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Loans, Allowance for Credit Losses, and Asset Quality Information | 12 Months Ended
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Dec. 31, 2022
Receivables [Abstract] |
Loans, Allowance for Credit Losses, and Asset Quality Information | Loans, Allowance for Credit Losses, and Asset Quality Information The following is a summary of the major categories of total loans outstanding:
| December 31, 2022 |  | December 31, 2021
($ in thousands) | Amount |  | Percentage |  | Amount |  | Percentage
Commercial, financial, and agricultural | $ | 641,941 |  |  | 9 | % |  | 648,997 |  |  | 11 | %
Real estate – construction, land development & other land loans | 934,176 |  |  | 14 | % |  | 828,549 |  |  | 13 | %
Real estate mortgage – residential (1-4 family) first mortgages | 1,195,785 |  |  | 18 | % |  | 1,021,966 |  |  | 17 | %
Real estate mortgage – home equity loans/lines of credit | 323,726 |  |  | 5 | % |  | 331,932 |  |  | 5 | %
Real estate mortgage – commercial and other | 3,510,261 |  |  | 53 | % |  | 3,194,737 |  |  | 53 | %
Consumer loans | 60,659 |  |  | 1 | % |  | 57,238 |  |  | 1 | %
Subtotal | 6,666,548 |  |  | 100 | % |  | 6,083,419 |  |  | 100 | %
Unamortized net deferred loan fees | (1,403) |  |  |  |  | (1,704) |  |  |
Total loans | $ | 6,665,145 |  |  |  |  | 6,081,715 |  |  |
Also included in the table above are SBA loans, generally originated under the SBA 7A loan program, with additional information on these loans presented in the table below.
($ in thousands) | December 31, 2022 |  | December 31, 2021
Guaranteed portions of SBA Loans included in table above | $ | 31,893 |  |  | 48,377 |
Unguaranteed portions of SBA Loans included in table above | 116,910 |  |  | 122,772 |
Total SBA loans included in the table above | $ | 148,803 |  |  | 171,149 |
Sold portions of SBA loans with servicing retained - not included in table above | $ | 392,370 |  |  | 414,240 |
As of December 31, 2022, there were essentially no remaining loans originated under the SBA's Paycheck Protection Program ("PPP") as provided for under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") of 2020. As of December 31, 2021, the Company had $39.0 million in remaining PPP loans which have been excluded from the above SBA 7A Loan program table. At December 31, 2022 and December 31, 2021, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $4.3 million and $6.0 million respectively. At December 31, 2022 and December 31, 2021, loans in the amount of $5.3 billion and $4.3 billion, respectively, were pledged as collateral for certain borrowings. Refer to Note 9 for further discussion. Total loans at December 31, 2022 and 2021 included loans to executive officers and directors of the Company, and their associates, totaling approximately $6.0 million and $0.6 million, respectively. There were six new loans and advances totaling approximately $5.5 million on those loans in 2022 and repayments amounted to $0.1 million. Management does not believe these loans involve more than the normal risk of collectability or present other unfavorable features. For acquisitions completed prior to the Company's adoption of CECL, loans designated as PCI loans were reclassified as PCD loans, upon the adoption of CECL. Activity in the accretable yield for PCI loans under the Incurred Loss methodology used by the Company prior to adopting CECL was not material for the year ended December 31, 2020. As of December 31, 2022 and 2021, unamortized discounts on all acquired loans totaled $11.6 million and $17.2 million, respectively. Loan discounts are generally amortized as yield adjustments over the respective lives of the loans, while the loans perform. Nonperforming assets, defined as nonaccrual loans, troubled debt restructurings, loans past due 90 or more days and still accruing interest, and foreclosed real estate, are summarized as follows:
($ in thousands) | December 31, 2022 |  | December 31, 2021
Nonperforming assets |  |  |
Nonaccrual loans | $ | 28,514 |  |  | 34,696 |
Restructured loans - accruing | 9,121 |  |  | 13,866 |
Accruing loans > 90 days past due | — |  |  | 1,004 |
Total nonperforming loans | 37,635 |  |  | 49,566 |
Foreclosed properties | 658 |  |  | 3,071 |
Total nonperforming assets | $ | 38,293 |  |  | 52,637 |
At December 31, 2022 and 2021, the Company had $0.8 million and $1.5 million in residential mortgage loans in process of foreclosure, respectively. At December 31, 2022, there was one loan with an immaterial commitment to lend additional funds to borrowers whose loans were nonperforming. At December 31, 2021, there were no commitments to lend additional funds to debtors whose loans were nonperforming. The following table is a summary of the Company’s nonaccrual loans by major categories for the year ended December 31, 2022.
