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Loans and Leases | 12 Months Ended
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Dec. 31, 2018
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-PCI or PCI. Loans that are originated by BancShares and 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 BancShares will be unable to collect all contractually required payments are classified as PCI. Additionally, acquired loans are recorded at fair value at the date of acquisition, with no corresponding allowance for loan and lease losses. See Note A for additional information on non-PCI and PCI loans and leases. Loans and leases outstanding include the following at December 31, 2018 and 2017:
(Dollars in thousands) | December 31, 2018 |  | December 31, 2017
Non-PCI loans and leases: |  |  |
Commercial: |  |  |
Construction and land development | $ | 757,854 |  |  | $ | 669,215 |
Commercial mortgage | 10,717,234 |  |  | 9,729,022 |
Other commercial real estate | 426,985 |  |  | 473,433 |
Commercial and industrial and leases | 3,938,730 |  |  | 3,625,208 |
Other | 296,424 |  |  | 302,176 |
Total commercial loans | 16,137,227 |  |  | 14,799,054 |
Noncommercial: |  |  |
Residential mortgage | 4,265,687 |  |  | 3,523,786 |
Revolving mortgage | 2,542,975 |  |  | 2,701,525 |
Construction and land development | 257,030 |  |  | 248,289 |
Consumer | 1,713,781 |  |  | 1,561,173 |
Total noncommercial loans | 8,779,473 |  |  | 8,034,773 |
Total non-PCI loans and leases | 24,916,700 |  |  | 22,833,827 |
PCI loans: |  |  |
Total PCI loans | 606,576 |  |  | 762,998 |
Total loans and leases | $ | 25,523,276 |  |  | $ | 23,596,825 |
At December 31, 2018, $9.12 billion in noncovered 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 December 31, 2017, $8.75 billion in noncovered loans with a lendable collateral value of $6.08 billion were used to secure $835.2 million in FHLB of Atlanta advances, resulting in additional borrowing capacity of $5.24 billion. At December 31, 2018, $2.94 billion in noncovered loans with a lendable collateral value of $2.19 billion were used to secure additional borrowing capacity at the Federal Reserve Bank (FRB). At December 31, 2017, $2.77 billion in noncovered loans with a lendable collateral value of $2.08 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. Loans held for sale totaled $45.5 million and $51.2 million at December 31, 2018 and 2017, 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 fair value. During 2018, total proceeds from sales of residential mortgage loans were $618.1 million of which $608.5 million related to sales of loans held for sale. The remaining $9.6 million related to sales of portfolio loans, which were sold at par. During 2017, total proceeds from sales of residential mortgage loans were $823.5 million, of which $660.8 million related to sales of loans held for sale. The remaining $162.6 million related to sales of portfolio loans, which resulted in a gain of $1.0 million. Net deferred fees on originated non-PCI loans and leases, including unearned income as well as unamortized costs, were $79 thousand and $1.7 million at December 31, 2018 and December 31, 2017, respectively. The unamortized discounts related to purchased non-PCI loans in the Capital Commerce, HomeBancorp, Guaranty, Cordia Bancorp, Inc. (Cordia) and First Citizens Bancorporation, Inc. (Bancorporation) acquisitions were $3.1 million, $6.3 million, $10.8 million, $1.4 million and $12.0 million at December 31, 2018, respectively. At December 31, 2017, the unamortized discounts related to purchased non-PCI loans and leases from the Guaranty, Cordia and Bancorporation acquisitions were $14.2 million, $2.7 million and $18.1 million, respectively. During the years ended December 31, 2018 and December 31, 2017, accretion income on purchased non-PCI loans and leases was $12.8 million and $13.6 million, respectively. Loans and leases to borrowers in medical, dental or related fields were $4.98 billion as of December 31, 2018, which represents 19.5 percent of total loans and leases, compared to $4.86 billion or 20.6 percent of total loans and leases at December 31, 2017. 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 percent of total loans and leases outstanding at December 31, 2018. 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. 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 December 31, 2018 and 2017, 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. The composition of the loans and leases outstanding at December 31, 2018 and December 31, 2017, by credit quality indicator are provided below:
