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Loans and Leases
 12 Months Ended
Dec. 31, 2020
Loans and Leases Receivable Disclosure [Abstract]  
Loans and Leases
LOANS AND LEASES
BancShares’ accounting methods for loans and leases depends whether they are originated or purchased, and if purchased, whether or not the loans reflect more than insignificant credit deterioration since origination, which is determined as of the acquisition date. Non-PCD loans consist of loans originated by BancShares and loans purchased from other institutions that do not reflect more than insignificant credit deterioration at acquisition and are reported by loan segments as defined in Note A, Accounting Policies and Basis of Presentation. Purchased loans which reflect more than insignificant credit deterioration are classified as PCD and reported as a single loan segment or class. At the date of acquisition, all acquired loans are recorded at fair value.
Loans and leases outstanding include the following at December 31, 2020 and 2019:
(Dollars in thousands)December 31, 2020
Commercial:
Construction and land development$985,424 
Owner occupied commercial mortgage11,165,012 
Non-owner occupied commercial mortgage2,987,689 
Commercial and industrial and leases5,013,644 
SBA-PPP2,406,291 
Total commercial loans22,558,060 
Consumer:
Residential mortgage5,561,686 
Revolving mortgage2,052,854 
Construction and land development348,123 
Consumer auto1,255,402 
Consumer other552,968 
Total consumer loans9,771,033 
Total non-PCD loans and leases32,329,093 
PCD loans462,882 
Total loans and leases$32,791,975 
(Dollars in thousands)December 31, 2019
Commercial:
Construction and land development$1,013,454 
Commercial mortgage12,282,635 
Other commercial real estate542,028 
Commercial and industrial and leases4,403,792 
Other310,093 
Total commercial loans18,552,002 
Noncommercial:
Residential mortgage5,293,917 
Revolving mortgage2,339,072 
Construction and land development357,385 
Consumer1,780,404 
Total noncommercial loans9,770,778 
Total non-PCI loans and leases28,322,780 
PCI loans558,716 
Total loans and leases$28,881,496 
Certain residential real estate loans are originated to be sold to investors and are recorded in loans held for sale at fair value. Loans held for sale totaled $124.8 million and $67.9 million at December 31, 2020 and 2019, respectively. We may change our strategy for certain portfolio loans and sell them in the secondary market. At such time, portfolio loans are transferred to loans held for sale at fair value.
During 2020, total proceeds from sales of residential mortgage loans were $1.05 billion, the majority of which were originated to be sold. An additional $7.6 million related to sales of portfolio loans, which were sold at par. During 2019, total proceeds from sales of residential mortgage loans were $756.0 million, of which $731.8 million related to sales of loans held for sale. The remaining $24.2 million related to sales of portfolio loans, which resulted in a gain of $0.3 million.
Net deferred fees on originated non-PCD loans and leases, including unearned income as well as unamortized costs, were $50.2 million and $0.9 million at December 31, 2020 and 2019, respectively. Of the amount outstanding as of December 31, 2020, $41.1 million relates to net deferred fees and costs on SBA-PPP loans. The unamortized discounts related to purchased non-PCD loans was $19.5 million at December 31, 2020 and $30.9 million at December 31, 2019. The net unamortized discount related to PCD loans and leases was $45.3 million at December 31, 2020 and $88.2 million at December 31, 2019.
Loans and leases to borrowers in medical, dental or related fields were $5.54 billion as of December 31, 2020, which represented 16.9% of total loans and leases, compared to $5.16 billion or 17.9% of total loans and leases at December 31, 2019. The credit risk of this industry concentration is mitigated through our underwriting policies, which emphasize reliance on adequate borrower cash flow, rather than underlying collateral value, and our preference for financing secured by owner-occupied real property. Except for this single concentration, no other industry represented more than 10% of total loans and leases outstanding at December 31, 2020.
The aging of the outstanding loans and leases, by class, at December 31, 2020 and December 31, 2019 is provided in the tables below. Loans and leases 30 days or less past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the loan agreement.
