Non-Covered Loans and Allowance for Non-Covered Loan Losses (Tables) - Noncovered

3 Months Ended

Mar. 31, 2017

Loans

Summary of non-covered loans by portfolio segment

Non-covered loans summarized by portfolio segment are as follows (in thousands).

	March 31,		December 31,
	2017		2016
Commercial and industrial	$	1,655,945	$	1,696,453
Real estate		2,852,245		2,816,767
Construction and land development		767,798		786,850
Consumer		42,656		41,352
Broker-dealer (1)		465,209		502,077
		5,783,853		5,843,499
Allowance for non-covered loan losses		(55,157)		(54,186)
Total non-covered loans, net of allowance	$	5,728,696	$	5,789,313

(1) Represents margin loans to customers and correspondents associated with our broker-dealer segment operations.

Schedule of carrying values and the outstanding balances of the PCI loans

The following table presents the carrying values and the outstanding balances of non-covered PCI loans (in thousands).

	March 31,		December 31,
	2017		2016
Carrying amount	$	47,765	$	51,432
Outstanding balance		63,716		67,988

Schedule of changes in the accretable yield for the PCI loans

Changes in the accretable yield for non-covered PCI loans were as follows (in thousands).

	Three Months Ended March 31,
	2017		2016
Balance, beginning of period	$	13,116	$	17,744
Reclassifications from nonaccretable difference, net(1)		139		2,343
Accretion		(1,813)		(3,919)
Balance, end of period	$	11,442	$	16,168

(1) Reclassifications from nonaccretable difference are primarily due to net increases in expected cash flows in the quarterly recasts. Reclassifications to nonaccretable difference occur when accruing loans are moved to non-accrual and expected cash flows are no longer predictable and the accretable yield is eliminated.

Summary of impaired loans by class

Non-covered impaired loans, segregated between those considered to be PCI loans and those without credit impairment at acquisition, are summarized by class in the following tables (in thousands).

	Unpaid		Recorded		Recorded		Total
	Contractual		Investment with		Investment with		Recorded		Related
March 31, 2017	Principal Balance		No Allowance		Allowance		Investment		Allowance
PCI
Commercial and industrial:
Secured	$	22,495	$	6,558	$	1,455	$	8,013	$	208
Unsecured		2,150		—		—		—		—
Real estate:
Secured by commercial properties		35,756		10,459		16,109		26,568		1,873
Secured by residential properties		13,256		8,414		1,779		10,193		181
Construction and land development:
Residential construction loans		—		—		—		—		—
Commercial construction loans and land development		4,983		1,030		1,683		2,713		326
Consumer		2,839		—		278		278		65
Broker-dealer		—		—		—		—		—
		81,479		26,461		21,304		47,765		2,653
Non-PCI
Commercial and industrial:
Secured		10,880		7,607		1,452		9,059		778
Unsecured		817		778		—		778		—
Real estate:
Secured by commercial properties		11,949		11,596		—		11,596		—
Secured by residential properties		1,334		1,074		—		1,074		—
Construction and land development:
Residential construction loans		15		—		—		—		—
Commercial construction loans and land development		680		—		661		661		144
Consumer		228		223		—		223		—
Broker-dealer		—		—		—		—		—
		25,903		21,278		2,113		23,391		922
	$	107,382	$	47,739	$	23,417	$	71,156	$	3,575

	Unpaid		Recorded		Recorded		Total
	Contractual		Investment with		Investment with		Recorded		Related
December 31, 2016	Principal Balance		No Allowance		Allowance		Investment		Allowance
PCI
Commercial and industrial:
Secured	$	25,354	$	3,234	$	5,438	$	8,672	$	557
Unsecured		—		—		—		—		—
Real estate:
Secured by commercial properties		38,005		11,097		17,413		28,510		1,907
Secured by residential properties		13,606		7,401		3,088		10,489		200
Construction and land development:
Residential construction loans		—		—		—		—		—
Commercial construction loans and land development		5,780		1,391		2,076		3,467		377
Consumer		3,223		237		57		294		56
Broker-dealer		—		—		—		—		—
		85,968		23,360		28,072		51,432		3,097
Non-PCI
Commercial and industrial:
Secured		6,311		3,313		1,372		4,685		115
Unsecured		946		925		—		925		—
Real estate:
Secured by commercial properties		10,134		10,000		—		10,000		—
Secured by residential properties		1,344		1,116		—		1,116		—
Construction and land development:
Residential construction loans		28		28		—		28		—
Commercial construction loans and land development		738		48		679		727		167
Consumer		246		244		—		244		—
Broker-dealer		—		—		—		—		—
		19,747		15,674		2,051		17,725		282
	$	105,715	$	39,034	$	30,123	$	69,157	$	3,379

Summary of average investment in impaired loans by class

Average recorded investment in non-covered impaired loans is summarized by class in the following table (in thousands).

