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Loans

6 Months Ended

Jun. 30, 2023

Note 6 — Loans

The following is a summary of total loans:


	June 30,		December 31,
(Dollars in thousands)	2023		2022
Loans:
Construction and land development ⁽¹⁾	$	2,817,125	$	2,860,360
Commercial non-owner occupied		8,476,236		8,072,959
Commercial owner occupied real estate		5,585,951		5,460,193
Consumer owner occupied ⁽²⁾		5,927,781		5,162,042
Home equity loans		1,347,714		1,313,168
Commercial and industrial		5,378,294		5,313,483
Other income producing property		711,712		696,242
Consumer		1,285,478		1,278,426
Other loans		6,494		20,989
Total loans		31,536,785		30,177,862
Less allowance for credit losses		(427,392)		(356,444)
Loans, net	$	31,109,393	$	29,821,418

(1)

Construction and land development includes loans for both commercial construction and development, as well as loans for 1-4 family construction and lot loans.

(2)

Consumer owner occupied real estate includes loans on both 1-4 family owner occupied property, as well as loans collateralized by 1-4 family owner occupied property with a business intent.

The above table reflects the loan portfolio at the amortized cost basis for the periods June 30, 2023 and December 31, 2022, to include net deferred costs of $61.2 million compared to net deferred fees of $49.7 million, respectively, and unamortized discount related to loans acquired of $59.3 million and $72.1 million, respectively. Accrued interest receivables of $110.4 million and $105.4 million, respectively, are accounted for separately and reported in other assets for the periods June 30, 2023 and December 31, 2022.

The Company purchased loans through its acquisition of Atlantic Capital, for which there was, at acquisition, evidence of more than an insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:


(Dollars in thousands)	March 1, 2022
Book value of acquired loans at acquisition	$	137,874
Allowance for credit losses at acquisition		(13,758)
Non-credit discount at acquisition		(5,943)
Carrying value or book value of acquired loans at acquisition	$	118,173

As part of the ongoing monitoring of the credit quality of our loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the level of classified loans, (ii) net charge-offs, (iii) non-performing loans (see details below), and (iv) the general economic conditions of the markets that we serve.

The Company utilizes a risk grading matrix to assign a risk grade to each commercial loan. Classified loans are assessed at a minimum every six months. A description of the general characteristics of the risk grades is as follows:

●

Pass—These loans range from minimal credit risk to average, however, still acceptable credit risk.

●

Special mention—A special mention loan has potential weaknesses that deserve Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

●

Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

●

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

Construction and land development loans in the following table are on commercial and speculative real estate. Consumer owner occupied loans are collateralized by 1-4 family owner occupied property with a business intent.

The following tables present the credit risk profile by risk grade of commercial loans by origination year as of June 30, 2023 and December 31, 2022:


		Term Loans
(Dollars in thousands)		Amortized Cost Basis by Origination Year
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving		Total
Construction and land development
Risk rating:
Pass	$	218,442	$	922,947	$	564,722	$	50,133	$	13,914	$	30,228	$	63,747	$	1,864,133
Special mention		—		10,424		1,162		13		—		490		—		12,089
Substandard		1,654		1,364		—		253		1,312		7,936		—		12,519
Doubtful		—		—		—		—		—		5		—		5
Total Construction and land development	$	220,096	$	934,735	$	565,884	$	50,399	$	15,226	$	38,659	$	63,747	$	1,888,746
Construction and land development
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	2

Commercial non-owner occupied
Risk rating:
Pass	$	531,832	$	2,383,472	$	1,997,313	$	704,995	$	804,870	$	1,728,824	$	79,251	$	8,230,557
Special mention		23,012		10,493		682		44,468		12,518		59,635		93		150,901
Substandard		6,111		5,683		13,147		4,574		30,978		34,284		—		94,777
Doubtful		—		—		1		—		—		—		—		1
Total Commercial non-owner occupied	$	560,955	$	2,399,648	$	2,011,143	$	754,037	$	848,366	$	1,822,743	$	79,344	$	8,476,236
Commercial non-owner occupied
Current-period gross charge-offs	$	—	$	—	$	51	$	—	$	—	$	—	$	—	$	51

