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Loans | 9 Months Ended
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Sep. 30, 2022
Receivables [Abstract] |
Portfolio Loans | LOANS The following table presents a summary of loans by category:
(in thousands) | September 30, 2022 |  | December 31, 2021
Commercial and industrial | $ | 3,710,012 |  |  | $ | 3,396,590 |
Real estate: |  |  |
Commercial - investor owned | 2,286,458 |  |  | 2,141,143 |
Commercial - owner occupied | 2,152,189 |  |  | 2,035,785 |
Construction and land development | 583,649 |  |  | 734,073 |
Residential | 397,450 |  |  | 454,052 |
Total real estate loans | 5,419,746 |  |  | 5,365,053 |
Other | 232,158 |  |  | 265,137 |
Loans, before unearned loan fees | 9,361,916 |  |  | 9,026,780 |
Unearned loan fees, net | (6,929) |  |  | (9,138) |
Loans, including unearned loan fees | $ | 9,354,987 |  |  | $ | 9,017,642 |
PPP loans totaled $13.3 million at September 30, 2022, or $13.2 million net of deferred fees of $0.1 million. The loan balance at September 30, 2022 includes a net premium on acquired loans of $12.3 million. At September 30, 2022, loans of $2.8 billion were pledged to FHLB and the Federal Reserve Bank. PPP loans totaled $276.2 million at December 31, 2021, or $272.0 million net of deferred fees of $4.2 million. The loan balance included a net premium on acquired loans of $11.9 million at December 31, 2021. At December 31, 2021, loans of $2.5 billion were pledged to FHLB and the Federal Reserve Bank. Accrued interest receivable totaled $33.6 million and $30.6 million at September 30, 2022 and December 31, 2021, respectively, and was reported in “Other Assets” on the consolidated balance sheets. A summary of the activity in the ACL on loans by category for the three and nine months ended September 30, 2022 is as follows:
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Other |  |  |  | Total
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at June 30, 2022 | $ | 65,646 |  |  | $ | 33,338 |  |  | $ | 16,156 |  |  | $ | 13,180 |  |  | $ | 7,478 |  |  | $ | 4,748 |  |  |  |  | $ | 140,546 |
Provision (benefit) for credit losses | 4,202 |  |  | 71 |  |  | 224 |  |  | (3,987) |  |  | 99 |  |  | (105) |  |  |  |  | 504 |
Charge-offs | (1,320) |  |  | — |  |  | (190) |  |  | — |  |  | (401) |  |  | (88) |  |  |  |  | (1,999) |
Recoveries | 640 |  |  | 225 |  |  | 232 |  |  | 10 |  |  | 365 |  |  | 49 |  |  |  |  | 1,521 |
Balance at September 30, 2022 | $ | 69,168 |  |  | $ | 33,634 |  |  | $ | 16,422 |  |  | $ | 9,203 |  |  | $ | 7,541 |  |  | $ | 4,604 |  |  |  |  | $ | 140,572 |
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Other |  |  |  | Total
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2021 | $ | 63,825 |  |  | $ | 35,877 |  |  | $ | 17,560 |  |  | $ | 14,536 |  |  | $ | 7,927 |  |  | $ | 5,316 |  |  |  |  | $ | 145,041 |
Provision (benefit) for credit losses | 7,283 |  |  | (2,488) |  |  | (1,424) |  |  | (5,378) |  |  | (50) |  |  | (588) |  |  |  |  | (2,645) |
Charge-offs | (3,576) |  |  | (200) |  |  | (395) |  |  | — |  |  | (1,706) |  |  | (262) |  |  |  |  | (6,139) |
Recoveries | 1,636 |  |  | 445 |  |  | 681 |  |  | 45 |  |  | 1,370 |  |  | 138 |  |  |  |  | 4,315 |
Balance at September 30, 2022 | $ | 69,168 |  |  | $ | 33,634 |  |  | $ | 16,422 |  |  | $ | 9,203 |  |  | $ | 7,541 |  |  | $ | 4,604 |  |  |  |  | $ | 140,572 |
The ACL on sponsor finance loans, which is included in the categories above, represented $19.2 million and $18.2 million, respectively, as of September 30, 2022 and December 31, 2021. A summary of the activity in the ACL on loans by category for the three and nine months ended September 30, 2021 is as follows:
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Other |  |  |  | Total
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at June 30, 2021 | $ | 53,351 |  |  | $ | 36,003 |  |  | $ | 15,564 |  |  | $ | 11,632 |  |  | $ | 4,677 |  |  | $ | 6,958 |  |  |  |  | $ | 128,185 |
Initial allowance on acquired PCD loans | 1,077 |  |  | 3,651 |  |  | 1,504 |  |  | 37 |  |  | — |  |  | 737 |  |  |  |  | 7,006 |
Provision for credit losses* | 9,836 |  |  | 1,475 |  |  | 1,909 |  |  | 2,215 |  |  | 5,271 |  |  | (1,951) |  |  |  |  | 18,755 |
Charge-offs | (2,829) |  |  | (117) |  |  | (259) |  |  | (3) |  |  | (840) |  |  | (203) |  |  |  |  | (4,251) |
Recoveries | 452 |  |  | 1,623 |  |  | 15 |  |  | 171 |  |  | 115 |  |  | 25 |  |  |  |  | 2,401 |
Balance at September 30, 2021 | $ | 61,887 |  |  | $ | 42,635 |  |  | $ | 18,733 |  |  | $ | 14,052 |  |  | $ | 9,223 |  |  | $ | 5,566 |  |  |  |  | $ | 152,096 |
*Provision includes $23.9 million on certain acquired First Choice loans
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Other |  |  |  | Total
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2020 | $ | 58,812 |  |  | $ | 32,062 |  |  | $ | 17,012 |  |  | $ | 21,413 |  |  | $ | 4,585 |  |  | $ | 2,787 |  |  |  |  | $ | 136,671 |
Initial allowance on acquired PCD loans | 1,077 |  |  | 3,651 |  |  | 1,504 |  |  | 37 |  |  | — |  |  | 737 |  |  |  |  | 7,006 |
Provision for credit losses* | 8,538 |  |  | 7,715 |  |  | 686 |  |  | (7,833) |  |  | 5,374 |  |  | 2,305 |  |  |  |  | 16,785 |
Charge-offs | (8,019) |  |  | (2,489) |  |  | (503) |  |  | (3) |  |  | (1,155) |  |  | (389) |  |  |  |  | (12,558) |
Recoveries | 1,479 |  |  | 1,696 |  |  | 34 |  |  | 438 |  |  | 419 |  |  | 126 |  |  |  |  | 4,192 |
Balance at September 30, 2021 | $ | 61,887 |  |  | $ | 42,635 |  |  | $ | 18,733 |  |  | $ | 14,052 |  |  | $ | 9,223 |  |  | $ | 5,566 |  |  |  |  | $ | 152,096 |
*Provision includes $23.9 million on certain acquired First Choice loans
The CECL methodology incorporates various economic scenarios. The Company utilizes three forecasts in the model: Moody’s baseline, a stronger near-term growth upside and a moderate recession downside forecast. The Company weights these scenarios at 40%, 30%, and 30%, respectively, which added approximately $9.5 million to the ACL over the baseline model. These forecasts incorporate an expectation that the Federal Reserve will continue to aggressively tighten monetary policy and will wind down its treasury and mortgage-backed securities portfolio and continue raising the federal funds rate, that the Russia-Ukraine military conflict will have a limited disruption on the economy, that the global pandemic will continue to recede and become less disruptive to supply chains and the risk of a period of stagflation. The Company has also recognized the risk posed by loans that have received multiple deferrals of principal and interest payments, including the hospitality sector, by allocating additional reserves to those segments. Some of the key risks to the forecasts that could result in future provision for credit losses are continued or worsening supply-chain disruptions, the risk that the Federal Reserve tightens too aggressively and pushes the economy into a recession, labor shortages and declines in job growth, oil prices increase more than anticipated or a period of persistently high inflation. In addition to the CECL methodology, the Company incorporates qualitative adjustments into the ACL on loans to capture credit risks inherent within the loan portfolio that are not captured in the discounted cash flow (DCF) model. Included in these risks are 1) changes in lending policies and procedures, 2) actual and expected