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Loans Held for Investment (Tables)
6 Months Ended
Jun. 30, 2019
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:
 
June 30, 2019
 
December 31, 2018
 
(dollars in thousands)
Business loans
 
 
 
Commercial and industrial
$
1,300,083

 
$
1,364,423

Franchise
860,299

 
765,416

Commercial owner occupied (1)
1,667,912

 
1,679,122

SBA
180,363

 
193,882

Agribusiness
126,857

 
138,519

    Total business loans
4,135,514

 
4,141,362

Real estate loans
 

 
 
Commercial non-owner occupied
2,121,312

 
2,003,174

Multi-family
1,520,135

 
1,535,289

One-to-four family (2)
248,392

 
356,264

Construction
505,401

 
523,643

Farmland
169,724

 
150,502

Land
40,748

 
46,628

    Total real estate loans
4,605,712

 
4,615,500

Consumer loans
 
 
 
Consumer loans
40,680

 
89,424

Gross loans held for investment (3)
8,781,906

 
8,846,286

Deferred loan origination (fees)/costs and (discounts)/premiums, net
(9,968
)
 
(9,468
)
Loans held for investment
8,771,938

 
8,836,818

Allowance for loan losses
(35,026
)
 
(36,072
)
Loans held for investment, net
$
8,736,912

 
$
8,800,746

 
 
 
 
Loans held for sale, at lower of cost or fair value
$
8,529

 
$
5,719

______________________________
(1) Secured by real estate.
(2) Includes second trust deeds.
(3) Total gross loans held for investment for June 30, 2019 and December 31, 2018 are net of the unaccreted fair value net purchase discounts of $52.0 million and $61.0 million, respectively.
Summary of loan portfolio by the Company's internal risk grading system
The following tables stratify the loan portfolio, including loans held for sale, by the Company’s internal risk grading as of the periods indicated:
 
 
Credit Risk Grades
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total Gross
Loans
June 30, 2019
 
(dollars in thousands)
Business loans
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,287,607

 
$
5,150

 
$
7,326

 
$

 
$
1,300,083

Franchise
 
845,659

 
13,630

 
1,010

 

 
860,299

Commercial owner occupied
 
1,659,772

 
953

 
7,187

 

 
1,667,912

SBA
 
179,488

 
1,131

 
6,911

 

 
187,530

Agribusiness
 
112,796

 
765

 
13,296

 

 
126,857

Real estate loans
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
2,122,431

 

 
243

 

 
2,122,674

Multi-family
 
1,515,897

 
4,019

 
219

 

 
1,520,135

One-to-four family
 
247,539

 

 
853

 

 
248,392

Construction
 
505,401

 

 

 

 
505,401

Farmland
 
163,687

 
5,923

 
114

 

 
169,724

Land
 
40,110

 

 
638

 

 
40,748

Consumer loans
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
40,623

 

 
57

 

 
40,680

     Totals
 
$
8,721,010

 
$
31,571

 
$
37,854

 
$

 
$
8,790,435


 
 
Credit Risk Grades
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total Gross
Loans
December 31, 2018
 
(dollars in thousands)
Business loans
 
 

 
 

 
 

 
 
 
 

Commercial and industrial
 
$
1,340,322

 
$
12,005

 
$
12,134

 
$

 
$
1,364,461

Franchise
 
760,795

 
4,431

 
190

 

 
765,416

Commercial owner occupied
 
1,660,994

 
1,580

 
16,548

 

 
1,679,122

SBA
 
189,006

 
2,289

 
6,906

 

 
198,201

Agribusiness
 
125,355

 

 
13,164

 

 
138,519

Real estate loans
 
 

 
 

 
 

 
 
 
 
Commercial non-owner occupied
 
1,998,118

 
731

 
5,687

 

 
2,004,536

Multi-family
 
1,530,567

 
4,060

 
662

 

 
1,535,289

One-to-four family
 
350,083

 
728

 
5,453

 

 
356,264

Construction
 
523,643

 

 

 

 
523,643

Farmland
 
150,381

 

 
121

 

 
150,502

Land
 
46,008

 
132

 
488

 

