Loans Held for Investment (Tables)

3 Months Ended

Mar. 31, 2020

Loans Held for Investment

Summary of loans held for investment by portfolio segment

Loans held for investment summarized by portfolio segment are as follows (in thousands).

	March 31,		December 31,
	2020		2019
Commercial real estate	$	3,062,042	$	3,000,523
Commercial and industrial		2,101,968		2,025,720
Construction and land development		955,173		940,564
1-4 family residential		676,630		791,020
Consumer		43,187		47,046
Broker-dealer (1)		506,250		576,527
		7,345,250		7,381,400
Allowance for credit losses		(106,739)		(61,136)
Total loans held for investment, net of allowance	$	7,238,511	$	7,320,264

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

Summary of non-accrual loans by portfolio segment

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

	March 31,		December 31,
	2020		2019
Commercial real estate:
Non-owner occupied	$	18,168	$	3,813
Owner occupied		5,184		3,495
Commercial and industrial		47,121		15,262
Construction and land development		1,402		1,316
1-4 family residential		10,599		7,382
Consumer		310		26
Broker-dealer		—		—
	$	82,784	$	31,294

At March 31, 2020 and December 31, 2019, an additional $4.6 million and $4.8 million, respectively, of real estate loans secured by residential properties and classified as held for sale were in non-accrual status.

The following table provides further details associated with non-accrual loans (in thousands).

							Three Months Ended
							March 31, 2020
	Non-accrual Loans						Interest Income
March 31, 2020	with Allowance		with No Allowance		Total		Recognized (1)
Commercial real estate:
Non-owner occupied	$	9,179	$	8,989	$	18,168	$	(97)
Owner occupied		1,162		4,022		5,184		16
Commercial and industrial		39,950		7,171		47,121		300
Construction and land development		176		1,226		1,402		22
1-4 family residential		1,516		9,083		10,599		983
Consumer		310		—		310		(5)
Broker-dealer		—		—		—		—
	$	52,293	$	30,491	$	82,784	$	1,219

(1) Interest income recognized on non-accrual loans during the three months ended March 31, 2019 was $0.4 million.

Schedule of information regarding TDRs granted

Information regarding TDRs granted during the three months ended March 31, 2020, is shown in the following table (dollars in thousands). There were no TDRs granted during the three months ended March 31, 2019. At March 31, 2020 and December 31, 2019, the Bank had nominal unadvanced commitments to borrowers whose loans have been restructured in TDRs.

	Three Months Ended March 31, 2020
	Number of	Balance at		Balance at
	Loans	Extension		End of Period
Commercial real estate:
Non-owner occupied	—	$	—	$	—
Owner occupied	—		—		—
Commercial and industrial	1		1,089		1,166
Construction and land development	—		—		—
1-4 family residential	—		—		—
Consumer	—		—		—
Broker-dealer	—		—		—
Covered	—		—		—
	1	$	1,089	$	1,166

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

An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands).

													Accruing Loans
	Loans Past Due		Loans Past Due		Loans Past Due		Total		Current		Total		Past Due
March 31, 2020	30-59 Days		60-89 Days		90 Days or More		Past Due Loans		Loans		Loans		90 Days or More
Commercial real estate:
Non-owner occupied	$	6,488	$	16,772	$	199	$	23,459	$	1,721,265	$	1,744,724	$	—
Owner occupied		12,152		2,685		3,400		18,237		1,299,081		1,317,318		—
Commercial and industrial		6,740		1,125		2,768		10,633		2,091,335		2,101,968		47
Construction and land development		3,955		3		98		4,056		951,117		955,173		97
1-4 family residential		16,832		2,600		5,896		25,328		651,302		676,630		—
Consumer		167		158		284		609		42,578		43,187		—
Broker-dealer		—		—		—		—		506,250		506,250		—
	$	46,334	$	23,343	$	12,645	$	82,322	$	7,262,928	$	7,345,250	$	144

													Accruing Loans
	Loans Past Due		Loans Past Due		Loans Past Due		Total		Current		Total		Past Due
December 31, 2019	30-59 Days		60-89 Days		90 Days or More		Past Due Loans		Loans		Loans		90 Days or More
Commercial real estate:
Non-owner occupied	$	4,062	$	—	$	2,790	$	6,852	$	1,702,500	$	1,709,352	$	—
Owner occupied		1,813		880		3,265		5,958		1,285,213		1,291,171		—
Commercial and industrial		5,967		1,735		3,395		11,097		2,014,623		2,025,720		3
Construction and land development		7,580		1,827		—		9,407		931,157		940,564		—
1-4 family residential		12,058		3,442		6,520		22,020		769,000		791,020		—
Consumer		455		34		—		489		46,557		47,046		—
Broker-dealer		—		—		—		—		576,527		576,527		—
	$	31,935	$	7,918	$	15,970	$	55,823	$	7,325,577	$	7,381,400	$	3

Schedule of internal risk grades of loans by class

The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands).

