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Loans
 3 Months Ended
Mar. 31, 2020
Loans and Leases Receivable Disclosure [Abstract]  
Loans Loans

The following table shows the Company’s loan portfolio by category as of the dates shown:
 
March 31,
 
December 31,
 
March 31,
(Dollars in thousands)
2020
 
2019
 
2019
Balance:
 
 
 
 
 
Commercial
$
9,025,886

 
$
8,285,920

 
$
7,994,191

Commercial real estate
8,185,531

 
8,020,276

 
6,973,505

Home equity
494,655

 
513,066

 
528,448

Residential real estate
1,377,389

 
1,354,221

 
1,053,524

Premium finance receivables
 
 
 
 
 
Commercial insurance
3,465,055

 
3,442,027

 
2,988,788

Life insurance
5,221,639

 
5,074,602

 
4,555,369

Consumer and other
37,166

 
110,178

 
120,804

    Total loans, net of unearned income
$
27,807,321

 
$
26,800,290

 
$
24,214,629

Mix:
 
 
 
 
 
Commercial
32
%
 
31
%
 
33
%
Commercial real estate
29

 
30

 
29

Home equity
2

 
2

 
2

Residential real estate
5

 
5

 
4

Premium finance receivables
 
 
 
 
 
Commercial insurance
13

 
13

 
12

Life insurance
19

 
19

 
19

Consumer and other
0

 
0

 
1

Total loans, net of unearned income
100
%
 
100
%
 
100
%


The Company’s loan portfolio is generally comprised of loans to consumers and small to medium-sized businesses located within the geographic market areas that the banks serve. The premium finance receivables portfolios are made to customers throughout the United States and Canada. The Company strives to maintain a loan portfolio that is diverse in terms of loan type, industry, borrower and geographic concentrations. Such diversification reduces the exposure to economic downturns that may occur in different segments of the economy or in different industries.

Certain premium finance receivables are recorded net of unearned income. The unearned income portions of such premium finance receivables were $115.2 million at March 31, 2020, $118.4 million at December 31, 2019 and $110.0 million at March 31, 2019.

Total loans, excluding PCD loans, include net deferred loan fees and costs and fair value purchase accounting adjustments totaling $11.1 million at March 31, 2020, $9.1 million at December 31, 2019 and $6.4 million at March 31, 2019. Prior to January 1, 2020, PCI loans were recorded net of credit discounts. See “PCI Loans” below.

It is the policy of the Company to review each prospective credit in order to determine the appropriateness and, when required, the adequacy of security or collateral necessary to obtain when making a loan. The type of collateral, when required, will vary from liquid assets to real estate. The Company seeks to ensure access to collateral, in the event of default, through adherence to state lending laws and the Company’s credit monitoring procedures.

PCI Loans

Prior to January 1, 2020, PCI loans were aggregated into pools by common risk characteristics for accounting purposes, including recognition of interest income on a pool basis. Measurement of any allowance for loan losses on these loans were offset by the remaining discount related to the pool. Changes in expected cash flows would vary from period to period as the Company periodically updated its cash flow model assumptions for PCI loans. The factors that most significantly affect the estimates of gross cash flows expected to be collected, and accordingly the accretable yield, included changes in the benchmark interest rate indices for variable-rate products and changes in prepayment assumptions and loss estimates. As a result of the implementation of CECL, beginning in the first quarter of 2020, PCI loans transitioned to a classification of PCD, which no longer maintains the prior pools and related accounting concepts. The following tables present the required disclosures for PCI loans before the adoption of CECL.

Acquired Loan Information at Acquisition—PCI Loans

The following table presents the unpaid principal balance and carrying value for these acquired loans:
 
 
December 31, 2019
 
(In thousands)
Unpaid
Principal
Balance
 
Carrying
Value
 
 
PCI loans
$
455,784

 
$
425,372



Accretable Yield Activity - PCI Loans

The following table provides activity for the accretable yield of PCI loans as of March 31, 2019:

 
Three Months Ended
(In thousands)

March 31,
2019
Accretable yield, beginning balance
 
$
34,876

Accretable yield amortized to interest income
 
(3,829
)
Reclassification from non-accretable difference (1)
 
1,574

Increases in interest cash flows due to payments and changes in interest rates
 
1,471

Accretable yield, ending balance
 
$
34,092


(1)
Reclassification is the result of subsequent increases in expected principal cash flows.

Accretion to interest income accounted for under ASC 310-30 totaled $3.8 million in the first quarter of 2019.