changes in business and economic conditions, 3) changes in the nature and volume of the portfolio, 4) changes in lending management, 5) changes in volume and the severity of past due loans, 6) changes in the quality of the loan review system, 7) changes in the value of underlying collateral, 8) the existence and effect of concentrations of credit and 9) other factors such as the regulatory, legal and competitive environments and events such as natural disasters and pandemics. At September 30, 2022, the ACL on loans included a qualitative adjustment of approximately $40.8 million. Of this amount, approximately $7.5 million was allocated to sponsor finance loans due to their unsecured nature. The following tables present the recorded investment in nonperforming loans by category:
| September 30, 2022
(in thousands) | Nonaccrual |  | Restructured, accruing |  | Loans over 90 days past due and still accruing interest |  | Total nonperforming loans |  | Nonaccrual loans with no allowance
Commercial and industrial | $ | 13,304 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 13,305 |  |  | $ | 1,551 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 3,388 |  |  | — |  |  | — |  |  | 3,388 |  |  | 3,388 |
Commercial - owner occupied | 1,150 |  |  | — |  |  | — |  |  | 1,150 |  |  | 1,150 |
Residential | 252 |  |  | 74 |  |  | — |  |  | 326 |  |  | 252 |
Other | 1 |  |  | — |  |  | 14 |  |  | 15 |  |  | — |
Total | $ | 18,095 |  |  | $ | 74 |  |  | $ | 15 |  |  | $ | 18,184 |  |  | $ | 6,341 |
| December 31, 2021
(in thousands) | Nonaccrual |  | Restructured, accruing |  | Loans over 90 days past due and still accruing interest |  | Total nonperforming loans |  | Nonaccrual loans with no allowance
Commercial and industrial | $ | 17,052 |  |  | $ | 2,783 |  |  | $ | 1,703 |  |  | $ | 21,538 |  |  | $ | 5,685 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 1,575 |  |  | — |  |  | — |  |  | 1,575 |  |  | 168 |
Commercial - owner occupied | 2,839 |  |  | — |  |  | — |  |  | 2,839 |  |  | 2,550 |
Residential | 1,971 |  |  | 76 |  |  | 1 |  |  | 2,048 |  |  | 1,348 |
Other | 12 |  |  | — |  |  | 12 |  |  | 24 |  |  | — |
Total | $ | 23,449 |  |  | $ | 2,859 |  |  | $ | 1,716 |  |  | $ | 28,024 |  |  | $ | 9,751 |
The nonperforming loan balances at both September 30, 2022 and December 31, 2021 exclude government guaranteed balances of $6.5 million. No material interest income was recognized on nonaccrual loans during the three and nine months ended September 30, 2022 or 2021. The amortized cost basis of collateral-dependent nonperforming loans by class of loan is presented as of the dates indicated:
| September 30, 2022
| Type of Collateral
(in thousands) | Commercial Real Estate |  | Residential Real Estate |  | Blanket Lien |  |
Commercial and industrial | $ | 4,271 |  |  | $ | — |  |  | $ | 4,726 |  |  |
Real estate: |  |  |  |  |  |  |
Commercial - investor owned | 2,268 |  |  | 1,120 |  |  | — |  |  |
Commercial - owner occupied | 1,139 |  |  | 11 |  |  | — |  |  |
Residential | — |  |  | 326 |  |  | — |  |  |
Total | $ | 7,678 |  |  | $ | 1,457 |  |  | $ | 4,726 |  |  |
| December 31, 2021
| Type of Collateral
(in thousands) | Commercial Real Estate |  | Residential Real Estate |  | Blanket Lien |  |
Commercial and industrial | $ | 4,271 |  |  | $ | 209 |  |  | $ | 9,312 |  |  |
Real estate: |  |  |  |  |  |  |
Commercial - investor owned | 169 |  |  | 1,200 |  |  | — |  |  |
Commercial - owner occupied | 2,807 |  |  | 32 |  |  | — |  |  |
Residential | — |  |  | 2,048 |  |  | — |  |  |
Total | $ | 7,247 |  |  | $ | 3,489 |  |  | $ | 9,312 |  |  |
There were no loans restructured during the three or nine months ended September 30, 2022 or 2021.
