Loans Held for Investment (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017			December 31, 2016
	(dollars in thousands)
Business loans:
Commercial and industrial	$	733,852		$	563,169
Franchise	565,415			459,421
Commercial owner occupied (1)	729,476			454,918
SBA	108,224			96,705
Agriculture	98,842			—
Real estate loans:
Commercial non-owner occupied	1,095,184			586,975
Multi-family	746,547			690,955
One-to-four family (2)	322,048			100,451
Construction	289,600			269,159
Farmland	136,587			—
Land	31,799			19,829
Other loans	7,309			4,112
Total gross loans (3)	4,864,883			3,245,694
Plus: Deferred loan origination costs/(fees) and premiums/(discounts), net	568			3,630
Total loans	4,865,451			3,249,324
Less: loans held for sale, at lower of cost or fair value	6,840			7,711
Loans held for investment	4,858,611			3,241,613
Allowance for loan losses	(25,055		)	(21,296		)
Loans held for investment, net	$	4,833,556		$	3,220,317

______________________________

(1) Secured by real estate.

(2) Includes second trust deeds.

(3) Total gross loans for June 30, 2017 are net of the unaccreted fair value purchase discounts of $25.2 million.

Summary of Company's investment in purchased credit impaired loans

The carrying amount of those loans is as follows:



	June 30, 2017		December 31, 2016
	(dollars in thousands)
Business loans:
Commercial and industrial	$	3,679	$	2,586
Commercial owner occupied	3,208		491
SBA	361		—
Real estate loans:
Commercial non-owner occupied	1,151		1,088
Multi-family	237		—
One-to-four family	262		1
Construction/Land	549		—
Other loans	274		393
Total purchase credit impaired	$	9,721	$	4,559

Summary of accretable yield on purchased credit impaired

The following table summarizes the accretable yield on the purchased credit impaired loans for the three months ended June 30, 2017, March 31, 2017 and June 30, 2016 and for the six months ended June 30, 2017 and 2016:



	Three Months Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016

Balance at the beginning of period	$	3,601		$	3,747		$	3,254		$	3,747		$	2,726
Additions	2,036			—			—			2,036			788
Accretion	(712		)	(629		)	(147		)	(1,341		)	(276		)
Payoffs	—			—			(126		)	—			(449		)
Reclassification from (to) nonaccretable difference	(1,428		)	483			—			(945		)	192
Balance at the end of period	$	3,497		$	3,601		$	2,981		$	3,497		$	2,981

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
	Contractual Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans
	(dollars in thousands)
June 30, 2017
Business loans:
Commercial owner occupied	$	240	$	206	$	—	$	206	$	—
SBA	146		73		—		73		—
Real estate loans:
One-to-four family	135		104		—		104		—
Land	35		12		—		12		—
Totals	$	556	$	395	$	—	$	395	$	—



	Impaired Loans
	Contractual Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans
	(dollars in thousands)
December 31, 2016
Business loans:
Commercial and industrial	$	1,990	$	250	$	250	$	—	$	250
Commercial owner occupied	847		436		—		436		—
SBA	3,865		316		—		316		—
Real estate loans:
One-to-four family	291		124		—		124		—
Land	36		15		—		15		—
Totals	$	7,029	$	1,141	$	250	$	891	$	250



	Impaired Loans
	Three Months Ended
	June 30, 2017				March 31, 2017				June 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Business loans:
Commercial and industrial	$	7	$	—	$	200	$	5	$	350	$	8
Franchise	—		—		—		—		1,461		24
Commercial owner occupied	125		2		192		3		494		9
SBA	222		4		307		5		247		4
Real estate loans:
One-to-four family	105		3		116		3		393		5
Land	12		1		14		1		19		1
Totals	$	471	$	10	$	829	$	17	$	2,964	$	51