($ in thousands) |  | Nonaccrual Loans with No Allowance |  | Nonaccrual Loans with an Allowance |  | Total Nonaccrual Loans
Commercial, financial, and agricultural |  | $ | 3,855 |  |  | 6,374 |  |  | 10,229 |
Real estate – construction, land development & other land loans |  | — |  |  | 1,009 |  |  | 1,009 |
Real estate mortgage – residential (1-4 family) first mortgages |  | 157 |  |  | 3,132 |  |  | 3,289 |
Real estate mortgage – home equity loans/lines of credit |  | — |  |  | 1,397 |  |  | 1,397 |
Real estate mortgage – commercial and other |  | 5,010 |  |  | 7,495 |  |  | 12,505 |
Consumer loans |  | — |  |  | 85 |  |  | 85 |
Total |  | $ | 9,022 |  |  | 19,492 |  |  | 28,514 |
The following table is a summary of the Company’s nonaccrual loans by major categories for the year ended December 31, 2021.
($ in thousands) |  | Nonaccrual Loans with No Allowance |  | Nonaccrual Loans with an Allowance |  | Total Nonaccrual Loans
Commercial, financial, and agricultural |  | $ | 3,947 |  |  | 8,205 |  |  | 12,152 |
Real estate – construction, land development & other land loans |  | 495 |  |  | 137 |  |  | 632 |
Real estate mortgage – residential (1-4 family) first mortgages |  | 858 |  |  | 4,040 |  |  | 4,898 |
Real estate mortgage – home equity loans/lines of credit |  | — |  |  | 694 |  |  | 694 |
Real estate mortgage – commercial and other |  | 7,648 |  |  | 8,583 |  |  | 16,231 |
Consumer loans |  | — |  |  | 89 |  |  | 89 |
Total |  | $ | 12,948 |  |  | 21,748 |  |  | 34,696 |
There is no interest income recognized during the periods presented on nonaccrual loans. The Company follows its nonaccrual policy of reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. The following table represents the accrued interest receivables written off by reversing interest income for the periods indicate.
($ in thousands) | Year Ended December 31, 2022 | Year Ended December 31, 2021
Commercial, financial, and agricultural | $ | 102 |  | 195 |
Real estate – construction, land development & other land loans | 16 |  | 6 |
Real estate mortgage – residential (1-4 family) first mortgages | 45 |  | 31 |
Real estate mortgage – home equity loans/lines of credit | 20 |  | 14 |
Real estate mortgage – commercial and other | 139 |  | 453 |
Consumer loans | 2 |  | — |
Total | $ | 324 |  | 699 |
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2022.
($ in thousands) | Accruing 30-59 Days Past Due |  | Accruing 60- 89 Days Past Due |  | Accruing 90 Days or More Past Due |  | Nonaccrual Loans |  | Accruing Current |  | Total Loans Receivable
Commercial, financial, and agricultural | $ | 438 |  |  | 565 |  |  | — |  |  | 10,229 |  |  | 630,709 |  |  | 641,941 |
Real estate – construction, land development & other land loans | 238 |  |  | 1,687 |  |  | — |  |  | 1,009 |  |  | 931,242 |  |  | 934,176 |
Real estate mortgage – residential (1-4 family) first mortgages | 3,415 |  |  | 25 |  |  | — |  |  | 3,289 |  |  | 1,189,056 |  |  | 1,195,785 |
Real estate mortgage – home equity loans/lines of credit | 457 |  |  | 371 |  |  | — |  |  | 1,397 |  |  | 321,501 |  |  | 323,726 |
Real estate mortgage – commercial and other | 620 |  |  | 97 |  |  | — |  |  | 12,505 |  |  | 3,497,039 |  |  | 3,510,261 |
Consumer loans | 249 |  |  | 66 |  |  | — |  |  | 85 |  |  | 60,259 |  |  | 60,659 |
Total | $ | 5,417 |  |  | 2,811 |  |  | — |  |  | 28,514 |  |  | 6,629,806 |  |  | 6,666,548 |
Unamortized net deferred loan fees |  |  |  |  |  |  |  |  |  | (1,403) |
Total loans |  |  |  |  |  |  |  |  |  |  | $ | 6,665,145 |
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2021.
