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