	Impaired Loans
	Six Months Ended
	June 30, 2017				June 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
Business loans:
Commercial and industrial	$	200	$	5	$	329	$	13
Franchise	—		—		1,546		51
Commercial owner occupied	192		5		506		18
SBA	307		9		135		4
Real estate loans:
Commercial non-owner occupied	—		—		71		2
One-to-four family	116		6		322		10
Land	14		2		19		1
Totals	$	829	$	27	$	2,928	$	99

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, 2017		December 31, 2016
	(dollars in thousands)
Nonaccruing loans	$	395	$	1,141
Accruing loans	—		—
Total impaired loans	$	395	$	1,141

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
June 30, 2017	(dollars in thousands)
Business loans:
Commercial and industrial	$	715,759	$	8,972	$	9,121	$	—	$	733,852
Franchise	565,415		—		—		—		565,415
Commercial owner occupied	711,959		2,035		15,482		—		729,476
SBA	107,429		10		785		—		108,224
Agriculture	92,522		4,634		1,686		—		98,842
Real estate loans:
Commercial non-owner occupied	1,087,928		5,784		1,472		—		1,095,184
Multi-family	745,766		—		781		—		746,547
One-to-four family	321,021		171		856		—		322,048
Construction and land	320,610		—		789		—		321,399
Farmland	134,409		77		2,101				136,587
Other loans	6,975		—		334		—		7,309
Totals	$	4,809,793	$	21,683	$	33,407	$	—	$	4,864,883



	Credit Risk Grades
	Pass		Special Mention		Substandard		Doubtful		Total Gross Loans
December 31, 2016	(dollars in thousands)
Business loans:
Commercial and industrial	$	550,919	$	8,216	$	3,784	$	250	$	563,169
Franchise	459,421		—		—		—		459,421
Commercial owner occupied	450,416		281		4,221		—		454,918
SBA	96,190		53		462		—		96,705
Real estate loans:
Commercial non-owner occupied	585,093		810		1,072		—		586,975
Multi-family	681,942		6,610		2,403		—		690,955
One-to-four family	100,010		—		441		—		100,451
Construction and land	288,973		—		15		—		288,988
Other loans	3,719		—		393		—		4,112
Totals	$	3,216,683	$	15,970	$	12,791	$	250	$	3,245,694

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								Non-
	Current		30-59		60-89		90+		Total		Accruing
June 30, 2017	(dollars in thousands)
Business loans:
Commercial and industrial	$	733,250	$	225	$	280	$	97	$	733,852	$	—
Franchise	565,415		—		—		—		565,415		—
Commercial owner occupied	728,403		—		901		172		729,476		206
SBA	108,057		17		18		132		108,224		73
Agriculture	98,842		—		—		—		98,842		—
Real estate loans:
Commercial non-owner occupied	1,094,655		—		529		—		1,095,184		—
Multi-family	746,310		—		237		—		746,547		—
One-to-four family	321,653		354		—		41		322,048		104
Construction/Land/Other	465,279		4		—		12		465,295		12
Totals	$	4,861,864	$	600	$	1,965	$	454	$	4,864,883	$	395



			Days Past Due								Non-
	Current		30-59		60-89		90+		Total		Accruing
December 31, 2016	(dollars in thousands)
Business loans:
Commercial and industrial	$	562,805	$	104	$	—	$	260	$	563,169	$	250
Franchise	459,421		—		—		—		459,421		—
Commercial owner occupied	454,918		—		—		—		454,918		436
SBA	96,389		—		—		316		96,705		316
Real estate loans:
Commercial non-owner occupied	586,975		—		—		—		586,975		—
Multi-family	690,955		—		—		—		690,955		—
One-to-four family	100,314		18		71		48		100,451		124
Construction	269,159		—		—		—		269,159		—
Land	19,814		—		—		15		19,829		15
Other loans	4,112		—		—		—		4,112		—
Totals	$	3,244,862	$	122	$	71	$	639	$	3,245,694	$	1,141