Loans and Leases

3 Months Ended

Mar. 31, 2021

Loans and Leases Receivable Disclosure [Abstract]

Loans and Leases

LOANS AND LEASES

BancShares’ accounting methods for loans and leases depends on whether they are originated or purchased, and if purchased, whether or not the loans reflect more than insignificant credit deterioration since origination, which is determined as of the acquisition date. Non purchased credit deteriorated (“PCD”) loans consist of loans originated by BancShares and loans purchased from other institutions, that do not reflect more than insignificant credit deterioration at acquisition. Purchased loans which reflect more than insignificant credit deterioration are classified as PCD and reported as a single loan segment or class. At the date of acquisition, all acquired loans are recorded at fair value.

Loans and leases outstanding included the following at March 31, 2021 and December 31, 2020:

(Dollars in thousands)	March 31, 2021		December 31, 2020
Commercial:
Construction and land development	$	1,022,087	$	985,424
Owner occupied commercial mortgage	11,340,966		11,165,012
Non-owner occupied commercial mortgage	3,017,898		2,987,689
Commercial and industrial and leases	4,946,445		5,013,644
SBA-PPP	2,769,906		2,406,291
Total commercial loans	23,097,302		22,558,060
Consumer:
Residential mortgage	5,566,026		5,561,686
Revolving mortgage	1,938,422		2,052,854
Construction and land development	336,065		348,123
Consumer auto	1,271,586		1,255,402
Consumer other	538,677		552,968
Total consumer loans	9,650,776		9,771,033
PCD loans	432,773		462,882
Total loans and leases	$	33,180,851	$	32,791,975

At March 31, 2021 and December 31, 2020, accrued interest receivable on loans was $103.2 million and $107.7 million, respectively, and was excluded from the estimate of credit losses.

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, BancShares may change its 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. Loans held for sale totaled $129.3 million and $124.8 million at March 31, 2021 and December 31, 2020, respectively.

The following table presents selected components of the amortized cost of loans.

(Dollars in thousands)	March 31, 2021		December 31, 2020
Deferred fees, including unearned fees and unamortized costs on non-PCD loans
Net deferred fees related to SBA-PPP loans	$	66,717	$	41,064
Net deferred fees related to other portfolios	11,932		9,153
Total net deferred fees	$	78,649	$	50,217
Net unamortized discount on purchased loans
Non-PCD	$	17,009	$	19,473
PCD	41,141		45,254
Total	$	58,150	$	64,727

The aging of the outstanding loans and leases, by class, at March 31, 2021 and December 31, 2020 is provided in the tables below. Loans and leases past due less than 30 days 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.

	March 31, 2021
(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
Commercial:
Construction and land development	$	277	$	—	$	1,595	$	1,872	$	1,020,215	$	1,022,087
Owner occupied commercial mortgage	13,153		2,996		11,028		27,177		11,313,789		11,340,966
Non-owner occupied commercial mortgage	5,046		303		8,917		14,266		3,003,632		3,017,898
Commercial and industrial and leases	13,284		4,771		3,249		21,304		4,925,141		4,946,445
SBA-PPP	—		—		—		—		2,769,906		2,769,906
Total commercial loans	31,760		8,070		24,789		64,619		23,032,683		23,097,302
Consumer:
Residential mortgage	34,350		7,396		30,789		72,535		5,493,491		5,566,026
Revolving mortgage	6,222		1,603		8,531		16,356		1,922,066		1,938,422
Construction and land development	266		944		652		1,862		334,203		336,065
Consumer auto	4,432		1,014		860		6,306		1,265,280		1,271,586
Consumer other	2,246		1,213		1,516		4,975		533,702		538,677
Total consumer loans	47,516		12,170		42,348		102,034		9,548,742		9,650,776
PCD loans	11,250		4,322		33,694		49,266		383,507		432,773
Total loans and leases	$	90,526	$	24,562	$	100,831	$	215,919	$	32,964,932	$	33,180,851
	December 31, 2020
(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
Commercial:
Construction and land development	$	956	$	527	$	1,603	$	3,086	$	982,338	$	985,424
Owner occupied commercial mortgage	8,757		2,232		14,082		25,071		11,139,941		11,165,012
Non-owner occupied commercial mortgage	12,370		—		5,973		18,343		2,969,346		2,987,689
Commercial and industrial and leases	14,532		2,842		3,243		20,617		4,993,027		5,013,644
SBA-PPP	—		—		—		—		2,406,291		2,406,291
Total commercial loans	36,615		5,601		24,901		67,117		22,490,943		22,558,060
Consumer:
Residential mortgage	43,218		8,364		31,690		83,272		5,478,414		5,561,686
Revolving mortgage	11,977		2,626		7,415		22,018		2,030,836		2,052,854
Construction and land development	932		77		330		1,339		346,784		348,123
Consumer auto	6,825		1,835		1,076		9,736		1,245,666		1,255,402
Consumer other	3,610		1,464		1,505		6,579		546,389		552,968
Total consumer loans	66,562		14,366		42,016		122,944		9,648,089		9,771,033
PCD loans	18,322		6,076		31,026		55,424		407,458		462,882
Total loans and leases	$	121,499	$	26,043	$	97,943	$	245,485	$	32,546,490	$	32,791,975

