Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Allowance for Loan and Lease Losses

The following tables show the activity in the allowance for PCI loan and lease losses by loan class for the three and six months ended June 30, 2017 and June 30, 2016.

	Three months ended June 30, 2017
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Consumer and other			Total
PCI Loans
Allowance for loan and lease losses:
Balance at April 1	$	297		$	5,193		$	344		$	362		$	4,273		$	406		$	49		$	10,924
Provision	280			1,604			10			94			556			5			23			2,572
Charge-offs	—			—			—			—			—			—			—			—
Recoveries	—			—			—			—			—			—			—			—
Balance at June 30	$	577		$	6,797		$	354		$	456		$	4,829		$	411		$	72		$	13,496
	Three months ended June 30, 2016
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Consumer and other			Total
Balance at April 1	$	733		$	6,750		$	770		$	225		$	4,680		$	415		$	184		$	13,757
Provision	(453		)	(935		)	(154		)	60			(382		)	(177		)	(105		)	(2,146		)
Charge-offs	—			(56		)	—			—			—			—			—			(56		)
Recoveries	—			—			—			—			—			—			—			—
Balance at June 30	$	280		$	5,759		$	616		$	285		$	4,298		$	238		$	79		$	11,555
	Six months ended June 30, 2017
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Consumer and other			Total
Balance at January 1	$	483		$	6,423		$	502		$	504		$	4,818		$	956		$	83		$	13,769
Provision	94			374			(148		)	(48		)	11			(545		)	(11		)	(273		)
Charge-offs	—			—			—			—			—			—			—			—
Recoveries	—			—			—			—			—			—			—			—
Balance at June 30	$	577		$	6,797		$	354		$	456		$	4,829		$	411		$	72		$	13,496
	Six months ended June 30, 2016
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Consumer and other			Total
Balance at January 1	$	1,082		$	7,838		$	773		$	445		$	5,398		$	523		$	253		$	16,312
Provision	(802		)	(1,914		)	(152		)	(160		)	(729		)	(285		)	(101		)	(4,143		)
Charge-offs	—			(165		)	(5		)	—			(371		)	—			(73		)	(614		)
Recoveries	—			—			—			—			—			—			—			—
Balance at June 30	$	280		$	5,759		$	616		$	285		$	4,298		$	238		$	79		$	11,555

The following tables present the activity in the ALLL for non-PCI loan and lease losses by loan class for the three and six months ended June 30, 2017 and June 30, 2016:

	Three months ended June 30, 2017
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Total
Non-PCI Loans
Allowance for loan and lease losses:
Balance at April 1	$	31,391		$	48,611		$	3,572		$	50,829		$	6,315		$	3,534		$	15,835		$	21,290		$	1,513		$	27,129		$	210,019
Provision	2,372			639			33			968			186			(214		)	155			1,054			(10		)	4,569			9,752
Charge-offs	(413		)	(235		)	—			(3,121		)	(97		)	(64		)	(222		)	(280		)	—			(4,991		)	(9,423		)
Recoveries	209			731			7			2,392			—			46			75			401			—			1,093			4,954
Balance at June 30	$	33,559		$	49,746		$	3,612		$	51,068		$	6,404		$	3,302		$	15,843		$	22,465		$	1,503		$	27,800		$	215,302
	Three months ended June 30, 2016
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Total
Balance at April 1	$	16,885		$	70,456		$	2,207		$	44,479		$	5,422		$	1,777		$	14,727		$	16,125		$	1,575		$	19,373		$	193,026
Provision	291			701			(79		)	81			343			37			1,487			1,470			78			2,299			6,708
Charge-offs	(136		)	(44		)	—			(1,177		)	—			(88		)	(179		)	(1,081		)	—			(3,136		)	(5,841		)
Recoveries	129			500			10			525			1			29			41			214			—			1,111			2,560
Balance at June 30	$	17,169		$	71,613		$	2,138		$	43,908		$	5,766		$	1,755		$	16,076		$	16,728		$	1,653		$	19,647		$	196,453
	Six months ended June 30, 2017
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and  industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Total
Balance at January 1	$	28,877		$	48,278		$	3,269		$	50,225		$	5,907		$	3,127		$	14,447		$	21,013		$	1,596		$	28,287		$	205,026
Provision	4,908			645			337			4,560			761			241			1,506			1,604			(93		)	6,359			20,828
Charge-offs	(490		)	(272		)	(5		)	(6,374		)	(270		)	(187		)	(472		)	(1,105		)	—			(9,019		)	(18,194		)
Recoveries	264			1,095			11			2,657			6			121			362			953			—			2,173			7,642
Balance at June 30	$	33,559		$	49,746		$	3,612		$	51,068		$	6,404		$	3,302		$	15,843		$	22,465		$	1,503		$	27,800		$	215,302
	Six months ended June 30, 2016
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and  industrial			Lease financing			Other			Residential mortgage			Revolving mortgage			Construction and land development - non- commercial			Consumer			Total
Balance at January 1	$	16,288		$	69,896		$	2,168		$	43,116		$	5,524		$	1,855		$	14,105		$	15,971		$	1,485		$	19,496		$	189,904
Provision	1,234			1,096			(184		)	2,282			62			(290		)	2,262			2,628			165			4,293			13,548
Charge-offs	(562		)	(134		)	—			(2,494		)	—			(160		)	(352		)	(2,116		)	—			(6,243		)	(12,061		)
Recoveries	209			755			154			1,004			180			350			61			245			3			2,101			5,062
Balance at June 30	$	17,169		$	71,613		$	2,138		$	43,908		$	5,766		$	1,755		$	16,076		$	16,728		$	1,653		$	19,647		$	196,453

