	10,717,234
Commercial | Other commercial real estate
Loans and leases, not acquired in a transfer accounted for as debt securities	491,063	426,985
Commercial | Commercial and industrial
Loans and leases, not acquired in a transfer accounted for as debt securities	4,129,384	3,938,730
Commercial | Other
Loans and leases, not acquired in a transfer accounted for as debt securities	301,791	296,424
Noncommercial
Loans and leases, not acquired in a transfer accounted for as debt securities	9,363,584	8,779,473
PCI loans	260,761
Noncommercial | Construction and land development
Loans and leases, not acquired in a transfer accounted for as debt securities	321,903	257,030
Noncommercial | Mortgage
Loans and leases, not acquired in a transfer accounted for as debt securities	4,869,562	4,265,687
PCI loans		309,904
Noncommercial | Revolving mortgage
Loans and leases, not acquired in a transfer accounted for as debt securities	2,414,884	2,542,975
Noncommercial | Consumer
Loans and leases, not acquired in a transfer accounted for as debt securities	$ 1,757,235	$ 1,713,781

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Investments (Unrealized Losses) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Investment securities available for sale:
Fair Value, Less than 12 months	$ 1,817,847	$ 705,526
Unrealized Losses, Less than 12 months	5,841	3,943
Fair Value, 12 months or more	550,090	2,796,627
Unrealized Losses, Greater than 12 months	3,641	52,489
Fair Value, Total	2,367,937	3,502,153
Unrealized Losses, Total	9,482	56,432
Investment securities held to maturity
Unrealized Losses, Total	0
U. S. Treasury
Investment securities available for sale:
Fair Value, Less than 12 months	49,867	248,983
Unrealized Losses, Less than 12 months	2	113
Fair Value, 12 months or more	0	848,622
Unrealized Losses, Greater than 12 months	0	2,053
Fair Value, Total	49,867	1,097,605
Unrealized Losses, Total	2	2,166
Agency Securities
Investment securities available for sale:
Fair Value, Less than 12 months	323,470	115,273
Unrealized Losses, Less than 12 months	1,471	601
Fair Value, 12 months or more	66,278	2,310
Unrealized Losses, Greater than 12 months	341	38
Fair Value, Total	389,748	117,583
Unrealized Losses, Total	1,812	639
Mortgage-backed securities
Investment securities available for sale:
Fair Value, Less than 12 months	1,413,342	262,204
Unrealized Losses, Less than 12 months	4,165	2,387
Fair Value, 12 months or more	477,249	1,940,695
Unrealized Losses, Greater than 12 months	3,178	50,376
Fair Value, Total	1,890,591	2,202,899
Unrealized Losses, Total	7,343	52,763
Investment securities held to maturity
Fair Value, Less than 12 months		5,111
Unrealized Losses, Less than 12 months		181
Fair Value, 12 months or more		10,131
Unrealized Losses, 12 months or more		309
Fair Value, Total		15,242
Unrealized Losses, Total	0	490
Corporate bonds
Investment securities available for sale:
Fair Value, Less than 12 months		79,066
Unrealized Losses, Less than 12 months		842
Fair Value, 12 months or more		5,000
Unrealized Losses, Greater than 12 months		22
Fair Value, Total		84,066
Unrealized Losses, Total		864
Corporate Bonds
Investment securities available for sale:
Fair Value, Less than 12 months	31,168
Unrealized Losses, Less than 12 months	203
Fair Value, 12 months or more	6,563
Unrealized Losses, Greater than 12 months	122
Fair Value, Total	37,731
Unrealized Losses, Total	325	$ 864
Other
Investment securities held to maturity
Unrealized Losses, Total	$ 0

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Accumulated Other Comprehensive Income (Loss) (Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax		$ 1,136	$ 0	$ 6,855	$ 0
Amortization of actuarial losses and prior service cost		(2,730)	(3,476)	(8,192)	(10,427)
Total before taxes		(2,745)	(3,495)	(8,235)	(10,486)
Amounts reclassified from accumulated other comprehensive income, net of tax		5,933	7,698	14,926	16,526
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, before Tax		(15)	(19)	(43)	(59)
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax		631	804	1,894	2,412
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax		(2,114)	(2,691)	(6,341)	(8,074)
Other Comprehensive Income (Loss) Reclassification Adjustment Of Unrealized Losses From AOCI For Securities Available For Sale Transferred To Held To Maturity Before Tax		(6,095)	(6,502)	(18,004)	(10,975)
Other Comprehensive Income (Loss) Reclassification Adjustment Of Unrealized Losses From AOCI For Securities Available For Sale Transferred To Held To Maturity Tax		1,402	1,495	4,141	2,523
Other Comprehensive Income (Loss) Reclassification Adjustment Of Unrealized Losses From AOCI For Securities Available For Sale Transferred To Held To Maturity Net Of Tax		(4,693)	(5,007)	(13,863)	(8,452)
Tax effect		262	0	1,577	0
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax		874		5,278
Unrealized Losses on Investment Securities Available for Sale
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from accumulated other comprehensive income, net of tax	[1]	(874)	0	(5,278)	0
Defined Benefit Pension Items
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from accumulated other comprehensive income, net of tax	[1]	$ 2,114	$ 2,691	$ 6,341	$ 8,074

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
BancShares Plan
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 0.0	$ 0.0
Bancorporation Plan
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 3.5	$ 3,500.0

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Leases (Supplemental Cash Flow Information) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 9,579
Operating cash flows from finance leases	220
Financing cash flows from finance leases	1,111
Right-of-use assets obtained in exchange for new operating lease liabilities	17,762
Right-of-use assets obtained in exchange for new finance lease liabilities	$ 1,886

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Loans and Leases (Changes In Carrying Value Of Acquired Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Jan. 13, 2017	Mar. 11, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Unpaid Principal Balance	$ 724,745	$ 999,926	$ 724,745	$ 999,926
Carrying Value of Acquired Impaired Loans [Roll Forward]
Beginning balance			606,576	762,998
Fair value of acquired loans						$ 29,430	$ 15,555
Accretion	16,200	13,500	45,891	45,699
Payments received and other changes, net			(168,308)	(186,234)
Ending balance	513,589	$ 638,018	513,589	$ 638,018
Loans on the Cost Recovery Method
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans on cost recovery method	3,100		3,100		$ 3,300
Commercial
Carrying Value of Acquired Impaired Loans [Roll Forward]
Beginning balance			296,672
Ending balance	252,828		252,828
Noncommercial
Carrying Value of Acquired Impaired Loans [Roll Forward]
Ending balance	260,761		260,761
Mortgage | Noncommercial
Carrying Value of Acquired Impaired Loans [Roll Forward]
Beginning balance			309,904
PCI Loans
Carrying Value of Acquired Impaired Loans [Roll Forward]
Nonaccruing	$ 800		$ 800		$ 1,300

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Allowance for Loan and Lease Losses (Summary of Activity In Allowance for Loan and Lease Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Net loans and leases					$ 26,969,686	$ 25,299,564
Loan and Leases Acquired with Deteriorated Credit Quality [Abstract]
Loans and leases acquired with deteriorated credit quality					513,589	606,576	$ 638,018	$ 762,998
Commercial
Loan and Leases Acquired with Deteriorated Credit Quality [Abstract]
Loans and leases acquired with deteriorated credit quality					252,828	296,672
Noncommercial
Loan and Leases Acquired with Deteriorated Credit Quality [Abstract]
Loans and leases acquired with deteriorated credit quality					260,761
Noncommercial | Mortgage
Loan and Leases Acquired with Deteriorated Credit Quality [Abstract]
Loans and leases acquired with deteriorated credit quality						309,904
Non-PCI Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 218,240	$ 212,442	$ 214,568	$ 211,867
Provision for Loan, Lease, and Other Losses	8,242	2,354	25,991	15,883
Charge-offs	(9,647)	(9,447)	(30,403)	(28,739)
Recoveries	3,123	2,939	9,802	9,277
Ending balance	219,958	208,288	219,958	208,288
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					173,124	146,430
Loans and leases collectively evaluated for impairment					26,509,798	24,770,270
Net loans and leases					26,682,922	24,916,700
ALLL for loans and leases individually evaluated for impairment					10,895	9,827
ALLL for loans and leases collectively evaluated for impairment					209,063	204,741
Total allowance for loan and lease losses	218,240	212,442	219,958	208,288	219,958	214,568	208,288	211,867
Non-PCI Loans | Commercial
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					83,787	68,641
ALLL for loans and leases individually evaluated for impairment					4,423	4,445
Non-PCI Loans | Commercial | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	31,944	23,664	35,270	24,470
Provision for Loan, Lease, and Other Losses	208	8,702	(3,217)	7,788
Charge-offs	(116)	(35)	(188)	(43)
Recoveries	52	136	223	252
Ending balance	32,088	32,467	32,088	32,467
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					5,713	2,175
Loans and leases collectively evaluated for impairment					938,034	755,679
Net loans and leases					943,747	757,854
ALLL for loans and leases individually evaluated for impairment					311	490
ALLL for loans and leases collectively evaluated for impairment					31,777	34,780
Total allowance for loan and lease losses	31,944	23,664	32,088	24,470	32,088	35,270	32,467	24,470
Non-PCI Loans | Commercial | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	48,962	44,465	43,451	45,005
Provision for Loan, Lease, and Other Losses	(1,337)	(2,870)	4,748	(3,369)
Charge-offs	(1)	(606)	(851)	(1,111)
Recoveries	226	99	502	563
Ending balance	47,850	41,088	47,850	41,088
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					64,380	55,447
Loans and leases collectively evaluated for impairment					11,388,973	10,661,787
Net loans and leases					11,453,353	10,717,234
ALLL for loans and leases individually evaluated for impairment					2,850	2,671
ALLL for loans and leases collectively evaluated for impairment					45,000	40,780
Total allowance for loan and lease losses	48,962	44,465	47,850	41,088	47,850	43,451	41,088	45,005
Non-PCI Loans | Commercial | Other commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,342	3,823	2,481	4,571
Provision for Loan, Lease, and Other Losses	(90)	(1,219)	(230)	(2,044)
Charge-offs	0	0	0	(69)
Recoveries	0	1	1	147
Ending balance	2,252	2,605	2,252	2,605
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					1,171	860
Loans and leases collectively evaluated for impairment					489,892	426,125
Net loans and leases					491,063	426,985
ALLL for loans and leases individually evaluated for impairment					12	42
ALLL for loans and leases collectively evaluated for impairment					2,240	2,439
Total allowance for loan and lease losses	2,342	3,823	2,481	4,571	2,252	2,481	2,605	4,571
Non-PCI Loans | Commercial | Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	56,901	61,311	55,620	59,824
Provision for Loan, Lease, and Other Losses	4,714	(5,260)	10,138	(907)
Charge-offs	(3,047)	(2,106)	(8,327)	(6,874)
Recoveries	611	497	1,748	2,399
Ending balance	59,179	54,442	59,179	54,442
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					12,262	9,868
Loans and leases collectively evaluated for impairment					4,117,122	3,928,862
Net loans and leases					4,129,384	3,938,730
ALLL for loans and leases individually evaluated for impairment					1,191	1,137
ALLL for loans and leases collectively evaluated for impairment					57,988	54,483
Total allowance for loan and lease losses	56,901	61,311	59,179	54,442	59,179	55,620	54,442	59,824
Non-PCI Loans | Commercial | Other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,183	4,691	2,221	4,689
Provision for Loan, Lease, and Other Losses	54	(2,404)	(618)	(2,403)
Charge-offs	(42)	(56)	(73)	(98)
Recoveries	20	117	685	160
Ending balance	2,215	2,348	2,215	2,348
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					261	291
Loans and leases collectively evaluated for impairment					301,530	296,133
Net loans and leases					301,791	296,424
ALLL for loans and leases individually evaluated for impairment					59	105
ALLL for loans and leases collectively evaluated for impairment					2,156	2,116
Total allowance for loan and lease losses	2,183	4,691	2,215	4,689	2,215	2,221	2,348	4,689
Non-PCI Loans | Noncommercial
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					89,337	77,789
ALLL for loans and leases individually evaluated for impairment					6,472	5,382
Non-PCI Loans | Noncommercial | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,750	4,027	2,350	3,962
Provision for Loan, Lease, and Other Losses	148	(1,203)	548	(1,046)
Charge-offs	0	0	0	(219)
Recoveries	0	0	0	127
Ending balance	2,898	2,824	2,898	2,824
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					3,088	3,749
Loans and leases collectively evaluated for impairment					318,815	253,281
Net loans and leases					321,903	257,030
ALLL for loans and leases individually evaluated for impairment					88	81
ALLL for loans and leases collectively evaluated for impairment					2,810	2,269
Total allowance for loan and lease losses	2,750	4,027	2,898	2,824	2,898	2,350	2,824	3,962
Non-PCI Loans | Noncommercial | Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	16,932	17,802	15,472	15,706
Provision for Loan, Lease, and Other Losses	1,024	(1,828)	2,903	1,176
Charge-offs	(313)	(360)	(957)	(1,455)
Recoveries	68	128	293	315
Ending balance	17,711	15,742	17,711	15,742
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					54,311	42,168
Loans and leases collectively evaluated for impairment					4,815,251	4,223,519
Net loans and leases					4,869,562	4,265,687
ALLL for loans and leases individually evaluated for impairment					2,761	1,901
ALLL for loans and leases collectively evaluated for impairment					14,950	13,571
Total allowance for loan and lease losses	16,932	17,802	17,711	15,742	17,711	15,472	15,742	15,706
Non-PCI Loans | Noncommercial | Revolving mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	21,121	21,886	21,862	22,436
Provision for Loan, Lease, and Other Losses	(153)	465	(272)	1,220
Charge-offs	(534)	(759)	(1,990)	(2,778)
Recoveries	201	712	1,035	1,426
Ending balance	20,635	22,304	20,635	22,304
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					28,730	28,852
Loans and leases collectively evaluated for impairment					2,386,154	2,514,123
Net loans and leases					2,414,884	2,542,975
ALLL for loans and leases individually evaluated for impairment					2,559	2,515
ALLL for loans and leases collectively evaluated for impairment					18,076	19,347
Total allowance for loan and lease losses	21,121	21,886	20,635	22,304	20,635	21,862	22,304	22,436
Non-PCI Loans | Noncommercial | Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	35,105	30,773	35,841	31,204
Provision for Loan, Lease, and Other Losses	3,674	7,971	11,991	15,468
Charge-offs	(5,594)	(5,525)	(18,017)	(16,092)
Recoveries	1,945	1,249	5,315	3,888
Ending balance	35,130	34,468	35,130	34,468
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Loans and leases individually evaluated for impairment					3,208	3,020
Loans and leases collectively evaluated for impairment					1,754,027	1,710,761
Net loans and leases					1,757,235	1,713,781
ALLL for loans and leases individually evaluated for impairment					1,064	885
ALLL for loans and leases collectively evaluated for impairment					34,066	34,956
Total allowance for loan and lease losses	35,105	30,773	35,130	34,468	35,130	35,841	34,468	31,204
PCI Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	8,343	12,423	9,144	10,026
Provision for Loan, Lease, and Other Losses	(1,476)	(1,514)	(2,277)	1,000
Charge-offs	0	0	0	(117)
Recoveries	0	0	0	0
Ending balance	6,867	10,909	6,867	10,909
Allowance for Loans and Leases Evaluated for Impairment [Abstract]
Total allowance for loan and lease losses	$ 8,343	$ 12,423	$ 6,867	$ 10,909	$ 6,867	$ 9,144	$ 10,909	$ 10,026

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Other Real Estate Owned (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Real Estate Properties [Line Items]
Advances from Federal Home Loan Banks			$ 175,200
Mortgage Loans in Process of Foreclosure, Amount	$ 21,100		$ 22,000
Total
Beginning balance	48,030	$ 51,097
Additions	15,426	17,013
Sales	(17,595)	(23,488)
Write-downs/losses	(3,221)	(3,156)
Ending balance	46,253	43,601
Mortgage
Total
Beginning balance	17,200
Ending balance	16,400
2019 Acquisitions
Total
Additions	$ 3,613
HomeBancorp Inc.
Total
Additions		$ 2,135

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Investments (Aggregate Values and Unrealized Gains and Losses) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Investment securities available for sale
Cost	$ 4,898,771	$ 4,607,117
Gross unrealized gains	15,594	6,425
Gross unrealized losses	9,482	56,432
Fair value	4,904,883	4,557,110
Cost	87,588	73,809
Gross unrealized gains	29,605	19,010
Gross unrealized losses	339	220
Fair value	116,854	92,599
Investment securities held to maturity
Cost	2,145,943	2,184,653
Gross unrealized gains	71,857
Gross unrealized losses	0
Fair value	2,217,800	2,201,502
Cost	7,132,302	6,865,579
Gross unrealized gains	117,056	42,774
Gross unrealized losses	9,821	57,142
Fair value	7,239,537	6,851,211
U.S. Treasury
Investment securities available for sale
Cost	748,206	1,249,243
Gross unrealized gains	1,114	633
Gross unrealized losses	2	2,166
Fair value	749,318	1,247,710
Government agency
Investment securities available for sale
Cost	666,029	257,252
Gross unrealized gains	1,404	222
Gross unrealized losses	1,812	639
Fair value	665,621	256,835
Mortgage-backed securities
Investment securities available for sale
Cost	3,329,593	2,956,793
Gross unrealized gains	10,369	5,309
Gross unrealized losses	7,343	52,763
Fair value	3,332,619	2,909,339
Investment securities held to maturity
Cost	2,115,141	2,184,653
Gross unrealized gains	71,857	17,339
Gross unrealized losses	0	490
Fair value	2,186,998	2,201,502
Corporate bonds
Investment securities available for sale
Cost	154,943	143,829
Gross unrealized gains	2,707	261
Gross unrealized losses	325	864
Fair value	157,325	$ 143,226
Other
Investment securities held to maturity
Cost	30,802
Gross unrealized gains	0
Gross unrealized losses	0
Fair value	$ 30,802

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Operating and Finance Lease Assets and Liabilities

The following table presents lease assets and liabilities as of September 30, 2019:

(Dollars in thousands)	Classification	September 30, 2019
Assets:
Operating	Other assets	$	79,857
Finance	Premises and equipment	9,402
Total leased assets		$	89,259
Liabilities:
Operating	Other liabilities	$	79,234
Finance	Other borrowings	8,610
Total lease liabilities		$	87,844

Schedule of Net Lease Cost

(Dollars in thousands)	Classification	Three months ended September 30, 2019			Nine months ended September 30, 2019
Lease cost:
Operating lease cost (1)	Occupancy expense	$	5,273		$	12,059
Finance lease cost:
Amortization of leased assets	Equipment expense	541			1,434
Interest on lease liabilities	Interest expense - Other borrowings	93			220
Variable lease cost	Occupancy expense	527			1,779
Sublease income	Occupancy expense	(86		)	(303		)
Net lease cost		$	6,348		$	15,189
(1) Operating lease cost includes short-term lease cost, which is immaterial.

