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Loans and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2022
Receivables [Abstract] |
Loans and Allowance for Credit Losses | Note 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 $100.2 million and $67.8 million at December 31, 2022 and 2021, respectively. Included in commercial non-real estate loans at December 31, 2022 and 2021 was $38.8 million and $531.1 million, respectively, of Paycheck Protection Program loans, described below. The following table presents loans, net of unearned income, by portfolio class at December 31, 2022 and 2021:
($ in thousands) | 2022 |  | 2021 |
Commercial non-real estate | $ | 10,146,453 |  | $ | 9,612,460 |
Commercial real estate - owner occupied |  | 3,033,058 |  |  | 2,821,246 |
Total commercial and industrial |  | 13,179,511 |  |  | 12,433,706 |
Commercial real estate - income producing |  | 3,560,991 |  |  | 3,464,626 |
Construction and land development |  | 1,703,592 |  |  | 1,228,670 |
Residential mortgages |  | 3,092,605 |  |  | 2,423,890 |
Consumer |  | 1,577,347 |  |  | 1,583,390 |
Total loans | $ | 23,114,046 |  | $ | 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 generally 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. The Bank makes loans in the normal course of business to directors and executive officers of the Company and the Bank and to their associates. Loans to such related parties are made on substantially the same terms, including interest rates and collateral requirements, as those prevailing at the time for comparable transactions with unrelated parties and do not involve more than normal risk of collectability when originated. Balances of loans to the Company’s directors, executive officers and their associates at December 31, 2022 and 2021 were approximately $30.4 million and $62.9 million, respectively. Related party loan activity in 2022 reflect new loans of $3.0 million, and repayments of $35.3 million. The Bank has a line of credit with the Federal Home Loan Bank of Dallas that is secured by blanket pledges of certain qualifying loan types. The Bank had borrowings on this line of $1.4 and $1.1 billion at December 31, 2022 and 2021, respectively. The following schedules show activity in the allowance for credit losses by portfolio class for the years ended December 31, 2022 and 2021, as well as the corresponding recorded investment in loans at December 31, 2022 and 2021. Effective January 1, 2020, the Company adopted the provisions of ASC 326 (CECL) using a modified retrospective basis.
|  | Commercial Non-Real Estate |  |  | Commercial Real Estate-Owner Occupied |  |  | Total Commercial and Industrial |  |  | Commercial Real Estate-Income Producing |  |  | Construction and Land Development |  |  | Residential Mortgages |  |  | Consumer |  |  | Total |
($ in thousands) |  | Year Ended December 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 |  |  | (7,637 | ) |  |  | (948 | ) |  |  | (8,585 | ) |  |  | (1,073 | ) |  |  | (3 | ) |  |  | (137 | ) |  |  | (12,792 | ) |  |  | (22,590 | )
Recoveries |  |  | 11,812 |  |  |  | 733 |  |  |  | 12,545 |  |  |  | 878 |  |  |  | 134 |  |  |  | 1,749 |  |  |  | 5,382 |  |  |  | 20,688 |
Net provision for loan losses |  |  | (3,602 | ) |  |  | (4,934 | ) |  |  | (8,536 | ) |  |  | (35,902 | ) |  |  | 8,265 |  |  |  | 229 |  |  |  | 3,570 |  |  |  | (32,374 | )
Ending balance - allowance for loan losses |  | $ | 96,461 |  |  | $ | 48,284 |  |  | $ | 144,745 |  |  | $ | 71,961 |  |  | $ | 30,498 |  |  | $ | 32,464 |  |  | $ | 28,121 |  |  | $ | 307,789 |
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 |  |  | 462 |  |  |  | (21 | ) |  |  | 441 |  |  |  | (299 | ) |  |  | 3,203 |  |  |  | 9 |  |  |  | 621 |  |  |  | 3,975 |
Ending balance - reserve for unfunded lending commitments |  | $ | 4,984 |  |  | $ | 302 |  |  | $ | 5,286 |  |  | $ | 1,395 |  |  | $ | 25,110 |  |  | $ | 31 |  |  | $ | 1,487 |  |  | $ | 33,309 |
