Quarterly report pursuant to Section 13 or 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v3.19.2
LOANS AND ALLOWANCE FOR LOAN LOSSES
6 Months Ended
Jun. 30, 2019
Loans and Leases Receivable Disclosure [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES

4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at June 30, 2019 and December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

June 30, 2019

    

December 31, 2018

Construction and Land Development

​

$

1,267,712

​

$

1,194,821

Commercial Real Estate - Owner Occupied

​

 

1,966,776

​

 

1,337,345

Commercial Real Estate - Non-Owner Occupied

​

 

3,104,823

​

 

2,467,410

Multifamily Real Estate

​

 

602,115

​

 

548,231

Commercial & Industrial

​

 

2,032,799

​

 

1,317,135

Residential 1-4 Family - Commercial

​

 

801,703

​

 

713,750

Residential 1-4 Family - Mortgage

​

 

850,063

​

 

600,578

Auto

​

 

311,858

​

 

301,943

HELOC

​

 

660,621

​

 

613,383

Consumer

​

 

383,653

​

 

379,694

Other Commercial

​

 

238,391

​

 

241,917

Total loans held for investment, net (1)

​

$

12,220,514

​

$

9,716,207

(1) Loans, as presented, are net of deferred fees and costs totaling $7.2 million and $5.1 million as of June 30, 2019 and December 31, 2018, respectively.

The following table shows the aging of the Company’s loan portfolio, by segment, at June 30, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

Greater than

    

​

​

    

​

​

    

​

​

    

​

​

​

​

30-59 Days

​

60-89 Days

​

90 Days and

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Past Due

​

Past Due

​

still Accruing

​

PCI

​

Nonaccrual

​

Current

​

Total Loans

Construction and Land Development

​

$

2,327

​

$

318

​

$

855

​

$

12,181

​

$

5,619

​

$

1,246,412

​

$

1,267,712

Commercial Real Estate - Owner Occupied

​

 

1,707

​

 

—

​

 

2,540

​

 

32,628

​

 

4,062

​

 

1,925,839

​

 

1,966,776

Commercial Real Estate - Non-Owner Occupied

​

 

141

​

 

164

​

 

1,489

​

 

15,755

​

 

1,685

​

 

3,085,589

​

 

3,104,823

Multifamily Real Estate

​

 

1,218

​

 

—

​

 

—

​

 

92

​

 

—

​

 

600,805

​

 

602,115

Commercial & Industrial

​

 

3,223

​

 

1,175

​

 

295

​

 

3,930

​

 

1,183

​

 

2,022,993

​

 

2,032,799

Residential 1-4 Family - Commercial

​

 

1,622

​

 

651

​

 

863

​

 

12,675

​

 

4,135

​

 

781,757

​

 

801,703

Residential 1-4 Family - Mortgage

​

 

5,969

​

 

2,801

​

 

845

​

 

17,821

​

 

8,677

​

 

813,950

​

 

850,063

Auto

​

 

2,120

​

 

299

​

 

122

​

 

7

​

 

449

​

 

308,861

​

 

311,858

HELOC

​

 

4,978

​

 

1,336

​

 

658

​

 

4,869

​

 

1,432

​

 

647,348

​

 

660,621

Consumer

​

 

2,794

​

 

1,423

​

 

1,099

​

 

689

​

 

115

​

 

377,533

​

 

383,653

Other Commercial

​

​

30

​

​

—

​

​

62

​

​

654

​

​

105

​

​

237,540

​

​

238,391

Total loans held for investment

​

$

26,129

​

$

8,167

​

$

8,828

​

$

101,301

​

$

27,462

​

$

12,048,627

​

$

12,220,514

​

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

Greater than

    

​

​

    

​

​

    

​

​

    

​

​

​

​

30-59 Days

​

60-89 Days

​

90 Days and

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Past Due

​

Past Due

​

still Accruing

​

PCI

​

Nonaccrual

​

Current

​

Total Loans

Construction and Land Development

​

$

759

​

$

6

​

$

180

​

$

8,654

​

$

8,018

​

$

1,177,204

​

$

1,194,821

Commercial Real Estate - Owner Occupied

​

 

8,755

​

 

1,142

​

 

3,193

​

 

25,644

​

 

3,636

​

 

1,294,975

​

 

1,337,345

Commercial Real Estate - Non-Owner Occupied

​

 

338

​

 

41

​

 

—

​

 

