Loans (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of components of loans held for investment

The following table presents the composition of the loan portfolio as of the dates indicated:



	December 31,
	2019			2018
	(dollars in thousands)
Business loans:
Commercial and industrial	$	1,265,185		$	1,364,423
Franchise	916,875			765,416
Commercial owner occupied ⁽¹⁾	1,674,092			1,679,122
SBA	175,815			193,882
Agribusiness	127,834			138,519
Total business loans	4,159,801			4,141,362
Real estate loans:
Commercial non-owner occupied	2,072,374			2,003,174
Multi-family	1,576,870			1,535,289
One-to-four family ⁽²⁾	254,779			356,264
Construction	410,065			523,643
Farmland	175,997			150,502
Land	31,090			46,628
Total real estate loans	4,521,175			4,615,500
Consumer loans:
Consumer loans	50,922			89,424
Gross loans held for investment ⁽³⁾	8,731,898			8,846,286
Deferred loan origination fees and discounts, net	(9,587		)	(9,468		)
Loans held for investment	8,722,311			8,836,818
Allowance for loan losses	(35,698		)	(36,072		)
Loans held for investment, net	$	8,686,613		$	8,800,746

Loans held for sale, at lower of cost or fair value	$	1,672		$	5,719

______________________________

⁽¹⁾ Secured by real estate.

⁽²⁾ Includes second trust deeds.

⁽³⁾ Total gross loans held for investment for December 31, 2019 and December 31, 2018 net of the unaccreted fair value net purchase discounts of $40.7 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 by the Company’s internal risk rating, including loans held for sale, as of the periods indicated:



	Credit Risk Grades
	Pass		Special Mention		Substandard		Doubtful		Total Gross Loans
December 31, 2019	(dollars in thousands)
Business loans
Commercial and industrial	$	1,236,073	$	13,226	$	15,886	$	—	$	1,265,185
Franchise	898,191		7,851		10,833		—		916,875
Commercial owner occupied	1,659,391		11,167		3,534		—		1,674,092
SBA	166,011		3,255		8,221		—		177,487
Agribusiness	123,338		—		4,496		—		127,834
Real estate loans
Commercial non-owner occupied	2,070,068		1,178		1,128		—		2,072,374
Multi-family	1,576,654		—		216		—		1,576,870
One-to-four family	254,218		—		561		—		254,779
Construction	410,065		—		—		—		410,065
Farmland	175,997		—		—		—		175,997
Land	31,073		—		17		—		31,090
Consumer loans
Consumer loans	50,868		—		54		—		50,922
Totals	$	8,651,947	$	36,677	$	44,946	$	—	$	8,733,570

	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
Warehouse facilities	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 credit quality of the loan portfolio

The following tables present the aging of loan portfolio, including loans held for sale, by type of loans as of the periods indicated:



			Days Past Due
	Current		30-59		60-89		90+		Total Gross Loans		Non-accruing
December 31, 2019	(dollars in thousands)
Business loans
Commercial and industrial	$	1,260,940	$	422	$	826	$	2,997	$	1,265,185	$	4,637
Franchise	907,733		—		9,142		—		916,875		—
Commercial owner occupied	1,673,761		331		—		—		1,674,092		—
SBA	174,271		169		613		2,434		177,487		2,519
Agribusiness	127,834		—		—		—		127,834		—
Real estate loans
Commercial non-owner occupied	2,070,067		1,179		—		1,128		2,072,374		1,128
Multi-family	1,576,870		—		—		—		1,576,870		—
One-to-four family	254,779		—		—		—		254,779		366
Construction	410,065		—		—		—		410,065		—
Farmland	175,997		—		—		—		175,997		—
Land	31,090		—		—		—		31,090		—
Consumer loans
Consumer loans	50,914		5		2		1		50,922		—
Totals	$	8,714,321	$	2,106	$	10,583	$	6,560	$	8,733,570	$	8,650

			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
Warehouse facilities	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 and for the periods indicated:



	Recorded Investment		Unpaid Principal Balance		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
	(dollars in thousands)
December 31, 2019
Business loans
Commercial and industrial	$	7,529	$	7,755	$	—	$	7,529	$	—	$	3,649	$	22
Franchise	10,834		10,835		—		10,834		—		3,079		151
Commercial owner occupied	—		—		—		—		—		683		—
SBA	3,132		4,070		—		3,132		—		2,996		16
Agribusiness	—		—		—		—		—		6,602		363
Real estate loans
Commercial non-owner occupied	1,128		1,184		—		1,128		—		411		—
One-to-four family	366		412		—		366		—		379		—
Land	—		—		—		—		—		120		—
Consumer loans
Consumer	—		—		—		—		—		19		—
Totals	$	22,989	$	24,256	$	—	$	22,989	$	—	$	17,938	$	552
December 31, 2018
Business loans
Commercial and industrial	$	1,023	$	1,071	$	550	$	473	$	118	$	1,173	$	1
Franchise	189		190		—		189		—		119		—
Commercial owner occupied	599		628		—		599		—		1,549		—
SBA	2,739		7,598		488		2,251		466		1,814		—
Agribusiness	7,500		7,500		—		7,500		—		625		35
Real estate loans
Commercial non-owner occupied	—		—		—		—		—		538		—
Multi-family	—		—		—		—		—		500		—
One-to-four family	408		453		—		408		—		1,206		—
Land	—		—		—		—		—		5		—
Consumer loans
Consumer	—		—		—		—		—		33		—
Totals	$	12,458	$	17,440	$	1,038	$	11,420	$	584	$	7,562	$	36
December 31, 2017
Business loans
Commercial and industrial	$	1,160	$	1,585	$	—	$	1,160	$	—	$	441	$	—
Commercial owner occupied	97		98		97		—		55		153		—
SBA	1,201		4,329		—		1,201		—		434		—
Real estate loans
Commercial non-owner occupied	—		—		—		—		—		86		—
One-to-four family	817		849		—		817		—		166		—
Construction	—		—		—		—		—		1,017		—
Land	9		35		—		9		—		12		—
Totals	$	3,284	$	6,896	$	97	$	3,187	$	55	$	2,309	$	—