XML 22 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
LOANS AND ALLOWANCE
 6 Months Ended
Jun. 30, 2017
LOANS AND ALLOWANCE  
LOANS AND ALLOWANCE

NOTE 4 - LOANS AND ALLOWANCE

 

Loans were as follows:

 

 

 

 

 

 

 

 

 

 

    

June 30,

    

December 31,

 

 

 

2017

 

2016

 

Commercial

 

 

 

 

 

 

 

Commercial and industrial

 

$

492,942

 

$

461,092

 

Agricultural

 

 

62,687

 

 

73,467

 

Commercial Real Estate

 

 

 

 

 

 

 

Farm

 

 

101,859

 

 

111,807

 

Hotel

 

 

117,027

 

 

91,213

 

Construction and development

 

 

123,521

 

 

102,598

 

Other

 

 

1,081,508

 

 

857,078

 

Residential

 

 

 

 

 

 

 

1-4 family

 

 

684,187

 

 

608,366

 

Home equity

 

 

299,728

 

 

284,147

 

Consumer

 

 

 

 

 

 

 

Direct

 

 

64,958

 

 

61,574

 

Indirect

 

 

269

 

 

331

 

Total loans

 

 

3,028,686

 

 

2,651,673

 

Allowance for loan losses

 

 

(22,306)

 

 

(22,499)

 

Net loans

 

$

3,006,380

 

$

2,629,174

 

 

The Company purchased some financing receivables in the last several years.  The investment by portfolio class at June 30, 2017 and December 31, 2016 is as follows.  These loans are included in the above table and all other tables below at the recorded investment amount. 

 

 

 

 

 

 

 

 

 

 

 

    

June 30,

    

December 31,

 

 

 

2017

 

2016

 

Commercial and industrial

 

$

22,074

 

$

13,875

 

Agricultural

 

 

848

 

 

872

 

Construction and development

 

 

41,013

 

 

16,634

 

Farm real estate

 

 

1,944

 

 

389

 

Hotel

 

 

13,201

 

 

2,983

 

Other real estate

 

 

391,582

 

 

164,505

 

1-4 family

 

 

271,059

 

 

206,044

 

Home equity

 

 

28,880

 

 

14,342

 

Direct

 

 

3,424

 

 

2,517

 

 

 

$

774,025

 

$

422,161

 

 

The remaining accretable discount on the above loans was $13,513 and $7,313 at June 30, 2017 and December 31, 2016 respectively, with the non-accretable discount being $5,178 and $4,262 at June 30, 2017 and December 31, 2016.

 

Activity in the allowance for loan losses for the three months ended June 30, 2017 and 2016 was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2017

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, April 1

 

$

9,220

 

$

7,937

 

$

3,987

 

$

1,225

 

$

22,369

 

Provision charged to expense

 

 

(107)

 

 

(89)

 

 

260

 

 

36

 

 

100

 

Losses charged off

 

 

(123)

 

 

(252)

 

 

(270)

 

 

(765)

 

 

(1,410)

 

Recoveries

 

 

358

 

 

270

 

 

44

 

 

575

 

 

1,247

 

Balance, June 30

 

$

9,348

 

$

7,866

 

$

4,021

 

$

1,071

 

$

22,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2016

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, April 1

 

$

5,989

 

$

9,668

 

$

4,553

 

$

869

 

$

21,079

 

Provision charged to expense

 

 

937

 

 

(1,502)

 

 

387

 

 

383

 

 

205

 

Losses charged off

 

 

(65)

 

 

(78)

 

 

(342)

 

 

(843)

 

 

(1,328)

 

Recoveries

 

 

79

 

 

692

 

 

79

 

 

662

 

 

1,512

 

Balance, June 30

 

$

6,940

 

$

8,780

 

$

4,677

 

$

1,071

 

$

21,468

 

 

Activity in the allowance for loan losses for the six months ended June 30, 2017 and 2016 was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

2017

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1

 

$

9,654

 

$

7,706

 

$

4,247

 

$

892

 

$

22,499

 

Provision charged to expense

 

