Loans (Tables)

12 Months Ended

Sep. 30, 2017

The composition of net loans as of September 30, 2017 and 2016 is as follows:



	September 30,
	2017			2016
	(dollars in thousands)
Commercial real estate	$	4,124,805		$	3,754,107
Agriculture	2,122,138			2,168,937
Commercial non-real estate	1,718,914			1,673,166
Residential real estate	932,892			1,020,958
Consumer	66,559			76,273
Other	43,207			42,477
Ending balance	9,008,515			8,735,918

Less: Unamortized discount on acquired loans	(29,121		)	(39,947		)
Unearned net deferred fees and costs and loans in process	(10,841		)	(13,327		)
Total	$	8,968,553		$	8,682,644

Summary of the Company's nonaccrual loans

The following table presents the Company’s nonaccrual loans at September 30, 2017 and 2016, excluding ASC 310-30 loans. Loans greater than 90 days past due and still accruing interest as of September 30, 2017 and 2016 were $1.9 million and $2.0 million, respectively.



	September 30,
	2017		2016
Nonaccrual loans	(dollars in thousands)
Commercial real estate	$	14,693	$	13,870
Agriculture	99,325		66,301
Commercial non-real estate	13,674		27,280
Residential real estate	4,421		5,962
Consumer	112		223
Total	$	132,225	$	113,636

Composition of loan portfolio by internal risk rating

The composition of the loan portfolio by internally assigned grade is as follows as of September 30, 2017 and 2016. This table is presented net of unamortized discount on acquired loans and excludes loans measured at fair value with changes in fair value reported in earnings of $1.02 billion for 2017 and $1.13 billion for 2016:



As of September 30, 2017	Commercial Real Estate		Agriculture		Commercial Non-Real Estate		Residential Real Estate		Consumer		Other		Total
Credit Risk Profile by Internally Assigned Grade	(dollars in thousands)
Grade:
Pass	$	3,519,689	$	1,577,403	$	1,369,803	$	853,266	$	65,673	$	43,207	$	7,429,041
Watchlist	80,195		157,407		31,878		4,158		187		—		273,825
Substandard	37,627		130,953		21,438		7,368		306		—		197,692
Doubtful	521		119		3,841		242		—		—		4,723
Loss	—		—		—		—		—		—		—
Ending balance	3,638,032		1,865,882		1,426,960		865,034		66,166		43,207		7,905,281
Loans covered by FDIC loss sharing agreements	—		—		—		57,537		—		—		57,537
Total	$	3,638,032	$	1,865,882	$	1,426,960	$	922,571	$	66,166	$	43,207	$	7,962,818



As of September 30, 2016	Commercial Real Estate		Agriculture		Commercial Non-Real Estate		Residential Real Estate		Consumer		Other		Total
Credit Risk Profile by Internally Assigned Grade	(dollars in thousands)
Grade:
Pass	$	3,276,048	$	1,514,344	$	1,093,913	$	919,224	$	75,065	$	42,477	$	6,921,071
Watchlist	81,148		204,326		37,283		4,741		110		—		327,608
Substandard	57,415		130,569		42,319		10,885		417		—		241,605
Doubtful	147		630		395		130		—		—		1,302
Loss	—		—		—		—		—		—		—
Ending balance	3,414,758		1,849,869		1,173,910		934,980		75,592		42,477		7,491,586
Loans covered by FDIC loss sharing agreements	—		—		—		73,272		—		—		73,272
Total	$	3,414,758	$	1,849,869	$	1,173,910	$	1,008,252	$	75,592	$	42,477	$	7,564,858

Summary of past due financing receivables

The following table presents the Company’s past due loans at September 30, 2017 and 2016. This table is presented net of unamortized discount on acquired loans and excludes loans measured at fair value with changes in fair value reported in earnings of $1.02 billion for 2017 and $1.13 billion for 2016.



