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Loans and Leases
 12 Months Ended
Dec. 31, 2021
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases
LOANS AND LEASES
BancShares’ accounting methods for loans and leases depends 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-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 and are reported by loan segments as defined in Note A, Accounting Policies and Basis of Presentation. 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 include the following at December 31, 2021 and 2020:
(Dollars in thousands)December 31, 2021December 31, 2020
Commercial:
Construction and land development$1,111,797 $985,424 
Owner occupied commercial mortgage11,992,625 11,165,012 
Non-owner occupied commercial mortgage2,971,393 2,987,689 
Commercial and industrial and leases5,710,652 5,013,644 
SBA-PPP493,821 2,406,291 
Total commercial loans and leases22,280,288 22,558,060 
Consumer:
Residential mortgage5,679,919 5,561,686 
Revolving mortgage1,795,005 2,052,854 
Construction and land development399,570 348,123 
Consumer auto1,331,388 1,255,402 
Consumer other547,728 552,968 
Total consumer loans9,753,610 9,771,033 
Total non-PCD loans and leases32,033,898 32,329,093 
PCD loans337,624 462,882 
Total loans and leases$32,371,522 $32,791,975 
Certain residential real estate loans are originated to be sold to investors and are recorded in loans held for sale at fair value. Loans held for sale totaled $98.7 million and $124.8 million at December 31, 2021 and 2020, respectively. We may change our strategy for certain portfolio loans and sell them in the secondary market. At that time, portfolio loans are transferred to loans held for sale at the lower of cost or market value.
During 2021, total proceeds from sales of residential mortgage loans were $1.04 billion. During 2020, total proceeds from sales of residential mortgage loans were $1.05 billion, the majority of which were originated to be sold. An additional $7.6 million related to sales of portfolio loans, which were sold at par.
The following table presents selected components of the amortized cost of loans.
(Dollars in thousands)December 31, 2021December 31, 2020
Deferred fees, including unearned fees and unamortized costs on non-PCD loans
Net deferred fees related to SBA-PPP loans$14,882 $41,064 
Net deferred fees related to other portfolios16,9039,153
Total net deferred fees$31,785 $50,217 
Net unamortized discount on purchased loans
Non-PCD$11,428 $19,473 
PCD29,008 45,254 
Total$40,436 $64,727 
Loans and leases to borrowers in medical, dental or related fields were $7.09 billion as of December 31, 2021, which represented 21.9% of total loans and leases, compared to $5.54 billion or 16.9% of total loans and leases at December 31, 2020. The credit risk of this industry concentration is mitigated through our underwriting policies, which emphasize reliance on adequate borrower cash flow, rather than underlying collateral value, and our preference for financing secured by owner-occupied real property. Except for this single concentration, no other industry represented more than 10% of total loans and leases outstanding at December 31, 2021 or 2020. Similar to FCB’s branch footprint, the collateral of loans secured by real estate is concentrated within North Carolina and South Carolina. At December 31, 2021, real estate located in North Carolina and South Carolina represented 35.9% and 15.6%, respectively, of all real estate used as collateral.
The aging of the outstanding loans and leases, by class, at December 31, 2021 and 2020, is provided in the tables below. Loans and leases 30 days or less past due 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.
