XML 29 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
LOANS AND ALLOWANCE FOR LOAN LOSSES
 12 Months Ended
Dec. 31, 2016
LOANS AND ALLOWANCE FOR LOAN LOSSES  
LOANS AND ALLOWANCE FOR LOAN LOSSES

NOTE 5 — LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans were as follows:

 

 

 

 

 

 

 

 

 

    

December 31,

    

December 31,

 

 

 

2016

 

2015

 

Commercial

 

 

 

 

 

 

 

Commercial and industrial

 

$
461,092

 

$
380,960

 

Agricultural

 

 
73,467

 

 
64,704

 

Commercial Real Estate

 

 

 

 

 

 

 

Farm

 

 
111,807

 

 
97,916

 

Hotel

 

 
91,213

 

 
72,193

 

Construction and development

 

 
102,598

 

 
77,394

 

Other

 

 
857,078

 

 
678,381

 

Residential

 

 

 

 

 

 

 

1-4 family

 

 
608,366

 

 
438,808

 

Home equity

 

 
284,147

 

 
288,265

 

Consumer

 

 

 

 

 

 

 

Direct

 

 
61,574

 

 
56,312

 

Indirect

 

 
331

 

 
459

 

Total loans

 

 
2,651,673

 

 
2,155,392

 

Allowance for loan losses

 

 
(22,499)

 

 
(22,020)

 

Net loans

 

$
2,629,174

 

$
2,133,372

 

 

Financing receivables purchased during the years ended December 31, 2016 and 2015 by portfolio class are as follows.  These loans are included in the above table and all other tables below in the recorded investment amount.  No allowance for loan losses is provided for these loans at December 31, 2016 and 2015.

 

 

 

 

 

 

 

 

 

As of December 31,

 

As of December 31,

 

 

2016

 

2015

Commercial and industrial

 

$
13,875

 

$
9,406

Agricultural

 

 
872

 

 

 —

Construction and development

 

 
16,634

 

 
3,666

Farm real estate

 

 
389

 

 

 —

Hotel

 

 
2,983

 

 

 —

Other real estate

 

 
164,505

 

 
81,831

1-4 family

 

 
206,044

 

 
46,967

Home equity

 

 
14,342

 

 
19,076

Direct

 

 
2,517

 

 
2,818

 

 

$
422,161

 

$
163,764

 

The remaining discount on the above loans was $7,313 and $2,198 at December 31, 2016 and 2015 respectively.

The Company purchased some credit impaired (PCI) loans in 2014 related to the MBT acquisition.  These loans had a net balance of under $1,000 so additional disclosures were not made due to their immateriality.  There were no loans classified as purchased credit impaired from 2015 purchases.  The Company purchased some PCI loans in 2016 related to the Cheviot acquisition.  These loans had a contractual balance of $16,175 with a fair value of $11,560.

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ending December 31, 2016, 2015, and 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2016

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1

 

$
6,511

 

$
10,702

 

$
3,859

 

$
948

 

$
22,020

 

Provision charged to expense

 

 
3,166

 

 
(3,540)

 

 
1,318

 

 
761

 

 
1,705

 

Losses charged off

 

 
(682)

 

 
(663)

 

 
(1,345)

 

 
(3,725)

 

 
(6,415)

 

Recoveries

 

 
659

 

 
1,207

 

 
415

 

 
2,908

 

 
5,189

 

Balance, December 31

 

$
9,654

 

$
7,706

 

$
4,247

 

$
892

 

$
22,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2015

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1

 

$
2,977

 

$
15,605

 

$
3,501

 

$
1,167

 

$
23,250

 

Provision charged to expense

 

 
4,010

 

 
(6,118)

 

 
2,115

 

 
1,618

 

 
1,625

 

Losses charged off

 

 
(978)

 

 
(727)

 

 
(2,094)

 

 
(3,593)

 

 
(7,392)

 

Recoveries

 

 
502

 

 
1,942

 

 
337

 