($ in thousands) | Accruing 30-59 Days Past Due |  | Accruing 60- 89 Days Past Due |  | Accruing 90 Days or More Past Due |  | Nonaccrual Loans |  | Accruing Current |  | Total Loans Receivable
Commercial, financial, and agricultural | $ | 377 |  |  | 93 |  |  | — |  |  | 12,152 |  |  | 636,375 |  |  | 648,997 |
Real estate – construction, land development & other land loans | 4,046 |  |  | — |  |  | 286 |  |  | 632 |  |  | 823,585 |  |  | 828,549 |
Real estate mortgage – residential (1-4 family) first mortgages | 6,571 |  |  | 1,488 |  |  | — |  |  | 4,898 |  |  | 1,009,009 |  |  | 1,021,966 |
Real estate mortgage – home equity loans/lines of credit | 489 |  |  | 124 |  |  | 718 |  |  | 694 |  |  | 329,907 |  |  | 331,932 |
Real estate mortgage – commercial and other | 164 |  |  | 1,496 |  |  | — |  |  | 16,231 |  |  | 3,176,846 |  |  | 3,194,737 |
Consumer loans | 116 |  |  | 62 |  |  | — |  |  | 89 |  |  | 56,971 |  |  | 57,238 |
Total | $ | 11,763 |  |  | 3,263 |  |  | 1,004 |  |  | 34,696 |  |  | 6,032,693 |  |  | 6,083,419 |
Unamortized net deferred loan (fees) costs |  |  |  |  |  |  |  |  |  | (1,704) |
Total loans |  |  |  |  |  |  |  |  |  |  | $ | 6,081,715 |
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans on nonaccrual with a net book balance of $350,000 or greater for designation as collateral dependent loans, as well as certain other loans that may still be accruing interest and/or are less than $350,000 in size that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. The following table presents an analysis of collateral-dependent loans of the Company as of December 31, 2022.
($ in thousands) | Residential Property |  | Business Assets |  | Land |  | Commercial Property |  | Total Collateral-Dependent Loans
Commercial, financial, and agricultural | $ | — |  |  | 6,394 |  |  | — |  |  | — |  |  | 6,394 |
Real estate mortgage – residential (1-4 family) first mortgages | 157 |  |  | — |  |  | — |  |  | — |  |  | 157 |
Real estate mortgage – commercial and other | — |  |  | — |  |  | — |  |  | 6,723 |  |  | 6,723 |
Total | $ | 157 |  |  | 6,394 |  |  | — |  |  | 6,723 |  |  | 13,274 |
The following table presents an analysis of collateral-dependent loans of the Company as of December 31, 2021.
($ in thousands) | Residential Property |  | Business Assets |  | Land |  | Commercial Property |  | Total Collateral-Dependent Loans
Commercial, financial, and agricultural | $ | — |  |  | 7,886 |  |  | — |  |  | — |  |  | 7,886 |
Real estate – construction, land development & other land loans | — |  |  | — |  |  | 533 |  |  | — |  |  | 533 |
Real estate mortgage – residential (1-4 family) first mortgages | 871 |  |  | — |  |  | — |  |  | — |  |  | 871 |
Real estate mortgage – commercial and other | — |  |  | — |  |  | — |  |  | 10,743 |  |  | 10,743 |
Total | $ | 871 |  |  | 7,886 |  |  | 533 |  |  | 10,743 |  |  | 20,033 |
Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The Company's policy is to obtain third-party appraisals on any significant pieces of collateral. For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90% of the appraised value, which considers estimated selling costs. For real estate collateral that is in industries that are undergoing heightened stress, the Company often discounts the collateral values by an additional 10% to 25% due to additional discounts that are estimated to be incurred in a near-term sale. For non real-estate collateral secured loans, the Company generally writes nonaccrual loans down to 75% of the appraised value, which provides for selling costs and liquidity discounts that are usually incurred when disposing of non real-estate collateral. For reviewed loans that are not on nonaccrual basis, the Company assigns a specific allowance based on the parameters noted above. The Company does not believe that there is significant over-coverage of collateral for any of the loan types noted above. The following tables presents the activity in the ACL on loans for the periods indicated. The increase in ACL at December 31, 2022 as compared to the prior year was related to a combination of the allowance required for loan growth during the year, and updated economic forecasts and loss driver inputs to the CECL model. Throughout 2022, the economic forecasts have projected general weakening of the economy demonstrated by higher projected unemployment rates, lower GDP, and declining price indices for both commercial real estate and residential mortgages. These worsening economic projections translated to higher forecasted life of loan losses in our portfolio and a higher estimated ACL.
