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Loans (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Recorded Investment by Risk Category of Portfolio Loans by Portfolio Class and Category

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, 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)	$	1,025,274	$	600,089	$	359,330	$	156,889	$	127,622	$	95,642	$	15,631	$	773,641	$	3,154,118
Watch (7)	37,465		27,305		10,397		9,662		3,520		14,758		6,128		62,883		172,118
Classified (8-9)	19,268		2,554		5,443		2,426		271		911		1,944		13,718		46,535
Total Commercial and industrial	$	1,082,007	$	629,948	$	375,170	$	168,977	$	131,413	$	111,311	$	23,703	$	850,242	$	3,372,771

Commercial real estate-investor owned
Pass (1-6)	$	497,726	$	499,617	$	367,055	$	153,179	$	133,202	$	235,601	$	3,668	$	62,184	$	1,952,232
Watch (7)	9,701		44,311		33,781		8,944		2,365		47,826		—		3,231		150,159
Classified (8-9)	1,396		8,744		264		341		1,167		4,364		—		—		16,276
Total Commercial real estate-investor owned	$	508,823	$	552,672	$	401,100	$	162,464	$	136,734	$	287,791	$	3,668	$	65,415	$	2,118,667

Commercial real estate-owner occupied
Pass (1-6)	$	495,546	$	462,729	$	285,680	$	182,073	$	155,216	$	255,326	$	—	$	47,128	$	1,883,698
Watch (7)	16,007		13,284		25,665		33,631		10,725		17,548		—		352		117,212
Classified (8-9)	1,868		653		12,257		4,750		6,581		6,651		—		63		32,823
Total Commercial real estate-owner occupied	$	513,421	$	476,666	$	323,602	$	220,454	$	172,522	$	279,525	$	—	$	47,543	$	2,033,733

Construction real estate
Pass (1-6)	$	298,041	$	232,249	$	79,465	$	36,419	$	15,157	$	9,394	$	388	$	3,487	$	674,600
Watch (7)	38,496		16,080		60		1,208		11,143		2,377		—		—		69,364
Classified (8-9)	53		—		379		423		—		24		96		—		975
Total Construction real estate	$	336,590	$	248,329	$	79,904	$	38,050	$	26,300	$	11,795	$	484	$	3,487	$	744,939

Residential real estate
Pass (1-6)	$	136,636	$	78,641	$	41,755	$	15,737	$	26,345	$	114,292	$	283	$	101,199	$	514,888
Watch (7)	1,277		16,881		2,450		1,284		261		1,286		—		87		23,526
Classified (8-9)	879		222		563		76		12		2,245		—		75		4,072
Total residential real estate	$	138,792	$	95,744	$	44,768	$	17,097	$	26,618	$	117,823	$	283	$	101,361	$	542,486

Other
Pass (1-6)	$	110,977	$	70,441	$	20,206	$	24,006	$	7,781	$	20,193	$	—	$	10,683	$	264,287
Watch (7)	—		—		—		4		—		2,490		—		1		2,495
Classified (8-9)	—		—		13		14		—		18		—		1		46
Total Other	$	110,977	$	70,441	$	20,219	$	24,024	$	7,781	$	22,701	$	—	$	10,685	$	266,828


	December 31, 2020
	Term Loans by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Converted to Term Loans		Revolving Loans		Total
Commercial and industrial
Pass (1-6)	$	1,402,276	$	454,729	$	262,258	$	132,832	$	25,057	$	58,315	$	14,118	$	527,170	$	2,876,755
Watch (7)	44,922		15,369		9,585		7,509		19,613		110		—		60,448		157,556
Classified (8-9)	6,602		9,219		3,115		3,964		4,490		1,080		1,281		22,432		52,183
Total Commercial and industrial	$	1,453,800	$	479,317	$	274,958	$	144,305	$	49,160	$	59,505	$	15,399	$	610,050	$	3,086,494

Commercial real estate-investor owned
Pass (1-6)	$	481,867	$	338,843	$	189,305	$	131,718	$	138,288	$	161,439	$	6,509	$	32,058	$	1,480,027
Watch (7)	32,308		19,722		6,656		—		9,647		17,370		—		—		85,703
Classified (8-9)	—		5,278		8,716		5,830		1,245		2,620		—		—		23,689
Total Commercial real estate-investor owned	$	514,175	$	363,843	$	204,677	$	137,548	$	149,180	$	181,429	$	6,509	$	32,058	$	1,589,419