Commercial Owner Occupied
Risk rating:
Pass	$	330,520	$	1,047,572	$	1,134,877	$	682,805	$	693,419	$	1,346,100	$	80,999	$	5,316,292
Special mention		936		31,639		22,812		14,094		10,094		28,564		381		108,520
Substandard		8,750		15,769		31,741		18,982		16,778		68,684		430		161,134
Doubtful		—		—		—		1		—		4		—		5
Total commercial owner occupied	$	340,206	$	1,094,980	$	1,189,430	$	715,882	$	720,291	$	1,443,352	$	81,810	$	5,585,951
Commercial owner occupied
Current-period gross charge-offs	$	—	$	35	$	—	$	—	$	—	$	—	$	—	$	35

Commercial and industrial
Risk rating:
Pass	$	674,204	$	1,269,467	$	774,899	$	439,202	$	217,999	$	484,451	$	1,338,102	$	5,198,324
Special mention		8,534		11,437		3,965		914		2,539		993		13,775		42,157
Substandard		3,694		8,324		24,301		5,557		6,242		15,208		74,329		137,655
Doubtful		57		2		81		1		—		15		2		158
Total commercial and industrial	$	686,489	$	1,289,230	$	803,246	$	445,674	$	226,780	$	500,667	$	1,426,208	$	5,378,294
Commercial and industrial
Current-period gross charge-offs	$	967	$	1,348	$	2,959	$	38	$	250	$	402	$	329	$	6,293

Other income producing property
Risk rating:
Pass	$	39,690	$	157,778	$	104,488	$	57,141	$	43,710	$	128,364	$	44,450	$	575,621
Special mention		76		591		796		78		300		2,706		1,478		6,025
Substandard		287		659		1,910		273		553		6,964		—		10,646
Doubtful		—		—		—		—		—		5		—		5
Total other income producing property	$	40,053	$	159,028	$	107,194	$	57,492	$	44,563	$	138,039	$	45,928	$	592,297
Other income producing property
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer owner occupied
Risk rating:
Pass	$	5,519	$	4,664	$	2,923	$	1,475	$	347	$	452	$	19,455	$	34,835
Special mention		95		521		19		129		277		—		—		1,041
Substandard		—		2		—		930		1,587		187		150		2,856
Doubtful		—		—		—		—		—		1		—		1
Total Consumer owner occupied	$	5,614	$	5,187	$	2,942	$	2,534	$	2,211	$	640	$	19,605	$	38,733
Consumer owner occupied
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other loans
Risk rating:
Pass	$	6,494	$	—	$	—	$	—	$	—	$	—	$	—	$	6,494
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total other loans	$	6,494	$	—	$	—	$	—	$	—	$	—	$	—	$	6,494
Other loans
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Commercial Loans
Risk rating:
Pass	$	1,806,701	$	5,785,900	$	4,579,222	$	1,935,751	$	1,774,259	$	3,718,419	$	1,626,004	$	21,226,256
Special mention		32,653		65,105		29,436		59,696		25,728		92,388		15,727		320,733
Substandard		20,496		31,801		71,099		30,569		57,450		133,263		74,909		419,587
Doubtful		57		2		82		2		—		30		2		175
Total Commercial Loans	$	1,859,907	$	5,882,808	$	4,679,839	$	2,026,018	$	1,857,437	$	3,944,100	$	1,716,642	$	21,966,751
Total Commercial Loans
Current-period gross charge-offs	$	967	$	1,383	$	3,010	$	38	$	250	$	404	$	329	$	6,381


