Annual report pursuant to Section 13 and 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v3.22.0.1
LOANS AND ALLOWANCE FOR LOAN LOSSES
12 Months Ended
Dec. 31, 2021
Loans and Allowance for Loan Losses [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES

4. LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

On January 1, 2020, the Company adopted ASC 326. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. For further discussion on the Company’s accounting policies and policy elections related to the accounting standard update refer to Note 1 “Summary of Significant Accounting Policies” in this Form 10-K. All loan information presented as of December 31, 2021 and 2020 is in accordance with ASC 326. All loan information presented prior to January 1, 2020 is in accordance with previous applicable GAAP.

The information included below reflects the impact of the CARES Act, as amended by the CAA, and the Joint Guidance. See Note 1 “Summary of Significant Accounting Policies” in this Form 10-K for information about COVID-19 and related legislative and regulatory developments.

Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at December 31, 2021 and 2020 (dollars in thousands):

2021

    

2020

Construction and Land Development

$

862,236

$

925,798

Commercial Real Estate - Owner Occupied

 

1,995,409

 

2,128,909

Commercial Real Estate - Non-Owner Occupied

 

3,789,377

 

3,657,562

Multifamily Real Estate

 

778,626

 

814,745

Commercial & Industrial(1)

 

2,542,243

 

3,263,460

Residential 1-4 Family - Commercial

 

607,337

 

671,949

Residential 1-4 Family - Consumer

 

816,524

 

822,866

Residential 1-4 Family - Revolving

 

560,796

 

596,996

Auto

 

461,052

 

401,324

Consumer

 

176,992

 

247,730

Other Commercial(2)

 

605,251

 

489,975

Total LHFI, net of deferred fees and costs(3)

13,195,843

14,021,314

Allowance for loan and lease losses

(99,787)

(160,540)

Total LHFI, net

$

13,096,056

$

13,860,774

(1)Commercial & industrial loans include approximately $145.3 million and $1.2 billion in loans from the PPP at December 31, 2021 and December 31, 2020, respectively.

(2)Other commercial loans include approximately $5.1 million and $11.3 million in loans from the PPP at December 31, 2021 and, December 31, 2020, respectively.

(3)Total loans include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $49.3 million and $69.7 million as of December 31, 2021 and December 31, 2020, respectively.

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2021 (dollars in thousands):

    

    

    

    

Greater than

    

    

30-59 Days

60-89 Days

90 Days and

Current

Past Due

Past Due

still Accruing

Nonaccrual

Total Loans

Construction and Land Development

$

857,883

$

1,357

$

$

299

$

2,697

$

862,236

Commercial Real Estate - Owner Occupied

 

1,987,133

 

1,230

 

152

 

1,257

 

5,637

 

1,995,409

Commercial Real Estate - Non-Owner Occupied

 

3,783,211

 

1,965

 

127

 

433

 

3,641

 

3,789,377

Multifamily Real Estate

 

778,429

 

84

 

 

 

113

 

778,626

Commercial & Industrial

 

2,536,100

 

1,161

 

1,438

 

1,897

 

1,647

 

2,542,243

Residential 1-4 Family - Commercial

 

601,946

 

1,844

 

272

 

990

 

2,285

 

607,337

Residential 1-4 Family - Consumer

 

795,821

 

3,368

 

2,925

 

3,013

 

11,397

 

816,524

Residential 1-4 Family - Revolving

 

554,652

 

1,493

 

363

 

882

 

3,406

 

560,796

Auto

 

458,473

 

1,866

 

249

 

241

 

223

 

461,052

Consumer

 

175,943

 

689

 

186

 

120

 

54

 

176,992

Other Commercial

605,214

37

605,251

Total LHFI

$

13,134,805

$

15,094

$

5,712

$

9,132

$

31,100

$

13,195,843

% of total loans

99.54

%

0.11

%

0.04

%

0.07

%

0.24

%

100.00

%

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2020 (dollars in thousands):

    

    

    

    

Greater than

    

    

 

30-59 Days

60-89 Days

90 Days and

 

Current

Past Due

Past Due

still Accruing

Nonaccrual

Total Loans

 

Construction and Land Development

$

920,276

$

1,903

$

547

$

$

3,072

$

925,798

Commercial Real Estate - Owner Occupied

 

2,114,804

 

1,870

 

1,380

 

3,727

 

7,128

 

2,128,909

Commercial Real Estate - Non-Owner Occupied

 