Schedule of Lease Liability Maturities

The following table presents lease liability maturities in the next five years and thereafter:

(Dollars in thousands)	Operating Leases		Finance Leases		Total
2019 (1)	$	3,617	$	435	$	4,052
2020	14,052		2,142		16,194
2021	12,546		2,159		14,705
2022	11,142		1,876		13,018
2023	9,258		993		10,251
Thereafter	43,841		1,683		45,524
Total lease payments	$	94,456	$	9,288	$	103,744
Less: Interest	15,222		678		15,900
Present value of lease liabilities	$	79,234	$	8,610	$	87,844
(1) Represents the lease liability payments that will be made for the period October 1, 2019 through December 31, 2019.

Schedule of Lease Liability Maturities

The following table presents lease liability maturities in the next five years and thereafter:

(Dollars in thousands)	Operating Leases		Finance Leases		Total
2019 (1)	$	3,617	$	435	$	4,052
2020	14,052		2,142		16,194
2021	12,546		2,159		14,705
2022	11,142		1,876		13,018
2023	9,258		993		10,251
Thereafter	43,841		1,683		45,524
Total lease payments	$	94,456	$	9,288	$	103,744
Less: Interest	15,222		678		15,900
Present value of lease liabilities	$	79,234	$	8,610	$	87,844
(1) Represents the lease liability payments that will be made for the period October 1, 2019 through December 31, 2019.

Schedule of Remaining Weighted Average Lease Terms and Discount Rates

The following table presents the remaining weighted average lease terms and discount rates as of September 30, 2019:

Weighted average remaining lease term (years):	September 30, 2019
Operating	10.3
Finance	4.9
Weighted average discount rate:
Operating	3.22	%
Finance	3.07

Schedule of Supplemental Cash Flow Information

The following table presents supplemental cash flow information related to leases for the nine months ended September 30, 2019:

(Dollars in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,579
Operating cash flows from finance leases	220
Financing cash flows from finance leases	1,111
Right-of-use assets obtained in exchange for new operating lease liabilities	17,762
Right-of-use assets obtained in exchange for new finance lease liabilities	1,886

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Estimated Fair Values (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Values For Certain Financial Assets And Financial Liabilities

The table presents the carrying values and estimated fair values for financial instruments as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019				December 31, 2018
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	288,933	$	288,933	$	327,440	$	327,440
Overnight investments	949,899		949,899		797,406		797,406
Investment in marketable equity securities	116,854		116,854		92,599		92,599
Investment securities available for sale	4,904,883		4,904,883		4,557,110		4,557,110
Investment securities held to maturity	2,145,943		2,217,800		2,184,653		2,201,502
Loans held for sale	83,256		83,256		45,505		45,505
Net loans and leases	26,969,686		27,301,164		25,299,564		24,845,060
Income earned not collected	117,123		117,123		109,903		109,903
Federal Home Loan Bank stock	25,355		25,355		25,304		25,304
Mortgage and other servicing rights	22,431		24,823		24,066		27,435
Deposits	32,743,277		32,739,923		30,672,460		30,623,214
Securities sold under customer repurchase agreements	522,195		522,195		543,936		543,936
Federal Home Loan Bank borrowings	192,672		199,098		193,556		195,374
Subordinated debentures	149,051		156,566		140,741		151,670
Other borrowings	112,153		117,630		13,921		13,985
FDIC shared-loss payable	110,586		113,309		105,618		105,846
Accrued interest payable	17,859		17,859		3,712		3,712

Assets And Liabilities Carried At Fair Value On A Recurring Basis

For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	749,318	$	—	$	749,318	$	—
Government agency	665,621		—		665,621		—
Mortgage-backed securities	3,332,619		—		3,332,619		—
Corporate bonds	157,325		—		—		157,325
Total investment securities available for sale	$	4,904,883	$	—	$	4,747,558	$	157,325
Marketable equity securities	$	116,854	$	29,241	$	87,613	$	—
Loans held for sale	$	83,256	$	—	$	83,256	$	—
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,247,710	$	—	$	1,247,710	$	—
Government agency	256,835		—		256,835		—
Mortgage-backed securities	2,909,339		—		2,909,339		—
Corporate bonds	143,226		—		—		143,226
Total investment securities available for sale	$	4,557,110	$	—	$	4,413,884	$	143,226
Marketable equity securities	$	92,599	$	17,887	$	74,712	$	—
Loans held for sale	$	45,505	$	—	$	45,505	$	—

Fair Value of Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables summarize activity for Level 3 assets:

	Nine months ended September 30, 2019
(Dollars in thousands)	Corporate bonds
Balance at January 1, 2019	$	143,226
Amounts included in net income	123
Unrealized net gains included in other comprehensive income	2,985
Purchases	11,991
Balance at September 30, 2019	$	157,325

Fair Value Level 3 Significant Unobservable Input Assumptions

(Dollars in thousands)			September 30, 2019
Level 3 assets	Valuation technique	Significant unobservable input	Fair Value
Corporate bonds	Indicative bid provided by broker	Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer	$	157,325

Fair Value Option

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate originated for sale measured at fair value as of September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	83,256	$	81,073	$	2,183
	December 31, 2018
	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	45,505	$	44,073	$	1,432

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of September 30, 2019 or December 31, 2018.

We may be required to measure certain financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower of amortized cost or fair value accounting or write-downs of individual assets due to impairment.

Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Expected cash flows are determined using expected payment information at the individual loan level, discounted using the effective interest rate. The effective interest rate for the majority of impaired loans generally ranges between 3% and 7%.

OREO acquired or written down within the previous 12 months is deemed to be at fair value. Asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals ordered to ensure the reported values reflect the most current information.

Assets And Liabilities Carried At Fair Value On A Nonrecurring Basis

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	118,658	$	—	$	—	$	118,658
Other real estate remeasured during the previous 12 months	36,670		—		—		36,670
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	105,994	$	—	$	—	$	105,994
Other real estate remeasured during the previous 12 months	35,344		—		—		35,344

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Loans and Leases

9 Months Ended

Sep. 30, 2019

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

LOANS AND LEASES

BancShares' accounting methods for loans and leases differ depending on whether they are non-purchased credit impaired (Non-PCI) or purchased credit impaired (PCI). Loans that were originated by FCB, as well as loans that are performing under their contractual obligations at acquisition, are classified as Non-PCI. Loans that reflect credit deterioration since origination, such that it is probable at acquisition that FCB will be unable to collect all contractually required payments, are classified as PCI. Additionally, at the date of acquisition, all acquired loans are recorded at fair value with no corresponding allowance for loan and lease losses.

Loans and leases outstanding included the following at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Non-PCI loans and leases:
Commercial:
Construction and land development	$	943,747	$	757,854
Commercial mortgage	11,453,353		10,717,234
Other commercial real estate	491,063		426,985
Commercial and industrial and leases	4,129,384		3,938,730
Other	301,791		296,424
Total commercial loans	17,319,338		16,137,227
Noncommercial:
Residential mortgage	4,869,562		4,265,687
Revolving mortgage	2,414,884		2,542,975
Construction and land development	321,903		257,030
Consumer	1,757,235		1,713,781
Total noncommercial loans	9,363,584		8,779,473
Total non-PCI loans and leases	26,682,922		24,916,700
PCI loans:
Total PCI loans	513,589		606,576
Total loans and leases	$	27,196,511	$	25,523,276

At September 30, 2019, $9.33 billion in non-PCI loans with a lendable collateral value of $6.54 billion were used to secure $181.7 million in Federal Home Loan Bank (FHLB) of Atlanta advances, resulting in additional borrowing capacity of $6.35 billion. At December 31, 2018, $9.12 billion in non-PCI loans with a lendable collateral value of $6.36 billion were used to secure $175.2 million in FHLB of Atlanta advances, resulting in additional borrowing capacity of $6.18 billion.

At September 30, 2019, $3.47 billion in non-PCI loans with a lendable collateral value of $2.78 billion were used to secure additional borrowing capacity at the Federal Reserve Bank (FRB). At December 31, 2018, $2.94 billion in non-PCI loans with a lendable collateral value of $2.19 billion were used to secure additional borrowing capacity at the FRB.

Certain residential real estate loans are originated to be sold to investors and are recorded in loans held for sale at fair value. In addition, we may change our strategy for certain portfolio loans and decide to sell them in the secondary market. At that time, portfolio loans are transferred to loans held for sale at fair value. Since December 31, 2018, $23.9 million in portfolio loans were transferred to held for sale and subsequently sold. Loans held for sale totaled $83.3 million and $45.5 million at September 30, 2019 and December 31, 2018, respectively.

Net deferred fees on non-PCI loans and leases, including unearned income as well as unamortized costs and fees, were $0.2 million and $0.1 million at September 30, 2019 and December 31, 2018, respectively. The net unamortized discount related to purchased non-PCI loans and leases was $32.2 million at September 30, 2019 and $33.3 million at December 31, 2018. During the three months ended September 30, 2019 and September 30, 2018, accretion income on purchased non-PCI loans and leases was $3.5 million and $2.9 million, respectively. During the nine months ended September 30, 2019 and September 30, 2018, accretion income on purchased non-PCI loans and leases was $10.0 million and $9.9 million, respectively.

Credit quality indicators

Loans and leases are monitored for credit quality on a recurring basis. Commercial and noncommercial loans and leases have different credit quality indicators as a result of the unique characteristics of the loan segments being evaluated. The credit quality indicators for non-PCI and PCI commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. Commercial credit cards are included in the Commercial and industrial and leases segment, but are not specifically graded as with other commercial loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

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

Loss – Assets classified as loss are considered uncollectible and of such little value that it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather that it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.

Ungraded – Ungraded loans represent loans that are not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at September 30, 2019 and December 31, 2018 relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage, lease financing and other commercial real estate loans.

The credit quality indicators for non-PCI and PCI noncommercial loans are based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases.

Non-PCI loans and leases outstanding at September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	935,478	$	11,217,849	$	486,331	$	3,974,806	$	300,492	$	16,914,956
Special mention	2,295		111,617		3,191		51,355		599		169,057
Substandard	5,974		123,887		1,541		33,584		700		165,686
Doubtful	—		—		—		115		—		115
Ungraded	—		—		—		69,524		—		69,524
Total	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	17,319,338
	December 31, 2018
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	753,985	$	10,507,687	$	422,500	$	3,778,797	$	294,700	$	15,757,669
Special mention	1,369		114,219		3,193		54,814		1,105		174,700
Substandard	2,500		92,743		1,292		30,688		619		127,842
Doubtful	—		—		—		354		—		354
Ungraded	—		2,585		—		74,077		—		76,662
Total	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	16,137,227

	September 30, 2019
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,810,600	$	2,391,778	$	318,589	$	1,741,622	$	9,262,589
30-59 days past due	29,551		10,581		701		8,901		49,734
60-89 days past due	9,087		4,219		1,013		3,482		17,801
90 days or greater past due	20,324		8,306		1,600		3,230		33,460
Total	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	9,363,584
	December 31, 2018
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,214,783	$	2,514,269	$	254,837	$	1,696,321	$	8,680,210
30-59 days past due	28,239		12,585		581		10,035		51,440
60-89 days past due	7,357		4,490		21		3,904		15,772
90 days or greater past due	15,308		11,631		1,591		3,521		32,051
Total	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	8,779,473

PCI loans outstanding at September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI commercial Loans
Grade:
Pass	$	132,338	$	141,922
Special mention	43,535		48,475
Substandard	72,647		101,447
Doubtful	4,308		4,828
Total	$	252,828	$	296,672

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI noncommercial Loans
Current	$	234,494	$	268,280
30-59 days past due	8,613		11,155
60-89 days past due	5,573		7,708
90 days or greater past due	12,081		22,761
Total	$	260,761	$	309,904

The aging of the outstanding non-PCI loans and leases, by class, at September 30, 2019 and December 31, 2018 are provided in the tables below. Loans and leases past due 30 days or less are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	September 30, 2019
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	902	$	86	$	3,760	$	4,748	$	938,999	$	943,747
Commercial mortgage	22,270		2,386		10,737		35,393		11,417,960		11,453,353
Other commercial real estate	80		130		698		908		490,155		491,063
Commercial and industrial and leases	10,015		4,373		4,257		18,645		4,110,739		4,129,384
Other	61		211		13		285		301,506		301,791
Total commercial loans	33,328		7,186		19,465		59,979		17,259,359		17,319,338
Noncommercial:
Residential mortgage	29,551		9,087		20,324		58,962		4,810,600		4,869,562
Revolving mortgage	10,581		4,219		8,306		23,106		2,391,778		2,414,884
Construction and land development	701		1,013		1,600		3,314		318,589		321,903
Consumer	8,901		3,482		3,230		15,613		1,741,622		1,757,235
Total noncommercial loans	49,734		17,801		33,460		100,995		9,262,589		9,363,584
Total non-PCI loans and leases	$	83,062	$	24,987	$	52,925	$	160,974	$	26,521,948	$	26,682,922
	December 31, 2018
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	516	$	9	$	444	$	969	$	756,885	$	757,854
Commercial mortgage	14,200		2,066		3,237		19,503		10,697,731		10,717,234
Other commercial real estate	91		76		300		467		426,518		426,985
Commercial and industrial and leases	9,655		1,759		2,892		14,306		3,924,424		3,938,730
Other	285		—		89		374		296,050		296,424
Total commercial loans	24,747		3,910		6,962		35,619		16,101,608		16,137,227
Noncommercial:
Residential mortgage	28,239		7,357		15,308		50,904		4,214,783		4,265,687
Revolving mortgage	12,585		4,490		11,631		28,706		2,514,269		2,542,975
Construction and land development	581		21		1,591		2,193		254,837		257,030
Consumer	10,035		3,904		3,521		17,460		1,696,321		1,713,781
Total noncommercial loans	51,440		15,772		32,051		99,263		8,680,210		8,779,473
Total non-PCI loans and leases	$	76,187	$	19,682	$	39,013	$	134,882	$	24,781,818	$	24,916,700

The recorded investment, by class, in non-PCI loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Commercial:
Construction and land development	$	5,372	$	—	$	666	$	—
Commercial mortgage	24,993		796		12,594		—
Commercial and industrial and leases	6,630		1,099		4,624		808
Other commercial real estate	709		—		366		—
Other	121		—		279		—
Total commercial loans	37,825		1,895		18,529		808
Noncommercial:
Construction and land development	1,716		—		1,823		—
Residential mortgage	43,677		439		35,662		—
Revolving mortgage	22,748		—		25,563		—
Consumer	2,850		1,913		2,969		2,080
Total noncommercial loans	70,991		2,352		66,017		2,080
Total non-PCI loans and leases	$	108,816	$	4,247	$	84,546	$	2,888

Purchased non-PCI loans and leases

The following table relates to purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and provides the contractually required payments, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	1,078,854	$	175,465
Fair value at acquisition date	850,352		162,845

The recorded fair values of purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	15,647	$	8,663
Commercial mortgage	203,605		74,713
Other commercial real estate	98,107		7,509
Commercial and industrial and leases	28,135		40,208
Total commercial loans	345,494		131,093
Noncommercial:
Residential mortgage	405,419		24,641
Revolving mortgage	54,081		2,162
Construction and land development	31,668		3,552
Consumer	13,690		1,397
Total noncommercial loans	504,858		31,752
Total non-PCI loans	$	850,352	$	162,845

Purchased credit-impaired loans

The following table relates to PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and summarizes the contractually required payments, which include principal and interest, expected cash flows to be collected and the fair value of PCI loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	19,720	$	23,389
Contractual cash flows expected to be collected	16,815		21,392
Fair value at acquisition date	13,032		16,398

The recorded fair values of PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	—	$	1,233
Commercial mortgage	7,589		9,355
Commercial and industrial and leases	1,660		1,202
Total commercial loans	9,249		11,790
Noncommercial:
Residential mortgage	3,783		4,591
Construction and land development	—		17
Total noncommercial loans	3,783		4,608
Total PCI loans	$	13,032	$	16,398

The following table provides changes in the carrying value of all PCI loans during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	606,576		$	762,998
Fair value of acquired loans	29,430			15,555
Accretion	45,891			45,699
Payments received and other changes, net	(168,308		)	(186,234		)
Balance at September 30	$	513,589		$	638,018
Unpaid principal balance at September 30	$	724,745		$	999,926

The carrying value of PCI loans on the cost recovery method was $3.1 million and $3.3 million at September 30, 2019 and December 31, 2018, respectively. The cost recovery method is applied to loans when the timing of future cash flows cannot be reasonably estimated due to borrower nonperformance or uncertainty in the ultimate disposition of the asset. The recorded investment of PCI loans on nonaccrual status was $0.8 million and $1.3 million at September 30, 2019 and December 31, 2018, respectively. The remaining discount on PCI loans was $85.0 million and $95.5 million at September 30, 2019 and December 31, 2018, respectively.

During the three months ended September 30, 2019 and September 30, 2018, accretion income on PCI loans was $16.2 million and $13.5 million, respectively. During the nine months ended September 30, 2019 and September 30, 2018, accretion income on PCI loans was $45.9 million and $45.7 million, respectively.

For PCI loans, improved credit loss expectations generally result in the reclassification of nonaccretable difference to accretable yield. Changes in expected cash flow not related to credit improvements or deterioration do not affect the nonaccretable difference.

The following table documents changes to the amount of accretable yield for the first nine months of 2019 and 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	312,894		$	316,679
Additions from Biscayne Bancshares and First South Bancorp acquisitions	8,777			—
Additions from HomeBancorp acquisition	—			4,142
Accretion	(45,891		)	(45,699		)
Reclassifications from nonaccretable difference	6,156			5,866
Changes in expected cash flows that do not affect nonaccretable difference	(21,757		)	42,214
Balance at September 30	$	260,179		$	323,202

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Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2019

Mortgage Servicing Rights [Abstract]

Transfers and Servicing of Financial Assets [Text Block]

Our portfolio of residential mortgage loans serviced for third parties was $3.06 billion and $2.95 billion as of September 30, 2019 and December 31, 2018, respectively. These loans are originated by BancShares and sold to third parties on a non-recourse basis with servicing rights retained. The retained servicing rights were recorded as a servicing asset and are reported in other intangible assets on the Consolidated Balance Sheets, and the associated amortization expense and any valuation allowance recognized was included as a reduction of mortgage income in the Consolidated Statements of Income. Mortgage servicing rights are initially recorded at fair value and then carried at the lower of amortized cost or fair value.

