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Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2022
Receivables [Abstract] |
Allowance for Credit Losses | Allowance for Credit Losses (In Thousands) The following is a summary of total non purchased and purchased loans as of the dates presented:
| September 30, 2022 |  | December 31, 2021
Commercial, financial, agricultural (1) | $ | 1,513,091 |  |  | $ | 1,423,270 |
Lease financing | 108,517 |  |  | 80,192 |
Real estate – construction: |  |  |
Residential | 359,754 |  |  | 302,275 |
Commercial | 855,302 |  |  | 802,621 |
Total real estate – construction | 1,215,056 |  |  | 1,104,896 |
Real estate – 1-4 family mortgage: |  |  |
Primary | 2,144,119 |  |  | 1,816,120 |
Home equity | 499,626 |  |  | 474,604 |
Rental/investment | 322,844 |  |  | 288,474 |
Land development | 161,300 |  |  | 145,048 |
Total real estate – 1-4 family mortgage | 3,127,889 |  |  | 2,724,246 |
Real estate – commercial mortgage: |  |  |
Owner-occupied | 1,562,952 |  |  | 1,563,351 |
Non-owner occupied | 3,320,116 |  |  | 2,856,947 |
Land development | 133,597 |  |  | 128,739 |
Total real estate – commercial mortgage | 5,016,665 |  |  | 4,549,037 |
Installment loans to individuals | 128,946 |  |  | 143,340 |
Gross loans | 11,110,164 |  |  | 10,024,981 |
Unearned income | (5,160) |  |  | (4,067) |
Loans, net of unearned income | 11,105,004 |  |  | 10,020,914 |
Allowance for credit losses on loans | (174,356) |  |  | (164,171) |
Net loans | $ | 10,930,648 |  |  | $ | 9,856,743 |
(1)Includes Paycheck Protection Program (“PPP”) loans of $5,476 and $58,391 as of September 30, 2022 and December 31, 2021, respectively. Allowance for Credit Losses on Loans The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire loan portfolio. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is accounted for as a separate liability in the Consolidated Balance Sheets. The allowance for credit losses on loans held for investment, as reported in the Company’s Consolidated Balance Sheets, is adjusted by a provision for credit losses, which is reported in earnings, and reduced by net charge-offs. Loan losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of September 30, 2022 and December 31, 2021, the Company had accrued interest receivable for loans of $45,293 and $41,692, respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program established in 2020 in response to the COVID-19 pandemic of $1,263 and $1,273, respectively, as of September 30, 2022 and December 31, 2021. The following tables provide a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending balance of the allowance based on the Company’s credit loss methodology for the periods presented:
| Commercial |  | Real Estate - Construction |  | Real Estate - 1-4 Family Mortgage |  | Real Estate - Commercial Mortgage |  | Lease Financing |  | Installment Loans to Individuals |  | Total
Three Months Ended September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 30,193 |  |  | $ | 17,290 |  |  | $ | 41,910 |  |  | $ | 64,373 |  |  | $ | 1,802 |  |  | $ | 10,563 |  |  | $ | 166,131 |
Charge-offs | (373) |  |  | — |  |  | (208) |  |  | (1,956) |  |  | — |  |  | (722) |  |  | (3,259) |
