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Portfolio Loans (Tables)
 12 Months Ended
Dec. 31, 2018
Non-covered Loans [Line Items]  
Summary of Loans to Executive Officers and Directors
Following is a summary of activity for the years ended December 31, 2018, 2017, and 2016 of loans to executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director. Such loans were made in the normal course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers and did not involve more than the normal risk of collectibility.
(in thousands)
December 31, 2018
 
December 31, 2017
 
December 31, 2016
Balance at beginning of year
$
5,349

 
$
15,406

 
$
4,394

New loans and advances
13,995

 
1,353

 
11,539

Payments and other reductions
(2,175
)
 
(11,410
)
 
(527
)
Balance at end of year
$
17,169

 
$
5,349

 
$
15,406
Non-Covered Loans  
Non-covered Loans [Line Items]  
Summary of Portfolio Loans by Category
The table below shows the loan portfolio composition including carrying value by segment of loans accounted for at amortized cost, which includes our originated loans, and loans accounted for as PCI.
(in thousands)

December 31, 2018
 
December 31, 2017
Loans accounted for at amortized cost
$
4,303,600

 
$
4,022,896

Loans accounted for as PCI
46,401

 
74,154

Total loans
$
4,350,001

 
$
4,097,050


The following tables refer to loans accounted for at amortized cost.

Below is a summary of loans by category at December 31, 2018 and 2017:
 
(in thousands)
December 31, 2018
 
December 31, 2017
Commercial and industrial
$
2,121,008

 
$
1,918,720

Real estate loans:
 
 
 
Commercial - investor owned
843,728

 
769,275

Commercial - owner occupied
604,498

 
554,589

Construction and land development
330,097

 
303,091

Residential
298,944

 
341,312

Total real estate loans
2,077,267

 
1,968,267

Consumer and other
107,351

 
137,234

Loans, before unearned loan fees
4,305,626

 
4,024,221

Unearned loan fees, net
(2,026
)
 
(1,325
)
    Loans, including unearned loan fees
$
4,303,600

 
$
4,022,896
Summary of Allowance for Loan Losses and the Recorded Investment in Portfolio Loans by Class and Category Based on Impairment Method
A summary of activity in the allowance for loan losses and the recorded investment in loans by class and category based on impairment method for the years ended indicated below 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
Balance at December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
26,406

 
$
3,890

 
$
3,308

 
$
1,487

 
$
2,237

 
$
838

 
$
38,166

Provision (provision reversal)
8,394

 
709

 
1,216

 
97

 
(583
)
 
(20
)
 
9,813

Losses charged off
(6,894
)
 
—

 
(313
)
 
(56
)
 
(546
)
 
(167
)
 
(7,976
)
Recoveries
1,133

 
84

 
28

 
459

 
508

 
80

 
2,292

Balance, end of year
$
29,039

 
$
4,683


$
4,239


$
1,987


$
1,616


$
731


$
42,295

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
26,996

 
$
3,420

 
$
2,890

 
$
1,304

 
$
2,023

 
$
932

 
$
37,565

Provision (provision reversal)
8,737

 
456

 
404

 
336

 
797

 
34

 
10,764

Losses charged off
(9,872
)
 
(117
)
 
(90
)
 
(254
)
 
(973
)
 
(201
)
 
(11,507
)
Recoveries
545

 
131

 
104

 
101

 
390

 
73

 
1,344

Balance, end of year
$
26,406

 
$
3,890


$
3,308


$
1,487


$
2,237


$
838


$
38,166

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
22,056

 
$
3,484

 
$
2,969

 
$
1,704

 
$
1,796

 
$
1,432

 
$
33,441

Provision (provision reversal)
6,569

 
(11
)
 
(1,202
)
 
(1,334
)
 
129

 
1,400

 
5,551

Losses charged off
(2,303
)
 
(95
)
 
—

 
—

 
(25
)
 
(1,912
)
 
(4,335
)
Recoveries
674

 
42

 
1,123

 
934

 
123

 
12

 
2,908

Balance, end of year
$
26,996

 
$
3,420

 
$
2,890


$
1,304


$
2,023


$
932


$
37,565



(in thousands)
Commercial and industrial
 
CRE - investor owned
 
CRE - owner occupied
 
Construction and land development
 
Residential real estate
 
Consumer and other
 
Total
Balance December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
4,266

 
$
—

 
$
109

 
$
—

 
$
52

 
$
26

 
$
4,453

Collectively evaluated for impairment
24,773

 
4,683

 
4,130

 
1,987

 
1,564

 
705

 
37,842

Total
$
29,039

 
$
4,683

 
$
4,239

 
$
1,987

 
$
1,616

 
$
731

 
$
42,295

Loans - Ending balance:
 
 
 
 
 
 
 

 
 
 
 
 
 