No troubled debt restructurings subsequently defaulted during the three or nine months ended September 30, 2022 or 2021. The aging of the recorded investment in past due loans by class is presented as of the dates indicated.
| September 30, 2022
(in thousands) | 30-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | Current |  | Total
Commercial and industrial | $ | 4,966 |  |  | $ | 6,869 |  |  | $ | 11,835 |  |  | $ | 3,698,058 |  |  | $ | 3,709,893 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 2,059 |  |  | — |  |  | 2,059 |  |  | 2,284,399 |  |  | 2,286,458 |
Commercial - owner occupied | 9,241 |  |  | 187 |  |  | 9,428 |  |  | 2,142,761 |  |  | 2,152,189 |
Construction and land development | 1,192 |  |  | — |  |  | 1,192 |  |  | 582,457 |  |  | 583,649 |
Residential | 192 |  |  | — |  |  | 192 |  |  | 397,258 |  |  | 397,450 |
Other | 44 |  |  | 15 |  |  | 59 |  |  | 225,289 |  |  | 225,348 |
Total | $ | 17,694 |  |  | $ | 7,071 |  |  | $ | 24,765 |  |  | $ | 9,330,222 |  |  | $ | 9,354,987 |
| December 31, 2021
(in thousands) | 30-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | Current |  | Total
Commercial and industrial | $ | 24,447 |  |  | $ | 14,158 |  |  | $ | 38,605 |  |  | $ | 3,353,770 |  |  | $ | 3,392,375 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 3,880 |  |  | — |  |  | 3,880 |  |  | 2,137,263 |  |  | 2,141,143 |
Commercial - owner occupied | 10,070 |  |  | 289 |  |  | 10,359 |  |  | 2,025,426 |  |  | 2,035,785 |
Construction and land development | 24 |  |  | — |  |  | 24 |  |  | 734,049 |  |  | 734,073 |
Residential | 3,181 |  |  | 1,305 |  |  | 4,486 |  |  | 449,566 |  |  | 454,052 |
Other | 37 |  |  | 11 |  |  | 48 |  |  | 260,166 |  |  | 260,214 |
Total | $ | 41,639 |  |  | $ | 15,763 |  |  | $ | 57,402 |  |  | $ | 8,960,240 |  |  | $ | 9,017,642 |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: •Grades 1, 2, and 3 – Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry. •Grade 4 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. •Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. •Grade 6 – Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7, 8, or 9 rating. •Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated at this time, due to strong collateral and/or guarantor support. •Grade 8 – Substandard credits include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted. •Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on nonaccrual. The recorded investment by risk category of loans by class and year of origination is presented in the following tables as of the dates indicated:
|  | September 30, 2022
|  | Term Loans by Origination Year |  |  |  |  |  |
(in thousands) |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans Converted to Term Loans |  | Revolving Loans |  | Total
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 1,085,307 |  |  | $ | 717,307 |  |  | $ | 360,383 |  |  | $ | 208,530 |  |  | $ | 65,014 |  |  | $ | 89,982 |  |  | $ | 7,860 |  |  | $ | 936,868 |  |  | $ | 3,471,251 |
Watch (7) |  | 45,503 |  |  | 12,222 |  |  | 14,739 |  |  | 495 |  |  | 9,026 |  |  | 4,145 |  |  | 155 |  |  | 87,336 |  |  | 173,621 |
Classified (8-9) |  | 16,722 |  |  | 7,013 |  |  | 1,328 |  |  | 3,839 |  |  | 172 |  |  | 1,024 |  |  | — |  |  | 14,672 |  |  | 44,770 |
