Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

Allowance for Loan and Lease Losses

The following tables provide information on non-PCI impaired loans and leases individually evaluated as of March 31, 2018 and December 31, 2017 including interest income recognized in the period during which the loans and leases were considered impaired.

	March 31, 2018
(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	$	740	$	391	$	1,131	$	1,461	$	171
Commercial mortgage	37,100		33,177		70,277		75,584		3,521
Other commercial real estate	1,086		413		1,499		1,614		306
Commercial and industrial	5,514		2,097		7,611		10,882		621
Lease financing	1,896		270		2,166		3,610		494
Residential mortgage	23,417		17,930		41,347		44,065		2,905
Revolving mortgage	9,998		15,527		25,525		27,948		1,053
Construction and land development - noncommercial	1,294		2,509		3,803		4,620		82
Consumer	1,744		847		2,591		2,872		713
Total non-PCI impaired loans and leases	$	82,789	$	73,161	$	155,950	$	172,656	$	9,866
	December 31, 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	$	788	$	—	$	788	$	1,110	$	185
Commercial mortgage	39,135		34,520		73,655		78,936		3,648
Other commercial real estate	1,351		506		1,857		2,267		209
Commercial and industrial	6,326		1,648		7,974		10,475		665
Lease financing	1,890		24		1,914		2,571		397
Other	—		521		521		521		—
Residential mortgage	19,135		18,707		37,842		39,946		2,733
Revolving mortgage	5,875		17,895		23,770		25,941		1,085
Construction and land development - noncommercial	592		3,959		4,551		5,224		68
Consumer	2,107		667		2,774		3,043		738
Total non-PCI impaired loans and leases	$	77,199	$	78,447	$	155,646	$	170,034	$	9,728

Non-PCI impaired loans less than $500,000 that are collectively evaluated were $46.9 million and $49.1 million at March 31, 2018 and December 31, 2017, respectively.

The following tables show the average non-PCI impaired loan balance and the interest income recognized by loan class for the three months ended March 31, 2018 and March 31, 2017:

	Three months ended March 31, 2018				Three months ended March 31, 2017
(Dollars in thousands)	Average balance		Interest income recognized		Average balance		Interest income recognized
Non-PCI impaired loans and leases:
Construction and land development - commercial	$	1,155	$	11	$	1,055	$	12
Commercial mortgage	72,267		711		75,310		642
Other commercial real estate	1,713		11		1,584		8
Commercial and industrial	7,524		76		11,529		104
Lease financing	2,238		11		1,568		14
Other	—		—		196		2
Residential mortgage	38,724		275		32,963		253
Revolving mortgage	24,792		201		7,969		57
Construction and land development - noncommercial	4,104		48		2,605		33
Consumer	2,508		28		1,900		23
Total non-PCI impaired loans and leases	$	155,025	$	1,372	$	136,679	$	1,148

The following tables present the activity in the ALLL for non-PCI loan and lease losses by loan class for the three months ended March 31, 2018 and March 31, 2017:

	Three months ended March 31, 2018
(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	$	24,470		$	45,005		$	4,571		$	53,697		$	6,127		$	4,689		$	15,706		$	22,436		$	3,962		$	31,204		$	211,867
Provision	2,225			(1,365		)	(1,293		)	(425		)	987			114			1,512			466			107			2,923			5,251
Charge-offs	—			(46		)	—			(1,475		)	(854		)	(3		)	(806		)	(992		)	(182		)	(5,255		)	(9,613		)
Recoveries	23			239			145			1,219			41			42			77			194			26			1,309			3,315
Balance at March 31	$	26,718		$	43,833		$	3,423		$	53,016		$	6,301		$	4,842		$	16,489		$	22,104		$	3,913		$	30,181		$	210,820
	Three months ended March 31, 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	2,536			6			304			3,592			575			517			1,351			550			(83		)	1,728			11,076
Charge-offs	(77		)	(37		)	(5		)	(3,253		)	(173		)	(123		)	(250		)	(825		)	—			(3,966		)	(8,709		)
Recoveries	55			364			4			265			6			13			287			552			—			1,080			2,626
Balance at March 31	$	31,391		$	48,611		$	3,572		$	50,829		$	6,315		$	3,534		$	15,835		$	21,290		$	1,513		$	27,129		$	210,019

The following tables show the activity in the allowance for PCI loan losses by loan class for the three months ended March 31, 2018 and March 31, 2017.