17,335

​

 

1,789

​

 

2,447,907

​

 

2,467,410

Multifamily Real Estate

​

 

—

​

 

146

​

 

—

​

 

88

​

 

—

​

 

547,997

​

 

548,231

Commercial & Industrial

​

 

3,353

​

 

389

​

 

132

​

 

2,156

​

 

1,524

​

 

1,309,581

​

 

1,317,135

Residential 1-4 Family - Commercial

​

 

6,619

​

 

1,577

​

 

1,409

​

 

13,707

​

 

2,481

​

 

687,957

​

 

713,750

Residential 1-4 Family - Mortgage

​

 

12,049

​

 

5,143

​

 

2,437

​

 

16,766

​

 

7,276

​

 

556,907

​

 

600,578

Auto

​

 

3,320

​

 

403

​

 

195

​

 

7

​

 

576

​

 

297,442

​

 

301,943

HELOC

​

 

4,611

​

 

1,644

​

 

440

​

 

5,115

​

 

1,518

​

 

600,055

​

 

613,383

Consumer

​

 

1,504

​

 

1,096

​

 

870

​

 

32

​

 

135

​

 

376,057

​

 

379,694

Other Commercial

​

​

126

​

​

—

​

​

—

​

​

717

​

​

—

​

​

241,074

​

​

241,917

Total loans held for investment

​

$

41,434

​

$

11,587

​

$

8,856

​

$

90,221

​

$

26,953

​

$

9,537,156

​

$

9,716,207

​

The following table shows the PCI loan portfolios, by segment and their delinquency status, at June 30, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

30-89 Days

    

Greater than

    

​

​

    

​

​

​

​

Past Due

​

90 Days

​

Current

​

Total

Construction and Land Development

​

$

165

​

$

1,296

​

$

10,720

​

$

12,181

Commercial Real Estate - Owner Occupied

​

 

745

​

 

3,974

​

 

27,909

​

 

32,628

Commercial Real Estate - Non-Owner Occupied

​

 

116

​

 

999

​

 

14,640

​

 

15,755

Multifamily Real Estate

​

 

—

​

 

—

​

 

92

​

 

92

Commercial & Industrial

​

 

245

​

 

1,081

​

 

2,604

​

 

3,930

Residential 1-4 Family - Commercial

​

 

582

​

 

670

​

 

11,423

​

 

12,675

Residential 1-4 Family - Mortgage

​

 

1,423

​

 

3,779

​

 

12,619

​

 

17,821

Auto

​

 

—

​

 

—

​

 

7

​

 

7

HELOC

​

 

277

​

 

361

​

 

4,231

​

 

4,869

Consumer

​

​

—

​

​

5

​

​

684

​

​

689

Other Commercial

​

 

—

​

 

—

​

 

654

​

 

654

Total

​

$

3,553

​

$

12,165

​

$

85,583

​

$

101,301

​

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

30-89 Days

    

Greater than

    

​

​

    

​

​

​

​

Past Due

​

90 Days

​

Current

​

Total

Construction and Land Development

​

$

108

​

$

1,424

​

$

7,122

​

$

8,654

Commercial Real Estate - Owner Occupied

​

 

658

​

 

4,281

​

 

20,705

​

 

25,644

Commercial Real Estate - Non-Owner Occupied

​

 

61

​

 

1,810

​

 

15,464

​

 

17,335

Multifamily Real Estate

​

 

—

​

 

—

​

 

88

​

 

88

Commercial & Industrial

​

 

47

​

 

1,092

​

 

1,017

​

 

2,156

Residential 1-4 Family - Commercial

​

 

931

​

 

3,464

​

 

9,312

​

 

13,707

Residential 1-4 Family - Mortgage

​

 

1,899

​

 

2,412

​

 

12,455

​

 

16,766

Auto

​

​

—

​

​

—

​

​

7

​

​

7

HELOC

​

 

498

​

 

252

​

 

4,365

​

 

5,115

Consumer

​

​

5

​

​

9

​

​

18

​

​

32

Other Commercial

​

 

57

​

 

—

​

 

660

​

 

717

Total

​

$

4,264

​

$

14,744

​

$

71,213

​

$

90,221

​

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans, by segment at June 30, 2019 and December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2019

​

December 31, 2018

​

    

​

​

    

Unpaid

    

​

​

    

​

​

    

Unpaid

    