		Term Loans
(Dollars in thousands)		Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving		Total
Construction and land development
Risk rating:
Pass	$	875,751	$	742,985	$	134,996	$	63,439	$	14,521	$	29,442	$	65,656	$	1,926,790
Special mention		1,643		988		268		76		7,219		2,068		—		12,262
Substandard		214		10,409		11		2,326		—		4,282		—		17,242
Doubtful		—		—		—		—		—		6		—		6
Total Construction and land development	$	877,608	$	754,382	$	135,275	$	65,841	$	21,740	$	35,798	$	65,656	$	1,956,300
Construction and land development
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial non-owner occupied
Risk rating:
Pass	$	2,245,943	$	1,849,079	$	816,791	$	959,707	$	506,350	$	1,417,397	$	108,759	$	7,904,026
Special mention		7,579		4,225		936		11,036		24,067		32,110		5,000		84,953
Substandard		13,256		25,557		609		9,383		6,472		26,366		2,257		83,900
Doubtful		—		1		—		79		—		—		—		80
Total Commercial non-owner occupied	$	2,266,778	$	1,878,862	$	818,336	$	980,205	$	536,889	$	1,475,873	$	116,016	$	8,072,959
Commercial non-owner occupied
Current-period gross charge-offs	$	8	$	—	$	—	$	—	$	—	$	360	$	—	$	368

Commercial Owner Occupied
Risk rating:
Pass	$	1,046,562	$	1,136,289	$	725,040	$	709,669	$	446,497	$	1,080,522	$	75,506	$	5,220,085
Special mention		3,620		25,263		3,383		7,934		7,160		34,724		1,294		83,378
Substandard		12,861		34,210		19,962		16,502		9,487		62,808		895		156,725
Doubtful		—		—		1		—		—		4		—		5
Total commercial owner occupied	$	1,063,043	$	1,195,762	$	748,386	$	734,105	$	463,144	$	1,178,058	$	77,695	$	5,460,193
Commercial owner occupied
Current-period gross charge-offs		—		—		—		1,143		—		833		—		1,976

Commercial and industrial
Risk rating:
Pass	$	1,566,203	$	895,368	$	506,655	$	274,446	$	212,522	$	333,286	$	1,386,678	$	5,175,158
Special mention		5,885		3,782		3,401		1,859		3,378		1,316		24,347		43,968
Substandard		6,308		27,974		4,770		6,591		6,783		8,476		32,876		93,778
Doubtful		—		—		—		—		155		422		2		579
Total commercial and industrial	$	1,578,396	$	927,124	$	514,826	$	282,896	$	222,838	$	343,500	$	1,443,903	$	5,313,483
Commercial and industrial
Current-period gross charge-offs		4		2,825		198		630		2,214		2,589		1,742		10,202

Other income producing property
Risk rating:
Pass	$	149,793	$	92,887	$	60,473	$	46,189	$	47,155	$	107,436	$	46,179	$	550,112
Special mention		952		957		1,257		378		190		3,652		2,328		9,714
Substandard		876		359		1,281		300		214		11,214		1,065		15,309
Doubtful		401		—		—		—		—		136		—		537
Total other income producing property	$	152,022	$	94,203	$	63,011	$	46,867	$	47,559	$	122,438	$	49,572	$	575,672
Other income producing property
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	46	$	50	$	96

Consumer owner occupied
Risk rating:
Pass	$	5,947	$	3,124	$	1,811	$	418	$	68	$	332	$	15,910	$	27,610
Special mention		537		20		136		284		—		—		66		1,043
Substandard		13		95		12		1,614		—		202		151		2,087
Doubtful		—		—		—		—		1		—		—		1
Total Consumer owner occupied	$	6,497	$	3,239	$	1,959	$	2,316	$	69	$	534	$	16,127	$	30,741
Consumer owner occupied
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other loans
Risk rating:
Pass	$	20,989	$	—	$	—	$	—	$	—	$	—	$	—	$	20,989
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total other loans	$	20,989	$	—	$	—	$	—	$	—	$	—	$	—	$	20,989
Other loans
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Commercial Loans
Risk rating:
Pass	$	5,911,188	$	4,719,732	$	2,245,766	$	2,053,868	$	1,227,113	$	2,968,415	$	1,698,688	$	20,824,770
Special mention		20,216		35,235		9,381		21,567		42,014		73,870		33,035		235,318
Substandard		33,528		98,604		26,645		36,716		22,956		113,348		37,244		369,041
Doubtful		401		1		1		79		156		568		2		1,208
Total Commercial Loans	$	5,965,333	$	4,853,572	$	2,281,793	$	2,112,230	$	1,292,239	$	3,156,201	$	1,768,969	$	21,430,337
Total Commercial Loans
Current-period gross charge-offs	$	12	$	2,825	$	198	$	1,773	$	2,214	$	3,828	$	1,792	$	12,642