Contractually specified mortgage servicing fees, late fees and ancillary fees earned for the three months ended September 30, 2019 and 2018 were $1.9 million and are reported in mortgage income in the Consolidated Statements of Income. For the nine months ended September 30, 2019 and 2018, contractually specified mortgage servicing fees, late fees, and ancillary fees earned were $5.8 million and $5.6 million, respectively.

The following table explains changes in the servicing asset during the three and nine months ended September 30, 2019 and 2018:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Beginning balance	$	20,665		$	21,657		$	21,396		$	21,945
Servicing rights originated	1,532			1,396			3,943			4,026
Amortization	(1,581		)	(1,420		)	(4,595		)	(4,338		)
Valuation allowance (increase) decrease	(45		)	—			(173		)	—
Ending balance	$	20,571		$	21,633		$	20,571		$	21,633

BancShares recorded valuation allowance provision expense of $45.0 thousand and $173.0 thousand for the three and nine months ended September 30, 2019, respectively. There was no provision expense or release recorded for the the three and nine months ended September 30, 2018. Mortgage servicing rights valuations are performed using a pooling methodology where loans with similar risk characteristics are grouped together and evaluated using discounted cash flows to estimate the present value of future earnings. Key economic assumptions used to value mortgage servicing rights were as follows:

	September 30, 2019			December 31, 2018
Discount rate - conventional fixed loans	8.67		%	9.69		%
Discount rate - all loans excluding conventional fixed loans	9.67		%	10.69		%
Weighted average constant prepayment rate	14.15		%	9.26		%
Weighted average cost to service a loan	$	87.09		$	87.52

The fair value of mortgage servicing rights is sensitive to changes in assumptions and is determined by estimating the present value of the asset's future cash flows by utilizing discount rates, prepayment rates, and other inputs. The discount rate is based on the 10-year U.S. Treasury rate plus a risk premium of 700 basis points for conventional fixed loans and 800 basis points for all other loans. The prepayment rate is derived from the Public Securities Association Standard Prepayment model. Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity. This results in a decrease in fair value. The average cost to service a loan is based on the number of loans serviced and the total cost to service the loans.

Other Servicing Rights

Other servicing rights were acquired as part of a business combination and relate to the sale of the guaranteed portion of government guaranteed loans with servicing retained. The amount of the other servicing rights were $1.9 million and $2.7 million at September 30, 2019 and December 31, 2018, respectively.

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Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

LEASES

BancShares leases certain branch locations, administrative offices and equipment. Operating lease ROU assets are included in other assets and the associated lease obligations are included in other liabilities on the Consolidated Balance Sheets. Finance leases are included in premises and equipment and other borrowings on the Consolidated Balance Sheets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets; we instead recognize lease expense for these leases on a straight-line basis over the lease term.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our corresponding obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating and finance lease ROU asset also includes initial direct costs and pre-paid lease payments made, excluding lease incentives. As most of our leases do not provide an implicit rate, BancShares uses its incremental borrowing rate, based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using secured rates for new FHLB advances under similar terms as the lease at inception. We utilize the implicit or incremental borrowing rate at the effective date of a modification not accounted for as a separate contract or a change in the lease terms to determine the present value of lease payments. BancShares used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 25 years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in calculating the value of the ROU and lease liability. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

We determine if an arrangement is a lease at inception and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have no related party lease agreements. As of September 30, 2019, there were no leases that have not yet commenced that would have a material impact on our Consolidated Financial Statements.

The following table presents lease assets and liabilities as of September 30, 2019:

(Dollars in thousands)	Classification	September 30, 2019
Assets:
Operating	Other assets	$	79,857
Finance	Premises and equipment	9,402
Total leased assets		$	89,259
Liabilities:
Operating	Other liabilities	$	79,234
Finance	Other borrowings	8,610
Total lease liabilities		$	87,844

The following table presents lease costs for the three and nine months ended September 30, 2019. Variable lease cost primarily represents variable payments such as common area maintenance and utilities that are recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments that are adjusted periodically for inflation. While lease liabilities are not remeasured as a result of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.

(Dollars in thousands)	Classification	Three months ended September 30, 2019			Nine months ended September 30, 2019
Lease cost:
Operating lease cost (1)	Occupancy expense	$	5,273		$	12,059
Finance lease cost:
Amortization of leased assets	Equipment expense	541			1,434
Interest on lease liabilities	Interest expense - Other borrowings	93			220
Variable lease cost	Occupancy expense	527			1,779
Sublease income	Occupancy expense	(86		)	(303		)
Net lease cost		$	6,348		$	15,189
(1) Operating lease cost includes short-term lease cost, which is immaterial.

The following table presents lease liability maturities in the next five years and thereafter:

(Dollars in thousands)	Operating Leases		Finance Leases		Total
2019 (1)	$	3,617	$	435	$	4,052
2020	14,052		2,142		16,194
2021	12,546		2,159		14,705
2022	11,142		1,876		13,018
2023	9,258		993		10,251
Thereafter	43,841		1,683		45,524
Total lease payments	$	94,456	$	9,288	$	103,744
Less: Interest	15,222		678		15,900
Present value of lease liabilities	$	79,234	$	8,610	$	87,844
(1) Represents the lease liability payments that will be made for the period October 1, 2019 through December 31, 2019.

The following table presents the remaining weighted average lease terms and discount rates as of September 30, 2019:

Weighted average remaining lease term (years):	September 30, 2019
Operating	10.3
Finance	4.9
Weighted average discount rate:
Operating	3.22	%
Finance	3.07

The following table presents supplemental cash flow information related to leases for the nine months ended September 30, 2019:

(Dollars in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,579
Operating cash flows from finance leases	220
Financing cash flows from finance leases	1,111
Right-of-use assets obtained in exchange for new operating lease liabilities	17,762
Right-of-use assets obtained in exchange for new finance lease liabilities	1,886

Leases

LEASES

BancShares leases certain branch locations, administrative offices and equipment. Operating lease ROU assets are included in other assets and the associated lease obligations are included in other liabilities on the Consolidated Balance Sheets. Finance leases are included in premises and equipment and other borrowings on the Consolidated Balance Sheets. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets; we instead recognize lease expense for these leases on a straight-line basis over the lease term.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our corresponding obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating and finance lease ROU asset also includes initial direct costs and pre-paid lease payments made, excluding lease incentives. As most of our leases do not provide an implicit rate, BancShares uses its incremental borrowing rate, based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is determined using secured rates for new FHLB advances under similar terms as the lease at inception. We utilize the implicit or incremental borrowing rate at the effective date of a modification not accounted for as a separate contract or a change in the lease terms to determine the present value of lease payments. BancShares used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 25 years. The exercise of lease renewal options is at our sole discretion. When it is reasonably certain that we will exercise our option to renew or extend the lease term, that option is included in calculating the value of the ROU and lease liability. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

We determine if an arrangement is a lease at inception and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have no related party lease agreements. As of September 30, 2019, there were no leases that have not yet commenced that would have a material impact on our Consolidated Financial Statements.

The following table presents lease assets and liabilities as of September 30, 2019:

(Dollars in thousands)	Classification	September 30, 2019
Assets:
Operating	Other assets	$	79,857
Finance	Premises and equipment	9,402
Total leased assets		$	89,259
Liabilities:
Operating	Other liabilities	$	79,234
Finance	Other borrowings	8,610
Total lease liabilities		$	87,844

The following table presents lease costs for the three and nine months ended September 30, 2019. Variable lease cost primarily represents variable payments such as common area maintenance and utilities that are recognized in the period in which the expense was incurred. Certain of our lease agreements also include rental payments that are adjusted periodically for inflation. While lease liabilities are not remeasured as a result of these changes, these adjustments are treated as variable lease costs and recognized in the period in which the expense is incurred.

(Dollars in thousands)	Classification	Three months ended September 30, 2019			Nine months ended September 30, 2019
Lease cost:
Operating lease cost (1)	Occupancy expense	$	5,273		$	12,059
Finance lease cost:
Amortization of leased assets	Equipment expense	541			1,434
Interest on lease liabilities	Interest expense - Other borrowings	93			220
Variable lease cost	Occupancy expense	527			1,779
Sublease income	Occupancy expense	(86		)	(303		)
Net lease cost		$	6,348		$	15,189
(1) Operating lease cost includes short-term lease cost, which is immaterial.

The following table presents lease liability maturities in the next five years and thereafter:

(Dollars in thousands)	Operating Leases		Finance Leases		Total
2019 (1)	$	3,617	$	435	$	4,052
2020	14,052		2,142		16,194
2021	12,546		2,159		14,705
2022	11,142		1,876		13,018
2023	9,258		993		10,251
Thereafter	43,841		1,683		45,524
Total lease payments	$	94,456	$	9,288	$	103,744
Less: Interest	15,222		678		15,900
Present value of lease liabilities	$	79,234	$	8,610	$	87,844
(1) Represents the lease liability payments that will be made for the period October 1, 2019 through December 31, 2019.

The following table presents the remaining weighted average lease terms and discount rates as of September 30, 2019:

Weighted average remaining lease term (years):	September 30, 2019
Operating	10.3
Finance	4.9
Weighted average discount rate:
Operating	3.22	%
Finance	3.07

The following table presents supplemental cash flow information related to leases for the nine months ended September 30, 2019:

(Dollars in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,579
Operating cash flows from finance leases	220
Financing cash flows from finance leases	1,111
Right-of-use assets obtained in exchange for new operating lease liabilities	17,762
Right-of-use assets obtained in exchange for new finance lease liabilities	1,886

XML

Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2019

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]

Loans And Leases Outstanding

Loans and leases outstanding included the following at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Non-PCI loans and leases:
Commercial:
Construction and land development	$	943,747	$	757,854
Commercial mortgage	11,453,353		10,717,234
Other commercial real estate	491,063		426,985
Commercial and industrial and leases	4,129,384		3,938,730
Other	301,791		296,424
Total commercial loans	17,319,338		16,137,227
Noncommercial:
Residential mortgage	4,869,562		4,265,687
Revolving mortgage	2,414,884		2,542,975
Construction and land development	321,903		257,030
Consumer	1,757,235		1,713,781
Total noncommercial loans	9,363,584		8,779,473
Total non-PCI loans and leases	26,682,922		24,916,700
PCI loans:
Total PCI loans	513,589		606,576
Total loans and leases	$	27,196,511	$	25,523,276

Composition Of The Loans And Leases Outstanding By Credit Quality Indicator

September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	935,478	$	11,217,849	$	486,331	$	3,974,806	$	300,492	$	16,914,956
Special mention	2,295		111,617		3,191		51,355		599		169,057
Substandard	5,974		123,887		1,541		33,584		700		165,686
Doubtful	—		—		—		115		—		115
Ungraded	—		—		—		69,524		—		69,524
Total	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	17,319,338
	December 31, 2018
(Dollars in thousands)	Non-PCI commercial loans and leases
Grade:	Construction and land development		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Total non-PCI commercial loans and leases
Pass	$	753,985	$	10,507,687	$	422,500	$	3,778,797	$	294,700	$	15,757,669
Special mention	1,369		114,219		3,193		54,814		1,105		174,700
Substandard	2,500		92,743		1,292		30,688		619		127,842
Doubtful	—		—		—		354		—		354
Ungraded	—		2,585		—		74,077		—		76,662
Total	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	16,137,227

	September 30, 2019
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,810,600	$	2,391,778	$	318,589	$	1,741,622	$	9,262,589
30-59 days past due	29,551		10,581		701		8,901		49,734
60-89 days past due	9,087		4,219		1,013		3,482		17,801
90 days or greater past due	20,324		8,306		1,600		3,230		33,460
Total	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	9,363,584
	December 31, 2018
	Non-PCI noncommercial loans and leases
(Dollars in thousands)	Residential mortgage		Revolving mortgage		Construction and land development		Consumer		Total non-PCI noncommercial loans and leases
Current	$	4,214,783	$	2,514,269	$	254,837	$	1,696,321	$	8,680,210
30-59 days past due	28,239		12,585		581		10,035		51,440
60-89 days past due	7,357		4,490		21		3,904		15,772
90 days or greater past due	15,308		11,631		1,591		3,521		32,051
Total	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	8,779,473

PCI loans outstanding at September 30, 2019 and December 31, 2018 by credit quality indicator are provided below:

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI commercial Loans
Grade:
Pass	$	132,338	$	141,922
Special mention	43,535		48,475
Substandard	72,647		101,447
Doubtful	4,308		4,828
Total	$	252,828	$	296,672

	September 30, 2019		December 31, 2018
(Dollars in thousands)	PCI noncommercial Loans
Current	$	234,494	$	268,280
30-59 days past due	8,613		11,155
60-89 days past due	5,573		7,708
90 days or greater past due	12,081		22,761
Total	$	260,761	$	309,904

Aging Of The Outstanding Loans And Leases By Class Excluding Loans Impaired At Acquisition Date

The aging of the outstanding non-PCI loans and leases, by class, at September 30, 2019 and December 31, 2018 are provided in the tables below. Loans and leases past due 30 days or less are considered current as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.

	September 30, 2019
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	902	$	86	$	3,760	$	4,748	$	938,999	$	943,747
Commercial mortgage	22,270		2,386		10,737		35,393		11,417,960		11,453,353
Other commercial real estate	80		130		698		908		490,155		491,063
Commercial and industrial and leases	10,015		4,373		4,257		18,645		4,110,739		4,129,384
Other	61		211		13		285		301,506		301,791
Total commercial loans	33,328		7,186		19,465		59,979		17,259,359		17,319,338
Noncommercial:
Residential mortgage	29,551		9,087		20,324		58,962		4,810,600		4,869,562
Revolving mortgage	10,581		4,219		8,306		23,106		2,391,778		2,414,884
Construction and land development	701		1,013		1,600		3,314		318,589		321,903
Consumer	8,901		3,482		3,230		15,613		1,741,622		1,757,235
Total noncommercial loans	49,734		17,801		33,460		100,995		9,262,589		9,363,584
Total non-PCI loans and leases	$	83,062	$	24,987	$	52,925	$	160,974	$	26,521,948	$	26,682,922
	December 31, 2018
(Dollars in thousands)	30-59 days past due		60-89 days past due		90 days or greater		Total past due		Current		Total loans and leases
Non-PCI loans and leases:
Commercial:
Construction and land development	$	516	$	9	$	444	$	969	$	756,885	$	757,854
Commercial mortgage	14,200		2,066		3,237		19,503		10,697,731		10,717,234
Other commercial real estate	91		76		300		467		426,518		426,985
Commercial and industrial and leases	9,655		1,759		2,892		14,306		3,924,424		3,938,730
Other	285		—		89		374		296,050		296,424
Total commercial loans	24,747		3,910		6,962		35,619		16,101,608		16,137,227
Noncommercial:
Residential mortgage	28,239		7,357		15,308		50,904		4,214,783		4,265,687
Revolving mortgage	12,585		4,490		11,631		28,706		2,514,269		2,542,975
Construction and land development	581		21		1,591		2,193		254,837		257,030
Consumer	10,035		3,904		3,521		17,460		1,696,321		1,713,781
Total noncommercial loans	51,440		15,772		32,051		99,263		8,680,210		8,779,473
Total non-PCI loans and leases	$	76,187	$	19,682	$	39,013	$	134,882	$	24,781,818	$	24,916,700

Recorded Investment, By Class, In Loans And Leases On Nonaccrual Status And Loans And Leases Greater Than 90 Days Past Due And Still Accruing

The recorded investment, by class, in non-PCI loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Nonaccrual loans and leases		Loans and leases > 90 days and accruing		Nonaccrual loans and leases		Loans and leases > 90 days and accruing
Commercial:
Construction and land development	$	5,372	$	—	$	666	$	—
Commercial mortgage	24,993		796		12,594		—
Commercial and industrial and leases	6,630		1,099		4,624		808
Other commercial real estate	709		—		366		—
Other	121		—		279		—
Total commercial loans	37,825		1,895		18,529		808
Noncommercial:
Construction and land development	1,716		—		1,823		—
Residential mortgage	43,677		439		35,662		—
Revolving mortgage	22,748		—		25,563		—
Consumer	2,850		1,913		2,969		2,080
Total noncommercial loans	70,991		2,352		66,017		2,080
Total non-PCI loans and leases	$	108,816	$	4,247	$	84,546	$	2,888

Schedule Of Loans And Leases Purchased

The following table relates to purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and provides the contractually required payments, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	1,078,854	$	175,465
Fair value at acquisition date	850,352		162,845

The recorded fair values of purchased non-PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	15,647	$	8,663
Commercial mortgage	203,605		74,713
Other commercial real estate	98,107		7,509
Commercial and industrial and leases	28,135		40,208
Total commercial loans	345,494		131,093
Noncommercial:
Residential mortgage	405,419		24,641
Revolving mortgage	54,081		2,162
Construction and land development	31,668		3,552
Consumer	13,690		1,397
Total noncommercial loans	504,858		31,752
Total non-PCI loans	$	850,352	$	162,845

Purchased credit-impaired loans

The following table relates to PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions and summarizes the contractually required payments, which include principal and interest, expected cash flows to be collected and the fair value of PCI loans at the acquisition date:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Contractually required payments	$	19,720	$	23,389
Contractual cash flows expected to be collected	16,815		21,392
Fair value at acquisition date	13,032		16,398

The recorded fair values of PCI loans acquired in the Biscayne Bancshares and First South Bancorp transactions as of the acquisition date are as follows:

(Dollars in thousands)	Biscayne Bancshares		First South Bancorp
Commercial:
Construction and land development	$	—	$	1,233
Commercial mortgage	7,589		9,355
Commercial and industrial and leases	1,660		1,202
Total commercial loans	9,249		11,790
Noncommercial:
Residential mortgage	3,783		4,591
Construction and land development	—		17
Total noncommercial loans	3,783		4,608
Total PCI loans	$	13,032	$	16,398

Changes In Carrying Value Of PCI Loans

The following table provides changes in the carrying value of all PCI loans during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	606,576		$	762,998
Fair value of acquired loans	29,430			15,555
Accretion	45,891			45,699
Payments received and other changes, net	(168,308		)	(186,234		)
Balance at September 30	$	513,589		$	638,018
Unpaid principal balance at September 30	$	724,745		$	999,926

Changes in Carrying Value of Accretable Yield for PCI Loans

The following table documents changes to the amount of accretable yield for the first nine months of 2019 and 2018:

(Dollars in thousands)	2019			2018
Balance at January 1	$	312,894		$	316,679
Additions from Biscayne Bancshares and First South Bancorp acquisitions	8,777			—
Additions from HomeBancorp acquisition	—			4,142
Accretion	(45,891		)	(45,699		)
Reclassifications from nonaccretable difference	6,156			5,866
Changes in expected cash flows that do not affect nonaccretable difference	(21,757		)	42,214
Balance at September 30	$	260,179		$	323,202

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 124,779	$ 117,318	$ 355,497	$ 310,840
Unrealized (losses) gains on securities available for sale:
Unrealized gains (losses) on securities available for sale arising during the period	3,932	(13,810)	62,974	(9,656)
Tax effect	(906)	3,175	(14,485)	2,221
Reclassification adjustment for realized gains on securities available for sale included in income before income taxes	(1,136)	0	(6,855)	0
Tax effect	262	0	1,577	0
Total change in unrealized (losses) gains on securities available for sale, net of tax	2,152	(10,635)	43,211	(7,435)
Unrealized losses on securities available for sale transferred to held to maturity:
Unrealized losses on securities available for sale transferred to held to maturity	0	0	0	(109,507)
Tax effect	0	0	0	25,186
Reclassification adjustment for accretion of unrealized losses on securities available for sale transferred to held to maturity	6,095	6,502	18,004	10,975
Tax effect	(1,402)	(1,495)	(4,141)	(2,523)
Total change in unrealized losses on securities available for sale transferred to held to maturity, net of tax	4,693	5,007	13,863	(75,869)
Change in pension obligation:
Amortization of actuarial losses and prior service cost	2,745	3,495	8,235	10,486
Tax effect	(631)	(804)	(1,894)	(2,412)
Total change in pension obligation, net of tax	2,114	2,691	6,341	8,074
Net current period other comprehensive income	8,959	(2,937)	63,415	(75,230)
Total comprehensive income	$ 133,738	$ 114,381	$ 418,912	$ 235,610

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Entity Central Index Key	0000798941
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-16715
Entity Registrant Name	First Citizens BancShares Inc /DE/
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	56-1528994
Entity Address, Address Line One	4300 Six Forks Road
Entity Address, City or Town	Raleigh
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27609
City Area Code	(919)
Local Phone Number	716-7000
Title of 12(b) Security	Class A Common Stock, Par Value $1
Trading Symbol	FCNCA
Security Exchange Name	NASDAQ
Title of 12(g) Security	Class B Common Stock, Par Value $1
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Class A Common Stock
Entity Common Stock, Shares Outstanding		9,732,720
Class B Common Stock
Entity Common Stock, Shares Outstanding		1,005,185

XML

Accounting Policies and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Accounting Policies and Basis of Presentation

ACCOUNTING POLICIES AND BASIS OF PRESENTATION

First Citizens BancShares, Inc. (BancShares) is a financial holding company organized under the laws of Delaware and conducts operations through its banking subsidiary, First-Citizens Bank & Trust Company (FCB), which is headquartered in Raleigh, North Carolina.

General

These consolidated financial statements and notes thereto are presented in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flow activity required in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and consolidated results of operations have been made. The unaudited interim consolidated financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements included in BancShares' Annual Report on Form 10-K for the year ended December 31, 2018.

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported cash flows, shareholders' equity or net income.

During the third quarter of 2019, the Company identified items in the prior period related to unsettled investment activity that had been reported as cash flows from operating activities and should have been presented as investing activities. The Company corrected the previously presented cash flows for this activity and in doing so, decreased net cash flows from operating activities with an offsetting increase in net cash flows from investing activities. The Company has evaluated the effect of the incorrect presentation, both qualitatively and quantitatively, and concluded that it was immaterial.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. The estimates that BancShares considers significant are the allowance for loan and lease losses, fair value measurements, Federal Deposit Insurance Corporation (FDIC) shared-loss payable, pension plan assumptions, goodwill and other intangible assets, and income taxes.

Share Repurchases

During the third quarter of 2019, BancShares repurchased 295,900 shares of Class A common stock for $135.4 million at an average cost per share of $457.50. During the first nine months of 2019, BancShares repurchased a total of 744,400 shares of Class A common stock for $325.9 million at an average cost per share of $437.84. During the three and nine months ended September 30, 2018, BancShares repurchased a total of 125,000 shares of Class A common stock for $58.1 million at an average cost per share of $464.68. All Class A common stock repurchases completed in 2019 and 2018 were consummated under previously approved authorizations.

The shares repurchases in the third quarter of 2019 included 50,000 shares of Class A common stock purchased from Ella Ann Holding, as trustee of her revocable trust. Mrs. Holding is the widow of BancShares’ former Executive Vice Chairman, Frank B. Holding, and the mother of Frank B. Holding, Jr. and Hope H. Bryant, BancShares’ Chairman and Chief Executive Officer and Vice Chairman, respectively. Pursuant to the existing share purchase authorization, the board’s independent Audit Committee reviewed and approved the repurchase of up to 250,000 shares held by Mrs. Holding on or before April 30, 2020, pursuant to BancShares’ related person transaction policy.

Subsequent to quarter-end through October 31, 2019, BancShares repurchased an additional 146,100 shares of Class A common stock for $69.1 million at an average cost per share of $472.94, which included 50,000 shares repurchased from Mrs. Holding.

On October 29, 2019, the Board authorized share repurchases of up to 500,000 of BancShares' Class A common stock for the period November 1, 2019 through January 31, 2020. This authority will supersede all previously approved authorities.

Recently Adopted Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842)

This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The key difference between prior standards and this ASU is the requirement for lessees to recognize all lease contracts on their balance sheet. This ASU requires lessees to classify leases as either operating or finance leases, which are substantially similar to the previous operating and capital leases classifications. The distinction between these two classifications under the new standard does not relate to balance sheet treatment, but relates to treatment in the statements of income and cash flows. Lessor guidance remains largely unchanged with the exception of how a lessor determines the appropriate lease classification for each lease to better align the lessor guidance with revised lessee classification guidance.

We adopted this standard, as of January 1, 2019, using the effective date method that allows for entities to initially apply the new leases standard at the adoption date. In addition, we made several policy elections permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We determined that most renewal options would not be reasonably determinable in estimating the expected lease term.

We made the policy election available under Topic 842 to combine lease and non-lease components and applied this practical expedient to leases in effect prior to the date of adoption. We will continue to apply the practical expedient to all leases entered into going forward.

The adoption of the new standard had an impact on our Consolidated Balance Sheet as of January 1, 2019, with the recording of operating Right-of-Use (ROU) assets and operating lease liabilities of $70.7 million and $71.8 million, respectively. The operating lease liability included a $1.1 million fair value adjustment for leases assumed in the acquisition of HomeBancorp, Inc. (HomeBancorp). In addition, at the adoption date we had finance lease ROU assets and finance lease liabilities, previously classified as capital leases, of $9.1 million and $8.3 million, respectively.  The Company did not have a cumulative-effect adjustment to the opening balance of retained earnings at commencement. The Company has no related party lease agreements.  This ASU did not have a material impact on our Consolidated Statements of Income. See Note N in the Consolidated Financial Statements for additional disclosures.

FASB ASU 2018-15 - Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). This ASU requires entities to use the guidance in FASB ASC 350-40, Intangibles - Goodwill and Other - Internal Use Software, to determine whether to capitalize or expense implementation costs related to the service contract. This ASU also requires entities to (1) expense capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement (2) present the expense related to the capitalized implementation costs in the same line item on the income statement as fees associated with the hosting element of the arrangement (3) classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element (4) present the capitalized implementation costs in the same balance sheet line item that a prepayment for the fees associated with the hosting arrangement would be presented.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. BancShares adopted this standard effective July 1, 2019 on a prospective basis. As of September 30, 2019, $3.7 million of deferred implementation costs related to cloud computing arrangements were recorded in other assets. These costs are expensed over the fixed, noncancellable term of the arrangement and are recorded to processing fees paid to third parties, consistent with the line item of the income statement where fees paid for the associated hosted service are recorded.

Recently Issued Accounting Pronouncements

FASB ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by eliminating the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and adding a requirement to disclose an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.

The amendments in this ASU are effective for public entities for fiscal years ending after December 15, 2020. Early adoption is permitted for all entities. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

This ASU modifies the disclosure requirements on fair value measurements by eliminating the requirements to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. This ASU also added specific disclosure requirements for fair value measurements for public business entities including the requirement to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2019, and all interim periods within those fiscal years. Early adoption is permitted upon issuance of the ASU. Entities are permitted to early adopt amendments that remove or modify disclosures and delay the adoption of the additional disclosures until their effective date. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

This ASU eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative test.

This ASU will be effective for BancShares' annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt the guidance for our annual impairment test in fiscal year 2020. BancShares does not anticipate any impact to our consolidated financial position or consolidated results of operations as a result of the adoption.

FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

This ASU introduces a new credit loss methodology which requires earlier recognition of credit losses, replacing multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The amendments in this ASU require loss estimates be determined over the lifetime of the asset and broaden the information that an entity must consider in developing its expected credit losses. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity's size, complexity and risk profile.

For BancShares, the standard will apply to loans, unfunded loan commitments and debt securities. A cross-functional team co-led by Corporate Finance and Risk Management is in place to implement the new standard. We have completed initial current expected credit losses (CECL) models and accounting interpretations. We continue to refine and test our models, estimation techniques, operational processes and controls to be used in preparing CECL loss estimates and related financial statement disclosures. We have also begun evaluating our debt securities portfolio to determine the impact of adoption of CECL. We expect a significant portion of our securities portfolio to have an expectation of zero losses and therefore have no initial impact at adoption.

The CECL calculated losses on the loan portfolio are derived using estimated probability of default and loss given default models based on historical loss experience, borrower characteristics, forecasts of relevant economic conditions and other factors. Bancshares intends to use a two-year reasonable and supportable forecast period that incorporates one economic forecast, with a 12-month straight-line reversion period to historical averages. The outstanding loans are bifurcated between commercial and non-commercial portfolios and then further segmented into pools with similar risk characteristics. The commercial portfolio, comprising the majority of Bancshares’ total loans, primarily consists of loans with short contractual maturities that are expected to result in a reduction to the allowance for credit losses. This reduction is expected to be partially offset by an increase in the allowance for credit losses in the non-commercial portfolio given its longer contractual maturities. The Company is still evaluating the credit loss models for purchase credit impaired loans (PCI) to determine the appropriate amount required to be added to the allowance for credit losses.

BancShares continues to evaluate the impact of this standard on its consolidated financial statements but the total magnitude of this impact is still being finalized. The final impact will be dependent on, among other items, loan and debt security portfolio composition and credit quality at the adoption date, as well as economic conditions, financial models used and forecasts in place at that time. Based on current factors, the overall allowance for credit losses is expected to decrease in aggregate, but the magnitude of the change is not anticipated to be material in relation to total assets, retained earnings or regulatory capital.

The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. BancShares will adopt the guidance in the first quarter of 2020 using a modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.

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Loans and Leases (Aging Of The Outstanding Loans and Leases By Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]
PCI loans	$ 513,589	$ 606,576	$ 638,018	$ 762,998
Non-PCI loans	26,682,922	24,916,700
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
PCI loans	252,828	296,672
Non-PCI loans	17,319,338	16,137,227
Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	943,747	757,854
Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	11,453,353	10,717,234
Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	491,063	426,985
Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	4,129,384	3,938,730
Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	301,791	296,424
Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
PCI loans	260,761
Non-PCI loans	9,363,584	8,779,473
Noncommercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	321,903	257,030
Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
PCI loans		309,904
Non-PCI loans	4,869,562	4,265,687
Noncommercial | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	2,414,884	2,542,975
Noncommercial | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-PCI loans	1,757,235	1,713,781
PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current loans	234,494
PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current loans		268,280
Non-PCI Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	160,974	134,882
Current loans	26,521,948	24,781,818
Non-PCI loans	26,682,922	24,916,700
Non-PCI Loans | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	59,979	35,619
Current loans	17,259,359	16,101,608
Non-PCI loans	17,319,338	16,137,227
Non-PCI Loans | Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	4,748	969
Current loans	938,999	756,885
Non-PCI loans	943,747	757,854
Non-PCI Loans | Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	35,393	19,503
Current loans	11,417,960	10,697,731
Non-PCI loans	11,453,353	10,717,234
Non-PCI Loans | Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	908	467
Current loans	490,155	426,518
Non-PCI loans	491,063	426,985
Non-PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	18,645	14,306
Current loans	4,110,739	3,924,424
Non-PCI loans	4,129,384	3,938,730
Non-PCI Loans | Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	285	374
Current loans	301,506	296,050
Non-PCI loans	301,791	296,424
Non-PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	100,995	99,263
Current loans	9,262,589	8,680,210
Non-PCI loans	9,363,584	8,779,473
Non-PCI Loans | Noncommercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	3,314	2,193
Current loans	318,589	254,837
Non-PCI loans	321,903	257,030
Non-PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	58,962	50,904
Current loans	4,810,600	4,214,783
Non-PCI loans	4,869,562	4,265,687
Non-PCI Loans | Noncommercial | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	23,106	28,706
Current loans	2,391,778	2,514,269
Non-PCI loans	2,414,884	2,542,975
Non-PCI Loans | Noncommercial | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	15,613	17,460
Current loans	1,741,622	1,696,321
Non-PCI loans	1,757,235	1,713,781
30 to 59 Days past due | PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	8,613
30 to 59 Days past due | PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans		11,155
30 to 59 Days past due | Non-PCI Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	83,062	76,187
30 to 59 Days past due | Non-PCI Loans | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	33,328	24,747
30 to 59 Days past due | Non-PCI Loans | Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	902	516
30 to 59 Days past due | Non-PCI Loans | Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	22,270	14,200
30 to 59 Days past due | Non-PCI Loans | Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	80	91
30 to 59 Days past due | Non-PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	10,015	9,655
30 to 59 Days past due | Non-PCI Loans | Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	61	285
30 to 59 Days past due | Non-PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	49,734	51,440
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	701	581
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	29,551	28,239
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	10,581	12,585
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	8,901	10,035
60 to 89 Days past due | PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	5,573
60 to 89 Days past due | PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans		7,708
60 to 89 Days past due | Non-PCI Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	24,987	19,682
60 to 89 Days past due | Non-PCI Loans | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	7,186	3,910
60 to 89 Days past due | Non-PCI Loans | Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	86	9
60 to 89 Days past due | Non-PCI Loans | Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	2,386	2,066
60 to 89 Days past due | Non-PCI Loans | Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	130	76
60 to 89 Days past due | Non-PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	4,373	1,759
60 to 89 Days past due | Non-PCI Loans | Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	211	0
60 to 89 Days past due | Non-PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	17,801	15,772
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	1,013	21
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	9,087	7,357
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	4,219	4,490
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	3,482	3,904
90 Days or greater | PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	12,081
90 Days or greater | PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans		22,761
90 Days or greater | Non-PCI Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	52,925	39,013
90 Days or greater | Non-PCI Loans | Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	19,465	6,962
90 Days or greater | Non-PCI Loans | Commercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	3,760	444
90 Days or greater | Non-PCI Loans | Commercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	10,737	3,237
90 Days or greater | Non-PCI Loans | Commercial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	698	300
90 Days or greater | Non-PCI Loans | Commercial | Commercial and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	4,257	2,892
90 Days or greater | Non-PCI Loans | Commercial | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	13	89
90 Days or greater | Non-PCI Loans | Noncommercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	33,460	32,051
90 Days or greater | Non-PCI Loans | Noncommercial | Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	1,600	1,591
90 Days or greater | Non-PCI Loans | Noncommercial | Mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	20,324	15,308
90 Days or greater | Non-PCI Loans | Noncommercial | Revolving mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	8,306	11,631
90 Days or greater | Non-PCI Loans | Noncommercial | Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due loans	$ 3,230	$ 3,521

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Investments (Narrative) (Details) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) investments investment shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) investments investment shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Schedule of Investments [Line Items]
Available for sale securities, realized gains	$ 1,300,000		$ 7,000,000.0
Available for sale securities, realized loss	190,000.0		190,000
Available for sale securities, realized gain (loss)	$ 1,136,000	$ 0	$ 6,855,000	$ 0
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, number of positions | investment	108		108
Unrealized losses related to marketability of securities or issuer's ability to honor redemption obligations	$ 0		$ 0
Investment value deemed to be OTTI	0
Investment securities, aggregate carrying value, pledged as collateral	$ 3,400,000,000		$ 3,400,000,000		$ 4,030,000,000.00
Mortgage-backed securities
Schedule of Investments [Line Items]
Available-for-sale, securities in unrealized loss positions, number of positions, greater than or equal to one year | investments	107		107
Corporate Bonds
Schedule of Investments [Line Items]
Available-for-sale, securities in unrealized loss positions, number of positions, greater than or equal to one year | investments	1		1
Visa Class B Common Stock
Schedule of Investments [Line Items]
Investment owned (in shares) | shares	298		298
Investment owned, fair value	$ 0		$ 0

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Estimated Fair Values (Assets and Liabilities Carried at Fair Value on a Recurring Basis Significant Unobservable Inputs) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3	$ 0	$ 0
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Investment securities available for sale	4,904,883		$ 4,904,883	$ 4,557,110
Corporate Bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance			143,226
Amounts included in net income			123
Unrealized net (losses) gains included in other comprehensive income			2,985
Purchases			11,991
Ending balance	157,325		157,325
Fair Value, Measurements, Recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Investment securities available for sale	4,904,883		4,904,883	4,557,110
Fair Value, Measurements, Recurring | Corporate Bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Investment securities available for sale	157,325		157,325	143,226
Significant Unobservable Inputs (Level 3 Inputs) | Fair Value, Measurements, Recurring
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Investment securities available for sale	157,325		157,325	143,226
Significant Unobservable Inputs (Level 3 Inputs) | Fair Value, Measurements, Recurring | Corporate Bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Investment securities available for sale	$ 157,325		$ 157,325	$ 143,226

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FDIC Shared-Loss Receivable FDIC Shared-Loss Payable (Changes in Payable to FDIC) (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2019 USD ($)
FDIC Shared-Payable [Abstract]
Accretion expense	$ 4,968
FDIC shared-loss payable	$ 110,586

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Mortgage Servicing Rights (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Mortgage Servicing Rights [Abstract]
Residential Mortgage Loans Serviced	$ 3,060,000,000.00		$ 3,060,000,000.00		$ 2,950,000,000
Contractually Specified Servicing Fee, Late Fee, and Ancillary Fee Earned in Exchange for Servicing Financial Asset	1,900,000	$ 1,900,000	5,800,000	$ 5,600,000
Other servicing rights	1,900,000		1,900,000		$ 2,700,000
Amortization of Mortgage Servicing Rights (MSRs)	1,581,000	1,420,000	4,595,000	4,338,000
Valuation allowance provision (reversal)	$ 45,000.0	$ 0	$ 173,000	$ 0