 

(137)

 

 

(249)

 

 

11

 

 

475

 

 

100

 

Losses charged off

 

 

(597)

 

 

(457)

 

 

(453)

 

 

(1,651)

 

 

(3,158)

 

Recoveries

 

 

428

 

 

866

 

 

216

 

 

1,355

 

 

2,865

 

Balance, June 30

 

$

9,348

 

$

7,866

 

$

4,021

 

$

1,071

 

$

22,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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

 

 

827

 

 

(2,089)

 

 

1,471

 

 

496

 

 

705

 

Losses charged off

 

 

(627)

 

 

(581)

 

 

(845)

 

 

(1,717)

 

 

(3,770)

 

Recoveries

 

 

229

 

 

748

 

 

192

 

 

1,344

 

 

2,513

 

Balance, June 30

 

$

6,940

 

$

8,780

 

$

4,677

 

$

1,071

 

$

21,468

 

 

 

The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method at June 30, 2017 and December 31, 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

June 30, 2017

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$

769

 

$

1,019

 

$

144

 

$

 —

 

$

1,932

 

Ending Balance collectively evaluated for impairment

 

 

8,579

 

 

6,612

 

 

3,877

 

 

1,071

 

 

20,139

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 

235

 

 

 —

 

 

 —

 

 

235

 

Total ending allowance balance

 

$

9,348

 

$

7,866

 

$

4,021

 

$

1,071

 

$

22,306

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$

2,124

 

$

6,163

 

$

7,997

 

$

986

 

$

17,270

 

Ending Balance collectively evaluated for impairment

 

 

553,505

 

 

1,404,920

 

 

974,271

 

 

64,241

 

 

2,996,937

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 

12,832

 

 

1,647

 

 

 —

 

 

14,479

 

Total ending loan balance excludes $8,060 of accrued interest

 

$

555,629

 

$

1,423,915

 

$

983,915

 

$

65,227

 

$

3,028,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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

 

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

 

 

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 $1,558 at June 30, 2017 and $2,697 at December 31, 2016.

 

In connection with the previous acquisitions, the Company acquired $25,417 of purchased credit impaired loans with $6,404 of non accretable yield and no accretable yield.  The Company provided an additional allowance for loan losses of $235 on these loans at June 30, 2017.

 

The recorded investment in loans excludes accrued interest receivable due to immateriality.

 

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2017 and December 31, 2016.  Performing troubled debt restructurings totaling $393 and $1,925 were excluded as allowed by ASC 310-40.

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

    

 

 

Unpaid

 

 

 

 

for Loan

 

 

 

Principal

 

Recorded

 

Losses

 

June 30, 2017

 

Balance

 

Investment

 

Allocated

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

179

 

$

142

 

$

68

 

Agricultural

 

 

1,488

 

 

1,488

 

 

701

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

1,347

 

 

1,345

 

 

550

 

Hotel

 

 

4,196

 

 

2,950

 

 

201

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 

1,858

 

 

1,752

 

 

503

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

1,071

 

 

1,026

 

 

143

 

Home Equity

 

 

101

 

 

101

 

 

 1

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 —

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with allowance recorded

 

 

10,240

 

 

8,804

 

 

2,167

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

850

 

$

350

 

$

 —

 

Agricultural

 

 

144

 

 

144

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

577

 

 

314

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

1,758

 

 

1,454

 

 

 —

 

Other

 

 

5,077

 

 

2,951

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

7,840

 

 

6,172

 

 

 —

 

Home Equity

 

 

1,871

 

 

1,569

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

1,088

 

 

986

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with no allowance recorded

 

 

19,205

 

 

13,940

 

 

 —

 

Total impaired loans

 

$

29,445

 

$

22,744

 

$

2,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

 

 

 

Unpaid

 

 

 

 

for Loan

 

 

 

Principal

 

Recorded

 

Losses

 

December 31, 2016

 

Balance

 

Investment

 

Allocated

 

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

 

$

 —

 

Agricultural

 

 

254

 

 

253

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

506

 

 

241

 

 

 —

 

Hotel

 

 

64

 

 

64

 

 

 —

 

Construction and development

 

 

239

 

 

162

 

 

 —

 

Other

 

 

3,558

 

 

2,652

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

9,215

 

 

7,432

 

 

 —

 

Home Equity

 

 

2,233

 

 

1,875

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

139

 

 

130

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with no allowance recorded

 

 

17,236

 

 

13,131

 

 

 —

 

Total impaired loans

 

$

23,508

 

$

19,272

 

$

1,800

 

 

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the three months ending June 30, 2017 and June 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40.