For the consumer segment, delinquency of a loan is determined by past due status. Consumer loans are automatically placed on nonaccrual status once the loan is 90 days past due. Construction and land development loans are on 1-4 properties and lots.

The following table presents the credit risk profile by past due status of consumer loans by origination year as of June 30, 2023:


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of June 30, 2023	2023		2022		2021		2020		2019		Prior		Revolving		Total
Consumer owner occupied
Days past due:
Current	$	609,226	$	1,836,525	$	1,598,865	$	642,978	$	303,557	$	883,000	$	—	$	5,874,151
30 days past due		—		1,351		1,346		727		344		1,651		1		5,420
60 days past due		—		466		864		164		53		1,499		—		3,046
90 days past due		—		1,378		—		821		512		3,720		—		6,431
Total Consumer owner occupied	$	609,226	$	1,839,720	$	1,601,075	$	644,690	$	304,466	$	889,870	$	1	$	5,889,048
Consumer owner occupied
Current-period gross charge-offs	$	—	$	37	$	—	$	—	$	—	$	2	$	—	$	39

Home equity loans
Days past due:
Current	$	3,686	$	6,269	$	4,853	$	2,958	$	1,212	$	15,534	$	1,308,808	$	1,343,320
30 days past due		—		—		156		43		89		425		1,539		2,252
60 days past due		—		40		—		—		—		507		731		1,278
90 days past due		42		49		—		15		1		230		527		864
Total Home equity loans	$	3,728	$	6,358	$	5,009	$	3,016	$	1,302	$	16,696	$	1,311,605	$	1,347,714
Home equity loans
Current-period gross charge-offs	$	—	$	—	$	—	$	39	$	—	$	—	$	—	$	39

Consumer
Days past due:
Current	$	202,695	$	355,302	$	170,088	$	90,851	$	71,344	$	162,334	$	204,891	$	1,257,505
30 days past due		27		545		304		18		39		1,061		13,579		15,573
60 days past due		1		93		124		168		99		737		8,021		9,243
90 days past due		1		100		141		28		70		1,038		1,779		3,157
Total consumer	$	202,724	$	356,040	$	170,657	$	91,065	$	71,552	$	165,170	$	228,270	$	1,285,478
Consumer
Current-period gross charge-offs	$	64	$	883	$	259	$	157	$	153	$	357	$	3,873	$	5,746

Construction and land development
Days past due:
Current	$	62,286	$	600,901	$	208,596	$	29,686	$	9,897	$	16,777	$	—	$	928,143
30 days past due		3		—		—		—		—		167		—		170
60 days past due		—		—		—		—		—		65		—		65
90 days past due		—		—		—		1		—		—		—		1
Total Construction and land development	$	62,289	$	600,901	$	208,596	$	29,687	$	9,897	$	17,009	$	—	$	928,379
Construction and land development
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other income producing property
Days past due:
Current	$	6,239	$	45,046	$	19,131	$	4,759	$	2,578	$	41,060	$	286	$	119,099
30 days past due		—		—		—		—		—		61		—		61
60 days past due		—		—		—		—		—		—		—		—
90 days past due		—		—		—		—		—		255		—		255
Total other income producing property	$	6,239	$	45,046	$	19,131	$	4,759	$	2,578	$	41,376	$	286	$	119,415
Other income producing property
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Consumer Loans
Days past due:
Current	$	884,132	$	2,844,043	$	2,001,533	$	771,232	$	388,588	$	1,118,705	$	1,513,985	$	9,522,218
30 days past due		30		1,896		1,806		788		472		3,365		15,119		23,476
60 days past due		1		599		988		332		152		2,808		8,752		13,632
90 days past due		43		1,527		141		865		583		5,243		2,306		10,708
Total Consumer Loans	$	884,206	$	2,848,065	$	2,004,468	$	773,217	$	389,795	$	1,130,121	$	1,540,162	$	9,570,034

