Annual report pursuant to Section 13 and 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v3.19.3.a.u2
LOANS AND ALLOWANCE FOR LOAN LOSSES
12 Months Ended
Dec. 31, 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 December 31, 2019 and 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

2019

    

2018

Construction and Land Development

​

$

1,250,924

​

$

1,194,821

Commercial Real Estate - Owner Occupied

​

 

2,041,243

​

 

1,337,345

Commercial Real Estate - Non-Owner Occupied

​

 

3,286,098

​

 

2,467,410

Multifamily Real Estate

​

 

633,743

​

 

548,231

Commercial & Industrial

​

 

2,114,033

​

 

1,317,135

Residential 1-4 Family - Commercial

​

 

724,337

​

 

640,419

Residential 1-4 Family - Consumer

​

 

890,503

​

 

673,909

Residential 1-4 Family - Revolving

​

 

659,504

​

 

613,383

Auto

​

 

350,419

​

 

301,943

Consumer

​

 

372,853

​

 

379,694

Other Commercial

​

 

287,279

​

 

241,917

Total loans held for investment, net

​

$

12,610,936

​

$

9,716,207

​

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 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

​

$

4,563

​

$

482

​

$

189

​

$

10,944

​

$

3,703

​

$

1,231,043

​

$

1,250,924

Commercial Real Estate - Owner Occupied

​

 

3,482

​

 

2,184

​

 

1,062

​

 

27,438

​

 

6,003

​

 

2,001,074

​

 

2,041,243

Commercial Real Estate - Non-Owner Occupied

​

 

457

​

 

—

​

 

1,451

​

 

14,565

​

 

381

​

 

3,269,244

​

 

3,286,098

Multifamily Real Estate

​

 

223

​

 

—

​

 

474

​

 

94

​

 

—

​

 

632,952

​

 

633,743

Commercial & Industrial

​

 

8,698

​

 

1,598

​

 

449

​

 

1,579

​

 

1,735

​

 

2,099,974

​

 

2,114,033

Residential 1-4 Family - Commercial

​

 

1,479

​

 

2,207

​

 

674

​

 

12,205

​

 

4,301

​

 

703,471

​

 

724,337

Residential 1-4 Family - Consumer

​

 

16,244

​

 

3,072

​

 

4,515

​

 

14,713

​

 

9,292

​

 

842,667

​

 

890,503

Residential 1-4 Family - Revolving

​

 

10,190

​

 

1,784

​

 

3,357

​

 

4,127

​

 

2,080

​

 

637,966

​

 

659,504

Auto

​

 

2,525

​

 

236

​

 

272

​

 

4

​

 

563

​

 

346,819

​

 

350,419

Consumer

​

 

2,128

​

 

1,233

​

 

953

​

 

668

​

 

77

​

 

367,794

​

 

372,853

Other Commercial

​

​

464

​

​

—

​

​

—

​

​

344

​

​

97

​

​

286,374

​

​

287,279

Total loans held for investment

​

$

50,453

​

$

12,796

​

$

13,396

​

$

86,681

​

$

28,232

​

$

12,419,378

​

$

12,610,936

​

​

​

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

​

 

13,601

​

 

2,481

​

 

614,732

​

 

640,419

Residential 1-4 Family - Consumer

​

 

12,049

​

 

5,143

​

 

2,437

​

 

16,872

​

 

7,276

​

 

630,132

​

 

673,909

Residential 1-4 Family - Revolving

​

 

4,611

​

 

1,644

​

 

440

​

 

5,115

​

 

1,518

​

 

600,055

​

 

613,383

Auto

​

 

3,320

​

 

403

​

 

195

​

 

7

​

 

576

​

 

297,442

​

 

301,943

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

​

​

Nonaccrual loans totaled $28.2 million, $27.0 million, and $21.7 million at December 31, 2019, 2018 and 2017, respectively. Had these loans performed in accordance with their original terms, interest income of approximately $1.8

million, $2.3 million, and $698,000 would have been recorded in 2019, 2018, and 2017, respectively. All nonaccrual loans were included in the impaired loan disclosure in 2019 and 2018.

