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Loans
3 Months Ended
Mar. 31, 2017
Receivables [Abstract]  
Portfolio Loans
LOANS

The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions. These loans are accounted for using the guidance in the Accounting Standards Codification (ASC) section 310-30 and 310-20. Loans accounted for using ASC 310-30 are sometimes referred to as purchased credit impaired, or PCI, loans.
 
The table below shows the loan portfolio composition including carrying value by segment of loans accounted for under ASC 310-30 (PCI loans) and loans not accounted for under this guidance, which includes our originated loans. 

 
March 31, 2017
 
December 31, 2016
Loans not accounted for as ASC 310-30
$
3,802,681

 
$
3,118,392

Loans accounted for as ASC 310-30
88,383

 
39,769

Total loans
$
3,891,064

 
$
3,158,161


The following tables refer to loans not accounted for as ASC 310-30 loans.

Below is a summary of loans by category at March 31, 2017 and December 31, 2016:
 
(in thousands)
March 31, 2017
 
December 31, 2016
Commercial and industrial
$
1,773,105

 
$
1,632,714

Real estate:
 
 
 
    Commercial - investor owned
726,413

 
544,808

    Commercial - owner occupied
480,281

 
350,148

    Construction and land development
288,342

 
194,542

    Residential
356,415

 
240,760

Total real estate loans
1,851,451

 
1,330,258

Consumer and other
179,100

 
156,182

Loans, before unearned loan fees
3,803,656

 
3,119,154

Unearned loan fees, net
(975
)
 
(762
)
    Loans, including unearned loan fees
$
3,802,681

 
$
3,118,392



A summary of the activity in the allowance for loan losses and the recorded investment in loans by class and category based on impairment method through March 31, 2017, and at December 31, 2016, is as follows:

(in thousands)
Commercial and industrial
 
CRE - investor owned
 
CRE -
owner occupied
 
Construction and land development
 
Residential real estate
 
Consumer and other
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
$
26,996

 
$
3,420

 
$
2,890

 
$
1,304

 
$
2,023

 
$
932

 
$
37,565

Provision (provision reversal) for loan losses
1,835

 
(105
)
 
(249
)
 
(11
)
 
(3
)
 
66

 
1,533

Losses charged off
(133
)
 

 

 

 
(9
)
 
(29
)
 
(171
)
Recoveries
80

 
9

 
89

 
9

 
25

 
9

 
221

Balance at March 31, 2017
$
28,778

 
$
3,324


$
2,730


$
1,302


$
2,036


$
978


$
39,148


(in thousands)
Commercial and industrial
 
CRE - investor owned
 
CRE -
owner occupied
 
Construction and land development
 
Residential real estate
 
Consumer and other
 
Total
Balance March 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
5,047

 
$

 
$

 
$
140

 
$

 
$

 
$
5,187

Collectively evaluated for impairment
23,731

 
3,324

 
2,730

 
1,162

 
2,036

 
978

 
33,961

Total
$
28,778

 
$
3,324


$
2,730


$
1,302


$
2,036


$
978


$
39,148

Loans - Ending balance:
 
 
 
 
 
 
 

 
 
 
 
 
 
Individually evaluated for impairment
$
12,152

 
$
281

 
$
1,591

 
$
1,575

 
$
61

 
$

 
$
15,660

Collectively evaluated for impairment
1,760,953

 
726,132

 
478,690

 
286,767

 
356,354

 
178,125

 
3,787,021

Total
$
1,773,105

 
$
726,413


$
480,281


$
288,342


$
356,415


$
178,125


$
3,802,681

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2,909

 
$

 
$

 
$
155

 
$

 
$

 
$
3,064

Collectively evaluated for impairment
24,087

 
3,420

 
2,890

 
1,149

 
2,023

 
932

 
34,501

Total
$
26,996

 
$
3,420


$
2,890


$
1,304


$
2,023


$
932


$
37,565

Loans - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
12,523

 
$
430

 
$
1,854

 
$
1,903

 
$
62

 
$

 
$
16,772

Collectively evaluated for impairment
1,620,191

 
544,378

 
348,294

 
192,639

 
240,698

 
155,420

 
3,101,620

Total
$
1,632,714

 
$
544,808


$
350,148


$
194,542


$
240,760


$
155,420


$
3,118,392



A summary of loans individually evaluated for impairment by category at March 31, 2017 and December 31, 2016, is as follows:

 
March 31, 2017
(in thousands)
Unpaid
Contractual
Principal Balance
 
Recorded
Investment
With No Allowance
 
Recorded
Investment
With
Allowance
 
Total
Recorded Investment
 
Related Allowance
 
Average
Recorded Investment
Commercial and industrial
$
11,930

 
$
40

 
$
11,963

 
$
12,003

 
$
5,047

 
$
12,017

Real estate:
 
 
 
 
 
 
 
 
 
 
 
    Commercial - investor owned
281

 
282

 

 
282

 

 
272

    Commercial - owner occupied

 

 

 

 

 

    Construction and land development
1,575

 
1,658

 
341

 
1,999

 
140

 
1,813

    Residential
62

 
62

 

 
62

 

 
62

Consumer and other

 

 

 

 

 

Total
$
13,848

 
$
2,042


$
12,304


$
14,346


$
5,187


$
14,164


 
December 31, 2016
(in thousands)
Unpaid
Contractual
Principal Balance
 
Recorded
Investment
With No Allowance
 
Recorded
Investment
With
Allowance
 
Total
Recorded Investment
 
Related Allowance
 
Average
Recorded Investment
Commercial and industrial
$
12,341

 
$
566

 
$
11,791

 
$
12,357

 
$
2,909

 
$
4,489

Real estate:
 
 
 
 
 
 
 
 
 
 
 
    Commercial - investor owned
525

 
435

 

 
435

 

 
668

    Commercial - owner occupied
225

 
231

 

 
231

 

 
227

    Construction and land development
1,904

 
1,947

 
359

 
2,306

 
155

 
1,918

    Residential
62

 
62

 

 
62

 

 
64

Consumer and other

 

 

 

 

 

Total
$
15,057

 
$
3,241


$
12,150


$
15,391


$
3,064


$
7,366




The following table presents details for past due and impaired loans:
 
Three months ended March 31,
(in thousands)
2017
 
2016
Total interest income that would have been recognized under original terms
$
315

 
$
148

Total cash received and recognized as interest income on non-accrual loans
23

 
6

Total interest income recognized on impaired loans
33

 
6



There were no loans over 90 days past due and still accruing interest at March 31, 2017 or December 31, 2016.

The recorded investment in impaired loans by category at March 31, 2017 and December 31, 2016, is as follows: 
 
March 31, 2017
(in thousands)
Non-accrual
 
Restructured
 
Loans over 90 days past due and still accruing interest
 
Total
Commercial and industrial
$
9,692

 
$
2,311

 
$

 
$
12,003

Real estate:
 
 
 
 
 
 
 
    Commercial - investor owned
282

 

 

 
282

    Commercial - owner occupied

 

 

 

    Construction and land development
1,979

 
20

 

 
1,999

    Residential
62

 

 

 
62

Consumer and other

 

 

 

       Total
$
12,015

 
$
2,331


$


$
14,346


 
December 31, 2016
(in thousands)
Non-accrual
 
Restructured
 
Loans over 90 days past due and still accruing interest
 
Total
Commercial and industrial
$
10,046

 
$
2,311

 
$

 
$
12,357

Real estate:
 
 
 
 
 
 
 
    Commercial - investor owned
435

 

 

 
435

    Commercial - owner occupied
231

 

 

 
231

    Construction and land development
2,286

 
20

 

 
2,306

    Residential
62

 

 

 
62

Consumer and other

 

 

 

       Total
$
13,060

 
$
2,331

 
$

 
$
15,391



There were no restructured loans during the three months ended March 31, 2017 and 2016.