The following tables provide information on non-PCI impaired loans and leases, exclusive of loans and leases evaluated collectively as a homogeneous group, as of June 30, 2017 and December 31, 2016 including interest income recognized in the period during which the loans and leases were considered impaired.

	June 30, 2017
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Construction and land development - commercial	$	554	$	274	$	828	$	932	$	93
Commercial mortgage	41,376		33,292		74,668		80,633		4,166
Other commercial real estate	1,133		434		1,567		1,877		225
Commercial and industrial	6,135		3,621		9,756		11,983		623
Lease financing	1,591		194		1,785		1,785		66
Other	—		662		662		662		—
Residential mortgage	23,899		15,438		39,337		40,972		2,687
Revolving mortgage	5,708		3,096		8,804		10,054		1,086
Construction and land development - noncommercial	795		2,906		3,701		4,393		86
Consumer	1,546		727		2,273		2,521		632
Total non-PCI impaired loans and leases	$	82,737	$	60,644	$	143,381	$	155,812	$	9,664
	December 31, 2016
(Dollars in thousands)	With a recorded allowance		With no recorded allowance		Total		Unpaid principal balance		Related allowance recorded
Non-PCI impaired loans and leases:
Construction and land development - commercial	$	1,002	$	43	$	1,045	$	1,172	$	151
Commercial mortgage	42,875		33,486		76,361		82,658		3,488
Other commercial real estate	1,279		284		1,563		1,880		152
Commercial and industrial	8,920		3,680		12,600		16,637		1,732
Lease financing	1,002		72		1,074		1,074		75
Other	142		—		142		233		23
Residential mortgage	20,269		11,207		31,476		32,588		2,447
Revolving mortgage	1,825		5,788		7,613		8,831		366
Construction and land development - noncommercial	645		1,968		2,613		3,030		109
Consumer	1,532		380		1,912		2,086		667
Total non-PCI impaired loans and leases	$	79,491	$	56,908	$	136,399	$	150,189	$	9,210

The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three and six months ended June 30, 2017 and June 30, 2016:

	Three months ended June 30, 2017				Three months ended June 30, 2016
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Construction and land development - commercial	$	970	$	11	$	3,236	$	40
Commercial mortgage	74,121		651		79,442		616
Other commercial real estate	1,525		9		878		7
Commercial and industrial	10,159		98		9,938		84
Lease financing	1,911		14		1,214		15
Other	434		5		813		10
Residential mortgage	36,767		272		24,982		178
Revolving mortgage	8,484		62		6,421		40
Construction and land development - noncommercial	3,185		33		413		5
Consumer	2,052		24		1,422		20
Total non-PCI impaired loans and leases	$	139,608	$	1,179	$	128,759	$	1,015
	Six months ended June 30, 2017				Six months ended June 30, 2016
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Construction and land development - commercial	$	1,013	$	23	$	3,200	$	81
Commercial mortgage	74,715		1,293		86,193		1,382
Other commercial real estate	1,555		17		651		12
Commercial and industrial	10,844		202		12,744		235
Lease financing	1,740		28		1,436		35
Other	315		7		943		24
Residential mortgage	34,864		525		24,240		350
Revolving mortgage	8,227		119		6,365		72
Construction and land development - noncommercial	2,895		66		485		11
Consumer	1,976		47		1,344		38
Total non-PCI impaired loans and leases	$	138,144	$	2,327	$	137,601	$	2,240

Allocation of Allowance for Loan and Lease Losses

The following tables show the ending balances of PCI loans and lease and related allowance by class of loans as of June 30, 2017 and December 31, 2016:

	June 30, 2017
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	577	$	6,797	$	354	$	456	$	4,829	$	411	$	72	$	13,496
Loans and leases acquired with deteriorated credit quality	18,660		426,778		21,409		9,307		350,038		65,949		2,722		894,863
	December 31, 2016
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Consumer and other		Total
ALLL for loans and leases acquired with deteriorated credit quality	$	483	$	6,423	$	502	$	504	$	4,818	$	956	$	83	$	13,769
Loans and leases acquired with deteriorated credit quality	20,766		453,013		12,645		11,844		268,777		38,650		3,474		809,169

The following tables present the allowance for non-PCI loan losses and the recorded investment in loans, by loan class, based on impairment method as of June 30, 2017 and December 31, 2016:

	June 30, 2017
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	93	$	4,166	$	225	$	623	$	66	$	—	$	2,687	$	1,086	$	86	$	632	$	9,664
ALLL for loans and leases collectively evaluated for impairment	33,466		45,580		3,387		50,445		6,338		3,302		13,156		21,379		1,417		27,168		205,638
Total allowance for loan and lease losses	$	33,559	$	49,746	$	3,612	$	51,068	$	6,404	$	3,302	$	15,843	$	22,465	$	1,503	$	27,800	$	215,302
Loans and leases:
Loans and leases individually evaluated for impairment	$	828	$	74,668	$	1,567	$	9,756	$	1,785	$	662	$	39,337	$	8,804	$	3,701	$	2,273	$	143,381
Loans and leases collectively evaluated for impairment	739,463		9,226,486		361,772		2,543,856		852,158		485,911		3,266,024		2,669,882		214,532		1,473,137		21,833,221
Total loan and leases	$	740,291	$	9,301,154	$	363,339	$	2,553,612	$	853,943	$	486,573	$	3,305,361	$	2,678,686	$	218,233	$	1,475,410	$	21,976,602
	December 31, 2016
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Lease financing		Other		Residential mortgage		Revolving mortgage		Construction and land development - non-commercial		Consumer		Total
Allowance for loan and lease losses:
ALLL for loans and leases individually evaluated for impairment	$	151	$	3,488	$	152	$	1,732	$	75	$	23	$	2,447	$	366	$	109	$	667	$	9,210
ALLL for loans and leases collectively evaluated for impairment	28,726		44,790		3,117		48,493		5,832		3,104		12,000		20,647		1,487		27,620		195,816
Total allowance for loan and lease losses	$	28,877	$	48,278	$	3,269	$	50,225	$	5,907	$	3,127	$	14,447	$	21,013	$	1,596	$	28,287	$	205,026
Loans and leases:
Loans and leases individually evaluated for impairment	$	1,045	$	76,361	$	1,563	$	12,600	$	1,074	$	142	$	31,476	$	7,613	$	2,613	$	1,912	$	136,399
Loans and leases collectively evaluated for impairment	648,112		8,949,859		349,728		2,554,901		825,196		340,122		2,857,648		2,593,731		228,787		1,444,226		20,792,310
Total loan and leases	$	649,157	$	9,026,220	$	351,291	$	2,567,501	$	826,270	$	340,264	$	2,889,124	$	2,601,344	$	231,400	$	1,446,138	$	20,928,709

Troubled Debt Restructurings on Financing Receivables

The following table provides a summary of total TDRs by accrual status.