Current-period gross charge-offs	$	64	$	920	$	259	$	196	$	153	$	359	$	3,873	$	5,824

The following table presents total loans by origination year as of June 30, 2023:

Term Loans

(Dollars in thousands)

Amortized Cost Basis by Origination Year

As of June 30, 2023

2023

2022

2021

2020

2019

Prior

Revolving

Total

Total Loans

2,744,113

8,730,873

6,684,307

2,799,235

2,247,232

5,074,221

3,256,804

31,536,785

Current-period gross charge-offs

3,268

3,269

234

403

763

4,202

12,205

The following table presents the credit risk profile by past due status of consumer loans by origination year as of December 31, 2022:


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving		Total
Consumer owner occupied
Days past due:
Current	$	1,695,454	$	1,467,080	$	657,005	$	315,458	$	187,580	$	792,572	$	—	$	5,115,149
30 days past due		1,316		1,254		1,681		664		272		2,028		—		7,215
60 days past due		255		337		579		—		242		1,650		—		3,063
90 days past due		—		944		776		454		664		3,036		—		5,874
Total Consumer owner occupied	$	1,697,025	$	1,469,615	$	660,041	$	316,576	$	188,758	$	799,286	$	—	$	5,131,301
Consumer owner occupied
Current-period gross charge-offs	$	25	$	—	$	—	$	6	$	23	$	66	$	—	$	120

Home equity loans
Days past due:
Current	$	5,921	$	5,231	$	3,282	$	1,560	$	1,955	$	17,941	$	1,272,848	$	1,308,738
30 days past due		—		—		155		77		418		422		1,586		2,658
60 days past due		—		—		19		36		70		26		540		691
90 days past due		—		—		60		87		—		611		323		1,081
Total Home equity loans	$	5,921	$	5,231	$	3,516	$	1,760	$	2,443	$	19,000	$	1,275,297	$	1,313,168
Home equity loans
Current-period gross charge-offs	$	—	$	—	$	—	$	19	$	—	$	280	$	146	$	445

Consumer
Days past due:
Current	$	407,825	$	206,003	$	111,210	$	86,008	$	44,303	$	141,053	$	248,314	$	1,244,716
30 days past due		718		194		78		174		63		1,255		17,471		19,953
60 days past due		55		103		107		36		144		557		9,836		10,838
90 days past due		126		60		58		66		165		1,660		784		2,919
Total consumer	$	408,724	$	206,360	$	111,453	$	86,284	$	44,675	$	144,525	$	276,405	$	1,278,426
Consumer
Current-period gross charge-offs	$	254	$	653	$	337	$	265	$	62	$	664	$	7,979	$	10,214

Construction and land development
Days past due:
Current	$	466,475	$	351,485	$	50,472	$	14,053	$	7,006	$	13,588	$	379	$	903,458
30 days past due		2		—		—		57		23		43		—		125
60 days past due		—		—		—		—		—		—		—		—
90 days past due		—		—		436		—		—		41		—		477
Total Construction and land development	$	466,477	$	351,485	$	50,908	$	14,110	$	7,029	$	13,672	$	379	$	904,060
Construction and land development
Current-period gross charge-offs	$	—	$	—	$	21	$	—	$	—	$	4	$	—	$	25

