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

9 Months Ended

Sep. 30, 2018

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,
	2018		2017
Commercial and industrial	$	1,722,097	$	1,681,205
Real estate		3,381,757		3,011,524
Construction and land development		1,052,409		962,605
Consumer		46,739		40,446
Broker-dealer (1)		593,276		577,889
		6,796,278		6,273,669
Allowance for non-covered loan losses		(58,861)		(60,957)
Total non-covered loans, net of allowance	$	6,737,417	$	6,212,712

(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,
	2018		2017
Carrying amount	$	32,553	$	37,204
Outstanding balance		47,698		51,064

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,
	2018		2017		2018		2017
Balance, beginning of period	$	5,259	$	9,793	$	7,013	$	13,116
Additions		340		—		340		—
Reclassifications from nonaccretable difference, net(1)		1,053		277		1,603		854
Disposals of loans		—		(603)		(98)		(664)
Accretion		(1,504)		(1,851)		(3,710)		(5,690)
Balance, end of period	$	5,148	$	7,616	$	5,148	$	7,616

(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, 2018	Principal Balance		No Allowance		Allowance		Investment		Allowance
PCI
Commercial and industrial:
Secured	$	15,988	$	4,392	$	1,136	$	5,528	$	22
Unsecured		2,108		1,385		—		1,385		—
Real estate:
Secured by commercial properties		30,671		13,556		7,514		21,070		891
Secured by residential properties		6,149		1,879		1,974		3,853		319
Construction and land development:
Residential construction loans		—		—		—		—		—
Commercial construction loans and land development		1,189		183		524		707		112
Consumer		2,039		10		—		10		—
Broker-dealer		—		—		—		—		—
		58,144		21,405		11,148		32,553		1,344
Non-PCI
Commercial and industrial:
Secured		25,012		12,878		5,010		17,888		2,739
Unsecured		590		13		—		13		—
Real estate:
Secured by commercial properties		6,717		3,076		3,130		6,206		782
Secured by residential properties		1,225		769		—		769		—
Construction and land development:
Residential construction loans		15		—		—		—		—
Commercial construction loans and land development		3,475		2,857		545		3,402		49
Consumer		152		45		—		45		—
Broker-dealer		—		—		—		—		—
		37,186		19,638		8,685		28,323		3,570
	$	95,330	$	41,043	$	19,833	$	60,876	$	4,914

	Unpaid		Recorded		Recorded		Total
	Contractual		Investment with		Investment with		Recorded		Related
December 31, 2017	Principal Balance		No Allowance		Allowance		Investment		Allowance
PCI
Commercial and industrial:
Secured	$	19,752	$	3,610	$	2,489	$	6,099	$	89
Unsecured		—		—		—		—		—
Real estate:
Secured by commercial properties		34,598		7,583		12,092		19,675		1,391
Secured by residential properties		12,600		5,307		4,558		9,865		325
Construction and land development:
Residential construction loans		—		—		—		—		—
Commercial construction loans and land development		2,001		428		1,010		1,438		215
Consumer		2,377		12		115		127		18
Broker-dealer		—		—		—		—		—
		71,328		16,940		20,264		37,204		2,038
Non-PCI
Commercial and industrial:
Secured		23,666		15,308		2,072		17,380		365
Unsecured		761		616		—		616		—
Real estate:
Secured by commercial properties		15,504		10,934		3,686		14,620		932
Secured by residential properties		1,596		1,177		—		1,177		—
Construction and land development:
Residential construction loans		15		—		—		—		—
Commercial construction loans and land development		653		—		611		611		93
Consumer		162		56		—		56		—
Broker-dealer		—		—		—		—		—
		42,357		28,091		6,369		34,460		1,390
	$	113,685	$	45,031	$	26,633	$	71,664	$	3,428

