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Loans and Allowance for Loan and Lease Losses | 12 Months Ended
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Dec. 31, 2017
Loans And Leases Receivable Disclosure [Abstract] |
Loans and Allowance for Loan and Lease Losses | NOTE 4 - LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES The following table presents the recorded investment and unpaid principal for loans at December 31, 2017 and 2016:
|  | December 31, 2017 |  |  | December 31, 2016 |
|  | Recorded |  |  | Unpaid |  |  |  |  |  |  | Recorded |  |  | Unpaid |  |  |  |  |
(Dollars in thousands) |  | Investment |  |  | Principal |  |  | Difference |  |  | Investment |  |  | Principal |  |  | Difference |
Commercial real estate |  | $ | 745,893 |  |  | $ | 753,803 |  |  | $ | (7,910 | ) |  | $ | 442,237 |  |  | $ | 447,926 |  |  | $ | (5,689 | )
Construction, land development, land |  |  | 134,812 |  |  |  | 138,045 |  |  |  | (3,233 | ) |  |  | 109,812 |  |  |  | 113,211 |  |  |  | (3,399 | )
1-4 family residential properties |  |  | 125,827 |  |  |  | 127,499 |  |  |  | (1,672 | ) |  |  | 104,974 |  |  |  | 106,852 |  |  |  | (1,878 | )
Farmland |  |  | 180,141 |  |  |  | 184,006 |  |  |  | (3,865 | ) |  |  | 141,615 |  |  |  | 142,673 |  |  |  | (1,058 | )
Commercial |  |  | 920,812 |  |  |  | 924,133 |  |  |  | (3,321 | ) |  |  | 778,643 |  |  |  | 783,349 |  |  |  | (4,706 | )
Factored receivables |  |  | 374,410 |  |  |  | 376,046 |  |  |  | (1,636 | ) |  |  | 238,198 |  |  |  | 239,432 |  |  |  | (1,234 | )
Consumer |  |  | 31,131 |  |  |  | 31,144 |  |  |  | (13 | ) |  |  | 29,764 |  |  |  | 29,782 |  |  |  | (18 | )
Mortgage warehouse |  |  | 297,830 |  |  |  | 297,830 |  |  |  | — |  |  |  | 182,381 |  |  |  | 182,381 |  |  |  | — |
Total |  |  | 2,810,856 |  |  | $ | 2,832,506 |  |  | $ | (21,650 | ) |  |  | 2,027,624 |  |  | $ | 2,045,606 |  |  | $ | (17,982 | )
Allowance for loan and lease losses |  |  | (18,748 | ) |  |  |  |  |  |  |  |  |  |  | (15,405 | ) |  |  |  |  |  |  |  |
|  | $ | 2,792,108 |  |  |  |  |  |  |  |  |  |  | $ | 2,012,219 |  |  |  |  |  |  |  |  |
The difference between the recorded investment and unpaid principal balance is principally associated with (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI) totaling $18,706,000 and $15,210,000 at December 31, 2017 and 2016, respectively, and (2) net deferred origination and factoring fees totaling $2,944,000 and $2,772,000 at December 31, 2017 and 2016, respectively. As of December 31, 2017, most of the Company’s non-factoring business activity is with customers located within certain states. The states of Texas (24%), Colorado (26%), Illinois (17%), and Iowa (7%), make up 74% of the Company’s gross loans, excluding factored receivables. Therefore, the Company’s exposure to credit risk is affected by changes in the economies in these states. At December 31, 2016, the states of Texas (23%), Colorado (22%), Illinois (21%), and Iowa (7%) made up 73% of the Company’s gross loans, excluding factored receivables. A majority (77%) of the Company’s factored receivables, representing approximately 10% of the total loan portfolio as of December 31, 2017, are receivables purchased from trucking fleets and owner-operators in the transportation industry. At December 31, 2016, 77% of our factored receivables, representing approximately 9% of our total loan portfolio, were receivables purchased from trucking fleets, owner-operators, and freight brokers in the transportation industry. At December 31, 2017 and 2016, the Company had $32,459,000 and $23,597,000, respectively, of customer reserves associated with factored