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

30-89 Days

    

Greater than

    

​

​

    

​

​

​

​

Past Due

​

90 Days

​

Current

​

Total

Construction and Land Development

​

$

136

​

$

343

​

$

10,465

​

$

10,944

Commercial Real Estate - Owner Occupied

​

 

480

​

 

6,884

​

 

20,074

​

 

27,438

Commercial Real Estate - Non-Owner Occupied

​

 

848

​

 

987

​

 

12,730

​

 

14,565

Multifamily Real Estate

​

 

—

​

 

—

​

 

94

​

 

94

Commercial & Industrial

​

 

—

​

 

989

​

 

590

​

 

1,579

Residential 1-4 Family - Commercial

​

 

543

​

 

1,995

​

 

9,667

​

 

12,205

Residential 1-4 Family - Consumer

​

 

927

​

 

1,781

​

 

12,005

​

 

14,713

Residential 1-4 Family - Revolving

​

 

287

​

 

205

​

 

3,635

​

 

4,127

Auto

​

 

—

​

 

—

​

 

4

​

 

4

Consumer

​

​

—

​

​

9

​

​

659

​

​

668

Other Commercial

​

 

—

​

 

—

​

 

344

​

 

344

Total

​

$

3,221

​

$

13,193

​

$

70,267

​

$

86,681

​

​

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

​

 

871

​

 

3,454

​

 

9,276

​

 

13,601

Residential 1-4 Family - Consumer

​

 

1,959

​

 

2,422

​

 

12,491

​

 

16,872

Residential 1-4 Family - Revolving

​

 

498

​

 

252

​

 

4,365

​

 

5,115

Auto

​

​

—

​

​

—

​

​

7

​

​

7

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 December 31, 2019 and 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 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

​

$

5,877

​

$

7,174

​

$

—

​

$

10,290

​

$

12,038

​

$

—

Commercial Real Estate - Owner Occupied

​

 

8,801

​

 

9,296

​

 

—

​

 

8,386

​

 

9,067

​

 

—

Commercial Real Estate - Non-Owner Occupied

​

 

3,510

​

 

4,059

​

 

—

​

 

6,578

​

 

6,929

​

 

—

Commercial & Industrial

​

 

3,668

​

 

3,933

​

 

—

​

 

3,059

​

 

3,251

​

 

—

Residential 1-4 Family - Commercial

​

 

4,047

​

 

4,310

​

 

—

​

 

3,378

​

 

3,439

​

 

—

Residential 1-4 Family - Consumer

​

 

8,420

​

 

9,018

​

 

—

​

 

9,642

​

 

10,317

​

 

—

Residential 1-4 Family - Revolving

​

 

862

​

 

865

​

 

—

​

 

1,150

​

 

1,269

​

 

—

Consumer

​

​

—

​

​

—

​

​

—

​

​

30

​

​

102

​

​

—

Other Commercial

​

 

—

​

 

—

​

 

—

​

 

478

​

 

478

​

 

—

Total impaired loans without a specific allowance

​

$

35,185

​

$

38,655

​

$

—

​

$

42,991

​

$

46,890

​

$

—

Loans with a specific allowance

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Construction and Land Development

​

$

984

​

$

1,032

​

$

49

​

$

372

​

$

491

​

$

63

Commercial Real Estate - Owner Occupied

​

 

2,820

​

 

3,093

​

 

146

​

 

4,304

​

 

4,437

​

 

359

Commercial Real Estate - Non-Owner Occupied

​

 

335

​

 

383

​

 

2

​

 

391

​

 

391

​

 

1

Commercial & Industrial

​

 

2,568

​

 

2,590

​

 

619

​

 

1,183

​

 

1,442

​

 

752

Residential 1-4 Family - Commercial

​

 

1,726

​

 

1,819

​

 

162

​

 

2,120

​

 

2,152

​

 

89

Residential 1-4 Family - Consumer

​

 

12,026

​

 

12,670

​

 

1,242

​

 

6,389

​

 

6,645

​

 

470

Residential 1-4 Family - Revolving

​

 

2,186

​

 

2,369

​

 

510

​

 

724

​

 

807

​

 

188

Auto

​

 

563

​

 

879

​

 

221

​

 

576

​

 

830

​

 

231

Consumer

​

 

168

​

 

336

​

 

46

​

 

178

​

 

467

​

 

64

Other Commercial

​

​

562

​

​

567

​

​

30

​

​

—

​

​

—

​

​

—

Total impaired loans with a specific allowance

​

$

23,938

​

$

25,738

​

$

3,027

​

$

16,237

​

$

17,662

​

$

2,217

Total impaired loans

​

$

59,123

​

$

64,393

​

$

3,027

​

$

59,228

​

$

64,552

​

$

2,217

​

​

The following table shows the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the years ended December 31, 2019, 2018 and 2017 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2019

