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

9 Months Ended

Sep. 30, 2017

Loans

Summary of non-covered loans by portfolio segment

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

	September 30,		December 31,
	2017		2016
Commercial and industrial	$	1,735,468	$	1,696,453
Real estate		2,944,155		2,816,767
Construction and land development		941,628		786,850
Consumer		41,958		41,352
Broker-dealer (1)		485,604		502,077
		6,148,813		5,843,499
Allowance for non-covered loan losses		(58,779)		(54,186)
Total non-covered loans, net of allowance	$	6,090,034	$	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).

	September 30,		December 31,
	2017		2016
Carrying amount	$	37,937	$	51,432
Outstanding balance		52,096		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 September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Balance, beginning of period	$	9,793	$	15,229	$	13,116	$	17,744
Reclassifications from nonaccretable difference, net(1)		277		708		854		4,655
Disposals of loans		(603)		—		(664)		—
Accretion		(1,851)		(1,884)		(5,690)		(8,346)
Balance, end of period	$	7,616	$	14,053	$	7,616	$	14,053

(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
September 30, 2017	Principal Balance		No Allowance		Allowance		Investment		Allowance
PCI
Commercial and industrial:
Secured	$	19,390	$	3,556	$	2,676	$	6,232	$	111
Unsecured		—		—		—		—		—
Real estate:
Secured by commercial properties		28,362		6,548		13,388		19,936		1,422
Secured by residential properties		12,964		7,703		2,315		10,018		284
Construction and land development:
Residential construction loans		—		—		—		—		—
Commercial construction loans and land development		3,462		477		1,111		1,588		237
Consumer		2,588		19		144		163		44
Broker-dealer		—		—		—		—		—
		66,766		18,303		19,634		37,937		2,098
Non-PCI
Commercial and industrial:
Secured		21,218		17,844		—		17,844		—
Unsecured		745		708		—		708		—
Real estate:
Secured by commercial properties		15,402		11,380		3,386		14,766		846
Secured by residential properties		1,536		1,151		—		1,151		—
Construction and land development:
Residential construction loans		15		—		—		—		—
Commercial construction loans and land development		659		—		626		626		112
Consumer		167		63		—		63		—
Broker-dealer		—		—		—		—		—
		39,742		31,146		4,012		35,158		958
	$	106,508	$	49,449	$	23,646	$	73,095	$	3,056

	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 September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Commercial and industrial:
Secured	$	20,452	$	25,338	$	18,717	$	25,903
Unsecured		713		38		817		38
Real estate:
Secured by commercial properties		35,458		34,491		36,606		37,329
Secured by residential properties		11,412		11,746		11,387		12,179
Construction and land development:
Residential construction loans		—		—		14		111
Commercial construction loans and land development		2,590		4,161		3,204		4,692
Consumer		324		412		382		583
Broker-dealer		—		—		—		—
	$	70,949	$	76,186	$	71,127	$	80,835

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).

	September 30,		December 31,
	2017		2016
Commercial and industrial:
Secured	$	20,726	$	8,590
Unsecured		708		925
Real estate:
Secured by commercial properties		14,766		11,034
Secured by residential properties		1,608		1,197
Construction and land development:
Residential construction loans		—		28
Commercial construction loans and land development		626		727
Consumer		63		244
Broker-dealer		—		—
	$	38,497	$	22,745

Schedule of information regarding TDRs granted

Information regarding TDRs granted during the nine months ended September 30, 2017 and 2016, respectively, is shown in the following table (dollars in thousands). At September 30, 2017 and December 31, 2016, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs.

	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 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	$	1,235	1	$	1,196	$	944
Unsecured	—		—		—	—		—		—
Real estate:
Secured by commercial properties	1		1,481		1,385	—		—		—
Secured by residential properties	—		—		—	—		—		—
Construction and land development:
Residential construction loans	—		—		—	—		—		—
Commercial construction loans and land development	1		655		626	—		—		—
Consumer	—		—		—	—		—		—
Broker-dealer	—		—		—	—		—		—
	3	$	3,493	$	3,246	1	$	1,196	$	944

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 nine months ended September 30, 2017 and 2016.