 
1,756

 

 
4,537

 

Balance, December 31

 

$
6,511

 

$
10,702

 

$
3,859

 

$
948

 

$
22,020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2014

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1

 

$
3,291

 

$
20,210

 

$
3,409

 

$
699

 

$
27,609

 

Provision charged to expense

 

 
(1,204)

 

 
(1,284)

 

 
1,977

 

 
2,011

 

 
1,500

 

Losses charged off

 

 
(241)

 

 
(5,583)

 

 
(2,295)

 

 
(2,899)

 

 
(11,018)

 

Recoveries

 

 
1,131

 

 
2,262

 

 
410

 

 
1,356

 

 
5,159

 

Balance, December 31

 

$
2,977

 

$
15,605

 

$
3,501

 

$
1,167

 

$
23,250

 

The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method as of December 31, 2016 and 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

December 31, 2016

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$
898

 

$
755

 

$
147

 

$

 —

 

$
1,800

 

Ending Balance collectively evaluated for impairment

 

 
8,756

 

 
6,951

 

 
4,100

 

 
892

 

 
20,699

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total ending allowance balance

 

$
9,654

 

$
7,706

 

$
4,247

 

$
892

 

$
22,499

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$
2,705

 

$
7,904

 

$
10,458

 

$
130

 

$
21,197

 

Ending Balance collectively evaluated for impairment

 

 
531,854

 

 
1,147,536

 

 
880,357

 

 
61,775

 

 
2,621,522

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 
7,256

 

 
1,698

 

 

 —

 

 
8,954

 

Total ending loan balance excludes $7,342 of accrued interest

 

$
534,559

 

$
1,162,696

 

$
892,513

 

$
61,905

 

$
2,651,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

December 31, 2015

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$
92

 

$
1,166

 

$
171

 

$

 —

 

$
1,429

 

Ending Balance collectively evaluated for impairment

 

 
6,419

 

 
9,536

 

 
3,688

 

 
948

 

 
20,591

 

Total ending allowance balance

 

$
6,511

 

$
10,702

 

$
3,859

 

$
948

 

$
22,020

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$
812

 

$
8,909

 

$
9,155

 

$
113

 

$
18,989

 

Ending Balance collectively evaluated for impairment

 

 
444,852

 

 
916,975

 

 
717,918

 

 
56,658

 

 
2,136,403

 

Total ending loan balance excludes $5,878 of accrued interest

 

$
445,664

 

$
925,884

 

$
727,073

 

$
56,771

 

$
2,155,392

 

The allowance for loans collectively evaluated for impairment consists of reserves on groups of similar loans based on historical loss experience adjusted for other factors, as well as reserves on certain loans that are classified but determined not to be impaired based on an analysis which incorporates probability of default with a loss given default scenario. The reserves on these loans totaled $2,697 at December 31, 2016 and $1,583 at December 31, 2015.

Nonperforming loans were as follows:

 

 

 

 

 

 

 

 

December 31

    

2016

    

2015

 

Loans past due 90 days or more still on accrual

 

$
2,135

 

$

 —

 

Troubled debt restructurings (accruing)

 

 
3,270

 

 
3,196

 

Non-accrual loans

 

 
15,808

 

 
12,843

 

Total

 

$
21,213

 

$
16,039

 

Nonperforming loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.  

The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2016, 2015, and 2014. Performing troubled debt restructurings at December 31, 2016, 2015, and 2014, totaling $1,925, $2,760 and $7,499 were excluded as allowed by ASC 310‑40.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

    

 

 

    

 

 

 

 

 

Unpaid

 

 

 

 

for Loan

 

Interest

 

Cash Basis

 

 

 

Principal

 

Recorded

 

Losses

 

Income

 

Interest

 

December 31, 2016

 

Balance

 

Investment

 

Allocated

 

Recognized

 

Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
719

 

$
689

 

$
429

 

$

 —

 

$

 —

 

Agricultural

 

 
1,441

 