3,651,232

 

2,144

 

1,721

 

148

 

2,317

 

3,657,562

Multifamily Real Estate

 

814,095

 

617

 

 

 

33

 

814,745

Commercial & Industrial

 

3,257,201

 

1,848

 

1,190

 

1,114

 

2,107

 

3,263,460

Residential 1-4 Family - Commercial

 

657,351

 

2,227

 

818

 

1,560

 

9,993

 

671,949

Residential 1-4 Family - Consumer

 

792,852

 

10,182

 

1,533

 

5,699

 

12,600

 

822,866

Residential 1-4 Family - Revolving

 

587,522

 

2,975

 

1,044

 

826

 

4,629

 

596,996

Auto

 

398,206

 

2,076

 

376

 

166

 

500

 

401,324

Consumer

 

245,551

 

1,166

 

550

 

394

 

69

 

247,730

Other Commercial

489,959

16

489,975

Total LHFI

$

13,929,049

$

27,024

$

9,159

$

13,634

$

42,448

$

14,021,314

% of total loans

99.34

%

0.19

%

0.07

%

0.10

%

0.30

%

100.00

%

The following table shows the Company’s amortized cost basis of loans on nonaccrual status as of December 31, 2020, as well as amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2021 (dollars in thousands):

Nonaccrual

December 31, 2020

December 31, 2021

Nonaccrual With No ALLL

90 Days Past due and still Accruing

Construction and Land Development

$

3,072

$

2,697

$

1,985

$

299

Commercial Real Estate - Owner Occupied

7,128

5,637

970

1,257

Commercial Real Estate - Non-Owner Occupied

2,317

3,641

1,089

433

Multifamily Real Estate

33

113

Commercial & Industrial

2,107

1,647

1

1,897

Residential 1-4 Family - Commercial

9,993

2,285

990

Residential 1-4 Family - Consumer

12,600

11,397

3,013

Residential 1-4 Family - Revolving

4,629

3,406

882

Auto

500

223

241

Consumer

69

54

120

Total LHFI

$

42,448

$

31,100

$

4,045

$

9,132

The following table shows the Company’s amortized cost basis of loans on nonaccrual status as of January 1, 2020 as well as amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of December 31, 2020 (dollars in thousands):

Nonaccrual

January 1, 2020

December 31, 2020

Nonaccrual With No ALLL

90 Days Past due and still Accruing

Construction and Land Development

$

4,060

$

3,072

$

1,985

$

Commercial Real Estate - Owner Occupied

13,889

7,128

1,994

3,727

Commercial Real Estate - Non-Owner Occupied

1,368

2,317

148

Multifamily Real Estate

33

Commercial & Industrial

3,037

2,107

1

1,114

Residential 1-4 Family - Commercial

6,492

9,993

6,388

1,560

Residential 1-4 Family - Consumer

13,117

12,600

1,069

5,699

Residential 1-4 Family - Revolving

2,490

4,629

60

826

Auto

565

500

166

Consumer

88

69

394

Other Commercial

98

Total LHFI

$

45,204

$

42,448

$

11,497

$

13,634

There was no interest income recognized on nonaccrual loans during the years ended December 31, 2021 and 2020. See Note 1 “Summary of Significant Accounting Policies” for additional information on the Company’s policies for nonaccrual loans.

Troubled Debt Restructurings

The CARES Act, as amended by the CAA, permits financial institutions to suspend requirements under GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDRs and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of January 1, 2022 or 60 days after the end of the COVID-19 emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. In addition, federal bank regulatory authorities also issued guidance to encourage financial institutions to make loan modifications for borrowers affected by COVID-19 and have assured financial institutions that they will neither receive supervisory criticism for such prudent loan modifications, nor be required by examiners to automatically categorize COVID-19-related loan modifications as TDRs. As of December 31, 2021, there were no material loans still under their modified terms. As of December 31, 2020, the Company had approximately $146.1 million in loans still under their modified terms. The Company’s modification program primarily included payment deferrals and interest only modifications.

As of December 31, 2021, the Company has TDRs totaling $18.0 million with an estimated $859,000 of allowance for those loans for the current period. As of December 31, 2020, the Company had TDRs totaling $20.6 million with an estimated $1.6 million of allowance for those loans.

