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Loans Held for Investment and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Loans Held-for-Investment by Class of Financing Receivables
Loans
held-for-investment
by class of financing receivables are as follows (in thousands):
                         
 
June 30,
   
December 31,
   
 
2019
   
2018
   
2018
 
Commercial
  $
813,887
    $
775,010
    $
844,953
 
Agricultural
   
97,535
     
92,583
     
96,677
 
Real estate
   
2,730,585
     
2,567,878
     
2,639,346
 
Consumer
   
398,945
     
396,009
     
372,660
 
                         
Total loans
held-for-investment
  $
4,040,952
    $
3,831,480
    $
3,953,636
 
                         
 
 
 
 
 
 
 
 
 
 
 
Non-Accrual Loans, Loans Still Accruing and Past Due 90 Days or More and Restructured Loans
The Company’s
non-accrual
loans, loans still accruing and past due 90 days or more and restructured loans are as follows (in thousands):
                         
 
June 30,
   
December 31,
   
 
2019
   
2018
   
2018
 
Non-accrual
loans*
   $
26,408
    $
26,685
    $
27,534
 
Loans still accruing and past due 90 days or more
   
300
     
200
     
1,008
 
Troubled debt restructured loans**
   
471
     
514
     
513
 
                         
Total
  $
27,179
    $
27,399
    $
29,055
 
                         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Includes $464,000, $2,813,000 and $827,000 of purchased credit impaired loans as of June 30, 2019 and 2018, and December 31, 2018, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
** Troubled debt restructured loans of $3,906,000, $4,329,000 and $3,840,000, whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in
non-accrual
loans at June 30, 2019 and 2018, and December 31, 2018, respectively.
 
 
 
 
 
 
 
 
 
 
 
Recorded Investment in Impaired Loans and Related Valuation Allowance
The Company’s recorded investment in impaired loans and the related valuation allowance are as follows (in thousands):
 
                                             
June 30, 2019
    
June 30, 2018
    
December 31, 2018
  
Recorded
Investment
    
Valuation
Allowance
    
Recorded
Investment
    
Valuation
Allowance
    
Recorded
Investment
    
Valuation
Allowance
  
 
$26,408
     $
3,866
     $
26,685
     $
4,823
     $
27,534
     $
4,069
  
                                             
 
 
 
 
 
 
 
 
 
 
 
Schedule of Non-Accrual Loans
Non-accrual
loans at June 30, 2019 and 2018, and December 31, 2018, consisted of the following by class of financing receivables (in thousands):
                         
 
June 30,
   
December 31,
   
 
2019
   
2018
   
2018
 
Commercial
  $
8,189
    $
7,580
    $
9,334
 
Agricultural
   
1,047
     
1,259
     
759
 
Real estate
   
16,787
     
16,715
     
16,714
 
Consumer
   
385
     
1,131
     
727
 
                         
Total
  $
26,408
    $
26,685
    $
27,534
 
                         
 
 
 
 
 
 
 
 
 
 
 
Schedule of Impaired Loans and Related Allowance
The Company’s impaired loans and related allowance are summarized in the following tables by class of financing receivables (in thousands). No interest income was recognized on impaired loans subsequent to their classification as impaired.
                                                         
June 30, 2019
  
Unpaid
Contractual
Principal
Balance
   
Recorded
Investment
With No
Allowance*
   
Recorded
Investment
With
Allowance
   
Total
Recorded
Investment
   
Related
Allowance
   
Year-
to-date
Average
Recorded
Investment
   
Three-
Month
Average
Recorded
Investment
 
Commercial
  $
9,340
    $
6,212
    $
1,977
    $
8,189
    $
1,022
    $
8,699
    $
8,562
 
Agricultural
   
1,108
     
434
     
613
     
1,047
     
119
     
1,090
     
1,071
 
Real Estate
   
24,262
     
5,034
     
11,753
     
16,787
     
2,515
     
18,054
     
17,105
 
Consumer
   
525
     
27
     
358
     
385
     
210
     
465
     
427
 
                                                         
Total
  $
35,235
    $
11,707
    $
14,701
    $
26,408
    $
3,866
    $
28,308
    $
27,165
 