​

December 31, 2018

​

December 31, 2017

​

    

​

​

    

Interest

    

​

​

    

Interest

    

​

​

    

Interest

​

​

Average

​

Income

​

Average

​

Income

​

Average

​

Income

​

​

Investment

​

Recognized

​

Investment

​

Recognized

​

Investment

​

Recognized

Construction and Land Development

​

$

6,764

​

$

110

​

$

11,648

​

$

234

​

$

17,080

​

$

590

Commercial Real Estate - Owner Occupied

​

 

12,258

​

 

323

​

 

13,383

​

 

499

​

 

6,580

​

 

306

Commercial Real Estate - Non-Owner Occupied

​

 

4,775

​

 

147

​

 

7,157

​

 

246

​

 

6,083

​

 

172

Commercial & Industrial

​

 

6,438

​

 

293

​

 

4,672

​

 

232

​

 

3,208

​

 

150

Residential 1-4 Family - Commercial

​

 

6,145

​

 

120

​

 

5,667

​

 

180

​

 

4,422

​

 

162

Residential 1-4 Family - Consumer

​

 

20,963

​

 

308

​

 

16,977

​

 

236

​

 

12,812

​

 

222

Residential 1-4 Family - Revolving

​

 

3,256

​

 

82

​

 

2,000

​

 

23

​

 

2,659

​

 

36

Auto

​

 

788

​

 

15

​

 

824

​

 

20

​

 

579

​

 

19

Consumer

​

 

187

​

 

5

​

 

263

​

 

5

​

 

428

​

 

14

Other Commercial

​

​

584

​

​

22

​

​

486

​

​

27

​

​

382

​

​

22

Total impaired loans

​

$

62,158

​

$

1,425

​

$

63,077

​

$

1,702

​

$

54,233

​

$

1,693

​

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 year ended December 31, 2019, the recorded investment in TDRs prior to modifications was not materially impacted by the modifications.

The following table provides a summary, by segment, of TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed in nonaccrual status, which are considered to be nonperforming, as of December 31, 2019 and 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2019

​

December 31, 2018

​

    

No. of

    

Recorded

    

Outstanding

    

No. of

    

Recorded

    

Outstanding

​

​

Loans

​

Investment

​

Commitment

​

Loans

​

Investment

​

Commitment

Performing

 

  

 

​

  

 

​

  

 

  

 

​

  

 

​

  

Construction and Land Development

 

4

​

$

1,114

​

$

—

 

5

​

$

2,496

​

$

—

Commercial Real Estate - Owner Occupied

 

6

​

 

2,228

​

 

26

 

8

​

 

2,783

​

 

—

Commercial Real Estate - Non-Owner Occupied

 

1

​

 

1,089

​

 

—

 

4

​

 

4,438

​

 

—

Commercial & Industrial

 

4

​

 

1,020

​

 

—

 

4

​

 

978

​

 

—

Residential 1-4 Family - Commercial

 

5

​

 

290

​

 

—

 

8

​

 

1,075

​

 

—

Residential 1-4 Family - Consumer

 

69

​

 

9,396

​

 

—

 

52

​

 

6,882

​

 

—

Residential 1-4 Family - Revolving

 

2

​

 

56

​

 

—

 

2

​

 

58

​

 

—

Consumer

 

4

​

 

29

​

 

—

 

1

​

 

13

​

 

—

Other Commercial

​

1

​

​

464

​

​

—

​

1

​

​

478

​

​

—

Total performing

 

96

​

$

15,686

​

$

26

 

85

​

$

19,201

​

$

—

Nonperforming

 

  

​

 

  

​

 

  

 

  

​

 

  

​

 

  

Construction and Land Development

 

—

​

$

—

​

$

—

 

2

​

$

3,474

​

$

—

Commercial Real Estate - Owner Occupied

 

2

​

 

176

​

 

—

 

2

​

 

198

​

 

—

Commercial & Industrial

 

1

​

 

55

​

 

—

 

6

​

 

461

​

 

—

Residential 1-4 Family - Commercial

 

—

​

 

—

​

 

—

 

1

​

 

60

​

 

—

Residential 1-4 Family - Consumer

 

19

​

 

3,522

​

 

—

 