A TDR occurs when a lender, for economic or legal reasons, grants a concession to the borrower related to the borrower’s financial difficulties, that it would not otherwise consider. All loans that are considered to be TDRs are evaluated for credit losses in accordance with the Company’s ALLL methodology. For the years ended December 31, 2021 and 2020, the recorded investment in TDRs prior to modifications was not materially impacted by the modifications.

The following table provides a summary, by class, of TDRs that continue to accrue interest under the terms of the applicable restructuring agreement, which are considered to be performing, and TDRs that have been placed on nonaccrual status, which are considered to be nonperforming, as of December 31, 2021 and 2020 (dollars in thousands):

December 31, 2021

December 31, 2020

    

No. of

    

Recorded

    

Outstanding

    

No. of

    

Recorded

    

Outstanding

Loans

Investment

Commitment

Loans

Investment

Commitment

Performing

 

  

 

  

 

  

 

  

 

  

 

  

Construction and Land Development

 

4

$

201

$

 

4

$

215

$

Commercial Real Estate - Owner Occupied

 

3

 

572

 

 

6

 

2,033

 

176

Commercial Real Estate - Non-Owner Occupied

 

 

 

 

1

 

1,089

 

Commercial & Industrial

 

 

 

 

4

 

727

 

Residential 1-4 Family - Commercial

 

 

 

 

3

 

245

 

Residential 1-4 Family - Consumer

 

75

 

9,021

 

 

77

 

8,943

 

Residential 1-4 Family - Revolving

 

3

 

265

 

4

 

3

 

277

 

Consumer

 

2

 

15

 

 

3

 

22

 

Other Commercial

1

239

1

410

Total performing

 

88

$

10,313

$

4

 

102

$

13,961

$

176

Nonperforming

 

  

 

  

 

  

 

  

 

  

 

  

Commercial Real Estate - Owner Occupied

 

2

$

830

$

 

1

$

20

$

Commercial Real Estate - Non-Owner Occupied

3

1,357

1

134

Commercial & Industrial

 

3

 

729

 

 

3

 

237

 

Residential 1-4 Family - Commercial

 

3

 

388

 

 

4

 

1,296

 

Residential 1-4 Family - Consumer

 

24

 

4,239

 

 

23

 

4,865

 

Residential 1-4 Family - Revolving

 

3

 

99

 

 

3

 

103

 

Total nonperforming

 

38

$

7,642

$

 

35

$

6,655

$

Total performing and nonperforming

 

126

$

17,955

$

4

 

137

$

20,616

$

176

The Company considers a default of a TDR to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the years ended December 31, 2021 and 2020, the Company did not have any material loans that went into default that had been restructured in the twelve-month period prior to the time of default.

The following table shows, by class and modification type, TDRs that occurred during the year ended December 31, 2021 and 2020 (dollars in thousands):

All Restructurings

2021

2020

    

    

Recorded

    

    

Recorded

No. of

Investment at

No. of

Investment at

Loans

Period End

Loans

Period End

Modified to interest only, at a market rate

 

  

 

  

 

  

 

  

Residential 1-4 Family - Commercial

$

1

644

Total interest only at market rate of interest

 

$

 

1

$

644

Term modification, at a market rate

 

  

 

  

 

  

 

  

Commercial & Industrial

 

$

 

3

 

103

Commercial Real Estate - Non-Owner Occupied

 

1

153

 

 

Residential 1-4 Family - Commercial

 

 

 

1

 

294

Residential 1-4 Family - Consumer

2

101

4

320

Consumer

1

9

Total loan term extended at a market rate

 

3

$

254

 

9

$

726

Term modification, below market rate

 

  

 

  

 

  

 

  

Construction and Land Development

$

1

$

34

Commercial & Industrial

 

 

 

2

 

355

Residential 1-4 Family - Commercial

1

287

Residential 1-4 Family - Consumer

 

12

1,810

 

18

 

2,519

Residential 1-4 Family - Revolving

 

 

 

2

 

275

Consumer

 

1

 

15

 

 

Total loan term extended at a below market rate

 

13

$

1,825

 

24

$

3,470

Interest rate modification, below market rate

 

  

 

  

 

  

 

  

Residential 1-4 Family - Commercial

 

1

$

45

 

$

Total interest only at below market rate of interest

 

1

$

45

 

$

Total

 

17

$

2,124

 