 
1,441

 

 
469

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
1,106

 

 
1,105

 

 
360

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 
1,900

 

 
1,755

 

 
395

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
1,091

 

 
1,046

 

 
146

 

 

 —

 

 

 —

 

Home Equity

 

 
15

 

 
105

 

 
1

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with allowance recorded

 

 
6,272

 

 
6,141

 

 
1,800

 

 

 —

 

 

 —

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
1,028

 

$
322

 

$

 —

 

$
53

 

$
53

 

Agricultural

 

 
254

 

 
253

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
506

 

 
241

 

 

 —

 

 

 —

 

 

 —

 

Hotel

 

 
64

 

 
64

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 
239

 

 
162

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 
3,558

 

 
2,652

 

 

 —

 

 
200

 

 
200

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
9,215

 

 
7,432

 

 

 —

 

 
53

 

 
53

 

Home Equity

 

 
2,233

 

 
1,875

 

 

 —

 

 
47

 

 
47

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
139

 

 
130

 

 

 —

 

 
12

 

 
12

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with no allowance recorded

 

 
17,236

 

 
13,131

 

 

 —

 

 
365

 

 
365

 

Total impaired loans

 

$
23,508

 

$
19,272

 

$
1,800

 

$
365

 

$
365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

    

 

 

    

 

 

 

 

 

Unpaid

 

 

 

 

for Loan

 

Interest

 

Cash Basis

 

 

 

Principal

 

Recorded

 

Losses

 

Income

 

Interest

 

December 31, 2015

 

Balance

 

Investment

 

Allocated

 

Recognized

 

Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
150

 

$
150

 

$
92

 

$

 —

 

$

 —

 

Agricultural

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 
2,480

 

 
2,363

 

 
1,166

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
1,357

 

 
1,309

 

 
167

 

 

 —

 

 

 —

 

Home Equity

 

 
159

 

 
159

 

 
4

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with allowance recorded

 

 
4,146

 

 
3,981

 

 
1,429

 

 

 —

 

 

 —

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
676

 

$
655

 

$

 —

 

$
34

 

$
34

 

Agricultural

 

 
7

 

 
7

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
496

 

 
309

 

 

 —

 

 
12

 

 
12

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 
189

 

 
186

 

 

 —

 

 
47

 

 
47

 

Other

 

 
4,429

 

 
3,291

 

 

 —

 

 
160

 

 
160

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
6,718

 

 
5,391

 

 

 —

 

 
49

 

 
49

 

Home Equity

 

 
2,589

 

 
2,296

 

 

 —

 

 
17

 

 
17

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
126

 

 
113

 

 

 —

 

 
18

 

 
18

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 
5

 

 
5

 

Subtotal — impaired with no allowance recorded

 

 
15,230

 

 
12,248

 

 

 —

 

 
342

 

 
342

 

Total impaired loans

 

$
19,376

 

$
16,229

 

$
1,429

 

$
342

 

$
342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

    

 

 

    

 

 

 

 

 

Unpaid

 

 

 

 

for Loan

 

Interest

 

Cash Basis

 

 

 

Principal

 

Recorded

 

Losses

 

Income

 

Interest

 

December 31, 2014

 

Balance

 

Investment

 

Allocated

 

Recognized

 

Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
82

 

$
64

 

$
12

 

$

 —

 

$

 —

 

Agricultural

 

 
397

 

 
150

 

 
150

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
76

 

 
76

 

 
21

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 
979

 

 
889

 

 
684

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
1,543

 

 
1,478

 

 
178

 

 

 —

 

 

 —

 

Home Equity

 

 
167

 

 
167

 

 
5

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with allowance recorded

 

 
3,244

 

 
2,824

 

 
1,050

 

 

 —

 

 

 —

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
761

 

$
491

 

$

 —

 

$
10

 

$
10

 

Agricultural

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
864

 

 
616

 

 

 —

 

 

 —

 

 

 —

 

Hotel

 