The amortized cost, by class, of loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at March 31, 2021 and December 31, 2020, were as follows:

	March 31, 2021				December 31, 2020
(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	$	1,648	$	—	$	1,661	$	—
Owner occupied commercial mortgage	22,796		1,400		23,103		3,625
Non-owner occupied commercial mortgage	10,939		2,211		7,932		147
Commercial and industrial and leases	15,718		607		10,626		540
Total commercial loans	51,101		4,218		43,322		4,312
Consumer:
Residential mortgage	61,907		29		66,345		—
Revolving mortgage	23,952		—		22,236		—
Construction and land development	566		543		652		—
Consumer auto	3,027		—		3,166		—
Consumer other	816		1,155		823		1,195
Total consumer loans	90,268		1,727		93,222		1,195
PCD loans	53,165		1,432		54,939		355
Total loans and leases	$	194,534	$	7,377	$	191,483	$	5,862

Credit Quality

Loans and leases are monitored for credit quality on a recurring basis. Commercial and consumer 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 commercial loans and leases are borrower risk classifications developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated at least annually, with more frequent evaluations done on criticized loans. Commercial loans are also updated if there is evidence of potential credit deterioration, such as delinquency. Commercial credit cards are included in the Commercial and industrial and leases segment, but are evaluated based primarily upon delinquency status. The risk classifications 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 March 31, 2021 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 consumer and PCD 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.

The following tables represent current credit quality indicators by origination year as of March 31, 2021.

	March 31, 2021
	Commercial Loans Amortized Cost Basis by Origination Year
Classification:	2021		2020		2019		2018		2017		Prior		Revolving		Revolving converted to term loans		Total
(Dollars in thousands)
Construction and land development
Pass	$	46,039	$	399,172	$	310,753	$	168,534	$	48,089	$	28,797	$	12,548	$	—	$	1,013,932
Special Mention	—		232		—		181		85		—		145		—		643
Substandard	—		225		590		1,447		5,170		80		—		—		7,512
Total	46,039		399,629		311,343		170,162		53,344		28,877		12,693		—		1,022,087
Owner occupied commercial mortgage
Pass	632,239		3,202,842		2,166,465		1,521,886		1,206,771		2,249,426		106,579		101		11,086,309
Special Mention	687		10,398		29,975		39,868		12,074		37,441		2,974		72		133,489
Substandard	3,564		9,322		14,441		9,287		26,702		49,856		7,996		—		121,168
Total	636,490		3,222,562		2,210,881		1,571,041		1,245,547		2,336,723		117,549		173		11,340,966
Non-owner occupied commercial mortgage
Pass	158,815		809,647		603,274		332,010		319,514		638,882		35,835		—		2,897,977
Special Mention	794		676		880		10,778		1,440		2,918		500		—		17,986
Substandard	75		12,018		22,293		12,643		8,762		44,396		1,748		—		101,935
Total	159,684		822,341		626,447		355,431		329,716		686,196		38,083		—		3,017,898
Commercial and industrial and leases
Pass	424,035		1,423,941		884,987		442,129		251,356		445,265		874,664		5,150		4,751,527
Special Mention	102		10,601		22,183		8,335		6,160		7,764		11,376		194		66,715
Substandard	5,507		15,179		4,398		5,572		3,950		5,597		24,608		1,410		66,221
Doubtful	—		—		—		—		—		—		2		—		2
Ungraded	—		—		—		—		—		—		61,980		—		61,980
Total	429,644		1,449,721		911,568		456,036		261,466		458,626		972,630		6,754		4,946,445
SBA-PPP
Pass	936,012		1,833,894		—		—		—		—		—		—		2,769,906
Total commercial	$	2,207,869	$	7,728,147	$	4,060,239	$	2,552,670	$	1,890,073	$	3,510,422	$	1,140,955	$	6,927	$	23,097,302
	Consumer and PCD Loans Amortized Cost Basis by Origination Year
Days Past Due:	2021		2020		2019		2018		2017		Prior		Revolving		Revolving converted to term loans		Total
(Dollars in thousands)
Residential mortgage
Current	$	521,849	$	1,810,979	$	889,902	$	561,267	$	518,205	$	1,166,958	$	24,331	$	—	$	5,493,491
30-59 days	2,367		2,193		236		9,619		4,113		15,567		255		—		34,350
60-89 days	—		256		1,012		1,040		558		4,530		—		—		7,396
90 days or greater	—		286		1,455		838		3,797		24,384		29		—		30,789
Total	524,216		1,813,714		892,605		572,764		526,673		1,211,439		24,615		—		5,566,026
Revolving mortgage
Current	—		—		—		—		—		—		1,772,173		149,893		1,922,066
30-59 days	—		—		—		—		—		—		3,877		2,345		6,222
60-89 days	—		—		—		—		—		—		699		904		1,603
90 days or greater	—		—		—		—		—		—		4,112		4,419		8,531
Total	—		—		—		—		—		—		1,780,861		157,561		1,938,422
Construction and land development
Current	40,360		209,701		52,406		16,883		8,037		5,241		1,575		—		334,203
30-59 days	—		108		15		61		30		52		—		—		266
60-89 days	—		240		138		59		366		141		—		—		944
90 days or greater	—		543		—		—		59		50		—		—		652
Total	40,360		210,592		52,559		17,003		8,492		5,484		1,575		—		336,065

