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Loans and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2022
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, Dallas, and San Antonio; 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 $69.3 million and $67.8 million at March 31, 2022 and December 31, 2021, respectively. Included in commercial non-real estate loans at March 31, 2022 and December 31, 2021 was $334.8 million an d $531.1 million, respectively, of Paycheck Protection Program loans, described in more detail below. The following table presents loans, net of unearned income, by portfolio class at March 31, 2022 and December 31, 2021.
|  | March 31, |  |  | December 31, |
(in thousands) |  | 2022 |  |  | 2021 |
Commercial non-real estate |  | $ | 9,584,480 |  |  | $ | 9,612,460 |
Commercial real estate - owner occupied |  |  | 2,868,233 |  |  |  | 2,821,246 |
Total commercial and industrial |  |  | 12,452,713 |  |  |  | 12,433,706 |
Commercial real estate - income producing |  |  | 3,563,299 |  |  |  | 3,464,626 |
Construction and land development |  |  | 1,286,655 |  |  |  | 1,228,670 |
Residential mortgages |  |  | 2,462,900 |  |  |  | 2,423,890 |
Consumer |  |  | 1,557,774 |  |  |  | 1,583,390 |
Total loans |  | $ | 21,323,341 |  |  | $ | 21,134,282 |
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, which 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 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. The following tables present activity in the allowance for credit losses (ACL) by portfolio class for the three months ended March 31, 2022 and 2021, as well as the corresponding recorded investment in loans at the end of each period.
|  |  |  |  | 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 |
|  | Three Months Ended March 31, 2022 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 95,888 |  |  | $ | 53,433 |  |  | $ | 149,321 |  |  | $ | 108,058 |  |  | $ | 22,102 |  |  | $ | 30,623 |  |  | $ | 31,961 |  |  | $ | 342,065 |
Charge-offs |  |  | (2,659 | ) |  |  | — |  |  |  | (2,659 | ) |  |  | (4 | ) |  |  | — |  |  |  | (42 | ) |  |  | (2,680 | ) |  |  | (5,385 | )
Recoveries |  |  | 2,142 |  |  |  | 389 |  |  |  | 2,531 |  |  |  | 878 |  |  |  | 68 |  |  |  | 61 |  |  |  | 1,528 |  |  |  | 5,066 |
Net provision for loan losses |  |  | (8,072 | ) |  |  | (5,361 | ) |  |  | (13,433 | ) |  |  | (3,565 | ) |  |  | (1,082 | ) |  |  | (4,307 | ) |  |  | (1,516 | ) |  |  | (23,903 | )
Ending balance - allowance for loan losses |  | $ | 87,299 |  |  | $ | 48,461 |  |  | $ | 135,760 |  |  | $ | 105,367 |  |  | $ | 21,088 |  |  | $ | 26,335 |  |  | $ | 29,293 |  |  | $ | 317,843 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 4,522 |  |  | $ | 323 |  |  | $ | 4,845 |  |  | $ | 1,694 |  |  | $ | 21,907 |  |  | $ | 22 |  |  | $ | 866 |  |  | $ | 29,334 |
Provision for losses on unfunded commitments |  |  | (246 | ) |  |  | 108 |  |  |  | (138 | ) |  |  | 453 |  |  |  | 474 |  |  |  | (3 | ) |  |  | 590 |  |  |  | 1,376 |
Ending balance - reserve for unfunded lending commitments |  |  | 4,276 |  |  |  | 431 |  |  |  | 4,707 |  |  |  | 2,147 |  |  |  | 22,381 |  |  |  | 19 |  |  |  | 1,456 |  |  |  | 30,710 |
Total allowance for credit losses |  | $ | 91,575 |  |  | $ | 48,892 |  |  | $ | 140,467 |  |  | $ | 107,514 |  |  | $ | 43,469 |  |  | $ | 26,354 |  |  | $ | 30,749 |  |  | $ | 348,553 |
Allowance for loan losses: |  |  |
Individually evaluated |  | $ | 112 |  |  | $ | 32 |  |  | $ | 144 |  |  | $ | 20 |  |  | $ | 20 |  |  | $ | 408 |  |  | $ | 174 |  |  | $ | 766 |