	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Financing Receivables
As of September 30, 2017	(dollars in thousands)
Commercial real estate	$	876	$	22,536	$	6,504	$	29,916	$	3,608,116	$	3,638,032
Agriculture	1,453		3,181		20,844		25,478		1,840,404		1,865,882
Commercial non-real estate	2,485		115		8,580		11,180		1,415,780		1,426,960
Residential real estate	1,428		76		951		2,455		862,579		865,034
Consumer	71		24		18		113		66,053		66,166
Other	—		—		—		—		43,207		43,207
Ending balance	6,313		25,932		36,897		69,142		7,836,139		7,905,281
Loans covered by FDIC loss sharing agreements	998		54		738		1,790		55,747		57,537
Total	$	7,311	$	25,986	$	37,635	$	70,932	$	7,891,886	$	7,962,818



	30-59 Days Past Due			60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Financing Receivables
As of September 30, 2016	(dollars in thousands)
Commercial real estate	$	1,765		$	1,959	$	3,745	$	7,469	$	3,407,289	$	3,414,758
Agriculture	(26		)	709		11,549		12,232		1,837,637		1,849,869
Commercial non-real estate	1,588			5,515		9,594		16,697		1,157,213		1,173,910
Residential real estate	828			548		2,063		3,439		931,541		934,980
Consumer	209			20		28		257		75,335		75,592
Other	—			—		—		—		42,477		42,477
Ending balance	4,364			8,751		26,979		40,094		7,451,492		7,491,586
Loans covered by FDIC loss sharing agreements	1,404			1,173		367		2,944		70,328		73,272
Total	$	5,768		$	9,924	$	27,346	$	43,038	$	7,521,820	$	7,564,858

Summary of impaired financing receivables

The following table presents the Company’s impaired loans. This table excludes purchased credit impaired loans and loans measured at fair value with changes in fair value reported in earnings of $1.02 billion for 2017 and $1.13 billion for 2016:



	As of September 30, 2017						As of September 30, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired loans:	(dollars in thousands)
With an allowance recorded:
Commercial real estate	$	20,819	$	24,893	$	3,621	$	29,965	$	32,349	$	3,846
Agriculture	79,219		88,268		11,468		71,501		80,842		12,278
Commercial non-real estate	17,950		28,755		4,779		34,526		35,283		6,475
Residential real estate	5,177		5,874		2,581		6,244		6,886		3,000
Consumer	280		287		86		383		393		87
Total impaired loans with an allowance recorded	123,445		148,077		22,535		142,619		155,753		25,686

With no allowance recorded:
Commercial real estate	16,652		69,677		—		24,040		24,660		—
Agriculture	51,256		64,177		—		30,339		31,907		—
Commercial non-real estate	13,983		38,924		—		15,299		16,469		—
Residential real estate	2,574		9,613		—		4,120		5,807		—
Consumer	13		950		—		12		12		—
Total impaired loans with no allowance recorded	84,478		183,341		—		73,810		78,855		—
Total impaired loans	$	207,923	$	331,418	$	22,535	$	216,429	$	234,608	$	25,686

The average recorded investment on impaired loans and interest income recognized on impaired loans for the years ended September 30, 2017, 2016 and 2015, respectively, are as follows:



	For the year ended
	September 30, 2017				September 30, 2016				September 30, 2015
	Average Recorded Investment		Interest Income Recognized while on Impaired Status		Average Recorded Investment		Interest Income Recognized while on Impaired Status		Average Recorded Investment		Interest Income Recognized while on Impaired Status
	(dollars in thousands)
Commercial real estate	$	42,347	$	2,163	$	70,266	$	3,876	$	69,918	$	3,936
Agriculture	131,026		5,503		100,052		6,502		42,599		1,953
Commercial non-real estate	41,489		1,485		45,592		1,971		49,561		3,092
Residential real estate	8,900		453		11,773		576		12,523		588
Consumer	369		47		309		55		241		35
Total	$	224,131	$	9,651	$	227,992	$	12,980	$	174,842	$	9,604

