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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 9 Months Ended
Sep. 30, 2017
Loans and Allowance for Loan Losses [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily made to borrowers located within Texas and are classified by major type as follows:
 
September 30,
2017
 
December 31,
2016
 
(Dollars in thousands)
Commercial and industrial
$
446,029

 
$
416,752

Mortgage warehouse
83,577

 
67,038

Real estate:
 
 
 
Commercial real estate (including multi-family residential)
1,045,220

 
891,989

Commercial real estate construction and land development
225,574

 
159,247

1-4 family residential (including home equity)
283,399

 
246,987

Residential construction
106,299

 
98,657

Consumer and other
11,442

 
10,965

Total loans
2,201,540

 
1,891,635

Allowance for loan losses
(23,722
)
 
(17,911
)
Loans, net
$
2,177,818

 
$
1,873,724
Past Due Financing Receivables
An aging analysis of the recorded investment in past due loans, segregated by class of loans, is as follows:
 
September 30, 2017
 
Loans Past Due and Still Accruing
 
 
 
 
 
 
 
30-89
Days
 
90 or More
Days
 
Total Past
Due Loans
 
Nonaccrual
Loans
 
Current
Loans
 
Total
Loans
 
(Dollars in thousands)
Commercial and industrial
$
5,224

 
$
—

 
$
5,224

 
$
5,031

 
$
435,774

 
$
446,029

Mortgage warehouse
—

 
—

 
—

 
—

 
83,577

 
83,577

Real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
2,736

 
—

 
2,736

 
8,097

 
1,034,387

 
1,045,220

Commercial real estate construction and land development
1,266

 
—

 
1,266

 
—

 
224,308

 
225,574

1-4 family residential (including home equity)
1,012

 
—

 
1,012

 
735

 
281,652

 
283,399

Residential construction
1,779

 
—

 
1,779

 
—

 
104,520

 
106,299

Consumer and other
32

 
—

 
32

 
50

 
11,360

 
11,442

Total loans
$
12,049

 
$
—

 
$
12,049

 
$
13,913

 
$
2,175,578

 
$
2,201,540

 
December 31, 2016
 
Loans Past Due and Still Accruing
 
 
 
 
 
 
 
30-89
Days
 
90 or More
Days
 
Total Past
Due Loans
 
Nonaccrual
Loans
 
Current
Loans
 
Total
Loans
 
(Dollars in thousands)
Commercial and industrial
$
1,028

 
$
911

 
$
1,939

 
$
3,896

 
$
410,917

 
$
416,752

Mortgage warehouse
—

 
—

 
—

 
—

 
67,038

 
67,038

Real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
1,661

 
—

 
1,661

 
11,663

 
878,665

 
891,989

Commercial real estate construction and land development
263

 
—

 
263

 
—

 
158,984

 
159,247

1-4 family residential (including home equity)
280

 
—

 
280

 
217

 
246,490

 
246,987

Residential construction
—

 
—

 
—

 
—

 
98,657

 
98,657

Consumer and other
125

 
—

 
125

 
12

 
10,828

 
10,965

Total loans
$
3,357

 
$
911

 
$
4,268

 
$
15,788

 
$
1,871,579

 
$
1,891,635
Impaired Financing Receivables
Impaired loans by class of loans are set forth in the following tables.
 
September 30, 2017
 
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
 
(Dollars in thousands)
With no related allowance recorded:
 
 
 
 
 
Commercial and industrial
$
5,461

 
$
6,787

 
$
—

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
7,195

 
7,195

 
—

Commercial real estate construction and land development
209

 
209

 
—

1-4 family residential (including home equity)
1,327

 
1,327

 
—

Residential construction
—

 
—

 
—

Consumer and other
2

 
2

 
—

Total
14,194

 
15,520

 
—

 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
Commercial and industrial
7,569

 
7,569

 
2,947

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
9,304

 
9,525

 
862

Commercial real estate construction and land development
—

 
—

 
—

1-4 family residential (including home equity)
—

 
—

 
—

Residential construction
—

 
—

 
—

Consumer and other
48

 
48

 
20

Total
16,921

 
17,142

 
3,829

 
 
 
 
 
 
Total:
 
 
 
 
 
Commercial and industrial
13,030

 
14,356

 
2,947

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
16,499

 
16,720

 
862

Commercial real estate construction and land development
209

 
209

 
—

1-4 family residential (including home equity)
1,327

 
1,327

 
—

Residential construction
—

 
—

 
—

Consumer and other
50

 
50

 
20

 
$
31,115

 
$
32,662

 
$
3,829

    
 