                                                         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Includes $464,000 of purchased credit impaired loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                         
June 30, 2018
  
Unpaid
Contractual
Principal
Balance
   
Recorded
Investment
With No
Allowance*
   
Recorded
Investment
With
Allowance
   
Total
Recorded
Investment
   
Related
Allowance
   
Year-
to-date
Average
Recorded
Investment
   
Three-
Month
Average
Recorded
Investment
 
Commercial
  $
9,432
    $
3,264
    $
4,316
    $
7,580
    $
1,379
    $
8,485
    $
8,226
 
Agricultural
   
1,278
     
50
     
1,209
     
1,259
     
368
     
1,670
     
1,589
 
Real Estate
   
22,358
     
3,569
     
13,146
     
16,715
     
2,645
     
18,441
     
18,019
 
Consumer
   
1,344
     
169
     
962
     
1,131
     
431
     
1,240
     
1,192
 
                                                         
Total
  $
34,412
    $
7,052
    $
19,633
    $
26,685
    $
4,823
    $
29,836
    $
29,026
 
                                                         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Includes $2,813,000 of purchased credit impaired loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
December 31, 2018
  
Unpaid
Contractual
Principal
Balance
   
Recorded
Investment
With No
Allowance*
   
Recorded
Investment
With
Allowance
   
Total
Recorded
Investment
   
Related
Allowance
   
12 Month
Average
Recorded
Investment
 
Commercial
  $
10,808
    $
6,728
    $
2,606
    $
9,334
    $
1,133
    $
7,986
 
Agricultural
   
799
     
213
     
546
     
759
     
170
     
842
 
Real Estate
   
24,072
     
6,699
     
10,015
     
16,714
     
2,409
     
16,042
 
Consumer
   
935
     
101
     
626
     
727
     
357
     
914
 
                                                 
Total
  $
36,614
    $
13,741
    $
13,793
    $
27,534
    $
4,069
    $
25,784
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Includes $827,000 of purchased credit impaired loans.
 
 
 
 
 
 
 
 
 
 
 
Schedule of Internal Ratings of Loans
The following summarizes the Company’s internal ratings of its loans
held-for-investment
by class of financing receivables and portfolio segments, which are the same (in thousands):
                                         
June 30, 2019
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
Commercial
  $
767,275
    $
31,124
    $
15,488
    $
—  
     $
813,887
 
Agricultural
   
94,481
     
58
     
2,996
     
—  
      
97,535
 
Real Estate
   
2,656,139
     
20,044
     
54,402
     
—  
      
2,730,585
 
Consumer
   
397,017
     
264
     
1,664
     
—  
      
398,945
 
                                         
Total
  $
3,914,912
    $
  51,490
    $
  74,550
    $
  —  
     $
  4,040,952
 
                                         
                               
June 30, 2018
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
Commercial
  $
749,387
    $
6,439
    $
19,184
    $
—  
     $
775,010
 
Agricultural
   
87,768
     
1,568
     
3,247
     
—  
      
92,583
 
Real Estate
   
2,487,399
     
26,182
     
54,297
     
—  
      
2,567,878
 
Consumer
   
393,200
     
368
     
2,441
     
—  
      
396,009
 
                                         
Total
  $
3,717,754
    $
34,557
    $
79,169
    $
—  
     $
3,831,480
 
                                         
 
 
 
 
 
 
 
 
 
                                         
December 31, 2018
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
Commercial
  $
804,584
    $
  23,392
    $
  16,977
    $
  —  
     $
844,953
 
Agricultural
   
92,864
     
46
     
3,767
     
—  
      
96,677
 
Real Estate
   
2,559,379
     
26,626
     
53,341
     
—  
      
2,639,346
 
Consumer
   
370,510
     
315
     
1,835
     
—  
      
372,660
 
                                         
Total
  $
3,827,337
    $
50,379
    $
75,920
    $
—  
     $
  3,953,636
 
                                         
 