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate - Construction, Land Development & Other Land Loans |  | Real Estate Mortgage - Residential (1-4 Family) First Mortgages |  | Real Estate Mortgage - Home Equity Loans/Lines of Credit |  | Real Estate Mortgage - Commercial and Other |  | Consumer Loans |  | Total
As of and for the year ended December 31, 2022
Beginning balance | $ | 16,249 |  |  | 16,519 |  |  | 8,686 |  |  | 4,337 |  |  | 30,342 |  |  | 2,656 |  |  | 78,789 |
Charge-offs | (2,519) |  |  | — |  |  | — |  |  | (43) |  |  | (1,063) |  |  | (840) |  |  | (4,465) |
Recoveries | 756 |  |  | 480 |  |  | 17 |  |  | 600 |  |  | 1,983 |  |  | 207 |  |  | 4,043 |
Provisions/(Reversals) | 3,232 |  |  | (1,871) |  |  | 2,651 |  |  | (1,736) |  |  | 9,447 |  |  | 877 |  |  | 12,600 |
Ending balance | $ | 17,718 |  |  | 15,128 |  |  | 11,354 |  |  | 3,158 |  |  | 40,709 |  |  | 2,900 |  |  | 90,967 |
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate - Construction, Land Development & Other Land Loans |  | Real Estate Mortgage - Residential (1-4 Family) First Mortgages |  | Real Estate Mortgage - Home Equity Loans/Lines of Credit |  | Real Estate Mortgage - Commercial and Other |  | Consumer loans |  | Unallocated |  | Total
As of and for the year ended December 31, 2021
Beginning balance | $ | 11,316 |  |  | 5,355 |  |  | 8,048 |  |  | 2,375 |  |  | 23,603 |  |  | 1,478 |  |  | 213 |  |  | 52,388 |
Adjustment for implementation of CECL | 3,067 |  |  | 6,140 |  |  | 2,584 |  |  | 2,580 |  |  | (257) |  |  | 674 |  |  | (213) |  |  | 14,575 |
Allowance for Select PCD loans | 2,917 |  |  | 165 |  |  | 222 |  |  | 92 |  |  | 1,489 |  |  | 10 |  |  | — |  |  | 4,895 |
Charge-offs | (3,722) |  |  | (245) |  |  | (273) |  |  | (400) |  |  | (2,295) |  |  | (667) |  |  | — |  |  | (7,602) |
Recoveries | 1,744 |  |  | 948 |  |  | 761 |  |  | 578 |  |  | 533 |  |  | 358 |  |  | — |  |  | 4,922 |
Provisions/ (Reversals) | 927 |  |  | 4,156 |  |  | (2,656) |  |  | (888) |  |  | 7,269 |  |  | 803 |  |  | — |  |  | 9,611 |
Ending balance | $ | 16,249 |  |  | 16,519 |  |  | 8,686 |  |  | 4,337 |  |  | 30,342 |  |  | 2,656 |  |  | — |  |  | 78,789 |
The following table presents the activity in the allowance for loan losses for the year ended December 31, 2020 under the Incurred Loss methodology.
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate - Construction, Land Development & Other Land Loans |  | Real Estate Mortgage - Residential (1-4 Family) First Mortgages |  | Real Estate Mortgage - Home Equity Loans/Lines of Credit |  | Real Estate Mortgage - Commercial and Other |  | Consumer loans |  | Unallo- cated |  | Total
As of and for the year ended December 31, 2020
Beginning balance | $ | 4,553 |  |  | 1,976 |  |  | 3,832 |  |  | 1,127 |  |  | 8,938 |  |  | 972 |  |  | — |  |  | 21,398 |
Charge-offs | (5,608) |  |  | (51) |  |  | (478) |  |  | (524) |  |  | (968) |  |  | (873) |  |  | — |  |  | (8,502) |
Recoveries | 745 |  |  | 1,552 |  |  | 754 |  |  | 487 |  |  | 621 |  |  | 294 |  |  | — |  |  | 4,453 |
Provisions | 11,626 |  |  | 1,878 |  |  | 3,940 |  |  | 1,285 |  |  | 15,012 |  |  | 1,085 |  |  | 213 |  |  | 35,039 |
Ending balance | $ | 11,316 |  |  | 5,355 |  |  | 8,048 |  |  | 2,375 |  |  | 23,603 |  |  | 1,478 |  |  | 213 |  |  | 52,388 |
Ending balances as of December 31, 2020: Allowance for loan losses
Individually evaluated for impairment | $ | 3,546 |  |  | 30 |  |  | 800 |  |  | — |  |  | 2,175 |  |  | — |  |  | — |  |  | 6,551 |
Collectively evaluated for impairment | 7,742 |  |  | 5,325 |  |  | 7,141 |  |  | 2,375 |  |  | 21,428 |  |  | 1,475 |  |  | 213 |  |  | 45,699 |
Purchased credit impaired | 28 |  |  | — |  |  | 107 |  |  | — |  |  | — |  |  | 3 |  |  | — |  |  | 138 |
Loans receivable as of December 31, 2020:
Ending balance – total | $ | 782,549 |  |  | 570,672 |  |  | 972,378 |  |  | 306,256 |  |  | 2,049,203 |  |  | 53,955 |  |  | — |  |  | 4,735,013 |
