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Loans Held for Investment (Tables)
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Schedule of components of loans held for investment
The following table sets forth the composition of our loan portfolio in dollar amounts at the dates indicated:
 
September 30, 2018
 
December 31, 2017
 
(dollars in thousands)
Business loans
 
 
 
Commercial and industrial
$
1,359,841

 
$
1,086,659

Franchise
735,366

 
660,414

Commercial owner occupied (1)
1,675,528

 
1,289,213

SBA
193,487

 
185,514

Agribusiness
133,241

 
116,066

    Total business loans
4,097,463

 
3,337,866

Real estate loans
 

 
 
Commercial non-owner occupied
1,931,165

 
1,243,115

Multi-family
1,554,692

 
794,384

One-to-four family (2)
376,617

 
270,894

Construction
504,708

 
282,811

Farmland
138,479

 
145,393

Land
49,992

 
31,233

    Total real estate loans
4,555,653

 
2,767,830

Consumer loans
 
 
 
Consumer loans
114,736

 
92,931

Gross loans held for investment (3)
8,767,852

 
6,198,627

Deferred loan origination costs/(fees) and premiums/(discounts), net
(8,648
)
 
(2,403
)
Loans held for investment
8,759,204

 
6,196,224

Allowance for loan losses
(33,306
)
 
(28,936
)
Loans held for investment, net
$
8,725,898

 
$
6,167,288

 
 
 
 
Loans held for sale, at lower of cost or fair value
$
52,880

 
$
23,426

______________________________
(1) Secured by real estate.
(2) Includes second trust deeds.
(3) Total gross loans held for investment for September 30, 2018 and December 31, 2017 are net of the unaccreted fair value net purchase discounts of $71.7 million and $29.1 million, respectively.
Summary of loan portfolio by the Company's internal risk grading system
The following tables stratify the loan portfolio by the Company’s internal risk grading as of the periods indicated:

 
 
Credit Risk Grades
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total Gross
Loans
September 30, 2018
 
(dollars in thousands)
Business loans
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,325,912

 
$
14,380

 
$
19,549

 
$
—

 
$
1,359,841

Franchise
 
735,157

 
—

 
209

 
—

 
735,366

Commercial owner occupied
 
1,690,912

 
1,348

 
24,890

 
—

 
1,717,150

SBA
 
195,527

 
1,810

 
5,892

 
—

 
203,229

Agribusiness
 
126,695

 
—

 
6,546

 
—

 
133,241

Real estate loans
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
1,924,416

 
163

 
8,102

 
—

 
1,932,681

Multi-family
 
1,553,437

 
—

 
1,255

 
—

 
1,554,692

One-to-four family
 
368,270

 
1,066

 
7,281

 
—

 
376,617

Construction
 
504,708

 
—

 
—

 
—

 
504,708

Farmland
 
138,356

 
—

 
123

 
—

 
138,479

Land
 
49,292

 
—

 
700

 
—

 
49,992

Consumer loans
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
114,598

 
5

 
133

 
—

 
114,736

     Totals
 
$
8,727,280

 
$
18,772

 
$
74,680

 
$
—

 
$
8,820,732


 
 
Credit Risk Grades
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total Gross
Loans
December 31, 2017
 
(dollars in thousands)
Business loans
 
 

 
 

 
 

 
 
 
 

Commercial and industrial
 
$
1,063,452

 
$
8,163

 
$
15,044

 
$
—

 
$
1,086,659

Franchise
 
660,414

 
—

 
—

 
—

 
660,414

Commercial owner occupied
 
1,273,381

 
654

 
21,180

 
—

 
1,295,215

SBA
 
199,468

 
1

 
3,469

 
—

 
202,938

Agribusiness
 
108,143

 
4,079

 
3,844

 
—

 
116,066

Real estate loans
 
 

 
 

 
 

 
 
 
 
Commercial non-owner occupied
 
1,242,045

 
—

 
1,070

 
—

 
1,243,115

Multi-family
 
794,156

 
—

 
228

 
—

 
794,384

One-to-four family
 
268,776

 
154

 
1,964

 
—

 
270,894

Construction
 
282,294

 
517

 
—

 
—

 
282,811

Farmland
 
144,234

 
44

 
1,115

 
—

 
145,393

Land
 
30,979

 
—

 
254

 
—

 
31,233

Consumer loans
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
92,794

 
—

 
137

 
—

 
92,931

Totals
 
$
6,160,136

 
$
13,612

 
$
48,305

 
$
—

 
$
6,222,053
Schedule of delinquencies in the Company's loan portfolio
The following tables set forth delinquencies in the Company’s loan portfolio at the dates indicated:

 
 
 
 
Days Past Due
 
 
 
 
 
 
Current
 
30-59
 
60-89
 
90+
 
Total Gross Loans
 
Non-accruing
September 30, 2018
 
(dollars in thousands)
Business loans
 
 
 
 

 
 

 
 

 
 
 
 
Commercial and industrial
 
$
1,358,766

 
$
334

 
$
636

 
$
105

 
$
1,359,841

 
$
1,027

Franchise
 
735,157

 
—

 
—

 
209

 
735,366

 
209

Commercial owner occupied
 
1,716,146

 
793

 
—

 
211

 
1,717,150

 
—

SBA
 
200,596

 
4

 
—

 
2,629

 
203,229

 
2,748

  Agribusiness
 
133,241

 
—

 
—

 
—

 
133,241

 
—

Real estate loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial non-owner occupied
 
1,931,391

 
—

 
—

 
1,290

 
1,932,681

 
1,290

Multi-family
 
1,554,103

 
—

 
—

 
589

 
1,554,692

 
589

One-to-four family
 
375,694

 
836

 
76

 
11

 
376,617

 
1,388

Construction
 
504,708

 
—

 
—

 
—

 
504,708

 
—

Farmland
 
138,479

 
—

 
—

 
—

 
138,479

 
—

Land
 
49,988

 
—

 
—

 
4

 
49,992

 
4

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
114,718

 
10

 
8

 
—

 
114,736

 
13

Totals
 
$
8,812,987

 
$
1,977

 
$
720

 
$
5,048

 
$
8,820,732

 
$
7,268


 
 
 

 
Days Past Due
 
 

 
 
 
 
Current
 
30-59
 
60-89
 
90+
 
Total Gross Loans
 
Non-accruing
December 31, 2017
 
(dollars in thousands)
Business loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
1,085,770

 
$
84

 
$
570

 
$
235

 
$
1,086,659

 
$
1,160

Franchise
 
660,414

 
—

 
—

 
—

 
660,414

 
—

Commercial owner occupied
 
1,291,255

 
3,474

 
486

 
—

 
1,295,215

 
97

SBA
 
200,821

 
177

 
—

 
1,940

 
202,938

 
1,201

Agribusiness
 
116,066

 
—

 
—

 
—

 
116,066

 
—

Real estate loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial non-owner occupied
 
1,243,115

 
—

 
—

 
—

 
1,243,115

 
—

Multi-family
 
792,603

 
1,781

 
—

 
—

 
794,384

 
—

One-to-four family
 
269,725

 
354

 
—

 
815

 
270,894

 
817

Construction
 
282,811

 
—

 
—

 
—

 
282,811

 
—

Farmland
 
145,393

 
—

 
—

 
—

 
145,393

 
—

Land
 
31,141

 
83

 
—

 
9

 
31,233

 
9

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
92,880

 
11

 
—

 
40

 
92,931

 
—

Totals
 
$
6,211,994

 
$
5,964

 
$
1,056

 
$
3,039

 
$
6,222,053

 
$
3,284
Summary of Company's investment in impaired loans
The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated:

 
 
Impaired Loans
 
 
Unpaid Principal Balance
 
Recorded Investment
 
With Specific Allowance
 
Without Specific Allowance
 
Specific Allowance for Impaired Loans
 
 
(dollars in thousands)
September 30, 2018
 
 
 
 
 
 
 
 
 
 
Business loans
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,515

 
$
1,027

 
$
—

 
$
1,027

 
$
—

Franchise
 
205

 
209

 
—

 
209

 
—

SBA
 
7,618

 
2,748

 
488

 
2,260

 
250

Real estate loans
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
1,287

 
1,290

 
—

 
1,290

 
—

Multi-family
 
589

 
589

 
—

 
589

 
—

One-to-four family
 
1,476

 
1,388

 
—

 
1,388

 
—

Land
 
34

 
4

 
—

 
4

 
—

Consumer loans
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
15

 
13

 
—

 
13

 
—

Totals
 
$
12,739

 
$
7,268

 
$
488

 
$
6,780

 
$
250

  

 
 
Impaired Loans
 
 
Unpaid Principal Balance
 
Recorded Investment
 
With Specific Allowance
 
Without Specific Allowance
 
Specific Allowance for Impaired Loans
 
 
(dollars in thousands)
December 31, 2017
 
 

 
 

 
 

 
 

 
 