December 31, 2020
(Dollars in thousands)30-59 days
past due		60-89 days
past due		90 days or greaterTotal past
due		CurrentTotal loans
and leases
Commercial:
Construction and land development$956 $527 $1,603 $3,086 $982,338 $985,424 
Owner occupied commercial mortgage8,757 2,232 14,082 25,071 11,139,941 11,165,012 
Non-owner occupied commercial mortgage12,370 — 5,973 18,343 2,969,346 2,987,689 
Commercial and industrial and leases14,532 2,842 3,243 20,617 4,993,027 5,013,644 
SBA-PPP— — — — 2,406,291 2,406,291 
Total commercial loans36,615 5,601 24,901 67,117 22,490,943 22,558,060 
Consumer:
Residential mortgage43,218 8,364 31,690 83,272 5,478,414 5,561,686 
Revolving mortgage11,977 2,626 7,415 22,018 2,030,836 2,052,854 
Construction and land development 932 77 330 1,339 346,784 348,123 
Consumer auto6,825 1,835 1,076 9,736 1,245,666 1,255,402 
Consumer other3,610 1,464 1,505 6,579 546,389 552,968 
Total consumer loans66,562 14,366 42,016 122,944 9,648,089 9,771,033 
PCD loans18,322 6,076 31,026 55,424 407,458 462,882 
Total loans and leases$121,499 $26,043 $97,943 $245,485 $32,546,490 $32,791,975 
December 31, 2019
(Dollars in thousands)30-59 days
past due		60-89 days
past due		90 days or greaterTotal past
due		CurrentTotal loans
and leases
Commercial:
Construction and land development$3,146 $195 $2,702 $6,043 $1,007,411 $1,013,454 
Commercial mortgage20,389 8,774 8,319 37,482 12,245,153 12,282,635 
Other commercial real estate861 331 698 1,890 540,138 542,028 
Commercial and industrial and leases18,269 4,842 5,032 28,143 4,375,649 4,403,792 
Other51 411 126 588 309,505 310,093 
Total commercial loans42,716 14,553 16,877 74,146 18,477,856 18,552,002 
Noncommercial:
Residential mortgage45,839 18,289 24,409 88,537 5,205,380 5,293,917 
Revolving mortgage9,729 3,468 9,865 23,062 2,316,010 2,339,072 
Construction and land development 977 218 1,797 2,992 354,393 357,385 
Consumer10,481 3,746 3,571 17,798 1,762,606 1,780,404 
Total noncommercial loans67,026 25,721 39,642 132,389 9,638,389 9,770,778 
PCI loans26,478 10,784 28,973 66,235 492,481 558,716 
Total loans and leases$136,220 $51,058 $85,492 $272,770 $28,608,726 $28,881,496 
The amortized cost, by class, of loans and leases on nonaccrual status, and loans and leases greater than 90 days past due and still accruing at December 31, 2020 and December 31, 2019, were as follows:
 
January 1, 2020(1)
December 31, 2020
(Dollars in thousands)Nonaccrual
loans and
leases		Nonaccrual
loans and
leases		Loans and
leases > 90
days and
accruing
Commercial:
Construction and land development$4,281 $1,661 $— 
Owner occupied commercial mortgage24,476 23,103 3,625 
Non-owner occupied commercial mortgage5,965 7,932 147 
Commercial and industrial and leases7,685 10,626 540 
Total commercial loans42,407 43,322 4,312 
Consumer:
Residential mortgage44,357 66,345 — 
Revolving mortgage22,411 22,236 — 
Construction and land development2,828 652 — 
Consumer auto2,145 3,166 — 
Consumer other798 823 1,195 
Total consumer loans72,539 93,222 1,195 
PCD loans53,771 54,939 355 
Total loans and leases$168,717 $191,483 $5,862 
(1)Upon the adoption of ASC 326, BancShares eliminated the pooling of PCI loans and as a result $47.0 million in additional PCD loans were recognized as nonaccrual loans at January 1, 2020. As of December 31, 2020, $24.9 million of these loans remained outstanding.
 December 31, 2019
(Dollars in thousands)Nonaccrual
loans and
leases		Loans and
leases > 90 days and accruing
Commercial:
Construction and land development$4,281 $— 
Commercial mortgage29,733 — 
Commercial and industrial and leases7,365 1,094 
Other commercial real estate708 — 
Other320 — 
Total commercial loans42,407 1,094 
Consumer:
Construction and land development2,828 — 
Residential mortgage44,357 45 
Revolving mortgage22,411 — 
Consumer2,943 2,152 
Total noncommercial loans72,539 2,197 
Total non-PCI loans and leases$114,946 $3,291 
Credit quality indicators
Loans and leases are monitored for credit quality on a recurring basis. Commercial and noncommercial loans and leases have different credit quality indicators as a result of the unique characteristics of the loan segments being evaluated. The credit quality indicators for non-PCD commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:
Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.
Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.
Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.
Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.
Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at December 31, 2020 and 2019, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit. The remaining balance is comprised of a small amount of commercial mortgage, lease financing and other commercial real estate loans.
The credit quality indicators for consumer and PCD loans are based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases.
The following tables represent current credit quality indicators by origination year as of December 31, 2020.
Commercial Loans Amortized Cost Basis by Origination Year
Classification:20202019201820172016PriorRevolvingRevolving converted to term loansTotal
(Dollars in thousands)
Construction and land development
Pass$342,183 $341,233 $190,429 $50,776 $23,969 $11,306 $10,969 $— $970,865 
Special Mention246 — 6,421 5,342 — — 153 — 12,162 
Substandard229 629 1,450 — 8 81 — — 2,397 
Total342,658 341,862 198,300 56,118 23,977 11,387 11,122 — 985,424 
Owner occupied commercial mortgage
Pass3,183,467 2,201,165 1,625,141 1,301,412 1,049,858 1,454,020 101,556 133 10,916,752 
Special Mention6,274 20,702 36,739 12,387 17,699 25,693 5,115 72 124,681 
Substandard10,280 19,052 9,842 20,928 13,736 41,303 8,438 — 123,579 
Total3,200,021 2,240,919 1,671,722 1,334,727 1,081,293 1,521,016 115,109 205 11,165,012 
Non-owner occupied commercial mortgage
Pass865,514 609,975 378,136 331,800 282,810 391,517 32,149 — 2,891,901 
Special Mention569 905 10,794 1,808 5,121 3,279 483 — 22,959 
Substandard2,899 18,546 12,296 8,764 14,087 15,427 810 — 72,829 
Total868,982 629,426 401,226 342,372 302,018 410,223 33,442 — 2,987,689 
Commercial and industrial and leases
Pass1,620,622 983,852 504,463 310,468 234,735 286,996 899,978 5,520 4,846,634 
Special Mention3,146 17,065 7,265 5,393 3,307 4,912 9,152 189 50,429 
Substandard17,811 4,095 4,370 4,257 2,548 3,801 22,384 983 60,249 
Ungraded— — — — — — 56,332 — 56,332 
Total1,641,579 1,005,012 516,098 320,118 240,590 295,709 987,846 6,692 5,013,644 
SBA-PPP
Pass2,406,291 — — — — — — — 2,406,291 
Total commercial$8,459,531 $4,217,219 $2,787,346 $2,053,335 $1,647,878 $2,238,335 $1,147,519 $6,897 $22,558,060 
Consumer and PCD Loans Amortized Cost Basis by Origination Year
Days Past Due:20202019201820172016PriorRevolvingRevolving converted to term loansTotal
(Dollars in thousands)
Residential mortgage
Current$1,882,683 $978,298 $655,798 $596,309 $461,719 $878,634 $24,973 $— $5,478,414 
30-59 days2,278 4,573 11,463 3,772 8,613 12,299 220 — 43,218 
60-89 days30 100 1,246 1,449 834 4,705 — — 8,364 
90 days or greater282 4,831 3,150 4,015 5,689 13,723 — — 31,690 
Total1,885,273 987,802 671,657 605,545 476,855 909,361 25,193 — 5,561,686 
Revolving mortgage
Current— — — — — — 1,879,968 150,868 2,030,836 
30-59 days— — — — — — 8,241 3,736 11,977 
60-89 days— — — — — — 527 2,099 2,626 
90 days or greater— — — — — — 2,301 5,114 7,415 
Total— — — — — — 1,891,037 161,817 2,052,854 
Construction and land development
Current215,112 85,707 24,860 10,269 6,093 2,218 2,525 — 346,784 
30-59 days— 420 121 370 — 21 — — 932 
60-89 days— — — 9 — 68 — — 77 
90 days or greater— — — — — 330 — — 330 
Total215,112 86,127 24,981 10,648 6,093 2,637 2,525 — 348,123 
Consumer auto
Current521,719 340,594 219,597 104,280 49,872 9,604 — — 1,245,666 
30-59 days2,175 1,873 1,257 842 544 134 — — 6,825 
60-89 days329 689 312 351 109 45 — — 1,835 
90 days or greater170 527 217 57 102 3 — — 1,076 
Total524,393 343,683 221,383 105,530 50,627 9,786 — — 1,255,402 
Consumer other
Current53,842 27,117 10,911 7,159 2,980 29,336 415,044 — 546,389 