| December 31, 2018
| Non-PCI commercial loans and leases
(Dollars in thousands) | 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 |
| December 31, 2017
| Non-PCI commercial loans and leases
| Construction and land development |  | Commercial mortgage |  | Other commercial real estate |  | Commercial and industrial and leases |  | Other |  | Total non-PCI commercial loans and leases
Pass | $ | 665,197 |  |  | $ | 9,521,019 |  |  | $ | 468,942 |  |  | $ | 3,395,086 |  |  | $ | 298,064 |  |  | $ | 14,348,308 |
Special mention | 691 |  |  | 78,643 |  |  | 1,260 |  |  | 48,470 |  |  | 2,919 |  |  | 131,983 |
Substandard | 3,327 |  |  | 128,848 |  |  | 3,224 |  |  | 25,202 |  |  | 1,193 |  |  | 161,794 |
Doubtful | — |  |  | 262 |  |  | — |  |  | 385 |  |  | — |  |  | 647 |
Ungraded | — |  |  | 250 |  |  | 7 |  |  | 156,065 |  |  | — |  |  | 156,322 |
Total | $ | 669,215 |  |  | $ | 9,729,022 |  |  | $ | 473,433 |  |  | $ | 3,625,208 |  |  | $ | 302,176 |  |  | $ | 14,799,054 |
| 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 |
| December 31, 2017
| Non-PCI noncommercial loans and leases
| Residential mortgage |  | Revolving mortgage |  | Construction and land development |  | Consumer |  | Total non-PCI noncommercial loans and leases
Current | $ | 3,465,935 |  |  | $ | 2,674,390 |  |  | $ | 239,648 |  |  | $ | 1,546,473 |  |  | $ | 7,926,446 |
30-59 days past due | 27,886 |  |  | 13,428 |  |  | 7,154 |  |  | 8,812 |  |  | 57,280 |
60-89 days past due | 8,064 |  |  | 3,485 |  |  | 108 |  |  | 2,893 |  |  | 14,550 |
90 days or greater past due | 21,901 |  |  | 10,222 |  |  | 1,379 |  |  | 2,995 |  |  | 36,497 |
Total | $ | 3,523,786 |  |  | $ | 2,701,525 |  |  | $ | 248,289 |  |  | $ | 1,561,173 |  |  | $ | 8,034,773 |
| December 31, 2018 |  | December 31, 2017
(Dollars in thousands) | PCI commercial loans
Pass | $ | 141,922 |  |  | $ | 201,332 |
Special mention | 48,475 |  |  | 63,257 |
Substandard | 101,447 |  |  | 117,068 |
Doubtful | 4,828 |  |  | 11,735 |
Ungraded | — |  |  | 27 |
Total | $ | 296,672 |  |  | $ | 393,419 |
| December 31, 2018 |  | December 31, 2017
(Dollars in thousands) | PCI noncommercial loans
Current | $ | 268,280 |  |  | $ | 318,632 |
30-89 days past due | 11,155 |  |  | 13,343 |
60-89 days past due | 7,708 |  |  | 6,212 |
90 days or greater past due | 22,761 |  |  | 31,392 |
Total | $ | 309,904 |  |  | $ | 369,579 |
The aging of the outstanding non-PCI loans and leases, by class, at December 31, 2018, and December 31, 2017 are 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, 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 - commercial | $ | 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 - noncommercial | 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 |
| December 31, 2017
| 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 - commercial | $ | 491 |  |  | $ | 442 |  |  | $ | 357 |  |  | $ | 1,290 |  |  | $ | 667,925 |  |  | $ | 669,215 |
Commercial mortgage | 12,288 |  |  | 2,375 |  |  | 6,490 |  |  | 21,153 |  |  | 9,707,869 |  |  | 9,729,022 |
Other commercial real estate | 107 |  |  | — |  |  | 75 |  |  | 182 |  |  | 473,251 |  |  | 473,433 |
Commercial and industrial and leases | 9,677 |  |  | 1,677 |  |  | 2,239 |  |  | 13,593 |  |  | 3,611,615 |  |  | 3,625,208 |
Other | 188 |  |  | 6 |  |  | 133 |  |  | 327 |  |  | 301,849 |  |  | 302,176 |
Total commercial loans | 22,751 |  |  | 4,500 |  |  | 9,294 |  |  | 36,545 |  |  | 14,762,509 |  |  | 14,799,054 |
Noncommercial: |  |  |  |  |  |  |  |  |  |  |
Residential mortgage | 27,886 |  |  | 8,064 |  |  | 21,901 |  |  | 57,851 |  |  | 3,465,935 |  |  | 3,523,786 |