Recoveries | 415 |  |  | — |  |  | 378 |  |  | 50 |  |  | 113 |  |  | 728 |  |  | 1,684 |
Net (charge-offs) recoveries | 42 |  |  | — |  |  | 170 |  |  | (1,906) |  |  | 113 |  |  | 6 |  |  | (1,575) |
(Recovery of) provision for credit losses on loans | 268 |  |  | 1,454 |  |  | 1,452 |  |  | 6,800 |  |  | 399 |  |  | (573) |  |  | 9,800 |
Ending balance | $ | 30,503 |  |  | $ | 18,744 |  |  | $ | 43,532 |  |  | $ | 69,267 |  |  | $ | 2,314 |  |  | $ | 9,996 |  |  | $ | 174,356 |
Nine Months Ended September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 33,922 |  |  | $ | 16,419 |  |  | $ | 32,356 |  |  | $ | 68,940 |  |  | $ | 1,486 |  |  | $ | 11,048 |  |  | $ | 164,171 |
Impact of PCD loans acquired during the period | 1,648 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,648 |
Charge-offs | (4,714) |  |  | — |  |  | (532) |  |  | (2,670) |  |  | (7) |  |  | (2,351) |  |  | (10,274) |
Recoveries | 1,982 |  |  | — |  |  | 725 |  |  | 397 |  |  | 136 |  |  | 2,271 |  |  | 5,511 |
Net (charge-offs) recoveries | (2,732) |  |  | — |  |  | 193 |  |  | (2,273) |  |  | 129 |  |  | (80) |  |  | (4,763) |
(Recovery of) provision for credit losses on loans | (2,335) |  |  | 2,325 |  |  | 10,983 |  |  | 2,600 |  |  | 699 |  |  | (972) |  |  | 13,300 |
Ending balance | $ | 30,503 |  |  | $ | 18,744 |  |  | $ | 43,532 |  |  | $ | 69,267 |  |  | $ | 2,314 |  |  | $ | 9,996 |  |  | $ | 174,356 |
Period-End Amount Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 4,064 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,649 |  |  | $ | — |  |  | $ | 370 |  |  | $ | 7,083 |
Collectively evaluated | 26,439 |  |  | 18,744 |  |  | 43,532 |  |  | 66,618 |  |  | 2,314 |  |  | 9,626 |  |  | 167,273 |
Ending balance | $ | 30,503 |  |  | $ | 18,744 |  |  | $ | 43,532 |  |  | $ | 69,267 |  |  | $ | 2,314 |  |  | $ | 9,996 |  |  | $ | 174,356 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 9,088 |  |  | $ | 153 |  |  | $ | 5,965 |  |  | $ | 19,043 |  |  | $ | — |  |  | $ | 370 |  |  | $ | 34,619 |
Collectively evaluated | 1,504,003 |  |  | 1,214,903 |  |  | 3,121,924 |  |  | 4,997,622 |  |  | 103,357 |  |  | 128,576 |  |  | 11,070,385 |
Ending balance | $ | 1,513,091 |  |  | $ | 1,215,056 |  |  | $ | 3,127,889 |  |  | $ | 5,016,665 |  |  | $ | 103,357 |  |  | $ | 128,946 |  |  | $ | 11,105,004 |
Nonaccruing loans with no allowance for credit losses | $ | 429 |  |  | $ | 153 |  |  | $ | 5,809 |  |  | $ | 4,633 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 11,026 |
| Commercial |  | Real Estate - Construction |  | Real Estate - 1-4 Family Mortgage |  | Real Estate - Commercial Mortgage |  | Lease Financing |  | Installment Loans to Individuals |  | Total
Three Months Ended September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 36,994 |  |  | $ | 15,729 |  |  | $ | 31,303 |  |  | $ | 74,893 |  |  | $ | 1,511 |  |  | $ | 11,924 |  |  | $ | 172,354 |
Charge-offs | (1,225) |  |  | — |  |  | (276) |  |  | (184) |  |  | (13) |  |  | (1,281) |  |  | (2,979) |
Recoveries | 418 |  |  | — |  |  | 193 |  |  | 190 |  |  | 11 |  |  | 1,051 |  |  | 1,863 |
Net (charge-offs) recoveries | (807) |  |  | — |  |  | (83) |  |  | 6 |  |  | (2) |  |  | (230) |  |  | (1,116) |