Collectively evaluated |  |  | 87,187 |  |  |  | 48,429 |  |  |  | 135,616 |  |  |  | 105,347 |  |  |  | 21,068 |  |  |  | 25,927 |  |  |  | 29,119 |  |  |  | 317,077 |
Allowance for loan losses |  | $ | 87,299 |  |  | $ | 48,461 |  |  | $ | 135,760 |  |  | $ | 105,367 |  |  | $ | 21,088 |  |  | $ | 26,335 |  |  | $ | 29,293 |  |  | $ | 317,843 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Collectively evaluated |  |  | 4,276 |  |  |  | 431 |  |  |  | 4,707 |  |  |  | 2,147 |  |  |  | 22,381 |  |  |  | 19 |  |  |  | 1,456 |  |  |  | 30,710 |
Reserve for unfunded lending commitments: |  | $ | 4,276 |  |  | $ | 431 |  |  | $ | 4,707 |  |  | $ | 2,147 |  |  | $ | 22,381 |  |  | $ | 19 |  |  | $ | 1,456 |  |  | $ | 30,710 |
Total allowance for credit losses |  | $ | 91,575 |  |  | $ | 48,892 |  |  | $ | 140,467 |  |  | $ | 107,514 |  |  | $ | 43,469 |  |  | $ | 26,354 |  |  | $ | 30,749 |  |  | $ | 348,553 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 1,742 |  |  | $ | 951 |  |  | $ | 2,693 |  |  | $ | 1,309 |  |  | $ | 122 |  |  | $ | 4,534 |  |  | $ | 929 |  |  | $ | 9,587 |
Collectively evaluated |  |  | 9,582,738 |  |  |  | 2,867,282 |  |  |  | 12,450,020 |  |  |  | 3,561,990 |  |  |  | 1,286,533 |  |  |  | 2,458,366 |  |  |  | 1,556,845 |  |  |  | 21,313,754 |
Total loans |  | $ | 9,584,480 |  |  | $ | 2,868,233 |  |  | $ | 12,452,713 |  |  | $ | 3,563,299 |  |  | $ | 1,286,655 |  |  | $ | 2,462,900 |  |  | $ | 1,557,774 |  |  | $ | 21,323,341 |
In arriving at the March 31, 2022 allowance, the Company weighted the March 2022 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, with a 40% probability. The March 31, 2022 baseline scenario assumes COVID-19 infections have already abated; the disruption to the U.S. economy from the Russian invasion of Ukraine will be limited and temporary; the legislature passes a $600 billion social and climate package; full-employment economy being achieved in late 2022 or early 2023; GDP continues to grow between 3%-3.5% in 2022 and 2023; and the Federal Reserve has four 25-basis point interest rate increases in 2022. Alternative Moody’s forecast scenarios have varying depictions of economic performance as compared to the baseline. Consistent with our December 31, 2021 calculation, management determined that assumptions provided for in the downside slower near-term growth (S-2) to be somewhat more likely than the baseline scenario; as such, the S-2 scenario was given a 60% probability weighting in the allowance for credit losses calculation at March 31, 2022. The S-2 scenario assumes that, when compared to baseline, the conflict between Russian and Ukraine spans longer than anticipated and that global supply chain issues worsen, prompting a higher rate of inflation, and as a result, the Federal Reserve raises interest rates more often, generating corrections in equity markets and declines in spending. Further, the S-2 scenario assumes the economic legislation package will be less effective; unemployment begins to rise in the second quarter of 2022, with the return to full employment not occurring until the fourth quarter of 2023; and the number of COVID-19 cases slows consumer spending on retail goods and travel and leisure activities. Despite the lingering economic effects of the COVID-19 pandemic and the emergence of new risks stemming from geopolitical conflict, overall credit loss outlook on our portfolio has not changed materially since year-end. Positive economic indicators of growth in our markets, continued improvements in our asset quality metrics and minimal credit losses in recent periods allowed for a release of credit loss reserves across all portfolios at March 31, 2022.