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Loans and Leases Loans and Leases (Schedule of Contractually Required Payments Including Principal and Interest, Expected Cash Flows to be Collected and Fair Values) (Details) - USD ($) $ in Thousands	Jan. 13, 2017	Mar. 11, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
PCI loans and leases	$ 29,430	$ 15,555

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Allowance for Loan and Lease Losses (Troubled Debt Restructuring) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) loans	Sep. 30, 2018 USD ($) loans	Sep. 30, 2019 USD ($) loans	Sep. 30, 2018 USD ($) loans	Dec. 31, 2018 USD ($)
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	142	104	381	385
Financing Receivable, Modifications, Recorded Investment	$ 161,312		$ 161,312		$ 156,130
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 14,251	$ 11,807	$ 35,546	$ 37,155
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	59	50	164	162
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 4,036	$ 3,766	$ 13,976	$ 11,472
PCI Loans
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	17,400		17,400		18,200
Commercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	71,972		71,972		74,560
Commercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,627		1,627		2,298
Commercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	57,270		57,270		61,065
Commercial | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	474		474		860
Commercial | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	12,341		12,341		10,046
Commercial | Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	260		260		291
Noncommercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	89,340		89,340		81,570
Noncommercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,088		3,088		2,337
Noncommercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	54,237		54,237		47,524
Noncommercial | Revolving mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	28,807		28,807		28,688
Noncommercial | Consumer and Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,208		3,208		3,021
Accruing
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	124,414		124,414		127,093
Accruing | Commercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	61,512		61,512		64,171
Accruing | Commercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	518		518		1,946
Accruing | Commercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	50,206		50,206		53,270
Accruing | Commercial | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	474		474		851
Accruing | Commercial | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,161		10,161		7,986
Accruing | Commercial | Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	153		153		118
Accruing | Noncommercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	62,902		62,902		62,922
Accruing | Noncommercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,570		1,570		2,227
Accruing | Noncommercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	37,798		37,798		37,903
Accruing | Noncommercial | Revolving mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	20,968		20,968		20,492
Accruing | Noncommercial | Consumer and Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,566		2,566		2,300
Nonaccruing
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	36,898		36,898		29,037
Nonaccruing | Commercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	10,460		10,460		10,389
Nonaccruing | Commercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,109		1,109		352
Nonaccruing | Commercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	7,064		7,064		7,795
Nonaccruing | Commercial | Other commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	0		0		9
Nonaccruing | Commercial | Commercial and industrial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2,180		2,180		2,060
Nonaccruing | Commercial | Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	107		107		173
Nonaccruing | Noncommercial
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	26,438		26,438		18,648
Nonaccruing | Noncommercial | Construction and land development
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,518		1,518		110
Nonaccruing | Noncommercial | Mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	16,439		16,439		9,621
Nonaccruing | Noncommercial | Revolving mortgage
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	7,839		7,839		8,196
Nonaccruing | Noncommercial | Consumer and Other
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 642		$ 642		$ 721
Interest only period provided
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	2	1	6	3
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 1,221	$ 300	$ 3,209	$ 1,136
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	0	0	2	2
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 0	$ 0	$ 2,064	$ 836
Loan term extension
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	5	9	13	32
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 2,473	$ 2,565	$ 3,870	$ 4,414
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	0	2	4	9
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 0	$ 327	$ 514	$ 943
Below market interest rate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	80	56	205	211
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 4,460	$ 7,109	$ 14,968	$ 24,245
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	34	32	86	82
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 2,034	$ 2,832	$ 5,977	$ 6,098
Discharged from bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	55	38	157	139
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 6,097	$ 1,833	$ 13,499	$ 7,360
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	25	16	72	69
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 2,002	$ 607	$ 5,421	$ 3,595

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Accumulated Other Comprehensive Income (Loss) (Schedule Of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss), before Tax		$ (223,080)		$ (223,080)		$ (305,438)
Deferred tax expense (benefit)		(51,308)		(51,308)		(70,251)
Accumulated other comprehensive income (loss), net of tax		(171,772)		(171,772)		(235,187)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		(5,933)	$ (7,698)	(14,926)	$ (16,526)
Amortization of actuarial losses and prior service cost		(2,730)	(3,476)	(8,192)	(10,427)
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, before Tax		2,745	3,495	8,235	10,486
Unrealized Losses on Investment Securities Available for Sale
Accumulated Other Comprehensive Income (Loss), before Tax		6,112		6,112		(50,007)
Deferred tax expense (benefit)		1,406		1,406		(11,502)
Accumulated other comprehensive income (loss), net of tax		4,706		4,706		(38,505)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	[1]	874	0	5,278	0
Unrealized Losses On Securities Available For Sale Transferred To Held To Maturity
Accumulated Other Comprehensive Income (Loss), before Tax		(74,397)		(74,397)		(92,401)
Deferred tax expense (benefit)		(17,111)		(17,111)		(21,252)
Accumulated other comprehensive income (loss), net of tax		(57,286)		(57,286)		(71,149)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	[1]	(4,693)	(5,007)	(13,863)	(8,452)
Funded Status of Defined Benefit Plan
Accumulated Other Comprehensive Income (Loss), before Tax		(154,795)		(154,795)		(163,030)
Deferred tax expense (benefit)		(35,603)		(35,603)		(37,497)
Accumulated other comprehensive income (loss), net of tax		(119,192)		(119,192)		$ (125,533)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	[1]	$ (2,114)	$ (2,691)	$ (6,341)	$ (8,074)

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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Estimated Fair Values (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3	$ 0	$ 0
Gains (Losses) from fair value changes on originated loans held for sale	583	$ (773)	$ 750	$ (528)
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liability measured at fair value on nonrecurring basis	$ 0		$ 0		$ 0
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3				$ 65,300
Discount Rate | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held-for-sale, measurement input	0.06		0.06
OREO, measurement input	0.06		0.06
Discount Rate | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held-for-sale, measurement input	0.11		0.11
OREO, measurement input	0.11		0.11
Effective Interest Rate | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held-for-sale, measurement input	0.03		0.03
Effective Interest Rate | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held-for-sale, measurement input	0.07		0.07

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Leases (Lease Liability Maturities) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating Leases
2019	$ 3,617
2020	14,052
2021	12,546
2022	11,142
2023	9,258
Thereafter	43,841
Total lease payments	94,456
Less: Interest	15,222
Present value of lease liabilities	79,234
Finance Leases
2019	435
2020	2,142
2021	2,159
2022	1,876
2023	993
Thereafter	1,683
Total lease payments	9,288
Less: Interest	678
Present value of lease liabilities	8,610
Total
2019	4,052
2020	16,194
2021	14,705
2022	13,018
2023	10,251
Thereafter	45,524
Total lease payments	103,744
Less: Interest	15,900
Present value of lease liabilities	$ 87,844

XML

Leases (Operating and Finance Lease Assets and Liabilities) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Leases [Abstract]
Asset, operating	$ 79,857
Asset, finance	9,402
Total leased assets	89,259
Present value of lease liabilities	79,234
Present value of lease liabilities	8,610
Total lease liabilities	87,844
Operating lease, fair value adjustment	1,100
Accumulated deprecation on finance leases	$ 447

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Estimated Fair Values

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Values

ESTIMATED FAIR VALUES

Fair value estimates are intended to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. Where there is no active market for a financial instrument, BancShares has made estimates using discounted cash flows or other valuation techniques. Inputs used in these valuation techniques are subjective in nature, involve uncertainties and require significant judgment and therefore can only be derived within a range of precision. Accordingly, the derived fair value estimates presented below are not necessarily indicative of the amounts BancShares would realize in a current market exchange.

ASC 820, Fair Value Measurements and Disclosures, indicates that assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels. The levels are based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy for an asset or liability is based on the highest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows:

• Level 1 values are based on quoted prices for identical instruments in active markets.

• Level 2 values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 values are derived from valuation techniques in which one or more significant inputs or assumptions are not observable in the market. These unobservable inputs and assumptions reflect estimates that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models and similar techniques.

BancShares' management reviews any changes to its valuation methodologies to ensure they are appropriate and supportable, and refines valuation methodologies as more market-based data becomes available. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period.

The methodologies used to estimate the fair value of financial assets and financial liabilities are discussed below:

Investment securities available for sale and held to maturity. The fair value of U.S. Treasury, government agency and mortgage-backed securities is generally estimated using a third party pricing service. The third party provider evaluates securities based on comparable investments with trades and market data and will utilize pricing models that use a variety of inputs, such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids and offers as needed. These securities are generally classified as Level 2. Corporate bonds held by BancShares are generally measured at fair value based on indicative bids from broker-dealers and are not directly observable. These securities are considered Level 3.

Investment in marketable equity securities. Equity securities are measured at fair value using observable closing prices and the valuation also considers the amount of market activity by examining the trade volume of each security. Equity securities are classified as Level 1 if they are traded in an active market and as Level 2 if the observable closing price is from a less than active market.

Loans held for sale. Management elects the fair value option on certain residential real estate loans that are originated to be sold to investors. The loans are carried at fair value based on quoted market prices for similar types of loans. Accordingly, the inputs used to calculate fair value of originated residential real estate loans held for sale are classified as Level 2 inputs. Portfolio loans that are subsequently transferred to held for sale to be sold in the secondary market are carried at fair value when a firm commitment from a counterparty exists. The fair value of the transferred portfolio loans is based on the quoted prices and is considered a Level 1 input.

Net loans and leases (PCI and Non-PCI). Fair value is estimated based on discounted future cash flows using the current interest rates at which loans with similar terms would be made to borrowers of similar credit quality. The inputs used in the fair value measurements for loans and leases are considered Level 3 inputs.

FHLB stock. The carrying amount of FHLB stock is a reasonable estimate of fair value as these securities are not readily marketable and are evaluated for impairment based on the ultimate recoverability of the par value. BancShares considers positive and negative evidence, including the profitability and asset quality of the issuer, dividend payment history and recent redemption experience, when determining the ultimate recoverability of the par value. BancShares believes its investment in FHLB stock is ultimately recoverable at par. The inputs used in the fair value measurement for the FHLB stock are considered Level 2 inputs.

Mortgage and other servicing rights. Mortgage and other servicing rights are carried at the lower of amortized cost or market value and are, therefore, carried at fair value only when fair value is less than the amortized cost. The fair value of mortgage and other servicing rights is performed using a pooling methodology. Similar loans are pooled together and a model that relies on discount rates, estimates of prepayment rates and the weighted average cost to service the loans is used to determine the fair value. The inputs used in the fair value measurement for mortgage and other servicing rights are considered Level 3 inputs.

Deposits. For non-time deposits, carrying value is a reasonable estimate of fair value. The fair value of time deposits is estimated by discounting future cash flows using the interest rates currently offered for deposits of similar remaining maturities. The inputs used in the fair value measurement for deposits are considered Level 2 inputs.    

Borrowings. For borrowings, the fair values are determined based on recent trades or sales of the actual security if available. Otherwise, fair values are estimated by discounting future cash flows using current interest rates for similar financial instruments. The inputs used in the fair value measurement for FHLB borrowings, subordinated debentures, and other borrowings are considered Level 2 inputs.

Payable to the FDIC for shared-loss agreements. The fair value of the payable to the FDIC for shared-loss agreements is determined based on expected payments to the FDIC in accordance with the shared-loss agreements. Cash flows are discounted using current discount rates to reflect the timing of the estimated amounts due to the FDIC. The inputs used in the fair value measurement for the payable to the FDIC are considered Level 3 inputs.

Off-balance-sheet commitments and contingencies. Carrying amounts are reasonable estimates of the fair values for such financial instruments. Carrying amounts include unamortized fee income and, in some cases, reserves for any credit losses from those financial instruments. These amounts are not material to BancShares' financial position.

 For all other financial assets and financial liabilities, the carrying value is a reasonable estimate of the fair value as of September 30, 2019 and December 31, 2018. The carrying value and fair value for these assets and liabilities are equivalent because they are relatively short term in nature and there is no interest rate or credit risk that would cause the fair value to differ from the carrying value. Cash and due from banks is classified on the fair value hierarchy as Level 1. Overnight investments, income earned not collected, securities sold under customer repurchase agreements, and accrued interest payable are considered Level 2.

The table presents the carrying values and estimated fair values for financial instruments as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019				December 31, 2018
	Carrying value		Fair value		Carrying value		Fair value
Cash and due from banks	$	288,933	$	288,933	$	327,440	$	327,440
Overnight investments	949,899		949,899		797,406		797,406
Investment in marketable equity securities	116,854		116,854		92,599		92,599
Investment securities available for sale	4,904,883		4,904,883		4,557,110		4,557,110
Investment securities held to maturity	2,145,943		2,217,800		2,184,653		2,201,502
Loans held for sale	83,256		83,256		45,505		45,505
Net loans and leases	26,969,686		27,301,164		25,299,564		24,845,060
Income earned not collected	117,123		117,123		109,903		109,903
Federal Home Loan Bank stock	25,355		25,355		25,304		25,304
Mortgage and other servicing rights	22,431		24,823		24,066		27,435
Deposits	32,743,277		32,739,923		30,672,460		30,623,214
Securities sold under customer repurchase agreements	522,195		522,195		543,936		543,936
Federal Home Loan Bank borrowings	192,672		199,098		193,556		195,374
Subordinated debentures	149,051		156,566		140,741		151,670
Other borrowings	112,153		117,630		13,921		13,985
FDIC shared-loss payable	110,586		113,309		105,618		105,846
Accrued interest payable	17,859		17,859		3,712		3,712

Among BancShares' assets and liabilities, investment securities available for sale, marketable equity securities and loans held for sale are reported at their fair values on a recurring basis. For assets and liabilities carried at fair value on a recurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	749,318	$	—	$	749,318	$	—
Government agency	665,621		—		665,621		—
Mortgage-backed securities	3,332,619		—		3,332,619		—
Corporate bonds	157,325		—		—		157,325
Total investment securities available for sale	$	4,904,883	$	—	$	4,747,558	$	157,325
Marketable equity securities	$	116,854	$	29,241	$	87,613	$	—
Loans held for sale	$	83,256	$	—	$	83,256	$	—
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Investment securities available for sale
U.S. Treasury	$	1,247,710	$	—	$	1,247,710	$	—
Government agency	256,835		—		256,835		—
Mortgage-backed securities	2,909,339		—		2,909,339		—
Corporate bonds	143,226		—		—		143,226
Total investment securities available for sale	$	4,557,110	$	—	$	4,413,884	$	143,226
Marketable equity securities	$	92,599	$	17,887	$	74,712	$	—
Loans held for sale	$	45,505	$	—	$	45,505	$	—

During the three and nine months ended September 30, 2019, there were no transfers between levels. For the three months ended September 30, 2018, there were no transfers between levels and for the nine ended September 30, 2018, there were transfers from Level 2 to Level 3 of $65.3 million for corporate bonds available for sale. The transfers were due to a lack of observable inputs and trade activity for those securities.

The following tables summarize activity for Level 3 assets:

	Nine months ended September 30, 2019
(Dollars in thousands)	Corporate bonds
Balance at January 1, 2019	$	143,226
Amounts included in net income	123
Unrealized net gains included in other comprehensive income	2,985
Purchases	11,991
Balance at September 30, 2019	$	157,325

The following table presents quantitative information about Level 3 fair value measurements for fair value on a recurring basis at September 30, 2019:

(Dollars in thousands)			September 30, 2019
Level 3 assets	Valuation technique	Significant unobservable input	Fair Value
Corporate bonds	Indicative bid provided by broker	Multiple factors, including but not limited to, current operations, financial condition, cash flows, and recently executed financing transactions related to the issuer	$	157,325

Fair Value Option

BancShares has elected the fair value option for residential real estate loans originated to be sold. This election reduces certain timing differences in the Consolidated Statement of Income and better aligns with the management of the portfolio from a business perspective. The changes in fair value were recorded as a component of mortgage income and included a gain of $583 thousand and a loss of $773 thousand for the three months ended September 30, 2019 and September 30, 2018, respectively. The changes in fair value included a gain of $750 thousand and a loss of $528 thousand for nine months ended September 30, 2019 and September 30, 2018, respectively.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for residential real estate originated for sale measured at fair value as of September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	83,256	$	81,073	$	2,183
	December 31, 2018
	Fair value		Aggregate unpaid principal balance		Difference
Originated loans held for sale	$	45,505	$	44,073	$	1,432

No originated loans held for sale were 90 or more days past due or on nonaccrual status as of September 30, 2019 or December 31, 2018.

We may be required to measure certain financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower of amortized cost or fair value accounting or write-downs of individual assets due to impairment.

Impaired loans are deemed to be at fair value if an associated allowance or current period charge-off has been recorded. The value of impaired loans is determined by either collateral valuations or discounted present value of the expected cash flow calculations. Collateral values are determined using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Expected cash flows are determined using expected payment information at the individual loan level, discounted using the effective interest rate. The effective interest rate for the majority of impaired loans generally ranges between 3% and 7%.

OREO acquired or written down within the previous 12 months is deemed to be at fair value. Asset valuations are determined by using appraisals or other third-party value estimates of the subject property with discounts generally between 6% and 11% applied for estimated selling costs and other external factors that may impact the marketability of the property. Changes to the value of the assets between scheduled valuation dates are monitored through continued communication with brokers and monthly reviews by the asset manager assigned to each asset. If there are any significant changes in the market or the subject property, valuations are adjusted or new appraisals ordered to ensure the reported values reflect the most current information.

For financial assets and liabilities carried at fair value on a nonrecurring basis, the following table provides fair value information as of September 30, 2019 and December 31, 2018:

	September 30, 2019
			Fair value measurements using:
(Dollars in thousands)	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	118,658	$	—	$	—	$	118,658
Other real estate remeasured during the previous 12 months	36,670		—		—		36,670
	December 31, 2018
			Fair value measurements using:
	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Impaired loans	$	105,994	$	—	$	—	$	105,994
Other real estate remeasured during the previous 12 months	35,344		—		—		35,344

No financial liabilities were carried at fair value on a nonrecurring basis as of September 30, 2019 and December 31, 2018.

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Business Combinations

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Business Combinations

BUSINESS COMBINATIONS

Community Financial Holding Co. Inc.