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Average

    

Interest

    

Cash Basis

 

 

 

Balance

 

Income

 

Income

 

Three months ended  June 30, 2017

 

Impaired Loans

 

Recognized

 

Recognized

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

464

 

 

30

 

 

30

 

Agricultural

 

 

1,750

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

1,675

 

 

 —

 

 

 —

 

Hotel

 

 

2,966

 

 

 —

 

 

 —

 

Construction and development

 

 

1,509

 

 

 —

 

 

 —

 

Other

 

 

4,319

 

 

35

 

 

35

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

7,512

 

 

 5

 

 

 5

 

Home equity

 

 

1,842

 

 

 5

 

 

 5

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

1,009

 

 

 1

 

 

 1

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

Total loans

 

$

23,046

 

$

76

 

$

76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Average

    

Interest

    

Cash Basis

 

 

 

Balance

 

Income

 

Income

 

Three months ended  June 30, 2016

 

Impaired Loans

 

Recognized

 

Recognized

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

756

 

$

18

 

$

18

 

Agricultural

 

 

827

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

829

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

175

 

 

 —

 

 

 —

 

Other

 

 

4,760

 

 

91

 

 

91

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

7,467

 

 

17

 

 

17

 

Home equity

 

 

2,317

 

 

12

 

 

12

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

124

 

 

 2

 

 

 2

 

Indirect

 

 

 1

 

 

 —

 

 

 —

 

Total loans

 

$

17,256

 

$

140

 

$

140

 

 

 

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the six months ending June 30, 2017 and June 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

Interest

 

Cash Basis

 

 

 

Balance

 

Income

 

Income

 

Six months ended June 30, 2017

    

Impaired Loans

    

Recognized

    

Recognized

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

646

 

$

62

 

 

62

 

Agricultural

 

 

1,731

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

1,565

 

 

 —

 

 

 —

 

Hotel

 

 

1,999

 

 

 —

 

 

 —

 

Construction and development

 

 

1,060

 

 

 —

 

 

 —

 

Other

 

 

4,348

 

 

74

 

 

74

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

7,834

 

 

 9

 

 

 9

 

Home equity

 

 

1,888

 

 

10

 

 

10

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

716

 

 

 2

 

 

 2

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

Total loans

 

$

21,787

 

$

157

 

$

157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Average

    

Interest

    

Cash Basis

 

 

 

Balance

 

Income

 

Income

 

Six months ended June 30, 2016

 

Impaired Loans

 

Recognized

 

Recognized

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

772

 

$

31

 

$

31

 

Agricultural

 

 

554

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

656

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

178

 

 

 —

 

 

 —

 

Other

 

 

5,058

 

 

117

 

 

117

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

7,211

 

 

27

 

 

27

 

Home equity

 

 

2,363

 

 

16

 

 

16

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

121

 

 

 6

 

 

 6

 

Indirect

 

 

 1

 

 

 1

 

 

 1

 

Total loans

 

$

16,914

 

$

198

 

$

198

 

 

 

 

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2017 and December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due over

 

 

 

 

 

 

 

 

 

90 days and

 

 

 

Non-accrual

still accruing

 

 

    

June 30, 2017

    

December 31, 2016

    

June 30, 2017

    

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

    

 

 

    

 

 

    

 

 

    

 

Commercial and industrial

 

$

490

 

$

882

 

$

 —

 

$

 —

 

Agricultural

 

 

1,569

 

 

1,631

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

1,659

 

 

1,347

 

 

 —

 

 