 
11,423

 

 
11,377

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 
84

 

 
78

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 
5,848

 

 
4,186

 

 

 —

 

 
94

 

 
94

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
7,325

 

 
6,400

 

 

 —

 

 
28

 

 
28

 

Home Equity

 

 
2,847

 

 
2,618

 

 

 —

 

 
15

 

 
15

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
238

 

 
213

 

 

 —

 

 
17

 

 
17

 

Indirect

 

 
7

 

 
7

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with no allowance recorded

 

 
29,397

 

 
25,986

 

 

 —

 

 
164

 

 
164

 

Total impaired loans

 

$
32,641

 

$
28,810

 

$
1,050

 

$
164

 

$
164

 

 

The following table presents the average recorded investment of impaired loans in 2016, 2015, and 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

2016

    

2015

    

2014

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
805

 

$
1,165

 

$
308

 

Agricultural

 

 
998

 

 
31

 

 
195

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 
933

 

 
401

 

 
875

 

Hotel

 

 
26

 

 
2,851

 

 
7,255

 

Construction and development

 

 
156

 

 
53

 

 
270

 

Other

 

 
4,800

 

 
5,734

 

 
9,259

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 
7,642

 

 
7,362

 

 
8,062

 

Home equity

 

 
2,212

 

 
2,268

 

 
2,535

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 
123

 

 
130

 

 
264

 

Indirect

 

 

 —

 

 
1

 

 
6

 

Total loans

 

$
17,695

 

$
19,996

 

$
29,029

 

 

The following table presents the recorded investment in non‑accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2016 and 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due over

 

 

 

 

 

 

 

 

 

90 days and

 

 

 

Non-accrual

still accruing

 

 

    

December 31, 2016

    

December 31, 2015

    

December 31, 2016

    

December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

    

 

 

    

 

 

    

 

 

    

 

Commercial and industrial

 

$
882

 

$
654

 

$

 —

 

$

 —

 

Agricultural

 

 
1,631

 

 
7

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
1,347

 

 
308

 

 

 —

 

 

 —

 

Hotel

 

 
64

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 
122

 

 
144

 

 
2,135

 

 

 —

 

Other

 

 
3,219

 

 
4,791

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
7,163

 

 
5,211

 

 

 —

 

 

 —

 

Home Equity

 

 
1,273

 

 
1,639

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
107

 

 
89

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total

 

$
15,808

 

$
12,843

 

$
2,135

 

$

 —

 

 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2016 and 2015 by class of loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

Greater than

    

 

 

    

 

 

 

 

 

Total

 

30-59 Days

 

60-89 Days

 

90 Days

 

Total

 

Loans Not

 

December 31, 2016

 

Loans

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
461,092

 

$

 —

 

$

 —

 

$
176

 

$
176

 

$
460,916

 

Agricultural

 

 
73,467

 

 
215

 

 

 —

 

 
1,606

 

 
1,821

 

 
71,646

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
111,807

 

 
81

 

 

 —

 

 
1,243

 

 
1,324

 

 
110,483

 

Hotel

 

 
91,213

 

 

 —

 

 

 —

 

 
63

 

 
63

 

 
91,150

 

Construction and development

 

 
102,598

 

 
1,416

 

 

 —

 

 
2,223

 

 
3,639

 

 
98,959

 

Other

 

 
857,078

 

 
1,268

 

 
90

 

 
1,812

 

 
3,170

 

 
853,908

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
608,366

 

 
4,884

 

 
2,002

 

 
3,262

 

 
10,148

 

 
598,218

 

Home Equity

 

 
284,147

 

 
830

 

 
137

 

 
914

 

 
1,881

 

 
282,266

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
61,574

 

 
936

 

 

 —

 

 
66

 

 
1,002

 

 
60,572

 

Indirect

 

 
331

 

 
10

 

 

 —

 

 

 —

 

 
10

 

 
321

 

Total — excludes $7,342 of accrued interest

 