Commercial real estate-owner occupied
Pass (1-6)	$	419,142	$	287,001	$	215,181	$	179,382	$	104,470	$	167,456	$	2,672	$	45,323	$	1,420,627
Watch (7)	13,657		5,257		3,113		6,198		4,338		8,460		1,776		941		43,740
Classified (8-9)	2,420		7,427		5,822		6,140		1,309		10,860		—		63		34,041
Total Commercial real estate-owner occupied	$	435,219	$	299,685	$	224,116	$	191,720	$	110,117	$	186,776	$	4,448	$	46,327	$	1,498,408

Construction real estate
Pass (1-6)	$	223,069	$	156,360	$	45,460	$	18,579	$	11,539	$	9,144	$	—	$	28,880	$	493,031
Watch (7)	2,544		86		34,179		11,632		—		2,499		—		—		50,940
Classified (8-9)	56		2,124		503		1		—		31		—		—		2,715
Total Construction real estate	$	225,669	$	158,570	$	80,142	$	30,212	$	11,539	$	11,674	$	—	$	28,880	$	546,686

Residential real estate
Pass (1-6)	$	57,059	$	27,907	$	17,718	$	17,138	$	27,443	$	92,657	$	1,172	$	66,902	$	307,996
Watch (7)	210		840		526		—		514		1,603		287		511		4,491
Classified (8-9)	571		733		121		14		898		3,181		—		253		5,771
Total residential real estate	$	57,840	$	29,480	$	18,365	$	17,152	$	28,855	$	97,441	$	1,459	$	67,666	$	318,258

Other
Pass (1-6)	$	43,526	$	28,195	$	30,074	$	9,646	$	5,641	$	17,027	$	—	$	40,779	$	174,888
Watch (7)	—		1		8		—		—		2,637		—		1		2,647
Classified (8-9)	—		18		19		13		—		17		8		4		79
Total Other	$	43,526	$	28,214	$	30,101	$	9,659	$	5,641	$	19,681	$	8	$	40,784	$	177,614

In the tables above, loan originations in 2021 and 2020 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 presents the recorded investment on loans based on payment activity as of the periods indicated:


	September 30, 2021
(in thousands)	Performing		Non Performing		Total
Commercial and industrial	$	6,395	$	5	$	6,400
Real estate:
Commercial - investor owned	2,584		—		2,584
Commercial - owner occupied	24,727		—		24,727
Construction and land development	2,820		—		2,820
Residential	204		—		204
Other	413		11		424
Total	$	37,143	$	16	$	37,159


	December 31, 2020
(in thousands)	Performing		Non Performing		Total
Commercial and industrial	$	2,502	$	—	$	2,502
Real estate:



Residential	921		—		921
Other	4,612		21		4,633
Total	$	8,035	$	21	$	8,056

The Company has purchased loans through the FCBP acquisition, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:


($ in thousands)	At July 21, 2021
Par value of acquired loans	$	180,440
Allowance for credit losses	(7,006)
Non-credit discount	(6,428)
Purchase price of acquired loans	$	167,006

Acquired PCD Loans


($ in thousands)	At July 21, 2021
Par value of acquired loans	$	180,440
Allowance for credit losses	(7,006)
Non-credit discount	(6,428)
Purchase price of acquired loans	$	167,006

Portfolio loans, net

Non-covered Loans [Line Items]

Summary of Portfolio Loans by Category

The following table presents a summary of loans by category:


(in thousands)	September 30, 2021		December 31, 2020
Commercial and industrial	$	3,386,599	$	3,100,299
Real estate:
Commercial - investor owned	2,121,251		1,589,419
Commercial - owner occupied	2,058,460		1,498,408
Construction and land development	747,759		546,686
Residential	542,690		319,179
Total real estate loans	5,470,160		3,953,692
Other	270,037		187,083
Loans, before unearned loan fees	9,126,796		7,241,074
Unearned loan fees, net	(10,213)		(16,139)
Loans, including unearned loan fees	$	9,116,583	$	7,224,935

Summary of Allowance for Loan Losses and the Recorded Investment in Portfolio Loans by Class and Category Based on Impairment Method

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


(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 (benefit) 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

The ACL on sponsor finance loans, which is included in the categories above, represented $17.2 million and $19.0 million, respectively, as of September 30, 2021 and December 30, 2020.