 —

 

Hotel

 

 

2,950

 

 

64

 

 

 —

 

 

 —

 

Construction and development

 

 

1,416

 

 

122

 

 

 —

 

 

2,135

 

Other

 

 

3,543

 

 

3,219

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

5,854

 

 

7,163

 

 

 —

 

 

 —

 

Home Equity

 

 

992

 

 

1,273

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

963

 

 

107

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total

 

$

19,436

 

$

15,808

 

$

 —

 

$

2,135

 

 

Included in the above non-accrual loans at June 30, 2017 and December 31, 2016 are $7,290 and $3,564 of loans from the Cheviot and FCB Bancorp acquisitions.

 

The following tables present the aging of the recorded investment in past due loans as of June 30, 2017 and December 31, 2016 by class of loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

Greater than

    

 

 

    

 

 

 

 

 

Total

 

30-59 Days

 

60-89 Days

 

90 Days

 

Total

 

Loans Not

 

June 30, 2017

 

Loans

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

492,942

 

$

56

 

$

 —

 

$

174

 

$

230

 

$

492,712

 

Agricultural

 

 

62,687

 

 

15

 

 

15

 

 

1,548

 

 

1,578

 

 

61,109

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

101,859

 

 

 6

 

 

22

 

 

1,539

 

 

1,567

 

 

100,292

 

Hotel

 

 

117,027

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

117,027

 

Construction and development

 

 

123,521

 

 

 —

 

 

 —

 

 

1,416

 

 

1,416

 

 

122,105

 

Other

 

 

1,081,508

 

 

817

 

 

224

 

 

2,080

 

 

3,121

 

 

1,078,387

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

684,187

 

 

911

 

 

2,102

 

 

2,897

 

 

5,910

 

 

678,277

 

Home Equity

 

 

299,728

 

 

421

 

 

214

 

 

519

 

 

1,154

 

 

298,574

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

64,958

 

 

104

 

 

20

 

 

952

 

 

1,076

 

 

63,882

 

Indirect

 

 

269

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

269

 

Total — excludes $8,060 of accrued interest

 

$

3,028,686

 

$

2,330

 

$

2,597

 

$

11,125

 

$

16,052

 

$

3,012,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

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

 

 

Troubled Debt Restructurings

 

From time to time, the terms of certain loans are modified as troubled debt restructurings. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk.

 

The total of troubled debt restructurings at June 30, 2017 and December 31, 2016 was $4,346 and $6,474, respectively. The Company has allocated $454 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2017. The Company has committed to lend additional amounts totaling $0 to customers with outstanding loans that are classified as troubled debt restructurings. At December 31, 2016, the comparable numbers were $508 of specific reserves and $0 of commitments.

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending June 30, 2016  There were no loans classified as troubled debt restructurings during the three month period ending June 30, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the three months ended June 30, 2016

 

Number of Loans

 

Investment

 

Investment

 

Commercial

 

 

 

 

 

 

 

 

 

Agricultural

 

 1

 

$

89

 

$

89

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 

 1

 

 

124

 

 

124

 

Total

 

 2

 

$

213

 

$

213

 

 

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the six month period ending June 30, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the six months ended June 30, 2017

 

Number of Loans

 

Investment

 

Investment

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

Other

 

 1

 

 

53

 

 

53

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 

 1

 

 

330

 

 

330

 

Total

 

 2

 

$

383

 

$

383

 

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the six month period ending June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the six months ended June 30, 2016

 

Number of Loans

 

Investment

 

Investment

 

Commercial

 

 

 

 

 

 

 

 

 

Agricultural

 

 1

 

$

89

 

$

89

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 

 1

 

 

124

 

 

124

 

Home Equity

 
4

 

 

76

 

 

76

 

Total

 

 6

 

$

289

 

$

289

 

 

 

 

 

 

 

 

 

 

 

 

There were no troubled debt restructurings where there was a payment default within twelve months following the modification during the three and six month periods ending June 30, 2017.  The following table presents loans where there was a payment default within twelve months following the modification during both the three and six month periods ending June 30, 2016.