Unamortized net deferred loan fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3,698) |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,731,315 |
Ending balances as of December 31, 2020: Loans
Individually evaluated for impairment | $ | 7,700 |  |  | 677 |  |  | 9,303 |  |  | 15 |  |  | 18,582 |  |  | 4 |  |  | — |  |  | 36,281 |
Collectively evaluated for impairment | 774,712 |  |  | 569,845 |  |  | 958,848 |  |  | 306,141 |  |  | 2,026,682 |  |  | 53,913 |  |  | — |  |  | 4,690,141 |
Purchased credit impaired | 137 |  |  | 150 |  |  | 4,227 |  |  | 100 |  |  | 3,939 |  |  | 38 |  |  | — |  |  | 8,591 |
Interest income recorded on impaired loans during the year ended December 31, 2020 was $1.1 million, and reflects interest income recorded on nonaccrual loans prior to them being placed on nonaccrual status and interest income recorded on accruing TDRs. Credit Quality Indicators The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type. The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
| Risk Grade | Description
Pass: |
| 1 | Loans with virtually no risk, including cash secured loans.
| 2 | Loans with documented significant overall financial strength. These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
| 3 | Loans with documented satisfactory overall financial strength. These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
| 4 | Loans to borrowers with acceptable financial condition. These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.
| 5 | Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management. Collateral is generally available and felt to provide reasonable coverage with realizable liquidation values in normal circumstances. Repayment performance is satisfactory.
| P (Pass) | Consumer loans that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels. These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.
Special Mention: |
| 6 | Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Company.
Classified: |
| 7 | An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
| 8 | Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable. Loss appears imminent, but the exact amount and timing is uncertain.
| 9 | Loans that are considered uncollectible and are in the process of being charged-off. This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
| F (Fail) | Consumer loans with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of December 31, 2022. Acquired loans are presented in the year originated, not in the year of acquisition.
| Term Loans by Year of Origination |  |  |  |
($ in thousands) | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving |  | Total
Commercial, financial, and agricultural
Pass | $ | 185,167 |  |  | 107,747 |  |  | 85,110 |  |  | 51,274 |  |  | 590 |  |  | 76,588 |  |  | 120,590 |  |  | 627,066 |
Special Mention | 342 |  |  | 166 |  |  | 648 |  |  | 1,312 |  |  | — |  |  | 990 |  |  | 332 |  |  | 3,790 |
Classified | 734 |  |  | 1,909 |  |  | 808 |  |  | 1,384 |  |  | — |  |  | 5,762 |  |  | 488 |  |  | 11,085 |
Total commercial, financial, and agricultural | 186,243 |  |  | 109,822 |  |  | 86,566 |  |  | 53,970 |  |  | 590 |  |  | 83,340 |  |  | 121,410 |  |  | 641,941 |
Real estate – construction, land development & other land loans
Pass | 550,752 |  |  | 267,096 |  |  | 42,421 |  |  | 30,973 |  |  | — |  |  | 12,722 |  |  | 19,519 |  |  | 923,483 |
Special Mention | 5,128 |  |  | 5 |  |  | 3,679 |  |  | — |  |  | — |  |  | 100 |  |  | 13 |  |  | 8,925 |
Classified | 656 |  |  | 107 |  |  | 38 |  |  | 899 |  |  | — |  |  | 44 |  |  | 24 |  |  | 1,768 |
Total real estate – construction, development & other land loans | 556,536 |  |  | 267,208 |  |  | 46,138 |  |  | 31,872 |  |  | — |  |  | 12,866 |  |  | 19,556 |  |  | 934,176 |
Real estate mortgage – residential (1-4 family) first mortgages