The following table provides purchased impaired loans at September 30, 2017 and September 30, 2016:



	September 30, 2017						September 30, 2016
	Outstanding Balance ¹		Recorded Investment ²		Carrying Value ³		Outstanding Balance ¹		Recorded Investment ²		Carrying Value ³
	(dollars in thousands)
Commercial real estate	$	110,797	$	30,099	$	29,417	$	129,615	$	44,448	$	43,676
Agriculture	10,463		7,174		7,059		19,174		15,254		15,254
Commercial non-real estate	9,825		1,920		1,920		11,588		3,196		3,196
Residential real estate	61,981		52,736		52,540		76,696		65,737		64,830
Consumer	798		666		666		1,033		896		896
Total lending	$	193,864	$	92,595	$	91,602	$	238,106	$	129,531	$	127,852

¹Represents the legal balance of ASC 310-30 loans.
²Represents the book balance of ASC 310-30 loans.
³Represents the book balance of ASC 310-30 loans net of the related allowance for loan and lease losses.

Summary of all non-accruing loans restructured in Troubled Debt Restructurings on financing receivables

The following table presents the recorded value of the Company’s TDR balances as of September 30, 2017 and 2016:



	September 30, 2017				September 30, 2016
	Accruing		Nonaccrual		Accruing		Nonaccrual
	(dollars in thousands)
Commercial real estate	$	1,121	$	5,351	$	18,250	$	2,356
Agriculture	22,678		59,633		19,823		28,688
Commercial non-real estate	8,369		5,641		8,102		4,789
Residential real estate	311		688		370		937
Consumer	11		21		23		8
Total	$	32,490	$	71,334	$	46,568	$	36,778

The following table presents a summary of all accruing loans restructured in TDRs during the years ended September 30, 2017, 2016 and 2015, respectively:



	September 30, 2017					September 30, 2016					September 30, 2015
		Recorded Investment					Recorded Investment					Recorded Investment
	Number	Pre- Modification		Post- Modification		Number	Pre- Modification		Post- Modification		Number	Pre- Modification		Post- Modification
	(dollars in thousands)
Commercial real estate
Rate modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—
Term extension	2	3,726		3,726		2	1,897		1,897		—	—		—
Payment modification	—	—		—		—	—		—		6	22,232		22,232
Bankruptcy	—	—		—		—	—		—		1	477		477
Other	—	—		—		3	6,714		6,714		—	—		—
Total commercial real estate	2	3,726		3,726		5	8,611		8,611		7	22,709		22,709
Agriculture
Rate modification	—	—		—		—	—		—		—	—		—
Term extension	9	18,072		18,072		16	27,134		27,134		2	1,410		1,410
Payment modification	1	102		102		4	989		989		7	18,551		18,551
Bankruptcy	—	—		—		—	—		—		—	—		—
Other	3	728		728		—	—		—		—	—		—
Total agriculture	13	18,902		18,902		20	28,123		28,123		9	19,961		19,961
Commercial non-real estate
Rate modification	—	—		—		1	49		49		—	—		—
Term extension	2	613		613		5	120		120		2	2,296		2,296
Payment modification	6	1,281		1,281		2	948		948		4	1,709		1,709
Bankruptcy	—	—		—		—	—		—		—	—		—
Other	1	150		150		4	8,500		8,500		—	—		—
Total commercial non-real estate	9	2,044		2,044		12	9,617		9,617		6	4,005		4,005
Residential real estate
Rate modification	—	—		—		—	—		—		1	13		13
Term extension	—	—		—		1	42		42		2	53		53
Payment modification	1	9		9		—	—		—		—	—		—
Bankruptcy	—	—		—		—	—		—		1	19		19
Other	—	—		—		—	—		—		—	—		—
Total residential real estate	1	9		9		1	42		42		4	85		85
Consumer
Rate modification	—	—		—		—	—		—		—	—		—
Term extension	—	—		—		—	—		—		—	—		—
Payment modification	—	—		—		—	—		—		1	17		17
Bankruptcy	1	8		8		—	—		—		1	6		6
Other	—	—		—		—	—		—		—	—		—
Total consumer	1	8		8		—	—		—		2	23		23
Total accruing	26	$	24,689	$	24,689	38	$	46,393	$	46,393	28	$	46,783	$	46,783
Change in recorded investment due to principal paydown at time of modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—
Change in recorded investment due to charge-offs at time of modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—