​

​

​

​

Recorded

​

Principal

​

Related

​

Recorded

​

Principal

​

Related

​

​

Investment

​

Balance

​

Allowance

​

Investment

​

Balance

​

Allowance

Loans without a specific allowance

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Construction and Land Development

​

$

6,837

​

$

8,863

​

$

—

​

$

10,290

​

$

12,038

​

$

—

Commercial Real Estate - Owner Occupied

​

 

10,138

​

 

10,433

​

 

—

​

 

8,386

​

 

9,067

​

 

—

Commercial Real Estate - Non-Owner Occupied

​

 

6,265

​

 

6,568

​

 

—

​

 

6,578

​

 

6,929

​

 

—

Commercial & Industrial

​

 

2,583

​

 

2,605

​

 

—

​

 

3,059

​

 

3,251

​

 

—

Residential 1-4 Family - Commercial

​

 

4,986

​

 

5,126

​

 

—

​

 

4,516

​

 

4,576

​

 

—

Residential 1-4 Family - Mortgage

​

 

8,821

​

 

9,455

​

 

—

​

 

8,504

​

 

9,180

​

 

—

HELOC

​

 

2,205

​

 

2,220

​

 

—

​

 

1,150

​

 

1,269

​

 

—

Consumer

​

​

—

​

​

—

​

​

—

​

​

30

​

​

102

​

​

—

Other Commercial

​

 

—

​

 

—

​

 

—

​

 

478

​

 

478

​

 

—

Total impaired loans without a specific allowance

​

$

41,835

​

$

45,270

​

$

—

​

$

42,991

​

$

46,890

​

$

—

Loans with a specific allowance

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Construction and Land Development

​

$

877

​

$

954

​

$

111

​

$

372

​

$

491

​

$

63

Commercial Real Estate - Owner Occupied

​

 

1,723

​

 

1,834

​

 

104

​

 

4,304

​

 

4,437

​

 

359

Commercial Real Estate - Non-Owner Occupied

​

 

565

​

 

613

​

 

11

​

 

391

​

 

391

​

 

1

Commercial & Industrial

​

 

407

​

 

430

​

 

135

​

 

1,183

​

 

1,442

​

 

752

Residential 1-4 Family - Commercial

​

 

4,703

​

 

4,850

​

 

341

​

 

3,180

​

 

3,249

​

 

185

Residential 1-4 Family - Mortgage

​

 

6,985

​

 

7,302

​

 

612

​

 

5,329

​

 

5,548

​

 

374

Auto

​

 

449

​

 

668

​

 

179

​

 

576

​

 

830

​

 

231

HELOC

​

 

1,230

​

 

1,340

​

 

330

​

 

724

​

 

807

​

 

188

Consumer

​

 

186

​

 

349

​

 

69

​

 

178

​

 

467

​

 

64

Other Commercial

​

​

576

​

​

577

​

​

30

​

​

—

​

​

—

​

​

—

Total impaired loans with a specific allowance

​

$

17,701

​

$

18,917

​

$

1,922

​

$

16,237

​

$

17,662

​

$

2,217

Total impaired loans

​

$

59,536

​

$

64,187

​

$

1,922

​

$

59,228

​

$

64,552

​

$

2,217

​

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the three and six months ended June 30, 2019 and 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 2019

​

June 30, 2019

​

    

​

​

    

Interest

    

​

​

    

Interest

​

​

Average

​

Income

​

Average

​

Income

​

​

Investment

​

Recognized

​

Investment

​

Recognized

Construction and Land Development

​

$

7,811

​

$

13

​

$

8,167

​

$

54

Commercial Real Estate - Owner Occupied

​

 

12,002

​

 

91

​

 

12,030

​

 

200

Commercial Real Estate - Non-Owner Occupied

​

 

6,931

​

 

60

​

 

6,944

​

 

119

Commercial & Industrial

​

 

3,038

​

 

27

​

 

3,081

​

 

59

Residential 1-4 Family - Commercial

​

 

9,969

​

 

73

​

 

9,730

​

 

138

Residential 1-4 Family - Mortgage

​

 

15,986

​

 

6

​

 

16,057

​

 

105

Auto

​

 

493

​

 

—

​

 

520

​

 

1

HELOC

​

 

3,489

​

 

38

​

 

3,506

​

 

78

Consumer

​

 

191

​

 

2

​

 

195

​

 