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

	Twelve Months Preceding September 30, 2017					Twelve Months Preceding September 30, 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	$	1,196	$	944
Unsecured	—		—		—	—		—		—
Real estate:
Secured by commercial properties	1		1,481		1,385	—		—		—
Secured by residential properties	—		—		—	—		—		—
Construction and land development:
Residential construction loans	—		—		—	—		—		—
Commercial construction loans and land development	—		—		—	—		—		—
Consumer	—		—		—	—		—		—
Broker-dealer	—		—		—	—		—		—
	1	$	1,481	$	1,385	1	$	1,196	$	944

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
September 30, 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	$	9,180	$	348	$	5,441	$	14,969	$	1,587,935	$	6,232	$	1,609,136	$	125
Unsecured		1,843		11		—		1,854		124,478		—		126,332		—
Real estate:
Secured by commercial properties		13,017		—		5,361		18,378		2,151,678		19,936		2,189,992		—
Secured by residential properties		1,168		582		541		2,291		741,854		10,018		754,163		—
Construction and land development:
Residential construction loans		232		945		—		1,177		172,302		—		173,479		—
Commercial construction loans and land development		510		—		—		510		766,051		1,588		768,149		—
Consumer		58		107		28		193		41,602		163		41,958		—
Broker-dealer		—		—		—		—		485,604		—		485,604		—
	$	26,008	$	1,993	$	11,371	$	39,372	$	6,071,504	$	37,937	$	6,148,813	$	125

															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).

September 30, 2017	Pass		Special Mention		Substandard		PCI		Total
Commercial and industrial:
Secured	$	1,532,920	$	19,964	$	50,020	$	6,232	$	1,609,136
Unsecured		124,113		996		1,223		—		126,332
Real estate:
Secured by commercial properties		2,125,077		4,808		40,171		19,936		2,189,992
Secured by residential properties		737,712		3,263		3,170		10,018		754,163
Construction and land development:
Residential construction loans		173,479		—		—		—		173,479
Commercial construction loans and land development		763,142		2,652		767		1,588		768,149
Consumer		41,700		—		95		163		41,958
Broker-dealer		485,604		—		—		—		485,604
	$	5,983,747	$	31,683	$	95,446	$	37,937	$	6,148,813

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 September 30, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	21,834	$	28,734	$	7,645	$	524	$	471	$	59,208
Provision charged to (recapture from) operations		2,165		(1,278)		144		(147)		(405)		479
Loans charged off		(1,264)		(5)		(3)		(33)		—		(1,305)
Recoveries on charged off loans		280		88		4		25		—		397
Balance, end of period	$	23,015	$	27,539	$	7,790	$	369	$	66	$	58,779

	Commercial and				Construction and
Nine Months Ended September 30, 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		3,376		2,424		796		74		(89)		6,581
Loans charged off		(3,070)		(305)		(13)		(194)		—		(3,582)
Recoveries on charged off loans		1,340		184		5		65		—		1,594
Balance, end of period	$	23,015	$	27,539	$	7,790	$	369	$	66	$	58,779

	Commercial and				Construction and
Three Months Ended September 30, 2016	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	20,720	$	23,302	$	6,288	$	325	$	378	$	51,013
Provision charged to (recapture from) operations		3,973		(116)		823		228		(189)		4,719
Loans charged off		(3,550)		(1)		—		(67)		—		(3,618)
Recoveries on charged off loans		295		196		—		20		—		511
Balance, end of period	$	21,438	$	23,381	$	7,111	$	506	$	189	$	52,625

	Commercial and				Construction and
Nine Months Ended September 30, 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		30,494		5,333		1,047		243		(19)		37,098
Loans charged off		(30,333)		(1,299)		—		(155)		(1)		(31,788)
Recoveries on charged off loans		1,432		364		—		104		—		1,900
Balance, end of period	$	21,438	$	23,381	$	7,111	$	506	$	189	$	52,625

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
September 30, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	17,311	$	13,722	$	626	$	—	$	—	$	31,659
Loans collectively evaluated for impairment		1,711,925		2,900,479		939,414		41,795		485,604		6,079,217
PCI Loans		6,232		29,954		1,588		163		—		37,937
	$	1,735,468	$	2,944,155	$	941,628	$	41,958	$	485,604	$	6,148,813

	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
September 30, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	—	$	846	$	112	$	—	$	—	$	958
Loans collectively evaluated for impairment		22,904		24,987		7,441		325		66		55,723
PCI Loans		111		1,706		237		44		—		2,098
	$	23,015	$	27,539	$	7,790	$	369	$	66	$	58,779

	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