|  |  |  |  | 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 |
|  | Three Months Ended March 31, 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 |  |  | (17,512 | ) |  |  | (347 | ) |  |  | (17,859 | ) |  |  | (194 | ) |  |  | (248 | ) |  |  | (109 | ) |  |  | (3,694 | ) |  |  | (22,104 | )
Recoveries |  |  | 1,899 |  |  |  | 37 |  |  |  | 1,936 |  |  |  | — |  |  |  | 159 |  |  |  | 206 |  |  |  | 1,549 |  |  |  | 3,850 |
Net provision for loan losses |  |  | (5,144 | ) |  |  | (2,301 | ) |  |  | (7,445 | ) |  |  | 6,899 |  |  |  | (1,200 | ) |  |  | (6,420 | ) |  |  | 603 |  |  |  | (7,563 | )
Ending balance - allowance for loan losses |  | $ | 128,936 |  |  | $ | 66,523 |  |  | $ | 195,459 |  |  | $ | 116,179 |  |  | $ | 25,173 |  |  | $ | 42,519 |  |  | $ | 45,030 |  |  | $ | 424,360 |
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 |  |  | 2,642 |  |  |  | 131 |  |  |  | 2,773 |  |  |  | 439 |  |  |  | (617 | ) |  |  | 3 |  |  |  | 54 |  |  |  | 2,652 |
Ending balance - reserve for unfunded lending commitments |  |  | 7,171 |  |  |  | 512 |  |  |  | 7,683 |  |  |  | 1,538 |  |  |  | 22,077 |  |  |  | 22 |  |  |  | 1,239 |  |  |  | 32,559 |
Total allowance for credit losses |  | $ | 136,107 |  |  | $ | 67,035 |  |  | $ | 203,142 |  |  | $ | 117,717 |  |  | $ | 47,250 |  |  | $ | 42,541 |  |  | $ | 46,269 |  |  | $ | 456,919 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 4,564 |  |  | $ | 1,242 |  |  | $ | 5,806 |  |  | $ | 22 |  |  | $ | 21 |  |  | $ | 486 |  |  | $ | 739 |  |  | $ | 7,074 |
Collectively evaluated for impairment |  |  | 124,372 |  |  |  | 65,281 |  |  |  | 189,653 |  |  |  | 116,157 |  |  |  | 25,152 |  |  |  | 42,033 |  |  |  | 44,291 |  |  |  | 417,286 |
Allowance for loan losses |  | $ | 128,936 |  |  | $ | 66,523 |  |  | $ | 195,459 |  |  | $ | 116,179 |  |  | $ | 25,173 |  |  | $ | 42,519 |  |  | $ | 45,030 |  |  | $ | 424,360 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 190 |  |  | $ | 51 |  |  | $ | 241 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 241 |
Collectively evaluated |  |  | 6,981 |  |  |  | 461 |  |  |  | 7,442 |  |  |  | 1,538 |  |  |  | 22,077 |  |  |  | 22 |  |  |  | 1,239 |  |  |  | 32,318 |
Reserve for unfunded lending commitments: |  | $ | 7,171 |  |  | $ | 512 |  |  | $ | 7,683 |  |  | $ | 1,538 |  |  | $ | 22,077 |  |  | $ | 22 |  |  | $ | 1,239 |  |  | $ | 32,559 |
Total allowance for credit losses |  | $ | 136,107 |  |  | $ | 67,035 |  |  | $ | 203,142 |  |  | $ | 117,717 |  |  | $ | 47,250 |  |  | $ | 42,541 |  |  | $ | 46,269 |  |  | $ | 456,919 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 20,132 |  |  | $ | 10,047 |  |  | $ | 30,179 |  |  | $ | 4,363 |  |  | $ | 131 |  |  | $ | 5,241 |  |  | $ | 2,779 |  |  | $ | 42,693 |
Collectively evaluated for impairment |  |  | 10,071,210 |  |  |  | 2,785,057 |  |  |  | 12,856,267 |  |  |  | 3,406,665 |  |  |  | 1,122,010 |  |  |  | 2,483,551 |  |  |  | 1,753,673 |  |  |  | 21,622,166 |
Total loans |  | $ | 10,091,342 |  |  | $ | 2,795,104 |  |  | $ | 12,886,446 |  |  | $ | 3,411,028 |  |  | $ | 1,122,141 |  |  | $ | 2,488,792 |  |  | $ | 1,756,452 |  |  | $ | 21,664,859 |
The modest release across most portfolios during the first quarter of 2021 reflects the improvements in the economic forecast. The continued elevated allowance level was a result of uncertainty surrounding future performance as the impact of stimulus diminishes and modifications expire. In arriving at the allowance for credit losses at March 31, 2021, the Company weighted the baseline economic forecast at 65% and the downside slower near-term growth scenario S-2 at 35%. 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.
