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Loans and Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2021
Receivables [Abstract] |
Loans and Allowance for Credit Losses | 3. Loans and Allowance for Credit Losses The Company generally makes loans in its market areas of south and central Mississippi; southern and central Alabama; northwest, central and south Louisiana; the northern, central and panhandle regions of Florida; certain areas of east and northeast Texas, including Houston, Beaumont and Dallas; and Nashville, Tennessee. Loans, net of unearned income, by portfolio are presented at amortized cost basis in the table below. Amortized cost does not include accrued interest, which is reflected in the accrued interest line item in the Consolidated Balance Sheets, totaling $70.5 million and $76.2 million at September 30, 2021 and December 31, 2020, respectively. Included in commercial non-real estate loans at September 30, 2021 and December 31, 2020 was $935.3 million and $2.0 billion, respectively, of Paycheck Protection Program loans, described in more detail below. The following table presents loans, net of unearned income, by portfolio class at September 30, 2021 and December 31, 2020.
|  | September 30, |  |  | December 31, |
(in thousands) |  | 2021 |  |  | 2020 |
Commercial non-real estate |  | $ | 9,416,990 |  |  | $ | 9,986,983 |
Commercial real estate - owner occupied |  |  | 2,812,926 |  |  |  | 2,857,445 |
Total commercial and industrial |  |  | 12,229,916 |  |  |  | 12,844,428 |
Commercial real estate - income producing |  |  | 3,467,939 |  |  |  | 3,357,939 |
Construction and land development |  |  | 1,213,991 |  |  |  | 1,065,057 |
Residential mortgages |  |  | 2,351,053 |  |  |  | 2,665,212 |
Consumer |  |  | 1,623,116 |  |  |  | 1,857,295 |
Total loans |  | $ | 20,886,015 |  |  | $ | 21,789,931 |
The following briefly describes the composition of each loan category and portfolio class. Commercial and industrial Commercial and industrial loans are made available to businesses for working capital (including financing of inventory and receivables), business expansion, to facilitate the acquisition of a business, and the purchase of equipment and machinery, including equipment leasing. These loans are primarily made based on the identified cash flows of the borrower and, when secured, have the added strength of the underlying collateral. Commercial non-real estate loans may be secured by the assets being financed or other tangible or intangible business assets such as accounts receivable, inventory, ownership, enterprise value or commodity interests, and may incorporate a personal or corporate guarantee; however, some short-term loans may be made on an unsecured basis, including a small portfolio of corporate credit cards, generally issued as a part of overall customer relationships. Commercial non-real estate loans also include loans made under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). PPP loans are guaranteed by the SBA and are forgivable to the debtor upon satisfaction of certain criteria. The loans bear interest at 1% per annum and have two or five year terms, depending on the date of origination. These loans also earn an origination fee of 1%, 3%, or 5%, depending on the loan size; this origination fee is deferred and amortized over the estimated life of the loan using the effective yield method. Commercial real estate – owner occupied loans consist of commercial mortgages on properties where repayment is generally dependent on the cash flow from the ongoing operations and activities of the borrower. Like commercial non-real estate, these loans are primarily made based on the identified cash flows of the borrower, but also have the added strength of the value of underlying real estate collateral. Commercial real estate – income producing Commercial real estate – income producing loans consist of loans secured by commercial mortgages on properties where the loan is made to real estate developers or investors and repayment is dependent on the sale, refinance, or income generated from the operation of the property. Properties financed include retail, office, multifamily, senior housing, hotel/motel, skilled nursing facilities and other commercial properties. Construction and land development Construction and land development loans are made to facilitate the acquisition, development, improvement and construction of both commercial and residential-purpose properties. Such loans are made to builders and investors where repayment is expected to be made from the sale, refinance or operation of the property or to businesses to be used in their business operations. This portfolio also includes residential construction loans and loans secured by raw land not yet under development. Residential mortgages Residential mortgages consist of closed-end loans secured by first liens on 1- 4 family residential properties. The portfolio includes both fixed and adjustable rate loans, although most longer term, fixed rate loans originated are sold in the secondary mortgage market. Consumer Consumer loans include second lien mortgage home loans, home equity lines of credit and nonresidential consumer purpose loans. Nonresidential consumer loans include both direct and indirect loans. Direct nonresidential consumer loans are made to finance the purchase of personal property, including automobiles, recreational vehicles and boats, and for other personal purposes (secured and unsecured), and deposit account secured loans. Indirect nonresidential consumer loans include automobile financing provided to the consumer through an agreement with automobile dealerships, though the Company is no longer engaged in this type of lending and the remaining portfolio is in runoff. Consumer loans also include a small portfolio of credit card receivables issued on the basis of applications received through referrals from the Bank’s branches, online and other marketing efforts. Allowance for Credit Losses The following tables present activity in the allowance for credit losses (ACL) by portfolio class for the nine months ended September 30, 2021 and 2020, as well as the corresponding recorded investment in loans at the end of each period. Effective January 1, 2020, the Company adopted the provisions of Accounting Standards Codification (ASC) 326, “Financial Instruments – Credit Losses,” using a modified retrospective basis. ASC 326, commonly referred to as CECL, prescribed a change in computing allowance for credit losses from an incurred methodology to a life of loan methodology. The difference between the December 31, 2019 incurred allowance and the CECL allowance is reflected as a cumulative effect of change in accounting principle in the ACL activity for the nine months ended September 30, 2020.