Total allowance for credit losses |  | $ | 101,445 |  |  | $ | 48,586 |  |  | $ | 150,031 |  |  | $ | 73,356 |  |  | $ | 55,608 |  |  | $ | 32,495 |  |  | $ | 29,608 |  |  | $ | 341,098 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 71 |  |  | $ | 31 |  |  | $ | 102 |  |  | $ | 16 |  |  | $ | 18 |  |  | $ | 239 |  |  | $ | 101 |  |  | $ | 476 |
Collectively evaluated |  |  | 96,390 |  |  |  | 48,253 |  |  |  | 144,643 |  |  |  | 71,945 |  |  |  | 30,480 |  |  |  | 32,225 |  |  |  | 28,020 |  |  |  | 307,313 |
Allowance for loan losses |  | $ | 96,461 |  |  | $ | 48,284 |  |  | $ | 144,745 |  |  | $ | 71,961 |  |  | $ | 30,498 |  |  | $ | 32,464 |  |  | $ | 28,121 |  |  | $ | 307,789 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Collectively evaluated |  |  | 4,984 |  |  |  | 302 |  |  |  | 5,286 |  |  |  | 1,395 |  |  |  | 25,110 |  |  |  | 31 |  |  |  | 1,487 |  |  |  | 33,309 |
Reserve for unfunded lending commitments |  | $ | 4,984 |  |  | $ | 302 |  |  | $ | 5,286 |  |  | $ | 1,395 |  |  | $ | 25,110 |  |  | $ | 31 |  |  | $ | 1,487 |  |  | $ | 33,309 |
Total allowance for credit losses |  | $ | 101,445 |  |  | $ | 48,586 |  |  | $ | 150,031 |  |  | $ | 73,356 |  |  | $ | 55,608 |  |  | $ | 32,495 |  |  | $ | 29,608 |  |  | $ | 341,098 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,248 |  |  | $ | 920 |  |  | $ | 2,168 |  |  | $ | 1,240 |  |  | $ | 116 |  |  | $ | 3,476 |  |  | $ | 515 |  |  | $ | 7,515 |
Collectively evaluated for impairment |  |  | 10,145,205 |  |  |  | 3,032,138 |  |  |  | 13,177,343 |  |  |  | 3,559,751 |  |  |  | 1,703,476 |  |  |  | 3,089,129 |  |  |  | 1,576,832 |  |  |  | 23,106,531 |
Total loans |  | $ | 10,146,453 |  |  | $ | 3,033,058 |  |  | $ | 13,179,511 |  |  | $ | 3,560,991 |  |  | $ | 1,703,592 |  |  | $ | 3,092,605 |  |  | $ | 1,577,347 |  |  | $ | 23,114,046 |
|  | Commercial Non-Real Estate |  |  | Commercial Real Estate-Owner Occupied |  |  | Total Commercial and Industrial |  |  | Commercial Real Estate-Income Producing |  |  | Construction and Land Development |  |  | Residential Mortgages |  |  | Consumer |  |  | Total |
($ in thousands) |  | Year Ended December 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 |  |  | (33,523 | ) |  |  | (3,179 | ) |  |  | (36,702 | ) |  |  | (425 | ) |  |  | (274 | ) |  |  | (713 | ) |  |  | (12,722 | ) |  |  | (50,836 | )
Recoveries |  |  | 8,985 |  |  |  | 642 |  |  |  | 9,627 |  |  |  | 105 |  |  |  | 2,172 |  |  |  | 1,459 |  |  |  | 6,282 |  |  |  | 19,645 |
Net provision for loan losses |  |  | (29,267 | ) |  |  | (13,164 | ) |  |  | (42,431 | ) |  |  | (1,096 | ) |  |  | (6,258 | ) |  |  | (18,965 | ) |  |  | (8,171 | ) |  |  | (76,921 | )
Ending balance - allowance for loan losses |  | $ | 95,888 |  |  | $ | 53,433 |  |  | $ | 149,321 |  |  | $ | 108,058 |  |  | $ | 22,102 |  |  | $ | 30,623 |  |  | $ | 31,961 |  |  | $ | 342,065 |
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 |  |  | (7 | ) |  |  | (58 | ) |  |  | (65 | ) |  |  | 595 |  |  |  | (787 | ) |  |  | 3 |  |  |  | (319 | ) |  |  | (573 | )
Ending balance - reserve for unfunded lending commitments |  | $ | 4,522 |  |  | $ | 323 |  |  | $ | 4,845 |  |  | $ | 1,694 |  |  | $ | 21,907 |  |  | $ | 22 |  |  | $ | 866 |  |  | $ | 29,334 |
Total allowance for credit losses |  | $ | 100,410 |  |  | $ | 53,756 |  |  | $ | 154,166 |  |  | $ | 109,752 |  |  | $ | 44,009 |  |  | $ | 30,645 |  |  | $ | 32,827 |  |  | $ | 371,399 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | 177 |  |  | $ | 94 |  |  | $ | 271 |  |  | $ | 20 |  |  | $ | 20 |  |  | $ | 408 |  |  | $ | 184 |  |  | $ | 903 |
Collectively evaluated |  |  | 95,711 |  |  |  | 53,339 |  |  |  | 149,050 |  |  |  | 108,038 |  |  |  | 22,082 |  |  |  | 30,215 |  |  |  | 31,777 |  |  |  | 341,162 |
