XML 29 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
LOANS AND ALLOWANCE FOR LOAN LOSSES
 12 Months Ended
Dec. 31, 2017
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,

 

 

 

2017

 

2016

 

Commercial

 

 

 

 

 

 

 

Commercial and industrial

 

$

515,122

 

$

461,092

 

Agricultural

 

 

63,869

 

 

73,467

 

Commercial Real Estate

 

 

 

 

 

 

 

Farm

 

 

106,010

 

 

111,807

 

Hotel

 

 

119,512

 

 

91,213

 

Construction and development

 

 

86,045

 

 

102,598

 

Other

 

 

1,125,908

 

 

857,078

 

Residential

 

 

 

 

 

 

 

1-4 family

 

 

681,518

 

 

608,366

 

Home equity

 

 

298,653

 

 

284,147

 

Consumer

 

 

 

 

 

 

 

Direct

 

 

66,658

 

 

61,574

 

Indirect

 

 

168

 

 

331

 

Total loans

 

 

3,063,463

 

 

2,651,673

 

Allowance for loan losses

 

 

(22,543)

 

 

(22,499)

 

Net loans

 

$

3,040,920

 

$

2,629,174

 

 

Financing receivables purchased in prior years 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, 2017 and 2016.

 

 

 

 

 

 

 

 

 

As of December 31,

 

As of December 31,

 

 

2017

 

2016

Commercial and industrial

 

$

14,414

 

$

13,875

Agricultural

 

 

887

 

 

872

Construction and development

 

 

15,177

 

 

16,634

Farm real estate

 

 

3,045

 

 

389

Hotel

 

 

10,044

 

 

2,983

Other real estate

 

 

334,990

 

 

164,505

1-4 family

 

 

254,040

 

 

206,044

Home equity

 

 

24,838

 

 

14,342

Direct

 

 

2,538

 

 

2,517

 

 

$

659,973

 

$

422,161

 

The remaining discount on the above loans was $11,824 and $7,313 at December 31, 2017 and 2016 respectively.

The Company purchased some PCI loans in 2017 related to the FCB acquisition.  These loans had a contractual balance of $10,186 with a fair value of $7,614.  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.  There were no loans classified as purchased credit impaired from 2015 purchases.

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ending December 31, 2017, 2016, and 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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

 

 

1,862

 

 

(1,496)

 

 

118

 

 

766

 

 

1,250

 

Losses charged off

 

 

(780)

 

 

(814)

 

 

(922)

 

 

(3,487)

 

 

(6,003)

 

Recoveries

 

 

497

 

 

1,033

 

 

418

 

 

2,849

 

 

4,797

 

Balance, December 31

 

$

11,233

 

$

6,429

 

$

3,861

 

$

1,020

 

$

22,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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

 

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, 2017 and 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

 

December 31, 2017

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$

2,457

 

$

862

 

$

142

 

$

 —

 

$

3,461

 

Ending Balance collectively evaluated for impairment

 

 

8,776

 

 

5,567

 

 

3,719

 

 

1,020

 

 

19,082

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total ending allowance balance

 

$

11,233

 

$

6,429

 

$

3,861

 

$

1,020

 

$

22,543

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance individually evaluated for impairment

 

$

3,461

 

$

5,737

 

$

8,640

 

$

973

 

$

18,811

 

Ending Balance collectively evaluated for impairment

 

 

575,530

 

 

1,423,353

 

 

970,273

 

 

65,853

 

 

3,035,009

 

Ending Balance acquired with deteriorated credit quality

 

 

 —

 

 

8,385

 

 

1,258

 

 

 —

 

 

9,643

 

Total ending loan balance excludes $9,095 of accrued interest

 

$

578,991

 

$

1,437,475

 

$

980,171

 

$

66,826

 

$

3,063,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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

 

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 $1,174 at December 31, 2017 and $2,697 at December 31, 2016.