December 31, 2021
(Dollars in thousands)30-59 days
past due		60-89 days
past due		90 days or greaterTotal past
due		CurrentTotal loans
and leases
Commercial:
Construction and land development$456 $— $2,099 $2,555 $1,109,242 $1,111,797 
Owner occupied commercial mortgage18,073 517 6,929 25,519 11,967,106 11,992,625 
Non-owner occupied commercial mortgage1,335 33 2,217 3,585 2,967,808 2,971,393 
Commercial and industrial and leases7,909 3,714 6,238 17,861 5,692,791 5,710,652 
SBA-PPP— — — — 493,821 493,821 
Total commercial loans27,773 4,264 17,483 49,520 22,230,768 22,280,288 
Consumer:
Residential mortgage18,585 4,066 14,205 36,856 5,643,063 5,679,919 
Revolving mortgage5,446 2,086 4,612 12,144 1,782,861 1,795,005 
Construction and land development 388 — 41 429 399,141 399,570 
Consumer auto5,628 1,134 1,214 7,976 1,323,412 1,331,388 
Consumer other2,335 2,013 1,154 5,502 542,226 547,728 
Total consumer loans32,382 9,299 21,226 62,907 9,690,703 9,753,610 
PCD loans10,898 2,899 13,160 26,957 310,667 337,624 
Total loans and leases$71,053 $16,462 $51,869 $139,384 $32,232,138 $32,371,522 
December 31, 2020
(Dollars in thousands)30-59 days
past due		60-89 days
past due		90 days or greaterTotal past
due		CurrentTotal loans
and leases
Commercial:
Construction and land development$956 $527 $1,603 $3,086 $982,338 $985,424 
Owner occupied commercial mortgage8,757 2,232 14,082 25,071 11,139,941 11,165,012 
Non-owner occupied commercial mortgage12,370 — 5,973 18,343 2,969,346 2,987,689 
Commercial and industrial and leases14,532 2,842 3,243 20,617 4,993,027 5,013,644 
SBA-PPP— — — — 2,406,291 2,406,291 
Total commercial loans36,615 5,601 24,901 67,117 22,490,943 22,558,060 
Consumer:
Residential mortgage43,218 8,364 31,690 83,272 5,478,414 5,561,686 
Revolving mortgage11,977 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 auto6,825 1,835 1,076 9,736 1,245,666 1,255,402 
Consumer other3,610 1,464 1,505 6,579 546,389 552,968 
Total consumer loans66,562 14,366 42,016 122,944 9,648,089 9,771,033 
PCD loans18,322 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 December 31, 2021 and December 31, 2020, were as follows:
 December 31, 2021December 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$2,128 $— $1,661 $— 
Owner occupied commercial mortgage11,355 4,573 23,103 3,625 
Non-owner occupied commercial mortgage4,420 197 7,932 147 
Commercial and industrial and leases17,384 661 10,626 540 
Total commercial loans35,287 5,431 43,322 4,312 
Consumer:
Residential mortgage35,395 — 66,345 — 
Revolving mortgage15,882 — 22,236 — 
Construction and land development482 — 652 — 
Consumer auto3,089 — 3,166 — 
Consumer other555 951 823 1,195 
Total consumer loans55,403 951 93,222 1,195 
PCD loans29,616 543 54,939 355 
Total loans and leases$120,306 $6,925 $191,483 $5,862 

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-PCD 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. 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 which 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 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 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 not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at December 31, 2021 and 2020, 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 December 31, 2021.
Commercial Loans Amortized Cost Basis by Origination Year
Classification:20212020201920182017PriorRevolvingRevolving converted to term loansTotal
(Dollars in thousands)
Construction and land development
Pass$467,540 $374,206 $178,035 $23,546 $43,541 $8,419 $9,491 $— $1,104,778 