Pass | 317,282 |  |  | 274,756 |  |  | 186,102 |  |  | 98,559 |  |  | 185 |  |  | 301,885 |  |  | 1,379 |  |  | 1,180,148 |
Special Mention | 1,189 |  |  | 127 |  |  | 110 |  |  | 470 |  |  | — |  |  | 2,416 |  |  | — |  |  | 4,312 |
Classified | 763 |  |  | 251 |  |  | 221 |  |  | 359 |  |  | — |  |  | 9,072 |  |  | 659 |  |  | 11,325 |
Total real estate mortgage – residential (1-4 family) first mortgages | 319,234 |  |  | 275,134 |  |  | 186,433 |  |  | 99,388 |  |  | 185 |  |  | 313,373 |  |  | 2,038 |  |  | 1,195,785 |
Real estate mortgage – home equity loans/lines of credit
Pass | 869 |  |  | 1,091 |  |  | 349 |  |  | 237 |  |  | — |  |  | 2,020 |  |  | 309,786 |  |  | 314,352 |
Special Mention | 175 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18 |  |  | 1,072 |  |  | 1,265 |
Classified | 106 |  |  | 156 |  |  | 94 |  |  | 87 |  |  | — |  |  | 213 |  |  | 7,453 |  |  | 8,109 |
Total real estate mortgage – home equity loans/lines of credit | 1,150 |  |  | 1,247 |  |  | 443 |  |  | 324 |  |  | — |  |  | 2,251 |  |  | 318,311 |  |  | 323,726 |
Real estate mortgage – commercial and other
Pass | 1,096,643 |  |  | 1,186,678 |  |  | 569,624 |  |  | 247,448 |  |  | 179 |  |  | 324,361 |  |  | 48,882 |  |  | 3,473,815 |
Special Mention | 1,715 |  |  | 1,114 |  |  | 4,436 |  |  | 8,289 |  |  | — |  |  | 4,457 |  |  | 665 |  |  | 20,676 |
Classified | 3,480 |  |  | 1,265 |  |  | 84 |  |  | 2,456 |  |  | — |  |  | 8,118 |  |  | 367 |  |  | 15,770 |
Total real estate mortgage – commercial and other | 1,101,838 |  |  | 1,189,057 |  |  | 574,144 |  |  | 258,193 |  |  | 179 |  |  | 336,936 |  |  | 49,914 |  |  | 3,510,261 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 35,406 |  |  | 7,946 |  |  | 3,610 |  |  | 1,056 |  |  | 3 |  |  | 1,250 |  |  | 10,953 |  |  | 60,224 |
Special Mention | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Classified | 320 |  |  | 31 |  |  | 3 |  |  | 1 |  |  | — |  |  | 25 |  |  | 55 |  |  | 435 |
Total consumer loans | 35,726 |  |  | 7,977 |  |  | 3,613 |  |  | 1,057 |  |  | 3 |  |  | 1,275 |  |  | 11,008 |  |  | 60,659 |
Total | $ | 2,200,727 |  |  | 1,850,445 |  |  | 897,337 |  |  | 444,804 |  |  | 957 |  |  | 750,041 |  |  | 522,237 |  |  | 6,666,548 |
Unamortized net deferred loan fees |  | (1,403) |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 6,665,145 |
At December 31, 2022, as derived from the table above, the Company had $39.0 million in loans graded as Special Mention and $48.5 million in loans graded as Classified, which includes all nonaccrual loans. In the table above, substantially all of the "Classified Loans" have grades of 7 or Fail, with those categories having similar levels of risk. Revolving lines of credit that converted to term loans during the year ended December 31, 2022 amounted to $3.3 million. The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of December 31, 2021. Acquired loans are presented in the year originated, not in the year of acquisition.
| Term Loans by Year of Origination |  |  |  |
($ in thousands) | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving |  | Total
Commercial, financial, and agricultural
Pass | $ | 204,945 |  |  | 138,540 |  |  | 71,369 |  |  | 66,645 |  |  | 16,009 |  |  | 17,492 |  |  | 112,933 |  |  | 627,933 |
Special Mention | 225 |  |  | 1,255 |  |  | 1,313 |  |  | 2,729 |  |  | 225 |  |  | 9 |  |  | 2,348 |  |  | 8,104 |
Classified | 1,609 |  |  | 793 |  |  | 1,703 |  |  | 7,096 |  |  | 511 |  |  | 96 |  |  | 1,152 |  |  | 12,960 |
Total commercial, financial, and agricultural | 206,779 |  |  | 140,588 |  |  | 74,385 |  |  | 76,470 |  |  | 16,745 |  |  | 17,597 |  |  | 116,433 |  |  | 648,997 |
Real estate – construction, land development & other land loans
Pass | 573,613 |  |  | 133,888 |  |  | 69,066 |  |  | 12,455 |  |  | 9,764 |  |  | 8,190 |  |  | 13,737 |  |  | 820,713 |
Special Mention | 41 |  |  | 737 |  |  | 5,095 |  |  | 110 |  |  | 104 |  |  | 2 |  |  | 9 |  |  | 6,098 |