	Three Months Ended March 31,
	2017		2016
Commercial and industrial:
Secured	$	15,215	$	26,155
Unsecured		852		41
Real estate:
Secured by commercial properties		38,337		40,371
Secured by residential properties		11,436		12,524
Construction and land development:
Residential construction loans		14		111
Commercial construction loans and land development		3,784		4,622
Consumer		520		655
Broker-dealer		—		—
	$	70,158	$	84,479

Summary of non-accrual loans by class

Non-covered non-accrual loans, excluding those classified as held for sale, are summarized by class in the following table (in thousands).

	March 31,		December 31,
	2017		2016
Commercial and industrial:
Secured	$	12,712	$	8,590
Unsecured		778		925
Real estate:
Secured by commercial properties		11,596		11,034
Secured by residential properties		1,074		1,197
Construction and land development:
Residential construction loans		—		28
Commercial construction loans and land development		661		727
Consumer		223		244
Broker-dealer		—		—
	$	27,044	$	22,745

Schedule of information regarding TDRs granted

Information regarding TDRs granted during the three months ended March 31, 2017 and 2016, respectively is shown in the following table (in thousands). At March 31, 2017 and December 31, 2016, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs.

	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Number of	Balance at		Balance at		Number of	Balance at		Balance at
	Loans	Extension		End of Period		Loans	Extension		End of Period
Commercial and industrial:
Secured	1	$	1,357	$	1,342	1	$	1,196	$	1,196
Unsecured	—		—		—	—		—		—
Real estate:
Secured by commercial properties	1		1,481		1,470	—		—		—
Secured by residential properties	—		—		—	—		—		—
Construction and land development:
Residential construction loans	—		—		—	—		—		—
Commercial construction loans and land development	—		—		—	—		—		—
Consumer	—		—		—	—		—		—
Broker-dealer	—		—		—	—		—		—
	2	$	2,838	$	2,812	1	$	1,196	$	1,196

All of the non-covered loan modifications included in the table above involved payment term extensions. The Bank did not grant principal reductions on any restructured non-covered loans during the three months ened March 31, 2017 and 2016.

The following table presents information regarding TDRs granted during the twelve months preceding March 31, 2017 and 2016, respectively, for which a payment was at least 30 days past due (dollars in thousands).

	Twelve Months Preceding March 31, 2017					Twelve Months Preceding March 31, 2016
	Number of	Balance at		Balance at		Number of	Balance at		Balance at
	Loans	Extension		End of Period		Loans	Extension		End of Period
Commercial and industrial:
Secured	—	$	—	$	—	—	$	—	$	—
Unsecured	—		—		—	—		—		—
Real estate:
Secured by commercial properties	1		1,481		1,470	1		1,084		1,017
Secured by residential properties	—		—		—	—		—		—
Construction and land development:
Residential construction loans	—		—		—	—		—		—
Commercial construction loans and land development	—		—		—	—		—		—
Consumer	—		—		—	—		—		—
Broker-dealer	—		—		—	—		—		—
	1	$	1,481	$	1,470	1	$	1,084	$	1,017

Schedule of analysis of the aging of the entity's loan portfolio

An analysis of the aging of the Bank’s non-covered loan portfolio is shown in the following tables (in thousands).

															Accruing Loans (Non-PCI)
	Loans Past Due		Loans Past Due		Loans Past Due		Total		Current		PCI		Total		Past Due
March 31, 2017	30-59 Days		60-89 Days		90 Days or More		Past Due Loans		Loans		Loans		Loans		90 Days or More
Commercial and industrial:
Secured	$	3,816	$	1,186	$	3,643	$	8,645	$	1,544,697	$	8,013	$	1,561,355	$	14
Unsecured		1,814		—		—		1,814		92,776		—		94,590		—
Real estate:
Secured by commercial properties		5,489		54		78		5,621		2,025,795		26,568		2,057,984		—
Secured by residential properties		602		419		—		1,021		783,047		10,193		794,261		—
Construction and land development:
Residential construction loans		—		—		—		—		136,354		—		136,354		—
Commercial construction loans and land development		24		—		661		685		628,046		2,713		631,444		—
Consumer		230		26		4		260		42,118		278		42,656		4
Broker-dealer		—		—		—		—		465,209		—		465,209		—
	$	11,975	$	1,685	$	4,386	$	18,046	$	5,718,042	$	47,765	$	5,783,853	$	18

															Accruing Loans (Non-PCI)
	Loans Past Due		Loans Past Due		Loans Past Due		Total		Current		PCI		Total		Past Due
December 31, 2016	30-59 Days		60-89 Days		90 Days or More		Past Due Loans		Loans		Loans		Loans		90 Days or More
Commercial and industrial:
Secured	$	4,727	$	704	$	6,770	$	12,201	$	1,576,239	$	8,672	$	1,597,112	$	3,095
Unsecured		596		1		909		1,506		97,835		—		99,341		1
Real estate:
Secured by commercial properties		550		9,417		1,492		11,459		1,915,126		28,510		1,955,095		—
Secured by residential properties		506		361		369		1,236		849,947		10,489		861,672		—
Construction and land development:
Residential construction loans		—		28		—		28		128,624		—		128,652		—
Commercial construction loans and land development		2,500		1,784		48		4,332		650,399		3,467		658,198		—
Consumer		176		31		—		207		40,851		294		41,352		—
Broker-dealer		—		—		—		—		502,077		—		502,077		—
	$	9,055	$	12,326	$	9,588	$	30,969	$	5,761,098	$	51,432	$	5,843,499	$	3,096

Schedule of internal risk grades of loans by class

The following tables present the internal risk grades of non-covered loans, as previously described, in the portfolio by class (in thousands).