December 31, 2016
 
Recorded Investment
 
Unpaid Principal
Balance
 
Related Allowance
 
(Dollars in thousands)
With no related allowance recorded:
 
 
 
 
 
Commercial and industrial
$
5,300

 
$
5,414

 
$
—

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
11,748

 
11,833

 
—

Commercial real estate construction and land development
—

 
—

 
—

1-4 family residential (including home equity)
217

 
217

 
—

Residential construction
—

 
—

 
—

Consumer and other
5

 
5

 
—

Total
17,270

 
17,469

 
—

 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
Commercial and industrial
3,108

 
3,328

 
1,543

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
573

 
573

 
105

Commercial real estate construction and land development
—

 
—

 
—

1-4 family residential (including home equity)
—

 
—

 
—

Residential construction
—

 
—

 
—

Consumer and other
6

 
6

 
6

Total
3,687

 
3,907

 
1,654

 
 
 
 
 
 
Total:
 
 
 
 
 
Commercial and industrial
8,408

 
8,742

 
1,543

Mortgage warehouse
—

 
—

 
—

Real estate:
 
 
 
 
 
Commercial real estate (including multi-family residential)
12,321

 
12,406

 
105

Commercial real estate construction and land development
—

 
—

 
—

1-4 family residential (including home equity)
217

 
217

 
—

Residential construction
—

 
—

 
—

Consumer and other
11

 
11

 
6

 
$
20,957

 
$
21,376

 
$
1,654

The following table presents average impaired loans and interest recognized on impaired loans for the three and nine months ended September 30, 2017 and 2016:
 
Three Months Ended September 30,
 
2017
 
2016
 
Average Recorded Investment
 
Interest Income
Recognized
 
Average Recorded Investment
 
Interest Income
Recognized
 
(Dollars in thousands)
Commercial and industrial
$
13,848

 
$
98

 
$
7,461

 
$
211

Mortgage warehouse
—

 
—

 
—

 
—

Real estate:
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
16,568

 
147

 
12,486

 
159

Commercial real estate construction and land development
209

 
3

 
—

 
—

1-4 family residential (including home equity)
1,342

 
3

 
524

 
16

Residential construction
—

 
—

 
—

 
—

Consumer and other
51

 
—

 
50

 
1

          Total
$
32,018

 
$
251

 
$
20,521

 
$
387

 
Nine Months Ended September 30,
 
2017
 
2016
 
Average Recorded Investment
 
Interest Income
Recognized
 
Average Recorded Investment
 
Interest Income
Recognized
 
(Dollars in thousands)
Commercial and industrial
$
14,343

 
$
332

 
$
8,963

 
$
374

Mortgage warehouse
—

 
—

 
—

 
—

Real estate:
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
16,737

 
327

 
13,373

 
381

Commercial real estate construction and land development
314

 
7

 
—

 
—

1-4 family residential (including home equity)
1,352

 
4

 
814

 
24

Residential construction
—

 
—

 
—

 
—

Consumer and other
58

 
1

 
61

 
3

          Total
$
32,804

 
$
671

 
$
23,211

 
$
782
Financing Receivable Credit Quality Indicators
Based on the most recent analysis performed, the risk category of loans by class of loan at September 30, 2017 is as follows:
 
Pass
 
Watch
 
Special Mention
 
Substandard
 
Doubtful
 
Total
 
(Dollars in thousands)
Commercial and industrial
$
413,195

 
$
12,270

 
$
1,698

 
$
18,866

 
$
—

 
$
446,029

Mortgage warehouse
83,577

 
—

 
—

 
—

 
—

 
83,577

Real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
985,254

 
18,220

 
3,672

 
38,074

 
—

 
1,045,220

Commercial real estate construction and land development
213,312

 
4,790

 
2,426

 
5,046

 
—

 
225,574

1-4 family residential (including home equity)
278,224

 
838

 
1,980

 
2,357

 
—

 
283,399

Residential construction
104,051

 
2,248

 
—

 
—

 
—

 
106,299

Consumer and other
11,250

 
139

 
3

 
50

 
—

 
11,442

Total loans
$
2,088,863

 
$
38,505

 
$
9,779

 
$
64,393

 
$
—

 
$
2,201,540

The following table presents the risk category of loans by class of loan at December 31, 2016:
 
Pass
 
Watch
 
Special Mention
 
Substandard
 
Doubtful
 
Total
 
(Dollars in thousands)
Commercial and industrial
$
384,979

 
$
11,784

 
$
3,344

 
$
16,645

 
$
—

 
$
416,752

Mortgage warehouse
67,038

 
—

 
—

 
—

 
—

 
67,038

Real estate:
 
 
 
 
 
 
 
 
 
 