Classified | 1,541 |  |  | 49 |  |  | 47 |  |  | 83 |  |  | 14 |  |  | 4 |  |  | — |  |  | 1,738 |
Total real estate – construction, development & other land loans | 575,195 |  |  | 134,674 |  |  | 74,208 |  |  | 12,648 |  |  | 9,882 |  |  | 8,196 |  |  | 13,746 |  |  | 828,549 |
Real estate mortgage – residential (1-4 family) first mortgages
Pass | 241,619 |  |  | 224,617 |  |  | 120,097 |  |  | 82,531 |  |  | 86,074 |  |  | 234,950 |  |  | 11,051 |  |  | 1,000,939 |
Special Mention | 888 |  |  | 615 |  |  | 516 |  |  | 229 |  |  | 323 |  |  | 3,237 |  |  | 94 |  |  | 5,902 |
Classified | 419 |  |  | 156 |  |  | 535 |  |  | 1,185 |  |  | 653 |  |  | 11,246 |  |  | 931 |  |  | 15,125 |
Total real estate mortgage – residential (1-4 family) first mortgages | 242,926 |  |  | 225,388 |  |  | 121,148 |  |  | 83,945 |  |  | 87,050 |  |  | 249,433 |  |  | 12,076 |  |  | 1,021,966 |
Real estate mortgage – home equity loans/lines of credit
Pass | 3,111 |  |  | 498 |  |  | 439 |  |  | 1,304 |  |  | 245 |  |  | 1,649 |  |  | 317,319 |  |  | 324,565 |
Special Mention | 194 |  |  | — |  |  | 15 |  |  | — |  |  | — |  |  | 19 |  |  | 1,341 |  |  | 1,569 |
Classified | 75 |  |  | 97 |  |  | 71 |  |  | — |  |  | — |  |  | 607 |  |  | 4,948 |  |  | 5,798 |
Total real estate mortgage – home equity loans/lines of credit | 3,380 |  |  | 595 |  |  | 525 |  |  | 1,304 |  |  | 245 |  |  | 2,275 |  |  | 323,608 |  |  | 331,932 |
Real estate mortgage – commercial and other
Pass | 1,328,156 |  |  | 796,992 |  |  | 355,885 |  |  | 211,118 |  |  | 197,165 |  |  | 197,659 |  |  | 66,104 |  |  | 3,153,079 |
Special Mention | 1,759 |  |  | 4,849 |  |  | 5,801 |  |  | 3,741 |  |  | 2,072 |  |  | 1,801 |  |  | 1,440 |  |  | 21,463 |
Classified | 7,147 |  |  | 413 |  |  | 2,110 |  |  | 6,025 |  |  | 3,897 |  |  | 603 |  |  | — |  |  | 20,195 |
Total real estate mortgage – commercial and other | 1,337,062 |  |  | 802,254 |  |  | 363,796 |  |  | 220,884 |  |  | 203,134 |  |  | 200,063 |  |  | 67,544 |  |  | 3,194,737 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 14,960 |  |  | 25,431 |  |  | 2,965 |  |  | 1,722 |  |  | 673 |  |  | 525 |  |  | 10,810 |  |  | 57,086 |
Special Mention | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |
Classified | — |  |  | 73 |  |  | — |  |  | 8 |  |  | — |  |  | 25 |  |  | 42 |  |  | 148 |
Total consumer loans | 14,960 |  |  | 25,508 |  |  | 2,965 |  |  | 1,730 |  |  | 673 |  |  | 550 |  |  | 10,852 |  |  | 57,238 |
Total | $ | 2,380,302 |  |  | 1,329,007 |  |  | 637,027 |  |  | 396,981 |  |  | 317,729 |  |  | 478,114 |  |  | 544,259 |  |  | 6,083,419 |
Unamortized net deferred loan fees |  | (1,704) |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 6,081,715 |
At December 31, 2021, as derived from the table above, the Company had $43.1 million in loans graded as Special Mention and $56.0 million in loans graded as Classified, which includes all nonaccrual loans. In the table above, substantially all of the "Classified Loans" have grades of 7 or Fail, with those categories having similar levels of risk. Revolving lines of credit that converted to term loans during the year ended December 31, 2021 amounted to $1.0 million. Troubled Debt Restructurings The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to minimize potential losses. The vast majority of the Company’s TDRs modified during the years ended December 31, 2022, 2021, and 2020 related to interest rate reductions combined with extension of terms. The Company does not generally grant principal forgiveness. The Company’s TDRs can be classified as either nonaccrual or accruing based on the loan’s payment status. The TDRs that are nonaccrual are reported within the nonaccrual loan totals presented previously. The following table presents information related to loans modified in a TDR during the year ended December 31, 2022.