Individually evaluated for impairment
$
12,950

 
$
398

 
$
2,135

 
$
—

 
$
2,277

 
$
311

 
$
18,071

Collectively evaluated for impairment
2,108,058

 
843,330

 
602,363

 
330,097

 
296,667

 
105,014

 
4,285,529

Total
$
2,121,008

 
$
843,728

 
$
604,498

 
$
330,097

 
$
298,944

 
$
105,325

 
$
4,303,600

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2,508

 
$
—

 
$
71

 
$
—

 
$
—

 
$
—

 
$
2,579

Collectively evaluated for impairment
23,898

 
3,890

 
3,237

 
1,487

 
2,237

 
838

 
35,587

Total
$
26,406

 
$
3,890

 
$
3,308

 
$
1,487

 
$
2,237

 
$
838

 
$
38,166

Loans - Ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
12,665

 
$
422

 
$
1,975

 
$
136

 
$
1,602

 
$
375

 
$
17,175

Collectively evaluated for impairment
1,906,055

 
768,853

 
552,614

 
302,955

 
339,710

 
135,534

 
4,005,721

Total
$
1,918,720

 
$
769,275

 
$
554,589

 
$
303,091

 
$
341,312

 
$
135,909

 
$
4,022,896
Summary of Portfolio Loans Individually Evaluated for Impairment and Recorded Investment in Impaired Non-Covered Loans by Category
A summary of nonperforming loans individually evaluated for impairment by category at December 31, 2018 and 2017, and the income recognized on impaired loans is as follows:
 
December 31, 2018
(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
$
21,893

 
$
3,294

 
$
9,656

 
$
12,950

 
$
4,266

 
$
13,827

Real estate:
 
 
 
 
 
 
 
 
 
 
 
    Commercial - investor owned
553

 
398

 
—

 
398

 
—

 
277

    Commercial - owner occupied
847

 
472

 
336

 
808

 
109

 
691

    Construction and land development
—

 
—

 
—

 
—

 
—

 
—

    Residential
2,425

 
1,659

 
618

 
2,277

 
52

 
778

Consumer and other
329

 
—

 
312

 
312

 
26

 
—

Total
$
26,047

 
$
5,823

 
$
10,922

 
$
16,745

 
$
4,453

 
$
15,573


 
December 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
$
20,750

 
$
2,321

 
$
10,344

 
$
12,665

 
$
2,508

 
$
16,270

Real estate:
 
 
 
 
 
 
 
 
 
 
 
    Commercial - investor owned
560

 
422

 
—

 
422

 
—

 
521

    Commercial - owner occupied
487

 
—

 
487

 
487

 
71

 
490

    Construction and land development
441

 
136

 
—

 
136

 
—

 
331

    Residential
1,730

 
1,602

 
—

 
1,602

 
—

 
1,735

Consumer and other
375

 
375

 
—

 
375

 
—

 
375

Total
$
24,343

 
$
4,856

 
$
10,831

 
$
15,687

 
$
2,579

 
$
19,722



 
December 31,
(in thousands)
2018
 
2017
 
2016
Total interest income that would have been recognized under original terms on impaired loans
$
2,153

 
$
1,324

 
$
1,079

Total cash received and recognized as interest income on impaired loans
284

 
643

 
251

Total interest income recognized on impaired loans still accruing
149

 
63

 
155



There were no loans over 90 days past due and still accruing interest at December 31, 2018 or 2017.
Schedule of Recorded Investment in Impaired Portfolio Loans by Category
The recorded investment in nonperforming loans by category at December 31, 2018 and 2017, is as follows:
 
 
December 31, 2018
(in thousands)
Non-accrual
 
Restructured, not on non-accrual
 
Total
Commercial and industrial
$
12,805

 
$
145

 
$
12,950

Real estate:
 
 
 
 
 
    Commercial - investor owned
398

 
—

 
398

    Commercial - owner occupied
808

 
—

 
808

    Construction and land development
—

 
—

 
—

    Residential
2,197

 
80

 
2,277

Consumer and other
312

 
—

 
312

       Total
$
16,520

 
$
225

 
$
16,745


 
December 31, 2017
(in thousands)
Non-accrual
 
Restructured, not on non-accrual
 
Total
Commercial and industrial
$
11,946

 
$
719

 
$
12,665

Real estate:
 
 
 
 
 
    Commercial - investor owned
422

 
—

 
422

    Commercial - owner occupied
487

 
—

 
487

    Construction and land development
136

 
—

 
136

    Residential
1,602

 
—

 
1,602

Consumer and other
375

 
—

 
375

       Total
$
14,968

 
$
719

 
$
15,687
Summary of Recorded Investment by for Portfolio Loans Restructured
The recorded investment by category for the portfolio loans that have been restructured during the years ended December 31, 2018 and 2017, is as follows:
 