The following table presents a summary of all non-accruing loans restructured in TDRs during the years ended September 30, 2017, 2016 and 2015:



	September 30, 2017					September 30, 2016					September 30, 2015
		Recorded Investment					Recorded Investment					Recorded Investment
	Number	Pre- Modification		Post- Modification		Number	Pre- Modification		Post- Modification		Number	Pre- Modification		Post- Modification
	(dollars in thousands)
Commercial real estate
Rate modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—
Term extension	—	—		—		—	—		—		2	740		740
Payment modification	—	—		—		—	—		—		2	1,082		1,082
Bankruptcy	—	—		—		—	—		—		—	—		—
Other	—	—		—		—	—		—		—	—		—
Total commercial real estate	—	—		—		—	—		—		4	1,822		1,822
Agriculture
Rate modification	—	—		—		—	—		—		—	—		—
Term extension	12	19,062		19,062		1	101		100		—	—		—
Payment modification	4	565		565		4	932		887		1	229		229
Bankruptcy	—	—		—		—	—		—		—	—		—
Other	2	570		570		1	95		95		—	—		—
Total agriculture	18	20,197		20,197		6	1,128		1,082		1	229		229
Commercial Non-Real Estate
Rate modification	—	—		—		—	—		—		1	32		—
Term extension	2	2,389		2,389		—	—		—		5	257		180
Payment modification	1	1,399		1,399		2	760		760		2	22		3
Bankruptcy	—	—		—		—	—		—		—	—		—
Other	—	—		—		—	—		—		—	—		—
Total commercial non-real estate	3	3,788		3,788		2	760		760		8	311		183
Residential real estate
Rate modification	—	—		—		—	—		—		1	67		67
Term extension	—	—		—		—	—		—		3	169		169
Payment modification	1	21		21		3	254		253		1	19		19
Bankruptcy	1	112		112		—	—		—		1	39		39
Other	—	—		—		—	—		—		1	24		8
Total residential real estate	2	133		133		3	254		253		7	318		302
Consumer
Rate modification	—	—		—		—	—		—		—	—		—
Term extension	3	21		21		—	—		—		2	1		—
Payment modification	—	—		—		—	—		—		—	—		—
Bankruptcy	—	—		—		1	8		8		—	—		—
Other	—	—		—		—	—		—		—	—		—
Total consumer	3	21		21		1	8		8		2	1		—
Total non-accruing	26	$	24,139	$	24,139	12	$	2,150	$	2,103	22	$	2,681	$	2,536
Change in recorded investment due to principal paydown at time of modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—
Change in recorded investment due to charge-offs at time of modification	—	$	—	$	—	7	$	47	$	—	5	$	145	$	—

The table below represents loans that were modified as TDRs within the previous 12 months and for which there was a payment default for the years ended September 30, 2017, 2016 and 2015, respectively.



	September 30, 2017			September 30, 2016			September 30, 2015
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(dollars in thousands)
Commercial real estate	—	$	—	—	$	—	—	$	—
Agriculture	2	8,383		2	7,307		—	—
Commercial non-real estate	1	—		2	275		2	—
Residential real estate	—	—		1	—		1	8
Consumer	—	—		1	8		2	—
Total	3	$	8,383	6	$	7,590	5	$	8