Commercial real estate (including multi-family residential)
834,781

 
16,009

 
6,804

 
34,395

 
—

 
891,989

Commercial real estate construction and land development
149,010

 
8,124

 
—

 
2,113

 
—

 
159,247

1-4 family residential (including home equity)
242,208

 
512

 
2,069

 
2,198

 
—

 
246,987

Residential construction
97,808

 
—

 
415

 
434

 
—

 
98,657

Consumer and other
10,520

 
364

 
4

 
77

 
—

 
10,965

Total loans
$
1,786,344

 
$
36,793

 
$
12,636

 
$
55,862

 
$
—

 
$
1,891,635
Allowance for Credit Losses on Financing Receivables
The following table presents the activity in the allowance for loan losses by portfolio type for the three and nine months ended September 30, 2017 and 2016:
 
Commercial
and
industrial 
 
Mortgage
warehouse
 
Commercial
real estate
(including
multi-family
residential)
 
Commercial
real estate
construction
and land
development
 
1-4 family
residential
(including
home equity)
 
Residential
construction
 
Consumer
and other
 
Total
 
(Dollars in thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance June 30, 2017
$
6,282

 
$
—

 
$
9,328

 
$
1,894

 
$
1,988

 
$
835

 
$
683

 
$
21,010

Provision for loan losses
3,925

 
—

 
2,580

 
443

 
272

 
148

 
(460
)
 
6,908

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(4,059
)
 
—

 
—

 
—

 
—

 
—

 
(148
)
 
(4,207
)
Recoveries
11

 
—

 
—

 
—

 
—

 
—

 
—

 
11

Net charge-offs
(4,048
)
 
—

 
—

 
—

 
—

 
—

 
(148
)
 
(4,196
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance September 30, 2017
$
6,159

 
$
—

 
$
11,908

 
$
2,337

 
$
2,260

 
$
983

 
$
75

 
$
23,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Nine Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance January 1, 2017
$
5,059

 
$
—

 
$
8,950

 
$
1,217

 
$
1,876

 
$
748

 
$
61

 
$
17,911

Provision for loan losses
6,423

 
—

 
2,958

 
1,110

 
374

 
235

 
158

 
11,258

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(5,794
)
 
—

 
—

 
—

 
—

 
—

 
(148
)
 
(5,942
)
Recoveries
471

 
—

 
—

 
10

 
10

 
—

 
4

 
495

Net charge-offs
(5,323
)
 
—

 
—

 
10

 
10

 
—

 
(144
)
 
(5,447
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance September 30, 2017
$
6,159

 
$
—

 
$
11,908

 
$
2,337

 
$
2,260

 
$
983

 
$
75

 
$
23,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance June 30, 2016
$
4,105

 
$
—

 
$
6,846

 
$
1,368

 
$
1,642

 
$
887

 
$
69

 
$
14,917

Provision for loan losses
781

 
—

 
1,563

 
(76
)
 
101

 
(159
)
 
4

 
2,214

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(8
)
 
—

 
—

 
—

 
—

 
—

 
(4
)
 
(12
)
Recoveries
22

 
—

 
43

 
—

 
—

 
—

 
1

 
66

Net charge-offs
14

 
—

 
43

 
—

 
—

 
—

 
(3
)
 
54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance September 30, 2016
$
4,900

 
$
—

 
$
8,452

 
$
1,292

 
$
1,743

 
$
728

 
$
70

 
$
17,185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Nine Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance January 1, 2016
$
3,644

 
$
—

 
$
5,914

 
$
1,221

 
$
1,432

 
$
820

 
$
67

 
$
13,098

Provision for loan losses
1,640

 
—

 
2,624

 
71

 
301

 
(92
)
 
25

 
4,569

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(451
)
 
—

 
(129
)
 
—

 
—

 
—

 
(26
)
 
(606
)
Recoveries
67

 
—

 
43

 
—

 
10

 
—

 
4

 
124

Net charge-offs
(384
)
 
—

 
(86
)
 
—

 
10

 
—

 
(22
)
 
(482
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance September 30, 2016
$
4,900

 
$
—

 
$
8,452

 
$
1,292

 
$
1,743

 
$
728

 
$
70

 
$
17,185


The following table presents the balance of the allowance for loan losses by portfolio type based on the impairment method as of September 30, 2017 and December 31, 2016:
 
Commercial
and
industrial 
 
Mortgage
warehouse
 
Commercial
real estate
(including
multi-family
residential)
 
Commercial
real estate
construction
and land
development
 
1-4 family
residential
(including
home equity)
 
Residential
construction
 
Consumer
and other
 
Total
 
(Dollars in thousands)
Allowance for loan losses related to:
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2,947