Revolving mortgage | 13,428 |  |  | 3,485 |  |  | 10,222 |  |  | 27,135 |  |  | 2,674,390 |  |  | 2,701,525 |
Construction and land development - noncommercial | 7,154 |  |  | 108 |  |  | 1,379 |  |  | 8,641 |  |  | 239,648 |  |  | 248,289 |
Consumer | 8,812 |  |  | 2,893 |  |  | 2,995 |  |  | 14,700 |  |  | 1,546,473 |  |  | 1,561,173 |
Total noncommercial loans | 57,280 |  |  | 14,550 |  |  | 36,497 |  |  | 108,327 |  |  | 7,926,446 |  |  | 8,034,773 |
Total non-PCI loans and leases | $ | 80,031 |  |  | $ | 19,050 |  |  | $ | 45,791 |  |  | $ | 144,872 |  |  | $ | 22,688,955 |  |  | 22,833,827 |
The recorded investment, by class, in loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at December 31, 2018 and December 31, 2017 for non-PCI loans and leases, were as follows:
| December 31, 2018 |  | December 31, 2017
(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
Non-PCI loans and leases: |  |  |  |  |  |  |
Construction and land development - commercial | $ | 666 |  |  | $ | — |  |  | $ | 1,040 |  |  | $ | — |
Commercial mortgage | 12,594 |  |  | — |  |  | 22,625 |  |  | 397 |
Other commercial real estate | 366 |  |  | — |  |  | 916 |  |  | — |
Commercial and industrial and leases | 4,624 |  |  | 808 |  |  | 4,876 |  |  | 428 |
Residential mortgage | 35,662 |  |  | — |  |  | 38,942 |  |  | — |
Revolving mortgage | 25,563 |  |  | — |  |  | 19,990 |  |  | — |
Construction and land development - noncommercial | 1,823 |  |  | — |  |  | 1,989 |  |  | — |
Consumer | 2,969 |  |  | 2,080 |  |  | 1,992 |  |  | 2,153 |
Other | 279 |  |  | — |  |  | 164 |  |  | — |
Total non-PCI loans and leases | $ | 84,546 |  |  | $ | 2,888 |  |  | $ | 92,534 |  |  | $ | 2,978 |
Purchased non-PCI loans and leases The following table relates to purchased non-PCI loans acquired in the Palmetto Heritage, Capital Commerce and HomeBancorp transactions in 2018 and the Guaranty transaction in 2017. The table summarizes the contractually required payments, which include principal and interest, estimate of contractual cash flows not expected to be collected and fair value of the acquired loans at the acquisition date.
(Dollars in thousands) | Palmetto Heritage |  | Capital Commerce |  | HomeBancorp |  | Guaranty
Contractually required payments | $ | 142,413 |  |  | $ | 198,568 |  |  | $ | 710,876 |  |  | $ | 703,916 |
Contractual cash flows not expected to be collected | — |  |  | 5,427 |  |  | 9,845 |  |  | 16,073 |
Fair value at acquisition date | 131,283 |  |  | 173,354 |  |  | 550,618 |  |  | 574,553 |
The recorded fair values of purchased non-PCI loans acquired in the Palmetto Heritage, Capital Commerce and HomeBancorp transactions in 2018 and the Guaranty transaction in 2017 as of their respective acquisition date were as follows:
(Dollars in thousands) | Palmetto Heritage |  | Capital Commerce |  | HomeBancorp |  | Guaranty
Commercial: |  |  |  |  |  |  |
Construction and land development | $ | 13,186 |  |  | $ | 10,299 |  |  | $ | 525 |  |  | $ | — |
Commercial mortgage | 29,225 |  |  | 57,049 |  |  | 188,688 |  |  | 850 |
Other commercial real estate | 753 |  |  | 6,370 |  |  | 55,183 |  |  | — |
Commercial and industrial and leases | 8,153 |  |  | 34,301 |  |  | 7,931 |  |  | 583 |
Other | 1,039 |  |  | — |  |  | — |  |  | 183,816 |
Total commercial loans and leases | 52,356 |  |  | 108,019 |  |  | 252,327 |  |  | 185,249 |
Noncommercial: |  |  |  |  |  |  |
Residential mortgage | 59,076 |  |  | 50,630 |  |  | 296,273 |  |  | 309,612 |
Revolving mortgage | 6,175 |  |  | 2,552 |  |  | 51 |  |  | 54,780 |
Construction and land development | 11,103 |  |  | 11,173 |  |  | — |  |  | — |
Consumer | 2,573 |  |  | 980 |  |  | 1,967 |  |  | 24,912 |
Total noncommercial loans and leases | 78,927 |  |  | 65,335 |  |  | 298,291 |  |  | 389,304 |
Total non-PCI loans | $ | 131,283 |  |  | $ | 173,354 |  |  | $ | 550,618 |  |  | $ | 574,553 |
PCI loans The following table relates to PCI loans acquired in the Palmetto Heritage, Capital Commerce and HomeBancorp transactions in 2018 and the Guaranty and HCB transactions in 2017. The table 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 respective acquisition dates.