3

Other Commercial

​

​

579

​

​

7

​

​

583

​

​

15

Total impaired loans

​

$

60,489

​

$

317

​

$

60,813

​

$

772

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 2018

​

June 30, 2018

​

    

​

​

    

Interest

    

​

​

    

Interest

​

​

Average

​

Income

​

Average

​

Income

​

​

Investment

​

Recognized

​

Investment

​

Recognized

Construction and Land Development

​

$

12,572

​

$

68

​

$

12,458

​

$

145

Commercial Real Estate - Owner Occupied

​

 

13,130

​

 

116

​

 

13,262

​

 

238

Commercial Real Estate - Non-Owner Occupied

​

 

7,187

​

 

48

​

 

7,496

​

 

109

Commercial & Industrial

​

 

5,792

​

 

57

​

 

5,970

​

 

130

Residential 1-4 Family - Commercial

​

 

7,744

​

 

72

​

 

7,839

​

 

140

Residential 1-4 Family - Mortgage

​

 

18,876

​

 

63

​

 

18,951

​

 

163

Auto

​

 

1,002

​

 

6

​

 

1,056

​

 

17

HELOC

​

 

4,439

​

 

34

​

 

4,447

​

 

69

Consumer

​

 

268

​

 

2

​

 

286

​

 

2

Other Commercial

​

​

488

​

​

7

​

​

490

​

​

14

Total impaired loans

​

$

71,498

​

$

473

​

$

72,255

​

$

1,027

​

​

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and six months ended June 30, 2019, the recorded investment in TDRs prior to modifications was not materially impacted by the modification.

The following table provides a summary, by segment, 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 June 30, 2019 and December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2019

​

December 31, 2018

​

    

No. of

    

Recorded

    

Outstanding

    

No. of

    

Recorded

    

Outstanding

​

​

Loans

​

Investment

​

Commitment

​

Loans

​

Investment

​

Commitment

Performing

 

  

 

​

  

 

​

  

 

  

 

​

  

 

​

  

Construction and Land Development

 

4

​

$

1,953

​

$

—

 

5

​

$

2,496

​

$

—

Commercial Real Estate - Owner Occupied

 

8

​

 

2,734

​

 

26

 

8

​

 

2,783

​

 

—

Commercial Real Estate - Non-Owner Occupied

 

3

​

 

4,244

​

 

—

 

4

​

 

4,438

​

 

—

Commercial & Industrial

 

2

​

 

583

​

 

—

 

4

​

 

978

​

 

—

Residential 1-4 Family - Commercial

 

40

​

 

3,926

​

 

—

 

30

​

 

2,887

​

 

—

Residential 1-4 Family - Mortgage

 

27

​

 

5,161

​

 

—

 

30

​

 

5,070

​

 

—

HELOC

 

2

​

 

57

​

 

—

 

2

​

 

58

​

 

—

Consumer

 

2

​

 

15

​

 

—

 

1

​

 

13

​

 

—

Other Commercial

​

1

​

​

471

​

​

—

​

1

​

​

478

​

​

—

Total performing

 

89

​

$

19,144

​

$

26

 

85

​

$

19,201

​

$

—

Nonperforming

 

  

​

 

  

​

 

  

 

  

​

 

  

​

 

  

Construction and Land Development

 

1

​

$

1,016

​

$

—

 

2

​

$

3,474

​

$

—

Commercial Real Estate - Owner Occupied

 

2

​

 

185

​

 

—

 

2

​

 

198

​

 

—

Commercial & Industrial

 

4

​

 

421

​

 

—

 

6

​

 

461

​

 

—

Residential 1-4 Family - Commercial

 

—

​

 

—

​

 

—

 

1

​

 

60

​

 

—

Residential 1-4 Family - Mortgage

 

17

​

 

2,854

​

 

—

 

15

​

 

3,135

​

 

—

HELOC

 

2

​

 

60

​

 

—

 

2

​

 

62

​

 

—

Consumer

​

—

​

​

—

​

​

—

​

1

​

​

7

​

​

—

Total nonperforming

 

26

​

$

4,536

​

$

—

 

29

​

$

7,397

​

$

—

Total performing and nonperforming

 

115

​

$

23,680

​

$

26

 

114

​

$

26,598

​

$

—

​

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 three and six months ended June 30, 2019 and 2018, 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 segment and modification type, TDRs that occurred during the three and six months ended June 30, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

All Restructurings

​

​

Three Months Ended June 30, 2019

​

Six Months Ended June 30, 2019

​

    