A summary of the activity in the ACL on loans by category for the three and nine months ended September 30, 2020 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, 2020	$	50,139	$	25,019	$	11,088	$	15,962	$	6,333	$	1,729	$	110,270
Provision for credit losses	8,929		4,869		(1,854)		2,873		(1,132)		342		14,027
Charge-offs	(2,006)		(272)		(30)		—		(173)		(103)		(2,584)
Recoveries	808		55		268		83		303		40		1,557
Balance at September 30, 2020	$	57,870	$	29,671	$	9,472	$	18,918	$	5,331	$	2,008	$	123,270


(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, 2019	$	27,455	$	5,935	$	4,873	$	2,611	$	1,280	$	1,134	$	43,288
CECL adoption	6,494		10,726		2,598		5,183		3,470		(84)		28,387
PCD loans immediately charged off	—		(5)		(57)		(217)		(1,401)		—		(1,680)
Balance at January 1, 2020	$	33,949	$	16,656	$	7,414	$	7,577	$	3,349	$	1,050	$	69,995
Provision for credit losses	27,688		10,692		1,740		11,220		1,623		1,150		54,113
Charge-offs	(5,372)		(498)		(30)		(31)		(327)		(294)		(6,552)
Recoveries	1,605		2,821		348		152		686		102		5,714
Balance at September 30, 2020	$	57,870	$	29,671	$	9,472	$	18,918	$	5,331	$	2,008	$	123,270

Financing Receivable, Noncurrent, Allowance for Credit Loss

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


(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 (benefit) 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

The ACL on sponsor finance loans, which is included in the categories above, represented $17.2 million and $19.0 million, respectively, as of September 30, 2021 and December 30, 2020.

A summary of the activity in the ACL on loans by category for the three and nine months ended September 30, 2020 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, 2020	$	50,139	$	25,019	$	11,088	$	15,962	$	6,333	$	1,729	$	110,270
Provision for credit losses	8,929		4,869		(1,854)		2,873		(1,132)		342		14,027
Charge-offs	(2,006)		(272)		(30)		—		(173)		(103)		(2,584)
Recoveries	808		55		268		83		303		40		1,557
Balance at September 30, 2020	$	57,870	$	29,671	$	9,472	$	18,918	$	5,331	$	2,008	$	123,270


(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, 2019	$	27,455	$	5,935	$	4,873	$	2,611	$	1,280	$	1,134	$	43,288
CECL adoption	6,494		10,726		2,598		5,183		3,470		(84)		28,387
PCD loans immediately charged off	—		(5)		(57)		(217)		(1,401)		—		(1,680)
Balance at January 1, 2020	$	33,949	$	16,656	$	7,414	$	7,577	$	3,349	$	1,050	$	69,995
Provision for credit losses	27,688		10,692		1,740		11,220		1,623		1,150		54,113
Charge-offs	(5,372)		(498)		(30)		(31)		(327)		(294)		(6,552)
Recoveries	1,605		2,821		348		152		686		102		5,714
Balance at September 30, 2020	$	57,870	$	29,671	$	9,472	$	18,918	$	5,331	$	2,008	$	123,270

Summary of Portfolio Loans Individually Evaluated for Impairment and Recorded Investment in Impaired Non-Covered Loans by Category

The following tables present the recorded investment in nonperforming loans by category:


	September 30, 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	$	27,655	$	2,870	$	5	$	30,530	$	12,137
Real estate:
Commercial - investor owned	1,846		—		—		1,846		425
Commercial - owner occupied	6,892		—		—		6,892		2,800

Residential	2,185		77		—		2,262		1,562
Other	13		—		11		24		12
Total	$	38,591	$	2,947	$	16	$	41,554	$	16,936


	December 31, 2020
(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	$	18,158	$	3,482	$	130	$	21,770	$	8,316
Real estate:
Commercial - investor owned	9,579		—		—		9,579		716
Commercial - owner occupied	2,940		—		—		2,940		6,024

Residential	4,112		77		—		4,189		—
Other	29		—		—		29		3,190
Total	$	34,818	$	3,559	$	130	$	38,507	$	18,246

The total nonperforming loan balances at September 30, 2021 and December 31, 2020 exclude government guaranteed balances of $5.1 million and $5.4 million, respectively.