 

 

 

 

 

 

 

 

For the three and six months ended June 30, 2016

    

Number of Loans

    

Recorded Investment

 

Commercial real estate

 

 

 

 

 

 

Other

 

 1

 

$

125

 

Residential

 

 

 

 

 

 

1-4 Family

 

 1

 

 

146

 

Total

 

 2

 

$

271

 

 

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 increase the allowance for loan losses or result in any charge offs during the three month periods ending June 30, 2017 and 2016, 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 the three month periods ending June 30, 2017 and 2016 that did not meet the definition of a troubled debt restructuring. These modified loans had a total recorded investment of $3,132 and $1,906 for the three month period ending June 30, 2017 and 2016 respectively.  These modified loans had a total recorded investment of $8,300 and $2,889 for the six month period ending June 30, 2017 and 2016 respectively.  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 significant.

 

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 credit relationships with an outstanding balance greater than $1 million on an annual basis. Only credit relationships over $250 are risk graded.  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 the 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 June 30, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Special

    

 

 

    

 

 

 

June 30, 2017

 

Pass

 

Mention

 

Substandard

 

Non-accrual

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

444,240

 

$

3,805

 

$

4,112

 

$

440

 

Agricultural

 

 

52,895

 

 

532

 

 

287

 

 

1,488

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

78,852

 

 

2,550

 

 

2,376

 

 

1,508

 

Hotel

 

 

114,077

 

 

 —

 

 

 —

 

 

2,950

 

Construction and development

 

 

93,126

 

 

4,467

 

 

56

 

 

1,416

 

Other

 

 

923,352

 

 

44,842

 

 

12,020

 

 

2,904

 

Total

 

$

1,706,542

 

$

56,196

 

$

18,851

 

$

10,706

 

 

At December 31, 2016, the risk category of loans by class of loans was 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

 

 

Loans not analyzed individually as part of the above described process are classified by delinquency. These loans are primarily smaller (<$250) commercial, smaller commercial real estate (<$250), residential mortgage and consumer loans. All commercial, commercial real estate, and consumer loans fully or partially secured by 1-4  family residential real estate that are 60-89 days will be classified as Watch. If loans are greater than 90 days past due, they will be classified as Substandard. Smaller commercial and commercial real estate loans on non-accrual are included in the non-accrual tables above.  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 are subsequently charged off. As of June 30, 2017 and December 31, 2016, the grading of loans by category of loans is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

    

Performing

    

Watch

    

Substandard

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

40,295

 

$

 —

 

$

50

 

Agricultural

 

 

7,389

 

 

15

 

 

81

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

16,422

 

 

 —

 

 

151

 

Construction and development

 

 

24,456

 

 

 —

 

 

 —

 

Other

 

 

97,723

 

 

28

 

 

639

 

Total

 

$

186,285

 

$

43

 

$

921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

    

Performing

    

Watch

    

Substandard

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

$

679,188

 

$

2,102

 

$

2,897

 

Home equity

 

 

298,995

 

 

214

 

 

519

 

Total

 

$

978,183

 

$

2,316

 

$

3,416

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$

63,986

 

$

28

 

$

944

 

Indirect

 

 

269

 

 

 —

 

 

 —

 

Total

 

$

64,255

 

$

28

 

$

944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2016

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$

61,508

 

$

 4

 

$

62

 

Indirect

 

 

331

 

 

 —

 

 

 —

 

Total

 

$

61,839

 

$

 4

 

$

62

 

 

 

 

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:

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

    

2017

 

    

2016

Commercial

$

17,287

 

$

10,817

1-4 Family

 

2,450

 

 

2,399

Outstanding Balance

$

19,737

 

$

13,216

 

 

 

 

 

 

Carrying amount, net of allowance of $235 and $0

$

14,244

 

$

8,954

 

 

For those purchased credit impaired loans (PCI) disclosed above, the Company increased the allowance for loan losses by $0 and $0 for the second quarter of 2017 and 2016 respectively and $235 and $0 during the six month period ending June 30, 2017 and 2016.