​

    

Recorded

    

​

    

Recorded

​

​

No. of

​

Investment at

​

No. of

​

Investment at

​

​

Loans

​

Period End

​

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

 

  

​

 

  

 

  

​

 

  

Residential 1-4 Family - Commercial

 

—

​

$

—

 

2

​

$

293

Residential 1-4 Family - Mortgage

 

1

​

 

43

 

2

​

 

80

Consumer

​

—

​

​

—

​

1

​

​

9

Total loan term extended at a market rate

 

1

​

$

43

 

5

​

$

382

​

​

​

​

​

​

​

​

​

​

​

Term modification, below market rate

 

  

​

 

  

 

  

​

 

  

Residential 1-4 Family - Commercial

 

8

​

$

431

 

13

​

$

1,358

Residential 1-4 Family - Mortgage

 

1

​

 

52

 

1

​

 

52

Consumer

​

—

​

​

—

​

1

​

​

6

Total loan term extended at a below market rate

 

9

​

$

483

 

15

​

$

1,416

​

​

​

​

​

​

​

​

​

​

​

Total

 

10

​

$

526

 

20

​

$

1,798

​

​

​

​

​

​

​

​

​

​

​

​

The following table shows, by segment and modification type, TDRs that occurred during the three and six months ended June 30, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

All Restructurings

​

​

Three Months Ended June 30, 2018

​

Six Months Ended

June 30, 2018

​

    

​

    

Recorded

    

​

    

Recorded

​

​

No. of

​

Investment at

​

No. of

​

Investment at

​

​

Loans

​

Period End

​

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

 

  

​

 

  

 

  

​

 

  

Construction and Land Development

 

2

​

$

1,263

 

2

​

$

1,263

Commercial Real Estate - Owner Occupied

 

2

​

 

564

 

5

​

 

1,375

Commercial & Industrial

 

1

​

 

63

 

1

​

 

63

Residential 1-4 Family - Commercial

 

1

​

 

72

 

2

​

 

221

Residential 1-4 Family - Mortgage

 

4

​

 

475

 

5

​

 

615

Total loan term extended at a market rate

 

10

​

$

2,437

 

15

​

$

3,537

​

​

​

​

​

​

​

​

​

​

​

Term modification, below market rate

 

  

​

 

  

 

  

​

 

  

Residential 1-4 Family - Commercial

 

3

​

$

608

 

3

​

$

608

Residential 1-4 Family - Mortgage

 

2

​

 

248

 

4

​

 

413

Total loan term extended at a below market rate

 

5

​

$

856

 

7

​

$

1,021

​

​

​

​

​

​

​

​

​

​

​

Total

 

15

​

$

3,293

 

22

​

$

4,558

​

​

​

​

​

​

​

​

​

​

​

​

The following tables show the ALL activity by segment for the six months ended June 30, 2019 and 2018. The tables below include 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):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 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

​

$

97

​

$

(800)

​

$

(101)

​

$

5,999

Commercial Real Estate - Owner Occupied

​

 

4,023

​

 

54

​

 

(231)

​

 

235

​

 

4,081

Commercial Real Estate - Non-Owner Occupied

​

 

8,865

​

 

92

​

 

—

​

 

654

​

 

9,611

Multifamily Real Estate

​

 

649

​

 

85

​

 

—

​

 

(70)

​

 

664

Commercial & Industrial

​

 

7,636

​

 

681

​

 

(1,858)

​

 

1,237

​

 

7,696

Residential 1-4 Family - Commercial

​

 

1,984

​

 

127

​

 

(267)

​

 

148

​

 

1,992

Residential 1-4 Family - Mortgage

​

 

1,200

​

 

219

​

 

(37)

​

 

136

​

 

1,518

Auto

​

 

1,443

​

 

339

​

 

(703)

​

 

334

​

 

1,413

HELOC

​

 

1,297

​

 

434

​

 

(523)

​

 

47

​

 

1,255

Consumer and all other(1)

​

 

7,145

​

 

1,238

​

 

(7,454)

​

 

7,305

​

 

8,234

Total

​

$

41,045

​

$

3,366

​

$

(11,873)

​

$

9,925

​

$

42,463

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2018

​

​

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

​

$

9,709

​

$

279

​

$

(61)

​

$

(600)

​

$

9,327

Commercial Real Estate - Owner Occupied

​

 

2,931

​

 