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,
	2018		2017		2018		2017
Commercial and industrial:
Secured	$	23,654	$	20,452	$	23,448	$	18,717
Unsecured		912		713		1,007		817
Real estate:
Secured by commercial properties		28,488		35,458		30,786		36,606
Secured by residential properties		4,677		11,412		7,832		11,387
Construction and land development:
Residential construction loans		—		—		—		14
Commercial construction loans and land development		2,798		2,590		3,079		3,204
Consumer		52		324		119		382
Broker-dealer		—		—		—		—
	$	60,581	$	70,949	$	66,271	$	71,127

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,
	2018		2017
Commercial and industrial:
Secured	$	21,310	$	20,262
Unsecured		13		616
Real estate:
Secured by commercial properties		7,506		14,620
Secured by residential properties		1,178		1,614
Construction and land development:
Residential construction loans		—		—
Commercial construction loans and land development		3,402		611
Consumer		45		56
Broker-dealer		—		—
	$	33,454	$	37,779

Schedule of information regarding TDRs granted

The Bank did not grant any TDRs during three or nine months ended September 30, 2018 or during the three months ended September 30, 2017. Information regarding TDRs granted during the nine months ended September 30, 2017 is shown in the following tables (dollars in thousands). At September 30, 2018 and December 31, 2017, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs.

	Nine Months Ended September 30, 2017
	Number of	Balance at		Balance at
	Loans	Extension		End of Period
Commercial and industrial:
Secured	1	$	1,357	$	1,235
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

All of the non-covered loan modifications included in the tables above involved payment term extensions. The Bank did not grant principal reductions on any restructured non-covered loans during the three and nine months ended September 30, 2018 and 2017. 

The following table presents information regarding TDRs granted during the twelve months preceding September 30, 2018 and 2017, respectively, for which a payment was at least 30 days past due (dollars in thousands).

	Twelve Months Preceding September 30, 2018					Twelve Months Preceding September 30, 2017
	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		3,294		3,130	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	$	3,294	$	3,130	1	$	1,481	$	1,385

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

An analysis of the aging of the Company’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, 2018	30-59 Days		60-89 Days		90 Days or More		Past Due Loans		Loans		Loans		Loans		90 Days or More
Commercial and industrial:
Secured	$	17,853	$	12,710	$	6,035	$	36,598	$	1,528,645	$	5,528	$	1,570,771	$	3,544
Unsecured		2,417		460		—		2,877		147,064		1,385		151,326		—
Real estate:
Secured by commercial properties		6,970		3,130		1,821		11,921		2,445,812		21,070		2,478,803		—
Secured by residential properties		1,248		663		696		2,607		896,494		3,853		902,954		688
Construction and land development:
Residential construction loans		739		—		—		739		240,901		—		241,640		—
Commercial construction loans and land development		3,100		1,035		—		4,135		805,927		707		810,769		—
Consumer		373		1,293		—		1,666		45,063		10		46,739		—
Broker-dealer		—		—		—		—		593,276		—		593,276		—
	$	32,700	$	19,291	$	8,552	$	60,543	$	6,703,182	$	32,553	$	6,796,278	$	4,232

															Accruing Loans (Non-PCI)
	Loans Past Due		Loans Past Due		Loans Past Due		Total		Current		PCI		Total		Past Due
December 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	$	2,060	$	312	$	5,714	$	8,086	$	1,544,131	$	6,099	$	1,558,316	$	640
Unsecured		642		—		—		642		122,247		—		122,889		—
Real estate:
Secured by commercial properties		442		—		2,195		2,637		2,213,331		19,675		2,235,643		—
Secured by residential properties		1,490		1,290		418		3,198		762,818		9,865		775,881		—
Construction and land development:
Residential construction loans		315		—		—		315		176,937		—		177,252		—
Commercial construction loans and land development		1,370		101		—		1,471		782,444		1,438		785,353		—
Consumer		194		20		—		214		40,105		127		40,446		—
Broker-dealer		—		—		—		—		577,889		—		577,889		—
	$	6,513	$	1,723	$	8,327	$	16,563	$	6,219,902	$	37,204	$	6,273,669	$	640