|  |  |  |  |  | Commercial |  |  | Total |  |  | Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  |  | real estate- |  |  | commercial |  |  | real estate- |  |  | Construction |  |  |  |  |  |  |  |  |  |  |  |  |
|  | non-real |  |  | owner |  |  | and |  |  | income |  |  | and land |  |  | Residential |  |  |  |  |  |  |  |  |
(in thousands) |  | estate |  |  | occupied |  |  | industrial |  |  | producing |  |  | development |  |  | mortgages |  |  | Consumer |  |  | Total |
|  | Nine Months Ended September 30, 2021 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 149,693 |  |  | $ | 69,134 |  |  | $ | 218,827 |  |  | $ | 109,474 |  |  | $ | 26,462 |  |  | $ | 48,842 |  |  | $ | 46,572 |  |  | $ | 450,177 |
Charge-offs |  |  | (32,369 | ) |  |  | (1,722 | ) |  |  | (34,091 | ) |  |  | (231 | ) |  |  | (267 | ) |  |  | (218 | ) |  |  | (9,874 | ) |  |  | (44,681 | )
Recoveries |  |  | 6,579 |  |  |  | 363 |  |  |  | 6,942 |  |  |  | 100 |  |  |  | 1,548 |  |  |  | 933 |  |  |  | 4,636 |  |  |  | 14,159 |
Net provision for loan losses |  |  | (17,594 | ) |  |  | (10,642 | ) |  |  | (28,236 | ) |  |  | 11,752 |  |  |  | (5,167 | ) |  |  | (18,484 | ) |  |  | (7,999 | ) |  |  | (48,134 | )
Ending balance - allowance for loan losses |  | $ | 106,309 |  |  | $ | 57,133 |  |  | $ | 163,442 |  |  | $ | 121,095 |  |  | $ | 22,576 |  |  | $ | 31,073 |  |  | $ | 33,335 |  |  | $ | 371,521 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 4,529 |  |  | $ | 381 |  |  | $ | 4,910 |  |  | $ | 1,099 |  |  | $ | 22,694 |  |  | $ | 19 |  |  | $ | 1,185 |  |  | $ | 29,907 |
Provision for losses on unfunded commitments |  |  | (176 | ) |  |  | (131 | ) |  |  | (307 | ) |  |  | 124 |  |  |  | (383 | ) |  |  | (8 | ) |  |  | (387 | ) |  |  | (961 | )
Ending balance - reserve for unfunded lending commitments |  |  | 4,353 |  |  |  | 250 |  |  |  | 4,603 |  |  |  | 1,223 |  |  |  | 22,311 |  |  |  | 11 |  |  |  | 798 |  |  |  | 28,946 |
Total allowance for credit losses |  | $ | 110,662 |  |  | $ | 57,383 |  |  | $ | 168,045 |  |  | $ | 122,318 |  |  | $ | 44,887 |  |  | $ | 31,084 |  |  | $ | 34,133 |  |  | $ | 400,467 |
Allowance for loan losses: |  |  |
Individually evaluated |  | $ | 113 |  |  | $ | 33 |  |  | $ | 146 |  |  | $ | 20 |  |  | $ | 20 |  |  | $ | 447 |  |  | $ | 202 |  |  | $ | 835 |
Collectively evaluated |  |  | 106,196 |  |  |  | 57,100 |  |  |  | 163,296 |  |  |  | 121,075 |  |  |  | 22,556 |  |  |  | 30,626 |  |  |  | 33,133 |  |  |  | 370,686 |
Allowance for loan losses |  | $ | 106,309 |  |  | $ | 57,133 |  |  | $ | 163,442 |  |  | $ | 121,095 |  |  | $ | 22,576 |  |  | $ | 31,073 |  |  | $ | 33,335 |  |  | $ | 371,521 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Collectively evaluated |  |  | 4,353 |  |  |  | 250 |  |  |  | 4,603 |  |  |  | 1,223 |  |  |  | 22,311 |  |  |  | 11 |  |  |  | 798 |  |  |  | 28,946 |
Reserve for unfunded lending commitments: |  | $ | 4,353 |  |  | $ | 250 |  |  | $ | 4,603 |  |  | $ | 1,223 |  |  | $ | 22,311 |  |  | $ | 11 |  |  | $ | 798 |  |  | $ | 28,946 |
Total allowance for credit losses |  | $ | 110,662 |  |  | $ | 57,383 |  |  | $ | 168,045 |  |  | $ | 122,318 |  |  | $ | 44,887 |  |  | $ | 31,084 |  |  | $ | 34,133 |  |  | $ | 400,467 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 5,929 |  |  | $ | 5,618 |  |  | $ | 11,547 |  |  | $ | 4,004 |  |  | $ | 127 |  |  | $ | 5,083 |  |  | $ | 1,315 |  |  | $ | 22,076 |
Collectively evaluated |  |  | 9,411,061 |  |  |  | 2,807,308 |  |  |  | 12,218,369 |  |  |  | 3,463,935 |  |  |  | 1,213,864 |  |  |  | 2,345,970 |  |  |  | 1,621,801 |  |  |  | 20,863,939 |
Total loans |  | $ | 9,416,990 |  |  | $ | 2,812,926 |  |  | $ | 12,229,916 |  |  | $ | 3,467,939 |  |  | $ | 1,213,991 |  |  | $ | 2,351,053 |  |  | $ | 1,623,116 |  |  | $ | 20,886,015 |
|  |  |  |  |  | Commercial |  |  | Total |  |  | Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  |  | real estate- |  |  | commercial |  |  | real estate- |  |  | Construction |  |  |  |  |  |  |  |  |  |  |  |  |
|  | non-real |  |  | owner |  |  | and |  |  | income |  |  | and land |  |  | Residential |  |  |  |  |  |  |  |  |
(in thousands) |  | estate |  |  | occupied |  |  | industrial |  |  | producing |  |  | development |  |  | mortgages |  |  | Consumer |  |  | Total |
|  | Nine Months Ended September 30, 2020 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 106,432 |  |  | $ | 10,977 |  |  | $ | 117,409 |  |  | $ | 20,869 |  |  | $ | 9,350 |  |  | $ | 20,331 |  |  | $ | 23,292 |  |  | $ | 191,251 |
Cumulative effect of change in accounting principle |  |  | (244 | ) |  |  | 14,877 |  |  |  | 14,633 |  |  |  | 7,287 |  |  |  | 7,478 |  |  |  | 12,921 |  |  |  | 7,092 |  |  |  | 49,411 |
Charge-offs |  |  | (364,123 | ) |  |  | (1,828 | ) |  |  | (365,951 | ) |  |  | (2,211 | ) |  |  | (7 | ) |  |  | (170 | ) |  |  | (13,640 | ) |  |  | (381,979 | )
Recoveries |  |  | 4,831 |  |  |  | 659 |  |  |  | 5,490 |  |  |  | 46 |  |  |  | 549 |  |  |  | 1,078 |  |  |  | 4,360 |  |  |  | 11,523 |
Net provision for loan losses |  |  | 401,155 |  |  |  | 41,336 |  |  |  | 442,491 |  |  |  | 78,661 |  |  |  | 12,325 |  |  |  | 17,613 |  |  |  | 27,378 |  |  |  | 578,468 |
Ending balance - allowance for loan losses |  | $ | 148,051 |  |  | $ | 66,021 |  |  | $ | 214,072 |  |  | $ | 104,652 |  |  | $ | 29,695 |  |  | $ | 51,773 |  |  | $ | 48,482 |  |  | $ | 448,674 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,974 |  |  | $ | — |  |  | $ | 3,974 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,974 |
Cumulative effect of change in accounting principle |  |  | 5,772 |  |  |  | 288 |  |  |  | 6,060 |  |  |  | 449 |  |  |  | 15,658 |  |  |  | 17 |  |  |  | 5,146 |  |  |  | 27,330 |
Provision for losses on unfunded commitments |  |  | (3,786 | ) |  |  | 187 |  |  |  | (3,599 | ) |  |  | 1,599 |  |  |  | 6,046 |  |  |  | (11 | ) |  |  | (3,813 | ) |  |  | 222 |
Ending balance - reserve for unfunded lending commitments |  |  | 5,960 |  |  |  | 475 |  |  |  | 6,435 |  |  |  | 2,048 |  |  |  | 21,704 |  |  |  | 6 |  |  |  | 1,333 |  |  |  | 31,526 |
Total allowance for credit losses |  | $ | 154,011 |  |  | $ | 66,496 |  |  | $ | 220,507 |  |  | $ | 106,700 |  |  | $ | 51,399 |  |  | $ | 51,779 |  |  | $ | 49,815 |  |  | $ | 480,200 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 27,304 |  |  | $ | 1,344 |  |  | $ | 28,648 |  |  | $ | 24 |  |  | $ | 169 |  |  | $ | 416 |  |  | $ | 456 |  |  | $ | 29,713 |
Collectively evaluated for impairment |  |  | 120,747 |  |  |  | 64,677 |  |  |  | 185,424 |  |  |  | 104,628 |  |  |  | 29,526 |  |  |  | 51,357 |  |  |  | 48,026 |  |  |  | 418,961 |
Allowance for loan losses |  | $ | 148,051 |  |  | $ | 66,021 |  |  | $ | 214,072 |  |  | $ | 104,652 |  |  | $ | 29,695 |  |  | $ | 51,773 |  |  | $ | 48,482 |  |  | $ | 448,674 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 992 |  |  | $ | — |  |  | $ | 992 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | $ | 997 |
Collectively evaluated |  |  | 4,968 |  |  |  | 475 |  |  |  | 5,443 |  |  |  | 2,048 |  |  |  | 21,704 |  |  |  | 6 |  |  |  | 1,328 |  |  |  | 30,529 |
Reserve for unfunded lending commitments: |  |  | 5,960 |  |  |  | 475 |  |  |  | 6,435 |  |  |  | 2,048 |  |  |  | 21,704 |  |  |  | 6 |  |  |  | 1,333 |  |  |  | 31,526 |
Total allowance for credit losses |  | $ | 154,011 |  |  | $ | 66,496 |  |  | $ | 220,507 |  |  | $ | 106,700 |  |  | $ | 51,399 |  |  | $ | 51,779 |  |  | $ | 49,815 |  |  | $ | 480,200 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 73,139 |  |  | $ | 11,124 |  |  | $ | 84,263 |  |  | $ | 5,549 |  |  | $ | 1,837 |  |  | $ | 6,064 |  |  | $ | 3,924 |  |  | $ | 101,637 |
Collectively evaluated for impairment |  |  | 10,184,649 |  |  |  | 2,768,283 |  |  |  | 12,952,932 |  |  |  | 3,401,005 |  |  |  | 1,094,312 |  |  |  | 2,748,324 |  |  |  | 1,941,994 |  |  |  | 22,138,567 |
Total loans |  | $ | 10,257,788 |  |  | $ | 2,779,407 |  |  | $ | 13,037,195 |  |  | $ | 3,406,554 |  |  | $ | 1,096,149 |  |  | $ | 2,754,388 |  |  | $ | 1,945,918 |  |  | $ | 22,240,204 |
The calculation of the allowance for credit losses is performed using two primary approaches: a collective approach for pools of loans that have similar risk characteristics using a loss rate analysis, and a specific reserve analysis for credits individually evaluated. The allowance for credit losses was developed using multiple Moody’s Analytics (“Moody’s) macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. In the calculation of the September 30, 2021 allowance, the Company weighted the September 2021 baseline economic forecast, which Moody’s defines as the “most likely outcome” based on current conditions and its view of where the economy is headed, at 50%. The September 2021 baseline scenario assumes: (1) coronavirus herd resiliency was achieved in late August 2021, with infection abatement in November 2021; (2) no new widespread economic shutdowns will occur in response to virus outbreaks; (3) the unemployment rate continues to decline, with fourth quarter 2021 averaging 4.5%, and full year 2021, 2022 and 2023 rates averaging 5.5%, 3.6% and 3.5%, respectively; (4) gross domestic product will increase an average of 6.0% in 2021, 4.3% in 2022 and 2.3% in 2023; (5) the Build Back Better infrastructure and social legislation package, forecasted to be passed in late 2021 at $2.5 trillion, will provide an additional boost to the economy; and (6) the Federal Reserve will continue to respond to the economic impact of COVID-19 by maintaining rates at or near zero until the first quarter of 2023. The downside scenario S-2 was weighted at 50% to incorporate a reasonably possible alternative economic outcome. The S-2 scenario reflects a slower economic recovery as compared to the baseline, with key assumptions that include a delay in infection abatement, continued supply chain disruptions, a scaled back stimulus package resulting in less of a rise in real consumer spending and a near-term rise in unemployment that impedes growth in late 2021 and in 2022. The modest release during the third quarter of 2021 reflects improvements in the economic forecast. The continued elevated allowance level is a result of uncertainty surrounding payment performance of borrowers in certain regions and/or industries that have not returned to pre-pandemic circumstances and as the impact of federal stimulus diminishes and modifications expire. Nonaccrual loans and loans modified in troubled debt restructurings The following table shows the composition of nonaccrual loans and those without an allowance for loan loss, by portfolio class.
|  |  | September 30, |  |  |  | December 31, |
|  | 2021 |  |  |  | 2020 |
(in thousands) |  |  | Total nonaccrual |  |  |  | Nonaccrual without allowance for loan loss |  |  |  | Total nonaccrual |  |  |  | Nonaccrual without allowance for loan loss |
Commercial non-real estate |  | $ |  | 9,948 |  |  | $ |  | 5,449 |  |  | $ |  | 52,836 |  |  | $ |  | 15,268 |
Commercial real estate - owner occupied |  |  |  | 6,720 |  |  |  |  | 5,379 |  |  |  |  | 13,856 |  |  |  |  | 7,038 |
Total commercial and industrial |  |  |  | 16,668 |  |  |  |  | 10,828 |  |  |  |  | 66,692 |  |  |  |  | 22,306 |
Commercial real estate - income producing |  |  |  | 4,249 |  |  |  |  | 3,922 |  |  |  |  | 6,743 |  |  |  |  | — |
Construction and land development |  |  |  | 1,238 |  |  |  |  | — |  |  |  |  | 2,486 |  |  |  |  | 1,116 |
Residential mortgages |  |  |  | 25,964 |  |  |  |  | 1,598 |  |  |  |  | 40,573 |  |  |  |  | 1,705 |
Consumer |  |  |  | 12,238 |  |  |  |  | 250 |  |  |  |  | 23,385 |  |  |  |  | — |
Total loans |  | $ |  | 60,357 |  |  | $ |  | 16,598 |  |  | $ |  | 139,879 |  |  | $ |  | 25,127 |
Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of $7.2 million and $21.6 million at September 30, 2021 and December 31, 2020, respectively. Total TDRs, both accruing and nonaccruing, were $10.3 million at September 30, 2021 and $25.8 million at December 31, 2020. All TDRs are individually evaluated for credit loss. At September 30, 2021, the Company had no unfunded commitments to borrowers whose loan terms have been modified in a TDR and $4.6 million at December 31, 2020. The tables below detail by portfolio class TDRs that were modified during the three and nine months ended September 30, 2021 and 2020. All such loans are individually evaluated for credit loss.
|  | Three Months Ended |
($ in thousands) |  | September 30, 2021 |  |  | September 30, 2020 |
Troubled Debt Restructurings: |  | Number of Contracts |  |  | Pre- Modification Outstanding Recorded Investment |  |  | Post- Modification Outstanding Recorded Investment |  |  | Number of Contracts |  |  | Pre- Modification Outstanding Recorded Investment |  |  | Post- Modification Outstanding Recorded Investment |
Commercial non-real estate |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | — |  |  | $ | — |  |  | $ | — |
Commercial real estate - owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate - income producing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction and land development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgages |  |  | 1 |  |  |  | 196 |  |  |  | 196 |  |  |  | 5 |  |  |  | 1,358 |  |  |  | 1,358 |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 25 |  |  |  | 25 |
Total loans |  |  | 1 |  |  | $ | 196 |  |  | $ | 196 |  |  |  | 7 |  |  | $ | 1,383 |  |  | $ | 1,383 |
|  | Nine Months Ended |
($ in thousands) |  | September 30, 2021 |  |  | September 30, 2020 |
|  |  |  |  |  | Pre- Modification |  |  | Post- Modification |  |  |  |  |  |  | Pre- Modification |  |  | Post- Modification |
|  | Number |  |  | Outstanding |  |  | Outstanding |  |  | Number |  |  | Outstanding |  |  | Outstanding |
|  | of |  |  | Recorded |  |  | Recorded |  |  | of |  |  | Recorded |  |  | Recorded |
Troubled Debt Restructurings: |  | Contracts |  |  | Investment |  |  | Investment |  |  | Contracts |  |  | Investment |  |  | Investment |
Commercial non-real estate |  |  | 3 |  |  | $ | 6,935 |  |  | $ | 6,935 |  |  |  | 3 |  |  | $ | 745 |  |  | $ | 745 |
Commercial real estate - owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total commercial and industrial |  |  | 3 |  |  |  | 6,935 |  |  |  | 6,935 |  |  |  | 3 |  |  |  | 745 |  |  |  | 745 |
Commercial real estate - income producing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction and land development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 15 |  |  |  | 15 |
Residential mortgages |  |  | 3 |  |  |  | 515 |  |  |  | 538 |  |  |  | 14 |  |  |  | 3,424 |  |  |  | 3,424 |
Consumer |  |  | 4 |  |  |  | 86 |  |  |  | 86 |  |  |  | 7 |  |  |  | 89 |  |  |  | 89 |
Total loans |  |  | 10 |  |  | $ | 7,536 |  |  | $ | 7,559 |  |  |  | 25 |  |  | $ | 4,273 |  |  | $ | 4,273 |
The TDRs modified during the nine months ended September 30, 2021 reflected in the table above include $7.1 million of loans with extended amortization terms or other payment concessions and $0.5 million of loans with other modifications. The TDRs modified during the nine months ended September 30, 2020 include $0.7 million of loans with extended amortization terms or other payment concessions, $1.1 million with reduced interest rates, $0.4 million with significant covenant waivers, and $2.1 million with other modifications. One residential mortgage loan totaling $0.6 million that defaulted during the nine months ended September 30, 2021 had been modified in a TDR during the twelve months prior to default. One commercial non-real estate loan totaling $0.4 million, one residential mortgage loan totaling $0.6 million and two consumer loans totaling $0.2 million that defaulted during the nine months ended September 30, 2020 had been modified in a TDR during the twelve months prior to default. The TDR disclosures above do not include loans eligible for exclusion from TDR assessment under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Loans modified under the CARES Act are reported in the aging analysis that follows based on the modified terms. Aging Analysis The tables below present the aging analysis of past due loans by portfolio class at September 30, 2021 and December 31, 2020.
September 30, 2021 |  | 30-59 days past due |  |  | 60-89 days past due |  |  | Greater than 90 days past due |  |  | Total past due |  |  | Current |  |  | Total Loans |  |  | Recorded investment > 90 days and still accruing |
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial non-real estate |  | $ | 5,623 |  |  | $ | 2,100 |  |  | $ | 14,568 |  |  | $ | 22,291 |  |  | $ | 9,394,699 |  |  | $ | 9,416,990 |  |  | $ | 7,228 |
Commercial real estate - owner occupied |  |  | 5,761 |  |  |  | 762 |  |  |  | 1,548 |  |  |  | 8,071 |  |  |  | 2,804,855 |  |  |  | 2,812,926 |  |  |  | 142 |
Total commercial and industrial |  |  | 11,384 |  |  |  | 2,862 |  |  |  | 16,116 |  |  |  | 30,362 |  |  |  | 12,199,554 |  |  |  | 12,229,916 |  |  |  | 7,370 |
Commercial real estate - income producing |  |  | 1,175 |  |  |  | 1,474 |  |  |  | 5,441 |  |  |  | 8,090 |  |  |  | 3,459,849 |  |  |  | 3,467,939 |  |  |  | 1,346 |
Construction and land development |  |  | 369 |  |  |  | 733 |  |  |  | 1,035 |  |  |  | 2,137 |  |  |  | 1,211,854 |  |  |  | 1,213,991 |  |  |  | 57 |
Residential mortgages |  |  | 3,799 |  |  |  | 5,579 |  |  |  | 17,567 |  |  |  | 26,945 |  |  |  | 2,324,108 |  |  |  | 2,351,053 |  |  |  | 254 |
Consumer |  |  | 13,750 |  |  |  | 3,108 |  |  |  | 7,331 |  |  |  | 24,189 |  |  |  | 1,598,927 |  |  |  | 1,623,116 |  |  |  | 943 |
Total |  | $ | 30,477 |  |  | $ | 13,756 |  |  | $ | 47,490 |  |  | $ | 91,723 |  |  | $ | 20,794,292 |  |  | $ | 20,886,015 |  |  | $ | 9,970 |
December 31, 2020 |  | 30-59 days past due |  |  | 60-89 days past due |  |  | Greater than 90 days past due |  |  | Total past due |  |  | Current |  |  | Total Loans |  |  | Recorded investment > 90 days and still accruing |
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial non-real estate |  | $ | 7,963 |  |  | $ | 2,564 |  |  | $ | 39,530 |  |  | $ | 50,057 |  |  | $ | 9,936,926 |  |  | $ | 9,986,983 |  |  | $ | 583 |
Commercial real estate - owner occupied |  |  | 1,525 |  |  |  | 753 |  |  |  | 13,663 |  |  |  | 15,941 |  |  |  | 2,841,504 |  |  |  | 2,857,445 |  |  |  | 955 |
Total commercial and industrial |  |  | 9,488 |  |  |  | 3,317 |  |  |  | 53,193 |  |  |  | 65,998 |  |  |  | 12,778,430 |  |  |  | 12,844,428 |  |  |  | 1,538 |
Commercial real estate - income producing |  |  | 1,494 |  |  |  | 798 |  |  |  | 5,744 |  |  |  | 8,036 |  |  |  | 3,349,903 |  |  |  | 3,357,939 |  |  |  | 182 |
Construction and land development |  |  | 4,168 |  |  |  | 284 |  |  |  | 2,001 |  |  |  | 6,453 |  |  |  | 1,058,604 |  |  |  | 1,065,057 |  |  |  | — |
Residential mortgages |  |  | 29,319 |  |  |  | 9,858 |  |  |  | 27,886 |  |  |  | 67,063 |  |  |  | 2,598,149 |  |  |  | 2,665,212 |  |  |  | 912 |
Consumer |  |  | 12,215 |  |  |  | 5,012 |  |  |  | 11,714 |  |  |  | 28,941 |  |  |  | 1,828,354 |  |  |  | 1,857,295 |  |  |  | 729 |
Total |  | $ | 56,684 |  |  | $ | 19,269 |  |  | $ | 100,538 |  |  | $ | 176,491 |  |  | $ | 21,613,440 |  |  | $ | 21,789,931 |  |  | $ | 3,361 |
Credit Quality Indicators The following tables present the credit quality indicators by segment and portfolio class of loans held for investment at September 30, 2021 and December 31, 2020. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. In addition, the Company often examines portfolios of loans to determine if there are areas of risk not specifically identified in its loan by loan approach.
|  | September 30, 2021 |
(in thousands) |  | Commercial non-real estate |  |  | Commercial real estate - owner- occupied |  |  | Total commercial and industrial |  |  | Commercial real estate - income producing |  |  | Construction and land development |  |  | Total commercial |
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 9,032,981 |  |  | $ | 2,659,738 |  |  | $ | 11,692,719 |  |  | $ | 3,363,503 |  |  | $ | 1,190,718 |  |  | $ | 16,246,940 |
Pass-Watch |  |  | 204,260 |  |  |  | 68,660 |  |  |  | 272,920 |  |  |  | 79,328 |  |  |  | 19,048 |  |  |  | 371,296 |
Special Mention |  |  | 46,263 |  |  |  | 24,878 |  |  |  | 71,141 |  |  |  | 4,739 |  |  |  | 1,887 |  |  |  | 77,767 |
Substandard |  |  | 133,486 |  |  |  | 59,650 |  |  |  | 193,136 |  |  |  | 20,369 |  |  |  | 2,338 |  |  |  | 215,843 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,416,990 |  |  | $ | 2,812,926 |  |  | $ | 12,229,916 |  |  | $ | 3,467,939 |  |  | $ | 1,213,991 |  |  | $ | 16,911,846 |
|  | December 31, 2020 |
(in thousands) |  | Commercial non-real estate |  |  | Commercial real estate - owner- occupied |  |  | Total commercial and industrial |  |  | Commercial real estate - income producing |  |  | Construction and land development |  |  | Total commercial |
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 9,439,264 |  |  | $ | 2,641,423 |  |  | $ | 12,080,687 |  |  | $ | 3,219,155 |  |  | $ | 1,033,060 |  |  | $ | 16,332,902 |
Pass-Watch |  |  | 314,739 |  |  |  | 114,358 |  |  |  | 429,097 |  |  |  | 89,968 |  |  |  | 22,820 |  |  |  | 541,885 |
Special Mention |  |  | 79,613 |  |  |  | 46,239 |  |  |  | 125,852 |  |  |  | 5,989 |  |  |  | 5,751 |  |  |  | 137,592 |
Substandard |  |  | 153,367 |  |  |  | 55,425 |  |  |  | 208,792 |  |  |  | 42,827 |  |  |  | 3,426 |  |  |  | 255,045 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,986,983 |  |  | $ | 2,857,445 |  |  | $ | 12,844,428 |  |  | $ | 3,357,939 |  |  | $ | 1,065,057 |  |  | $ | 17,267,424 |
|  | September 30, 2021 |  |  | December 31, 2020 |
(in thousands) |  | Residential mortgage |  |  | Consumer |  |  | Total |  |  | Residential mortgage |  |  | Consumer |  |  | Total |
Performing |  | $ | 2,323,682 |  |  | $ | 1,609,813 |  |  | $ | 3,933,495 |  |  | $ | 2,622,422 |  |  | $ | 1,832,885 |  |  | $ | 4,455,307 |
Nonperforming |  |  | 27,371 |  |  |  | 13,303 |  |  |  | 40,674 |  |  |  | 42,790 |  |  |  | 24,410 |  |  |  | 67,200 |
Total |  | $ | 2,351,053 |  |  | $ | 1,623,116 |  |  | $ | 3,974,169 |  |  | $ | 2,665,212 |  |  | $ | 1,857,295 |  |  | $ | 4,522,507 |
Below are the definitions of the Company’s internally assigned grades: Commercial:
| • | Pass – loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.
| • | Pass-Watch – credits in this category are of sufficient risk to cause concern. This category is reserved for credits that display negative performance trends. The “Watch” grade should be regarded as a transition category.
| • | Special Mention – a criticized asset category defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the institution’s credit position. Special mention credits are not considered part of the Classified credit categories and do not expose the institution to sufficient risk to warrant adverse classification.
| • | Substandard – an asset that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
| • | Doubtful – an asset that has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
| • | Loss – credits classified as Loss are considered uncollectable and are charged off promptly once so classified.
Residential and Consumer:
| • | Performing – accruing loans that have not been modified in a troubled debt restructuring.
| • | Nonperforming – loans for which there are good reasons to doubt that payments will be made in full. All loans with nonaccrual status and all loans that have been modified in a troubled debt restructuring are classified as nonperforming.
Vintage Analysis The following table presents credit quality disclosures of amortized cost by segment and vintage for term loans and by revolving and revolving converted to amortizing at September 30, 2021. The Company defines vintage as the later of origination, renewal or restructure date.
| Term Loans |  |  |  |  |  |  |  |  |  |  |
| Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Loans Converted to Term Loans |  |  | Total |
Commercial Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 3,916,476 |  |  | $ | 3,333,009 |  |  | $ | 2,308,701 |  |  | $ | 1,374,599 |  |  | $ | 1,105,917 |  |  | $ | 1,520,061 |  |  | $ | 2,582,321 |  |  | $ | 105,856 |  |  | $ | 16,246,940 |
Pass-Watch |  |  | 40,835 |  |  |  | 59,789 |  |  |  | 71,484 |  |  |  | 31,238 |  |  |  | 22,528 |  |  |  | 82,569 |  |  |  | 47,600 |  |  |  | 15,253 |  |  |  | 371,296 |
Special Mention |  |  | 15,346 |  |  |  | 3,105 |  |  |  | 6,857 |  |  |  | 11,061 |  |  |  | 19,648 |  |  |  | 8,613 |  |  |  | 11,841 |  |  |  | 1,296 |  |  |  | 77,767 |
Substandard |  |  | 26,982 |  |  |  | 51,212 |  |  |  | 38,745 |  |  |  | 17,302 |  |  |  | 27,220 |  |  |  | 22,332 |  |  |  | 25,384 |  |  |  | 6,666 |  |  |  | 215,843 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Commercial Loans |  | $ | 3,999,639 |  |  | $ | 3,447,115 |  |  | $ | 2,425,787 |  |  | $ | 1,434,200 |  |  | $ | 1,175,313 |  |  | $ | 1,633,575 |  |  | $ | 2,667,146 |  |  | $ | 129,071 |  |  | $ | 16,911,846 |
Residential Mortgage and Consumer Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 330,316 |  |  | $ | 461,269 |  |  | $ | 401,774 |  |  | $ | 265,787 |  |  | $ | 367,106 |  |  | $ | 973,576 |  |  | $ | 1,128,048 |  |  | $ | 5,619 |  |  | $ | 3,933,495 |
Nonperforming |  |  | 433 |  |  |  | 1,101 |  |  |  | 1,902 |  |  |  | 3,599 |  |  |  | 5,614 |  |  |  | 25,114 |  |  |  | 1,424 |  |  |  | 1,487 |  |  |  | 40,674 |
Total Consumer Loans |  | $ | 330,749 |  |  | $ | 462,370 |  |  | $ | 403,676 |  |  | $ | 269,386 |  |  | $ | 372,720 |  |  | $ | 998,690 |  |  | $ | 1,129,472 |  |  | $ | 7,106 |  |  | $ | 3,974,169 |
Residential Mortgage Loans in Process of Foreclosure Loans in process of foreclosure include those for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction. Included in loans at September 30, 2021 and December 31, 2020 was $6.1 million and $17.2 million, respectively, of consumer loans secured by single family residential real estate that were in process of foreclosure. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $4.0 million and $3.4 million of foreclosed single family residential properties in other real estate owned at September 30, 2021 and December 31, 2020, respectively. Loans Held for Sale Loans held for sale is composed primarily of mortgage loans originated for sale in the secondary market.

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