	Amortized Cost Basis by Origination Year
March 31, 2020	2020		2019		2018		2017		2016			2015 and Prior	Revolving		Total
Commercial real estate: non-owner occupied
Internal Grade 1-3 (Pass low risk)	$	2,702	$	42,015	$	9,354	$	14,536	$	15,164	$	19,926	$	402	$	104,099
Internal Grade 4-7 (Pass normal risk)		45,963		186,755		150,078		149,826		148,241		126,033		25,449		832,345
Internal Grade 8-11 (Pass high risk and watch)		48,289		117,730		169,739		126,886		174,480		82,043		1,145		720,312
Internal Grade 12 (Special mention)		—		—		—		—		—		—		—		—
Internal Grade 13 (Substandard accrual)		—		1,189		1,784		4,317		8,387		54,123		—		69,800
Internal Grade 14 (Substandard non-accrual)		—		15,330		—		882		—		1,956		—		18,168
Commercial real estate: owner occupied
Internal Grade 1-3 (Pass low risk)	$	19,261	$	35,707	$	11,362	$	27,494	$	23,433	$	48,577	$	2	$	165,836
Internal Grade 4-7 (Pass normal risk)		73,334		153,997		219,995		91,386		75,445		124,679		31,734		770,570
Internal Grade 8-11 (Pass high risk and watch)		6,627		76,220		64,306		92,640		33,586		43,919		15,103		332,401
Internal Grade 12 (Special mention)		—		—		—		—		—		48		—		48
Internal Grade 13 (Substandard accrual)		3,466		2,436		3,980		11,661		9,105		12,631		—		43,279
Internal Grade 14 (Substandard non-accrual)		555		—		81		2,528		1,041		979		—		5,184
Commercial and industrial
Internal Grade 1-3 (Pass low risk)	$	20,004	$	14,683	$	7,762	$	6,239	$	4,817	$	881	$	92,106	$	146,492
Internal Grade 4-7 (Pass normal risk)		36,169		119,001		77,750		58,562		25,450		19,585		374,251		710,768
Internal Grade 8-11 (Pass high risk and watch)		40,361		98,826		64,810		26,805		41,982		3,828		200,425		477,037
Internal Grade 12 (Special mention)		844		1,372		2,028		492		5,246		—		13,306		23,288
Internal Grade 13 (Substandard accrual)		28		3,411		8,785		2,642		6,596		4,396		16,475		42,333
Internal Grade 14 (Substandard non-accrual)		30,145		2,445		1,506		8,225		231		379		4,190		47,121
Construction and land development
Internal Grade 1-3 (Pass low risk)	$	4,717	$	21,250	$	23,557	$	282	$	1,169	$	337	$	1,956	$	53,268
Internal Grade 4-7 (Pass normal risk)		80,147		237,466		106,525		38,310		7,760		5,038		41,525		516,771
Internal Grade 8-11 (Pass high risk and watch)		24,257		164,164		133,025		22,711		4,431		2,119		6,899		357,606
Internal Grade 12 (Special mention)		—		—		—		—		—		—		—		—
Internal Grade 13 (Substandard accrual)		—		1,135		—		—		—		7		—		1,142
Internal Grade 14 (Substandard non-accrual)		—		458		—		—		768		176		—		1,402
Construction and land development - individuals
FICO less than 620	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
FICO between 620 and 720		—		4,394		1,474		—		—		—		—		5,868
FICO greater than 720		3,171		10,617		5,184		—		—		—		—		18,972
Substandard non-accrual		—		—		—		—		—		—		—		—
Other (1)		144		—		—		—		—		—		—		144
1-4 family residential
FICO less than 620	$	—	$	738	$	3,724	$	231	$	1,110	$	40,354	$	545	$	46,702
FICO between 620 and 720		1,252		11,793		15,878		10,850		13,739		48,114		1,585		103,211
FICO greater than 720		16,389		84,807		105,533		54,505		50,839		106,744		4,521		423,338
Substandard non-accrual		—		—		—		101		439		10,059		—		10,599
Other (1)		8,660		58,480		9,557		2,238		1,466		10,152		2,227		92,780
Consumer
FICO less than 620	$	318	$	1,830	$	312	$	193	$	59	$	100	$	373	$	3,185
FICO between 620 and 720		2,145		5,082		971		919		183		152		2,686		12,138
FICO greater than 720		2,722		8,327		3,694		542		500		131		5,062		20,978
Substandard non-accrual		—		—		—		35		—		25		250		310
Other (1)		2,346		3,178		673		66		56		—		257		6,576
Total loans with credit quality measures	$	474,016	$	1,484,836	$	1,203,427	$	756,104	$	655,723	$	767,491	$	842,474	$	6,184,071
Commercial and industrial (collateral maintenance)															$	654,929
Broker-dealer (collateral maintenance)															$	506,250
Total loans held for investment															$	7,345,250

(1)    Loans classified in this category were assigned a FICO score based on various factors specific to the borrower for credit modeling purposes.

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

Changes in the allowance for credit losses for loans held for investment, distributed by portfolio segment, are shown below (in thousands).

	Balance,		Transition		Provision for				Recoveries on		Balance,
	Beginning of		Adjustment		(Reversal of)		Loans		Charged Off		End of
Three Months Ended March 31, 2020	Period		CECL		Credit Losses		Charged Off		Loans		Period
Commercial real estate	$	31,595	$	8,073	$	14,475	$	(214)	$	10	$	53,939
Commercial and industrial		17,964		3,193		18,446		(1,440)		387		38,550
Construction and land development		4,878		577		907		(2)		—		6,360
1-4 family residential		6,386		(29)		201		(203)		10		6,365
Consumer		265		748		246		(176)		120		1,203
Broker-dealer		48		—		274		—		—		322
Total	$	61,136	$	12,562	$	34,549	$	(2,035)	$	527	$	106,739

	Balance,		Transition		Provision for				Recoveries on		Balance,
	Beginning of		Adjustment		(Reversal of)		Loans		Charged Off		End of
Three Months Ended March 31, 2019	Period		CECL		Credit Losses		Charged Off		Loans		Period
Commercial real estate	$	27,100	$	—	$	(255)	$	—	$	—	$	26,845
Commercial and industrial		21,980		—		458		(1,818)		648		21,268
Construction and land development		6,061		—		(153)		—		—		5,908
1-4 family residential		3,956		—		389		(28)		14		4,331
Consumer		267		—		586		(454)		10		409
Broker-dealer		122		—		(74)		—		—		48
Total	$	59,486	$	—	$	951	$	(2,300)	$	672	$	58,809