34

$

4,840

Allowance for Loan and Lease Losses

ALLL on the loan portfolio is a material estimate for the Company. The Company estimates its ALLL on its loan portfolio on a quarterly basis. The Company models the ALLL using two primary segments, Commercial and Consumer. Each loan segment is further disaggregated into classes based on similar risk characteristics. The Company has identified the following classes within each loan segment:

Commercial: Construction and Land Development, Commercial Real Estate – Owner Occupied, Commercial Real Estate – Non-Owner Occupied, Multifamily Real Estate, Commercial & Industrial, Residential 1-4 Family – Commercial, and Other Commercial
Consumer: Residential 1-4 Family – Consumer, Residential 1-4 Family – Revolving, Auto, and Consumer

The following tables show the ALLL activity by loan segment for the years ended December 31, 2021 and 2020 (dollars in thousands):

Year Ended December 31, 2021

Year Ended December 31, 2020

Commercial

Consumer

Total

    

Commercial

Consumer

Total

Balance at beginning of period

$

117,403

$

43,137

$

160,540

 

$

30,941

$

11,353

$

42,294

Impact of ASC 326 adoption on non-PCD loans

 

 

 

 

4,432

 

40,666

 

45,098

Impact of ASC 326 adoption on PCD loans

 

 

 

 

 

1,752

 

634

 

2,386

Impact of adopting ASC 326

 

 

 

 

6,184

 

41,300

 

47,484

Loans charged-off

 

(5,186)

 

(4,897)

 

(10,083)

 

 

(6,671)

 

(11,522)

 

(18,193)

Recoveries credited to allowance

 

4,915

 

3,303

 

8,218

 

 

3,517

 

3,238

 

6,755

Provision charged to operations

 

(39,230)

 

(19,658)

 

(58,888)

 

 

83,432

 

(1,232)

 

82,200

Balance at end of period

$

77,902

$

21,885

$

99,787

$

117,403

$

43,137

$

160,540

Credit Quality Indicators

Credit quality indicators are utilized to help estimate the collectability of each loan class within the Commercial and Consumer loan segments. For classes of loans within the Commercial segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is risk rating categories of Pass, Watch, Special Mention, Substandard, and Doubtful.  For classes of loans within the Consumer segment, the primary credit quality indicator used for evaluating credit quality and estimating the ALLL is delinquency bands of Current, 30-59, 60-89, 90+, and Nonaccrual.  While other credit quality indicators are evaluated and analyzed as part of the Company’s credit risk management activities, these indicators are primarily used in estimating the ALLL. The Company evaluates the credit risk of its loan portfolio on at least a quarterly basis.

Commercial Loans

The Company uses a risk rating system as the primary credit quality indicator for classes of loans within the Commercial segment. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the ACL. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows:

Pass is determined by the following criteria:

Risk rated 0 loans have little or no risk and are with General Obligation Municipal Borrowers;
Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;
Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;
Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;
Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan.

Watch is determined by the following criteria:

Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

Special Mention is determined by the following criteria:

Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position.

Substandard is determined by the following criteria:

Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected.

Doubtful is determined by the following criteria:

Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined;
Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

The table below details the amortized cost of the classes of loans within the Commercial segment by risk level and year of origination as of December 31, 2021 (dollars in thousands):