	Three months ended March 31, 2018
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	142		$	6,564		$	221		$	306		$	2,117		$	259		$	193		$	224		$	10,026
Provision	310			1,608			(46		)	13			264			209			(50		)	46			2,354
Charge-offs	—			(84		)	—			—			—			—			—			—			(84		)
Recoveries	—			—			—			—			—			—			—			—			—
Balance at March 31	$	452		$	8,088		$	175		$	319		$	2,381		$	468		$	143		$	270		$	12,296
	Three months ended March 31, 2017
(Dollars in thousands)	Construction and land development - commercial			Commercial mortgage			Other commercial real estate			Commercial and industrial			Residential mortgage			Revolving mortgage			Construction and land development - noncommercial			Consumer and other			Total
Balance at January 1	$	483		$	6,423		$	502		$	504		$	4,818		$	956		$	—		$	83		$	13,769
Provision	(186		)	(1,230		)	(158		)	(142		)	(545		)	(550		)	—			(34		)	(2,845		)
Charge-offs	—			—			—			—			—			—			—			—			—
Recoveries	—			—			—			—			—			—			—			—			—
Balance at March 31	$	297		$	5,193		$	344		$	362		$	4,273		$	406		$	—		$	49		$	10,924

Allocation of Allowance for Loan and Lease Losses

The following tables show the ending balances of PCI loans and related allowance by class of loans as of March 31, 2018 and December 31, 2017:

	March 31, 2018
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans acquired with deteriorated credit quality	$	452	$	8,088	$	175	$	319	$	2,381	$	468	$	143	$	270	$	12,296
Loans acquired with deteriorated credit quality	9,316		325,073		16,179		3,732		282,338		60,388		3,006		3,805		703,837
	December 31, 2017
(Dollars in thousands)	Construction and land development - commercial		Commercial mortgage		Other commercial real estate		Commercial and industrial		Residential mortgage		Revolving mortgage		Construction and land development - noncommercial		Consumer and other		Total
ALLL for loans acquired with deteriorated credit quality	$	142	$	6,564	$	221	$	306	$	2,117	$	259	$	193	$	224	$	10,026
Loans acquired with deteriorated credit quality	10,135		358,103		17,124		6,374		299,318		63,908		4,163		3,873		762,998

The following tables present the allowance for non-PCI loan and lease losses and the recorded investment in loans, by loan class, based on impairment method as of March 31, 2018 and December 31, 2017:

	March 31, 2018
(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	$	171	$	3,521	$	306	$	621	$	494	$	—	$	2,905	$	1,053	$	82	$	713	$	9,866
ALLL for loans and leases collectively evaluated for impairment	26,547		40,312		3,117		52,395		5,807		4,842		13,584		21,051		3,831		29,468		200,954
Total allowance for loan and lease losses	$	26,718	$	43,833	$	3,423	$	53,016	$	6,301	$	4,842	$	16,489	$	22,104	$	3,913	$	30,181	$	210,820
Loans and leases:
Loans and leases individually evaluated for impairment	$	1,131	$	70,277	$	1,499	$	7,611	$	2,166	$	—	$	41,347	$	25,525	$	3,803	$	2,591	$	155,950
Loans and leases collectively evaluated for impairment	737,282		9,788,859		385,235		2,687,594		908,423		281,485		3,546,444		2,626,123		239,311		1,551,434		22,752,190
Total loan and leases	$	738,413	$	9,859,136	$	386,734	$	2,695,205	$	910,589	$	281,485	$	3,587,791	$	2,651,648	$	243,114	$	1,554,025	$	22,908,140
	December 31, 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	$	185	$	3,648	$	209	$	665	$	397	$	—	$	2,733	$	1,085	$	68	$	738	$	9,728
ALLL for loans and leases collectively evaluated for impairment	24,285		41,357		4,362		53,032		5,730		4,689		12,973		21,351		3,894		30,466		202,139
Total allowance for loan and lease losses	$	24,470	$	45,005	$	4,571	$	53,697	$	6,127	$	4,689	$	15,706	$	22,436	$	3,962	$	31,204	$	211,867
Loans and leases:
Loans and leases individually evaluated for impairment	$	788	$	73,655	$	1,857	$	7,974	$	1,914	$	521	$	37,842	$	23,770	$	4,551	$	2,774	$	155,646
Loans and leases collectively evaluated for impairment	668,427		9,655,367		471,576		2,722,433		892,887		301,655		3,485,944		2,677,755		243,738		1,558,399		22,678,181
Total loan and leases	$	669,215	$	9,729,022	$	473,433	$	2,730,407	$	894,801	$	302,176	$	3,523,786	$	2,701,525	$	248,289	$	1,561,173	$	22,833,827