Other income producing property
Days past due:
Current	$	45,717	$	21,421	$	4,937	$	2,663	$	4,322	$	40,680	$	624	$	120,364
30 days past due		—		—		—		—		—		62		—		62
60 days past due		—		—		—		—		—		23		—		23
90 days past due		—		—		—		—		—		121		—		121
Total other income producing property	$	45,717	$	21,421	$	4,937	$	2,663	$	4,322	$	40,886	$	624	$	120,570
Other income producing property
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Consumer Loans
Days past due:
Current	$	2,621,392	$	2,051,220	$	826,906	$	419,742	$	245,166	$	1,005,834	$	1,522,165	$	8,692,425
30 days past due		2,036		1,448		1,914		972		776		3,810		19,057		30,013
60 days past due		310		440		705		72		456		2,256		10,376		14,615
90 days past due		126		1,004		1,330		607		829		5,469		1,107		10,472
Total Consumer Loans	$	2,623,864	$	2,054,112	$	830,855	$	421,393	$	247,227	$	1,017,369	$	1,552,705	$	8,747,525

Current-period gross charge-offs	$	279	$	653	$	358	$	290	$	85	$	1,014	$	8,125	$	10,804

The following table presents total loans by origination year as of December 31, 2022:


	Term Loans
(Dollars in thousands)	Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving		Total
Total Loans	$	8,589,197	$	6,907,684	$	3,112,648	$	2,533,623	$	1,539,466	$	4,173,570	$	3,321,674	$	30,177,862

Current-period gross charge-offs	$	291	$	3,478	$	556	$	2,063	$	2,299	$	4,842	$	9,917	$	23,446

The following table presents an aging analysis of past due accruing loans, segregated by class:


	30 - 59 Days		60 - 89 Days		90+ Days		Total				Non-		Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Accruing		Loans
June 30, 2023
Construction and land development	$	936	$	105	$	217	$	1,258	$	2,815,523	$	344	$	2,817,125
Commercial non-owner occupied		1,075		109		245		1,429		8,450,916		23,891		8,476,236
Commercial owner occupied		7,104		1,426		1,262		9,792		5,527,546		48,613		5,585,951
Consumer owner occupied		3,727		2,052		—		5,779		5,902,112		19,890		5,927,781
Home equity loans		1,876		595		—		2,471		1,340,536		4,707		1,347,714
Commercial and industrial		26,794		7,006		2,466		36,266		5,282,651		59,377		5,378,294
Other income producing property		1,713		—		—		1,713		706,203		3,796		711,712
Consumer		15,406		9,055		1		24,462		1,256,128		4,888		1,285,478
Other loans		—		—		—		—		6,494		—		6,494
	$	58,631	$	20,348	$	4,191	$	83,170	$	31,288,109	$	165,506	$	31,536,785
December 31, 2022
Construction and land development	$	2,146	$	3,653	$	—	$	5,799	$	2,853,734	$	827	$	2,860,360
Commercial non-owner occupied		1,158		978		77		2,213		8,050,321		20,425		8,072,959
Commercial owner occupied		10,748		2,059		2,231		15,038		5,410,066		35,089		5,460,193
Consumer owner occupied		6,001		744		40		6,785		5,137,950		17,307		5,162,042
Home equity loans		2,527		361		—		2,888		1,303,964		6,316		1,313,168
Commercial and industrial		24,500		11,677		1,704		37,881		5,258,473		17,129		5,313,483
Other income producing property		1,623		1,480		298		3,401		690,107		2,734		696,242
Consumer		19,713		10,655		—		30,368		1,243,660		4,398		1,278,426
Other loans		—		—		—		—		20,989		—		20,989
	$	68,416	$	31,607	$	4,350	$	104,373	$	29,969,264	$	104,225	$	30,177,862

The following table is a summary of information pertaining to nonaccrual loans by class, including loans modified for borrowers with financial difficulty as of June 30, 2023 and the information pertaining to nonaccrual loans by class, including restructured loans as of December 31, 2022:


	June 30,		Greater than		Non-accrual		December 31,
(Dollars in thousands)	2023		90 Days Accruing⁽¹⁾		with no allowance⁽¹⁾		2022
Construction and land development	$	344	$	217	$	7	$	827
Commercial non-owner occupied		23,891		245		14,391		20,425
Commercial owner occupied real estate		48,613		1,262		15,057		35,089
Consumer owner occupied		19,890		—		—		17,307
Home equity loans		4,707		—		—		6,316
Commercial and industrial		59,377		2,466		35,603		17,129
Other income producing property		3,796		—		—		2,734
Consumer		4,888		1		—		4,398
Total loans on nonaccrual status	$	165,506	$	4,191	$	65,058	$	104,225

(1)

Greater than 90 days accruing and non-accrual with no allowance loans at June 30, 2023.

There is no interest income recognized during the period on nonaccrual loans. The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Loans on nonaccrual status in which there is no allowance assigned are individually evaluated loans that do not carry a specific reserve. See Note 2 — Summary of Significant Accounting Policies for further detailed discussion on individually evaluated loans.

The following is a summary of collateral dependent loans, by type of collateral, and the extent to which they are collateralized during the period:


	June 30,		Collateral			December 31,		Collateral
(Dollars in thousands)	2023		Coverage		%	2022		Coverage		%
Commercial owner occupied real estate
Industrial	$	15,728	$	20,637	131%	$	—	$	—
Other		10,546		21,784	207%		14,638		38,900	266%
Commercial non-owner occupied real estate
Retail		3,327		4,950	149%		—		—
Other		13,451		27,922	208%		6,450		10,900	169%
Commercial and industrial
Other		50,907		51,443	101%		4,808		5,591	116%
Home equity loans
Residential 1-4 family dwelling		—		—			1,523		1,671	110%
Total collateral dependent loans	$	93,959	$	126,736		$	27,419	$	57,062

The Bank designates individually evaluated loans on non-accrual with a net book balance exceeding the designated threshold as collateral dependent loans. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining ACL. Under ASC 326-20-35-6, the Bank has adopted the collateral maintenance practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for selling costs, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The Bank’s threshold for individually evaluated loans is $1.0 million. The significant changes above in collateral percentage are due to appraisal value updates or changes in the number of loans within the asset class and collateral type. Overall collateral dependent loans increased $66.5 million during the six months ended June 30, 2023.

Loans on nonaccrual status at the date of modification are initially classified as nonaccrual. Loans on accruing status at the date of modification are initially classified as accruing if the note is reasonably assured of repayment and performance is expected in accordance with its modified terms. Such loans may be designated as nonaccrual loans subsequent to the modification date if reasonable doubt exists as to the collection of interest or principal under the modification agreement. Nonaccrual loans are returned to accruing status when there is economic substance to the modification, there is documented credit evaluation of the borrower’s financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum of six months). Refer to See Note 2 — Summary of Significant Accounting Policies for further detailed discussion on loan modified to a borrower experiencing financial difficulty and the losses from modifications of receivables to borrowers experiencing financial difficulty.

The following tables present loans designated as modifications made to borrowers experiencing financial difficulty during three and six months ended June 30, 2023 resulting from the adoption of ASU 2022-02, segregated by type of modification and asset class, and indicating the financial effect of the modifications. The amortized cost balance for the modified loans presented below exclude accrued interest receivable of approximately $68,000 as of June 30, 2023.


	Three Months Ended June 30,
	2023
					Increase in
	Amortized		% of Total		Weighted Average
(Dollars in thousands)	Cost		Asset Class		Life of Loan
Term extension
Construction and land development	$	1,255	$	0.04%	24 months
Commercial non-owner occupied		343		0.00%	60 months
Commercial owner occupied real estate		7,732		0.14%	22 months
Commercial and industrial		1,787		0.03%	6 months
Total term extensions	$	11,117


	Six Months Ended June 30,
	2023
					Increase in
	Amortized		% of Total		Weighted Average
(Dollars in thousands)	Cost		Asset Class		Life of Loan
Term extension
Construction and land development	$	1,512	$	0.05%	22 months
Commercial non-owner occupied		343		0.00%	60 months
Commercial owner occupied real estate		8,096		0.14%	22 months
Consumer owner occupied		281		0.02%	6 months
Commercial and industrial		2,700		0.05%	7 months
Total term extensions	$	12,932

There were no combination – term extension and interest rate reduction loans during the first quarter of 2023.