15

​

 

3,135

​

 

—

Residential 1-4 Family - Revolving

 

2

​

 

57

​

 

—

 

2

​

 

62

​

 

—

Consumer

​

—

​

​

—

​

​

—

​

1

​

​

7

​

​

—

Total nonperforming

 

24

​

$

3,810

​

$

—

 

29

​

$

7,397

​

$

—

Total performing and nonperforming

 

120

​

$

19,496

​

$

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 years ended December 31, 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 years ended December 31, 2019 and 2018 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

All Restructurings

​

​

2019

​

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

 

—

​

$

—

 

4

​

$

4,675

Commercial Real Estate - Owner Occupied

 

—

​

 

—

 

5

​

 

1,365

Commercial Real Estate - Non-Owner Occupied

 

—

​

 

—

 

1

​

 

1,089

Commercial & Industrial

 

1

​

 

376

 

3

​

 

334

Residential 1-4 Family - Commercial

 

1

​

 

72

 

1

​

 

71

Residential 1-4 Family - Consumer

 

7

​

 

1,688

 

9

​

 

1,079

Consumer

​

3

​

​

24

​

1

​

​

13

Total loan term extended at a market rate

 

12

​

$

2,160

 

24

​

$

8,626

​

​

​

​

​

​

​

​

​

​

​

Term modification, below market rate

 

  

​

 

  

 

  

​

 

  

Construction and Land Development

​

3

​

$

193

​

—

​

$

—

Commercial Real Estate - Non-Owner Occupied

 

—

​

 

—

 

1

​

​

2,782

Residential 1-4 Family - Consumer

 

22

​

 

2,658

 

19

​

 

2,783

Residential 1-4 Family - Revolving

 

—

​

 

—

 

2

​

​

46

Consumer

 

1

​

 

5

 

—

​

 

—

Total loan term extended at a below market rate

 

26

​

$

2,856

 

22

​

$

5,611

​

​

​

​

​

​

​

​

​

​

​

Interest rate modification, below market rate

 

  

​

 

  

 

  

​

 

  

Residential 1-4 Family - Commercial

 

—

​

$

—

 

1

​

$

265

Total interest only at below market rate of interest

 

—

​

$

—

 

1

​

$

265

​

​

​

​

​

​

​

​

​

​

​

Total

 

38

​

$

5,016

 

47

​

$

14,502

​

​

The following tables show the allowance for loan loss activity by segment for the year ended December 31, 2019, 2018, and 2017. 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):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 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

​

$

447

​

$

(2,005)

​

$

(1,348)

​

$

6,803

Commercial Real Estate - Owner Occupied

​

 

2,931

​

 

610

​

 

(709)

​

 

1,191

​

 

4,023

Commercial Real Estate - Non-Owner Occupied

​

 

7,544

​

 

100

​

 

(94)

​

 

1,315

​

 

8,865

Multifamily Real Estate

​

 

1,092

​

 

5

​

 

—

​

 

(448)

​

 

649

Commercial & Industrial

​

 

4,552

​

 

534

​

 

(833)

​

 

3,383

​

 

7,636

Residential 1-4 Family - Commercial

​

 

4,437

​

 

353

​

 

(176)

​

 

(2,922)

​

 

1,692

Residential 1-4 Family - Consumer

​

 

1,524

​

 

310

​

 

(852)

​

 

510

​

 

1,492

Residential 1-4 Family - Revolving

​

 

1,360

​

 

636

​

 

(1,206)

​

 

507

​

 

1,297

Auto

​

 

975

​

 

436

​

 

(1,074)

​

 

1,106

​

 

1,443

Consumer and all other(1)

​

 

4,084

​

 

1,737

​

 

(9,281)

​

 

10,605

​

 

7,145

Total

​

$

38,208

​

$

5,168

​

$

(16,230)

​

$

13,899

​

$

41,045

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 2017

​

​

Allowance for loan losses

​

    

Balance,

    

Recoveries

    

Loans

    

Provision

    

Balance,

​

​

beginning

​

credited to

​

charged

​

charged to

​

end of

​

​

of the year

​

allowance

​

off

​

operations

​

period

Construction and Land Development

​

$

10,055

​

$

206

​

$

(2,190)

​

$

1,638

​

$

9,709

Commercial Real Estate - Owner Occupied

​

 

3,801

​

 

171

​

 

(46)

​

 

(995)

​

 