receivables. These amounts represent customer reserves held to settle any payment disputes or collection shortfalls, may be used to pay customers’ obligations to various third parties as directed by the customer, are periodically released to or withdrawn by customers, and are reported as deposits in the consolidated balance sheets. Loans with carrying amounts of $596,230,000 and $497,573,000 at December 31, 2017 and 2016, respectively, were pledged to secure Federal Home Loan Bank advance capacity. During the year ended December 31, 2017, loans with a carrying amount of $3,914,000 were transferred to loans held for sale as the Company made the decision to sell the loans. These loans were subsequently sold resulting in proceeds of $3,834,000 and a loss on sale of loans of $80,000, which was recorded as other noninterest income in the consolidated statements of income. During the year ended December 31, 2016, loans with a carrying amount of $24,384,000 were transferred to loans held for sale as the Company made the decision to sell the loans. These loans were subsequently sold resulting in proceeds of $24,538,000 and a gain on sale of loans of $154,000, which was recorded as other noninterest income in the consolidated statements of income. No loan transfers were recorded during the year ended December 31, 2015. Allowance for Loan and Lease Losses The activity in the ALLL during the years ended December 31, 2017, 2016 and 2015 is as follows:
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Reclassification |  |  | Ending |
Year ended December 31, 2017 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | To Held For Sale |  |  | Balance |
Commercial real estate |  | $ | 1,813 |  |  | $ | 1,822 |  |  | $ | (259 | ) |  | $ | 59 |  |  | $ | — |  |  | $ | 3,435 |
Construction, land development, land |  |  | 465 |  |  |  | 825 |  |  |  | (582 | ) |  |  | 175 |  |  |  | — |  |  |  | 883 |
1-4 family residential properties |  |  | 253 |  |  |  | 24 |  |  |  | (31 | ) |  |  | 47 |  |  |  | — |  |  |  | 293 |
Farmland |  |  | 170 |  |  |  | 140 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 310 |
Commercial |  |  | 8,014 |  |  |  | 5,785 |  |  |  | (4,875 | ) |  |  | 1,329 |  |  |  | (2,103 | ) |  |  | 8,150 |
Factored receivables |  |  | 4,088 |  |  |  | 2,058 |  |  |  | (1,667 | ) |  |  | 118 |  |  |  | — |  |  |  | 4,597 |
Consumer |  |  | 420 |  |  |  | 859 |  |  |  | (1,004 | ) |  |  | 508 |  |  |  | — |  |  |  | 783 |
Mortgage warehouse |  |  | 182 |  |  |  | 115 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 297 |
|  | $ | 15,405 |  |  | $ | 11,628 |  |  | $ | (8,418 | ) |  | $ | 2,236 |  |  | $ | (2,103 | ) |  | $ | 18,748 |
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Reclassification |  |  | Ending |
Year ended December 31, 2016 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | To Held For Sale |  |  | Balance |
Commercial real estate |  | $ | 1,489 |  |  | $ | 313 |  |  | $ | (5 | ) |  | $ | 16 |  |  | $ | — |  |  | $ | 1,813 |
Construction, land development, land |  |  | 367 |  |  |  | 92 |  |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | 465 |
1-4 family residential properties |  |  | 274 |  |  |  | (22 | ) |  |  | (84 | ) |  |  | 85 |  |  |  | — |  |  |  | 253 |
Farmland |  |  | 134 |  |  |  | 36 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 170 |
Commercial |  |  | 5,276 |  |  |  | 5,390 |  |  |  | (3,643 | ) |  |  | 991 |  |  |  | — |  |  |  | 8,014 |
Factored receivables |  |  | 4,509 |  |  |  | 315 |  |  |  | (856 | ) |  |  | 120 |  |  |  | — |  |  |  | 4,088 |
Consumer |  |  | 216 |  |  |  | 689 |  |  |  | (564 | ) |  |  | 79 |  |  |  | — |  |  |  | 420 |
Mortgage warehouse |  |  | 302 |  |  |  | (120 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 182 |
|  | $ | 12,567 |  |  | $ | 6,693 |  |  | $ | (5,152 | ) |  | $ | 1,297 |  |  | $ | — |  |  | $ | 15,405 |
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Reclassification |  |  | Ending |
Year ended December 31, 2015 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | To Held For Sale |  |  | Balance |
Commercial real estate |  | $ | 533 |  |  | $ | 1,055 |  |  | $ | (152 | ) |  | $ | 53 |  |  | $ | — |  |  | $ | 1,489 |
Construction, land development, land |  |  | 333 |  |  |  | 34 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 367 |
1-4 family residential properties |  |  | 215 |  |  |  | 60 |  |  |  | (205 | ) |  |  | 204 |  |  |  | — |  |  |  | 274 |
Farmland |  |  | 19 |  |  |  | 115 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 134 |
Commercial |  |  | 4,003 |  |  |  | 1,375 |  |  |  | (145 | ) |  |  | 43 |  |  |  | — |  |  |  | 5,276 |
Factored receivables |  |  | 3,462 |  |  |  | 1,508 |  |  |  | (540 | ) |  |  | 79 |  |  |  | — |  |  |  | 4,509 |
Consumer |  |  | 140 |  |  |  | 218 |  |  |  | (347 | ) |  |  | 205 |  |  |  | — |  |  |  | 216 |
Mortgage warehouse |  |  | 138 |  |  |  | 164 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 302 |
|  | $ | 8,843 |  |  | $ | 4,529 |  |  | $ | (1,389 | ) |  | $ | 584 |  |  | $ | — |  |  | $ | 12,567 |
The following table presents loans individually and collectively evaluated for impairment, as well as PCI loans, and their respective ALLL allocations:
(Dollars in thousands) |  | Loan Evaluation |  |  | ALLL Allocations |
December 31, 2017 |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total loans |  |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total ALLL |
Commercial real estate |  | $ | 1,013 |  |  | $ | 735,118 |  |  | $ | 9,762 |  |  | $ | 745,893 |  |  | $ | 123 |  |  | $ | 3,312 |  |  | $ | — |  |  | $ | 3,435 |
Construction, land development, land |  |  | 136 |  |  |  | 130,732 |  |  |  | 3,944 |  |  |  | 134,812 |  |  |  | — |  |  |  | 883 |  |  |  | — |  |  |  | 883 |
1-4 family residential properties |  |  | 2,638 |  |  |  | 122,093 |  |  |  | 1,096 |  |  |  | 125,827 |  |  |  | 152 |  |  |  | 141 |  |  |  | — |  |  |  | 293 |
Farmland |  |  | 3,800 |  |  |  | 176,232 |  |  |  | 109 |  |  |  | 180,141 |  |  |  | — |  |  |  | 310 |  |  |  | — |  |  |  | 310 |
Commercial |  |  | 26,616 |  |  |  | 893,509 |  |  |  | 687 |  |  |  | 920,812 |  |  |  | 1,409 |  |  |  | 6,741 |  |  |  | — |  |  |  | 8,150 |
Factored receivables |  |  | 4,726 |  |  |  | 369,684 |  |  |  | — |  |  |  | 374,410 |  |  |  | 949 |  |  |  | 3,648 |  |  |  | — |  |  |  | 4,597 |
Consumer |  |  | 384 |  |  |  | 30,747 |  |  |  | — |  |  |  | 31,131 |  |  |  | 80 |  |  |  | 703 |  |  |  | — |  |  |  | 783 |
Mortgage warehouse |  |  | — |  |  |  | 297,830 |  |  |  | — |  |  |  | 297,830 |  |  |  | — |  |  |  | 297 |  |  |  | — |  |  |  | 297 |
|  | $ | 39,313 |  |  | $ | 2,755,945 |  |  | $ | 15,598 |  |  | $ | 2,810,856 |  |  | $ | 2,713 |  |  | $ | 16,035 |  |  | $ | — |  |  | $ | 18,748 |
(Dollars in thousands) |  | Loan Evaluation |  |  | ALLL Allocations |
December 31, 2016 |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total loans |  |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total ALLL |
Commercial real estate |  | $ | 1,456 |  |  | $ | 427,918 |  |  | $ | 12,863 |  |  | $ | 442,237 |  |  | $ | 100 |  |  | $ | 1,358 |  |  | $ | 355 |  |  | $ | 1,813 |
Construction, land development, land |  |  | 362 |  |  |  | 105,493 |  |  |  | 3,957 |  |  |  | 109,812 |  |  |  | 25 |  |  |  | 440 |  |  |  | — |  |  |  | 465 |
1-4 family residential properties |  |  | 1,095 |  |  |  | 101,551 |  |  |  | 2,328 |  |  |  | 104,974 |  |  |  | 1 |  |  |  | 252 |  |  |  | — |  |  |  | 253 |
Farmland |  |  | 1,333 |  |  |  | 140,045 |  |  |  | 237 |  |  |  | 141,615 |  |  |  | — |  |  |  | 170 |  |  |  | — |  |  |  | 170 |
Commercial |  |  | 33,033 |  |  |  | 738,088 |  |  |  | 7,522 |  |  |  | 778,643 |  |  |  | 2,101 |  |  |  | 5,913 |  |  |  | — |  |  |  | 8,014 |
Factored receivables |  |  | 3,176 |  |  |  | 235,022 |  |  |  | — |  |  |  | 238,198 |  |  |  | 1,546 |  |  |  | 2,542 |  |  |  | — |  |  |  | 4,088 |
Consumer |  |  | 73 |  |  |  | 29,691 |  |  |  | — |  |  |  | 29,764 |  |  |  | — |  |  |  | 420 |  |  |  | — |  |  |  | 420 |
Mortgage warehouse |  |  | — |  |  |  | 182,381 |  |  |  | — |  |  |  | 182,381 |  |  |  | — |  |  |  | 182 |  |  |  | — |  |  |  | 182 |
|  | $ | 40,528 |  |  | $ | 1,960,189 |  |  | $ | 26,907 |  |  | $ | 2,027,624 |  |  | $ | 3,773 |  |  | $ | 11,277 |  |  | $ | 355 |  |  | $ | 15,405 |
The following is a summary of information pertaining to impaired loans. PCI loans that have not deteriorated subsequent to acquisition are not considered impaired and therefore do not require an ALLL and are excluded from these tables.
|  | Impaired Loans and PCI Impaired Loans |  |  | Impaired Loans |
|  | With a Valuation Allowance |  |  | Without a Valuation Allowance |
(Dollars in thousands) |  | Recorded |  |  | Unpaid |  |  | Related |  |  | Recorded |  |  | Unpaid |
December 31, 2017 |  | Investment |  |  | Principal |  |  | Allowance |  |  | Investment |  |  | Principal |
Commercial real estate |  | $ | 165 |  |  | $ | 165 |  |  | $ | 123 |  |  | $ | 848 |  |  | $ | 881 |
Construction, land development, land |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 136 |  |  |  | 136 |
1-4 family residential properties |  |  | 237 |  |  |  | 235 |  |  |  | 152 |  |  |  | 2,401 |  |  |  | 2,519 |
Farmland |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,800 |  |  |  | 4,071 |
Commercial |  |  | 9,194 |  |  |  | 9,191 |  |  |  | 1,409 |  |  |  | 17,422 |  |  |  | 17,605 |
Factored receivables |  |  | 4,726 |  |  |  | 4,726 |  |  |  | 949 |  |  |  | — |  |  |  | — |
Consumer |  |  | 271 |  |  |  | 267 |  |  |  | 80 |  |  |  | 113 |  |  |  | 115 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 14,593 |  |  | $ | 14,584 |  |  | $ | 2,713 |  |  | $ | 24,720 |  |  | $ | 25,327 |
|  | Impaired Loans and PCI Impaired Loans |  |  | Impaired Loans |
|  | With a Valuation Allowance |  |  | Without a Valuation Allowance |
(Dollars in thousands) |  | Recorded |  |  | Unpaid |  |  | Related |  |  | Recorded |  |  | Unpaid |
December 31, 2016 |  | Investment |  |  | Principal |  |  | Allowance |  |  | Investment |  |  | Principal |
Commercial real estate |  | $ | 517 |  |  | $ | 517 |  |  | $ | 100 |  |  | $ | 939 |  |  | $ | 1,011 |
Construction, land development, land |  |  | 277 |  |  |  | 275 |  |  |  | 25 |  |  |  | 85 |  |  |  | 86 |
1-4 family residential properties |  |  | 8 |  |  |  | 14 |  |  |  | 1 |  |  |  | 1,087 |  |  |  | 1,215 |
Farmland |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,333 |  |  |  | 1,364 |
Commercial |  |  | 15,022 |  |  |  | 15,018 |  |  |  | 2,101 |  |  |  | 18,011 |  |  |  | 18,096 |
Factored receivables |  |  | 3,176 |  |  |  | 3,176 |  |  |  | 1,546 |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 73 |  |  |  | 73 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 525 |  |  |  | 525 |  |  |  | 355 |  |  |  | — |  |  |  | — |
|  | $ | 19,525 |  |  | $ | 19,525 |  |  | $ | 4,128 |  |  | $ | 21,528 |  |  | $ | 21,845 |
The following table presents average impaired loans and interest recognized on impaired loans for the years ended December 31, 2017, 2016, and 2015:
|  | Years Ended |
|  | December 31, 2017 |  |  | December 31, 2016 |  |  | December 31, 2015 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |  |  | Average |  |  | Interest |
(Dollars in thousands) |  | Impaired Loans |  |  | Recognized |  |  | Impaired Loans |  |  | Recognized |  |  | Impaired Loans |  |  | Recognized |
Commercial real estate |  | $ | 1,234 |  |  | $ | 33 |  |  | $ | 1,090 |  |  | $ | 46 |  |  | $ | 1,329 |  |  | $ | — |
Construction, land development, land |  |  | 249 |  |  |  | — |  |  |  | 181 |  |  |  | 4 |  |  |  | — |  |  |  | — |
1-4 family residential properties |  |  | 1,867 |  |  |  | 45 |  |  |  | 857 |  |  |  | 18 |  |  |  | 623 |  |  |  | 42 |
Farmland |  |  | 2,567 |  |  |  | 45 |  |  |  | 667 |  |  |  | 45 |  |  |  | — |  |  |  | — |
Commercial |  |  | 29,825 |  |  |  | 599 |  |  |  | 20,474 |  |  |  | 980 |  |  |  | 7,552 |  |  |  | 187 |
Factored receivables |  |  | 3,951 |  |  |  | — |  |  |  | 3,299 |  |  |  | — |  |  |  | 2,347 |  |  |  | — |
Consumer |  |  | 229 |  |  |  | 9 |  |  |  | 37 |  |  |  | 5 |  |  |  | — |  |  |  | — |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 262 |  |  |  | — |  |  |  | 525 |  |  |  | — |  |  |  | 263 |  |  |  | — |
|  | $ | 40,184 |  |  | $ | 731 |  |  | $ | 27,130 |  |  | $ | 1,098 |  |  | $ | 12,114 |  |  | $ | 229 |
Past Due and Nonaccrual Loans The following is a summary of contractually past due and nonaccrual loans at December 31, 2017 and 2016:
|  | Past Due |  |  | Past Due 90 |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30-89 Days |  |  | Days or More |  |  |  |  |  |  |  |  |
December 31, 2017 |  | Still Accruing |  |  | Still Accruing |  |  | Nonaccrual |  |  | Total |
Commercial real estate |  | $ | 1,374 |  |  | $ | — |  |  | $ | 1,012 |  |  | $ | 2,386 |
Construction, land development, land |  |  | — |  |  |  | — |  |  |  | 136 |  |  |  | 136 |
1-4 family residential properties |  |  | 1,378 |  |  |  | 62 |  |  |  | 2,625 |  |  |  | 4,065 |
Farmland |  |  | 250 |  |  |  | 109 |  |  |  | 3,412 |  |  |  | 3,771 |
Commercial |  |  | 6,630 |  |  |  | 39 |  |  |  | 22,247 |  |  |  | 28,916 |
Factored receivables |  |  | 20,858 |  |  |  | 1,454 |  |  |  | — |  |  |  | 22,312 |
Consumer |  |  | 947 |  |  |  | — |  |  |  | 384 |  |  |  | 1,331 |
Mortgage warehouse |  |  | 165 |  |  |  | — |  |  |  | — |  |  |  | 165 |
PCI |  |  | 72 |  |  |  | — |  |  |  | 2,333 |  |  |  | 2,405 |
|  | $ | 31,674 |  |  | $ | 1,664 |  |  | $ | 32,149 |  |  | $ | 65,487 |
|  | Past Due |  |  | Past Due 90 |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30-89 Days |  |  | Days or More |  |  |  |  |  |  |  |  |
December 31, 2016 |  | Still Accruing |  |  | Still Accruing |  |  | Nonaccrual |  |  | Total |
Commercial real estate |  | $ | 699 |  |  | $ | 144 |  |  | $ | 1,163 |  |  | $ | 2,006 |
Construction, land development, land |  |  | 619 |  |  |  | — |  |  |  | 362 |  |  |  | 981 |
1-4 family residential properties |  |  | 956 |  |  |  | — |  |  |  | 1,039 |  |  |  | 1,995 |
Farmland |  |  | 3,583 |  |  |  | 141 |  |  |  | 541 |  |  |  | 4,265 |
Commercial |  |  | 11,060 |  |  |  | 1,077 |  |  |  | 26,619 |  |  |  | 38,756 |
Factored receivables |  |  | 11,921 |  |  |  | 2,153 |  |  |  | — |  |  |  | 14,074 |
Consumer |  |  | 667 |  |  |  | 2 |  |  |  | 73 |  |  |  | 742 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 2,020 |  |  |  | 104 |  |  |  | 8,233 |  |  |  | 10,357 |
|  | $ | 31,525 |  |  | $ | 3,621 |  |  | $ | 38,030 |  |  | $ | 73,176 |
The following table presents information regarding nonperforming loans at the dates indicated:
(Dollars in thousands) |  | December 31, 2017 |  |  | December 31, 2016 |
Nonaccrual loans(1) |  | $ | 32,149 |  |  | $ | 38,030 |
Factored receivables greater than 90 days past due |  |  | 1,454 |  |  |  | 2,153 |
Troubled debt restructurings accruing interest |  |  | 5,128 |  |  |  | 5,123 |
|  | $ | 38,731 |  |  | $ | 45,306 |
(1)Includes troubled debt restructurings of $14,009,000 and $13,263,000 at December 31, 2017 and 2016, respectively. Credit Quality Information The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including: current collateral and financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes every loan and is performed on a regular basis. Large groups of smaller balance homogeneous loans, such as consumer loans, are analyzed primarily based on payment status. The Company uses the following definitions for risk ratings: Pass: Loans classified as pass are loans with low to average risk and not otherwise classified as substandard or doubtful. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. PCI: At acquisition, PCI loans had the characteristics of substandard loans and it was probable, at acquisition, that all contractually required principal payments would not be collected. The Company evaluates these loans on a projected cash flow basis with this evaluation performed quarterly. As of December 31, 2017 and 2016 based on the most recent analysis performed, the risk category of loans is as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2017 |  | Pass |  |  | Substandard |  |  | Doubtful |  |  | PCI |  |  | Total |
Commercial real estate |  | $ | 732,175 |  |  | $ | 3,956 |  |  | $ | — |  |  | $ | 9,762 |  |  | $ | 745,893 |
Construction, land development, land |  |  | 130,732 |  |  |  | 136 |  |  |  | — |  |  |  | 3,944 |  |  |  | 134,812 |
1-4 family residential |  |  | 122,044 |  |  |  | 2,687 |  |  |  | — |  |  |  | 1,096 |  |  |  | 125,827 |
Farmland |  |  | 171,017 |  |  |  | 9,015 |  |  |  | — |  |  |  | 109 |  |  |  | 180,141 |
Commercial |  |  | 878,957 |  |  |  | 41,168 |  |  |  | — |  |  |  | 687 |  |  |  | 920,812 |
Factored receivables |  |  | 370,839 |  |  |  | 2,325 |  |  |  | 1,246 |  |  |  | — |  |  |  | 374,410 |
Consumer |  |  | 30,739 |  |  |  | 392 |  |  |  | — |  |  |  | — |  |  |  | 31,131 |
Mortgage warehouse |  |  | 297,830 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 297,830 |
|  | $ | 2,734,333 |  |  | $ | 59,679 |  |  | $ | 1,246 |  |  | $ | 15,598 |  |  | $ | 2,810,856 |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2016 |  | Pass |  |  | Substandard |  |  | Doubtful |  |  | PCI |  |  | Total |
Commercial real estate |  | $ | 422,423 |  |  | $ | 6,951 |  |  | $ | — |  |  | $ | 12,863 |  |  | $ | 442,237 |
Construction, land development, land |  |  | 105,493 |  |  |  | 362 |  |  |  | — |  |  |  | 3,957 |  |  |  | 109,812 |
1-4 family residential |  |  | 101,339 |  |  |  | 1,307 |  |  |  | — |  |  |  | 2,328 |  |  |  | 104,974 |
Farmland |  |  | 136,474 |  |  |  | 4,904 |  |  |  | — |  |  |  | 237 |  |  |  | 141,615 |
Commercial |  |  | 729,634 |  |  |  | 41,487 |  |  |  | — |  |  |  | 7,522 |  |  |  | 778,643 |
Factored receivables |  |  | 236,084 |  |  |  | 1,029 |  |  |  | 1,085 |  |  |  | — |  |  |  | 238,198 |
Consumer |  |  | 29,688 |  |  |  | 76 |  |  |  | — |  |  |  | — |  |  |  | 29,764 |
Mortgage warehouse |  |  | 182,381 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 182,381 |
|  | $ | 1,943,516 |  |  | $ | 56,116 |  |  | $ | 1,085 |  |  | $ | 26,907 |  |  | $ | 2,027,624 |
Troubled Debt Restructurings The Company had a recorded investment in troubled debt restructurings of $19,137,000 and $18,386,000 as of December 31, 2017 and 2016, respectively. The Company had allocated specific allowances for these loans of $535,000 and $1,911,000 at December 31, 2017 and 2016, respectively, and had not committed to lend additional amounts. The following table presents loans modified as troubled debt restructurings that occurred during the years ended December 31, 2017, 2016, and 2015:
|  | Recorded |  |  | Number of |
(Dollars in thousands) |  | Investment |  |  | Loans |
December 31, 2017 |  |  |  |  |  |  |  |
Commercial |  | $ | 8,831 |  |  |  | 8 |
December 31, 2016 |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 809 |  |  |  | 3 |
Farmland |  |  | 793 |  |  |  | 1 |
Commercial |  |  | 16,612 |  |  |  | 27 |
|  | $ | 18,214 |  |  |  | 31 |
December 31, 2015 |  |  |  |  |  |  |  |
Commercial |  | $ | 1,544 |  |  |  | 4 |
Troubled debt restructurings during the years ended December 31, 2017, 2016, and 2015 were the result of extending amortization periods. The Company did not grant principal reductions or interest rate concessions on any restructured loans. There were no loans modified as troubled debt restructurings during the year ended December 31, 2017 for which there was a payment default during the year then ended. The Company had one borrower relationship with a recorded investment of $2,011,000 at December 31, 2016, comprised of 14 individual commercial loans that were modified as troubled debt restructurings during the year ended December 31, 2016 for which there were payment defaults during the year then ended. The payment defaults did not result in incremental allowance allocations or charge-offs. There were no loans modified as troubled debt restructurings during the year ended December 31, 2015 for which there was a payment default during the year then ended. Default is determined at 90 or more days past due. Residential Real Estate Loans In Process of Foreclosure At December 31, 2017, the Company had $484,000 in 1-4 family residential real estate loans for which formal foreclosure proceedings were in process. Purchased Credit Impaired Loans The Company has loans that were acquired for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding contractually required principal and interest and the carrying amount of these loans included in the balance sheet amounts of loans receivable at December 31, 2017 and 2016 are as follows:
|  | December 31, |  |  | December 31, |
(Dollars in thousands) |  | 2017 |  |  | 2016 |
Contractually required principal and interest: |  |  |  |  |  |  |  |
Real estate loans |  | $ | 16,360 |  |  | $ | 25,013 |
Commercial loans |  |  | 3,501 |  |  |  | 9,703 |
Outstanding contractually required principal and interest |  | $ | 19,861 |  |  | $ | 34,716 |
Gross carrying amount included in loans receivable |  | $ | 15,598 |  |  | $ | 26,907 |
The changes in accretable yield during the years ended December 31, 2017, 2016 and 2015 in regard to loans transferred at acquisition for which it was probable that all contractually required payments would not be collected are as follows:
|  | Years Ended December 31, |
(Dollars in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Accretable yield, beginning balance |  | $ | 4,261 |  |  | $ | 2,594 |  |  | $ | 4,977 |
Additions |  |  | 371 |  |  |  | 4,124 |  |  |  | — |
Accretion |  |  | (3,442 | ) |  |  | (3,092 | ) |  |  | (4,023 | )
Reclassification from nonaccretable to accretable yield |  |  | 2,108 |  |  |  | 646 |  |  |  | 1,805 |
Disposals |  |  | (505 | ) |  |  | (11 | ) |  |  | (165 | )
Accretable yield, ending balance |  | $ | 2,793 |  |  | $ | 4,261 |  |  | $ | 2,594 |

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