30-59 days322 114 77 18 11 7 3,061 — 3,610 
60-89 days102 20 13 18 3 23 1,285 — 1,464 
90 days or greater53 84 8 — — — 1,360 — 1,505 
Total54,319 27,335 11,009 7,195 2,994 29,366 420,750 — 552,968 
Total consumer2,679,097 1,444,947 929,030 728,918 536,569 951,150 2,339,505 161,817 9,771,033 
PCD loans
Current31,475 25,425 27,183 27,955 28,995 232,186 13,212 21,027 407,458 
30-59 days999 925 801 718 1,341 12,637 156 745 18,322 
60-89 days447 81 312 695 97 4,098 9 337 6,076 
90 days or greater721 2,325 4,755 1,208 897 19,963 111 1,046 31,026 
Total PCD33,642 28,756 33,051 30,576 31,330 268,884 13,488 23,155 462,882 
Total loans and leases$11,172,270 $5,690,922 $3,749,427 $2,812,829 $2,215,777 $3,458,369 $3,500,512 $191,869 $32,791,975 
Loans and leases outstanding at December 31, 2019 by credit quality indicator are provided below:
December 31, 2019
Commercial loans and leases
(Dollars in thousands)Construction and land
development		Commercial mortgageOther commercial real estateCommercial and industrial and leasesOtherPCITotal commercial loans and leases
Grade:
Pass$1,004,922 $12,050,799 $536,682 $4,256,456 $308,796 $148,412 $18,306,067 
Special mention2,577 115,164 3,899 44,604 622 44,290 211,156 
Substandard5,955 116,672 1,447 34,148 675 87,970 246,867 
Doubtful— — — 3 — 3,657 3,660 
Ungraded— — — 68,581 — — 68,581 
Total$1,013,454 $12,282,635 $542,028 $4,403,792 $310,093 $284,329 $18,836,331 
December 31, 2019
Noncommercial loans and leases
(Dollars in thousands)Residential mortgageRevolving mortgageConstruction and land development ConsumerPCITotal noncommercial loans and leases
Days past due:
Current$5,205,380 $2,316,010 $354,393 $1,762,606 $240,995 $9,879,384 
30-59 days past due45,839 9,729 977 10,481 13,764 80,790 
60-89 days past due18,289 3,468 218 3,746 5,608 31,329 
90 days or greater past due24,409 9,865 1,797 3,571 14,020 53,662 
Total$5,293,917 $2,339,072 $357,385 $1,780,404 $274,387 $10,045,165 
The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta and the Federal Reserve Bank (“FRB”) as of December 31, 2020 and 2019:
(Dollars in thousands)December 31, 2020December 31, 2019
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans$8,637,844 $6,574,636 
Less: advances652,675 563,690 
Available borrowing capacity$7,985,169 $6,010,946 
Pledged non-PCD loans$12,157,153 $9,407,688 
FRB
Lendable collateral value of pledged non-PCD loans$3,321,762 $2,981,712 
Less: advances— — 
Available borrowing capacity$3,321,762 $2,981,712 
Pledged non-PCD loans$4,104,866 $3,684,919 
Purchased loans and leases
The following table summarizes PCD loans acquired in the Community Financial transaction and provides the contractually required payments, less the initial allowance for credit losses and discount to produce the fair value of acquired loans with evidence of more than insignificant credit quality deterioration since origination at the acquisition date:
(Dollars in thousands)Community Financial
Contractually required payments$25,635 
Initial PCD allowance1,193 
Discount1,055 
Fair value at acquisition date$23,387 
The recorded fair values of purchased non-PCD loans acquired in the Community Financial transaction as of the acquisition date are as follows:
(Dollars in thousands)Community Financial
Commercial:
Construction and land development$9,428 
Owner occupied commercial mortgage31,473 
Non-owner occupied commercial mortgage25,143 
Commercial and industrial and leases15,065 
Total commercial loans81,109 
Consumer:
Residential mortgage21,168 
Revolving mortgage2,084 
Construction and land development5,254 
Consumer auto294 
Consumer other693 
Total consumer loans29,493 
Total non-PCD loans$110,602