|  |  | March 31, |  |  |  | December 31, |
|  | 2022 |  |  |  | 2021 |
(in thousands) |  |  | Total nonaccrual |  |  |  | Nonaccrual without allowance for loan loss |  |  |  | Total nonaccrual |  |  |  | Nonaccrual without allowance for loan loss |
Commercial non-real estate |  | $ |  | 5,312 |  |  | $ |  | 1,247 |  |  | $ |  | 6,974 |  |  | $ |  | 1,264 |
Commercial real estate - owner occupied |  |  |  | 2,749 |  |  |  |  | 716 |  |  |  |  | 4,921 |  |  |  |  | 729 |
Total commercial and industrial |  |  |  | 8,061 |  |  |  |  | 1,963 |  |  |  |  | 11,895 |  |  |  |  | 1,993 |
Commercial real estate - income producing |  |  |  | 1,956 |  |  |  |  | 1,233 |  |  |  |  | 5,458 |  |  |  |  | 5,207 |
Construction and land development |  |  |  | 584 |  |  |  |  | — |  |  |  |  | 844 |  |  |  |  | — |
Residential mortgages |  |  |  | 22,744 |  |  |  |  | 1,287 |  |  |  |  | 25,439 |  |  |  |  | 1,997 |
Consumer |  |  |  | 9,094 |  |  |  |  | 5 |  |  |  |  | 11,887 |  |  |  |  | 48 |
Total loans |  | $ |  | 42,439 |  |  | $ |  | 4,488 |  |  | $ |  | 55,523 |  |  | $ |  | 9,245 |
Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (“TDRs”) of $3.6 million and $6.8 million at March 31, 2022 and December 31, 2021, respectively. Total TDRs, both accruing and nonaccruing, were $6.5 million at March 31, 2022 and $10.6 million at December 31, 2021. All TDRs are individually evaluated for credit loss. At March 31, 2022 and December 31, 2021, the Company had no unfunded commitments to borrowers whose loan terms have been modified in a TDR. The table below provides detail by portfolio class TDRs that were modified during the three months ended March 31, 2022 and 2021. All such loans are individually evaluated for credit loss.
|  | Three Months Ended |
($ in thousands) |  | March 31, 2022 |  |  | March 31, 2021 |
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 |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | 3 |  |  | $ | 6,935 |  |  | $ | 6,935 |
Commercial real estate - owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 6,935 |  |  |  | 6,935 |
Commercial real estate - income producing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Construction and land development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgages |  |  | 2 |  |  |  | 110 |  |  |  | 115 |  |  |  | 1 |  |  |  | 210 |  |  |  | 210 |
Consumer |  |  | 2 |  |  |  | 73 |  |  |  | 73 |  |  |  | 1 |  |  |  | 54 |  |  |  | 54 |
Total loans |  |  | 4 |  |  | $ | 183 |  |  | $ | 188 |  |  |  | 5 |  |  | $ | 7,199 |  |  | $ | 7,199 |
The TDRs modified during the three months ended March 31, 2022 reflected in the table above include $0.1 million of loans with interest rate reduction and $0.1 million with other modifications. The TDRs modified during the three months ended March 31, 2021 include $1.9 million of loans with extended amortization terms or other payment concessions, and $5.3 million with other modifications. Two commercial non-real estate loans totaling $3.1 million that defaulted during the three months period ended March 31, 2022 had been modified in a TDR during the twelve months prior to default. One residential loan totaling $0.6 million that defaulted during the three months ended March 31, 2021 had been modified in a TDR during the twelve months prior to default. The TDR disclosures for the three months ended March 31, 2021 do not include loans eligible for exclusion from TDR assessment under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which expired on December 31, 2021. Any such loan having an eligible modification was 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 March 31, 2022 and December 31, 2021.