December 31, 2021

Term Loans Amortized Cost Basis by Origination Year

2021

2020

2019

2018

2017

Prior

Revolving Loans

Total

Construction and Land Development

Pass

$

430,764

$

218,672

$

39,937

$

40,128

$

11,299

$

50,908

$

22,996

$

814,704

Watch

395

185

12,923

129

349

4,026

-

18,007

Special Mention

-

-

-

-

-

735

-

735

Substandard

3,541

1

221

19,264

198

5,565

-

28,790

Total Construction and Land Development

$

434,700

$

218,858

$

53,081

$

59,521

$

11,846

$

61,234

$

22,996

$

862,236

Commercial Real Estate - Owner Occupied

Pass

$

222,079

$

279,165

$

321,503

$

263,422

$

179,994

$

555,540

$

19,705

$

1,841,408

Watch

185

18

7,959

10,875

14,648

57,466

702

91,853

Special Mention

-

932

11,826

610

1,052

19,480

507

34,407

Substandard

200

153

7,455

2,538

1,935

14,834

626

27,741

Total Commercial Real Estate - Owner Occupied

$

222,464

$

280,268

$

348,743

$

277,445

$

197,629

$

647,320

$

21,540

$

1,995,409

Commercial Real Estate - Non-Owner Occupied

Pass

$

642,386

$

421,063

$

520,035

$

377,176

$

374,949

$

1,102,193

$

36,568

$

3,474,370

Watch

2,152

841

35,721

39,356

18,242

101,797

14

198,123

Special Mention

-

10,609

25,691

20,119

12,741

4,775

73,935

Substandard

-

-

23,376

11,369

7,952

252

42,949

Total Commercial Real Estate - Non-Owner Occupied

$

644,538

$

432,513

$

604,823

$

448,020

$

405,932

$

1,216,717

$

36,834

$

3,789,377

Commercial & Industrial

Pass

$

770,662

$

450,478

$

287,926

$

110,710

$

38,395

$

170,857

$

619,583

$

2,448,611

Watch

1,233

9,641

2,766

31,635

1,370

4,405

17,220

68,270

Special Mention

206

935

8,477

1,023

564

561

3,249

15,015

Substandard

379

575

3,636

1,965

463

1,639

1,690

10,347

Total Commercial & Industrial

$

772,480

$

461,629

$

302,805

$

145,333

$

40,792

$

177,462

$

641,742

$

2,542,243

Multifamily Real Estate

Pass

$

63,431

$

187,616

$

108,402

$

114,077

$

66,562

$

228,013

$

1,548

$

769,649

Watch

359

459

522

1,340

Special Mention

44

2,248

624

4,517

91

7,524

Substandard

113

113

Total Multifamily Real Estate

$

63,475

$

189,864

$

109,385

$

119,053

$

66,562

$

228,739

$

1,548

$

778,626

Residential 1-4 Family - Commercial

Pass

$

108,259

$

94,184

$

65,682

$

46,267

$

55,995

$

196,052

$

550

$

566,989

Watch

2,041

4,887

7,483

2,415

7,573

311

24,710

Special Mention

96

436

391

4,126

5,049

Substandard

93

3,494

536

1,291

4,876

299

10,589

Total Residential 1-4 Family - Commercial

$

108,352

$

96,321

$

74,063

$

54,722

$

60,092

$

212,627

$

1,160

$

607,337

Other Commercial

Pass

$

226,595

$

167,497

$

98,848

$

5,620

$

25,723

$

44,114

$

30,445

$

598,842

Watch

581

1,246

4,341

6,168

Special Mention

2

2

Substandard

239

239

Total Other Commercial

$

226,595

$

167,497

$

98,848

$

6,201

$

26,971

$

48,694

$

30,445

$

605,251

Total Commercial

Pass

$

2,464,176

$

1,818,675

$

1,442,333

$

957,400

$

752,917

$

2,347,677

$

731,395

$

10,514,573

Watch

3,965

12,726

64,615

90,518

38,270

180,130

18,247

408,471

Special Mention

250

14,820

46,618

26,705

14,750

29,768

3,756

136,667

Substandard

4,213

729

38,182

35,672

3,887

35,218

2,867

120,768

Total Commercial

$

2,472,604

$

1,846,950

$

1,591,748

$

1,110,295

$

809,824

$

2,592,793

$

756,265

$

11,180,479

The table below details the amortized cost of the classes of loans within the Commercial segment by risk level and year of origination as of December 31, 2020 (dollars in thousands):