 
 
 
 
 
 
 
 
Schedule of Past Due Loans
The Company’s past due loans are as follows (in thousands):
                                                         
June 30, 2019
 
15-59

Days
Past
Due*
   
60-89

Days
Past
Due
   
Greater
Than 90
Days
   
Total
Past Due
   
Current
   
Total
Loans
   
90 Days
Past Due
Still
Accruing
 
Commercial
  $
2,671
    $
352
    $
610
    $
3,633
    $
810,254
    $
813,887
    $
58
 
Agricultural
   
315
     
163
     
30
     
508
     
97,027
     
97,535
     
30
 
Real Estate
   
16,130
     
712
     
865
     
17,707
     
2,712,878
     
2,730,585
     
180
 
Consumer
   
821
     
99
     
40
     
960
     
397,985
     
398,945
     
32
 
                                                         
Total
  $
19,937
    $
  1,326
    $
  1,545
    $
22,808
    $
  4,018,144
    $
  4,040,952
    $
  300
 
                                                         
                                           
June 30, 2018
 
15-59

Days
Past
Due*
   
60-89

Days
Past
Due
   
Greater
Than 90
Days
   
Total
Past Due
   
Current
   
Total
Loans
   
90 Days
Past Due
Still
Accruing
 
Commercial
  $
4,950
    $
1,085
    $
3,029
    $
9,064
    $
765,946
    $
775,010
    $
74
 
Agricultural
   
626
     
159
     
—  
      
785
     
91,798
     
92,583
     
—  
  
Real Estate
   
13,441
     
474
     
532
     
14,447
     
2,553,431
     
2,567,878
     
70
 
Consumer
   
919
     
232
     
76
     
1,227
     
394,782
     
396,009
     
56
 
                                                         
Total
  $
19,936
    $
1,950
    $
3,637
    $
25,523
    $
3,805,957
    $
3,831,480
    $
200
 
                                                         
                                           
December 31, 2018
 
15-59

Days
Past
Due*
   
60-89

Days
Past
Due
   
Greater
Than 90
Days
   
Total
Past Due
   
Total
Current
   
Total
Loans
   
Total 90
Days 
Past Due Still
Accruing
 
Commercial
  $
3,546
    $
682
    $
677
    $
4,905
    $
840,048
    $
844,953
    $
—  
  
Agricultural
   
791
     
19
     
26
     
836
     
95,841
     
96,677
     
—  
  
Real Estate
   
13,185
     
881
     
2,020
     
16,086
     
2,623,260
     
2,639,346
     
960
 
Consumer
   
782
     
263
     
54
     
1,099
     
371,561
     
372,660
     
48
 
                                                         
Total
  $
  18,304
    $
1,845
    $
2,777
    $
  22,926
    $
3,930,710
    $
3,953,636
    $
  1,008
 
                                                         
 
 
 
 
 
 
 
 
 
 
 
 
* The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due.
 
 
 
 
 
 
 
 
 
Schedule of Allowance for Loan Losses by Portfolio Segment
The following table details the allowance for loan losses by portfolio segment (in thousands). There were
no
allowances for purchased credit impaired loans at June 30, 2019 and 2018, and December 31, 2018. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
                                         
June 30, 2019
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
1,022
    $
119
    $
2,515
    $
210
    $
3,866
 
Loans collectively evaluated for impairment
   
12,877
     
1,241
     
28,284
     
5,552
     
47,954
 
                                         
Total
  $
  13,899
    $
  1,360
    $
  30,799
    $
  5,762
    $
  51,820
 
                                         
 
 
 
 
 
 
 
 
 
June 30, 2018
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
1,379
    $
368
    $
2,645
    $
431
    $
4,823
 
Loans collectively evaluated for impairment
   
7,839
     
1,034
     
30,598
     
5,657
     
45,128
 
                                         
Total
  $
9,218
    $
  1,402
    $
  33,243
    $
  6,088
    $
  49,951
 
                                         
                               
December 31, 2018
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
1,133
    $
170
    $
2,409
    $
357
    $
4,069
 