On September 24, 2019, FCB and Community Financial Holding Co. Inc. (Community Financial) entered into a definitive merger agreement for the acquisition by FCB of Duluth, Georgia-based Community Financial and its bank subsidiary, Gwinnett Community Bank. Under the terms of the agreement, total cash consideration of $2.3 million will paid to the shareholders of Community Financial. The transaction is anticipated to close during the first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. As of September 30, 2019, Community Financial reported $223.5 million in consolidated assets, $211.3 million in deposits and $147.0 million in loans.

Entegra Financial Corp.

On April 23, 2019, FCB and Entegra Financial Corp. (Entegra) entered into a definitive merger agreement for the acquisition by FCB of Franklin, North Carolina-based Entegra and its bank subsidiary, Entegra Bank. Under the terms of the agreement, cash consideration of $30.18 per share will be paid to the shareholders of Entegra for each share of common stock and for each restricted stock unit after conversion to common stock, and each option to purchase Entegra common stock will be canceled and each option holder will receive a cash payment. The total transaction value is estimated to be approximately $219.8 million. The transaction is anticipated to close during the fourth quarter of 2019 or first quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions. FCB will be required to divest certain branches or other assets and liabilities in order to obtain regulatory approval for the transactions contemplated by the merger agreement. Any divestiture plan is subject to approval by the Federal Reserve Board in conjunction with the Department of Justice and has not been finalized as of the date of this filing. As of September 30, 2019, Entegra Bank reported $1.70 billion in total assets, $1.28 billion in deposits and $1.09 billion in loans.

First South Bancorp, Inc.

On May 1, 2019, FCB completed the merger of Spartanburg, South Carolina-based First South Bancorp, Inc. (First South Bancorp) and its bank subsidiary, First South Bank. Under the terms of the agreement, cash consideration of $1.15 per share was paid to the shareholders of First South Bancorp for each share of common stock, totaling approximately $37.5 million. The merger allows FCB to expand its presence in South Carolina.

The First South Bancorp transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available.

The fair value of the assets acquired was $239.2 million, including $162.8 million in non-purchased credit impaired (non-PCI) loans, $16.4 million in purchased credit impaired (PCI) loans and $2.3 million in a core deposit intangible. Liabilities assumed were $215.6 million, of which $207.6 million were deposits. As a result of the transaction, FCB recorded $13.9 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase.

Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans).

The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	37,486
Assets
Cash and due from banks	$	4,633
Overnight investments	3,188
Investment securities	23,512
Loans	179,243
Premises and equipment	4,944
Other real estate owned	1,567
Income earned not collected	604
Intangible assets	2,268
Other assets	19,192
Total assets acquired	239,151
Liabilities
Deposits	207,556
Borrowings	5,155
Other liabilities	2,850
Total liabilities assumed	$	215,561
Fair value of net assets acquired			23,590
Goodwill recorded for First South Bancorp			$	13,896

Merger-related expenses of $2.5 million and $3.9 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from First South Bancorp was approximately $4.0 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included.

Biscayne Bancshares, Inc.

On April 2, 2019, FCB completed the merger of Coconut Grove, Florida-based Biscayne Bancshares, Inc. (Biscayne Bancshares) and its bank subsidiary, Biscayne Bank. Under the terms of the agreement, cash consideration of $25.05 per share was paid to the shareholders of Biscayne Bancshares for each share of common stock, totaling approximately $118.9 million. The merger will allow FCB to expand its presence in Florida and enhance banking efforts in South Florida.

The Biscayne Bancshares transaction was accounted for under the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding closing date fair values becomes available.

The fair value of the assets acquired was $1.03 billion, including $850.4 million in non-purchased credit impaired (non-PCI) loans, $13.0 million in purchased credit impaired (PCI) loans and $4.7 million in a core deposit intangible. Liabilities assumed were $956.8 million, of which $786.5 million were deposits. As a result of the transaction, FCB recorded $46.5 million of goodwill. The amount of goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The premium paid reflects the increased market share and related synergies that are expected to result from the acquisition. None of the goodwill was deductible for income tax purposes as the merger was accounted for as a qualified stock purchase.

Based on such credit factors as past due status, nonaccrual status, loan-to-value, credit scores, and other quantitative and qualitative considerations, the acquired loans were separated into loans with evidence of credit deterioration, which are accounted for under ASC 310-30 (PCI loans), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (non-PCI loans).

The following table provides the purchase price as of the acquisition date and the identifiable assets acquired and liabilities assumed at their estimated fair values:

(Dollars in thousands)	As recorded by FCB
Purchase price			$	118,949
Assets
Cash and due from banks	$	78,010
Overnight investments	306
Investment securities held to maturity	34,539
Loans	863,384
Premises and equipment	1,533
Other real estate owned	2,046
Income earned not collected	3,049
Intangible assets	4,745
Other assets	41,572
Total assets acquired	1,029,184
Liabilities
Deposits	786,512
Borrowings	157,415
Other liabilities	12,829
Total liabilities assumed	$	956,756
Fair value of net assets acquired			72,428
Goodwill recorded for Biscayne Bancshares			$	46,521

Merger-related expenses of $0.6 million and $3.5 million were recorded in the Consolidated Statements of Income for the three and nine months ended September 30, 2019, respectively. Loan-related interest income generated from Biscayne Bancshares was approximately $22.6 million since the acquisition date. The ongoing contributions of this transaction to BancShares' financial statements is not considered material, and therefore pro forma financial data is not included.

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Other Real Estate Owned

9 Months Ended

Sep. 30, 2019

Banking and Thrift [Abstract]

Real Estate Owned [Text Block]

NOTE F - OTHER REAL ESTATE OWNED (OREO)

The following table explains changes in OREO during the nine months ended September 30, 2019 and September 30, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	48,030
Additions	15,426
Acquired in business combination	3,613
Sales	(17,595		)
Write-downs/losses	(3,221		)
Balance at September 30, 2019	$	46,253
Balance at December 31, 2017	$	51,097
Additions	17,013
Acquired in business combination	2,135
Sales	(23,488		)
Write-downs/losses	(3,156		)
Balance at September 30, 2018	$	43,601

At September 30, 2019 and December 31, 2018, BancShares had $16.4 million and $17.2 million, respectively, of foreclosed residential real estate property in OREO. The recorded investment in consumer mortgage loans collateralized by residential real estate property in the process of foreclosure was $21.1 million and $22.0 million at September 30, 2019 and December 31, 2018, respectively.

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Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended		5 Months Ended	6 Months Ended	9 Months Ended
	Sep. 24, 2019	May 01, 2019	Apr. 23, 2019	Apr. 02, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Merger-related expenses					$ 3,892	$ 1,126			$ 9,695	$ 4,136
Goodwill recorded for First South Bancorp					296,764		$ 296,764	$ 296,764	296,764		$ 236,347
Community Financial
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 2,300
Assets					223,500		223,500	223,500	223,500
Deposits					211,300		211,300	211,300	211,300
Loans					147,000		147,000	147,000	147,000
First South Bancorp
Business Acquisition [Line Items]
Merger-related expenses					2,500				3,900
Interest income							4,000
Share price (usd per share)		$ 1.15
Purchase price		$ 37,486
Assets		239,151
Deposits		207,556
Intangible assets		2,268
Liabilities assumed		215,561
Goodwill recorded for First South Bancorp		$ 13,896
Entegra Financial
Business Acquisition [Line Items]
Share price (usd per share)			$ 30.18
Purchase price			$ 219,800
Assets					1,700,000		1,700,000	1,700,000	1,700,000
Deposits					1,280,000		1,280,000	1,280,000	1,280,000
Loans					1,090,000		1,090,000	1,090,000	1,090,000
Biscayne Bancshares
Business Acquisition [Line Items]
Merger-related expenses					600				3,500
Interest income								22,600
Share price (usd per share)				$ 25.05
Purchase price				$ 118,949
Assets				1,029,184
Deposits				786,512
Intangible assets				4,745
Liabilities assumed				956,756
Goodwill recorded for First South Bancorp				$ 46,521
Non-PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired					162,845		162,845	162,845	162,845
Non-PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired					850,352		850,352	850,352	850,352
PCI Loans | First South Bancorp
Business Acquisition [Line Items]
Loans acquired					16,398		16,398	16,398	16,398
PCI Loans | Biscayne Bancshares
Business Acquisition [Line Items]
Loans acquired					$ 13,032		$ 13,032	$ 13,032	$ 13,032

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]

Schedule of fair falue for off-balance sheet risks

The following table presents the commitments to extend credit and standby letters of credit as of September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Unused commitments to extend credit	$	10,509,643	$	10,054,712
Standby letters of credit	92,585		96,467

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Loans and Leases Loans and Leases (Recorded Fair Values of Purchased Non-Impaired Loans and Leases) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Reclassification of portfolio loans to (from) loans held for sale	$ (23.9)

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Allowance for Loan and Lease Losses (Note Restructurings During Period) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($) loans	Sep. 30, 2018 USD ($) loans	Sep. 30, 2019 USD ($) loans	Sep. 30, 2018 USD ($) loans
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	142	104	381	385
Financing Receivable, Modifications, Post-Modification Recorded Investment | $	$ 14,251	$ 11,807	$ 35,546	$ 37,155
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	59	50	164	162
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 4,036	$ 3,766	$ 13,976	$ 11,472
Loan term extension
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	5	9	13	32
Financing Receivable, Modifications, Post-Modification Recorded Investment | $	$ 2,473	$ 2,565	$ 3,870	$ 4,414
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	0	2	4	9
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 0	$ 327	$ 514	$ 943
Interest only period provided
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	2	1	6	3
Financing Receivable, Modifications, Post-Modification Recorded Investment | $	$ 1,221	$ 300	$ 3,209	$ 1,136
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	0	0	2	2
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 0	$ 0	$ 2,064	$ 836
Below market interest rate
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	80	56	205	211
Financing Receivable, Modifications, Post-Modification Recorded Investment | $	$ 4,460	$ 7,109	$ 14,968	$ 24,245
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	34	32	86	82
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 2,034	$ 2,832	$ 5,977	$ 6,098
Discharged from bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | loans	55	38	157	139
Financing Receivable, Modifications, Post-Modification Recorded Investment | $	$ 6,097	$ 1,833	$ 13,499	$ 7,360
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loans	25	16	72	69
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $	$ 2,002	$ 607	$ 5,421	$ 3,595

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Leases (Narrative) (Details)	Sep. 30, 2019
Minimum
Lessee, Lease, Description [Line Items]
Renewal terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Renewal terms	25 years

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Standby Letters of Credit
Guarantor Obligations [Line Items]
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 165,700	$ 147,300
Commitments to Extend Credit
Guarantor Obligations [Line Items]
Unused Commitments to Extend Credit	10,509,643	10,054,712
Qualified Affordable Housing Project Investments, Commitment	92,585	96,467
Qualified Affordable Housing Project Investments	$ 75,700	$ 68,000

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Estimated Fair Values (Fair Value Option) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Gains (Losses) from fair value changes on originated loans held for sale	$ 583	$ (773)	$ 750	$ (528)
Loans Held For Sale
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of originated loans held for sale	83,256		83,256		$ 45,505
Aggregate unpaid principle balance of originated loans held for sale	81,073		81,073		44,073
Difference between fair value and aggregate unpaid principle balance of originated loans held for sale	$ 2,183		$ 2,183		$ 1,432

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Leases (Net Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 5,273	$ 12,059
Amortization of leased assets	541	1,434
Interest on lease liabilities	93	220
Variable lease cost	527	1,779
Sublease income	(86)	(303)
Net lease cost	$ 6,348	$ 15,189

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Investments

9 Months Ended

Sep. 30, 2019

Investments [Abstract]

Investments

INVESTMENTS

The amortized cost and fair value of investment securities at September 30, 2019 and December 31, 2018, were as follows:

	September 30, 2019
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	748,206	$	1,114	$	2	$	749,318
Government agency	666,029		1,404		1,812		665,621
Mortgage-backed securities	3,329,593		10,369		7,343		3,332,619
Corporate bonds	154,943		2,707		325		157,325
Total investment securities available for sale	4,898,771		15,594		9,482		4,904,883
Investment in marketable equity securities	87,588		29,605		339		116,854
Investment securities held to maturity
Mortgage-backed securities	2,115,141		71,857		—		2,186,998
Other	30,802		—		—		30,802
Total investment securities held to maturity	2,145,943		71,857		—		2,217,800
Total investment securities	$	7,132,302	$	117,056	$	9,821	$	7,239,537
	December 31, 2018
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,249,243	$	633	$	2,166	$	1,247,710
Government agency	257,252		222		639		256,835
Mortgage-backed securities	2,956,793		5,309		52,763		2,909,339
Corporate bonds	143,829		261		864		143,226
Total investment securities available for sale	4,607,117		6,425		56,432		4,557,110
Investment in marketable equity securities	73,809		19,010		220		92,599
Investment securities held to maturity
Mortgage-backed securities	2,184,653		17,339		490		2,201,502
Total investment securities	$	6,865,579	$	42,774	$	57,142	$	6,851,211

Investments in mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in government agency securities represent securities issued by the United States Small Business Administration. Investments in corporate bonds and marketable equity securities represent positions in securities of other financial institutions. Other held to maturity investments include certificates of deposit with other financial institutions. BancShares also holds approximately 298,000 shares of Visa Class B common stock. BancShares' Visa Class B shares are not considered to have a readily determinable fair value and are included in the Consolidated Balance Sheet with no fair value.

The following table provides the amortized cost and fair value by contractual maturity for investment securities available for sale and held to maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities and government agency securities are dependent on the repayments of the underlying loan balances. Repayments of certain corporate bonds are subject to call provisions that can be exercised by the issuer at their discretion.

	September 30, 2019				December 31, 2018
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Non-amortizing securities maturing in:
One year or less	$	748,206	$	749,318	$	1,049,253	$	1,047,380
One through five years	13,364		13,795		205,526		205,805
Five through 10 years	137,638		139,430		134,370		133,626
Over 10 years	3,941		4,100		3,923		4,125
Government agency	666,029		665,621		257,252		256,835
Mortgage-backed securities	3,329,593		3,332,619		2,956,793		2,909,339
Total investment securities available for sale	$	4,898,771	$	4,904,883	$	4,607,117	$	4,557,110
Investment securities held to maturity
Non-amortizing securities maturing in:
One year or less	30,552		30,552		—		—
One through five years	250		250		—		—
Mortgage-backed securities	2,115,141		2,186,998		2,184,653		2,201,502
Total investment securities held to maturity	$	2,145,943	$	2,217,800	$	2,184,653	$	2,201,502

There were gross gains of $1.3 million and $7.0 million on sales of investment securities available for sale for the three and nine months ended September 30, 2019, respectively. There were gross losses of $190.0 thousand on sales of investment securities available for sale during the three and nine month periods ended September 30, 2019. There were no gross gains or losses on sales of investment securities available for sale for the three and nine months ended September 30, 2018.

The following table provides the realized and unrealized gains and losses on marketable equity securities for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30					Nine months ended September 30
(Dollars in thousands)	2019			2018		2019		2018
Marketable equity securities (losses) gains, net	$	(967	)	$	3,854	$	13,505	$	9,265
Less net gains recognized on marketable equity securities sold	714			946		3,029		1,181
Unrealized (losses) gains recognized on marketable equity securities held	$	(1,681	)	$	2,908	$	10,476	$	8,084

The following table provides information regarding securities with unrealized losses as of September 30, 2019 and December 31, 2018:

	September 30, 2019
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	49,867	$	2	$	—	$	—	$	49,867	$	2
Government agency	323,470		1,471		66,278		341		389,748		1,812
Mortgage-backed securities	1,413,342		4,165		477,249		3,178		1,890,591		7,343
Corporate bonds	31,168		203		6,563		122		37,731		325
Total	$	1,817,847	$	5,841	$	550,090	$	3,641	$	2,367,937	$	9,482
	December 31, 2018
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
Investment securities available for sale
U.S. Treasury	$	248,983	$	113	$	848,622	$	2,053	$	1,097,605	$	2,166
Government agency	115,273		601		2,310		38		117,583		639
Mortgage-backed securities	262,204		2,387		1,940,695		50,376		2,202,899		52,763
Corporate bonds	79,066		842		5,000		22		84,066		864
Total	$	705,526	$	3,943	$	2,796,627	$	52,489	$	3,502,153	$	56,432
Investment securities held to maturity
Mortgage-backed securities	$	5,111	$	181	$	10,131	$	309	$	15,242	$	490

As of September 30, 2019, there were 108 investment securities available for sale that had continuous losses for more than 12 months of which 107 were government sponsored enterprise-issued mortgage-backed securities or government agency securities and one was a corporate bond.

None of the unrealized losses identified as of September 30, 2019 or December 31, 2018 relate to the marketability of the securities or the issuers' ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the debt securities were purchased. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Debt securities having an aggregate carrying value of $3.40 billion at September 30, 2019 and $4.03 billion at December 31, 2018 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.

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FDIC Shared-Loss Receivable

9 Months Ended

Sep. 30, 2019

FDIC Shared-Loss Receivable [Abstract]

FDIC Shared-Loss Receivable

FDIC SHARED-LOSS PAYABLE

As of September 30, 2019, Bancshares has outstanding shared-loss agreements related to two FDIC-assisted transactions. These agreements include provisions related to payments that may be owed to the FDIC at the termination of the agreements (clawback liability). The clawback liability represents a payment by BancShares to the FDIC if actual cumulative losses on acquired covered assets are lower than the cumulative losses originally estimated by the FDIC at the time of acquisition and is recorded in the Consolidated Balance Sheets FDIC shared-loss payable. The clawback liability payment dates are March 2020 and March 2021.

As of September 30, 2019 shared-loss protection remains from FDIC transactions for single family residential loans acquired in the amount of $47.3 million.

The following table provides changes in the FDIC shared-loss payable since December 31, 2018:

(Dollars in thousands)	Total
Balance at December 31, 2018	$	105,618
Accretion	4,968
Balance at September 30, 2019	$	110,586

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2019

Retirement Benefits, Description [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

BancShares sponsors noncontributory defined benefit pension plans for its qualifying employees (BancShares Plan) and former First Citizens Bancorporation, Inc. employees (Bancorporation Plan). The service cost component of net periodic benefit cost is included in salaries and wages while all other non-service cost components are included in other noninterest expense.