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, 2018	Pass		Special Mention		Substandard		PCI		Total
Commercial and industrial:
Secured	$	1,499,468	$	7,289	$	58,486	$	5,528	$	1,570,771
Unsecured		148,499		122		1,320		1,385		151,326
Real estate:
Secured by commercial properties		2,399,783		—		57,950		21,070		2,478,803
Secured by residential properties		885,974		—		13,127		3,853		902,954
Construction and land development:
Residential construction loans		241,640		—		—		—		241,640
Commercial construction loans and land development		806,594		—		3,468		707		810,769
Consumer		46,634		—		95		10		46,739
Broker-dealer		593,276		—		—		—		593,276
	$	6,621,868	$	7,411	$	134,446	$	32,553	$	6,796,278

December 31, 2017	Pass		Special Mention		Substandard		PCI		Total
Commercial and industrial:
Secured	$	1,483,502	$	17,354	$	51,361	$	6,099	$	1,558,316
Unsecured		121,774		—		1,115		—		122,889
Real estate:
Secured by commercial properties		2,154,595		7,647		53,726		19,675		2,235,643
Secured by residential properties		756,091		—		9,925		9,865		775,881
Construction and land development:
Residential construction loans		177,252		—		—		—		177,252
Commercial construction loans and land development		780,905		2,259		751		1,438		785,353
Consumer		40,211		—		108		127		40,446
Broker-dealer		577,889		—		—		—		577,889
	$	6,092,219	$	27,260	$	116,986	$	37,204	$	6,273,669

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, 2018	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	23,517	$	28,584	$	7,271	$	207	$	417	$	59,996
Provision (recovery) for loan losses		(242)		450		443		27		(371)		307
Loans charged off		(1,820)		—		—		(26)		—		(1,846)
Recoveries on charged off loans		366		31		—		7		—		404
Balance, end of period	$	21,821	$	29,065	$	7,714	$	215	$	46	$	58,861

	Commercial and				Construction and
Nine Months Ended September 30, 2018	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Balance, beginning of period	$	23,674	$	28,775	$	7,844	$	311	$	353	$	60,957
Provision (recovery) for loan losses		(123)		186		(130)		(82)		(307)		(456)
Loans charged off		(5,236)		(30)		—		(69)		—		(5,335)
Recoveries on charged off loans		3,506		134		—		55		—		3,695
Balance, end of period	$	21,821	$	29,065	$	7,714	$	215	$	46	$	58,861

	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 (recovery) for loan losses		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 (recovery) for loan losses		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

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, 2018	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	17,255	$	5,947	$	3,402	$	—	$	—	$	26,604
Loans collectively evaluated for impairment		1,697,929		3,350,887		1,048,300		46,729		593,276		6,737,121
PCI Loans		6,913		24,923		707		10		—		32,553
	$	1,722,097	$	3,381,757	$	1,052,409	$	46,739	$	593,276	$	6,796,278

	Commercial and				Construction and
December 31, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	16,819	$	13,782	$	611	$	—	$	—	$	31,212
Loans collectively evaluated for impairment		1,658,287		2,968,202		960,556		40,319		577,889		6,205,253
PCI Loans		6,099		29,540		1,438		127		—		37,204
	$	1,681,205	$	3,011,524	$	962,605	$	40,446	$	577,889	$	6,273,669

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, 2018	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	2,739	$	782	$	49	$	—	$	—	$	3,570
Loans collectively evaluated for impairment		19,060		27,073		7,553		215		46		53,947
PCI Loans		22		1,210		112		—		—		1,344
	$	21,821	$	29,065	$	7,714	$	215	$	46	$	58,861

	Commercial and				Construction and
December 31, 2017	Industrial		Real Estate		Land Development		Consumer		Broker-Dealer		Total
Loans individually evaluated for impairment	$	365	$	932	$	93	$	—	$	—	$	1,390
Loans collectively evaluated for impairment		23,220		26,127		7,536		293		353		57,529
PCI Loans		89		1,716		215		18		—		2,038
	$	23,674	$	28,775	$	7,844	$	311	$	353	$	60,957