346

​

 

(125)

​

 

788

​

 

3,940

Commercial Real Estate - Non-Owner Occupied

​

 

7,544

​

 

7

​

 

(94)

​

 

295

​

 

7,752

Multifamily Real Estate

​

 

1,092

​

 

5

​

 

—

​

 

633

​

 

1,730

Commercial & Industrial

​

 

4,552

​

 

260

​

 

(459)

​

 

2,029

​

 

6,382

Residential 1-4 Family - Commercial

​

 

4,437

​

 

140

​

 

(113)

​

 

(1,927)

​

 

2,537

Residential 1-4 Family - Mortgage

​

 

1,524

​

 

202

​

 

(141)

​

 

304

​

 

1,889

Auto

​

 

975

​

 

190

​

 

(480)

​

 

403

​

 

1,088

HELOC

​

 

1,360

​

 

469

​

 

(267)

​

 

(263)

​

 

1,299

Consumer and all other(1)

​

 

4,084

​

 

783

​

 

(3,799)

​

 

4,258

​

 

5,326

Total

​

$

38,208

​

$

2,681

​

$

(5,539)

​

$

5,920

​

$

41,270

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

The following tables show the loan and ALL balances based on impairment methodology by segment as of June 30, 2019 and December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2019

​

​

Loans individually

​

Loans collectively

​

Loans acquired with

​

​

​

​

​

​

​

​

evaluated for

​

evaluated for

​

deteriorated credit

​

​

​

​

​

​

​

​

impairment

​

impairment

​

quality

​

Total

​

    

Loans

    

ALL

    

Loans

    

ALL

    

Loans

    

ALL

    

Loans

    

ALL

Construction and Land Development

​

$

7,714

​

$

111

​

$

1,247,817

​

$

5,888

​

$

12,181

​

$

—

​

$

1,267,712

​

$

5,999

Commercial Real Estate - Owner Occupied

​

 

11,861

​

 

104

​

 

1,922,287

​

 

3,977

​

 

32,628

​

 

—

​

 

1,966,776

​

 

4,081

Commercial Real Estate - Non-Owner Occupied

​

 

6,830

​

 

11

​

 

3,082,238

​

 

9,600

​

 

15,755

​

 

—

​

 

3,104,823

​

 

9,611

Multifamily Real Estate

​

 

—

​

 

—

​

 

602,023

​

 

664

​

 

92

​

 

—

​

 

602,115

​

 

664

Commercial & Industrial

​

 

2,990

​

 

135

​

 

2,025,879

​

 

7,561

​

 

3,930

​

 

—

​

 

2,032,799

​

 

7,696

Residential 1-4 Family - Commercial

​

 

9,689

​

 

341

​

 

779,339

​

 

1,651

​

 

12,675

​

 

—

​

 

801,703

​

 

1,992

Residential 1-4 Family - Mortgage

​

 

15,806

​

 

612

​

 

816,436

​

 

906

​

 

17,821

​

 

—

​

 

850,063

​

 

1,518

Auto

​

 

449

​

 

179

​

 

311,402

​

 

1,234

​

 

7

​

 

—

​

 

311,858

​

 

1,413

HELOC

​

 

3,435

​

 

330

​

 

652,317

​

 

925

​

 

4,869

​

 

—

​

 

660,621

​

 

1,255

Consumer and all other(1)

​

 

762

​

 

99

​

 

619,939

​

 

8,135

​

 

1,343

​

 

—

​

 

622,044

​

 

8,234

Total loans held for investment, net

​

$

59,536

​

$

1,922

​

$

12,059,677

​

$

40,541

​

$

101,301

​

$

—

​

$

12,220,514

​

$

42,463

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2018

​

​

Loans individually

​

Loans collectively

​

Loans acquired with

​

​

​

​

​

​

​

​

evaluated for

​

evaluated for

​

deteriorated credit

​

​

​

​

​

​

​

​

impairment

​

impairment

​

quality

​

Total

​

    

Loans

    

ALL

    

Loans

    

ALL

    

Loans

    

ALL

    

Loans

    

ALL

Construction and Land Development

​

$

10,662

​

$

63

​

$

1,175,505

​

$

6,740

​

$

8,654

​

$

—

​

$

1,194,821

​

$

6,803

Commercial Real Estate - Owner Occupied

​

 

12,690

​

 

359

​

 

1,299,011

​

 

3,664

​

 