(Dollars in thousands) | Palmetto Heritage |  | Capital Commerce |  | HomeBancorp |  | Guaranty |  | HCB
Contractually required payments | $ | 4,783 |  |  | $ | 13,871 |  |  | $ | 26,651 |  |  | $ | 158,456 |  |  | $ | 111,250 |
Cash flows expected to be collected | 4,112 |  |  | 11,814 |  |  | 19,697 |  |  | 142,000 |  |  | 101,802 |
Fair value of loans at acquisition | 3,863 |  |  | 10,772 |  |  | 15,555 |  |  | 114,533 |  |  | 85,149 |
The recorded fair values of PCI loans acquired in the Palmetto Heritage, Capital Commerce and HomeBancorp transactions in 2018 and the Guaranty and HCB transactions in 2017 as of their respective acquisition date were as follows:
(Dollars in thousands) | Palmetto Heritage |  | Capital Commerce |  | HomeBancorp |  | Guaranty |  | HCB
Commercial: |  |  |  |  |  |  |  |  |
Construction and land development | $ | 212 |  |  | $ | 1,482 |  |  | $ | — |  |  | $ | 55 |  |  | $ | 7,061 |
Commercial mortgage | 1,053 |  |  | 1,846 |  |  | 7,815 |  |  | 644 |  |  | 21,836 |
Other commercial real estate | — |  |  | — |  |  | — |  |  | — |  |  | 6,404 |
Commercial and industrial | 372 |  |  | 922 |  |  | 423 |  |  | 2 |  |  | 19,675 |
Total commercial loans | 1,637 |  |  | 4,250 |  |  | 8,238 |  |  | 701 |  |  | 54,976 |
Noncommercial: |  |  |  |  |  |  |  |  |
Residential mortgage | 2,226 |  |  | 6,503 |  |  | 7,317 |  |  | 80,475 |  |  | 25,857 |
Revolving mortgage | — |  |  | — |  |  | — |  |  | 33,319 |  |  | 3,434 |
Construction and land development | — |  |  | — |  |  | — |  |  | 26 |  |  | — |
Consumer | — |  |  | 19 |  |  | — |  |  | 12 |  |  | 882 |
Total noncommercial loans | 2,226 |  |  | 6,522 |  |  | 7,317 |  |  | 113,832 |  |  | 30,173 |
Total PCI loans | $ | 3,863 |  |  | $ | 10,772 |  |  | $ | 15,555 |  |  | $ | 114,533 |  |  | $ | 85,149 |
The following table provides changes in the carrying value of all PCI loans during the years ended December 31, 2018 and 2017:
(Dollars in thousands) | 2018 |  | 2017 |  | 2016
Balance at January 1 | $ | 762,998 |  |  | $ | 809,169 |  |  | $ | 950,516 |
Fair value of PCI loans acquired during the year | 30,190 |  |  | 199,682 |  |  | 80,690 |
Accretion | 61,502 |  |  | 76,594 |  |  | 76,565 |
Payments received and other changes, net | (248,114 | ) |  | (322,447 | ) |  | (298,602 | )
Balance at December 31 | $ | 606,576 |  |  | $ | 762,998 |  |  | $ | 809,169 |
Unpaid principal balance at December 31 | $ | 960,457 |  |  | $ | 1,175,441 |  |  | $ | 1,266,395 |
The carrying value of PCI loans on the cost recovery method was $3.3 million at December 31, 2018, and $1.1 million at December 31, 2017. The recorded investment of PCI loans on nonaccrual status was $1.3 million and $624 thousand at December 31, 2018, and December 31, 2017, respectively. During the years ended December 31, 2018, and December 31, 2017, accretion income on PCI loans was $61.5 million and $76.6 million, respectively. For PCI loans, improved credit loss expectations generally result in the reclassification of nonaccretable difference to accretable yield. Changes in expected cash flows not related to credit improvements or deterioration do not affect the nonaccretable difference. The following table summarizes changes to the amount of accretable yield for 2018 and 2017.
(Dollars in thousands) | 2018 |  | 2017 |  | 2016
Balance at January 1 | $ | 316,679 |  |  | $ | 335,074 |  |  | $ | 343,856 |
Additions from acquisitions | 6,393 |  |  | 44,120 |  |  | 12,488 |
Accretion | (61,502 | ) |  | (76,594 | ) |  | (76,565 | )
Reclassifications from nonaccretable difference | 5,980 |  |  | 18,901 |  |  | 29,931 |
Changes in expected cash flows that do not affect nonaccretable difference | 45,344 |  |  | (4,822 | ) |  | 25,364 |
Balance at December 31 | $ | 312,894 |  |  | $ | 316,679 |  |  | $ | 335,074 |

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