Total Commercial and industrial |  | $ | 1,147,532 |  |  | $ | 736,542 |  |  | $ | 376,450 |  |  | $ | 212,864 |  |  | $ | 74,212 |  |  | $ | 95,151 |  |  | $ | 8,015 |  |  | $ | 1,038,876 |  |  | $ | 3,689,642 |
Commercial real estate-investor owned |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 484,071 |  |  | $ | 628,899 |  |  | $ | 406,567 |  |  | $ | 265,033 |  |  | $ | 121,771 |  |  | $ | 227,789 |  |  | $ | 593 |  |  | $ | 45,532 |  |  | $ | 2,180,255 |
Watch (7) |  | 18,638 |  |  | 9,041 |  |  | 29,920 |  |  | 12,168 |  |  | — |  |  | 13,128 |  |  | — |  |  | — |  |  | 82,895 |
Classified (8-9) |  | 1,221 |  |  | — |  |  | 196 |  |  | 821 |  |  | 194 |  |  | 6,879 |  |  | 50 |  |  | — |  |  | 9,361 |
Total Commercial real estate-investor owned |  | $ | 503,930 |  |  | $ | 637,940 |  |  | $ | 436,683 |  |  | $ | 278,022 |  |  | $ | 121,965 |  |  | $ | 247,796 |  |  | $ | 643 |  |  | $ | 45,532 |  |  | $ | 2,272,511 |
Commercial real estate-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 364,007 |  |  | $ | 577,848 |  |  | $ | 380,740 |  |  | $ | 244,923 |  |  | $ | 126,757 |  |  | $ | 287,072 |  |  | $ | — |  |  | $ | 55,602 |  |  | $ | 2,036,949 |
Watch (7) |  | 9,052 |  |  | 2,282 |  |  | 13,694 |  |  | 5,125 |  |  | 14,284 |  |  | 8,303 |  |  | — |  |  | 800 |  |  | 53,540 |
Classified (8-9) |  | — |  |  | — |  |  | 3,206 |  |  | 8,880 |  |  | 16,147 |  |  | 11,505 |  |  | — |  |  | — |  |  | 39,738 |
Total Commercial real estate-owner occupied |  | $ | 373,059 |  |  | $ | 580,130 |  |  | $ | 397,640 |  |  | $ | 258,928 |  |  | $ | 157,188 |  |  | $ | 306,880 |  |  | $ | — |  |  | $ | 56,402 |  |  | $ | 2,130,227 |
Construction real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 224,466 |  |  | $ | 243,622 |  |  | $ | 77,015 |  |  | $ | 2,966 |  |  | $ | 2,543 |  |  | $ | 9,232 |  |  | $ | — |  |  | $ | 1,901 |  |  | $ | 561,745 |
Watch (7) |  | 17,349 |  |  | — |  |  | 520 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,869 |
Classified (8-9) |  | 1,192 |  |  | — |  |  | — |  |  | 12 |  |  | 410 |  |  | 14 |  |  | — |  |  | — |  |  | 1,628 |
Total Construction real estate |  | $ | 243,007 |  |  | $ | 243,622 |  |  | $ | 77,535 |  |  | $ | 2,978 |  |  | $ | 2,953 |  |  | $ | 9,246 |  |  | $ | — |  |  | $ | 1,901 |  |  | $ | 581,242 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 47,323 |  |  | $ | 69,924 |  |  | $ | 57,277 |  |  | $ | 22,535 |  |  | $ | 11,568 |  |  | $ | 93,339 |  |  | $ | 513 |  |  | $ | 90,659 |  |  | $ | 393,138 |
Watch (7) |  | 113 |  |  | 290 |  |  | — |  |  | 80 |  |  | 353 |  |  | 791 |  |  | — |  |  | — |  |  | 1,627 |
Classified (8-9) |  | 156 |  |  | 82 |  |  | — |  |  | 55 |  |  | 767 |  |  | 1,223 |  |  | — |  |  | 5 |  |  | 2,288 |
Total residential real estate |  | $ | 47,592 |  |  | $ | 70,296 |  |  | $ | 57,277 |  |  | $ | 22,670 |  |  | $ | 12,688 |  |  | $ | 95,353 |  |  | $ | 513 |  |  | $ | 90,664 |  |  | $ | 397,053 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 12,963 |  |  | $ | 92,335 |  |  | $ | 57,732 |  |  | $ | 11,299 |  |  | $ | 21,135 |  |  | $ | 20,562 |  |  | $ | — |  |  | $ | 8,399 |  |  | $ | 224,425 |
Watch (7) |  | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Classified (8-9) |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 5 |  |  | 13 |  |  | — |  |  | 1 |  |  | 24 |
Total Other |  | $ | 12,963 |  |  | $ | 92,335 |  |  | $ | 57,732 |  |  | $ | 11,304 |  |  | $ | 21,142 |  |  | $ | 20,575 |  |  | $ | — |  |  | $ | 8,400 |  |  | $ | 224,451 |