Special Mention18 152 283 — 45 — — — 498 
Substandard975 35 61 1,439 4,002 9 — — 6,521 
Total468,533 374,393 178,379 24,985 47,588 8,428 9,491 — 1,111,797 
Owner occupied commercial mortgage
Pass3,042,301 3,016,532 1,868,940 1,193,126 960,346 1,538,984 125,025 115 11,745,369 
Special Mention2,924 35,390 35,949 22,247 11,399 20,233 4,598 70 132,810 
Substandard28,456 6,239 14,817 10,590 17,362 31,565 5,417 — 114,446 
Total3,073,681 3,058,161 1,919,706 1,225,963 989,107 1,590,782 135,040 185 11,992,625 
Non-owner occupied commercial mortgage
Pass628,953 734,538 577,953 261,504 261,946 388,956 35,297 — 2,889,147 
Special Mention1,252 — 262 2,602 32 5,083 — — 9,231 
Substandard5,364 10,367 22,754 9,106 6,973 16,502 549 — 71,615 
Doubtful— — — — 1,400 — — — 1,400 
Total635,569 744,905 600,969 273,212 270,351 410,541 35,846 — 2,971,393 
Commercial and industrial and leases
Pass1,767,047 1,042,730 636,334 298,326 165,371 289,044 1,338,162 4,983 5,541,997 
Special Mention2,455 7,859 20,225 2,493 3,769 3,517 5,455 296 46,069 
Substandard15,752 6,579 3,111 4,000 1,642 2,679 15,911 864 50,538 
Doubtful— — — — — — 1 — 1 
Ungraded— — — — — — 72,047 — 72,047 
Total1,785,254 1,057,168 659,670 304,819 170,782 295,240 1,431,576 6,143 5,710,652 
SBA-PPP
Pass450,550 43,271 — — — — — — 493,821 
Total commercial$6,413,587 $5,277,898 $3,358,724 $1,828,979 $1,477,828 $2,304,991 $1,611,953 $6,328 $22,280,288 
Consumer and PCD Loans Amortized Cost Basis by Origination Year
Days Past Due:20212020201920182017PriorRevolvingRevolving converted to term loansTotal
(Dollars in thousands)
Residential mortgage
Current$1,964,807 $1,561,214 $607,551 $359,581 $339,318 $789,770 $20,822 $— $5,643,063 
30-59 days1,809 2,011 2,045 1,866 1,385 9,469 — — 18,585 
60-89 days465 26 67 649 507 2,352 — — 4,066 
90 days or greater225 428 681 1,998 744 10,129 — — 14,205 
Total1,967,306 1,563,679 610,344 364,094 341,954 811,720 20,822 — 5,679,919 
Revolving mortgage
Current— — — — — — 1,671,148 111,713 1,782,861 
30-59 days— — — — — — 3,688 1,758 5,446 
60-89 days— — — — — — 256 1,830 2,086 
90 days or greater— — — — — — 1,957 2,655 4,612 
Total— — — — — — 1,677,049 117,956 1,795,005 
Construction and land development
Current241,692 122,259 20,782 6,665 4,835 1,630 1,278 — 399,141 
30-59 days55 285 27 — 11 10 — — 388 
60-89 days— — — — — — — — — 
90 days or greater— — — — — 41 — — 41 
Total241,747 122,544 20,809 6,665 4,846 1,681 1,278 — 399,570 
Consumer auto
Current596,617 343,230 198,455 118,540 48,405 18,165 — — 1,323,412 
30-59 days1,331 1,570 1,265 879 409 174 — — 5,628 
60-89 days184 429 296 147 48 30 — — 1,134 
90 days or greater428 297 156 228 87 18 — — 1,214 
Total598,560 345,526 200,172 119,794 48,949 18,387 — — 1,331,388 
Consumer other
Current132,402 23,856 11,019 4,402 2,362 28,099 340,086 — 542,226 
30-59 days205 125 23 1 — 25 1,956 — 2,335 
60-89 days697 20 36 — — 1 1,259 — 2,013 
90 days or greater45 7 1 1 — — 1,100 — 1,154 
Total133,349 24,008 11,079 4,404 2,362 28,125 344,401 — 547,728 
Total consumer2,940,962 2,055,757 842,404 494,957 398,111 859,913 2,043,550 117,956 9,753,610 
PCD loans
Current— 22,154 20,896 20,486 21,739 200,915 10,070 14,407 310,667 
30-59 days— 798 98 479 164 9,173 — 186 10,898 
60-89 days— 302 143 158 22 2,196 — 78 2,899 
90 days or greater— 483 222 275 403 10,697 28 1,052 13,160 
Total PCD— 23,737 21,359 21,398 22,328 222,981 10,098 15,723 337,624 
Total loans and leases$9,354,549 $7,357,392 $4,222,487 $2,345,334 $1,898,267 $3,387,885 $3,665,601 $140,007 $32,371,522