No interest income was recognized on nonaccrual loans during the three and nine months ended September 30, 2021 or 2020.

The amortized cost basis of collateral-dependent nonperforming loans by class of loan is presented for the periods indicated:


	September 30, 2021
	Type of Collateral
(in thousands)	Commercial Real Estate		Residential Real Estate		Blanket Lien		Other
Commercial and industrial	$	10,804	$	300	$	11,761	$	—
Real estate:
Commercial - investor owned	426		1,209		—		—
Commercial - owner occupied	6,689		88		—		—

Residential	—		2,262		—		—
Other	—		—		—		12
Total	$	17,919	$	3,859	$	11,761	$	12

Summary of Recorded Investment by Category for Portfolio Loans Restructured

he amortized cost basis of collateral-dependent nonperforming loans by class of loan is presented for the periods indicated:


	September 30, 2021
	Type of Collateral
(in thousands)	Commercial Real Estate		Residential Real Estate		Blanket Lien		Other
Commercial and industrial	$	10,804	$	300	$	11,761	$	—
Real estate:
Commercial - investor owned	426		1,209		—		—
Commercial - owner occupied	6,689		88		—		—

Residential	—		2,262		—		—
Other	—		—		—		12
Total	$	17,919	$	3,859	$	11,761	$	12


	December 31, 2020
	Type of Collateral
(in thousands)	Commercial Real Estate		Residential Real Estate		Blanket Lien		Other
Commercial and industrial	$	8,316	$	—	$	394	$	—
Real estate:
Commercial - investor owned	9,579		—		—		—
Commercial - owner occupied	2,940		—		—		—

Residential	—		4,135		—		—
Other	—		—		—		17
Total	$	20,835	$	4,135	$	394	$	17

During the three and nine months ended September 30, 2021, one residential real estate loan totaling $0.2 million was modified as a troubled debt restructuring. The recorded investment by category for troubled debt restructurings that occurred during the three months ended September 30, 2020 are as follows:


	September 30, 2020
(in thousands, except for number of loans)		Number of loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Commercial and industrial		2	$	3,716	$	3,716
Real estate:



Residential		1	217		217

Total		3	$	3,933	$	3,933

The recorded investment by category for troubled debt restructurings that occurred during the nine months ended September 30, 2020 are as follows:



	September 30, 2020
(in thousands, except for number of loans)		Number of loans	Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Commercial and industrial		3	$	7,447	$	7,447
Real estate:



Residential		3	372		372

Total		6	$	7,819	$	7,819

Summary of Recorded Investment by Category for Portfolio Loans Restructured and Subsequently Defaulted

No troubled debt restructurings subsequently defaulted during the three and nine months ended September 30, 2021 or 2020.

Summary of Aging of Recorded Investment in Past Due Portfolio Loans by Portfolio Class and Category

The aging of the recorded investment in past due loans by class is presented for the periods indicated.


	September 30, 2021
(in thousands)	30-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total
Commercial and industrial	$	17,470	$	11,752	$	29,222	$	3,349,949	$	3,379,171
Real estate:
Commercial - investor owned	298		—		298		2,120,953		2,121,251
Commercial - owner occupied	9,900		4,560		14,460		2,044,000		2,058,460
Construction and land development	169		—		169		747,590		747,759
Residential	138		1,309		1,447		541,243		542,690
Other	274		11		285		266,967		267,252
Total	$	28,249	$	17,632	$	45,881	$	9,070,702	$	9,116,583


	December 31, 2020
(in thousands)	30-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total
Commercial and industrial	$	8,652	$	12,928	$	21,580	$	3,067,415	$	3,088,995
Real estate:
Commercial - investor owned	734		9,301		10,035		1,579,384		1,589,419
Commercial - owner occupied	328		4,647		4,975		1,493,433		1,498,408
Construction and land development	13		—		13		546,673		546,686
Residential	2,071		2,118		4,189		314,990		319,179
Other	1,731		50		1,781		180,467		182,248
Total	$	13,529	$	29,044	$	42,573	$	7,182,362	$	7,224,935