2,931

Commercial Real Estate - Non-Owner Occupied

​

 

6,622

​

 

2

​

 

(1,180)

​

 

2,100

​

 

7,544

Multifamily Real Estate

​

 

1,236

​

 

—

​

 

—

​

 

(144)

​

 

1,092

Commercial & Industrial

​

 

4,627

​

 

483

​

 

(2,277)

​

 

1,719

​

 

4,552

Residential 1-4 Family - Commercial

​

 

3,698

​

 

329

​

 

(463)

​

 

873

​

 

4,437

Residential 1-4 Family - Consumer

​

 

2,701

​

 

102

​

 

(588)

​

 

(691)

​

 

1,524

Residential 1-4 Family - Revolving

​

 

1,328

​

 

314

​

 

(1,019)

​

 

737

​

 

1,360

Auto

​

 

946

​

 

459

​

 

(1,038)

​

 

608

​

 

975

Consumer and all other(1)

​

 

2,178

​

 

1,189

​

 

(4,509)

​

 

5,226

​

 

4,084

Total

​

$

37,192

​

$

3,255

​

$

(13,310)

​

$

11,071

​

$

38,208

​

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

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 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

​

$

6,861

​

$

49

​

$

1,233,119

​

$

5,709

​

$

10,944

​

$

—

​

$

1,250,924

​

$

5,758

Commercial Real Estate - Owner Occupied

​

 

11,621

​

 

146

​

 

2,002,184

​

 

3,773

​

 

27,438

​

 

—

​

 

2,041,243

​

 

3,919

Commercial Real Estate - Non-Owner Occupied

​

 

3,845

​

 

2

​

 

3,267,688

​

 

9,541

​

 

14,565

​

 

—

​

 

3,286,098

​

 

9,543

Multifamily Real Estate

​

 

—

​

 

—

​

 

633,649

​

 

632

​

 

94

​

 

—

​

 

633,743

​

 

632

Commercial & Industrial

​

 

6,236

​

 

619

​

 

2,106,218

​

 

7,768

​

 

1,579

​

 

217

​

 

2,114,033

​

 

8,604

Residential 1-4 Family - Commercial

​

 

5,773

​

 

162

​

 

706,359

​

 

1,203

​

 

12,205

​

 

—

​

 

724,337

​

 

1,365

Residential 1-4 Family - Consumer

​

 

20,446

​

 

1,242

​

 

855,344

​

 

771

​

 

14,713

​

 

—

​

 

890,503

​

 

2,013

Residential 1-4 Family - Revolving

​

 

3,048

​

 

510

​

 

652,329

​

 

813

​

 

4,127

​

 

—

​

 

659,504

​

 

1,323

Auto

​

 

563

​

 

221

​

 

349,852

​

 

1,232

​

 

4

​

 

—

​

 

350,419

​

 

1,453

Consumer and all other(1)

​

 

730

​

 

76

​

 

658,390

​

 

7,608

​

 

1,012

​

 

—

​

 

660,132

​

 

7,684

Total loans held for investment, net

​

$

59,123

​

$

3,027

​

$

12,465,132

​

$

39,050

​

$

86,681

​

$

217

​

$

12,610,936

​

$

42,294

(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

​

 

5,498

​

 

89

​

 

621,320

​

 

1,603

​

 

13,601

​

 

—

​

 

640,419

​

 

1,692

Residential 1-4 Family - Consumer

​

 

16,031

​

 

470

​

 

641,006

​

 

1,022

​

 

16,872

​

 

—

​

 

673,909

​

 

1,492

Residential 1-4 Family - Revolving

​

 

1,874

​

 

188

​

 

606,394

​

 

1,109

​

 

5,115

​

 

—

​

 

613,383

​

 

1,297

Auto

​

 

576

​

 

231

​

 

301,360

​

 

1,212

​

 

7

​

 

—

​

 

301,943

​

 

1,443

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 allowance for loan losses; 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 December 31, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,197,066

​

$

37,182

​

$

5,732

​

$

—

​

$

1,239,980

Commercial Real Estate - Owner Occupied

​

 

1,916,492

​

 

87,004

​

 

10,309

​

 

—

​

 

2,013,805

Commercial Real Estate - Non-Owner Occupied

​

 

3,205,463

​

 

62,368

​

 

3,608

​

 

94

​

 

3,271,533

Multifamily Real Estate

​

 

613,844

​

 