Troubled Debt Restructurings on Financing Receivables

The following table provides the types of non-PCI TDRs made during the three months ended March 31, 2018 and March 31, 2017, as well as a summary of loans that were modified as a TDR during the twelve month periods ended March 31, 2018 and March 31, 2017 that subsequently defaulted during the three months ended March 31, 2018 and March 31, 2017. 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 March 31, 2018						Three months ended March 31, 2017
	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
Loan term extension
Commercial mortgage	1	$	305	1	$	305	—	$	—	—	$	—
Other commercial real estate	—	—		—	—		—	—		1	530
Commercial and industrial	3	549		—	—		2	94		—	—
Residential mortgage	—	—		—	—		1	32		1	47
Revolving mortgage	1	57		—	—		—	—		—	—
Consumer	1	21		—	—		2	14		—	—
Total loan term extension	6	932		1	305		5	140		2	577
Below market interest rate
Construction and land development - commercial	—	—		—	—		1	60		—	—
Commercial mortgage	6	1,380		2	47		10	2,512		1	92
Other commercial real estate	—	—		—	—		1	4		—	—
Commercial and industrial	8	361		4	11		3	108		1	—
Lease financing	—	—		—	—		3	839		2	769
Residential mortgage	22	2,189		10	1,277		30	1,543		15	824
Revolving mortgage	25	1,659		11	431		—	—		—	—
Construction and land development - noncommercial	—	—		—	—		2	412		—	—
Consumer	5	71		3	48		2	14		—	—
Other	—	—		—	—		1	143		—	—
Total below market interest rate	66	5,660		30	1,814		53	5,635		19	1,685
Discharged from bankruptcy
Commercial mortgage	1	140		2	502		—	—		1	190
Commercial and industrial	14	474		16	177		—	—		—	—
Lease financing	5	304		2	73		16	227		—	—
Residential mortgage	8	566		6	417		3	140		1	978
Revolving mortgage	5	440		4	193		4	99		9	649
Consumer	13	262		11	183		18	193		10	128
Total discharged from bankruptcy	46	2,186		41	1,545		41	659		21	1,945
Total non-PCI restructurings	118	$	8,778	72	$	3,664	99	$	6,434	42	$	4,207

The following table provides the types of PCI TDRs made during the three months ended March 31, 2018 and March 31, 2017, as well as a summary of loans that were modified as a TDR during the twelve month periods ended March 31, 2018 and March 31, 2017 that subsequently defaulted during the three months ended March 31, 2018 and March 31, 2017.

	Three months ended March 31, 2018						Three months ended March 31, 2017
	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
Interest only period provided
Commercial and industrial	1	$	644	—	$	—	—	$	—	—	$	—
Total interest only	1	644		—	—		—	—		—	—
Below market interest rate
Residential mortgage	—	—		—	—		2	181		1	73
Total below market interest rate	—	—		—	—		2	181		1	73
Discharged from bankruptcy
Commercial mortgage	2	1,627		2	1,627		—	—		—	—
Total discharged from bankruptcy	2	1,627		2	1,627		—	—		—	—
Total PCI restructurings	3	$	2,271	2	$	1,627	2	$	181	1	$	73

For the three months ended March 31, 2018 and March 31, 2017, the pre-modification and post-modification outstanding recorded investments of loans modified as TDRs were not materially different.

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

	March 31, 2018						December 31, 2017
(Dollars in thousands)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial loans
Construction and land development - commercial	$	948	$	253	$	1,201	$	4,089	$	483	$	4,572
Commercial mortgage	61,444		12,964		74,408		62,358		15,863		78,221
Other commercial real estate	950		491		1,441		1,012		788		1,800
Commercial and industrial	7,000		1,049		8,049		7,598		910		8,508
Lease financing	902		1,066		1,968		722		1,048		1,770
Other	—		—		—		521		—		521
Total commercial TDRs	71,244		15,823		87,067		76,300		19,092		95,392
Noncommercial
Residential mortgage	36,432		9,651		46,083		34,067		9,475		43,542
Revolving mortgage	19,267		5,364		24,631		17,673		5,180		22,853
Construction and land development - noncommercial	2,914		183		3,097		—		—		—
Consumer and other	2,063		529		2,592		2,351		423		2,774
Total noncommercial TDRs	60,676		15,727		76,403		54,091		15,078		69,169
Total TDRs	$	131,920	$	31,550	$	163,470	$	130,391	$	34,170	$	164,561

The majority of TDRs are included in the special mention, substandard or doubtful credit grading categories, which results in more elevated loss expectations when projecting the expected cash flows that are used to determine the allowance for loan losses associated with these loans. 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. Further, all TDRs are individually evaluated for impairment through a review of collateral values or analysis of cash flows at least annually.

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

(Dollars in thousands)	March 31, 2018		December 31, 2017
Accruing TDRs:
PCI	$	18,380	$	18,163
Non-PCI	113,540		112,228
Total accruing TDRs	131,920		130,391
Nonaccruing TDRs:
PCI	250		272
Non-PCI	31,300		33,898
Total nonaccruing TDRs	31,550		34,170
All TDRs:
PCI	18,630		18,435
Non-PCI	144,840		146,126
Total TDRs	$	163,470	$	164,561