Allowance for loan losses |  | $ | 95,888 |  |  | $ | 53,433 |  |  | $ | 149,321 |  |  | $ | 108,058 |  |  | $ | 22,102 |  |  | $ | 30,623 |  |  | $ | 31,961 |  |  | $ | 342,065 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Collectively evaluated |  |  | 4,522 |  |  |  | 323 |  |  |  | 4,845 |  |  |  | 1,694 |  |  |  | 21,907 |  |  |  | 22 |  |  |  | 866 |  |  |  | 29,334 |
Reserve for unfunded lending commitments: |  | $ | 4,522 |  |  | $ | 323 |  |  | $ | 4,845 |  |  | $ | 1,694 |  |  | $ | 21,907 |  |  | $ | 22 |  |  | $ | 866 |  |  | $ | 29,334 |
Total allowance for credit losses |  | $ | 100,410 |  |  | $ | 53,756 |  |  | $ | 154,166 |  |  | $ | 109,752 |  |  | $ | 44,009 |  |  | $ | 30,645 |  |  | $ | 32,827 |  |  | $ | 371,399 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3,431 |  |  | $ | 2,546 |  |  | $ | 5,977 |  |  | $ | 5,288 |  |  | $ | 125 |  |  | $ | 5,260 |  |  | $ | 1,232 |  |  | $ | 17,882 |
Collectively evaluated for impairment |  |  | 9,609,029 |  |  |  | 2,818,700 |  |  |  | 12,427,729 |  |  |  | 3,459,338 |  |  |  | 1,228,545 |  |  |  | 2,418,630 |  |  |  | 1,582,158 |  |  |  | 21,116,400 |
Total loans |  | $ | 9,612,460 |  |  | $ | 2,821,246 |  |  | $ | 12,433,706 |  |  | $ | 3,464,626 |  |  | $ | 1,228,670 |  |  | $ | 2,423,890 |  |  | $ | 1,583,390 |  |  | $ | 21,134,282 |
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 for collectively evaluated portfolios is developed using multiple Moody’s Analytics (“Moody’s”) macroeconomic forecasts applied to internally developed credit models for a two year reasonable and supportable period. These forecasts are anchored on a 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. The baseline scenario is positioned at the 50th percentile of possible outcomes. Several upside and downside alternative scenarios are also derived from that baseline scenario and considered when assessing reasonably possible outcomes. The mix of macroeconomic variables underlying the December 2022 scenarios differ in some respects from the comparable forecasts available at December 2021, given the shift in economic circumstances and risks. The decrease in the allowance for credit losses at December 31, 2022 compared to December 31, 2021 reflects the improvements in economic conditions, particularly in the first half of the year, and in the Company’s credit quality metrics. I n arriving at the allowance for credit losses at December 31, 2022, the Company weighted Moody’s December 2022 baseline economic forecast at 25% and downside recessionary S-2 scenario at 75%. The December 2022 baseline scenario maintains a generally optimistic outlook in its assumptions surrounding the drivers of economic growth, including its expectations of the effectiveness of the Federal Reserve's monetary policy in easing inflationary conditions, while sustaining economic growth and resulting in only a modest decline in job growth. The S-2 scenario is less optimistic compared to the baseline, reflecting the view that supply chain issues worsen and keep inflation elevated longer than expected in the baseline scenario. In turn, the Federal Reserve responds by raising the target interest rate more than assumed in the baseline, the impact of which will cause the U.S. to fall into a recession in the first quarter of 2023 that lasts for three quarters. The decrease in the allowance for credit losses at December 31, 2021 as compared to December 31, 2020 reflects significant improvement in economic conditions during the year and in the economic outlook at such time. Such improvements allowed for the release of certain of the reserves built in 2020 in response to the economic damage and uncertainty that stemmed from the COVID-19 pandemic. In arriving at the allowance for credit losses at December 31, 2021, the Company weighted the baseline economic forecast at 40%, the slower near-term growth scenario S-2 at 60%. 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.
