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Loans (Tables)

9 Months Ended

Jun. 30, 2020

The following table presents the composition of loans as of June 30, 2020 and September 30, 2019.


	June 30, 2020		September 30, 2019
	(dollars in thousands)
Commercial real estate	$	5,355,493	$	5,092,410
Agriculture	1,815,121		2,008,644
Commercial non-real estate	2,226,759		1,719,956
Residential real estate	862,821		812,208
Consumer	61,452		51,925
Other	34,713		47,541
Ending balance	10,356,359		9,732,684
Less: Unamortized discount on acquired loans	(9,098)		(13,655)
Unearned net deferred fees and costs and loans in process	(33,262)		(12,266)
Total	$	10,313,999	$	9,706,763

Schedule of the Company's nonaccrual loans

The following table presents the Company’s nonaccrual loans at June 30, 2020 and September 30, 2019, excluding ASC 310-30 loans. Loans greater than 90 days past due and still accruing interest as of June 30, 2020 and September 30, 2019, were $0.0 million and $11.2 million, respectively.


	June 30, 2020		September 30, 2019
	(dollars in thousands)
Nonaccrual loans
Commercial real estate	$	96,765	$	14,973
Agriculture	150,009		77,880
Commercial non-real estate	20,414		9,502
Residential real estate	4,607		2,661
Consumer	79		74
Total	$	271,874	$	105,090

Schedule of the composition of the loan portfolio by internal risk rating

The following table presents the composition of the loan portfolio by internally assigned grade as of June 30, 2020 and September 30, 2019. 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 $735.4 million at June 30, 2020 and $813.0 million at September 30, 2019.


As of June 30, 2020	Commercial Real Estate		Agriculture		Commercial Non-Real Estate		Residential Real Estate ¹		Consumer ¹		Other		Total
	(dollars in thousands)
Credit Risk Profile by Internally Assigned Grade
Grade:
Pass	$	4,544,252	$	1,095,048	$	1,936,134	$	835,956	$	60,512	$	34,713	$	8,506,615
Watchlist	175,893		234,251		48,334		11,392		710		—		470,580
Substandard	173,324		344,027		99,828		13,156		102		—		630,437
Doubtful	49		3,394		799		14		3		—		4,259
Loss	—		—		—		—		—		—		—
Ending balance	4,893,518		1,676,720		2,085,095		860,518		61,327		34,713		9,611,891
Loans covered by a FDIC loss sharing agreement	—		—		—		—		—		—		—
Total	$	4,893,518	$	1,676,720	$	2,085,095	$	860,518	$	61,327	$	34,713	$	9,611,891
¹ The Company generally does not risk rate residential real estate or consumer loans unless a default event such as a bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of residential real estate and consumer loans.


As of September 30, 2019	Commercial Real Estate		Agriculture		Commercial Non-Real Estate		Residential Real Estate ¹		Consumer ¹		Other		Total
	(dollars in thousands)
Credit Risk Profile by Internally Assigned Grade
Grade:
Pass	$	4,433,530	$	1,346,436	$	1,424,357	$	763,797	$	50,796	$	47,541	$	8,066,457
Watchlist	85,256		179,965		103,514		6,297		755		—		375,787
Substandard	54,242		322,327		42,048		6,863		205		—		425,685
Doubtful	56		5,811		296		55		2		—		6,220
Loss	—		—		—		—		—		—		—
Ending balance	4,573,084		1,854,539		1,570,215		777,012		51,758		47,541		8,874,149
Loans covered by a FDIC loss sharing agreement	—		—		—		31,891		—		—		31,891
Total	$	4,573,084	$	1,854,539	$	1,570,215	$	808,903	$	51,758	$	47,541	$	8,906,040
¹ The Company generally does not risk rate residential real estate or consumer loans unless a default event such as a bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of residential real estate and consumer loans.

Schedule of past due loans

The following table presents the Company’s past due loans at June 30, 2020 and September 30, 2019. 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 $735.4 million at June 30, 2020 and $813.0 million at September 30, 2019.