March 31, 2022 |  | 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 |  | $ | 7,206 |  |  | $ | 2,033 |  |  | $ | 5,247 |  |  | $ | 14,486 |  |  | $ | 9,569,994 |  |  | $ | 9,584,480 |  |  | $ | 701 |
Commercial real estate - owner occupied |  |  | 2,443 |  |  |  | 1,245 |  |  |  | 3,153 |  |  |  | 6,841 |  |  |  | 2,861,392 |  |  |  | 2,868,233 |  |  |  | 1,721 |
Total commercial and industrial |  |  | 9,649 |  |  |  | 3,278 |  |  |  | 8,400 |  |  |  | 21,327 |  |  |  | 12,431,386 |  |  |  | 12,452,713 |  |  |  | 2,422 |
Commercial real estate - income producing |  |  | 1,769 |  |  |  | 9 |  |  |  | 1,870 |  |  |  | 3,648 |  |  |  | 3,559,651 |  |  |  | 3,563,299 |  |  |  | — |
Construction and land development |  |  | 8,470 |  |  |  | 99 |  |  |  | 333 |  |  |  | 8,902 |  |  |  | 1,277,753 |  |  |  | 1,286,655 |  |  |  | 3 |
Residential mortgages |  |  | 29,874 |  |  |  | 2,766 |  |  |  | 9,723 |  |  |  | 42,363 |  |  |  | 2,420,537 |  |  |  | 2,462,900 |  |  |  | 209 |
Consumer |  |  | 7,093 |  |  |  | 2,743 |  |  |  | 4,666 |  |  |  | 14,502 |  |  |  | 1,543,272 |  |  |  | 1,557,774 |  |  |  | 1,634 |
Total |  | $ | 56,855 |  |  | $ | 8,895 |  |  | $ | 24,992 |  |  | $ | 90,742 |  |  | $ | 21,232,599 |  |  | $ | 21,323,341 |  |  | $ | 4,268 |
December 31, 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 |  | $ | 8,381 |  |  | $ | 3,123 |  |  | $ | 7,041 |  |  | $ | 18,545 |  |  | $ | 9,593,915 |  |  | $ | 9,612,460 |  |  | $ | 2,818 |
Commercial real estate - owner occupied |  |  | 704 |  |  |  | 653 |  |  |  | 1,563 |  |  |  | 2,920 |  |  |  | 2,818,326 |  |  |  | 2,821,246 |  |  |  | 142 |
Total commercial and industrial |  |  | 9,085 |  |  |  | 3,776 |  |  |  | 8,604 |  |  |  | 21,465 |  |  |  | 12,412,241 |  |  |  | 12,433,706 |  |  |  | 2,960 |
Commercial real estate - income producing |  |  | 281 |  |  |  | 107 |  |  |  | 5,307 |  |  |  | 5,695 |  |  |  | 3,458,931 |  |  |  | 3,464,626 |  |  |  | — |
Construction and land development |  |  | 2,624 |  |  |  | 1,022 |  |  |  | 587 |  |  |  | 4,233 |  |  |  | 1,224,437 |  |  |  | 1,228,670 |  |  |  | 83 |
Residential mortgages |  |  | 23,306 |  |  |  | 4,638 |  |  |  | 15,339 |  |  |  | 43,283 |  |  |  | 2,380,607 |  |  |  | 2,423,890 |  |  |  | 310 |
Consumer |  |  | 6,806 |  |  |  | 2,805 |  |  |  | 7,447 |  |  |  | 17,058 |  |  |  | 1,566,332 |  |  |  | 1,583,390 |  |  |  | 2,171 |
Total |  | $ | 42,102 |  |  | $ | 12,348 |  |  | $ | 37,284 |  |  | $ | 91,734 |  |  | $ | 21,042,548 |  |  | $ | 21,134,282 |  |  | $ | 5,524 |
Credit Quality Indicators The following tables present the credit quality indicators by segment and portfolio class of loans at March 31, 2022 and December 31, 2021. The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process.