| 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 | $ | 4,020 |  | $ | 941 |  |  | $ | 6,974 |  | $ | 1,264 |
Commercial real estate - owner occupied |  | 1,461 |  |  | 692 |  |  |  | 4,921 |  |  | 729 |
Total commercial and industrial |  | 5,481 |  |  | 1,633 |  |  |  | 11,895 |  |  | 1,993 |
Commercial real estate - income producing |  | 1,240 |  |  | 1,174 |  |  |  | 5,458 |  |  | 5,207 |
Construction and land development |  | 309 |  |  | — |  |  |  | 844 |  |  | — |
Residential mortgages |  | 25,269 |  |  | 1,884 |  |  |  | 25,439 |  |  | 1,997 |
Consumer |  | 6,692 |  |  | — |  |  |  | 11,887 |  |  | 48 |
Total loans | $ | 38,991 |  | $ | 4,691 |  |  | $ | 55,523 |  | $ | 9,245 |
Nonaccrual loans include nonaccruing loans modified in troubled debt restructurings (TDRs) of $2.6 million and $6.8 million, at December 31, 2022 and 2021, respectively. Total TDRs, both accruing and nonaccruing, were $4.5 million at December 31, 2022 and $10.6 million at December 31, 2021. All TDRs are individually evaluated for credit loss. The table below presents detail by portfolio class TDRs that were modified during the years ended December 31, 2022, 2021 and 2020.
| Years Ended |
($ in thousands) | 2022 |  |  | 2021 |  |  | 2020 |
|  |  | Outstanding Recorded Investment |  |  |  |  | Outstanding Recorded Investment |  |  |  |  | Outstanding Recorded Investment |
Troubled Debt Restructurings: | Number of Contracts |  | Pre- Modification |  | Post- Modification |  |  | Number of Contracts |  | Pre- Modification |  | Post- Modification |  |  | Number of Contracts |  | Pre- Modification |  | Post- Modification |
Commercial non-real estate |  | — |  | $ | — |  | $ | — |  |  |  | 4 |  | $ | 7,232 |  | $ | 7,232 |  |  |  | 3 |  | $ | 745 |  | $ | 745 |
Commercial real estate - owner occupied |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | 1 |  |  | 297 |  |  | 297 |
Total commercial and industrial |  | — |  |  | — |  |  | — |  |  |  | 4 |  |  | 7,232 |  |  | 7,232 |  |  |  | 4 |  |  | 1,042 |  |  | 1,042 |
Commercial real estate - income producing |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |
Construction and land development |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | 1 |  |  | 15 |  |  | 15 |
Residential mortgages |  | 3 |  |  | 148 |  |  | 153 |  |  |  | 6 |  |  | 1,489 |  |  | 1,512 |  |  |  | 15 |  |  | 3,424 |  |  | 3,424 |
Consumer |  | 3 |  |  | 76 |  |  | 76 |  |  |  | 4 |  |  | 86 |  |  | 86 |  |  |  | 6 |  |  | 89 |  |  | 89 |
Total loans |  | 6 |  | $ | 224 |  | $ | 229 |  |  |  | 14 |  | $ | 8,807 |  | $ | 8,830 |  |  |  | 26 |  | $ | 4,570 |  | $ | 4,570 |
The TDRs modified during the year ended December 31, 2022 reflected in the table above include $0.1 million with reduced interest rates, and $0.1 million with other modifications. The TDRs modified during the year ended December 31, 2021 include $7.1 million of loans with extended amortization terms or other payment concessions, $0.5 million with reduced interest rates, and $1.2 million with other modifications. The TDRs modified during the year ended December 31, 2020 include $1.0 million of loans with extended terms or other payment concessions, $0.4 million