As of March 31, 2017, the Company had $0.7 million specific reserves allocated to loans that have been restructured. There were no loans restructured that subsequently defaulted during the three months ended March 31, 2017 or 2016.

The aging of the recorded investment in past due loans by portfolio class and category at March 31, 2017 and December 31, 2016 is shown below.

 
March 31, 2017
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
    Commercial and industrial
$
10,624

 
$

 
$
10,624

 
$
1,762,481

 
$
1,773,105

    Real estate:
 
 
 
 
 
 
 
 
 
       Commercial - investor owned
708

 

 
708

 
725,705

 
726,413

       Commercial - owner occupied
529

 

 
529

 
479,752

 
480,281

       Construction and land development

 
1,214

 
1,214

 
287,128

 
288,342

       Residential
285

 

 
285

 
356,130

 
356,415

    Consumer and other
2

 

 
2

 
178,123

 
178,125

          Total
$
12,148

 
$
1,214


$
13,362


$
3,789,319


$
3,802,681


 
December 31, 2016
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
    Commercial and industrial
$
334

 
$
171

 
$
505

 
$
1,632,209

 
$
1,632,714

    Real estate:
 
 
 
 
 
 
 
 
 
       Commercial - investor owned

 
175

 
175

 
544,633

 
544,808

       Commercial - owner occupied
212

 
225

 
437

 
349,711

 
350,148

       Construction and land development
355

 
1,528

 
1,883

 
192,659

 
194,542

       Residential
91

 

 
91

 
240,669

 
240,760

    Consumer and other
7

 

 
7

 
155,413

 
155,420

          Total
$
999

 
$
2,099


$
3,098


$
3,115,294


$
3,118,392



The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
Grades 1, 2, and 3 Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry.
Grade 4 Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow.
Grade 5 Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow.
Grade 6 Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7, 8, or 9 rating.
Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support.
Grade 8Substandard credits will include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted.
Grade 9Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual.

The recorded investment by risk category of the loans by portfolio class and category at March 31, 2017, which is based upon the most recent analysis performed, and December 31, 2016 is as follows:

 
March 31, 2017
(in thousands)
Pass (1-6)
 
Watch (7)
 
Substandard (8)
 
Doubtful (9)
 
Total
    Commercial and industrial
$
1,629,105

 
$
75,946

 
$
68,054

 
$

 
$
1,773,105

    Real estate:
 
 
 
 
 
 
 
 
 
       Commercial - investor owned
706,958

 
15,777

 
3,678

 

 
726,413

       Commercial - owner occupied
440,319

 
35,505

 
4,457

 

 
480,281

       Construction and land development
283,410

 
2,841

 
2,091

 

 
288,342

       Residential
347,118

 
5,051

 
4,246

 

 
356,415

    Consumer and other
176,340

 
375

 
1,410

 

 
178,125

          Total
$
3,583,250

 
$
135,495

 
$
83,936

 
$

 
$
3,802,681


 
December 31, 2016
(in thousands)
Pass (1-6)
 
Watch (7)
 
Substandard (8)
 
Doubtful (9)
 
Total
    Commercial and industrial
$
1,499,114

 
$
57,416

 
$
76,184

 
$

 
$
1,632,714

    Real estate:
 
 
 
 
 
 
 
 
 
       Commercial - investor owned
530,494

 
10,449

 
3,865

 

 
544,808

       Commercial - owner occupied
306,658

 
39,249

 
4,241

 

 
350,148

       Construction and land development
185,505

 
6,575

 
2,462

 

 
194,542

       Residential
233,479

 
2,997

 
4,284

 

 
240,760

    Consumer and other
153,984

 

 
1,436

 

 
155,420

          Total
$
2,909,234

 
$
116,686


$
92,472


$


$
3,118,392