December 31, 2020

Term Loans Amortized Cost Basis by Origination Year

2020

2019

2018

2017

2016

Prior

Revolving Loans

Total

Construction and Land Development

Pass

$

316,585

$

277,142

$

116,800

$

24,770

$

42,970

$

54,023

$

23,324

$

855,614

Watch

1,873

18,181

8,434

344

2,355

6,372

412

37,971

Special Mention

5,532

135

2,655

8,322

Substandard

17,780

64

2,037

4,010

23,891

Total Construction and Land Development

$

318,458

$

300,855

$

143,149

$

25,178

$

47,362

$

67,060

$

23,736

$

925,798

Commercial Real Estate - Owner Occupied

Pass

$

286,522

$

375,541

$

300,583

$

233,359

$

128,261

$

570,361

$

18,838

$

1,913,465

Watch

1,942

14,611

22,224

15,623

24,979

41,361

1,648

122,388

Special Mention

988

6,052

5,749

4,198

9,907

30,455

1,121

58,470

Substandard

4,858

5,159

914

1,555

21,101

999

34,586

Total Commercial Real Estate - Owner Occupied

$

289,452

$

401,062

$

333,715

$

254,094

$

164,702

$

663,278

$

22,606

$

2,128,909

Commercial Real Estate - Non-Owner Occupied

Pass

$

381,849

$

455,427

$

433,183

$

403,677

$

336,630

$

850,035

$

30,421

$

2,891,222

Watch

28,354

142,279

76,838

59,451

79,533

224,944

16,870

628,269

Special Mention

702

11,072

34,905

18,073

40,771

11,211

723

117,457

Substandard

246

13,357

25

6,986

20,614

Total Commercial Real Estate - Non-Owner Occupied

$

411,151

$

608,778

$

558,283

$

481,201

$

456,959

$

1,093,176

$

48,014

$

3,657,562

Commercial & Industrial

Pass

$

1,730,876

$

350,618

$

199,489

$

67,035

$

71,799

$

140,461

$

590,701

$

3,150,979

Watch

4,872

32,028

13,073

6,500

3,182

4,906

19,972

84,533

Special Mention

1,009

2,178

3,890

1,150

724

1,234

4,755

14,940

Substandard

534

4,269

1,274

309

560

2,676

3,386

13,008

Total Commercial & Industrial

$

1,737,291

$

389,093

$

217,726

$

74,994

$

76,265

$

149,277

$

618,814

$

3,263,460

Multifamily Real Estate

Pass

$

144,805

$

85,740

$

150,724

$

117,881

$

67,984

$

231,113

$

2,311

$

800,558

Watch

5,074

475

617

560

6,726

Special Mention

2,280

4,388

760

7,428

Substandard

33

33

Total Multifamily Real Estate

$

147,085

$

90,814

$

155,587

$

117,881

$

68,601

$

232,466

$

2,311

$

814,745

Residential 1-4 Family - Commercial

Pass

$

104,630

$

89,332

$

70,310

$

79,156

$

68,915

$

201,492

$

2,236

$

616,071

Watch

666

6,665

8,252

4,141

4,067

9,307

195

33,293

Special Mention

601

663

468

5,923

7,655

Substandard

644

793

4,913

1,995

986

5,111

488

14,930

Total Residential 1-4 Family - Commercial

$

105,940

$

96,790

$

84,076

$

85,955

$

74,436

$

221,833

$

2,919

$

671,949

Other Commercial

Pass

$

223,490

$

112,045

$

9,549

$

30,314

$

16,494

$

42,158

$

44,180

$

478,230

Watch

613

1,299

1,189

3,934

7,035

Special Mention

10

7

4,591

102

4,710

Total Other Commercial

$

223,500

$

112,045

$

10,162

$

31,620

$

17,683

$

50,683

$

44,282

$

489,975

Total Commercial

Pass

$

3,188,757

$

1,745,845

$

1,280,638

$

956,192

$

733,053

$

2,089,643

$

712,011

$

10,706,139

Watch

37,707

218,838

129,909

87,358

115,922

291,384

39,097

920,215

Special Mention

4,989

24,834

49,668

24,091

51,870

56,829

6,701

218,982

Substandard

1,424

9,920

42,483

3,282

5,163

39,917

4,873

107,062

Total Commercial

$

3,232,877

$

1,999,437

$

1,502,698

$

1,070,923

$

906,008

$

2,477,773

$

762,682

$

11,952,398

Consumer Loans

For Consumer loans, the Company evaluates credit quality based on the delinquency status of the loan. The following table details the amortized cost of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of December 31, 2021 (dollars in thousands):