 
46,628

Consumer loans
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
89,321

 

 
103

 

 
89,424

Totals
 
$
8,764,593

 
$
25,956

 
$
61,456

 
$

 
$
8,852,005



Schedule of delinquencies in the Company's loan portfolio
The following tables set forth delinquencies in the Company’s loan portfolio, including loans held for sale, at the dates indicated:

 
 
 
 
Days Past Due
 
 
 
 
 
 
Current
 
30-59
 
60-89
 
90+
 
Total Gross Loans
 
Non-accruing
June 30, 2019
 
(dollars in thousands)
Business loans
 
 
 
 

 
 

 
 

 
 
 
 
Commercial and industrial
 
$
1,293,042

 
$
1,841

 
$
416

 
$
4,784

 
$
1,300,083

 
$
2,935

Franchise
 
859,289

 

 
313

 
697

 
860,299

 
697

Commercial owner occupied
 
1,666,135

 
1,054

 

 
723

 
1,667,912

 
564

SBA
 
184,613

 
511

 
72

 
2,334

 
187,530

 
2,338

  Agribusiness
 
126,857

 

 

 

 
126,857

 

Real estate loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial non-owner occupied
 
2,122,431

 

 

 
243

 
2,122,674

 
243

Multi-family
 
1,520,135

 

 

 

 
1,520,135

 

One-to-four family
 
248,392

 

 

 

 
248,392

 
380

Construction
 
505,401

 

 

 

 
505,401

 

Farmland
 
169,724

 

 

 

 
169,724

 

Land
 
40,268

 

 

 
480

 
40,748

 
480

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
40,670

 
10

 

 

 
40,680

 

Totals
 
$
8,776,957

 
$
3,416

 
$
801

 
$
9,261

 
$
8,790,435

 
$
7,637


 
 
 

 
Days Past Due
 
 

 
 
 
 
Current
 
30-59
 
60-89
 
90+
 
Total Gross Loans
 
Non-accruing
December 31, 2018
 
(dollars in thousands)
Business loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
1,362,017

 
$
309

 
$
1,204

 
$
931

 
$
1,364,461

 
$
931

Franchise
 
759,546

 
5,680

 

 
190

 
765,416

 
190

Commercial owner occupied
 
1,677,967

 
343

 

 
812

 
1,679,122

 
599

SBA
 
195,051

 
524

 

 
2,626

 
198,201

 
2,739

Agribusiness
 
138,519

 

 

 

 
138,519

 

Real estate loans
 
 

 
 

 
 

 
 

 
 

 
 

Commercial non-owner occupied
 
2,004,536

 

 

 

 
2,004,536

 

Multi-family
 
1,535,275

 
14

 

 

 
1,535,289

 

One-to-four family
 
356,219

 
30

 
9

 
6

 
356,264

 
398

Construction
 
523,643

 

 

 

 
523,643

 

Farmland
 
150,502

 

 

 

 
150,502

 

Land
 
46,628

 

 

 

 
46,628

 

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
89,249

 
146

 
29

 

 
89,424

 

Totals
 
$
8,839,152

 
$
7,046

 
$
1,242

 
$
4,565

 
$
8,852,005

 
$
4,857



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)
June 30, 2019
 
 
 
 
 
 
 
 
 
 
Business loans
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
3,417

 
$
2,935

 
$

 
$
2,935

 
$

Franchise
 
697

 
697

 

 
697

 

Commercial owner occupied
 
564

 
564

 

 
564

 

SBA
 
9,059

 
2,338

 

 
2,338

 

Agribusiness
 
7,466

 
7,466

 

 
7,466

 

Real estate loans
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
3,654

 
243

 

 
243

 

One-to-four family
 
413

 
380

 

 
380

 

Land
 
480

 
480

 

 
480

 

Totals
 
$
25,750

 
$
15,103

 
$

 
$
15,103

 
$

  

 
 
Impaired Loans
 
 
Unpaid Principal Balance
 
Recorded Investment
 
With Specific Allowance
 
Without Specific Allowance
 
Specific Allowance for Impaired Loans
 
 
(dollars in thousands)
December 31, 2018
 
 