$

2,651,673

 

$

9,640

 

$

2,229

 

$

11,365

 

$

23,234

 

$

2,628,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

Greater than

    

 

 

    

 

 

 

 

 

Total

 

30-59 Days

 

60-89 Days

 

90 Days

 

Total

 

Loans Not

 

December 31, 2015

 

Loans

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
380,960

 

$
93

 

$

 —

 

$
249

 

$
342

 

$
380,618

 

Agricultural

 

 
64,704

 

 
20

 

 

 —

 

 
7

 

 
27

 

 
64,677

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
97,916

 

 

 —

 

 

 —

 

 
119

 

 
119

 

 
97,797

 

Hotel

 

 
72,193

 

 

 —

 

 
13

 

 

 —

 

 
13

 

 
72,180

 

Construction and development

 

 
77,394

 

 

—

 

 
67

 

 
144

 

 
211

 

 
77,183

 

Other

 

 
678,381

 

 
873

 

 
102

 

 
2,601

 

 
3,576

 

 
674,805

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 
438,808

 

 
3,726

 

 
1,904

 

 
2,771

 

 
8,401

 

 
430,407

 

Home Equity

 

 
288,265

 

 
410

 

 
446

 

 
1,133

 

 
1,989

 

 
286,276

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 
56,312

 

 
40

 

 
65

 

 
68

 

 
173

 

 
56,139

 

Indirect

 

 
459

 

 
2

 

 

 —

 

 

—

 

 
2

 

 
457

 

Total — excludes $5,878 of accrued interest

 

$
2,155,392

 

$
5,164

 

$
2,597

 

$
7,092

 

$
14,853

 

$
2,140,539

 

 

Troubled Debt Restructurings

During the years ending December 31, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk, or a partial forgiveness of the principle balance.

Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 60 months to 30 years. Modifications involving an extension of the maturity date were for periods ranging from 6 months to 40 years.

The total of troubled debt restructurings at December 31, 2016 and 2015 was $6,474 and $8,389 respectively. The Company has allocated $508 and $863 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2016 and 2015. The Company has committed to lend additional amounts totaling $0 to customers with outstanding loans that are classified as troubled debt restructuring at December 31, 2016 and 2015.

The following tables present loans by class modified as troubled debt restructurings that occurred during the year ending December 31, 2016, 2015 and 2014:

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the year ended December 31, 2016

 

Number of Loans

 

Investment

 

Investment

 

Commercial

 

 

 

 

 

 

 

 

 

Agricultural

 
1

 

$
89

 

$
89

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

Other

 
2

 

 
298

 

 
298

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 
1

 

 
124

 

 
124

 

Home Equity

 
4

 

 
76

 

 
76

 

Total

 
8

 

$
587

 

$
587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the year ended December 31, 2015

 

Number of Loans

 

Investment

 

Investment

 

Commercial

 

 

 

 

 

 

 

 

 

Commercial and industrial

 
3

 

$
216

 

$
216

 

Commercial real estate

 

 

 

 

 

 

 

 

 

Other

 
9

 

 
1,664

 

 
1,403

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 
3

 

 
215

 

 
215

 

Home Equity

 
2

 

 
44

 

 
44

 

Total

 
17

 

$
2,139

 

$
1,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the year ended December 31, 2014

 

Number of Loans

 

Investment

 

Investment

 

Commercial real estate

 

 

 

 

 

 

 

 

 

Hotel

 
2

 

$
15,362

 

$
11,550

 

Other

 
2

 

 
1,015

 

 
1,015

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 
5

 

 
628

 

 
628

 

Home Equity

 
1

 

 
34

 

 
34

 

Consumer

 

 

 

 

 

 

 

 

 

Direct

 
1

 

 
26

 

 
26

 

Total

 
11

 

$
17,065

 

$
13,253

 

The troubled debt restructurings described above increased the allowance for loan losses by $0, $50 and $130 and resulted in charge offs of $0,  $261 and $3,849 during the years ending December 31, 2016, 2015 and 2014 respectively.