	Three and Six Months Ended June 30,
	2023
			Reduction in Weighted	Increase in
	Amortized		Average Contractual	Weighted Average
(Dollars in thousands)	Cost		Interest Rate	Life of Loan
Combination- Term Extension and Interest Rate Reduction
Consumer owner occupied	$	259	3.63 to 3.00%	20 months
Total	$	259

The Bank on occasion will enter into modification agreements which extend the maturity payoff on a loan or reduce the interest rate, for borrowers willing to continue to pay, to minimize losses for the Bank. At June 30, 2023, the Company had $4.3 million remaining in commitments to lend additional funds on loans to borrowers experiencing financial difficulty and modified during the current reporting period.

The following table presents loans designated as TDRs segregated by class and type of concession that were restructured, for the comparative period, prior to the adoption of ASU 2022-02. There were no loans restructured as TDRs during the three months ending June 30, 2022.


			Six Months Ended June 30,
	2022
		Pre-Modification		Post-Modification
	Number	Amortized		Amortized
(Dollars in thousands)	of loans	Cost		Cost
Interest rate modification
Commercial non-owner occupied	1	$	182	$	182
Commercial owner occupied	2		262		262
Consumer owner occupied	1		97		97
Commercial and industrial	4		434		434
Other income producing property	2		115		115
Total interest rate modifications	10	$	1,090	$	1,090
Term modification
Construction and land development	1	$	137	$	137
Commercial owner occupied	2		2,327		2,327
Total term modifications	3	$	2,464	$	2,464
	13	$	3,554	$	3,554

At June 30, 2022, the balance of accruing TDRs was $11.2 million. The Company had $579,000 remaining availability under commitments to lend additional funds on restructured loans at June 30, 2022. The amount of specific reserve associated with restructured loans was $8.2 million at June 30, 2022.

The following table presents the changes in status of loans modified within the previous six months to borrowers experiencing financial difficulty, as of June 30, 2023, by type of modification. There were no subsequent defaults.


	Paying Under		Converted to		Foreclosures
	Restructured Terms		Nonaccrual		and Defaults
	Amortized		Amortized		Amortized
(Dollars in thousands)	Cost		Cost		Cost
Term extension
Construction and land development	$	1,512	$	—	$	—
Commercial non-owner occupied		343		—		—
Commercial owner occupied real estate		8,096		—		—
Consumer owner occupied		540		—		—
Commercial and industrial		2,700		—		—
Total term extensions	$	13,191	$	—	$	—

The following table presents the changes in status of TDR loans within the previous twelve months as of June 30, 2022 by type of concession, for the comparative period, prior to the adoption of ASU 2022-02. There were no subsequent defaults that resulted in a change to reserves on the individually evaluated loan.


	Paying Under			Converted to			Foreclosures and
	Restructured Terms			Nonaccrual			Defaults
	Number	Recorded		Number	Recorded		Number	Recorded
(Dollars in thousands)	of Loans	Investment		of Loans	Investment		of Loans	Investment
Interest rate modification	12	$	1,354	—	$	—	—	$	—
Term modification	4		2,768	—		—	—		—
	16	$	4,122	—	$	—	—	$	—

The following table depicts the performance of loans modified within the previous six months to borrowers experiencing financial difficulty, as of June 30, 2023:


	Payment Status (Amortized Cost Basis)
			30-89 Days		90+ Days
(Dollars in thousands)	Current		Past Due		Past Due
Construction and land development	$	1,512	$	—	$	—
Commercial non-owner occupied		343		—		—
Commercial owner occupied real estate		8,096		—		—
Consumer owner occupied		540		—		—
Commercial and industrial		2,700		—		—
Total	$	13,191	$	—	$	—