	June 30, 2017						December 31, 2016
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans
Construction and land development - commercial	$	3,189	$	396	$	3,585	$	3,292	$	308	$	3,600
Commercial mortgage	64,031		14,969		79,000		70,263		14,435		84,698
Other commercial real estate	862		627		1,489		1,635		80		1,715
Commercial and industrial	8,234		621		8,855		9,193		1,436		10,629
Lease financing	1,025		760		1,785		882		192		1,074
Other	662		—		662		64		78		142
Total commercial TDRs	78,003		17,373		95,376		85,329		16,529		101,858
Noncommercial
Residential mortgage	37,022		7,013		44,035		34,012		5,117		39,129
Revolving mortgage	7,061		1,908		8,969		6,346		1,431		7,777
Construction and land development - noncommercial	237		—		237		240		—		240
Consumer and other	1,852		422		2,274		1,603		309		1,912
Total noncommercial TDRs	46,172		9,343		55,515		42,201		6,857		49,058
Total TDRs	$	124,175	$	26,716	$	150,891	$	127,530	$	23,386	$	150,916

The majority of TDRs are included in the special mention, substandard or doubtful grading categories. When a restructured loan subsequently defaults, it is evaluated and downgraded if appropriate. The more severely graded the loan, the lower the estimated expected cash flows and the greater the allowance recorded. TDRs are evaluated individually for impairment through a review of collateral values or analysis of cash flows.

The following table shows the accrual status of non-PCI and PCI TDRs.

(Dollars in thousands)	June 30, 2017		December 31, 2016
Accruing TDRs:
PCI	$	19,877	$	26,068
Non-PCI	104,298		101,462
Total accruing TDRs	124,175		127,530
Nonaccruing TDRs:
PCI	318		301
Non-PCI	26,398		23,085
Total nonaccruing TDRs	26,716		23,386
All TDRs:
PCI	20,195		26,369
Non-PCI	130,696		124,547
Total TDRs	$	150,891	$	150,916

The following table provides the types of non-PCI TDRs made during the three and six months ended June 30, 2017 and June 30, 2016, as well as a summary of loans that were modified as a TDR during the twelve month periods ended June 30, 2017 and June 30, 2016 that subsequently defaulted during the three and six months ended June 30, 2017 and June 30, 2016. BancShares defines payment default as movement of the TDR to nonaccrual status, which is generally 90 days past due for TDRs, foreclosure or charge-off, whichever occurs first.

	Three months ended June 30, 2017						Three months ended June 30, 2016
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Non-PCI loans and leases
Interest only period provided
Commercial mortgage	2	$	406	1	$	332	—	$	—	—	$	—
Residential mortgage	1	$	165	—	$	—	—	$	—	—	$	—
Total interest only	3	571		1	332		—	—		—	—
Loan term extension
Commercial mortgage	1	434		—	—		2	808		—	—
Other commercial real estate	—	—		—	—		1	841		—	—
Commercial and industrial	3	549		—	—		—	—		1	—
Residential mortgage	8	401		1	32		5	678		1	52
Consumer	1	13		—	—		—	—		—	—
Total loan term extension	13	1,397		1	32		8	2,327		2	52
Below market interest rate
Construction and land development - commercial	—	—		—	—		4	317		2	209
Commercial mortgage	8	1,448		5	420		12	1,741		5	577
Other commercial real estate	—	—		—	—		1	498		1	12
Commercial and industrial	6	276		2	88		8	694		5	197
Residential mortgage	48	2,266		22	1,020		42	2,473		20	1,337
Revolving mortgage	1	6		—	—		2	59		—	—
Construction and land development - noncommercial	1	10		—	—		—	—		—	—
Consumer	6	50		1	14		1	16		1	—
Other	—	—		1	—		—	—		1	85
Total below market interest rate	70	4,056		31	1,542		70	5,798		35	2,417
Discharged from bankruptcy
Construction and land development - commercial	1	17		1	17		—	—		—	—
Commercial mortgage	2	410		—	—		2	283		—	—
Commercial and industrial	1	—		1	—		2	49		—	—
Residential mortgage	8	223		7	77		5	147		7	506
Revolving mortgage	12	570		4	325		13	1,461		5	59
Construction and land development-noncommercial	—	—		1	20		—	—		—	—
Consumer	16	222		10	176		10	144		7	79
Total discharged from bankruptcy	40	1,442		24	615		32	2,084		19	644
Total non-PCI restructurings	126	$	7,466	57	$	2,521	110	$	10,209	56	$	3,113

