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Loans and Allowance for Loan and Lease Losses | 9 Months Ended
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Sep. 30, 2018
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:
|  | September 30, 2018 |  |  | December 31, 2017 |
|  | Recorded |  |  | Unpaid |  |  |  |  |  |  | Recorded |  |  | Unpaid |  |  |  |  |
(Dollars in thousands) |  | Investment |  |  | Principal |  |  | Difference |  |  | Investment |  |  | Principal |  |  | Difference |
Commercial real estate |  | $ | 906,494 |  |  | $ | 914,503 |  |  | $ | (8,009 | ) |  | $ | 745,893 |  |  | $ | 753,803 |  |  | $ | (7,910 | )
Construction, land development, land |  |  | 190,920 |  |  |  | 195,075 |  |  |  | (4,155 | ) |  |  | 134,812 |  |  |  | 138,045 |  |  |  | (3,233 | )
1-4 family residential properties |  |  | 194,752 |  |  |  | 196,361 |  |  |  | (1,609 | ) |  |  | 125,827 |  |  |  | 127,499 |  |  |  | (1,672 | )
Farmland |  |  | 177,313 |  |  |  | 180,599 |  |  |  | (3,286 | ) |  |  | 180,141 |  |  |  | 184,006 |  |  |  | (3,865 | )
Commercial |  |  | 1,123,598 |  |  |  | 1,127,844 |  |  |  | (4,246 | ) |  |  | 920,812 |  |  |  | 924,133 |  |  |  | (3,321 | )
Factored receivables |  |  | 611,285 |  |  |  | 613,832 |  |  |  | (2,547 | ) |  |  | 374,410 |  |  |  | 376,046 |  |  |  | (1,636 | )
Consumer |  |  | 31,423 |  |  |  | 31,576 |  |  |  | (153 | ) |  |  | 31,131 |  |  |  | 31,144 |  |  |  | (13 | )
Mortgage warehouse |  |  | 276,358 |  |  |  | 276,358 |  |  |  | — |  |  |  | 297,830 |  |  |  | 297,830 |  |  |  | — |
Total |  |  | 3,512,143 |  |  | $ | 3,536,148 |  |  | $ | (24,005 | ) |  |  | 2,810,856 |  |  | $ | 2,832,506 |  |  | $ | (21,650 | )
Allowance for loan and lease losses |  |  | (27,256 | ) |  |  |  |  |  |  |  |  |  |  | (18,748 | ) |  |  |  |  |  |  |  |
|  | $ | 3,484,887 |  |  |  |  |  |  |  |  |  |  | $ | 2,792,108 |  |  |  |  |  |  |  |  |
The difference between the recorded investment and the unpaid principal balance is primarily (1) premiums and discounts associated with acquisition date fair value adjustments on acquired loans (both PCI and non-PCI) totaling $20,869,000 and $18,706,000 at September 30, 2018 and December 31, 2017, respectively, and (2) net deferred origination and factoring fees totaling $3,136,000 and $2,944,000 at September 30, 2018 and December 31, 2017, respectively. At September 30, 2018 and December 31, 2017, the Company had $54,917,000 and $32,459,000, 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 $680,070,000 and $596,230,000 at September 30, 2018 and December 31, 2017, respectively, were pledged to secure Federal Home Loan Bank borrowing capacity. During the nine months ended September 30, 2017, loans with a carrying amount of $1,965,000 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 $1,919,000 and losses on sale of loans of $46,000, which were recorded as a reduction in other noninterest income in the consolidated statements of income. No loans were transferred to loans held for sale during the three months ended September 30, 2018 and 2017. There were no loans sold during the nine months ended September 30, 2018, other than those included in the sale of THF. See Note 2 – Business Combinations and Divestitures for details of the THF sale and its impact on our consolidated financial statements. Allowance for Loan and Lease Losses The activity in the allowance for loan and lease losses (“ALLL”) is as follows:
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Ending |
Three months ended September 30, 2018 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Balance |
Commercial real estate |  | $ | 3,803 |  |  | $ | 136 |  |  | $ | — |  |  | $ | 103 |  |  | $ | 4,042 |
Construction, land development, land |  |  | 1,025 |  |  |  | 244 |  |  |  | — |  |  |  | 2 |  |  |  | 1,271 |
1-4 family residential properties |  |  | 240 |  |  |  | 15 |  |  |  | (3 | ) |  |  | 7 |  |  |  | 259 |
Farmland |  |  | 509 |  |  |  | (6 | ) |  |  | — |  |  |  | — |  |  |  | 503 |
Commercial |  |  | 10,230 |  |  |  | 6,324 |  |  |  | (4,074 | ) |  |  | 273 |  |  |  | 12,753 |
Factored receivables |  |  | 7,727 |  |  |  | 64 |  |  |  | (228 | ) |  |  | 8 |  |  |  | 7,571 |
Consumer |  |  | 670 |  |  |  | 93 |  |  |  | (286 | ) |  |  | 104 |  |  |  | 581 |
Mortgage warehouse |  |  | 343 |  |  |  | (67 | ) |  |  | — |  |  |  | — |  |  |  | 276 |
|  | $ | 24,547 |  |  | $ | 6,803 |  |  | $ | (4,591 | ) |  | $ | 497 |  |  | $ | 27,256 |
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Ending |
Three months ended September 30, 2017 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Balance |
Commercial real estate |  | $ | 2,506 |  |  | $ | 58 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,564 |
Construction, land development, land |  |  | 915 |  |  |  | 210 |  |  |  | — |  |  |  | — |  |  |  | 1,125 |
1-4 family residential properties |  |  | 149 |  |  |  | 111 |  |  |  | (1 | ) |  |  | 23 |  |  |  | 282 |
Farmland |  |  | 261 |  |  |  | (22 | ) |  |  | — |  |  |  | — |  |  |  | 239 |
Commercial |  |  | 10,603 |  |  |  | (629 | ) |  |  | (755 | ) |  |  | 929 |  |  |  | 10,148 |
Factored receivables |  |  | 4,507 |  |  |  | 645 |  |  |  | (136 | ) |  |  | 30 |  |  |  | 5,046 |
Consumer |  |  | 627 |  |  |  | 208 |  |  |  | (270 | ) |  |  | 178 |  |  |  | 743 |
Mortgage warehouse |  |  | 229 |  |  |  | (9 | ) |  |  | — |  |  |  | — |  |  |  | 220 |
|  | $ | 19,797 |  |  | $ | 572 |  |  | $ | (1,162 | ) |  | $ | 1,160 |  |  | $ | 20,367 |
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Ending |
Nine months ended September 30, 2018 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Balance |
Commercial real estate |  | $ | 3,435 |  |  | $ | 506 |  |  | $ | (2 | ) |  | $ | 103 |  |  | $ | 4,042 |
Construction, land development, land |  |  | 883 |  |  |  | 376 |  |  |  | — |  |  |  | 12 |  |  |  | 1,271 |
1-4 family residential properties |  |  | 293 |  |  |  | (29 | ) |  |  | (17 | ) |  |  | 12 |  |  |  | 259 |
Farmland |  |  | 310 |  |  |  | 393 |  |  |  | (200 | ) |  |  | — |  |  |  | 503 |
Commercial |  |  | 8,150 |  |  |  | 8,895 |  |  |  | (4,701 | ) |  |  | 409 |  |  |  | 12,753 |
Factored receivables |  |  | 4,597 |  |  |  | 3,850 |  |  |  | (928 | ) |  |  | 52 |  |  |  | 7,571 |
Consumer |  |  | 783 |  |  |  | 287 |  |  |  | (776 | ) |  |  | 287 |  |  |  | 581 |
Mortgage warehouse |  |  | 297 |  |  |  | (21 | ) |  |  | — |  |  |  | — |  |  |  | 276 |
|  | $ | 18,748 |  |  | $ | 14,257 |  |  | $ | (6,624 | ) |  | $ | 875 |  |  | $ | 27,256 |
(Dollars in thousands) |  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Ending |
Nine months ended September 30, 2017 |  | Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Balance |
Commercial real estate |  | $ | 1,813 |  |  | $ | 888 |  |  | $ | (137 | ) |  | $ | — |  |  | $ | 2,564 |
Construction, land development, land |  |  | 465 |  |  |  | 1,235 |  |  |  | (582 | ) |  |  | 7 |  |  |  | 1,125 |
1-4 family residential properties |  |  | 253 |  |  |  | 16 |  |  |  | (29 | ) |  |  | 42 |  |  |  | 282 |
Farmland |  |  | 170 |  |  |  | 69 |  |  |  | — |  |  |  | — |  |  |  | 239 |
Commercial |  |  | 8,014 |  |  |  | 4,660 |  |  |  | (3,833 | ) |  |  | 1,307 |  |  |  | 10,148 |
Factored receivables |  |  | 4,088 |  |  |  | 1,978 |  |  |  | (1,102 | ) |  |  | 82 |  |  |  | 5,046 |
Consumer |  |  | 420 |  |  |  | 813 |  |  |  | (877 | ) |  |  | 387 |  |  |  | 743 |
Mortgage warehouse |  |  | 182 |  |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | 220 |
|  | $ | 15,405 |  |  | $ | 9,697 |  |  | $ | (6,560 | ) |  | $ | 1,825 |  |  | $ | 20,367 |
The following table presents loans individually and collectively evaluated for impairment, as well as purchased credit impaired (“PCI”) loans, and their respective ALLL allocations:
(Dollars in thousands) |  | Loan Evaluation |  |  | ALLL Allocations |
September 30, 2018 |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total loans |  |  | Individually |  |  | Collectively |  |  | PCI |  |  | Total ALLL |
Commercial real estate |  | $ | 7,847 |  |  | $ | 887,834 |  |  | $ | 10,813 |  |  | $ | 906,494 |  |  | $ | 581 |  |  | $ | 3,461 |  |  | $ | — |  |  | $ | 4,042 |
Construction, land development, land |  |  | 221 |  |  |  | 183,862 |  |  |  | 6,837 |  |  |  | 190,920 |  |  |  | 74 |  |  |  | 1,197 |  |  |  | — |  |  |  | 1,271 |
1-4 family residential properties |  |  | 2,240 |  |  |  | 191,868 |  |  |  | 644 |  |  |  | 194,752 |  |  |  | 125 |  |  |  | 134 |  |  |  | — |  |  |  | 259 |
Farmland |  |  | 4,156 |  |  |  | 172,782 |  |  |  | 375 |  |  |  | 177,313 |  |  |  | 72 |  |  |  | 431 |  |  |  | — |  |  |  | 503 |
Commercial |  |  | 19,680 |  |  |  | 1,102,309 |  |  |  | 1,609 |  |  |  | 1,123,598 |  |  |  | 1,496 |  |  |  | 11,253 |  |  |  | 4 |  |  |  | 12,753 |
Factored receivables |  |  | 6,841 |  |  |  | 604,444 |  |  |  | — |  |  |  | 611,285 |  |  |  | 1,916 |  |  |  | 5,655 |  |  |  | — |  |  |  | 7,571 |
Consumer |  |  | 256 |  |  |  | 31,167 |  |  |  | — |  |  |  | 31,423 |  |  |  | 29 |  |  |  | 552 |  |  |  | — |  |  |  | 581 |
Mortgage warehouse |  |  | — |  |  |  | 276,358 |  |  |  | — |  |  |  | 276,358 |  |  |  | — |  |  |  | 276 |  |  |  | — |  |  |  | 276 |
|  | $ | 41,241 |  |  | $ | 3,450,624 |  |  | $ | 20,278 |  |  | $ | 3,512,143 |  |  | $ | 4,293 |  |  | $ | 22,959 |  |  | $ | 4 |  |  | $ | 27,256 |
(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 |
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 allowance and are excluded from these tables.
|  | Impaired Loans and Purchased Credit |  |  | Impaired Loans |
|  | Impaired Loans With a Valuation Allowance |  |  | Without a Valuation Allowance |
(Dollars in thousands) |  | Recorded |  |  | Unpaid |  |  | Related |  |  | Recorded |  |  | Unpaid |
September 30, 2018 |  | Investment |  |  | Principal |  |  | Allowance |  |  | Investment |  |  | Principal |
Commercial real estate |  | $ | 6,031 |  |  | $ | 6,079 |  |  | $ | 581 |  |  | $ | 1,816 |  |  | $ | 1,869 |
Construction, land development, land |  |  | 167 |  |  |  | 168 |  |  |  | 74 |  |  |  | 54 |  |  |  | 54 |
1-4 family residential properties |  |  | 223 |  |  |  | 216 |  |  |  | 125 |  |  |  | 2,017 |  |  |  | 2,124 |
Farmland |  |  | 914 |  |  |  | 900 |  |  |  | 72 |  |  |  | 3,242 |  |  |  | 3,524 |
Commercial |  |  | 3,620 |  |  |  | 3,616 |  |  |  | 1,496 |  |  |  | 16,060 |  |  |  | 16,261 |
Factored receivables |  |  | 6,841 |  |  |  | 6,841 |  |  |  | 1,916 |  |  |  | — |  |  |  | — |
Consumer |  |  | 92 |  |  |  | 86 |  |  |  | 29 |  |  |  | 164 |  |  |  | 169 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 71 |  |  |  | 55 |  |  |  | 4 |  |  |  | — |  |  |  | — |
|  | $ | 17,959 |  |  | $ | 17,961 |  |  | $ | 4,297 |  |  | $ | 23,353 |  |  | $ | 24,001 |
|  | Impaired Loans and Purchased Credit |  |  | 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 |
The following table presents average impaired loans and interest recognized on impaired:
|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, 2018 |  |  | September 30, 2017 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |
(Dollars in thousands) |  | Impaired Loans |  |  | Recognized |  |  | Impaired Loans |  |  | Recognized |
Commercial real estate |  | $ | 6,861 |  |  | $ | 70 |  |  | $ | 853 |  |  | $ | — |
Construction, land development, land |  |  | 181 |  |  |  | 1 |  |  |  | 135 |  |  |  | — |
1-4 family residential properties |  |  | 2,205 |  |  |  | 21 |  |  |  | 1,817 |  |  |  | 16 |
Farmland |  |  | 3,835 |  |  |  | 10 |  |  |  | 3,361 |  |  |  | 14 |
Commercial |  |  | 24,579 |  |  |  | 46 |  |  |  | 22,003 |  |  |  | 167 |
Factored receivables |  |  | 5,724 |  |  |  | — |  |  |  | 3,907 |  |  |  | — |
Consumer |  |  | 260 |  |  |  | 3 |  |  |  | 136 |  |  |  | 4 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 75 |  |  |  | — |  |  |  | 143 |  |  |  | — |
|  | $ | 43,720 |  |  | $ | 151 |  |  | $ | 32,355 |  |  | $ | 201 |
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, 2018 |  |  | September 30, 2017 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |
(Dollars in thousands) |  | Impaired Loans |  |  | Recognized |  |  | Impaired Loans |  |  | Recognized |
Commercial real estate |  | $ | 4,429 |  |  | $ | 76 |  |  | $ | 1,150 |  |  | $ | 1 |
Construction, land development, land |  |  | 178 |  |  |  | 1 |  |  |  | 249 |  |  |  | — |
1-4 family residential properties |  |  | 2,439 |  |  |  | 25 |  |  |  | 1,509 |  |  |  | 23 |
Farmland |  |  | 3,978 |  |  |  | 27 |  |  |  | 2,287 |  |  |  | 32 |
Commercial |  |  | 23,149 |  |  |  | 665 |  |  |  | 27,077 |  |  |  | 398 |
Factored receivables |  |  | 5,783 |  |  |  | — |  |  |  | 3,847 |  |  |  | — |
Consumer |  |  | 320 |  |  |  | 4 |  |  |  | 117 |  |  |  | 4 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 35 |  |  |  | — |  |  |  | 262 |  |  |  | — |
|  | $ | 40,311 |  |  | $ | 798 |  |  | $ | 36,498 |  |  | $ | 458 |
Past Due and Nonaccrual Loans The following is a summary of contractually past due and nonaccrual loans:
|  | Past Due |  |  | Past Due 90 |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  | 30-89 Days |  |  | Days or More |  |  |  |  |  |  |  |  |
September 30, 2018 |  | Still Accruing |  |  | Still Accruing |  |  | Nonaccrual |  |  | Total |
Commercial real estate |  | $ | 2,493 |  |  | $ | — |  |  | $ | 7,873 |  |  | $ | 10,366 |
Construction, land development, land |  |  | 769 |  |  |  | — |  |  |  | 221 |  |  |  | 990 |
1-4 family residential properties |  |  | 1,253 |  |  |  | 79 |  |  |  | 2,156 |  |  |  | 3,488 |
Farmland |  |  | — |  |  |  | — |  |  |  | 3,387 |  |  |  | 3,387 |
Commercial |  |  | 3,976 |  |  |  | 246 |  |  |  | 16,865 |  |  |  | 21,087 |
Factored receivables |  |  | 32,645 |  |  |  | 2,252 |  |  |  | — |  |  |  | 34,897 |
Consumer |  |  | 820 |  |  |  | — |  |  |  | 276 |  |  |  | 1,096 |
Mortgage warehouse |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
PCI |  |  | 206 |  |  |  | — |  |  |  | 2,969 |  |  |  | 3,175 |
|  | $ | 42,162 |  |  | $ | 2,577 |  |  | $ | 33,747 |  |  | $ | 78,486 |
|  | 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 |
The following table presents information regarding nonperforming loans at the dates indicated:
(Dollars in thousands) |  | September 30, 2018 |  |  | December 31, 2017 |
Nonaccrual loans(1) |  | $ | 33,747 |  |  | $ | 32,149 |
Factored receivables greater than 90 days past due |  |  | 2,252 |  |  |  | 1,454 |
Troubled debt restructurings accruing interest |  |  | 3,603 |  |  |  | 5,128 |
|  | $ | 39,602 |  |  | $ | 38,731 |
| (1) | Includes troubled debt restructurings of $3,927,000 and $14,009,000 at September 30, 2018 and December 31, 2017, 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 and interest payments would not be collected. The Company evaluates these loans on a projected cash flow basis with this evaluation performed quarterly. As of September 30, 2018 and December 31, 2017, based on the most recent analysis performed, the risk category of loans is as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2018 |  | Pass |  |  | Substandard |  |  | Doubtful |  |  | PCI |  |  | Total |
Commercial real estate |  | $ | 889,505 |  |  | $ | 6,176 |  |  | $ | — |  |  | $ | 10,813 |  |  | $ | 906,494 |
Construction, land development, land |  |  | 183,706 |  |  |  | 377 |  |  |  | — |  |  |  | 6,837 |  |  |  | 190,920 |
1-4 family residential |  |  | 191,844 |  |  |  | 2,264 |  |  |  | — |  |  |  | 644 |  |  |  | 194,752 |
Farmland |  |  | 171,631 |  |  |  | 5,307 |  |  |  | — |  |  |  | 375 |  |  |  | 177,313 |
Commercial |  |  | 1,099,057 |  |  |  | 22,932 |  |  |  | — |  |  |  | 1,609 |  |  |  | 1,123,598 |
Factored receivables |  |  | 605,002 |  |  |  | 5,340 |  |  |  | 943 |  |  |  | — |  |  |  | 611,285 |
Consumer |  |  | 31,160 |  |  |  | 263 |  |  |  | — |  |  |  | — |  |  |  | 31,423 |
Mortgage warehouse |  |  | 276,358 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 276,358 |
|  | $ | 3,448,263 |  |  | $ | 42,659 |  |  | $ | 943 |  |  | $ | 20,278 |  |  | $ | 3,512,143 |
(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 |
Troubled Debt Restructurings The Company had a recorded investment in troubled debt restructurings of $7,530,000 and $19,137,000 as of September 30, 2018 and December 31, 2017, respectively. The Company had allocated specific allowances for these loans of $640,000 and $535,000 at September 30, 2018 and December 31, 2017, respectively, and had not committed to lend additional amounts. The Company’s troubled debt restructurings are the result of granting a borrower that is experiencing financial difficulty a concession such as extending amortization periods, reducing contractual interest rates, or a combination thereof. The Company did not grant principal reductions on any restructured loans. The following table presents loans modified as troubled debt restructurings that occurred during the nine months ended September 30, 2018 and 2017:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
(Dollars in thousands) |  | Number of |  |  | Recorded |  |  | Recorded |
September 30, 2018 |  | Loans |  |  | Investment |  |  | Investment |
1-4 family residential properties |  |  | 3 |  |  | $ | 111 |  |  | $ | 111 |
Farmland |  |  | 1 |  |  |  | 263 |  |  |  | 263 |
Commercial |  |  | 10 |  |  |  | 875 |  |  |  | 875 |
Total |  |  | 14 |  |  | $ | 1,249 |  |  | $ | 1,249 |
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
(Dollars in thousands) |  | Number of |  |  | Recorded |  |  | Recorded |
September 30, 2017 |  | Loans |  |  | Investment |  |  | Investment |
Commercial |  |  | 5 |  |  | $ | 2,184 |  |  | $ | 2,184 |
During the nine months ended September 30, 2018, the Company had one loan modified as troubled debt restructurings with a recorded investment of $156,000 for which there was a payment default within twelve months following the modification. During the nine months ended September 30, 2017, the Company had four loans modified as troubled debt restructurings with a recorded investment of $2,999,000 for which there were payment defaults within twelve months following the modification. The full recorded investment in one of these loans of $2,702,000 was charged off during the period. Default is determined at 90 or more days past due. Residential Real Estate Loans In Process of Foreclosure At September 30, 2018, the Company had $21,000 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 at September 30, 2018 and December 31, 2017, are as follows:
|  | September 30, |  |  | December 31, |
|  | 2018 |  |  | 2017 |
Contractually required principal and interest: |  |  |  |  |  |  |  |
Real estate loans |  | $ | 22,877 |  |  | $ | 16,360 |
Commercial loans |  |  | 4,141 |  |  |  | 3,501 |
Outstanding contractually required principal and interest |  | $ | 27,018 |  |  | $ | 19,861 |
Gross carrying amount included in loans receivable |  | $ | 20,278 |  |  | $ | 15,598 |
The changes in accretable yield during the three and nine months ended September 30, 2018 and 2017 in regard to loans transferred at acquisition for which it was probable that all contractually required payments would not be collected are as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Accretable yield, beginning balance |  | $ | 2,105 |  |  | $ | 3,126 |  |  | $ | 2,793 |  |  | $ | 4,261 |
Additions |  |  | 2,997 |  |  |  | — |  |  |  | 2,997 |  |  |  | — |
Accretion |  |  | (439 | ) |  |  | (411 | ) |  |  | (1,177 | ) |  |  | (3,117 | )
Reclassification from nonaccretable to accretable yield |  |  | 124 |  |  |  | 56 |  |  |  | 174 |  |  |  | 2,067 |
Disposals |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | (442 | )
Accretable yield, ending balance |  | $ | 4,787 |  |  | $ | 2,769 |  |  | $ | 4,787 |  |  | $ | 2,769 |

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