December 31, 2021

Term Loans Amortized Cost Basis by Origination Year

2021

2020

2019

2018

2017

Prior

Revolving Loans

Total

Residential 1-4 Family - Consumer

Current

$

248,904

$

174,459

$

47,905

$

33,809

$

44,179

$

246,554

$

11

$

795,821

30-59 Days Past Due

157

143

807

460

1,801

3,368

60-89 Days Past Due

624

107

2,194

2,925

90+ Days Past Due

46

20

304

2,643

3,013

Nonaccrual

444

117

884

1,330

8,622

11,397

Total Residential 1-4 Family - Consumer

$

249,348

$

174,616

$

48,211

$

36,144

$

46,380

$

261,814

$

11

$

816,524

Residential 1-4 Family - Revolving

Current

$

16,546

$

9,511

$

2,230

$

1,056

$

$

484

$

524,825

$

554,652

30-59 Days Past Due

1,493

1,493

60-89 Days Past Due

363

363

90+ Days Past Due

882

882

Nonaccrual

63

18

3,325

3,406

Total Residential 1-4 Family - Revolving

$

16,546

$

9,574

$

2,230

$

1,074

$

$

484

$

530,888

$

560,796

Auto

Current

$

207,229

$

123,848

$

72,427

$

31,745

$

16,020

$

7,204

$

$

458,473

30-59 Days Past Due

299

382

518

259

245

163

1,866

60-89 Days Past Due

45

29

95

33

36

11

249

90+ Days Past Due

55

101

42

20

23

241

Nonaccrual

81

55

27

27

33

223

Total Auto

$

207,628

$

124,441

$

73,137

$

32,084

$

16,351

$

7,411

$

$

461,052

Consumer

Current

$

25,084

$

16,059

$

38,594

$

30,890

$

12,853

$

16,929

$

35,534

$

175,943

30-59 Days Past Due

31

94

201

186

63

26

88

689

60-89 Days Past Due

11

13

62

60

34

6

186

90+ Days Past Due

1

4

33

72

8

2

120

Nonaccrual

54

54

Total Consumer

$

25,127

$

16,170

$

38,890

$

31,208

$

12,958

$

17,009

$

35,630

$

176,992

Total Consumer

Current

$

497,763

$

323,877

$

161,156

$

97,500

$

73,052

$

271,171

$

560,370

$

1,984,889

30-59 Days Past Due

330

633

862

1,252

768

1,990

1,581

7,416

60-89 Days Past Due

56

42

157

717

177

2,205

369

3,723

90+ Days Past Due

56

105

121

112

335

2,643

884

4,256

Nonaccrual

444

144

172

929

1,357

8,709

3,325

15,080

Total Consumer

$

498,649

$

324,801

$

162,468

$

100,510

$

75,689

$

286,718

$

566,529

$

2,015,364

The following table details the amortized cost of the classes of loans within the Consumer segment based on their delinquency status and year of origination as of December 31, 2020 (dollars in thousands):

December 31, 2020

Term Loans Amortized Cost Basis by Origination Year

2020

2019

2018

2017

2016

Prior

Revolving Loans

Total

Residential 1-4 Family - Consumer

Current

$

213,763

$

75,133

$

64,299

$

68,320

$

102,123

$

269,203

$

11

$

792,852

30-59 Days Past Due

678

181

2,243

516

457

6,107

10,182

60-89 Days Past Due

156

57

679

641

1,533

90+ Days Past Due

608

1,696

23

1,246

2,126

5,699

Nonaccrual

696

851

887

10,166

12,600

Total Residential 1-4 Family - Consumer

$

215,205

$

77,010

$

67,318

$

70,366

$

104,713

$

288,243

$

11

$

822,866

Residential 1-4 Family - Revolving

Current

$

13,217

$

3,916

$

1,593

$

300

$

$

636

$

567,860

$

587,522

30-59 Days Past Due

70

2,905

2,975

60-89 Days Past Due

53

991

1,044

90+ Days Past Due

826

826

Nonaccrual

21

227

4,381

4,629

Total Residential 1-4 Family - Revolving

$

13,340

$

3,916

$

1,614

$

300

$

$

863

$

576,963

$

596,996

Auto

Current

$

171,051

$

115,319

$

55,886

$

32,555

$

17,081

$

6,314

$

$

398,206

30-59 Days Past Due

239

467

543

478

197

152

2,076

60-89 Days Past Due

124

150

59

26

17

376

90+ Days Past Due

6

23

53

58

15

11

166

Nonaccrual

30

93

126

101

88

62

500

Total Auto

$

171,450

$

116,052

$

56,608

$

33,251

$

17,407

$

6,556

$

$

401,324

Consumer

Current

$

26,498

$

68,208

$

67,041

$

22,464

$

9,997

$

15,893

$

35,450

$

245,551

30-59 Days Past Due

35

252

504

98

15

143

119

1,166

60-89 Days Past Due

28

176

317

23

3

3

550

90+ Days Past Due

5

84

242

4

56

3

394

Nonaccrual

69

69

Total Consumer

$

26,566

$

68,720

$

68,104

$

22,589

$

10,012

$

16,164

$

35,575

$

247,730

Total Consumer

Current

$

424,529

$

262,576

$

188,819

$

123,639

$

129,201

$

292,046

$

603,321

$

2,024,131

30-59 Days Past Due

1,022

900

3,290

1,092

669

6,402

3,024

16,399

60-89 Days Past Due

361

326

374

761

26

661

994

3,503

90+ Days Past Due

619

1,803

318

62

1,261

2,193

829

7,085

Nonaccrual

30

93

843

952

975

10,524

4,381

17,798

Total Consumer

$

426,561

$

265,698

$

193,644

$

126,506

$

132,132

$

311,826

$

612,549

$

2,068,916

The Company did not have any material revolving loans convert to term during the years ended December 31, 2021 and 2020.