	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Financing Receivables
	(dollars in thousands)
As of June 30, 2020
Commercial real estate	$	93	$	30,393	$	28,683	$	59,169	$	4,834,349	$	4,893,518
Agriculture	82,476		5,842		69,351		157,669		1,519,051		1,676,720
Commercial non-real estate	21		323		15,595		15,939		2,069,156		2,085,095
Residential real estate	916		1,143		3,407		5,466		855,052		860,518
Consumer	15		13		20		48		61,279		61,327
Other	—		—		—		—		34,713		34,713
Ending balance	83,521		37,714		117,056		238,291		9,373,600		9,611,891
Loans covered by a FDIC loss sharing agreement	—		—		—		—		—		—
Total	$	83,521	$	37,714	$	117,056	$	238,291	$	9,373,600	$	9,611,891


	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Financing Receivables
	(dollars in thousands)
As of September 30, 2019
Commercial real estate	$	3,587	$	570	$	2,475	$	6,632	$	4,566,452	$	4,573,084
Agriculture	13,411		1,267		33,089		47,767		1,806,772		1,854,539
Commercial non-real estate	3,932		120		4,424		8,476		1,561,739		1,570,215
Residential real estate	311		676		939		1,926		775,086		777,012
Consumer	61		110		7		178		51,580		51,758
Other	—		—		—		—		47,541		47,541
Ending balance	21,302		2,743		40,934		64,979		8,809,170		8,874,149
Loans covered by a FDIC loss sharing agreement	536		410		331		1,277		30,614		31,891
Total	$	21,838	$	3,153	$	41,265	$	66,256	$	8,839,784	$	8,906,040

Schedule of impaired loans

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.


	June 30, 2020										September 30, 2019
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
	(dollars in thousands)
Impaired loans:
With an allowance recorded:
Commercial real estate	$	84,064	$	85,941	$	18,993	$	26,003	$	26,297	$	4,159
Agriculture	88,107		91,439		10,835		98,392		104,350		8,234
Commercial non-real estate	28,684		32,127		9,846		21,331		21,777		6,062
Residential real estate	5,513		6,034		2,101		3,829		4,311		1,795
Consumer	106		116		32		207		214		97
Total impaired loans with an allowance recorded	206,474		215,657		41,807		149,762		156,949		20,347
With no allowance recorded:
Commercial real estate	89,000		127,589		—		28,272		66,631		—
Agriculture	260,026		278,906		—		231,087		255,308		—
Commercial non-real estate	72,458		80,692		—		21,579		31,414		—
Residential real estate	5,389		7,801		—		3,290		5,454		—
Consumer	1		108		—		1		108		—
Total impaired loans with no allowance recorded	426,874		495,096		—		284,229		358,915		—
Total impaired loans	$	633,348	$	710,753	$	41,807	$	433,991	$	515,864	$	20,347

The following table presents the average recorded investment on impaired loans and interest income recognized on impaired loans for the three and nine months ended June 30, 2020 and 2019.


	Three Months Ended June 30,															Nine Months Ended June 30,
	2020						2019						2020					2019
	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			Average Recorded Investment		Interest Income Recognized While on Impaired Status
	(dollars in thousands)
Commercial real estate	$	152,871	$	1,684	$	40,199	$	718	$	113,146	$	5,350		$	39,399	$	1,415
Agriculture	348,006		3,421		253,240		7,147		354,202		16,722			196,563		10,349
Commercial non-real estate	97,310		678		26,381		468		84,849		5,079			24,518		1,146
Residential real estate	10,901		120		6,911		123		9,957		513			6,831		305
Consumer	117		2		261		8		148		6			237		19
Total	$	609,205	$	5,905	$	326,992	$	8,464	$	562,302	$	27,670		$	267,548	$	13,234

The following table provides purchased credit impaired loans at June 30, 2020 and September 30, 2019.


	June 30, 2020										September 30, 2019
	Outstanding Balance ¹		Recorded Investment ²		Carrying Value ³		Outstanding Balance ¹		Recorded Investment ²		Carrying Value ³
	(dollars in thousands)
Commercial real estate	$	87,125	$	20,903	$	20,762	$	90,295	$	22,124	$	21,965
Agriculture	4,119		3,086		3,086		4,462		2,756		2,491
Commercial non-real estate	7,016		136		107		7,190		221		192
Residential real estate	31,603		27,210		26,716		35,413		30,280		30,168
Consumer	399		340		310		493		438		438
Total lending	$	130,262	$	51,675	$	50,981	$	137,853	$	55,819	$	55,254
¹Represents the legal balance of ASC 310-30 loans.
² Represents the book balance of ASC 310-30 loans.
³ Represents the book balance of ASC 310-30 loans net of the related allowance for loan and lease losses.