Nonperforming loans were as follows:

 

 

 

 

 

 

 

 

December 31

    

2017

    

2016

 

Loans past due 90 days or more still on accrual

 

$

265

 

$

2,135

 

Troubled debt restructurings (accruing)

 

 

2,403

 

 

3,270

 

Non-accrual loans

 

 

15,895

 

 

15,808

 

Total

 

$

18,563

 

$

21,213

 

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, 2017, 2016, and 2015. Performing troubled debt restructurings at December 31, 2017, 2016, and 2015, totaling $228,  $1,925 and $2,760 were excluded as allowed by ASC 310‑40.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

Allowance

    

 

 

    

 

 

 

 

 

Unpaid

 

 

 

 

for Loan

 

Interest

 

Cash Basis

 

 

 

Principal

 

Recorded

 

Losses

 

Income

 

Interest

 

December 31, 2017

 

Balance

 

Investment

 

Allocated

 

Recognized

 

Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,936

 

$

1,902

 

$

1,632

 

$

 —

 

$

 —

 

Agricultural

 

 

1,438

 

 

1,438

 

 

825

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

709

 

 

708

 

 

433

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 

3,031

 

 

2,802

 

 

429

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

1,052

 

 

1,009

 

 

141

 

 

 —

 

 

 —

 

Home Equity

 

 

97

 

 

97

 

 

 1

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with allowance recorded

 

 

8,263

 

 

7,956

 

 

3,461

 

 

 —

 

 

 —

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

453

 

$

25

 

$

 —

 

$

172

 

$

172

 

Agricultural

 

 

96

 

 

96

 

 

 —

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

426

 

 

153

 

 

 —

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

37

 

 

37

 

 

 —

 

 

 —

 

 

 —

 

Other

 

 

2,193

 

 

1,809

 

 

 —

 

 

102

 

 

102

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

7,893

 

 

6,381

 

 

 —

 

 

46

 

 

46

 

Home Equity

 

 

1,376

 

 

1,153

 

 

 —

 

 

19

 

 

19

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

1,079

 

 

973

 

 

 —

 

 

 4

 

 

 4

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Subtotal — impaired with no allowance recorded

 

 

13,553

 

 

10,627

 

 

 —

 

 

343

 

 

343

 

Total impaired loans

 

$

21,816

 

$

18,583

 

$

3,461

 

$

343

 

$

343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

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

 

 

The following table presents the average recorded investment of impaired loans in 2017, 2016, and 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

2017

    

2016

    

2015

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,211

 

$

805

 

$

1,165

 

Agricultural

 

 

1,668

 

 

998

 

 

31

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

1,442

 

 

933

 

 

401

 

Hotel

 

 

1,783

 

 

26

 

 

2,851

 

Construction and development

 

 

651

 

 

156

 

 

53

 

Other

 

 

4,635

 

 

4,800

 

 

5,734

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

7,600

 

 

7,642

 

 

7,362

 

Home equity

 

 

1,699

 

 

2,212

 

 

2,268

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

 

816

 

 

123

 

 

130

 

Indirect

 

 

 —

 

 

 —

 

 

 1

 

Total loans

 

$

21,505

 

$

17,695

 

$

19,996

 

 

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, 2017 and 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due over

 

 

 

 

 

 

 

 

 

90 days and

 

 

 

Non-accrual

still accruing

 

 

    

December 31, 2017

    

December 31, 2016

    

December 31, 2017

    

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

    

 

 

    

 

 

    

 

 

    

 

Commercial and industrial

 

$

1,890

 

$

882

 

$

 —

 

$

 —

 

Agricultural

 

 

1,471

 

 

1,631

 

 

 —

 

 

 —

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

861

 

 

1,347

 

 

 —

 

 

 —

 

Hotel

 

 

 —

 

 

64

 

 

 —

 

 

 —

 

Construction and development

 

 

 —

 

 

122

 

 

 —

 

 

2,135

 

Other

 

 

3,722

 

 

3,219

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

6,365

 

 

7,163

 

 

265

 

 

 —

 

Home Equity

 

 

635

 

 

1,273

 

 

 —

 

 

 —

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

951

 

 

107

 

 

 —

 

 

 —

 

Indirect

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total

 

$

15,895

 

$

15,808

 

$

265

 

$

2,135

 

 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2017 and 2016 by class of loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

Greater than

    

 

 

    

 

 

 

 

 

Total

 