Year ended December 31, 2018
 
Year ended December 31, 2017
(in thousands, except for number of loans)
Number of Loans
 
Pre-Modification Outstanding
Recorded Balance
 
Post-Modification Outstanding
Recorded Balance
 
Number of Loans
 
Pre-Modification Outstanding
Recorded Balance
 
Post-Modification Outstanding
Recorded Balance
Commercial and industrial
1

 
$
187

 
$
187

 
1

 
$
676

 
$
676

Real estate:
 
 
 
 
 
 
 
 
 
 
 
     Residential
1

 
80

 
80

 
—

 
—

 
—

  Total
2

 
$
267

 
$
267

 
1

 
$
676

 
$
676
Summary of Recorded Investment by Category for Portfolio Loans Restructured and Subsequently Defaulted
The restructured portfolio loans primarily resulted from interest rate concessions and changing the terms of the loans. As of December 31, 2018, the Company allocated $2.7 million in specific reserves to loans that have been restructured.

Portfolio loans restructured that subsequently defaulted during the year ended December 31, 2018, and 2017, are as follows:
 
Year ended December 31, 2018
 
Year ended December 31, 2017
(in thousands, except for number of loans)
Number of Loans
 
Recorded Balance
 
Number of Loans
 
Recorded Balance
Commercial and industrial
—

 
—

 
2

 
343

Real Estate:
 
 
 
 
 
 
 
     Residential
—

 
—

 
1

 
5

  Total
—

 
—

 
3

 
348
Summary of Aging of Recorded Investment in Past Due Portfolio Loans by Portfolio Class and Category
The aging of the recorded investment in past due portfolio loans by portfolio class and category at December 31, 2018 and 2017 is shown below:
 
December 31, 2018
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
Commercial and industrial
$
66

 
$
10,257

 
$
10,323

 
$
2,110,685

 
$
2,121,008

Real estate:
 
 
 
 
 
 
 
 
 
Commercial - investor owned
529

 
127

 
656

 
843,072

 
843,728

Commercial - owner occupied
292

 
565

 
857

 
603,641

 
604,498

Construction and land development
6

 
—

 
6

 
330,091

 
330,097

Residential
709

 
897

 
1,606

 
297,338

 
298,944

Consumer and other
—

 
312

 
312

 
105,013

 
105,325

Total
$
1,602

 
$
12,158

 
$
13,760

 
$
4,289,840

 
$
4,303,600


 
December 31, 2017
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
Commercial and industrial
$
7,882

 
$
1,770

 
$
9,652

 
$
1,909,068

 
$
1,918,720

Real estate:
 
 
 
 
 
 
 
 
 
Commercial - investor owned
934

 
—

 
934

 
768,341

 
769,275

Commercial - owner occupied
—

 
—

 
—

 
554,589

 
554,589

Construction and land development
76

 
—

 
76

 
303,015

 
303,091

Residential
1,529

 
945

 
2,474

 
338,838

 
341,312

Consumer and other
407

 
—

 
407

 
135,502

 
135,909

Total
$
10,828

 
$
2,715

 
$
13,543

 
$
4,009,353

 
$
4,022,896
Summary of Recorded Investment by Risk Category of Portfolio Loans by Portfolio Class and Category
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, historical 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 8 – Substandard 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 9 – Doubtful 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 December 31, 2018 and December 31, 2017 is as follows:
 
December 31, 2018
(in thousands)
Pass (1-6)
 
Watch (7)
 
Classified (8 & 9)
 
Total
Commercial and industrial
$
1,927,782

 
$
146,033

 
$
47,193

 
$
2,121,008

Real estate:
 
 
 
 
 
 
 
Commercial - investor owned
823,128

 
15,083

 
5,517

 
843,728

Commercial - owner occupied
563,003

 
31,834

 
9,661

 
604,498

Construction and land development
318,451

 
11,580

 
66

 
330,097

Residential
287,802

 
4,232

 
6,910

 
298,944

Consumer and other
105,007

 
6

 
312

 
105,325

Total
$
4,025,173

 
$
208,768

 
$
69,659

 
$
4,303,600


 
December 31, 2017
(in thousands)
Pass (1-6)
 
Watch (7)
 
Substandard (8)
 
Total
Commercial and industrial
$
1,769,102

 
$
94,002

 
$
55,616

 
$
1,918,720

Real estate:
 
 
 
 
 
 
 
Commercial - investor owned
754,010

 
10,840

 
4,425

 
769,275

Commercial - owner occupied
514,616

 
34,440

 
5,533

 
554,589

Construction and land development
292,766

 
9,983

 
342

 
303,091

Residential
329,742

 
3,648

 
7,922

 
341,312

Consumer and other
134,704

 
10

 
1,195

 
135,909

Total
$
3,794,940

 
$
152,923

 
$
75,033

 
$
4,022,896