BancShares Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	2,628		$	3,396		$	7,886		$	10,187
Interest cost	7,557			7,093			22,669			21,281
Expected return on assets	(12,876		)	(11,966		)	(38,629		)	(35,899		)
Amortization of prior service cost	15			19			43			59
Amortization of net actuarial loss	2,099			3,398			6,297			10,192
Net periodic (benefit) cost	$	(577	)	$	1,940		$	(1,734	)	$	5,820

Bancorporation Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	563		$	643		$	1,689		$	1,929
Interest cost	1,759			1,588			5,276			4,767
Expected return on assets	(2,771		)	(3,106		)	(8,314		)	(9,322		)
Amortization of net actuarial loss	631			78			1,895			235
Net periodic cost (benefit)	$	182		$	(797	)	$	546		$	(2,391	)

No discretionary contributions were made during the three or nine months ended September 30, 2019 to the BancShares pension plan. Discretionary contributions of $3.5 million were made during the three and nine months ended September 30, 2019 to the Bancorporation pension plan. Management evaluates the need for its pension plan contributions on a periodic basis based upon numerous factors including, but not limited to, the funded status of the plans, returns on plan assets, discount rates and the current economic environment.

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Accounting Policies and Basis of Presentation Accounting Policies and Basis of Presentation (Recently Adopted Accounting Standards) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Oct. 29, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stock repurchased during period (in shares)		295,900	125,000	744,400	125,000
Stock repurchased during period		$ 135,400	$ 58,086	$ 325,900	$ 58,086
Stock repurchased during period (in USD per share)		$ 457.50	$ 464.68	$ 437.84	$ 464.68
Operating lease assets		$ 79,857		$ 79,857
Present value of lease liabilities		79,234		79,234
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets							$ 70,700
Present value of lease liabilities							71,800
Right-of-use asset previously classified as capital lease							9,100
Liability previously classified as capital lease							8,300
Accounting Standards Update 2016-02 | HomeBancorp Inc.
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Present value of lease liabilities							$ 1,100
Subsequent Event
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of shares authorized to be repurchased (in shares)						500,000
Stock repurchased during period (in shares)	146,100
Stock repurchased during period	$ 69,100
Stock repurchased during period (in USD per share)	$ 472.94
Cloud Computing Arrangement [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred costs		$ 3,700		$ 3,700
Repurchases From Ella Ann Holding
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of shares authorized to be repurchased (in shares)		250,000		250,000
Stock repurchased during period (in shares)		50,000
Repurchases From Ella Ann Holding | Subsequent Event
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stock repurchased during period (in shares)	50,000

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2019

BancShares Plan

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs

BancShares Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	2,628		$	3,396		$	7,886		$	10,187
Interest cost	7,557			7,093			22,669			21,281
Expected return on assets	(12,876		)	(11,966		)	(38,629		)	(35,899		)
Amortization of prior service cost	15			19			43			59
Amortization of net actuarial loss	2,099			3,398			6,297			10,192
Net periodic (benefit) cost	$	(577	)	$	1,940		$	(1,734	)	$	5,820

Bancorporation Plan

Defined Benefit Plan Disclosure [Line Items]

Schedule of Net Benefit Costs

Bancorporation Plan

For the three and nine months ended September 30, 2019 and 2018, the components of net periodic benefit cost are as follows:

	Three months ended September 30						Nine months ended September 30
(Dollars in thousands)	2019			2018			2019			2018
Service cost	$	563		$	643		$	1,689		$	1,929
Interest cost	1,759			1,588			5,276			4,767
Expected return on assets	(2,771		)	(3,106		)	(8,314		)	(9,322		)
Amortization of net actuarial loss	631			78			1,895			235
Net periodic cost (benefit)	$	182		$	(797	)	$	546		$	(2,391	)

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Accounting Policies and Basis of Presentation Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Reclassifications

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had no effect on previously reported cash flows, shareholders' equity or net income.

Use of Estimates

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. The estimates that BancShares considers significant are the allowance for loan and lease losses, fair value measurements, Federal Deposit Insurance Corporation (FDIC) shared-loss payable, pension plan assumptions, goodwill and other intangible assets, and income taxes.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842)

This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The key difference between prior standards and this ASU is the requirement for lessees to recognize all lease contracts on their balance sheet. This ASU requires lessees to classify leases as either operating or finance leases, which are substantially similar to the previous operating and capital leases classifications. The distinction between these two classifications under the new standard does not relate to balance sheet treatment, but relates to treatment in the statements of income and cash flows. Lessor guidance remains largely unchanged with the exception of how a lessor determines the appropriate lease classification for each lease to better align the lessor guidance with revised lessee classification guidance.

We adopted this standard, as of January 1, 2019, using the effective date method that allows for entities to initially apply the new leases standard at the adoption date. In addition, we made several policy elections permitted under the transition guidance, which among other things, allowed us to carry forward the historical lease classification. We determined that most renewal options would not be reasonably determinable in estimating the expected lease term.

We made the policy election available under Topic 842 to combine lease and non-lease components and applied this practical expedient to leases in effect prior to the date of adoption. We will continue to apply the practical expedient to all leases entered into going forward.

The adoption of the new standard had an impact on our Consolidated Balance Sheet as of January 1, 2019, with the recording of operating Right-of-Use (ROU) assets and operating lease liabilities of $70.7 million and $71.8 million, respectively. The operating lease liability included a $1.1 million fair value adjustment for leases assumed in the acquisition of HomeBancorp, Inc. (HomeBancorp). In addition, at the adoption date we had finance lease ROU assets and finance lease liabilities, previously classified as capital leases, of $9.1 million and $8.3 million, respectively.  The Company did not have a cumulative-effect adjustment to the opening balance of retained earnings at commencement. The Company has no related party lease agreements.  This ASU did not have a material impact on our Consolidated Statements of Income. See Note N in the Consolidated Financial Statements for additional disclosures.

FASB ASU 2018-15 - Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include internal-use software license). This ASU requires entities to use the guidance in FASB ASC 350-40, Intangibles - Goodwill and Other - Internal Use Software, to determine whether to capitalize or expense implementation costs related to the service contract. This ASU also requires entities to (1) expense capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement (2) present the expense related to the capitalized implementation costs in the same line item on the income statement as fees associated with the hosting element of the arrangement (3) classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element (4) present the capitalized implementation costs in the same balance sheet line item that a prepayment for the fees associated with the hosting arrangement would be presented.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. BancShares adopted this standard effective July 1, 2019 on a prospective basis. As of September 30, 2019, $3.7 million of deferred implementation costs related to cloud computing arrangements were recorded in other assets. These costs are expensed over the fixed, noncancellable term of the arrangement and are recorded to processing fees paid to third parties, consistent with the line item of the income statement where fees paid for the associated hosted service are recorded.

Recently Issued Accounting Pronouncements

FASB ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by eliminating the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and adding a requirement to disclose an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period.

The amendments in this ASU are effective for public entities for fiscal years ending after December 15, 2020. Early adoption is permitted for all entities. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2018-13 - Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement

This ASU modifies the disclosure requirements on fair value measurements by eliminating the requirements to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. This ASU also added specific disclosure requirements for fair value measurements for public business entities including the requirement to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2019, and all interim periods within those fiscal years. Early adoption is permitted upon issuance of the ASU. Entities are permitted to early adopt amendments that remove or modify disclosures and delay the adoption of the additional disclosures until their effective date. BancShares will adopt all applicable amendments and update the disclosures as appropriate during the first quarter of 2020.

FASB ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

This ASU eliminates Step 2 from the goodwill impairment test. Under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative test.

This ASU will be effective for BancShares' annual or interim goodwill impairment tests for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect to adopt the guidance for our annual impairment test in fiscal year 2020. BancShares does not anticipate any impact to our consolidated financial position or consolidated results of operations as a result of the adoption.

FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

This ASU introduces a new credit loss methodology which requires earlier recognition of credit losses, replacing multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The amendments in this ASU require loss estimates be determined over the lifetime of the asset and broaden the information that an entity must consider in developing its expected credit losses. The ASU does not specify a method for measuring expected credit losses and allows an entity to apply methods that reasonably reflect its expectations of the credit loss estimate based on the entity's size, complexity and risk profile.

For BancShares, the standard will apply to loans, unfunded loan commitments and debt securities. A cross-functional team co-led by Corporate Finance and Risk Management is in place to implement the new standard. We have completed initial current expected credit losses (CECL) models and accounting interpretations. We continue to refine and test our models, estimation techniques, operational processes and controls to be used in preparing CECL loss estimates and related financial statement disclosures. We have also begun evaluating our debt securities portfolio to determine the impact of adoption of CECL. We expect a significant portion of our securities portfolio to have an expectation of zero losses and therefore have no initial impact at adoption.

The CECL calculated losses on the loan portfolio are derived using estimated probability of default and loss given default models based on historical loss experience, borrower characteristics, forecasts of relevant economic conditions and other factors. Bancshares intends to use a two-year reasonable and supportable forecast period that incorporates one economic forecast, with a 12-month straight-line reversion period to historical averages. The outstanding loans are bifurcated between commercial and non-commercial portfolios and then further segmented into pools with similar risk characteristics. The commercial portfolio, comprising the majority of Bancshares’ total loans, primarily consists of loans with short contractual maturities that are expected to result in a reduction to the allowance for credit losses. This reduction is expected to be partially offset by an increase in the allowance for credit losses in the non-commercial portfolio given its longer contractual maturities. The Company is still evaluating the credit loss models for purchase credit impaired loans (PCI) to determine the appropriate amount required to be added to the allowance for credit losses.

BancShares continues to evaluate the impact of this standard on its consolidated financial statements but the total magnitude of this impact is still being finalized. The final impact will be dependent on, among other items, loan and debt security portfolio composition and credit quality at the adoption date, as well as economic conditions, financial models used and forecasts in place at that time. Based on current factors, the overall allowance for credit losses is expected to decrease in aggregate, but the magnitude of the change is not anticipated to be material in relation to total assets, retained earnings or regulatory capital.

The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. BancShares will adopt the guidance in the first quarter of 2020 using a modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.

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Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Allowance for Loan and Lease Losses

	Three months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Non-PCI Loans
Allowance for loan and lease losses:
Balance at July 1	$	31,944		$	48,962		$	2,342		$	56,901		$	2,183		$	16,932		$	21,121		$	2,750		$	35,105		$	218,240
Provision (credits)	208			(1,337		)	(90		)	4,714			54			1,024			(153		)	148			3,674			8,242
Charge-offs	(116		)	(1		)	—			(3,047		)	(42		)	(313		)	(534		)	—			(5,594		)	(9,647		)
Recoveries	52			226			—			611			20			68			201			—			1,945			3,123
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Three months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at July 1	$	23,664		$	44,465		$	3,823		$	61,311		$	4,691		$	17,802		$	21,886		$	4,027		$	30,773		$	212,442
Provision (credits)	8,702			(2,870		)	(1,219		)	(5,260		)	(2,404		)	(1,828		)	465			(1,203		)	7,971			2,354
Charge-offs	(35		)	(606		)	—			(2,106		)	(56		)	(360		)	(759		)	—			(5,525		)	(9,447		)
Recoveries	136			99			1			497			117			128			712			—			1,249			2,939
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288
	Nine months ended September 30, 2019
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	35,270		$	43,451		$	2,481		$	55,620		$	2,221		$	15,472		$	21,862		$	2,350		$	35,841		$	214,568
Provision (credits)	(3,217		)	4,748			(230		)	10,138			(618		)	2,903			(272		)	548			11,991			25,991
Charge-offs	(188		)	(851		)	—			(8,327		)	(73		)	(957		)	(1,990		)	—			(18,017		)	(30,403		)
Recoveries	223			502			1			1,748			685			293			1,035			—			5,315			9,802
Balance at September 30	$	32,088		$	47,850		$	2,252		$	59,179		$	2,215		$	17,711		$	20,635		$	2,898		$	35,130		$	219,958
	Nine months ended September 30, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial and leases			Other			Residential mortgage			Revolving mortgage			Construction and land development - non - commercial			Consumer			Total
Balance at January 1	$	24,470		$	45,005		$	4,571		$	59,824		$	4,689		$	15,706		$	22,436		$	3,962		$	31,204		$	211,867
Provision (credits)	7,788			(3,369		)	(2,044		)	(907		)	(2,403		)	1,176			1,220			(1,046		)	15,468			15,883
Charge-offs	(43		)	(1,111		)	(69		)	(6,874		)	(98		)	(1,455		)	(2,778		)	(219		)	(16,092		)	(28,739		)
Recoveries	252			563			147			2,399			160			315			1,426			127			3,888			9,277
Balance at September 30	$	32,467		$	41,088		$	2,605		$	54,442		$	2,348		$	15,742		$	22,304		$	2,824		$	34,468		$	208,288

The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group:

	September 30, 2019
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	2,018	$	3,695	$	5,713	$	6,146	$	311
Commercial mortgage	35,222		29,158		64,380		69,172		2,850
Other commercial real estate	195		976		1,171		1,265		12
Commercial and industrial and leases	7,238		5,024		12,262		14,456		1,191
Other	198		63		261		280		59
Total commercial loans	44,871		38,916		83,787		91,319		4,423
Noncommercial:
Residential mortgage	44,009		10,302		54,311		58,515		2,761
Revolving mortgage	25,070		3,660		28,730		31,772		2,559
Construction and land development	1,676		1,412		3,088		3,381		88
Consumer	3,155		53		3,208		3,594		1,064
Total noncommercial loans	73,910		15,427		89,337		97,262		6,472
Total non-PCI impaired loans and leases	$	118,781	$	54,343	$	173,124	$	188,581	$	10,895
	December 31, 2018
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	1,897	$	278	$	2,175	$	2,606	$	490
Commercial mortgage	34,177		21,270		55,447		61,317		2,671
Other commercial real estate	243		617		860		946		42
Commercial and industrial and leases	7,153		2,715		9,868		14,695		1,137
Other	216		75		291		301		105
Total commercial loans	43,686		24,955		68,641		79,865		4,445
Noncommercial:
Residential mortgage	40,359		1,809		42,168		45,226		1,901
Revolving mortgage	25,751		3,101		28,852		31,371		2,515
Construction and land development	2,337		1,412		3,749		4,035		81
Consumer	2,940		80		3,020		3,405		885
Total noncommercial loans	71,387		6,402		77,789		84,037		5,382
Total non-PCI impaired loans and leases	$	115,073	$	31,357	$	146,430	$	163,902	$	9,827

Non-PCI impaired loans less than $500,000 that were collectively evaluated for impairment totaled $42.8 million and $47.1 million at September 30, 2019 and December 31, 2018, respectively.

The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2019 and September 30, 2018:

	Three months ended September 30, 2019				Three months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	6,130	$	6	$	2,101	$	27
Commercial mortgage	70,351		551		63,752		583
Other commercial real estate	1,186		6		950		10
Commercial and industrial and leases	13,085		140		9,310		92
Other	298		2		205		1
Total commercial	91,050		705		76,318		713
Noncommercial:
Residential mortgage	56,029		346		42,601		330
Revolving mortgage	30,067		260		27,503		234
Construction and land development	3,124		25		3,190		42
Consumer	3,443		37		2,769		31
Total noncommercial	92,663		668		76,063		637
Total non-PCI impaired loans and leases	$	183,713	$	1,373	$	152,381	$	1,350
	Nine months ended September 30, 2019				Nine months ended September 30, 2018
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Commercial:
Construction and land development	$	3,460	$	40	$	1,580	$	55
Commercial mortgage	61,962		1,653		68,043		1,953
Other commercial real estate	797		20		1,336		33
Commercial and industrial and leases	11,478		353		9,500		269
Other	314		6		90		1
Total commercial	78,011		2,072		80,549		2,311
Noncommercial:
Residential mortgage	49,048		988		41,124		903
Revolving mortgage	29,477		763		26,228		657
Construction and land development	3,473		93		3,607		134
Consumer	3,152		97		2,644		87
Total noncommercial	85,150		1,941		73,603		1,781
Total non-PCI impaired loans and leases	$	163,161	$	4,013	$	154,152	$	4,092

for the three and nine months ended September 30, 2019 and September 30, 2018 is summarized as follows:

(Dollars in thousands)	Three months ended September 30, 2019			Three months ended September 30, 2018
PCI Loans
Allowance for loan losses:
Balance at July 1	$	8,343		$	12,423
(Credit) provision	(1,476		)	(1,514		)
Charge-offs	—			—
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909
	Nine months ended September 30, 2019			Nine months ended September 30, 2018
Balance at January 1	$	9,144		$	10,026
(Credit) provision	(2,277		)	1,000
Charge-offs	—			(117		)
Recoveries	—			—
Balance at September 30	$	6,867		$	10,909

Allocation of Allowance for Loan and Lease Losses

The following table presents the PCI allowance and recorded investment in loans at September 30, 2019 and December 31, 2018:

(Dollars in thousands)	September 30, 2019		December 31, 2018
ALLL for loans acquired with deteriorated credit quality	$	6,867	$	9,144
Loans acquired with deteriorated credit quality	513,589		606,576

The following tables present the allowance and recorded investment in loans and leases by class of loans, as well as the associated impairment method at September 30, 2019 and December 31, 2018:

	September 30, 2019
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	311	$	2,850	$	12	$	1,191	$	59	$	2,761	$	2,559	$	88	$	1,064	$	10,895
ALLL for loans and leases collectively evaluated for impairment	31,777		45,000		2,240		57,988		2,156		14,950		18,076		2,810		34,066		209,063
Total allowance for loan and lease losses	$	32,088	$	47,850	$	2,252	$	59,179	$	2,215	$	17,711	$	20,635	$	2,898	$	35,130	$	219,958
Loans and leases:
Loans and leases individually evaluated for impairment	$	5,713	$	64,380	$	1,171	$	12,262	$	261	$	54,311	$	28,730	$	3,088	$	3,208	$	173,124
Loans and leases collectively evaluated for impairment	938,034		11,388,973		489,892		4,117,122		301,530		4,815,251		2,386,154		318,815		1,754,027		26,509,798
Total loan and leases	$	943,747	$	11,453,353	$	491,063	$	4,129,384	$	301,791	$	4,869,562	$	2,414,884	$	321,903	$	1,757,235	$	26,682,922
	December 31, 2018
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial and leases		Other		Residential mortgage		Revolving mortgage		Construction and land development - non- commercial		Consumer		Total
Non-PCI Loans
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	490	$	2,671	$	42	$	1,137	$	105	$	1,901	$	2,515	$	81	$	885	$	9,827
ALLL for loans and leases collectively evaluated for impairment	34,780		40,780		2,439		54,483		2,116		13,571		19,347		2,269		34,956		204,741
Total allowance for loan and lease losses	$	35,270	$	43,451	$	2,481	$	55,620	$	2,221	$	15,472	$	21,862	$	2,350	$	35,841	$	214,568
Loans and leases:
Loans and leases individually evaluated for impairment	$	2,175	$	55,447	$	860	$	9,868	$	291	$	42,168	$	28,852	$	3,749	$	3,020	$	146,430
Loans and leases collectively evaluated for impairment	755,679		10,661,787		426,125		3,928,862		296,133		4,223,519		2,514,123		253,281		1,710,761		24,770,270
Total loan and leases	$	757,854	$	10,717,234	$	426,985	$	3,938,730	$	296,424	$	4,265,687	$	2,542,975	$	257,030	$	1,713,781	$	24,916,700

Troubled Debt Restructurings on Financing Receivables

The following table provides the types of modifications designated as TDRs during the three and nine months ended September 30, 2019 and September 30, 2018, as well as a summary of loans that were modified as a TDR during the twelve month periods ended September 30, 2019 and September 30, 2018 that subsequently defaulted during the three and nine months ended September 30, 2019 and September 30, 2018. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended September 30, 2019						Three months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	2	$	1,221	—	$	—	1	$	300	—	$	—
Loan term extension	5	2,473		—	—		9	2,565		2	327
Below market interest rate	80	4,460		34	2,034		56	7,109		32	2,832
Discharged from bankruptcy	55	6,097		25	2,002		38	1,833		16	607
Total restructurings	142	$	14,251	59	$	4,036	104	$	11,807	50	$	3,766
	Nine months ended September 30, 2019						Nine months ended September 30, 2018
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Loans and leases
Interest only	6	$	3,209	2	$	2,064	3	$	1,136	2	$	836
Loan term extension	13	3,870		4	514		32	4,414		9	943
Below market interest rate	205	14,968		86	5,977		211	24,245		82	6,098
Discharged from bankruptcy	157	13,499		72	5,421		139	7,360		69	3,595
Total restructurings	381	$	35,546	164	$	13,976	385	$	37,155	162	$	11,472

For the three and nine months ended September 30, 2019 and September 30, 2018, the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different.