| For the year ended December 31, 2022
($ in thousands, except number of contracts) | Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances
TDRs – Accruing |  |  |  |  |
Commercial, financial, and agricultural | 2 |  |  | $ | 143 |  |  | 143 |
Real estate – construction, land development & other land loans | 1 |  |  | 67 |  |  | 67 |
Real estate mortgage – residential (1-4 family) first mortgages | 2 |  |  | 75 |  |  | 78 |
TDRs – Nonaccrual |  |  |  |  |
Commercial, financial, and agricultural | 5 |  |  | 744 |  |  | 744 |
Real estate mortgage – residential (1-4 family) first mortgages | 1 |  |  | 36 |  |  | 36 |
Real estate mortgage – commercial and other | 1 |  |  | 72 |  |  | 72 |
Total TDRs arising during period | 12 |  |  | $ | 1,137 |  |  | 1,140 |
The following table presents information related to loans modified in a TDR during the year ended December 31, 2021.
| For the year ended December 31, 2021
($ in thousands, except number of contracts) | Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances
TDRs – Accruing |  |  |  |  |
Real estate mortgage – residential (1-4 family) first mortgages | 1 |  |  | $ | 33 |  |  | 33 |
TDRs – Nonaccrual |  |  |  |  |
Commercial, financial, and agricultural | 5 |  |  | 1,438 |  |  | 1,435 |
Real estate – construction, land development & other land loans | 1 |  |  | 75 |  |  | 75 |
Real estate mortgage – residential (1-4 family) first mortgages | 1 |  |  | 263 |  |  | 263 |
Real estate mortgage – commercial and other | 4 |  |  | 1,729 |  |  | 1,729 |
Total TDRs arising during period | 12 |  |  | $ | 3,538 |  |  | 3,535 |
The following table presents information related to loans modified in a TDR during the year ended December 31, 2020.
| For the year ended December 31, 2020
($ in thousands, except number of contracts) | Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances
TDRs – Accruing |  |  |  |  |
Commercial, financial, and agricultural | 2 |  |  | $ | 143 |  |  | 143 |
Real estate – construction, land development & other land loans | 1 |  |  | 67 |  |  | 67 |
Real estate mortgage – residential (1-4 family) first mortgages | 2 |  |  | 75 |  |  | 78 |
Consumer loans | 1 |  |  | 4 |  |  | 4 |
TDRs – Nonaccrual |  |  |  |  |
Commercial, financial, and agricultural | 1 |  |  | 72 |  |  | 72 |
Real estate mortgage – commercial and other | 5 |  |  | 5,977 |  |  | 5,977 |
Total TDRs arising during period | 12 |  |  | $ | 6,338 |  |  | 6,341 |
Accruing TDRs that were modified in the previous 12 months and that defaulted during the years ended December 31, 2022, 2021, and 2020 are presented in the table below. The Company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to nonaccrual status, or has been transferred to foreclosed real estate.
| For the Year Ended December 31, 2022 |  | For the Year Ended December 31, 2021 |  | For the Year Ended December 31, 2020
($ in thousands) | Number of Contracts |  | Recorded Investment |  | Number of Contracts |  | Recorded Investment |  | Number of Contracts |  | Recorded Investment
Accruing TDRs that subsequently defaulted |  |  |  |  |  |  |  |  |  |  |
Real estate mortgage – commercial and other | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | 1 |  |  | $ | 274 |
Total accruing TDRs that subsequently defaulted | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | 1 |  |  | $ | 274 |
Concentration of Credit Risk Most of the Company's business activity is with customers located within the markets where it has banking operations. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy within its markets. Approximately 90% of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations. Allowance for Credit Losses - Unfunded Loan Commitments In addition to the ACL on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. Under CECL, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans, and are discussed in Note 1. The allowance for credit losses for unfunded loan commitments of $13.3 million and $13.5 million at December 31, 2022 and December 31, 2021, respectively, is separately classified on the consolidated balance sheets within the line items "Other Liabilities." The following table prese nts the balance and activity in the allowance for credit losses for unfunded loan commitments for each period indicated.
($ in thousands) | December 31, 2022 | December 31, 2021 |
Beginning balance | $ | 13,506 |  | $ | 582 |  |
Adjustments for implementation of CECL on January 1, 2021 | — |  | 7,504 |  |
Day 2 provision for credit losses on unfunded commitments acquired from Select | — |  | 3,982 |  |
(Reversal of) provision for credit losses on changes in unfunded commitments | (200) |  | 1,438 |  |
Ending balance | $ | 13,306 |  | $ | 13,506 |  |
Allowance for Credit Losses - Securities HTM and AFS The ACL for securities HTM and AFS was immaterial at December 31, 2022 and December 31, 2021.

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