of loans with significant covenant waivers, $1.1 million with reduced interest rates, and $2.1 million of other modifications. At December 31, 2022 and 2021, the Company had no unfunded commitments to borrowers whose loan terms had been modified in TDRs. Three commercial non real estate loans totaling $3.1 million and two residential mortgage and four consumer loans totaling $0.3 million had payment defaults during the year ended December 31, 2022, and had been modified in a TDR in the twelve months preceding default. One residential mortgage loan totaling $0.6 million had a payment default during the year ended December 31, 2021, and had been modified in a TDR in the twelve months preceding default. Two commercial non real estate loans totaling $13.4 million, two residential mortgage loans totaling $0.8 million and one consumer loan totaling less than $0.1 million had payment defaults during the year ended December 31, 2020, and had been modified in a TDR in the twelve months preceding default. The TDR disclosures above do not include loans eligible for exclusion from TDR assessment under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Eligible modification must be related to COVID-19, executed on a loan that was not more than 30 days past due as of December 31, 2019 and executed between March 1, 2020 and December 31, 2020. This exclusion relief was extended to January 1, 2022 by the Consolidated Appropriations Act, 2021. These loans are reported in the aging analysis that follows based on the modified terms. Aging Analysis The tables below present the aging analysis of past due loans by portfolio class at December 31, 2022 and 2021.
December 31, 2022 | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Greater Than 90 Days Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Recorded Investment > 90 Days and Accruing |
($ in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial non-real estate | $ | 4,050 |  | $ | 21,329 |  | $ | 3,418 |  | $ | 28,797 |  | $ | 10,117,656 |  | $ | 10,146,453 |  | $ | 996 |
Commercial real estate - owner occupied |  | 19,069 |  |  | 3,346 |  |  | 1,894 |  |  | 24,309 |  |  | 3,008,749 |  |  | 3,033,058 |  |  | 1,623 |
Total commercial and industrial |  | 23,119 |  |  | 24,675 |  |  | 5,312 |  |  | 53,106 |  |  | 13,126,405 |  |  | 13,179,511 |  |  | 2,619 |
Commercial real estate - income producing |  | 879 |  |  | — |  |  | 1,174 |  |  | 2,053 |  |  | 3,558,938 |  |  | 3,560,991 |  |  | — |
Construction and land development |  | 4,029 |  |  | 242 |  |  | 133 |  |  | 4,404 |  |  | 1,699,188 |  |  | 1,703,592 |  |  | 54 |
Residential mortgages |  | 28,208 |  |  | 11,056 |  |  | 17,346 |  |  | 56,610 |  |  | 3,035,995 |  |  | 3,092,605 |  |  | 293 |
Consumer |  | 8,845 |  |  | 2,806 |  |  | 4,407 |  |  | 16,058 |  |  | 1,561,289 |  |  | 1,577,347 |  |  | 1,619 |
Total loans | $ | 65,080 |  | $ | 38,779 |  | $ | 28,372 |  | $ | 132,231 |  | $ | 22,981,815 |  | $ | 23,114,046 |  | $ | 4,585 |
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 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 loans | $ | 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 December 31, 2022 and December 31, 2021.