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the years ending December 31, 2016, 2015 and 2014:

 

 

 

 

 

 

 

For the year ended December 31, 2016

    

Number of Loans

    

Recorded Investment

 

Commercial real estate

 

 

 

 

 

 

Other

 
2

 

$
149

 

Residential

 

 

 

 

 

 

1-4 Family

 
2

 

 
250

 

Home equity

 
1

 

 
10

 

Total

 
5

 

$
409

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2015

    

Number of Loans

    

Recorded Investment

 

Commercial real estate

 

 

 

 

 

 

Other

 
3

 

$
863

 

Residential

 

 

 

 

 

 

1-4 Family

 
2

 

 
232

 

Home Equity

 
2

 

 
88

 

Total

 
7

 

$
1,183

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2014

    

Number of Loans

    

Recorded Investment

 

Commercial real estate

 

 

 

 

 

 

Other

 
1

 

$
1,431

 

Residential

 

 

 

 

 

 

1-4 Family

 
2

 

 
102

 

Home Equity

 
1

 

 
14

 

Total

 
4

 

$
1,547

 

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. The troubled debt restructurings that subsequently defaulted described above did not result in any increase in the allowance for loan losses or charge offs during the during the years ending December 31, 2016, 2015, and 2014 respectively.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the company’s internal underwriting policy.

The terms of certain other loans were modified during years ending December 31, 2016 and 2015 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2016 and 2015 of $12,484 and $5,973. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of the borrower to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial and commercial real estate loans individually by classifying the loans as to credit risk. This analysis includes the top 75 credit relationships on an annual basis. The Company uses the following definitions for risk ratings:

Special Mention — Loans classified as special mention have above average risk that requires management’s ongoing attention. The borrower may have demonstrated inability to generate profits or to maintain net worth, chronic delinquency and /or a demonstrated lack of willingness or capacity to meet obligations.

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 liquidation of the debt. They are classified by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Non‑accrual — Loans classified as non‑accrual are loans where the further accrual of interest is stopped because payment in full of principal and interest is not expected. In most cases, the principal and interest has been in default for a period of 90 days or more.

As of December 31, 2016 and 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Special

    

 

 

    

 

 

 

December 31, 2016

 

Pass

 

Mention

 

Substandard

 

Non-accrual

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
415,064

 

$
3,347

 

$
5,297

 

$
827

 

Agricultural

 

 
61,637

 

 
2,283

 

 

 —

 

 
1,441

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
89,297

 

 
2,209

 

 
694

 

 
1,340

 

Hotel

 

 
88,166

 

 

 —

 

 
2,983

 

 
64

 

Construction and development

 

 
74,811

 

 
3,600

 

 
2,287

 

 
31

 

Other

 

 
752,063

 

 
9,087

 

 
7,365

 

 
2,141

 

Total

 

$
1,481,038

 

$
20,526

 

$
18,626

 

$
5,844

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Special

    

 

 

    

 

 

 

December 31, 2015

 

Pass

 

Mention

 

Substandard

 

Non-accrual

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
338,436

 

$
8,324

 

$
636

 

$
555

 

Agricultural

 

 
58,253

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 
75,924

 

 
328

 

 
713

 

 
308

 

Hotel

 

 
72,193

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 
60,246

 

 

 —

 

 
2,499

 

 
113

 

Other

 

 
576,619

 

 
10,367

 

 
3,309

 

 
3,811

 

Total

 

$
1,181,671

 

$
19,019

 

$
7,157

 

$
4,787

 

 

Loans not analyzed individually as part of the above described process are classified by delinquency. These loans are primarily smaller commercial (<$250), smaller commercial real estate (<$250), residential mortgage and consumer loans. All commercial, commercial real estate, or consumer loans fully or partially secured by 1-4 family residential real estate that are 60‑89 days past due will be classified as Watch. If loans are greater than 90 days past due or commercial or commercial real estate loans on non-accrual, they will be classified as Substandard.  Consumer loans not secured by 1-4 family residential real estate that are 60‑119 days past due will be classified Substandard while loans greater than 119 days will be classified as Loss and charged off. As of December 31, 2016 and December 31, 2015, the grading of loans by category was as follows:

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

    

Performing

    

Watch

    

Substandard

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
36,502

 

$

 —

 

$
55

 

Agricultural

 

 
7,916

 

 

 —

 

 
190

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 
18,260

 

 

 —

 

 
7

 

Construction and development

 

 
21,778

 

 

 —

 

 
91

 

Other

 

 
85,254

 

 
90

 

 
1,078

 

Total

 

$
169,710

 

$
90

 

$
1,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

    

Performing

    

Watch

    

Substandard

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
32,910

 

$

 —

 

$
99

 

Agricultural

 

 
6,444

 

 

 —

 

 
7

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Construction and development

 

 
14,438

 

 
67

 

 
31

 

Farm

 

 
20,643

 

 

 —

 

 

 —

 

Other

 

 
83,193

 

 
102

 

 
980

 

Total

 

$
157,628

 

$
169

 

$
1,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

    

Performing

    

Watch

    

Substandard

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

$
603,102

 

$
2,002

 

$
3,262

 

Home equity

 

 
283,096

 

 
137

 

 
914

 

Total

 

$
886,198

 

$
2,139

 

$
4,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

    

Performing

    

Watch

    

Substandard

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

$
434,133

 

$
1,904

 

$
2,771

 

Home equity

 

 
286,686

 

 
446

 

 
1,133

 

Total

 

$
720,819

 

$
2,350

 

$
3,904

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$
61,508

 

$
4

 

$
62

 

Indirect

 

 
331

 

 

 —

 

 

 —

 

Total

 

$
61,839

 

$
4

 

$
62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$
56,179

 

$
101

 

$
32

 

Indirect

 

 
459

 

 

 —

 

 

 —

 

Total

 

$
56,638

 

$
101

 

$
32

 

 

The following table presents financing receivables purchased and/or sold during the year by portfolio segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

2016

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

Purchases

 

$
14,241

 

$
138,896

 

$
201,397

 

$
809

 

$
355,343

Sales

 

 

 

 

 

 

 

 
256,946

 

 

 

 

 
256,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

2015

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

Purchases

 

$
2,761

 

$
4,484

 

$
28,090

 

$
1,785

 

$
37,120

Sales

 

 

 

 

 

 

 

 
243,230

 

 

 

 

 
243,230

 

Purchased Credit Impaired Loans

The Company has purchased loans, for which there was, at acquisition, evidence of credit deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.  The carrying amount of these loans is as follows:

 

 

 

 

 

 

 

    

2016

 

    

2015

Commercial

$
10,817

 

$
240

1-4 Family

 
2,399

 

 
31

Outstanding Balance

$
13,216

 

$
271

 

 

 

 

 

 

Carrying amount, net of allowance of $0 and $0

$
8,954

 

$
212

 

For those purchased credit impaired loans (PCI) disclosed above, the Company did not increase the allowance for loan losses during 2016, 2015, and 2014.  No allowances for loan losses were reversed in 2016, 2015, or 2014.

Purchased credit impaired loans purchased during the years ending December 31, 2016, 2015, and 2014 for which it was probable at acquisition that all contractually required payments would not be collected are as follows:

 

 

 

 

 

 

 

 

 

 

2016

 

    

2015

    

2014

Contractually required payments receivable of

 

 

 

 

 

 

 

loans purchased during the year:

 

 

 

 

 

 

 

Commercial

$
12,907

 

$

 —

$
1,005

1-4 Family

 
3,268

 

 

 —

 
33

 

$
16,175

 

$

 —

$
1,038

 

 

 

 

 

 

 

 

Fair value of acquired loans at acquisition

$
11,560

 

$

 —

$
604