25,644

​

 

—

​

 

1,337,345

​

 

4,023

Commercial Real Estate - Non-Owner Occupied

​

 

6,969

​

 

1

​

 

2,443,106

​

 

8,864

​

 

17,335

​

 

—

​

 

2,467,410

​

 

8,865

Multifamily Real Estate

​

 

—

​

 

—

​

 

548,143

​

 

649

​

 

88

​

 

—

​

 

548,231

​

 

649

Commercial & Industrial

​

 

4,242

​

 

752

​

 

1,310,737

​

 

6,884

​

 

2,156

​

 

—

​

 

1,317,135

​

 

7,636

Residential 1-4 Family - Commercial

​

 

7,696

​

 

185

​

 

692,347

​

 

1,799

​

 

13,707

​

 

—

​

 

713,750

​

 

1,984

Residential 1-4 Family - Mortgage

​

 

13,833

​

 

374

​

 

569,979

​

 

826

​

 

16,766

​

 

—

​

 

600,578

​

 

1,200

Auto

​

 

576

​

 

231

​

 

301,360

​

 

1,212

​

 

7

​

 

—

​

 

301,943

​

 

1,443

HELOC

​

 

1,874

​

 

188

​

 

606,394

​

 

1,109

​

 

5,115

​

 

—

​

 

613,383

​

 

1,297

Consumer and all other(1)

​

 

686

​

 

64

​

 

620,176

​

 

7,081

​

 

749

​

 

—

​

 

621,611

​

 

7,145

Total loans held for investment, net

​

$

59,228

​

$

2,217

​

$

9,566,758

​

$

38,828

​

$

90,221

​

$

—

​

$

9,716,207

​

$

41,045

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the ALL; on those loans without a risk rating, the Company uses past due status to determine risk level. 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; or
● Loans that are not risk rated but that are 0 to 29 days past due.

Watch & Special Mention 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;
● 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; or
● Loans that are not risk rated but that are 30 to 89 days past due.

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; or
● Loans that are not risk rated but that are 90 to 149 days past due.

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; or
● Loans that are not risk rated but that are over 149 days past due.

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of June 30, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,204,655

​

$

43,268

​

$

7,608

​

$

—

​

$

1,255,531

Commercial Real Estate - Owner Occupied

​

 

1,848,333

​

 

65,257

​

 

20,558

​

 

—

​

 

1,934,148

Commercial Real Estate - Non-Owner Occupied

​

 

3,042,648

​

 

40,760

​

 

5,660

​

 

—

​

 

3,089,068

Multifamily Real Estate

​

 

586,626

​

 

15,397

​

 

—

​

 

—

​

 

602,023

Commercial & Industrial

​

 

1,945,547

​

 

79,232

​

 

4,090

​

 

—

​

 

2,028,869

Residential 1-4 Family - Commercial

​

 

755,438

​

 

26,284

​

 

7,306

​

 

—

​

 

789,028

Residential 1-4 Family - Mortgage

​

 

808,797

​

 

6,036

​

 

17,409

​

 

—

​

 

832,242

Auto

​

 

307,921

​

 

2,181

​

 

1,749

​

 

—

​

 

311,851

HELOC

​

 

643,778

​

 

5,418

​

 

6,556

​

 

—

​

 

655,752

Consumer

​

 

381,478

​

 

1,121

​

 

365

​

 

—

​

 

382,964

Other Commercial

​

​

235,981

​

​

1,588

​

​

168

​

​

—

​

​

237,737

Total

​

$

11,761,202

​

$

286,542

​

$

71,469

​

$

—

​

$

12,119,213

​

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,130,577

​

$

43,894

​

$

11,696

​

$

—

​

$

1,186,167

Commercial Real Estate - Owner Occupied

​

 

1,231,422

​

 

50,939

​

 

29,340

​

 

—

​

 

1,311,701

Commercial Real Estate - Non-Owner Occupied

​

 

2,425,500

​

 

17,648

​

 

6,927

​

 

—

​

 

2,450,075

Multifamily Real Estate

​

 

537,572

​

 

10,571

​

 

—

​

 

—

​

 

548,143

Commercial & Industrial

​

 

1,273,549

​

 

34,864

​

 

6,566

​

 

—

​

 

1,314,979

Residential 1-4 Family - Commercial

​

 

677,109

​

 

17,086

​

 

5,848

​

 

—

​

 