Total loans classified by risk category |  | $ | 2,328,083 |  |  | $ | 2,360,865 |  |  | $ | 1,403,317 |  |  | $ | 786,766 |  |  | $ | 390,148 |  |  | $ | 775,001 |  |  | $ | 9,171 |  |  | $ | 1,241,775 |  |  | $ | 9,295,126 |
Total loans classified by performing status |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 59,861 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,354,987 |
|  | December 31, 2021
|  | Term Loans by Origination Year |  |  |  |  |  |
(in thousands) |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans Converted to Term Loans |  | Revolving Loans |  | Total
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 1,180,601 |  |  | $ | 477,374 |  |  | $ | 317,869 |  |  | $ | 132,851 |  |  | $ | 116,738 |  |  | $ | 82,846 |  |  | $ | 11,648 |  |  | $ | 854,102 |  |  | $ | 3,174,029 |
Watch (7) |  | 35,005 |  |  | 17,502 |  |  | 9,404 |  |  | 9,880 |  |  | 12,217 |  |  | 10,979 |  |  | 4,037 |  |  | 53,595 |  |  | 152,619 |
Classified (8-9) |  | 14,917 |  |  | 3,530 |  |  | 3,840 |  |  | 1,689 |  |  | 2,988 |  |  | 813 |  |  | 787 |  |  | 10,996 |  |  | 39,560 |
Total Commercial and industrial |  | $ | 1,230,523 |  |  | $ | 498,406 |  |  | $ | 331,113 |  |  | $ | 144,420 |  |  | $ | 131,943 |  |  | $ | 94,638 |  |  | $ | 16,472 |  |  | $ | 918,693 |  |  | $ | 3,366,208 |
Commercial real estate-investor owned |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 651,740 |  |  | $ | 476,946 |  |  | $ | 346,245 |  |  | $ | 146,107 |  |  | $ | 112,043 |  |  | $ | 217,808 |  |  | $ | 3,625 |  |  | $ | 68,236 |  |  | $ | 2,022,750 |
Watch (7) |  | 16,871 |  |  | 35,908 |  |  | 32,755 |  |  | 1,003 |  |  | 502 |  |  | 17,478 |  |  | 300 |  |  | 2,062 |  |  | 106,879 |
Classified (8-9) |  | 1,376 |  |  | 3,135 |  |  | 835 |  |  | 817 |  |  | 1,159 |  |  | 4,141 |  |  | — |  |  | 50 |  |  | 11,513 |
Total Commercial real estate-investor owned |  | $ | 669,987 |  |  | $ | 515,989 |  |  | $ | 379,835 |  |  | $ | 147,927 |  |  | $ | 113,704 |  |  | $ | 239,427 |  |  | $ | 3,925 |  |  | $ | 70,348 |  |  | $ | 2,141,142 |
Commercial real estate-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 604,975 |  |  | $ | 423,263 |  |  | $ | 278,830 |  |  | $ | 164,210 |  |  | $ | 140,515 |  |  | $ | 235,973 |  |  | $ | 250 |  |  | $ | 48,349 |  |  | $ | 1,896,365 |
Watch (7) |  | 12,825 |  |  | 13,585 |  |  | 4,301 |  |  | 16,774 |  |  | 10,274 |  |  | 15,764 |  |  | — |  |  | 300 |  |  | 73,823 |
Classified (8-9) |  | 2,048 |  |  | 556 |  |  | 9,181 |  |  | 17,016 |  |  | 6,432 |  |  | 6,959 |  |  | — |  |  | — |  |  | 42,192 |
Total Commercial real estate-owner occupied |  | $ | 619,848 |  |  | $ | 437,404 |  |  | $ | 292,312 |  |  | $ | 198,000 |  |  | $ | 157,221 |  |  | $ | 258,696 |  |  | $ | 250 |  |  | $ | 48,649 |  |  | $ | 2,012,380 |
Construction real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 310,140 |  |  | $ | 229,396 |  |  | $ | 70,531 |  |  | $ | 35,936 |  |  | $ | 14,860 |  |  | $ | 7,180 |  |  | $ | 568 |  |  | $ | 2,992 |  |  | $ | 671,603 |
Watch (7) |  | 28,947 |  |  | 15,348 |  |  | 60 |  |  | 1,199 |  |  | 11,068 |  |  | 2,330 |  |  | — |  |  | — |  |  | 58,952 |
Classified (8-9) |  | — |  |  | — |  |  | 387 |  |  | 419 |  |  | — |  |  | 22 |  |  | — |  |  | — |  |  | 828 |