Acquired Loans

The Company has purchased loans that, at the time of acquisition, exhibited more than insignificant credit deterioration since origination. The Company elected to treat all loans that were previously identified as PCI as PCD.

Prior to the adoption of ASC 326

Nonaccrual loans totaled $28.2 million at December 31, 2019. Had these loans performed in accordance with their original terms, interest income of approximately $1.8 million would have been recorded in 2019. All nonaccrual loans were included in the impaired loan disclosure in 2019.

As of December 31, 2019, the Company measured the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by class for the years ended December 31, 2019 (dollars in thousands):

December 31, 2019

    

    

Interest

Average

Income

Investment

Recognized

Construction and Land Development

$

6,764

$

110

Commercial Real Estate - Owner Occupied

 

12,258

 

323

Commercial Real Estate - Non-Owner Occupied

 

4,775

 

147

Commercial & Industrial

 

6,438

 

293

Residential 1-4 Family - Commercial

 

6,145

 

120

Residential 1-4 Family - Consumer

 

20,963

 

308

Residential 1-4 Family - Revolving

 

3,256

 

82

Auto

 

788

 

15

Consumer

 

187

 

5

Other Commercial

584

22

Total impaired loans

$

62,158

$

1,425

The Company considers a default of a TDR to occur when the borrower is 90 days past due following the restructuring or a foreclosure and repossession of the applicable collateral occurs. During the year ended December 31, 2019, the Company did not have any material loans that went into default that had been restructured in the twelve-month period prior to the time of default.

The following table shows, by class and modification type, TDRs that occurred during the year ended December 31, 2019 (dollars in thousands):

All Restructurings

2019

    

    

Recorded

No. of

Investment at

Loans

Period End

Modified to interest only, at a market rate

 

  

 

  

Total interest only at market rate of interest

 

$

Term modification, at a market rate

 

  

 

  

Commercial & Industrial

1

$

376

Residential 1-4 Family - Commercial

 

1

72

Residential 1-4 Family - Consumer

 

7

 

1,688

Consumer

 

3

 

24

Total loan term extended at a market rate

 

12

$

2,160

Term modification, below market rate

 

  

 

  

Construction and Land Development

3

$

193

Residential 1-4 Family - Consumer

 

22

2,658

Consumer

1

5

Total loan term extended at a below market rate

 

26

$

2,856

Total

 

38

$

5,016

Allowance for Loan and Lease Losses

The following table shows the ALLL activity by class for the year ended December 31, 2019. The table below includes the provision for loan losses. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

Year Ended December 31, 2019

Allowance for loan losses

    

Balance,

    

Recoveries

    

Loans

    

Provision

    

Balance,

beginning of

credited to

charged

charged to

end of

the year

allowance

off

operations

period

Construction and Land Development

$

6,803

$

665

$

(4,218)

$

2,508

$

5,758

Commercial Real Estate - Owner Occupied

 

4,023

 

456

 

(1,346)

 

786

 

3,919

Commercial Real Estate - Non-Owner Occupied

 

8,865

 

109

 

(270)

 

839

 

9,543

Multifamily Real Estate

 

649

 

85

 

 

(102)

 

632

Commercial & Industrial

 

7,636

 

1,132

 

(3,096)

 

2,932

 

8,604

Residential 1-4 Family - Commercial

 

1,692

 

372

 

(472)

 

(227)

 

1,365

Residential 1-4 Family - Consumer

 

1,492

 

466

 

(144)

 

199

 

2,013

Residential 1-4 Family - Revolving

 

1,297

 

692

 

(698)

 

32

 

1,323

Auto

 

1,443

 

549

 

(1,282)

 

743

 

1,453

Consumer and all other(1)

 

7,145

 

2,706

 

(16,582)

 

14,415

 

7,684

Total

$

41,045

$

7,232

$

(28,108)

$

22,125

$

42,294

(1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes.