LOANS AND ALLOWANCE FOR LOAN LOSSES | ā ā 4. LOANS AND ALLOWANCE FOR LOAN LOSSES Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at December 31, 2019 and 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā 2019 2018 Construction and Land Development ā $ 1,250,924 ā $ 1,194,821 Commercial Real Estate - Owner Occupied ā 2,041,243 ā 1,337,345 Commercial Real Estate - Non-Owner Occupied ā 3,286,098 ā 2,467,410 Multifamily Real Estate ā 633,743 ā 548,231 Commercial & Industrial ā 2,114,033 ā 1,317,135 Residential 1-4 Family - Commercial ā 724,337 ā 640,419 Residential 1-4 Family - Consumer ā 890,503 ā 673,909 Residential 1-4 Family - Revolving ā 659,504 ā 613,383 Auto ā 350,419 ā 301,943 Consumer ā 372,853 ā 379,694 Other Commercial ā 287,279 ā 241,917 Total loans held for investment, net ā $ 12,610,936 ā $ 9,716,207 ā The following table shows the aging of the Companyās loan portfolio, by segment, at December 31, 2019 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Greater than ā ā ā ā ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā 90 Days and ā ā ā ā ā ā ā ā ā ā ā ā ā ā Past Due ā Past Due ā still Accruing ā PCI ā Nonaccrual ā Current ā Total Loans Construction and Land Development ā $ 4,563 ā $ 482 ā $ 189 ā $ 10,944 ā $ 3,703 ā $ 1,231,043 ā $ 1,250,924 Commercial Real Estate - Owner Occupied ā 3,482 ā 2,184 ā 1,062 ā 27,438 ā 6,003 ā 2,001,074 ā 2,041,243 Commercial Real Estate - Non-Owner Occupied ā 457 ā ā ā 1,451 ā 14,565 ā 381 ā 3,269,244 ā 3,286,098 Multifamily Real Estate ā 223 ā ā ā 474 ā 94 ā ā ā 632,952 ā 633,743 Commercial & Industrial ā 8,698 ā 1,598 ā 449 ā 1,579 ā 1,735 ā 2,099,974 ā 2,114,033 Residential 1-4 Family - Commercial ā 1,479 ā 2,207 ā 674 ā 12,205 ā 4,301 ā 703,471 ā 724,337 Residential 1-4 Family - Consumer ā 16,244 ā 3,072 ā 4,515 ā 14,713 ā 9,292 ā 842,667 ā 890,503 Residential 1-4 Family - Revolving ā 10,190 ā 1,784 ā 3,357 ā 4,127 ā 2,080 ā 637,966 ā 659,504 Auto ā 2,525 ā 236 ā 272 ā 4 ā 563 ā 346,819 ā 350,419 Consumer ā 2,128 ā 1,233 ā 953 ā 668 ā 77 ā 367,794 ā 372,853 Other Commercial ā ā 464 ā ā ā ā ā ā ā ā 344 ā ā 97 ā ā 286,374 ā ā 287,279 Total loans held for investment ā $ 50,453 ā $ 12,796 ā $ 13,396 ā $ 86,681 ā $ 28,232 ā $ 12,419,378 ā $ 12,610,936 ā ā ā The following table shows the aging of the Companyās loan portfolio, by segment, at December 31, 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Greater than ā ā ā ā ā ā ā ā ā ā 30-59 Days ā 60-89 Days ā 90 Days and ā ā ā ā ā ā ā ā ā ā ā ā ā ā Past Due ā Past Due ā still Accruing ā PCI ā Nonaccrual ā Current ā Total Loans Construction and Land Development ā $ 759 ā $ 6 ā $ 180 ā $ 8,654 ā $ 8,018 ā $ 1,177,204 ā $ 1,194,821 Commercial Real Estate - Owner Occupied ā 8,755 ā 1,142 ā 3,193 ā 25,644 ā 3,636 ā 1,294,975 ā 1,337,345 Commercial Real Estate - Non-Owner Occupied ā 338 ā 41 ā ā ā 17,335 ā 1,789 ā 2,447,907 ā 2,467,410 Multifamily Real Estate ā ā ā 146 ā ā ā 88 ā ā ā 547,997 ā 548,231 Commercial & Industrial ā 3,353 ā 389 ā 132 ā 2,156 ā 1,524 ā 1,309,581 ā 1,317,135 Residential 1-4 Family - Commercial ā 6,619 ā 1,577 ā 1,409 ā 13,601 ā 2,481 ā 614,732 ā 640,419 Residential 1-4 Family - Consumer ā 12,049 ā 5,143 ā 2,437 ā 16,872 ā 7,276 ā 630,132 ā 673,909 Residential 1-4 Family - Revolving ā 4,611 ā 1,644 ā 440 ā 5,115 ā 1,518 ā 600,055 ā 613,383 Auto ā 3,320 ā 403 ā 195 ā 7 ā 576 ā 297,442 ā 301,943 Consumer ā 1,504 ā 1,096 ā 870 ā 32 ā 135 ā 376,057 ā 379,694 Other Commercial ā ā 126 ā ā ā ā ā ā ā ā 717 ā ā ā ā ā 241,074 ā ā 241,917 Total loans held for investment ā $ 41,434 ā $ 11,587 ā $ 8,856 ā $ 90,221 ā $ 26,953 ā $ 9,537,156 ā $ 9,716,207 ā ā Nonaccrual loans totaled $28.2 million, $27.0 million, and $21.7 million at December 31, 2019, 2018 and 2017, respectively. Had these loans performed in accordance with their original terms, interest income of approximately $1.8 million, $2.3 million, and $698,000 would have been recorded in 2019, 2018, and 2017, respectively. All nonaccrual loans were included in the impaired loan disclosure in 2019 and 2018. The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2019 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā 30-89 Days Greater than ā ā ā ā ā ā Past Due ā 90 Days ā Current ā Total Construction and Land Development ā $ 136 ā $ 343 ā $ 10,465 ā $ 10,944 Commercial Real Estate - Owner Occupied ā 480 ā 6,884 ā 20,074 ā 27,438 Commercial Real Estate - Non-Owner Occupied ā 848 ā 987 ā 12,730 ā 14,565 Multifamily Real Estate ā ā ā ā ā 94 ā 94 Commercial & Industrial ā ā ā 989 ā 590 ā 1,579 Residential 1-4 Family - Commercial ā 543 ā 1,995 ā 9,667 ā 12,205 Residential 1-4 Family - Consumer ā 927 ā 1,781 ā 12,005 ā 14,713 Residential 1-4 Family - Revolving ā 287 ā 205 ā 3,635 ā 4,127 Auto ā ā ā ā ā 4 ā 4 Consumer ā ā ā ā ā 9 ā ā 659 ā ā 668 Other Commercial ā ā ā ā ā 344 ā 344 Total ā $ 3,221 ā $ 13,193 ā $ 70,267 ā $ 86,681 ā ā The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā 30-89 Days Greater than ā ā ā ā ā ā Past Due ā 90 Days ā Current ā Total Construction and Land Development ā $ 108 ā $ 1,424 ā $ 7,122 ā $ 8,654 Commercial Real Estate - Owner Occupied ā 658 ā 4,281 ā 20,705 ā 25,644 Commercial Real Estate - Non-Owner Occupied ā 61 ā 1,810 ā 15,464 ā 17,335 Multifamily Real Estate ā ā ā ā ā 88 ā 88 Commercial & Industrial ā 47 ā 1,092 ā 1,017 ā 2,156 Residential 1-4 Family - Commercial ā 871 ā 3,454 ā 9,276 ā 13,601 Residential 1-4 Family - Consumer ā 1,959 ā 2,422 ā 12,491 ā 16,872 Residential 1-4 Family - Revolving ā 498 ā 252 ā 4,365 ā 5,115 Auto ā ā ā ā ā ā ā ā 7 ā ā 7 Consumer ā ā 5 ā ā 9 ā ā 18 ā ā 32 Other Commercial ā 57 ā ā ā 660 ā 717 Total ā $ 4,264 ā $ 14,744 ā $ 71,213 ā $ 90,221 ā ā The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Companyās impaired loans, excluding PCI loans, by segment at December 31, 2019 and 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā ā ā Unpaid ā ā ā ā Unpaid ā ā ā ā Recorded ā Principal ā Related ā Recorded ā Principal ā Related ā ā Investment ā Balance ā Allowance ā Investment ā Balance ā Allowance Loans without a specific allowance ā ā ā ā ā ā Construction and Land Development ā $ 5,877 ā $ 7,174 ā $ ā ā $ 10,290 ā $ 12,038 ā $ ā Commercial Real Estate - Owner Occupied ā 8,801 ā 9,296 ā ā ā 8,386 ā 9,067 ā ā Commercial Real Estate - Non-Owner Occupied ā 3,510 ā 4,059 ā ā ā 6,578 ā 6,929 ā ā Commercial & Industrial ā 3,668 ā 3,933 ā ā ā 3,059 ā 3,251 ā ā Residential 1-4 Family - Commercial ā 4,047 ā 4,310 ā ā ā 3,378 ā 3,439 ā ā Residential 1-4 Family - Consumer ā 8,420 ā 9,018 ā ā ā 9,642 ā 10,317 ā ā Residential 1-4 Family - Revolving ā 862 ā 865 ā ā ā 1,150 ā 1,269 ā ā Consumer ā ā ā ā ā ā ā ā ā ā ā 30 ā ā 102 ā ā ā Other Commercial ā ā ā ā ā ā ā 478 ā 478 ā ā Total impaired loans without a specific allowance ā $ 35,185 ā $ 38,655 ā $ ā ā $ 42,991 ā $ 46,890 ā $ ā Loans with a specific allowance ā ā ā ā ā ā Construction and Land Development ā $ 984 ā $ 1,032 ā $ 49 ā $ 372 ā $ 491 ā $ 63 Commercial Real Estate - Owner Occupied ā 2,820 ā 3,093 ā 146 ā 4,304 ā 4,437 ā 359 Commercial Real Estate - Non-Owner Occupied ā 335 ā 383 ā 2 ā 391 ā 391 ā 1 Commercial & Industrial ā 2,568 ā 2,590 ā 619 ā 1,183 ā 1,442 ā 752 Residential 1-4 Family - Commercial ā 1,726 ā 1,819 ā 162 ā 2,120 ā 2,152 ā 89 Residential 1-4 Family - Consumer ā 12,026 ā 12,670 ā 1,242 ā 6,389 ā 6,645 ā 470 Residential 1-4 Family - Revolving ā 2,186 ā 2,369 ā 510 ā 724 ā 807 ā 188 Auto ā 563 ā 879 ā 221 ā 576 ā 830 ā 231 Consumer ā 168 ā 336 ā 46 ā 178 ā 467 ā 64 Other Commercial ā ā 562 ā ā 567 ā ā 30 ā ā ā ā ā ā ā ā ā Total impaired loans with a specific allowance ā $ 23,938 ā $ 25,738 ā $ 3,027 ā $ 16,237 ā $ 17,662 ā $ 2,217 Total impaired loans ā $ 59,123 ā $ 64,393 ā $ 3,027 ā $ 59,228 ā $ 64,552 ā $ 2,217 ā ā The following table shows the average recorded investment and interest income recognized for the Companyās impaired loans, excluding PCI loans, by segment for the years ended December 31, 2019, 2018 and 2017 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā December 31, 2017 ā ā ā Interest ā ā Interest ā ā Interest ā ā Average ā Income ā Average ā Income ā Average ā Income ā ā Investment ā Recognized ā Investment ā Recognized ā Investment ā Recognized Construction and Land Development ā $ 6,764 ā $ 110 ā $ 11,648 ā $ 234 ā $ 17,080 ā $ 590 Commercial Real Estate - Owner Occupied ā 12,258 ā 323 ā 13,383 ā 499 ā 6,580 ā 306 Commercial Real Estate - Non-Owner Occupied ā 4,775 ā 147 ā 7,157 ā 246 ā 6,083 ā 172 Commercial & Industrial ā 6,438 ā 293 ā 4,672 ā 232 ā 3,208 ā 150 Residential 1-4 Family - Commercial ā 6,145 ā 120 ā 5,667 ā 180 ā 4,422 ā 162 Residential 1-4 Family - Consumer ā 20,963 ā 308 ā 16,977 ā 236 ā 12,812 ā 222 Residential 1-4 Family - Revolving ā 3,256 ā 82 ā 2,000 ā 23 ā 2,659 ā 36 Auto ā 788 ā 15 ā 824 ā 20 ā 579 ā 19 Consumer ā 187 ā 5 ā 263 ā 5 ā 428 ā 14 Other Commercial ā ā 584 ā ā 22 ā ā 486 ā ā 27 ā ā 382 ā ā 22 Total impaired loans ā $ 62,158 ā $ 1,425 ā $ 63,077 ā $ 1,702 ā $ 54,233 ā $ 1,693 ā The Company considers TDRs to be impaired loans. A modification of a loanās terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrowerās financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Companyās allowance for loan loss methodology and are included in the preceding impaired loan tables. For the year ended December 31, 2019, the recorded investment in TDRs prior to modifications was not materially impacted by the modifications. The following table provides a summary, by segment, of TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed in nonaccrual status, which are considered to be nonperforming, as of December 31, 2019 and 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā No. of Recorded Outstanding No. of Recorded Outstanding ā ā Loans ā Investment ā Commitment ā Loans ā Investment ā Commitment Performing ā ā ā ā Construction and Land Development 4 ā $ 1,114 ā $ ā 5 ā $ 2,496 ā $ ā Commercial Real Estate - Owner Occupied 6 ā 2,228 ā 26 8 ā 2,783 ā ā Commercial Real Estate - Non-Owner Occupied 1 ā 1,089 ā ā 4 ā 4,438 ā ā Commercial & Industrial 4 ā 1,020 ā ā 4 ā 978 ā ā Residential 1-4 Family - Commercial 5 ā 290 ā ā 8 ā 1,075 ā ā Residential 1-4 Family - Consumer 69 ā 9,396 ā ā 52 ā 6,882 ā ā Residential 1-4 Family - Revolving 2 ā 56 ā ā 2 ā 58 ā ā Consumer 4 ā 29 ā ā 1 ā 13 ā ā Other Commercial ā 1 ā ā 464 ā ā ā ā 1 ā ā 478 ā ā ā Total performing 96 ā $ 15,686 ā $ 26 85 ā $ 19,201 ā $ ā Nonperforming ā ā ā ā Construction and Land Development ā ā $ ā ā $ ā 2 ā $ 3,474 ā $ ā Commercial Real Estate - Owner Occupied 2 ā 176 ā ā 2 ā 198 ā ā Commercial & Industrial 1 ā 55 ā ā 6 ā 461 ā ā Residential 1-4 Family - Commercial ā ā ā ā ā 1 ā 60 ā ā Residential 1-4 Family - Consumer 19 ā 3,522 ā ā 15 ā 3,135 ā ā Residential 1-4 Family - Revolving 2 ā 57 ā ā 2 ā 62 ā ā Consumer ā ā ā ā ā ā ā ā ā 1 ā ā 7 ā ā ā Total nonperforming 24 ā $ 3,810 ā $ ā 29 ā $ 7,397 ā $ ā Total performing and nonperforming 120 ā $ 19,496 ā $ 26 114 ā $ 26,598 ā $ ā ā The Company considers a default of a TDR to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the years ended December 31, 2019 and 2018, the Company did not have any material loans that went into default that had been restructured in the twelve-month period prior to the time of default. The following table shows, by segment and modification type, TDRs that occurred during the years ended December 31, 2019 and 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā All Restructurings ā ā 2019 ā 2018 ā ā Recorded ā Recorded ā ā No. of ā Investment at ā No. of ā Investment at ā ā Loans ā Period End ā Loans ā Period End Modified to interest only, at a market rate ā ā Total interest only at market rate of interest ā ā $ ā ā ā $ ā ā ā ā ā ā ā ā ā ā ā ā Term modification, at a market rate ā ā Construction and Land Development ā ā $ ā 4 ā $ 4,675 Commercial Real Estate - Owner Occupied ā ā ā 5 ā 1,365 Commercial Real Estate - Non-Owner Occupied ā ā ā 1 ā 1,089 Commercial & Industrial 1 ā 376 3 ā 334 Residential 1-4 Family - Commercial 1 ā 72 1 ā 71 Residential 1-4 Family - Consumer 7 ā 1,688 9 ā 1,079 Consumer ā 3 ā ā 24 ā 1 ā ā 13 Total loan term extended at a market rate 12 ā $ 2,160 24 ā $ 8,626 ā ā ā ā ā ā ā ā ā ā ā Term modification, below market rate ā ā Construction and Land Development ā 3 ā $ 193 ā ā ā $ ā Commercial Real Estate - Non-Owner Occupied ā ā ā 1 ā ā 2,782 Residential 1-4 Family - Consumer 22 ā 2,658 19 ā 2,783 Residential 1-4 Family - Revolving ā ā ā 2 ā ā 46 Consumer 1 ā 5 ā ā ā Total loan term extended at a below market rate 26 ā $ 2,856 22 ā $ 5,611 ā ā ā ā ā ā ā ā ā ā ā Interest rate modification, below market rate ā ā Residential 1-4 Family - Commercial ā ā $ ā 1 ā $ 265 Total interest only at below market rate of interest ā ā $ ā 1 ā $ 265 ā ā ā ā ā ā ā ā ā ā ā Total 38 ā $ 5,016 47 ā $ 14,502 ā ā The following tables show the allowance for loan loss activity by segment for the year ended December 31, 2019, 2018, and 2017. The tables below include the provision for loan losses. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, 2019 ā ā Allowance for loan losses ā Balance, Recoveries Loans Provision Balance, ā ā beginning of ā credited to ā charged ā charged to ā end of ā ā the year ā allowance ā off ā operations ā period Construction and Land Development ā $ 6,803 ā $ 665 ā $ (4,218) ā $ 2,508 ā $ 5,758 Commercial Real Estate - Owner Occupied ā 4,023 ā 456 ā (1,346) ā 786 ā 3,919 Commercial Real Estate - Non-Owner Occupied ā 8,865 ā 109 ā (270) ā 839 ā 9,543 Multifamily Real Estate ā 649 ā 85 ā ā ā (102) ā 632 Commercial & Industrial ā 7,636 ā 1,132 ā (3,096) ā 2,932 ā 8,604 Residential 1-4 Family - Commercial ā 1,692 ā 372 ā (472) ā (227) ā 1,365 Residential 1-4 Family - Consumer ā 1,492 ā 466 ā (144) ā 199 ā 2,013 Residential 1-4 Family - Revolving ā 1,297 ā 692 ā (698) ā 32 ā 1,323 Auto ā 1,443 ā 549 ā (1,282) ā 743 ā 1,453 Consumer and all other (1) ā 7,145 ā 2,706 ā (16,582) ā 14,415 ā 7,684 Total ā $ 41,045 ā $ 7,232 ā $ (28,108) ā $ 22,125 ā $ 42,294 (1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, 2018 ā ā Allowance for loan losses ā Balance, Recoveries Loans Provision Balance, ā ā beginning of ā credited to ā charged ā charged to ā end of ā ā the year ā allowance ā off ā operations ā period Construction and Land Development ā $ 9,709 ā $ 447 ā $ (2,005) ā $ (1,348) ā $ 6,803 Commercial Real Estate - Owner Occupied ā 2,931 ā 610 ā (709) ā 1,191 ā 4,023 Commercial Real Estate - Non-Owner Occupied ā 7,544 ā 100 ā (94) ā 1,315 ā 8,865 Multifamily Real Estate ā 1,092 ā 5 ā ā ā (448) ā 649 Commercial & Industrial ā 4,552 ā 534 ā (833) ā 3,383 ā 7,636 Residential 1-4 Family - Commercial ā 4,437 ā 353 ā (176) ā (2,922) ā 1,692 Residential 1-4 Family - Consumer ā 1,524 ā 310 ā (852) ā 510 ā 1,492 Residential 1-4 Family - Revolving ā 1,360 ā 636 ā (1,206) ā 507 ā 1,297 Auto ā 975 ā 436 ā (1,074) ā 1,106 ā 1,443 Consumer and all other (1) ā 4,084 ā 1,737 ā (9,281) ā 10,605 ā 7,145 Total ā $ 38,208 ā $ 5,168 ā $ (16,230) ā $ 13,899 ā $ 41,045 (1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, 2017 ā ā Allowance for loan losses ā Balance, Recoveries Loans Provision Balance, ā ā beginning ā credited to ā charged ā charged to ā end of ā ā of the year ā allowance ā off ā operations ā period Construction and Land Development ā $ 10,055 ā $ 206 ā $ (2,190) ā $ 1,638 ā $ 9,709 Commercial Real Estate - Owner Occupied ā 3,801 ā 171 ā (46) ā (995) ā 2,931 Commercial Real Estate - Non-Owner Occupied ā 6,622 ā 2 ā (1,180) ā 2,100 ā 7,544 Multifamily Real Estate ā 1,236 ā ā ā ā ā (144) ā 1,092 Commercial & Industrial ā 4,627 ā 483 ā (2,277) ā 1,719 ā 4,552 Residential 1-4 Family - Commercial ā 3,698 ā 329 ā (463) ā 873 ā 4,437 Residential 1-4 Family - Consumer ā 2,701 ā 102 ā (588) ā (691) ā 1,524 Residential 1-4 Family - Revolving ā 1,328 ā 314 ā (1,019) ā 737 ā 1,360 Auto ā 946 ā 459 ā (1,038) ā 608 ā 975 Consumer and all other (1) ā 2,178 ā 1,189 ā (4,509) ā 5,226 ā 4,084 Total ā $ 37,192 ā $ 3,255 ā $ (13,310) ā $ 11,071 ā $ 38,208 ā (1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes. The following tables show the loan and allowance for loan loss balances based on impairment methodology by segment as of December 31, 2019 and 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā Loans individually ā Loans collectively ā Loans acquired with ā ā ā ā ā ā ā ā evaluated for ā evaluated for ā deteriorated credit ā ā ā ā ā ā ā ā impairment ā impairment ā quality ā Total ā Loans ALL Loans ALL Loans ALL Loans ALL Construction and Land Development ā $ 6,861 ā $ 49 ā $ 1,233,119 ā $ 5,709 ā $ 10,944 ā $ ā ā $ 1,250,924 ā $ 5,758 Commercial Real Estate - Owner Occupied ā 11,621 ā 146 ā 2,002,184 ā 3,773 ā 27,438 ā ā ā 2,041,243 ā 3,919 Commercial Real Estate - Non-Owner Occupied ā 3,845 ā 2 ā 3,267,688 ā 9,541 ā 14,565 ā ā ā 3,286,098 ā 9,543 Multifamily Real Estate ā ā ā ā ā 633,649 ā 632 ā 94 ā ā ā 633,743 ā 632 Commercial & Industrial ā 6,236 ā 619 ā 2,106,218 ā 7,768 ā 1,579 ā 217 ā 2,114,033 ā 8,604 Residential 1-4 Family - Commercial ā 5,773 ā 162 ā 706,359 ā 1,203 ā 12,205 ā ā ā 724,337 ā 1,365 Residential 1-4 Family - Consumer ā 20,446 ā 1,242 ā 855,344 ā 771 ā 14,713 ā ā ā 890,503 ā 2,013 Residential 1-4 Family - Revolving ā 3,048 ā 510 ā 652,329 ā 813 ā 4,127 ā ā ā 659,504 ā 1,323 Auto ā 563 ā 221 ā 349,852 ā 1,232 ā 4 ā ā ā 350,419 ā 1,453 Consumer and all other (1) ā 730 ā 76 ā 658,390 ā 7,608 ā 1,012 ā ā ā 660,132 ā 7,684 Total loans held for investment, net ā $ 59,123 ā $ 3,027 ā $ 12,465,132 ā $ 39,050 ā $ 86,681 ā $ 217 ā $ 12,610,936 ā $ 42,294 (1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2018 ā ā Loans individually ā Loans collectively ā Loans acquired with ā ā ā ā ā ā ā ā evaluated for ā evaluated for ā deteriorated credit ā ā ā ā ā ā ā ā impairment ā impairment ā quality ā Total ā Loans ALL Loans ALL Loans ALL Loans ALL Construction and Land Development ā $ 10,662 ā $ 63 ā $ 1,175,505 ā $ 6,740 ā $ 8,654 ā $ ā ā $ 1,194,821 ā $ 6,803 Commercial Real Estate - Owner Occupied ā 12,690 ā 359 ā 1,299,011 ā 3,664 ā 25,644 ā ā ā 1,337,345 ā 4,023 Commercial Real Estate - Non-Owner Occupied ā 6,969 ā 1 ā 2,443,106 ā 8,864 ā 17,335 ā ā ā 2,467,410 ā 8,865 Multifamily Real Estate ā ā ā ā ā 548,143 ā 649 ā 88 ā ā ā 548,231 ā 649 Commercial & Industrial ā 4,242 ā 752 ā 1,310,737 ā 6,884 ā 2,156 ā ā ā 1,317,135 ā 7,636 Residential 1-4 Family - Commercial ā 5,498 ā 89 ā 621,320 ā 1,603 ā 13,601 ā ā ā 640,419 ā 1,692 Residential 1-4 Family - Consumer ā 16,031 ā 470 ā 641,006 ā 1,022 ā 16,872 ā ā ā 673,909 ā 1,492 Residential 1-4 Family - Revolving ā 1,874 ā 188 ā 606,394 ā 1,109 ā 5,115 ā ā ā 613,383 ā 1,297 Auto ā 576 ā 231 ā 301,360 ā 1,212 ā 7 ā ā ā 301,943 ā 1,443 Consumer and all other (1) ā 686 ā 64 ā 620,176 ā 7,081 ā 749 ā ā ā 621,611 ā 7,145 Total loans held for investment, net ā $ 59,228 ā $ 2,217 ā $ 9,566,758 ā $ 38,828 ā $ 90,221 ā $ ā ā $ 9,716,207 ā $ 41,045 (1) Consumer and Other Commercial are grouped together as Consumer and all other for reporting purposes. ā The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows: Pass is determined by the following criteria: ā Risk rated 0 loans have little or no risk and are with General Obligation Municipal Borrowers; ā Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents; ā Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety; ā Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment; ā Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan; or ā Loans that are not risk rated but that are 0 to 29 days past due. Watch & Special Mention is determined by the following criteria: ā Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrowerās ability to repay; ā Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Companyās credit position; or ā Loans that are not risk rated but that are 30 to 89 days past due. Substandard is determined by the following criteria: ā Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or ā Loans that are not risk rated but that are 90 to 149 days past due. Doubtful is determined by the following criteria: ā Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; ā Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted; or ā Loans that are not risk rated but that are over 149 days past due. The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2019 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass Watch & Special Mention Substandard Doubtful Total Construction and Land Development ā $ 1,197,066 ā $ 37,182 ā $ 5,732 ā $ ā ā $ 1,239,980 Commercial Real Estate - Owner Occupied ā 1,916,492 ā 87,004 ā 10,309 ā ā ā 2,013,805 Commercial Real Estate - Non-Owner Occupied ā 3,205,463 ā 62,368 ā 3,608 ā 94 ā 3,271,533 Multifamily Real Estate ā 613,844 ā 19,396 ā 409 ā ā ā 633,649 Commercial & Industrial ā 2,043,903 ā 60,495 ā 8,048 ā 8 ā 2,112,454 Residential 1-4 Family - Commercial ā 680,894 ā 24,864 ā 6,374 ā ā ā 712,132 Residential 1-4 Family - Consumer ā 841,408 ā 13,592 ā 20,534 ā 256 ā 875,790 Residential 1-4 Family - Revolving ā 641,069 ā 6,373 ā 7,935 ā ā ā 655,377 Auto ā 345,960 ā 2,630 ā 1,825 ā ā ā 350,415 Consumer ā 371,315 ā 550 ā 320 ā ā ā 372,185 Other Commercial ā ā 284,914 ā ā 1,863 ā ā 158 ā ā ā ā ā 286,935 Total ā $ 12,142,328 ā $ 316,317 ā $ 65,252 ā $ 358 ā $ 12,524,255 ā The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass Watch & Special Mention Substandard Doubtful Total Construction and Land Development ā $ 1,130,577 ā $ 43,894 ā $ 11,696 ā $ ā ā $ 1,186,167 Commercial Real Estate - Owner Occupied ā 1,231,422 ā 50,939 ā 29,340 ā ā ā 1,311,701 Commercial Real Estate - Non-Owner Occupied ā 2,425,500 ā 17,648 ā 6,927 ā ā ā 2,450,075 Multifamily Real Estate ā 537,572 ā 10,571 ā ā ā ā ā 548,143 Commercial & Industrial ā 1,273,549 ā 34,864 ā 6,566 ā ā ā 1,314,979 Residential 1-4 Family - Commercial ā 606,955 ā 14,876 ā 4,987 ā ā ā 626,818 Residential 1-4 Family - Consumer ā 624,346 ā 17,065 ā 15,626 ā ā ā 657,037 Residential 1-4 Family - Revolving ā 598,444 ā 6,316 ā 3,508 ā ā ā 608,268 Auto ā 296,907 ā 3,590 ā 1,439 ā ā ā 301,936 Consumer ā 378,873 ā 547 ā 242 ā ā ā 379,662 Other Commercial ā 239,857 ā 864 ā 479 ā ā ā 241,200 Total ā $ 9,344,002 ā $ 201,174 ā $ 80,810 ā $ ā ā $ 9,625,986 ā The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2019 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass Watch & Special Mention Substandard Doubtful Total Construction and Land Development ā $ 1,092 ā $ 3,692 ā $ 6,160 ā $ ā ā $ 10,944 Commercial Real Estate - Owner Occupied ā 8,264 ā 10,524 ā 8,650 ā ā ā 27,438 Commercial Real Estate - Non-Owner Occupied ā 3,826 ā 9,415 ā 1,324 ā ā ā 14,565 Multifamily Real Estate ā ā ā 94 ā ā ā ā ā 94 Commercial & Industrial ā 127 ā 25 ā 1,427 ā ā ā 1,579 Residential 1-4 Family - Commercial ā 6,000 ā 2,693 ā 3,512 ā ā ā 12,205 Residential 1-4 Family - Consumer ā 9,947 ā 557 ā 4,209 ā ā ā 14,713 Residential 1-4 Family - Revolving ā 2,887 ā 707 ā 533 ā ā ā 4,127 Auto ā 2 ā ā ā 2 ā ā ā 4 Consumer ā 657 ā ā ā 11 ā ā ā 668 Other Commercial ā ā 120 ā ā 224 ā ā ā ā ā ā ā ā 344 Total ā $ 32,922 ā $ 27,931 ā $ 25,828 ā $ ā ā $ 86,681 ā ā ā ā ā The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2018 (dollars in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass Watch & Special Mention Substandard Doubtful Total Construction and Land Development ā $ 1,835 ā $ 1,308 ā $ 5,511 ā $ ā ā $ 8,654 Commercial Real Estate - Owner Occupied ā 8,347 ā 6,685 ā 10,612 ā ā ā 25,644 Commercial Real Estate - Non-Owner Occupied ā 4,789 ā 7,992 ā 4,554 ā ā ā 17,335 Multifamily Real Estate ā ā ā 88 ā ā ā ā ā 88 Commercial & Industrial ā 762 ā 134 ā 1,260 ā ā ā 2,156 Residential 1-4 Family - Commercial ā 6,476 ā 2,771 ā 4,354 ā ā ā 13,601 Residential 1-4 Family - Consumer ā 9,930 ā 1,030 ā 5,912 ā ā ā 16,872 Residential 1-4 Family - Revolving ā 3,438 ā 1,031 ā 646 ā ā ā 5,115 Auto ā ā 7 ā ā ā ā ā ā ā ā ā ā ā 7 Consumer ā 17 ā ā ā 15 ā ā ā 32 Other Commercial ā ā 57 ā ā 660 ā ā ā ā ā ā ā ā 717 Total ā $ 35,658 ā $ 21,699 ā $ 32,864 ā $ ā ā $ 90,221 ā Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables ā Loans and Debt Securities Acquired with Deteriorated Credit Quality, ā ā ā ā ā ā ā ā ā ā For the Year Ended December 31, ā 2019 2018 Balance at beginning of period ā $ 31,201 ā $ 14,563 Additions ā 5,060 ā 12,225 Accretion ā (13,432) ā (8,654) Reclass of nonaccretable difference due to improvement in expected cash flows ā 4,485 ā 1,876 Measurement period adjustment ā 631 ā 3,974 Other, net (1) ā 3,329 ā 7,217 Balance at end of period ā $ 31,274 ā $ 31,201 (1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the year. The carrying value of the Companyās PCI loan portfolio, accounted for under ASC 310-30, totaled $86.7 million at December 31, 2019 and $90.2 million at December 31, 2018. The outstanding balance of the Companyās PCI loan portfolio totaled $104.9 million at December 31, 2019 and $113.5 million at December 31, 2018. The carrying value of the Companyās acquired performing loan portfolio, accounted for under ASC 310-20, Receivables ā Nonrefundable Fees and Other Costs |