Consumer auto
Current	155,101		484,026		302,622		191,055		87,139		45,337		—		—		1,265,280
30-59 days	—		1,327		962		1,054		703		386		—		—		4,432
60-89 days	—		433		197		253		117		14		—		—		1,014
90 days or greater	—		294		134		217		129		86		—		—		860
Total	155,101		486,080		303,915		192,579		88,088		45,823		—		—		1,271,586
Consumer other
Current	20,879		45,239		22,631		8,552		6,246		34,873		395,282		—		533,702
30-59 days	3		131		100		106		1		—		1,905		—		2,246
60-89 days	—		95		7		10		—		—		1,101		—		1,213
90 days or greater	—		14		114		6		—		—		1,382		—		1,516
Total	20,882		45,479		22,852		8,674		6,247		34,873		399,670		—		538,677
Total consumer	$	740,559	$	2,555,865	$	1,271,931	$	791,020	$	629,500	$	1,297,619	$	2,206,721	$	157,561	$	9,650,776
PCD loans
Current	$	—	$	28,056	$	24,347	$	26,763	$	24,879	$	247,606	$	11,788	$	20,068	$	383,507
30-59 days	—		344		390		407		300		9,423		19		367		11,250
60-89 days	—		51		88		—		165		3,896		—		122		4,322
90 days or greater	—		1,294		2,404		4,412		1,826		22,504		105		1,149		33,694
Total PCD	$	—	$	29,745	$	27,229	$	31,582	$	27,170	$	283,429	$	11,912	$	21,706	$	432,773
Total loans and leases	$	2,948,428	$	10,313,757	$	5,359,399	$	3,375,272	$	2,546,743	$	5,091,470	$	3,359,588	$	186,194	$	33,180,851

The following tables represent current credit quality indicators by origination year as of December 31, 2020.

	December 31, 2020
	Commercial Loans Amortized Cost Basis by Origination Year
Classification:	2020		2019		2018		2017		2016		Prior		Revolving		Revolving converted to term loans		Total
(Dollars in thousands)
Construction and land development
Pass	$	342,183	$	341,233	$	190,429	$	50,776	$	23,969	$	11,306	$	10,969	$	—	$	970,865
Special Mention	246		—		6,421		5,342		—		—		153		—		12,162
Substandard	229		629		1,450		—		8		81		—		—		2,397
Total	342,658		341,862		198,300		56,118		23,977		11,387		11,122		—		985,424
Owner occupied commercial mortgage
Pass	3,183,467		2,201,165		1,625,141		1,301,412		1,049,858		1,454,020		101,556		133		10,916,752
Special Mention	6,274		20,702		36,739		12,387		17,699		25,693		5,115		72		124,681
Substandard	10,280		19,052		9,842		20,928		13,736		41,303		8,438		—		123,579
Total	3,200,021		2,240,919		1,671,722		1,334,727		1,081,293		1,521,016		115,109		205		11,165,012
Non-owner occupied commercial mortgage
Pass	865,514		609,975		378,136		331,800		282,810		391,517		32,149		—		2,891,901
Special Mention	569		905		10,794		1,808		5,121		3,279		483		—		22,959
Substandard	2,899		18,546		12,296		8,764		14,087		15,427		810		—		72,829
Total	868,982		629,426		401,226		342,372		302,018		410,223		33,442		—		2,987,689
Commercial and industrial and leases
Pass	1,620,622		983,852		504,463		310,468		234,735		286,996		899,978		5,520		4,846,634
Special Mention	3,146		17,065		7,265		5,393		3,307		4,912		9,152		189		50,429
Substandard	17,811		4,095		4,370		4,257		2,548		3,801		22,384		983		60,249
Ungraded	—		—		—		—		—		—		56,332		—		56,332
Total	1,641,579		1,005,012		516,098		320,118		240,590		295,709		987,846		6,692		5,013,644
SBA-PPP
Pass	2,406,291		—		—		—		—		—		—		—		2,406,291
Total commercial	$	8,459,531	$	4,217,219	$	2,787,346	$	2,053,335	$	1,647,878	$	2,238,335	$	1,147,519	$	6,897	$	22,558,060

	Consumer and PCD Loans Amortized Cost Basis by Origination Year
Days Past Due:	2020		2019		2018		2017		2016		Prior		Revolving		Revolving converted to term loans		Total
(Dollars in thousands)
Residential mortgage
Current	$	1,882,683	$	978,298	$	655,798	$	596,309	$	461,719	$	878,634	$	24,973	$	—	$	5,478,414
30-59 days	2,278		4,573		11,463		3,772		8,613		12,299		220		—		43,218
60-89 days	30		100		1,246		1,449		834		4,705		—		—		8,364
90 days or greater	282		4,831		3,150		4,015		5,689		13,723		—		—		31,690
Total	1,885,273		987,802		671,657		605,545		476,855		909,361		25,193		—		5,561,686
Revolving mortgage
Current	—		—		—		—		—		—		1,879,968		150,868		2,030,836
30-59 days	—		—		—		—		—		—		8,241		3,736		11,977
60-89 days	—		—		—		—		—		—		527		2,099		2,626
90 days or greater	—		—		—		—		—		—		2,301		5,114		7,415
Total	—		—		—		—		—		—		1,891,037		161,817		2,052,854
Construction and land development
Current	215,112		85,707		24,860		10,269		6,093		2,218		2,525		—		346,784
30-59 days	—		420		121		370		—		21		—		—		932
60-89 days	—		—		—		9		—		68		—		—		77
90 days or greater	—		—		—		—		—		330		—		—		330
Total	215,112		86,127		24,981		10,648		6,093		2,637		2,525		—		348,123
Consumer auto
Current	521,719		340,594		219,597		104,280		49,872		9,604		—		—		1,245,666
30-59 days	2,175		1,873		1,257		842		544		134		—		—		6,825
60-89 days	329		689		312		351		109		45		—		—		1,835
90 days or greater	170		527		217		57		102		3		—		—		1,076
Total	524,393		343,683		221,383		105,530		50,627		9,786		—		—		1,255,402
Consumer other
Current	53,842		27,117		10,911		7,159		2,980		29,336		415,044		—		546,389
30-59 days	322		114		77		18		11		7		3,061		—		3,610
60-89 days	102		20		13		18		3		23		1,285		—		1,464
90 days or greater	53		84		8		—		—		—		1,360		—		1,505
Total	54,319		27,335		11,009		7,195		2,994		29,366		420,750		—		552,968
Total consumer	$	2,679,097	$	1,444,947	$	929,030	$	728,918	$	536,569	$	951,150	$	2,339,505	$	161,817	$	9,771,033
PCD loans
Current	$	31,475	$	25,425	$	27,183	$	27,955	$	28,995	$	232,186	$	13,212	$	21,027	$	407,458
30-59 days	999		925		801		718		1,341		12,637		156		745		18,322
60-89 days	447		81		312		695		97		4,098		9		337		6,076
90 days or greater	721		2,325		4,755		1,208		897		19,963		111		1,046		31,026
Total PCD	$	33,642	$	28,756	$	33,051	$	30,576	$	31,330	$	268,884	$	13,488	$	23,155	$	462,882
Total loans and leases	$	11,172,270	$	5,690,922	$	3,749,427	$	2,812,829	$	2,215,777	$	3,458,369	$	3,500,512	$	191,869	$	32,791,975

The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta and the Federal Reserve Bank (“FRB”) as of March 31, 2021 and December 31, 2020:

(Dollars in thousands)	March 31, 2021		December 31, 2020
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans	$	8,847,178	$	8,637,844
Less: Advances	648,671		652,675
Available borrowing capacity	$	8,198,507	$	7,985,169
Pledged non-PCD loans	$	12,327,626	$	12,157,153
FRB
Lendable collateral value of pledged non-PCD loans	$	3,367,466	$	3,321,762
Less: Advances	—		—
Available borrowing capacity	$	3,367,466	$	3,321,762
Pledged non-PCD loans	$	4,181,520	$	4,104,866