|  | March 31, 2022 |
(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 |  | $ | 9,223,834 |  |  | $ | 2,707,795 |  |  | $ | 11,931,629 |  |  | $ | 3,494,699 |  |  | $ | 1,260,421 |  |  | $ | 16,686,749 |
Pass-Watch |  |  | 186,008 |  |  |  | 72,436 |  |  |  | 258,444 |  |  |  | 50,088 |  |  |  | 24,916 |  |  |  | 333,448 |
Special Mention |  |  | 52,307 |  |  |  | 19,770 |  |  |  | 72,077 |  |  |  | 3,615 |  |  |  | 566 |  |  |  | 76,258 |
Substandard |  |  | 122,331 |  |  |  | 68,232 |  |  |  | 190,563 |  |  |  | 14,897 |  |  |  | 752 |  |  |  | 206,212 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,584,480 |  |  | $ | 2,868,233 |  |  | $ | 12,452,713 |  |  | $ | 3,563,299 |  |  | $ | 1,286,655 |  |  | $ | 17,302,667 |
|  | December 31, 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 |  | $ | 9,279,719 |  |  | $ | 2,650,399 |  |  | $ | 11,930,118 |  |  | $ | 3,373,099 |  |  | $ | 1,216,177 |  |  | $ | 16,519,394 |
Pass-Watch |  |  | 157,815 |  |  |  | 86,133 |  |  |  | 243,948 |  |  |  | 67,157 |  |  |  | 9,289 |  |  |  | 320,394 |
Special Mention |  |  | 43,344 |  |  |  | 23,377 |  |  |  | 66,721 |  |  |  | 4,466 |  |  |  | 1,909 |  |  |  | 73,096 |
Substandard |  |  | 131,582 |  |  |  | 61,337 |  |  |  | 192,919 |  |  |  | 19,904 |  |  |  | 1,295 |  |  |  | 214,118 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,612,460 |  |  | $ | 2,821,246 |  |  | $ | 12,433,706 |  |  | $ | 3,464,626 |  |  | $ | 1,228,670 |  |  | $ | 17,127,002 |
|  | March 31, 2022 |  |  | December 31, 2021 |
(in thousands) |  | Residential mortgage |  |  | Consumer |  |  | Total |  |  | Residential mortgage |  |  | Consumer |  |  | Total |
Performing |  | $ | 2,438,792 |  |  | $ | 1,547,751 |  |  | $ | 3,986,543 |  |  | $ | 2,396,282 |  |  | $ | 1,570,516 |  |  | $ | 3,966,798 |
Nonperforming |  |  | 24,108 |  |  |  | 10,023 |  |  |  | 34,131 |  |  |  | 27,608 |  |  |  | 12,874 |  |  |  | 40,482 |
Total |  | $ | 2,462,900 |  |  | $ | 1,557,774 |  |  | $ | 4,020,674 |  |  | $ | 2,423,890 |  |  | $ | 1,583,390 |  |  | $ | 4,007,280 |
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 tables presents credit quality disclosures of amortized cost by segment and vintage for term loans and by revolving and revolving converted to amortizing at March 31, 2022 and December 31, 2021. The Company defines vintage as the later of origination, renewal or restructure date.
| Term Loans |  |  |  |  |  |  |  |
| Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |
March 31, 2022 |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Loans Converted to Term Loans |  |  | Total |
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,326,731 |  |  | $ | 4,549,370 |  |  | $ | 2,750,447 |  |  | $ | 1,801,058 |  |  | $ | 1,068,711 |  |  | $ | 2,043,133 |  |  | $ | 3,072,931 |  |  | $ | 74,369 |  |  | $ | 16,686,749 |
Pass-Watch |  |  | 21,757 |  |  |  | 57,011 |  |  |  | 24,746 |  |  |  | 42,969 |  |  |  | 43,367 |  |  |  | 79,352 |  |  |  | 59,453 |  |  |  | 4,792 |  |  |  | 333,448 |
Special Mention |  |  | 4,110 |  |  |  | 13,566 |  |  |  | 5,128 |  |  |  | 8,612 |  |  |  | 12,472 |  |  |  | 12,378 |  |  |  | 19,536 |  |  |  | 456 |  |  |  | 76,258 |
Substandard |  |  | 31,450 |  |  |  | 24,783 |  |  |  | 36,877 |  |  |  | 37,591 |  |  |  | 15,382 |  |  |  | 36,110 |  |  |  | 23,046 |  |  |  | 973 |  |  |  | 206,212 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Commercial Loans |  | $ | 1,384,048 |  |  | $ | 4,644,730 |  |  | $ | 2,817,198 |  |  | $ | 1,890,230 |  |  | $ | 1,139,932 |  |  | $ | 2,170,973 |  |  | $ | 3,174,966 |  |  | $ | 80,590 |  |  | $ | 17,302,667 |