19,396

​

 

409

​

 

—

​

 

633,649

Commercial & Industrial

​

 

2,043,903

​

 

60,495

​

 

8,048

​

 

8

​

 

2,112,454

Residential 1-4 Family - Commercial

​

 

680,894

​

 

24,864

​

 

6,374

​

 

—

​

 

712,132

Residential 1-4 Family - Consumer

​

 

841,408

​

 

13,592

​

 

20,534

​

 

256

​

 

875,790

Residential 1-4 Family - Revolving

​

 

641,069

​

 

6,373

​

 

7,935

​

 

—

​

 

655,377

Auto

​

 

345,960

​

 

2,630

​

 

1,825

​

 

—

​

 

350,415

Consumer

​

 

371,315

​

 

550

​

 

320

​

 

—

​

 

372,185

Other Commercial

​

​

284,914

​

​

1,863

​

​

158

​

​

—

​

​

286,935

Total

​

$

12,142,328

​

$

316,317

​

$

65,252

​

$

358

​

$

12,524,255

​

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

​

 

606,955

​

 

14,876

​

 

4,987

​

 

—

​

 

626,818

Residential 1-4 Family - Consumer

​

 

624,346

​

 

17,065

​

 

15,626

​

 

—

​

 

657,037

Residential 1-4 Family - Revolving

​

 

598,444

​

 

6,316

​

 

3,508

​

 

—

​

 

608,268

Auto

​

 

296,907

​

 

3,590

​

 

1,439

​

 

—

​

 

301,936

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 December 31, 2019 (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Pass

    

Watch & Special Mention

    

Substandard

    

Doubtful

    

Total

Construction and Land Development

​

$

1,092

​

$

3,692

​

$

6,160

​

$

—

​

$

10,944

Commercial Real Estate - Owner Occupied

​

 

8,264

​

 

10,524

​

 

8,650

​

 

—

​

 

27,438

Commercial Real Estate - Non-Owner Occupied

​

 

3,826

​

 

9,415

​

 

1,324

​

 

—

​

 

14,565

Multifamily Real Estate

​

 

—

​

 

94

​

 

—

​

 

—

​

 

94

Commercial & Industrial

​

 

127

​

 

25

​

 

1,427

​

 

—

​

 

1,579

Residential 1-4 Family - Commercial

​

 

6,000

​

 

2,693

​

 

3,512

​

 

—

​

 

12,205

Residential 1-4 Family - Consumer

​

 

9,947

​

 

557

​

 

4,209

​

 

—

​

 

14,713

Residential 1-4 Family - Revolving

​

 

2,887

​

 

707

​

 

533

​

 

—

​

 

4,127

Auto

​

 

2

​

 

—

​

 

2

​

 

—

​

 

4

Consumer

​

 

657

​

 

—

​

 

11

​

 

—

​

 

668

Other Commercial

​

​

120

​

​

224

​

​

—

​

​

—

​

​

344

Total

​

$

32,922

​

$

27,931

​

$

25,828

​

$

—

​

$

86,681

​

​

​

​

​

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

​

 

6,476

​

 

2,771

​

 

4,354

​

 

—

​

 

13,601

Residential 1-4 Family - Consumer

​

 

9,930

​

 

1,030

​

 

5,912

​

 

—

​

 

16,872

Residential 1-4 Family - Revolving

​

 

3,438

​

 

1,031

​

 

646

​

 

—

​

 

5,115

Auto

​

​

7

​

​

—

​

​

—

​

​

—

​

​

7

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 Year Ended December 31, 

​

    

2019

    

2018

Balance at beginning of period

​

$

31,201

​

$

14,563

Additions

​

 

5,060

​

 

12,225

Accretion

​

 

(13,432)

​

 

(8,654)

Reclass of nonaccretable difference due to improvement in expected cash flows

​

 

4,485

​

 

1,876

Measurement period adjustment

​

 

631

​

 

3,974

Other, net (1)

​

 

3,329

​

 

7,217

Balance at end of period

​

$

31,274

​

$

31,201

(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 year.

The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $86.7 million at December 31, 2019 and $90.2 million at December 31, 2018. The outstanding balance of the Company’s PCI loan portfolio totaled $104.9 million at December 31, 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 $3.0 billion and $2.0 billion at December 31, 2019 and 2018, respectively; the remaining discount on these loans totaled $50.1 million and $30.3 million, respectively.