30-59 Days

 

60-89 Days

 

90 Days

 

Total

 

Loans Not

 

December 31, 2017

 

Loans

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Past Due

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

515,122

 

$

723

 

$

 6

 

$

1,890

 

$

2,619

 

$

512,503

 

Agricultural

 

 

63,869

 

 

34

 

 

 —

 

 

1,438

 

 

1,472

 

 

62,397

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

106,010

 

 

 4

 

 

 —

 

 

783

 

 

787

 

 

105,223

 

Hotel

 

 

119,512

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

119,512

 

Construction and development

 

 

86,045

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

86,045

 

Other

 

 

1,125,908

 

 

983

 

 

263

 

 

2,505

 

 

3,751

 

 

1,122,157

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

 

681,518

 

 

5,703

 

 

2,103

 

 

3,239

 

 

11,045

 

 

670,473

 

Home Equity

 

 

298,653

 

 

553

 

 

264

 

 

387

 

 

1,204

 

 

297,449

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

66,658

 

 

130

 

 

 —

 

 

928

 

 

1,058

 

 

65,600

 

Indirect

 

 

168

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

168

 

Total — excludes $9,095 of accrued interest

 

$

3,063,463

 

$

8,130

 

$

2,636

 

$

11,170

 

$

21,936

 

$

3,041,527

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

 

 

    

 

 

    

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

During the years ending December 31, 2017 and 2016, 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 principal 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, 2017 and 2016 was $3,845 and $6,474 respectively. The Company has allocated $405 and $508 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2017 and 2016. 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, 2017 and 2016.

The following tables present loans by class modified as troubled debt restructurings that occurred during the year ending December 31, 2017, 2016 and 2015:

 

 

 

 

 

 

 

 

 

 

 

    

 

    

Pre-Modification

    

Post-Modification

 

 

 

 

 

Outstanding Recorded

 

Outstanding Recorded

 

For the year ended December 31, 2017

 

Number of Loans

 

Investment

 

Investment

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

Other

 

 1

 

 

53

 

 

53

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 

 4

 

 

557

 

 

557

 

Total

 

 5

 

$

610

 

$

610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

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

 

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

 

Other

 

 —

 

 

 —

 

 

 —

 

Commercial real estate

 

 

 

 

 

 

 

 

 

Other

 
9

 

 

1,664

 

 

1,403

 

Home Equity

 
0

 

 

 —

 

 

 —

 

Residential

 

 

 

 

 

 

 

 

 

1-4 Family

 
3

 

 
215

 

 
215

 

Home Equity

 
2

 

 

44

 

 

44

 

Total

 

17

 

$

2,139

 

$

1,878

 

The troubled debt restructurings described above increased the allowance for loan losses by $0, $0 and $50 and resulted in charge offs of $0,  $0 and $261 during the years ending December 31, 2017, 2016 and 2015 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, 2017, 2016 and 2015:

 

 

 

 

 

 

 

For the year ended December 31, 2017

    

Number of Loans

    

Recorded Investment

 

Commercial real estate

 

 

 

 

 

 

Other

 

 4

 

$

511

 

Residential

 

 

 

 

 

 

1-4 Family

 

 2

 

 

209

 

Total

 

 6

 

$

720

 

 

 

 

 

 

 

 

 

 

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

 

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, 2017, 2016, and 2015 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, 2017 and 2016 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2017 and 2016 of $21,072 and $12,484. 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 50 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, 2017 and 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Special

    

 

 

    

 

 

 

December 31, 2017

 

Pass

 

Mention

 

Substandard

 

Non-accrual

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

468,610

 

$

3,786

 

$

2,340

 

$

1,885

 

Agricultural

 

 

53,271

 

 

1,556

 

 

369

 

 

1,438

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

Farm

 

 

85,763

 

 

3,055

 

 

1,536

 

 

857

 

Hotel

 

 

119,512

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

65,825

 

 

 —

 

 

1,613

 

 

 —

 

Other

 

 

1,003,129

 

 

23,636

 

 

14,208

 

 

3,099

 

Total

 

$

1,796,110

 

$

32,033

 

$

20,066

 