Loans collectively evaluated for impairment
   
10,815
     
1,276
     
29,933
     
5,109
     
47,133
 
                                         
Total
  $
  11,948
    $
1,446
    $
32,342
    $
5,466
    $
  51,202
 
                                         
 
 
 
 
 
 
Changes in Allowance for Loan Losses
Changes in the allowance for loan losses are summarized as follows by portfolio segment (in thousands):
                                         
Three months ended
June 30, 2019
  
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Beginning balance
  $
  12,475
    $
  1,430
    $
  31,887
    $
  5,793
    $
  51,585
 
Provision for loan losses
   
1,418
     
61
     
(929
 )    
50
     
600
 
Recoveries
   
423
     
5
     
60
     
209
     
697
 
Charge-offs
   
(417
 )    
(136
 )    
(219
 )    
(290
 )    
(1,062
 )
                                         
Ending balance
  $
13,899
    $
1,360
    $
30,799
    $
5,762
    $
51,820
 
                                         
                               
Three months ended
June 30, 2018
  
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Beginning balance
  $
9,277
    $
1,512
    $
32,539
    $
6,171
    $
49,499
 
Provision for loan losses
   
335
     
(115
 )    
799
     
86
     
1,105
 
Recoveries
   
126
     
5
     
18
     
147
     
296
 
Charge-offs
   
(520
 )    
—  
      
(113
 )    
(316
 )    
(949
 )
                                         
Ending balance
  $
9,218
    $
1,402
    $
33,243
    $
6,088
    $
49,951
 
                                         
                               
Six months ended
June 30, 2019
  
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Beginning balance
  $
11,948
    $
1,446
    $
32,342
    $
5,466
    $
51,202
 
Provision for loan losses
   
1,612
     
42
     
(531
 )    
442
     
1,565
 
Recoveries
   
1,073
     
7
     
149
     
349
     
1,578
 
Charge-offs
   
(734
 )    
(135
 )    
(1,161
 )    
(495
 )    
(2,525
 )
                                         
Ending balance
  $
13,899
    $
1,360
    $
30,799
    $
5,762
    $
51,820
 
                                         
                               
Six months ended
June 30, 2018
  
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Beginning balance
  $
10,865
    $
1,305
    $
29,896
    $
6,090
    $
48,156
 
Provision for loan losses
   
(1,292
 )    
88
     
3,233
     
386
     
2,415
 
Recoveries
   
284
     
9
     
260
     
247
     
800
 
Charge-offs
   
(639
 )    
—  
      
(146
 )    
(635
 )    
(1,420
 )
                                         
Ending balance
  $
9,218
    $
1,402
    $
33,243
    $
6,088
    $
49,951
 
                                         
 
 
 
 
 
 
Schedule of Investment in Loans Related to Balance in Allowance for Loan Losses on Basis of Company's Impairment Methodology
The Company’s recorded investment in loans related to the balance in the allowance for loan losses on the basis of the Company’s impairment methodology is as follows (in thousands). Purchased credit impaired loans of $464,000, $2,813,000 and $827,000 at June 30, 2019 and 2018, and December 31, 2018, respectively, are included in loans individually evaluated for impairment.
                                         
June 30, 2019
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
8,189
    $
1,047
    $
16,787
    $
385
    $
26,408
 
Loans collectively evaluated for impairment
   
805,698
     
96,488
     
2,713,798
     
398,560
     
4,014,544
 
                                         
Total
  $
813,887
    $
97,535
    $
2,730,585
    $
398,945
    $
4,040,952
 
                                         
 
 
 
 
 
 
 
 
 
                                         
June 30, 2018
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
7,580
    $
1,259
    $
16,715
    $
1,131
    $
26,685
 
Loans collectively evaluated for impairment
   
767,430
     
91,324
     
2,551,163
     
394,878
     
3,804,795
 
                                         
Total
  $
775,010
    $
92,583
    $
2,567,878
    $
396,009
    $
3,831,480
 
                                         
 
 
 
 
 
 
 
 
 