March 31, 2017	Pass		Special Mention		Substandard		PCI		Total
Commercial and industrial:
Secured	$	1,495,445	$	853	$	57,044	$	8,013	$	1,561,355
Unsecured		93,186		—		1,404		—		94,590
Real estate:
Secured by commercial properties		2,001,976		975		28,465		26,568		2,057,984
Secured by residential properties		775,056		3,321		5,691		10,193		794,261
Construction and land development:
Residential construction loans		136,354		—		—		—		136,354
Commercial construction loans and land development		627,893		—		838		2,713		631,444
Consumer		42,128		5		245		278		42,656
Broker-dealer		465,209		—		—		—		465,209
	$	5,637,247	$	5,154	$	93,687	$	47,765	$	5,783,853

December 31, 2016	Pass		Special Mention		Substandard		PCI		Total
Commercial and industrial:
Secured	$	1,531,895	$	72	$	56,473	$	8,672	$	1,597,112
Unsecured		97,646		—		1,695		—		99,341
Real estate:
Secured by commercial properties		1,888,231		3,693		34,661		28,510		1,955,095
Secured by residential properties		846,420		—		4,763		10,489		861,672
Construction and land development:
Residential construction loans		128,624		—		28		—		128,652
Commercial construction loans and land development		653,808		—		923		3,467		658,198
Consumer		40,789		6		263		294		41,352
Broker-dealer		502,077		—		—		—		502,077
	$	5,689,490	$	3,771	$	98,806	$	51,432	$	5,843,499

Schedule of changes in the allowance for loan losses by portfolio segment

Changes in the allowance for non-covered loan losses, distributed by portfolio segment, are shown below (in thousands).

	Commercial and				Construction and
Three Months Ended March 31, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	21,369	$	25,236	$	7,002	$	424	$	155	$	54,186
Provision charged to (recapture from) operations		475		922		(112)		56		(132)		1,209
Loans charged off		(605)		(82)		(11)		(34)		—		(732)
Recoveries on charged off loans		440		36		—		18		—		494
Balance, end of period	$	21,679	$	26,112	$	6,879	$	464	$	23	$	55,157

	Commercial and				Construction and
Three Months Ended March 31, 2016	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	19,845	$	18,983	$	6,064	$	314	$	209	$	45,415
Provision charged to (recapture from) operations		1,016		3,233		(503)		32		(93)		3,685
Loans charged off		(1,350)		—		—		(52)		(2)		(1,404)
Recoveries on charged off loans		658		56		—		40		—		754
Balance, end of period	$	20,169	$	22,272	$	5,561	$	334	$	114	$	48,450

Schedule of loan portfolio distributed by portfolio segment and impairment methodology

The non-covered loan portfolio was distributed by portfolio segment and impairment methodology as shown below (in thousands).

	Commercial and				Construction and
March 31, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	8,719	$	10,842	$	661	$	186	$	—	$	20,408
Loans collectively evaluated for impairment		1,639,213		2,804,642		764,424		42,192		465,209		5,715,680
PCI Loans		8,013		36,761		2,713		278		—		47,765
	$	1,655,945	$	2,852,245	$	767,798	$	42,656	$	465,209	$	5,783,853

	Commercial and				Construction and
December 31, 2016	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	4,508	$	9,704	$	727	$	205	$	—	$	15,144
Loans collectively evaluated for impairment		1,683,273		2,768,064		782,656		40,853		502,077		5,776,923
PCI Loans		8,672		38,999		3,467		294		—		51,432
	$	1,696,453	$	2,816,767	$	786,850	$	41,352	$	502,077	$	5,843,499

Schedule of allowance for loan losses distributed by portfolio segment and impairment methodology

The allowance for non-covered loan losses was distributed by portfolio segment and impairment methodology as shown below (in thousands).

	Commercial and				Construction and
March 31, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	778	$	—	$	144	$	—	$	—	$	922
Loans collectively evaluated for impairment		20,693		24,058		6,409		399		23		51,582
PCI Loans		208		2,054		326		65		—		2,653
	$	21,679	$	26,112	$	6,879	$	464	$	23	$	55,157

	Commercial and				Construction and
December 31, 2016	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	115	$	—	$	167	$	—	$	—	$	282
Loans collectively evaluated for impairment		20,697		23,129		6,458		368		155		50,807
PCI Loans		557		2,107		377		56		—		3,097
	$	21,369	$	25,236	$	7,002	$	424	$	155	$	54,186