Business loans
 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
1,585

 
$
1,160

 
$
—

 
$
1,160

 
$
—

Commercial owner occupied
 
98

 
97

 
97

 
—

 
55

SBA
 
4,329

 
1,201

 
—

 
1,201

 
—

Real estate loans
 
 

 
 

 
 

 
 

 
 

One-to-four family
 
849

 
817

 
—

 
817

 
—

Land
 
35

 
9

 
—

 
9

 
—

Totals
 
$
6,896

 
$
3,284

 
$
97

 
$
3,187

 
$
55

  

 
 
Impaired Loans
 
 
Three Months Ended
 
 
September 30, 2018
 
June 30, 2018
 
September 30, 2017
 
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
 
(dollars in thousands)
Business loans
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,030

 
$
—

 
$
1,272

 
$
—

 
$
446

 
$
7

Franchise
 
209

 
—

 
70

 
—

 
—

 
—

Commercial owner occupied
 
—

 
—

 
2,317

 
—

 
170

 
3

SBA
 
1,914

 
—

 
1,360

 
—

 
85

 
2

Real estate loans
 
 
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
1,290

 
—

 
430

 
—

 
342

 
7

Multi-family
 
589

 
—

 
589

 
—

 
—

 
—

One-to-four family
 
1,406

 
—

 
1,343

 
—

 
103

 
3

Land
 
5

 
—

 
6

 
—

 
11

 
—

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
13

 
$
—

 
15

 
—

 
—

 
—

Totals
 
$
6,456

 
$
—

 
$
7,402

 
$
—

 
$
1,157

 
$
22

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Cash basis and accrual basis is materially the same.


 
 
Impaired Loans
 
 
Nine Months Ended
 
 
September 30,
 
 
2018
 
2017
 
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
 
(dollars in thousands)
Business loans:
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,161

 
$
—

 
$
218

 
$
12

Franchise
 
93

 
—

 
—

 
—

Commercial owner occupied
 
1,931

 
—

 
162

 
8

SBA
 
1,505

 
—

 
204

 
10

Real estate loans:
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
573

 
—

 
114

 
7

Multi-family
 
666

 
—

 
—

 
—

One-to-four family
 
1,258

 
—

 
108

 
9

Land
 
6

 
—

 
13

 
1

Consumer loans:
 
 
 
 
 
 
 
 
Consumer loans
 
41

 
—

 
—

 
—

Totals
 
$
7,234

 
$
—

 
$
819

 
$
47

 
 
 
 
 
 
 
 
 
(1) Cash basis and accrual basis is materially the same.
Summary of additional detail on components of impaired loans
The following table provides additional detail on the components of impaired loans at the period end indicated: 
 
September 30, 2018
 
December 31, 2017
 
(dollars in thousands)
Nonaccruing loans
$
7,268

 
$
3,284

Accruing loans
—

 
—

Total impaired loans
$
7,268

 
$
3,284
Summary of Company's investment in purchased credit impaired loans
The Company has purchased loans that have experienced deterioration of credit quality between origination and acquisition and for which it was probable, at acquisition, that not all contractually required payments would be collected. The carrying amount of those loans is as follows:
 
September 30, 2018
 
December 31, 2017
 
(dollars in thousands)
Business loans
 
 
 
Commercial and industrial
$
1,700

 
$
3,310

Commercial owner occupied
2,808

 
1,262

SBA
1,304

 
1,802

Real estate loans
 

 
 

Commercial non-owner occupied
1,077

 
1,650

One-to-four family
909

 
255

   Construction
—

 
517

   Land
76

 
83

   Consumer loans
8

 
10

Total purchase credit impaired
$
7,882

 
$
8,889
Summary of accretable yield on purchased credit impaired
The following table summarizes the accretable yield on the purchased credit impaired loans for the three and nine month periods indicated.
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
June 30,
 
 
2018
 
2018
 
2017
 
2018
 
2017
 
 
(dollars in thousands)
Balance at the beginning of period
 
$
1,473

 
$
1,709

 
$
3,497

 
$
3,019

 
$
3,747

Additions
 
483

 
—

 
—

 
483

 
2,036

Accretion
 
(162
)
 
(270
)
 
(388
)
 
(668
)
 
(1,729
)
Payoffs
 
(1
)
 
32

 
39

 
(1,819
)
 
39

Reclassification from (to) nonaccretable difference
 
195

 
2

 
—

 
973

 
(945
)
Balance at the end of period
 
$
1,988

 
$
1,473

 
$
3,148

 
$
1,988

 
$
3,148