 
$
—

 
$
862

 
$
—

 
$
—

 
$
—

 
$
20

 
$
3,829

Collectively evaluated for impairment
3,212

 
—

 
11,046

 
2,337

 
2,260

 
983

 
55

 
19,893

Total allowance for loan losses
$
6,159

 
$
—

 
$
11,908

 
$
2,337

 
$
2,260

 
$
983

 
$
75

 
$
23,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,543

 
$
—

 
$
105

 
$
—

 
$
—

 
$
—

 
$
6

 
$
1,654

Collectively evaluated for impairment
3,516

 
—

 
8,845

 
1,217

 
1,876

 
748

 
55

 
16,257

Total allowance for loan losses
$
5,059

 
$
—

 
$
8,950

 
$
1,217

 
$
1,876

 
$
748

 
$
61

 
$
17,911

The following table presents the recorded investment in loans held for investment by portfolio type based on the impairment method as of September 30, 2017 and December 31, 2016:
 
Commercial
and
industrial 
 
Mortgage
warehouse
 
Commercial
real estate
(including
multi-family
residential)
 
Commercial
real estate
construction
and land
development
 
1-4 family
residential
(including
home equity)
 
Residential
construction
 
Consumer
and other
 
Total
 
(Dollars in thousands)
Recorded investment in loans:
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
13,030

 
$
—

 
$
16,499

 
$
209

 
$
1,327

 
$
—

 
$
50

 
$
31,115

Collectively evaluated for impairment
432,999

 
83,577

 
1,028,721

 
225,365

 
282,072

 
106,299

 
11,392

 
2,170,425

Total loans evaluated for impairment
$
446,029

 
$
83,577

 
$
1,045,220

 
$
225,574

 
$
283,399

 
$
106,299

 
$
11,442

 
$
2,201,540

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
8,408

 
$
—

 
$
12,321

 
$
—

 
$
217

 
$
—

 
$
11

 
$
20,957

Collectively evaluated for impairment
408,344

 
67,038

 
879,668

 
159,247

 
246,770

 
98,657

 
10,954

 
1,870,678

Total loans evaluated for impairment
$
416,752

 
$
67,038

 
$
891,989

 
$
159,247

 
$
246,987

 
$
98,657

 
$
10,965

 
$
1,891,635
Troubled Debt Restructurings on Financing Receivables
The following tables present information regarding loans modified in a troubled debt restructuring during the three and nine months ended September 30, 2017 and 2016:
 
Three Months Ended September 30,
 
2017
 
2016
 
Number of
Contracts
 
Pre-
Modification of
Outstanding
Recorded
Investment
 
Post-
Modification of
Outstanding
Recorded
Investment
 
Number of
Contracts
 
Pre-
Modification of
Outstanding
Recorded
Investment
 
Post-
Modification of
Outstanding
Recorded
Investment
 
(Dollars in thousands)
Troubled Debt Restructurings
Commercial and industrial
4

 
$
1,520

 
$
1,520

 
4

 
$
872

 
$
872

Mortgage warehouse
—

 
—

 
—

 
—

 
—

 
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
1

 
502

 
502

 
1

 
632

 
632

Commercial real estate construction and land development
—

 
—

 
—

 
—

 
—

 
—

1-4 family residential (including home equity)
—

 
—

 
—

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

Consumer and other
—

 
—

 
—

 
—

 
—

 
—

Total
5

 
$
2,022

 
$
2,022

 
5

 
$
1,504

 
$
1,504

 
Nine Months Ended September 30,
 
2017
 
2016
 
Number of
Contracts
 
Pre-
Modification of
Outstanding
Recorded
Investment
 
Post-
Modification of
Outstanding
Recorded
Investment
 
Number of
Contracts
 
Pre-
Modification of
Outstanding
Recorded
Investment
 
Post-
Modification of
Outstanding
Recorded
Investment
 
(Dollars in thousands)
Troubled Debt Restructurings
Commercial and industrial
7

 
$
3,441

 
$
3,441

 
16

 
$
3,803

 
$
3,803

Mortgage warehouse
—

 
—

 
—

 
—

 
—

 
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
3

 
8,783

 
8,783

 
7

 
6,882

 
6,882

Commercial real estate construction and land development
1

 
210

 
210

 
—

 
—

 
—

1-4 family residential (including home equity)
1

 
86

 
86

 
—

 
—

 
—

Residential construction
—

 
—

 
—

 
—

 
—

 
—

Consumer and other
—

 
—

 
—

 
1

 
7

 
7

Total
12

 
$
12,520

 
$
12,520

 
24

 
$
10,692

 
$
10,692