                                         
December 31, 2018
 
Commercial
   
Agricultural
   
Real Estate
   
Consumer
   
Total
 
Loans individually evaluated for impairment
  $
9,334
    $
759
    $
16,714
    $
727
    $
27,534
 
Loan collectively evaluated for impairment
   
835,619
     
95,918
     
2,622,632
     
371,933
     
3,926,102
 
                                         
Total
  $
844,953
    $
96,677
    $
2,639,346
    $
372,660
    $
3,953,636
 
                                         
 
 
 
 
 
 
Schedule of Loans Modified and Considered Troubled Debt Restructurings
The Company’s loans that were modified and considered troubled debt restructurings are as follows (in thousands):
                                                 
 
Three Months Ended June 30, 2019
   
Six Months Ended June 30, 2019
 
 
Number
   
Pre-

Modification
Recorded
Investment
    
Post-
Modification
Recorded
Investment
   
Number
   
Pre-

Modification
Recorded
Investment
    
Post-
Modification
Recorded
Investment
 
Commercial
   
2
    $
122
    $
122
     
3
    $
279
    $
279
 
Agricultural
   
2
     
253
     
253
     
10
     
619
     
619
 
Real Estate
   
—  
      
—  
      
—  
      
4
     
650
     
650
 
Consumer
   
—  
      
—  
      
—  
      
—  
      
—  
      
—  
  
                                                 
Total
   
4
    $
375
    $
375
     
17
    $
1,548
    $
1,548
 
                                                 
 
 
 
 
 
 
 
 
 
                                                 
 
Three Months Ended June 30, 2018
   
Six Months Ended June 30, 2018
 
 
Number
   
Pre-

Modification
Recorded
Investment
    
Post-
Modification
Recorded
Investment
   
Number
   
Pre-

Modification
Recorded
Investment
    
Post-
Modification
Recorded
Investment
 
Commercial
   
1
    $
279
    $
279
     
1
    $
279
    $
279
 
Agricultural
   
—  
      
—  
      
—  
      
1
     
4
     
4
 
Real Estate
   
2
     
162
     
162
     
4
     
525
     
525
 
Consumer
   
3
     
39
     
39
     
6
     
113
     
113
 
                                                 
Total
   
6
    $
480
    $
480
     
12
    $
921
    $
921
 
                                                 
 
 
 
 
 
 
Schedule of How Loans Were Modified as Troubled Debt Restructured Loans
The balances below provide information as to how the loans were modified as troubled debt restructured loans (in thousands):
 
Three Months Ended June 30, 2019
   
Six Months Ended June 30, 2019
 
  
Adjusted
Interest
Rate
   
Extended
Maturity
   
Combined
Rate and
Maturity
   
Adjusted
Interest
Rate
   
Extended
Maturity
   
Combined
Rate and
Maturity
 
Commercial
  $
—  
     $
122
    $
—  
     $
—  
     $
279
    $
—  
  
Agricultural
   
—  
      
253
     
—  
      
—  
      
354
     
265
 
Real Estate
   
—  
      
—  
      
—  
      
—  
      
202
     
448
 
Consumer
   
—  
      
—  
      
—  
      
—  
      
—  
      
—  
  
                                                 
Total
  $
—  
     $
375
    $
—  
     $
—  
     $
835
    $
713
 
                                                 
  
Three Months Ended June 30, 2018
   
Six Months Ended June 30, 2018
 
  
Adjusted
Interest
Rate
   
Extended
Maturity
   
Combined
Rate and
Maturity
   
Adjusted
Interest
Rate
   
Extended
Maturity
   
Combined
Rate and
Maturity
 
Commercial
  $
—  
     $
—  
     $
279
     
—  
     $
—  
     $
279
 
Agricultural
   
—  
      
—  
      
—  
      
—  
      
—  
      
4
 
Real Estate
   
—  
      
162
     
—  
      
—  
      
162
     
363
 
Consumer
   
—  
      
—  
      
39
     
—  
      
—  
      
113
 
                                                 
Total
  $
—  
     $
162
    $
318
     
—  
     $
162
    $
759