700,043

Residential 1-4 Family - Mortgage

​

 

554,192

​

 

14,855

​

 

14,765

​

 

—

​

 

583,812

Auto

​

 

296,907

​

 

3,590

​

 

1,439

​

 

—

​

 

301,936

HELOC

​

 

598,444

​

 

6,316

​

 

3,508

​

 

—

​

 

608,268

Consumer

​

 

378,873

​

 

547

​

 

242

​

 

—

​

 

379,662

Other Commercial

​

 

239,857

​

 

864

​

 

479

​

 

—

​

 

241,200

Total

​

$

9,344,002

​

$

201,174

​

$

80,810

​

$

—

​

$

9,625,986

​

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of June 30, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,455

​

$

4,264

​

$

6,462

​

$

—

​

$

12,181

Commercial Real Estate - Owner Occupied

​

 

8,690

​

 

10,453

​

 

13,485

​

 

—

​

 

32,628

Commercial Real Estate - Non-Owner Occupied

​

 

4,573

​

 

9,274

​

 

1,908

​

 

—

​

 

15,755

Multifamily Real Estate

​

 

—

​

 

92

​

 

—

​

 

—

​

 

92

Commercial & Industrial

​

 

109

​

 

94

​

 

3,727

​

 

—

​

 

3,930

Residential 1-4 Family - Commercial

​

 

6,238

​

 

2,998

​

 

3,371

​

 

68

​

 

12,675

Residential 1-4 Family - Mortgage

​

 

10,381

​

 

269

​

 

7,171

​

 

—

​

 

17,821

Auto

​

 

3

​

 

—

​

 

4

​

 

—

​

 

7

HELOC

​

 

3,502

​

 

760

​

 

607

​

 

—

​

 

4,869

Consumer

​

 

676

​

 

—

​

 

13

​

 

—

​

 

689

Other Commercial

​

​

52

​

​

602

​

​

—

​

​

—

​

​

654

Total

​

$

35,679

​

$

28,806

​

$

36,748

​

$

68

​

$

101,301

​

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,835

​

$

1,308

​

$

5,511

​

$

—

​

$

8,654

Commercial Real Estate - Owner Occupied

​

 

8,347

​

 

6,685

​

 

10,612

​

 

—

​

 

25,644

Commercial Real Estate - Non-Owner Occupied

​

 

4,789

​

 

7,992

​

 

4,554

​

 

—

​

 

17,335

Multifamily Real Estate

​

 

—

​

 

88

​

 

—

​

 

—

​

 

88

Commercial & Industrial

​

 

762

​

 

134

​

 

1,260

​

 

—

​

 

2,156

Residential 1-4 Family - Commercial

​

 

6,512

​

 

2,771

​

 

4,424

​

 

—

​

 

13,707

Residential 1-4 Family - Mortgage

​

 

9,894

​

 

1,030

​

 

5,842

​

 

—

​

 

16,766

Auto

​

​

7

​

​

—

​

​

—

​

​

—

​

​

7

HELOC

​

 

3,438

​

 

1,031

​

 

646

​

 

—

​

 

5,115

Consumer

​

 

17

​

 

—

​

 

15

​

 

—

​

 

32

Other Commercial

​

​

57

​

​

660

​

​

—

​

​

—

​

​

717

Total

​

$

35,658

​

$

21,699

​

$

32,864

​

$

—

​

$

90,221

​

Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows.

The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):

​

​

​

​

​

​

​

​

​

For the Six Months Ended June 30, 

​

    

2019

    

2018

Balance at beginning of period

​

$

31,201

​

$

14,563

Additions

​

 

2,432

​

 

12,225

Accretion

​

 

(6,510)

​

 

(4,673)

Reclass of nonaccretable difference due to improvement in expected cash flows

​

 

716

​

 

139

Measurement period adjustment

​

 

2,629

​

 

2,981

Other, net (1)

​

 

2,182

​

 

70

Balance at end of period

​

$

32,650

​

$

25,305

(1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter.

The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality, totaled $101.3 million at June 30, 2019 and $90.2 million at December 31, 2018. The outstanding balance of the Company’s PCI loan portfolio totaled $125.6 million at June 30, 2019 and $113.5 million at December 31, 2018. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $3.5 billion at June 30, 2019 and $2.0 billion at December 31, 2018; the remaining discount on these loans totaled $58.6 million at June 30, 2019 and $30.3 million at December 31, 2018.

​