Residential Mortgage and Consumer Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 170,543 |  |  | $ | 557,335 |  |  | $ | 486,997 |  |  | $ | 314,321 |  |  | $ | 197,414 |  |  | $ | 1,131,990 |  |  | $ | 1,123,451 |  |  | $ | 4,492 |  |  | $ | 3,986,543 |
Nonperforming |  |  | 30 |  |  |  | 1,250 |  |  |  | 1,027 |  |  |  | 2,299 |  |  |  | 3,360 |  |  |  | 25,096 |  |  |  | 746 |  |  |  | 323 |  |  |  | 34,131 |
Total Consumer Loans |  | $ | 170,573 |  |  | $ | 558,585 |  |  | $ | 488,024 |  |  | $ | 316,620 |  |  | $ | 200,774 |  |  | $ | 1,157,086 |  |  | $ | 1,124,197 |  |  | $ | 4,815 |  |  | $ | 4,020,674 |
| Term Loans |  |  |  |  |  |  |  |
| Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |
December 31, 2021 |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Loans Converted to Term Loans |  |  | Total |
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 4,946,459 |  |  | $ | 3,008,160 |  |  | $ | 2,035,849 |  |  | $ | 1,212,306 |  |  | $ | 937,639 |  |  | $ | 1,296,382 |  |  | $ | 3,002,064 |  |  | $ | 80,535 |  |  | $ | 16,519,394 |
Pass-Watch |  |  | 68,421 |  |  |  | 19,467 |  |  |  | 31,598 |  |  |  | 45,846 |  |  |  | 27,188 |  |  |  | 69,310 |  |  |  | 52,850 |  |  |  | 5,714 |  |  |  | 320,394 |
Special Mention |  |  | 17,536 |  |  |  | 2,683 |  |  |  | 10,296 |  |  |  | 12,410 |  |  |  | 10,669 |  |  |  | 3,656 |  |  |  | 9,603 |  |  |  | 6,243 |  |  |  | 73,096 |
Substandard |  |  | 43,895 |  |  |  | 43,494 |  |  |  | 36,763 |  |  |  | 14,664 |  |  |  | 28,337 |  |  |  | 16,125 |  |  |  | 20,358 |  |  |  | 10,482 |  |  |  | 214,118 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Commercial Loans |  | $ | 5,076,311 |  |  | $ | 3,073,804 |  |  | $ | 2,114,506 |  |  | $ | 1,285,226 |  |  | $ | 1,003,833 |  |  | $ | 1,385,473 |  |  | $ | 3,084,875 |  |  | $ | 102,974 |  |  | $ | 17,127,002 |
Residential Mortgage and Consumer Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 580,813 |  |  | $ | 467,497 |  |  | $ | 355,833 |  |  | $ | 223,494 |  |  | $ | 320,344 |  |  | $ | 892,361 |  |  | $ | 1,120,461 |  |  | $ | 5,995 |  |  | $ | 3,966,798 |
Nonperforming |  |  | 565 |  |  |  | 951 |  |  |  | 2,018 |  |  |  | 4,465 |  |  |  | 4,719 |  |  |  | 24,365 |  |  |  | 1,432 |  |  |  | 1,967 |  |  |  | 40,482 |
Total Consumer Loans |  | $ | 581,378 |  |  | $ | 468,448 |  |  | $ | 357,851 |  |  | $ | 227,959 |  |  | $ | 325,063 |  |  | $ | 916,726 |  |  | $ | 1,121,893 |  |  | $ | 7,962 |  |  | $ | 4,007,280 |
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 March 31, 2022 and December 31, 2021 were $5.6 million and $4.4 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 $2.4 million of foreclosed single family residential properties in other real estate owned at March 31, 2022 and December 31, 2021. Loans Held for Sale Loans held for sale totaled $59.9 million and $93.1 million at March 31, 2022 and December 31, 2021, respectively. Loans held for sale is composed primarily of mortgage loans originated for sale in the secondary market. At March 31, 2022, residential mortgage loans carried at the fair value option totaled $25.0 million with an unpaid principal balance of $25.1 million. At December 31, 2021, residential mortgage loans carried at the fair value option totaled $41.0 million with an unpaid principal balance of $40.1 million. All other loans held for sale are carried at lower of cost or market.

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