Total Construction real estate |  | $ | 339,087 |  |  | $ | 244,744 |  |  | $ | 70,978 |  |  | $ | 37,554 |  |  | $ | 25,928 |  |  | $ | 9,532 |  |  | $ | 568 |  |  | $ | 2,992 |  |  | $ | 731,383 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 116,352 |  |  | $ | 66,481 |  |  | $ | 21,356 |  |  | $ | 14,841 |  |  | $ | 24,778 |  |  | $ | 103,840 |  |  | $ | 9,980 |  |  | $ | 87,146 |  |  | $ | 444,774 |
Watch (7) |  | 2,425 |  |  | 2 |  |  | 622 |  |  | 1,157 |  |  | 248 |  |  | 1,305 |  |  | — |  |  | 79 |  |  | 5,838 |
Classified (8-9) |  | 414 |  |  | 169 |  |  | 554 |  |  | — |  |  | 12 |  |  | 2,024 |  |  | — |  |  | — |  |  | 3,173 |
Total residential real estate |  | $ | 119,191 |  |  | $ | 66,652 |  |  | $ | 22,532 |  |  | $ | 15,998 |  |  | $ | 25,038 |  |  | $ | 107,169 |  |  | $ | 9,980 |  |  | $ | 87,225 |  |  | $ | 453,785 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-6) |  | $ | 108,209 |  |  | $ | 68,806 |  |  | $ | 22,684 |  |  | $ | 23,145 |  |  | $ | 6,924 |  |  | $ | 13,832 |  |  | $ | 1,500 |  |  | $ | 9,166 |  |  | $ | 254,266 |
Watch (7) |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | 2,440 |  |  | — |  |  | 1 |  |  | 2,445 |
Classified (8-9) |  | — |  |  | — |  |  | 10 |  |  | 10 |  |  | — |  |  | 16 |  |  | — |  |  | 2 |  |  | 38 |
Total Other |  | $ | 108,209 |  |  | $ | 68,806 |  |  | $ | 22,694 |  |  | $ | 23,159 |  |  | $ | 6,924 |  |  | $ | 16,288 |  |  | $ | 1,500 |  |  | $ | 9,169 |  |  | $ | 256,749 |
Total loans classified by risk category |  | $ | 3,086,845 |  |  | $ | 1,832,001 |  |  | $ | 1,119,464 |  |  | $ | 567,058 |  |  | $ | 460,758 |  |  | $ | 725,750 |  |  | $ | 32,695 |  |  | $ | 1,137,076 |  |  | $ | 8,961,647 |
Total loans classified by performing status |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 55,995 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,017,642 |
In the tables above, loan originations in 2022 and 2021 with a classification of watch or classified primarily represent renewals or modifications initially underwritten and originated in prior years. For certain loans, primarily credit cards, the Company evaluates credit quality based on the aging status. The following tables present the recorded investment on loans based on payment activity as of the dates indicated:
| September 30, 2022
(in thousands) | Performing |  | Non Performing |  | Total
Commercial and industrial | $ | 20,250 |  |  | $ | 1 |  |  | $ | 20,251 |
Real estate: |  |  |  |  |
Commercial - investor owned | 13,947 |  |  | — |  |  | 13,947 |
Commercial - owner occupied | 21,962 |  |  | — |  |  | 21,962 |
Construction and land development | 2,407 |  |  | — |  |  | 2,407 |
Residential | 397 |  |  | — |  |  | 397 |
Other | 883 |  |  | 14 |  |  | 897 |
Total | $ | 59,846 |  |  | $ | 15 |  |  | $ | 59,861 |
| December 31, 2021
(in thousands) | Performing |  | Non Performing |  | Total
Commercial and industrial | $ | 26,166 |  |  | $ | 1 |  |  | $ | 26,167 |
Real estate: |  |  |  |  |
Commercial - investor owned | 1 |  |  | — |  |  | 1 |
Commercial - owner occupied | 23,405 |  |  | — |  |  | 23,405 |
Construction and land development | 2,690 |  |  | — |  |  | 2,690 |
Residential | 267 |  |  | — |  |  | 267 |
Other | 3,453 |  |  | 12 |  |  | 3,465 |
Total | $ | 55,982 |  |  | $ | 13 |  |  | $ | 55,995 |

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