 
 

 
 

 
 

 
 

Business loans
 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
1,071

 
$
1,023

 
$
550

 
$
473

 
$
118

Franchise
 
190

 
189

 

 
189

 

Commercial owner occupied
 
628

 
599

 

 
599

 

SBA
 
7,598

 
2,739

 
488

 
2,251

 
466

Agribusiness
 
7,500

 
7,500

 

 
7,500

 

Real estate loans
 
 

 
 

 
 

 
 

 
 

One-to-four family
 
453

 
408

 

 
408

 

Totals
 
$
17,440

 
$
12,458

 
$
1,038

 
$
11,420

 
$
584

  

The following table presents information on impaired loans and leases, disaggregated by class, for the periods indicated:

 
 
Impaired Loans
 
 
Three Months Ended
 
 
June 30, 2019
 
March 31, 2019
 
June 30, 2018
 
 
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
 
$
2,614

 
$

 
$
2,003

 
$

 
$
1,272

 
$

Franchise
 
4,047

 

 
3,976

 

 
70

 

Commercial owner occupied
 
564

 

 
576

 

 
2,317

 

SBA
 
3,139

 

 
3,279

 

 
1,360

 

Agribusiness
 
7,489

 
109

 
7,500

 
89

 

 

Real estate loans
 
 
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
162

 

 

 

 
430

 

Multi-family
 

 

 

 

 
589

 

One-to-four family
 
383

 

 
395

 

 
1,343

 

Land
 
160

 

 

 

 
6

 

Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
17

 
$

 
57

 

 
15

 

Totals
 
$
18,575

 
$
109

 
$
17,786

 
$
89

 
$
7,402

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Interest income recognized represents interest on accruing loans.
 
 
 
 
 
 
 
 
 
 
 
Impaired Loans
 
 
Six Months Ended
 
 
June 30,
 
 
2019
 
2018
 
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
Average Recorded Investment
 
Interest Income Recognized (1)
 
 
(dollars in thousands)
Business loans:
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
2,309

 
$

 
$
1,226

 
$

Franchise
 
4,012

 

 
35

 

Commercial owner occupied
 
570

 

 
2,896

 

SBA
 
3,209

 

 
1,300

 

Agribusiness
 
$
7,494

 
$
199

 

 

Real estate loans:
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
81

 

 
215

 

Multi-family
 

 

 
705

 

One-to-four family
 
389

 

 
1,184

 

Land
 
80

 

 
7

 

Consumer loans:
 
 
 
 
 
 
 
 
Consumer loans
 
37

 

 
55

 

Totals
 
$
18,181

 
$
199

 
$
7,623

 
$

 
 
 
 
 
 
 
 
 
(1) Interest income recognized represents interest on accruing loans.

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: 
 
June 30, 2019
 
December 31, 2018
 
(dollars in thousands)
Nonaccrual loans
$
7,637

 
$
4,857

Accruing loans
7,466

 
7,601

Total impaired loans
$
15,103

 
$
12,458


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:
 
June 30, 2019
 
December 31, 2018
 
(dollars in thousands)
Business loans
 
 
 
Commercial and industrial
$

 
$
10

Commercial owner occupied
578

 
632

SBA
1,190

 
1,265

Real estate loans
 

 
 

Commercial non-owner occupied

 
275

Total purchased credit impaired
$
1,768

 
$
2,182


Summary of accretable yield on purchased credit impaired
The following table summarizes the accretable yield on the purchased credit impaired loans for the periods indicated.
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
(dollars in thousands)
Balance at the beginning of period
 
$
332

 
$
411

 
$
1,709

 
$
411

 
$
3,019

Additions
 

 

 

 

 

Accretion
 
(45
)
 
(79
)
 
(270
)
 
(124
)
 
(506
)
Payoffs
 
(9
)
 

 
32

 
(9
)
 
(1,818
)
Sales
 

 

 

 
$

 
$

Reclassification from nonaccretable difference
 
18

 

 
2

 
18

 
778

Balance at the end of period
 
$
296

 
$
332

 
$
1,473

 
$
296

 
$
1,473