The following table provides a summary of total TDRs by accrual status. Total TDRs included $17.4 million and $18.2 million of PCI TDRs at September 30, 2019 and December 31, 2018, respectively:

	September 30, 2019						December 31, 2018
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans:
Construction and land development	$	518	$	1,109	$	1,627	$	1,946	$	352	$	2,298
Commercial mortgage	50,206		7,064		57,270		53,270		7,795		61,065
Other commercial real estate	474		—		474		851		9		860
Commercial and industrial and leases	10,161		2,180		12,341		7,986		2,060		10,046
Other	153		107		260		118		173		291
Total commercial loans	61,512		10,460		71,972		64,171		10,389		74,560
Noncommercial:
Residential mortgage	37,798		16,439		54,237		37,903		9,621		47,524
Revolving mortgage	20,968		7,839		28,807		20,492		8,196		28,688
Construction and land development	1,570		1,518		3,088		2,227		110		2,337
Consumer	2,566		642		3,208		2,300		721		3,021
Total noncommercial loans	62,902		26,438		89,340		62,922		18,648		81,570
Total loans	$	124,414	$	36,898	$	161,312	$	127,093	$	29,037	$	156,130

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
OPERATING ACTIVITIES
Net income	$ 355,497	$ 310,840
Adjustments to reconcile net income to cash provided by operating activities:
Provision (credit) for loan and lease losses	23,714	16,883
Deferred tax expense (benefit)	43,939	13,642
Net change in current taxes	(33,433)	(21,266)
Depreciation	77,024	71,484
Net (decrease) increase in accrued interest payable	14,147	(1,552)
Net (increase) decrease in income earned not collected	(3,567)	(7,650)
Realized gains on investment securities available for sale, net	(6,855)	0
Marketable equity securities gain (loss), net	(13,505)	(9,265)
Gain on extinguishment of debt	0	(26,517)
Origination of loans held for sale	(518,894)	(456,193)
Proceeds from sale of loans held for sale	490,261	468,705
Gain on sale of loans held for sale	(10,308)	(8,640)
Gain on sale of portfolio loans	(299)	0
Net writedowns/losses on other real estate	1,924	3,156
(Gain) loss on sales of premises and equipment	1,082	1,480
Net accretion of premiums and discounts	(29,737)	(22,965)
Amortization of intangible assets	17,934	17,580
Net change in FDIC payable for shared-loss agreements	4,968	3,234
Net change in mortgage servicing rights	(3,770)	(4,026)
Net change in other assets	1,454	34,851
Net change in other liabilities	(12,416)	(53,708)
Net cash provided by operating activities	399,160	330,073
INVESTING ACTIVITIES
Net increase in loans outstanding	(629,705)	(702,356)
Purchases of investment securities available for sale	(3,706,949)	(979,495)
Purchases of investment securities held to maturity	(223,353)	(68,699)
Purchases of marketable equity securities	(23,238)	(2,818)
Proceeds from maturities/calls of investment securities held to maturity	305,479	196,146
Proceeds from maturities/calls of investment securities available for sale	1,690,277	1,046,293
Proceeds from sales of investment securities available for sale	1,746,099	327,737
Proceeds from sales of marketable equity securities	12,739	9,503
Net decrease (increase) in overnight investments	(150,006)	455,295
Proceeds from sales of portfolio loans	24,247	0
Proceeds from sales of other real estate	18,892	23,488
Proceeds from sales of premises and equipment	128	1,648
Purchases of premises and equipment	(89,219)	(91,200)
Business acquisitions, net of cash acquired	(73,792)	(106,298)
Net cash used in investing activities	(1,098,401)	109,244
FINANCING ACTIVITIES
Net decrease in time deposits	376,596	(218,826)
Net increase in demand and other interest-bearing deposits	701,426	496,499
Net decrease in short-term borrowings	(138,741)	(127,547)
Repayment of long-term obligations	(43,545)	(717,370)
Origination of long-term obligations	100,000	125,000
Repurchase of common stock	(321,263)	(58,086)
Cash dividends paid	(13,739)	(12,612)
Net cash (used in) provided by financing activities	660,734	(512,942)
Change in cash and due from banks	(38,507)	(73,625)
Cash and due from banks at beginning of period	327,440	336,150
Cash and due from banks at end of period	288,933	262,525
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfers of loans to other real estate	13,242	17,013
Dividends declared but not paid	4,397	4,168
Net reclassification of portfolio loans to (from) loans held for sale	(22,758)	2,016
Transfers of premises and equipment to other real estate	2,184	0
Transfer of investment securities available for sale to held to maturity	0	2,485,761
Unsettled common stock repurchases	4,653	0
Initial recognition of operating lease assets	70,652	0
Initial recognition of operating lease liabilities	$ 71,793	$ 0

XML

Loans and Leases (Composition of the Loans and Leases Outstanding By Credit Quality Indicator) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	$ 26,682,922	$ 24,916,700
PCI loans	513,589	606,576	$ 638,018	$ 762,998
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	17,319,338	16,137,227
PCI loans	252,828	296,672
Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	11,453,353	10,717,234
Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	491,063	426,985
Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	4,129,384	3,938,730
Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	301,791	296,424
Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	943,747	757,854
Commercial | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	16,914,956	15,757,669
PCI loans	132,338	141,922
Commercial | Pass | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	11,217,849	10,507,687
Commercial | Pass | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	486,331	422,500
Commercial | Pass | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	3,974,806	3,778,797
Commercial | Pass | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	300,492	294,700
Commercial | Pass | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	935,478	753,985
Commercial | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	169,057	174,700
PCI loans	43,535	48,475
Commercial | Special Mention | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	111,617	114,219
Commercial | Special Mention | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	3,191	3,193
Commercial | Special Mention | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	51,355	54,814
Commercial | Special Mention | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	599	1,105
Commercial | Special Mention | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	2,295	1,369
Commercial | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	165,686	127,842
PCI loans	72,647	101,447
Commercial | Substandard | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	123,887	92,743
Commercial | Substandard | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	1,541	1,292
Commercial | Substandard | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	33,584	30,688
Commercial | Substandard | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	700	619
Commercial | Substandard | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	5,974	2,500
Commercial | Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	115	354
PCI loans	4,308	4,828
Commercial | Doubtful | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Doubtful | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Doubtful | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	115	354
Commercial | Doubtful | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Doubtful | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Ungraded
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	69,524	76,662
Commercial | Ungraded | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	2,585
Commercial | Ungraded | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Ungraded | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	69,524	74,077
Commercial | Ungraded | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Commercial | Ungraded | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	0	0
Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	9,363,584	8,779,473
PCI loans	260,761
Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	4,869,562	4,265,687
PCI loans		309,904
Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	321,903	257,030
Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	2,414,884	2,542,975
Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	1,757,235	1,713,781
Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	26,682,922	24,916,700
Past due loans	160,974	134,882
Current loans	26,521,948	24,781,818
Non-PCI Loans | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	17,319,338	16,137,227
Past due loans	59,979	35,619
Current loans	17,259,359	16,101,608
Non-PCI Loans | Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	11,453,353	10,717,234
Past due loans	35,393	19,503
Current loans	11,417,960	10,697,731
Non-PCI Loans | Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	491,063	426,985
Past due loans	908	467
Current loans	490,155	426,518
Non-PCI Loans | Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	4,129,384	3,938,730
Past due loans	18,645	14,306
Current loans	4,110,739	3,924,424
Non-PCI Loans | Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	301,791	296,424
Past due loans	285	374
Current loans	301,506	296,050
Non-PCI Loans | Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	943,747	757,854
Past due loans	4,748	969
Current loans	938,999	756,885
Non-PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	9,363,584	8,779,473
Past due loans	100,995	99,263
Current loans	9,262,589	8,680,210
Non-PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	4,869,562	4,265,687
Past due loans	58,962	50,904
Current loans	4,810,600	4,214,783
Non-PCI Loans | Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	321,903	257,030
Past due loans	3,314	2,193
Current loans	318,589	254,837
Non-PCI Loans | Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	2,414,884	2,542,975
Past due loans	23,106	28,706
Current loans	2,391,778	2,514,269
Non-PCI Loans | Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-PCI loans	1,757,235	1,713,781
Past due loans	15,613	17,460
Current loans	1,741,622	1,696,321
PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current loans	234,494
PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current loans		268,280
30 to 59 Days past due | Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	83,062	76,187
30 to 59 Days past due | Non-PCI Loans | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	33,328	24,747
30 to 59 Days past due | Non-PCI Loans | Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	22,270	14,200
30 to 59 Days past due | Non-PCI Loans | Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	80	91
30 to 59 Days past due | Non-PCI Loans | Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	10,015	9,655
30 to 59 Days past due | Non-PCI Loans | Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	61	285
30 to 59 Days past due | Non-PCI Loans | Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	902	516
30 to 59 Days past due | Non-PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	49,734	51,440
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	29,551	28,239
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	701	581
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	10,581	12,585
30 to 59 Days past due | Non-PCI Loans | Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	8,901	10,035
30 to 59 Days past due | PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	8,613
30 to 59 Days past due | PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans		11,155
60 to 89 Days past due | Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	24,987	19,682
60 to 89 Days past due | Non-PCI Loans | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	7,186	3,910
60 to 89 Days past due | Non-PCI Loans | Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	2,386	2,066
60 to 89 Days past due | Non-PCI Loans | Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	130	76
60 to 89 Days past due | Non-PCI Loans | Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	4,373	1,759
60 to 89 Days past due | Non-PCI Loans | Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	211	0
60 to 89 Days past due | Non-PCI Loans | Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	86	9
60 to 89 Days past due | Non-PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	17,801	15,772
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	9,087	7,357
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	1,013	21
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	4,219	4,490
60 to 89 Days past due | Non-PCI Loans | Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	3,482	3,904
60 to 89 Days past due | PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	5,573
60 to 89 Days past due | PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans		7,708
90 Days or greater | Non-PCI Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	52,925	39,013
90 Days or greater | Non-PCI Loans | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	19,465	6,962
90 Days or greater | Non-PCI Loans | Commercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	10,737	3,237
90 Days or greater | Non-PCI Loans | Commercial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	698	300
90 Days or greater | Non-PCI Loans | Commercial | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	4,257	2,892
90 Days or greater | Non-PCI Loans | Commercial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	13	89
90 Days or greater | Non-PCI Loans | Commercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	3,760	444
90 Days or greater | Non-PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	33,460	32,051
90 Days or greater | Non-PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	20,324	15,308
90 Days or greater | Non-PCI Loans | Noncommercial | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	1,600	1,591
90 Days or greater | Non-PCI Loans | Noncommercial | Revolving mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	8,306	11,631
90 Days or greater | Non-PCI Loans | Noncommercial | Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	3,230	3,521
90 Days or greater | PCI Loans | Noncommercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans	$ 12,081
90 Days or greater | PCI Loans | Noncommercial | Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due loans		$ 22,761

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Investments Marketable Equity Securities Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Marketable Equity Securities Gains (Losses) [Abstract]
Marketable equity securities (losses) gains, net	$ (967)	$ 3,854	$ 13,505	$ 9,265
Less net gains recognized on marketable equity securities sold	714	946	3,029	1,181
Unrealized (losses) gains recognized on marketable equity securities held	$ (1,681)	$ 2,908	$ 10,476	$ 8,084

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Consolidated Statements of Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest income
Loans and leases	$ 315,012,000	$ 272,215,000	$ 909,167,000	$ 785,283,000
Investment securities and dividend income	40,155,000	38,770,000	119,976,000	110,969,000
Overnight investments	7,151,000	4,721,000	20,820,000	15,932,000
Total interest income	362,318,000	315,706,000	1,049,963,000	912,184,000
Interest expense
Deposits	21,737,000	5,147,000	53,821,000	13,424,000
Short-term borrowings	542,000	398,000	1,516,000	1,175,000
Federal Home Loan Bank borrowings	1,316,000	1,099,000	4,187,000	4,335,000
Subordinated debentures	1,774,000	1,561,000	5,398,000	4,655,000
Long-term obligations	524,000	139,000	796,000	577,000
Total interest expense	25,893,000	8,344,000	65,718,000	24,166,000
Net interest income	336,425,000	307,362,000	984,245,000	888,018,000
Provision (credit) for loan and lease losses	6,766,000	840,000	23,714,000	16,883,000
Net interest income after provision for loan and lease losses	329,659,000	306,522,000	960,531,000	871,135,000
Noninterest income
Debt and Equity Securities, Gain (Loss)	1,136,000	0	6,855,000	0
Marketable equity securities (losses) gains, net	(967,000)	3,854,000	13,505,000	9,265,000
Gain on extinguishment of debt	0	703,000	0	26,517,000
Other	6,176,000	2,538,000	15,129,000	15,703,000
Total noninterest income	100,930,000	94,531,000	311,468,000	318,142,000
Noninterest expense
Salaries and wages	137,841,000	133,867,000	406,788,000	392,911,000
Employee benefits	28,358,000	28,850,000	91,090,000	90,656,000
Occupancy expense	28,163,000	26,632,000	82,810,000	80,686,000
Equipment expense	28,770,000	25,880,000	83,999,000	76,021,000
Processing fees paid to third parties	7,250,000	7,297,000	20,980,000	23,383,000
FDIC insurance expense	2,440,000	5,186,000	7,857,000	16,411,000
Collection and foreclosure-related expenses	3,044,000	4,269,000	9,725,000	12,389,000
Merger-related expenses	3,892,000	1,126,000	9,695,000	4,136,000
Other	30,667,000	34,430,000	98,535,000	105,000,000
Total noninterest expense	270,425,000	267,537,000	811,479,000	801,593,000
Income before income taxes	160,164,000	133,516,000	460,520,000	387,684,000
Income taxes	35,385,000	16,198,000	105,023,000	76,844,000
Net income	$ 124,779,000	$ 117,318,000	$ 355,497,000	$ 310,840,000
Average shares outstanding (in shares)	11,060,462	11,971,460	11,286,984	11,997,281
Net income per share	$ 11.27	$ 9.80	$ 31.50	$ 25.91
Cardholder services, net
Noninterest income
Revenue from contract with customers	$ 15,957,000	$ 14,678,000	$ 51,069,000	$ 44,385,000
Merchant services, net
Noninterest income
Revenue from contract with customers	6,034,000	5,857,000	18,324,000	18,512,000
Service charges on deposit accounts
Noninterest income
Revenue from contract with customers	27,112,000	25,994,000	77,967,000	78,489,000
Wealth management services
Noninterest income
Revenue from contract with customers	25,212,000	24,459,000	74,786,000	73,543,000
Other service charges and fees
Noninterest income
Revenue from contract with customers	8,237,000	7,651,000	23,823,000	22,887,000
Mortgage income
Noninterest income
Revenue from contract with customers	7,438,000	4,123,000	16,134,000	13,063,000
Insurance commissions
Noninterest income
Revenue from contract with customers	2,960,000	2,755,000	9,105,000	9,471,000
ATM income
Noninterest income
Revenue from contract with customers	$ 1,635,000	$ 1,919,000	$ 4,771,000	$ 6,307,000

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Mortgage Servicing Rights (MSR Carrying Value) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Servicing Asset at Amortized Cost [Line Items]
Mortgage servicing rights	$ 20,571,000	$ 21,633,000	$ 20,571,000	$ 21,633,000	$ 20,665,000	$ 21,396,000	$ 21,657,000	$ 21,945,000
Servicing rights originated	1,532,000	1,396,000	3,943,000	4,026,000
Amortization of Mortgage Servicing Rights (MSRs)	(1,581,000)	(1,420,000)	(4,595,000)	(4,338,000)
Valuation allowance (provision) reversal	$ 45,000.0	$ 0	$ 173,000	$ 0

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Repurchase Agreements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets Sold under Agreements to Repurchase [Line Items]
Securities Sold under Agreements to Repurchase, Fair Value of Collateral	$ 541,600
Securities sold under customer repurchase agreements	522,195	$ 543,936
Available-for-sale Securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities Sold under Agreements to Repurchase, Fair Value of Collateral	305,200	598,600
Held-to-maturity Securities
Assets Sold under Agreements to Repurchase [Line Items]
Securities Sold under Agreements to Repurchase, Fair Value of Collateral	236,400
Overnight and continuous
Assets Sold under Agreements to Repurchase [Line Items]
Securities sold under customer repurchase agreements	$ 522,200	$ 543,900

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Estimated Fair Values (Assets And Liabilities Carried At Fair Value On A Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate remeasured during current year	$ 46,253		$ 48,030	$ 43,601		$ 51,097
Mortgage servicing rights	20,571	$ 20,665	21,396	$ 21,633	$ 21,657	$ 21,945
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	118,658		105,994
Other real estate remeasured during current year	36,670		35,344
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0		0
Other real estate remeasured during current year	0		0
Fair Value, Measurements, Nonrecurring | Quoted Prices for Similar Assets and Liabilities (Level 2 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0		0
Other real estate remeasured during current year	0		0
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3 Inputs)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	118,658		105,994
Other real estate remeasured during current year	$ 36,670		$ 35,344