(Recovery of) Provision for credit losses on loans | (1,210) |  |  | 440 |  |  | 961 |  |  | (1,004) |  |  | 61 |  |  | (448) |  |  | (1,200) |
Ending balance | $ | 34,977 |  |  | $ | 16,169 |  |  | $ | 32,181 |  |  | $ | 73,895 |  |  | $ | 1,570 |  |  | $ | 11,246 |  |  | $ | 170,038 |
Nine Months Ended September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 39,031 |  |  | $ | 16,047 |  |  | $ | 32,165 |  |  | $ | 76,127 |  |  | $ | 1,624 |  |  | $ | 11,150 |  |  | $ | 176,144 |
Charge-offs | (5,907) |  |  | (52) |  |  | (529) |  |  | (416) |  |  | (13) |  |  | (4,286) |  |  | (11,203) |
Recoveries | 940 |  |  | 13 |  |  | 855 |  |  | 504 |  |  | 36 |  |  | 3,949 |  |  | 6,297 |
Net (charge-offs) recoveries | (4,967) |  |  | (39) |  |  | 326 |  |  | 88 |  |  | 23 |  |  | (337) |  |  | (4,906) |
(Recovery of) Provision for credit losses on loans | 913 |  |  | 161 |  |  | (310) |  |  | (2,320) |  |  | (77) |  |  | 433 |  |  | (1,200) |
Ending balance | $ | 34,977 |  |  | $ | 16,169 |  |  | $ | 32,181 |  |  | $ | 73,895 |  |  | $ | 1,570 |  |  | $ | 11,246 |  |  | $ | 170,038 |
Period-End Amount Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 9,717 |  |  | $ | — |  |  | $ | 206 |  |  | $ | 5,968 |  |  | $ | — |  |  | $ | 607 |  |  | $ | 16,498 |
Collectively evaluated | 25,260 |  |  | 16,169 |  |  | 31,975 |  |  | 67,927 |  |  | 1,570 |  |  | 10,639 |  |  | 153,540 |
Ending balance | $ | 34,977 |  |  | $ | 16,169 |  |  | $ | 32,181 |  |  | $ | 73,895 |  |  | $ | 1,570 |  |  | $ | 11,246 |  |  | $ | 170,038 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 15,193 |  |  | $ | — |  |  | $ | 5,311 |  |  | $ | 19,120 |  |  | $ | — |  |  | $ | 617 |  |  | $ | 40,241 |
Collectively evaluated | 1,420,826 |  |  | 1,091,296 |  |  | 2,719,432 |  |  | 4,516,610 |  |  | 79,215 |  |  | 149,204 |  |  | 9,976,583 |
Ending balance | $ | 1,436,019 |  |  | $ | 1,091,296 |  |  | $ | 2,724,743 |  |  | $ | 4,535,730 |  |  | $ | 79,215 |  |  | $ | 149,821 |  |  | $ | 10,016,824 |
Nonaccruing loans with no allowance for credit losses | $ | 2,658 |  |  | $ | — |  |  | $ | 3,039 |  |  | $ | 2,865 |  |  | $ | — |  |  | $ | 10 |  |  | $ | 8,572 |
The Company recorded a provision for credit losses of $9,800 during the third quarter of 2022, as compared to a negative provision for credit losses $1,200 recorded in the third quarter of 2021. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The provision activity during the current quarter was primarily driven by strong loan growth. Allowance for Credit Losses on Unfunded Loan Commitments The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses on unfunded loan commitments, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended September 30, | 2022 | 2021
Allowance for credit losses on unfunded loan commitments: |  |
Beginning balance | $ | 19,935 |  | $ | 20,535 |
Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense) | — |  | (200) |
Ending balance | $ | 19,935 |  | $ | 20,335 |
Nine Months Ended September 30, | 2022 | 2021
Allowance for credit losses on unfunded loan commitments: |  |
Beginning balance | $ | 20,035 |  | $ | 20,535 |
Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense) | (100) |  | (200) |
Ending balance | $ | 19,935 |  | $ | 20,335 |

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