| December 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 | $ | 9,641,117 |  | $ | 2,912,057 |  | $ | 12,553,174 |  | $ | 3,440,648 |  | $ | 1,690,756 |  | $ | 17,684,578 |
Pass-Watch |  | 284,843 |  |  | 49,093 |  |  | 333,936 |  |  | 111,587 |  |  | 12,097 |  |  | 457,620 |
Special Mention |  | 79,980 |  |  | 6,267 |  |  | 86,247 |  |  | 3,810 |  |  | 196 |  |  | 90,253 |
Substandard |  | 140,513 |  |  | 65,641 |  |  | 206,154 |  |  | 4,946 |  |  | 543 |  |  | 211,643 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 10,146,453 |  | $ | 3,033,058 |  | $ | 13,179,511 |  | $ | 3,560,991 |  | $ | 1,703,592 |  | $ | 18,444,094 |
| 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 |
| December 31, 2022 |  | December 31, 2021 |
($ in thousands) | Residential Mortgage |  | Consumer |  | Total |  | Residential Mortgage |  | Consumer |  | Total |
Performing | $ | 3,066,319 |  | $ | 1,570,186 |  | $ | 4,636,505 |  | $ | 2,396,282 |  | $ | 1,570,516 |  | $ | 3,966,798 |
Nonperforming |  | 26,286 |  |  | 7,161 |  |  | 33,447 |  |  | 27,608 |  |  | 12,874 |  |  | 40,482 |
Total | $ | 3,092,605 |  | $ | 1,577,347 |  | $ | 4,669,952 |  | $ | 2,423,890 |  | $ | 1,583,390 |  | $ | 4,007,280 |
The Company routinely assesses the ratings of loans in its portfolio through an established and comprehensive portfolio management process. 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 an 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 present credit quality disclosures of amortized cost by segment and vintage for term loans and by revolving and revolving converted to amortizing at December 31, 2022 and 2021. The Company defines vintage as the later of origination, renewal or restructure date.
| Term Loans |  |  |  |  |  |  |
| Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
December 31, 2022 ($ in thousands) | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term Loans |  | Total |
Commercial Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 4,789,035 |  | $ | 3,608,540 |  | $ | 2,026,017 |  | $ | 1,327,839 |  | $ | 779,966 |  | $ | 1,539,131 |  | $ | 3,482,828 |  | $ | 131,222 |  | $ | 17,684,578 |
Pass-Watch |  | 84,696 |  |  | 64,263 |  |  | 94,484 |  |  | 46,483 |  |  | 31,375 |  |  | 58,567 |  |  | 67,767 |  |  | 9,985 |  | $ | 457,620 |
Special Mention |  | 30,511 |  |  | 13,625 |  |  | 3,694 |  |  | 7,749 |  |  | 1,719 |  |  | 5,701 |  |  | 25,184 |  |  | 2,070 |  | $ | 90,253 |
Substandard |  | 50,016 |  |  | 14,409 |  |  | 21,266 |  |  | 29,350 |  |  | 21,637 |  |  | 23,593 |  |  | 40,213 |  |  | 11,159 |  | $ | 211,643 |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total Commercial Loans | $ | 4,954,258 |  | $ | 3,700,837 |  | $ | 2,145,461 |  | $ | 1,411,421 |  | $ | 834,697 |  | $ | 1,626,992 |  | $ | 3,615,992 |  | $ | 154,436 |  | $ | 18,444,094 |
Residential Mortgage and Consumer Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 735,080 |  | $ | 752,352 |  | $ | 564,345 |  | $ | 255,146 |  | $ | 149,234 |  | $ | 959,409 |  | $ | 1,216,105 |  | $ | 4,834 |  |  | 4,636,505 |
Nonperforming |  | 1,251 |  |  | 2,632 |  |  | 944 |  |  | 1,954 |  |  | 2,461 |  |  | 22,143 |  |  | 459 |  |  | 1,603 |  |  | 33,447 |
Total Consumer Loans | $ | 736,331 |  | $ | 754,984 |  | $ | 565,289 |  | $ | 257,100 |  | $ | 151,695 |  | $ | 981,552 |  | $ | 1,216,564 |  | $ | 6,437 |  | $ | 4,669,952 |
| Term Loans |  |  |  |  |  |  |
| Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
December 31, 2021 ($ in thousands) | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans |  | Revolving Loans Converted to Term Loans |  | Total |
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 are $4.9 million and $4.4 million of consumer loans secured by single family residential mortgage real estate that are in process of foreclosure as of December 31, 2022 and 2021, respectively. In addition to the single family residential real estate loans in process of foreclosure, the Company also held $0.4 million and $2.4 million of foreclosed single family residential properties in other real estate owned as of December 31, 2022 and 2021, respectively. Loans Held for Sale Loans held for sale totaled $26.4 million and $93.1 million, respectively, at December 31, 2022 and 2021. At December 31, 2022, residential mortgage loans carried at the fair value option totaled $10.8 million with an unpaid principal balance of $10.6 million. All other loans held for sale are carried at lower of cost or market.

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