$

7,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

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 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, 2017 and December 31, 2016, the grading of loans by category was as follows:

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

    

Performing

    

Watch

    

Substandard

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

38,490

 

$

 6

 

$

 5

 

Agricultural

 

 

7,202

 

 

 —

 

 

33

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

14,795

 

 

 —

 

 

 4

 

Construction and development

 

 

18,607

 

 

 —

 

 

 —

 

Other

 

 

81,167

 

 

46

 

 

623

 

Total

 

$

160,261

 

$

52

 

$

665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

    

Performing

    

Watch

    

Substandard

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

36,502

 

$

 —

 

$

55

 

Agricultural

 

 

7,916

 

 

 —

 

 

190

 

Commercial Real Estate

 

 

 

 

 

 

 

 

 

 

Farm

 

 

18,260

 

 

 —

 

 

 7

 

Hotel

 

 

 —

 

 

 —

 

 

 —

 

Construction and development

 

 

21,778

 

 

 —

 

 

91

 

Other

 

 

85,254

 

 

90

 

 

1,078

 

Total

 

$

169,710

 

$

90

 

$

1,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

    

Performing

    

Watch

    

Substandard

 

Residential

 

 

 

 

 

 

 

 

 

 

1-4 family

 

$

676,176

 

$

2,103

 

$

3,239

 

Home equity

 

 

298,002

 

 

264

 

 

387

 

Total

 

$

974,178

 

$

2,367

 

$

3,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2017

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$

65,707

 

$

 —

 

$

951

 

Indirect

 

 

168

 

 

 —

 

 

 —

 

Total

 

$

65,875

 

$

 —

 

$

951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

    

Performing

    

Substandard

    

Loss

 

Consumer

 

 

 

 

 

 

 

 

 

 

Direct

 

$

61,508

 

$

 4

 

$

62

 

Indirect

 

 

331

 

 

 —

 

 

 —

 

Total

 

$

61,839

 

$

 4

 

$

62

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

2017

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

Purchases

 

$

12,281

 

$

304,702

 

$

109,300

 

$

1,258

 

$

427,541

Sales

 

 

 

 

 

 

 

 

243,179

 

 

 

 

 

243,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Commercial

    

 

 

    

 

 

    

 

 

2016

 

Commercial

 

Real Estate

 

Residential

 

Consumer

 

Total

Purchases

 

$

14,241

 

$

138,896

 

$

201,397

 

$

809

 

$

355,343

Sales

 

 

 

 

 

 

 

 

256,946

 

 

 

 

 

256,946

 

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:

 

 

 

 

 

 

 

    

2017

 

    

2016

Commercial

$

11,649

 

$

10,817

1-4 Family

 

1,940

 

 

2,399

Outstanding Balance

$

13,589

 

$

13,216

 

 

 

 

 

 

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

$

9,643

 

$

8,954

 

For those purchased credit impaired loans (PCI) disclosed above, the Company did not increase the allowance for loan losses during 2017, 2016, and 2015.  No allowances for loan losses were reversed in 2017, 2016, or 2015.

Accretable yield, or income to be collected is as follows:

 

 

 

 

 

 

 

 

2017

 

    

2016

Balance at January 1

$

 —

 

$

 —

New loans purchased

 

580

 

 

 —

Accretion of income

 

(249)

 

 

 —

Reclassifications from nonaccretable difference

 

 —

 

 

 —

Balance at December 31

$

331

 

$

 —

 

Purchased credit impaired loans purchased during the years ending December 31, 2017, 2016, and 2015 for which it was probable at acquisition that all contractually required payments would not be collected are as follows:

 

 

 

 

 

 

 

 

 

 

 

2017

 

    

2016

 

    

2015

Contractually required payments receivable of

 

 

 

 

 

 

 

 

loans purchased during the year:

 

 

 

 

 

 

 

 

Commercial

$

9,912

 

$

12,907

 

$

 —

1-4 Family

 

274

 

 

3,268

 

 

 —

 

$

10,186

 

$

16,175

 

$

 —

 

 

 

 

 

 

 

 

 

Fair value of acquired loans at acquisition

$

7,614

 

$

11,560

 

$

 —