	Six months ended June 30, 2017						Six months ended June 30, 2016
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end		Number of Loans	Recorded investment at period end
Non-PCI loans and leases
Interest only period provided
Commercial mortgage	2	$	406	1	$	332	1	$	249	1	$	249
Residential mortgage	1	165		—	—		—	—		—	—
Total interest only	3	571		1	332		1	249		1	249
Loan term extension
Construction and land development - commercial	—	—		—	—		1	401		—	—
Commercial mortgage	1	434		—	—		4	1,096		—	—
Other commercial real estate	—	—		—	—		1	841		—	—
Commercial and industrial	6	639		—	—		—	—		1	—
Residential mortgage	9	433		1	32		7	978		1	52
Consumer	4	41		—	—		—	—		—	—
Other	1	523		—	—		—	—		—	—
Total loan term extension	21	2,070		1	32		13	3,316		2	52
Below market interest rate
Construction and land development - commercial	1	—		—	—		6	414		3	227
Commercial mortgage	21	4,734		6	509		22	2,866		9	1,078
Other commercial real estate	1	2		—	—		1	498		1	12
Commercial and industrial	14	804		2	88		11	704		5	197
Lease financing	3	760		2	701		—	—		—	—
Residential mortgage	95	4,894		35	1,643		94	5,998		32	2,107
Revolving mortgage	1	6		—	—		4	141		—	—
Construction and land development - noncommercial	7	663		—	—		—	—		—	—
Consumer	10	73		1	14		3	20		1	—
Other	1	139		1	—		1	85		1	85
Total below market interest rate	154	12,075		47	2,955		142	10,726		52	3,706
Discharged from bankruptcy
Construction and land development - commercial	1	17		1	17		—	—		1	14
Commercial mortgage	2	410		—	—		2	283		—	—
Commercial and industrial	1	—		1	—		2	49		—	—
Lease financing	16	178		—	—		—	—		—	—
Residential mortgage	16	777		8	956		11	721		7	506
Revolving mortgage	20	1,093		11	825		25	1,695		12	151
Construction and land development - noncommercial	1	20		1	20		—	—		—	—
Consumer	40	510		20	273		25	290		10	95
Total discharged from bankruptcy	97	3,005		42	2,091		65	3,038		30	766
Total non-PCI restructurings	275	$	17,721	91	$	5,410	221	$	17,329	85	$	4,773

The following table provides the types of PCI TDRs made during the three and six months ended June 30, 2017 and June 30, 2016, as well as a summary of loans that were modified as a TDR during the twelve month periods ended June 30, 2017 and June 30, 2016 that subsequently defaulted during the three and six months ended June 30, 2017 and June 30, 2016.

	Three months ended June 30, 2017						Three months ended June 30, 2016
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
PCI loans
Below market interest rate
Commercial mortgage	2	$	344	1	$	1,258	—	$	—	—	$	—
Residential mortgage	1	40		—	—		1	48		1	54
Total below market interest rate	3	384		1	1,258		1	48		1	54
Total PCI restructurings	3	$	384	1	$	1,258	1	$	48	1	$	54

	Six months ended June 30, 2017						Six months ended June 30, 2016
	All restructurings			Restructurings with payment default			All restructurings			Restructurings with payment default
(Dollars in thousands)	Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end		Number of loans	Recorded investment at period end
PCI loans
Below market interest rate
Construction and land development - commercial	—	$	—	—	$	—	1	$	55	—	$	—
Commercial mortgage	2	344		1	1,258		3	2,027		—	—
Residential mortgage	3	163		1	18		1	48		1	54
Total below market interest rate	5	507		2	1,276		5	2,130		1	54
Total PCI restructurings	5	$	507	2	$	1,276	5	$	2,130	1	$	54

For the three and six months ended June 30, 2017 and June 30, 2016, the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different.