Summary of troubled debt restructurings on accruing and nonaccrual loans

The following table presents the recorded value of the Company’s TDR balances as of June 30, 2020 and September 30, 2019.


	June 30, 2020						September 30, 2019
	Accruing		Nonaccrual		Accruing		Nonaccrual
	(dollars in thousands)
Commercial real estate	$	31,627	$	1,762	$	17,145	$	904
Agriculture	2,989		47,791		22,929		24,762
Commercial non-real estate	8,645		5,508		4,398		4,257
Residential real estate	285		86		263		102
Consumer	4		36		107		48
Total	$	43,550	$	55,183	$	44,842	$	30,073

TDRs are generally restructured through either a rate modification, term extension, payment modification or due to a bankruptcy. The following table presents a summary of all accruing loans restructured in TDRs for the three and nine months ended June 30, 2020 and 2019.


	Three Months Ended June 30,																			Nine Months Ended June 30,
	2020								2019								2020						2019
		Recorded Investment							Recorded Investment							Recorded Investment						Recorded Investment
	Number	Pre-Modification		Post-Modification		Number	Pre-Modification		Post-Modification		Number	Pre-Modification		Post-Modification			Number	Pre-Modification		Post-Modification
	(dollars in thousands)
Commercial real estate	1	$	12,001	$	12,001	2	$	15,466	$	15,466	2	$	14,880	$	14,880		2	$	15,466	$	15,466
Agriculture	—	—		—		16	11,537		11,537		2	993		993			16	11,537		11,537
Commercial non-real estate	—	—		—		—	—		—		4	5,096		5,096			—	—		—
Residential real estate	—	—		—		—	—		—		1	50		50			—	—		—
Consumer	—	—		—		—	—		—		—	—		—			1	89		89
Total accruing	1	$	12,001	$	12,001	18	$	27,003	$	27,003	9	$	21,019	$	21,019		19	$	27,092	$	27,092
Change in recorded investment due to principal paydown at time of modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—		—	$	—	$	—
Change in recorded investment due to chargeoffs at time of modification	—	—		—		—	—		—		—	—		—			—	—		—

The following table presents a summary of all nonaccruing loans restructured in TDRs for the three and nine months ended June 30, 2020 and 2019.


	Three Months Ended June 30,																			Nine Months Ended June 30,
	2020								2019								2020						2019
		Recorded Investment							Recorded Investment							Recorded Investment						Recorded Investment
	Number	Pre-Modification		Post-Modification		Number	Pre-Modification		Post-Modification		Number	Pre-Modification		Post-Modification			Number	Pre-Modification		Post-Modification
	(dollars in thousands)
Commercial real estate	—	$	—	$	—	1	$	882	$	882	1	$	2,216	$	2,216		1	$	882	$	882
Agriculture	1	19,342		19,342		9	5,802		5,802		11	20,797		20,797			9	5,802		5,802
Commercial non-real estate	3	922		922		2	3,699		3,699		5	1,752		1,752			2	3,699		3,699
Residential real estate	—	—		—		—	—		—		—	—		—			—	—		—
Consumer	—	—		—		—	—		—		—	—		—			—	—		—
Total nonaccruing	4	$	20,264	$	20,264	12	$	10,383	$	10,383	17	$	24,765	$	24,765		12	$	10,383	$	10,383
Change in recorded investment due to principal paydown at time of modification	—	$	—	$	—	—	$	—	$	—	—	$	—	$	—		—	$	—	$	—
Change in recorded investment due to chargeoffs at time of modification	—	—		—		—	—		—		—	—		—			—	—		—

The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default for the three and nine months ended June 30, 2020 and 2019, respectively.


	Three Months Ended June 30,											Nine Months Ended June 30,
	2020				2019					2020				2019
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment			Number of Loans	Recorded Investment
	(dollars in thousands)
Commercial real estate	1	$	1,720	—	$	—	1	$	1,720		—	$	—
Agriculture	5	166		—	—		10	1,261			—	—
Commercial non-real estate	4	1,308		—	—		4	1,308			—	—
Residential real estate	—	—		—	—		—	—			—	—
Consumer	—	—		—	—		—	—			—	—
Total	10	$	3,194	—	$	—	15	$	4,289		—	$	—