Loans

The following table presents loans by class as of the dates indicated:



	June 30, 2016		December 31, 2015
Real estate loans:
Commercial	$	1,816,813	$	1,793,258
Construction:
Land acquisition & development	218,650		224,066
Residential	113,944		111,763
Commercial	117,643		94,890
Total construction loans	450,237		430,719
Residential	1,030,593		1,032,851
Agricultural	166,872		156,234
Total real estate loans	3,464,515		3,413,062
Consumer:
Indirect consumer	687,768		622,529
Other consumer	153,185		153,717
Credit card	66,221		68,107
Total consumer loans	907,174		844,353
Commercial	824,962		792,416
Agricultural	139,892		142,151
Other, including overdrafts	3,646		1,339
Loans held for investment	5,340,189		5,193,321
Mortgage loans held for sale	73,053		52,875
Total loans	$	5,413,242	$	5,246,196

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the dates indicated:



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of June 30, 2016	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	2,707	$	336	$	287	$	3,330	$	1,784,134	$	29,349	$	1,816,813
Construction:
Land acquisition & development	305		205		69		579		212,210		5,861		218,650
Residential	619		—		—		619		113,053		272		113,944
Commercial	—		—		—		—		115,975		1,668		117,643
Total construction loans	924		205		69		1,198		441,238		7,801		450,237
Residential	4,526		981		2,138		7,645		1,020,251		2,697		1,030,593
Agricultural	224		103		112		439		160,970		5,463		166,872
Total real estate loans	8,381		1,625		2,606		12,612		3,406,593		45,310		3,464,515
Consumer:
Indirect consumer	5,503		1,823		304		7,630		679,558		580		687,768
Other consumer	823		170		35		1,028		151,764		393		153,185
Credit card	488		340		509		1,337		64,884		—		66,221
Total consumer loans	6,814		2,333		848		9,995		896,206		973		907,174
Commercial	4,268		806		592		5,666		792,012		27,284		824,962
Agricultural	578		243		97		918		138,230		744		139,892
Other, including overdrafts	—		—		311		311		3,335		—		3,646
Loans held for investment	20,041		5,007		4,454		29,502		5,236,376		74,311		5,340,189
Mortgage loans originated for sale	—		—		—		—		73,053		—		73,053
Total loans	$	20,041	$	5,007	$	4,454	$	29,502	$	5,309,429	$	74,311	$	5,413,242



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2015	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	6,051	$	724	$	418	$	7,193	$	1,762,294	$	23,771	$	1,793,258
Construction:
Land acquisition & development	3,190		163		1,325		4,678		212,757		6,631		224,066
Residential	1,288		—		—		1,288		110,182		293		111,763
Commercial	3,232		—		—		3,232		90,703		955		94,890
Total construction loans	7,710		163		1,325		9,198		413,642		7,879		430,719
Residential	5,991		1,196		2,063		9,250		1,018,359		5,242		1,032,851
Agricultural	176		17		—		193		150,686		5,355		156,234
Total real estate loans	19,928		2,100		3,806		25,834		3,344,981		42,247		3,413,062
Consumer:
Indirect consumer	6,675		1,089		210		7,974		614,029		526		622,529
Other consumer	1,312		331		34		1,677		151,381		659		153,717
Credit card	533		317		477		1,327		66,768		12		68,107
Total consumer loans	8,520		1,737		721		10,978		832,178		1,197		844,353
Commercial	8,493		1,060		699		10,252		759,851		22,313		792,416
Agricultural	879		152		62		1,093		140,430		628		142,151
Other, including overdrafts	—		—		314		314		1,025		—		1,339
Loans held for investment	37,820		5,049		5,602		48,471		5,078,465		66,385		5,193,321
Mortgage loans originated for sale	—		—		—		—		52,875		—		52,875
Total loans	$	37,820	$	5,049	$	5,602	$	48,471	$	5,131,340	$	66,385	$	5,246,196

Loans from business combinations included in the tables above include certain loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected.

The following table displays the outstanding unpaid principal balance, accrued interest receivable and accrual status of loans acquired with credit impairment as of June 30, 2016 and 2015:



As of June 30,	2016		2015

Outstanding balance	$	31,979	$	35,555

Carrying value
Loans on accrual status	20,140		22,293
Total carrying value	$	20,140	$	22,293

The following table summarizes changes in the accretable yield for loans acquired credit impaired for the three and six months ended June 30, 2016 and 2015:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015

Beginning balance	$	6,678		$	6,980		$	6,713		$	5,781
Accretion income	(615		)	(807		)	(1,229		)	(1,355		)
Reductions due to exit events	(158		)	—			(305		)	(396		)
Reclassifications from nonaccretable differences	—			1,309			726			3,452
Ending balance	$	5,905		$	7,482		$	5,905		$	7,482

Acquired loans that met the criteria for nonaccrual of interest prior to acquisition were considered performing upon acquisition. If interest on non-accrual loans had been accrued, such income would have been approximately $821 and $875 for the three months ended June 30, 2016 and 2015, respectively, and approximately $1,690 and $1,613 for the six months ended June 30, 2016 and 2015 respectively.

The Company considers impaired loans to include all originated and acquired loans, except consumer loans, that are risk rated as doubtful, or have been placed on non-accrual status or renegotiated in troubled debt restructurings. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:



As of June 30, 2016	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	57,833	$	22,624	$	22,740	$	45,364	$	6,273
Construction:
Land acquisition & development	13,358		5,267		1,692		6,959		898
Residential	981		272		—		272		—
Commercial	2,037		324		1,464		1,788		872
Total construction loans	16,376		5,863		3,156		9,019		1,770
Residential	5,399		2,835		1,131		3,966		134
Agricultural	6,441		5,662		193		5,855		7
Total real estate loans	86,049		36,984		27,220		64,204		8,184
Commercial	38,622		13,466		20,040		33,506		10,588
Agricultural	961		294		480		774		81
Total	$	125,632	$	50,744	$	47,740	$	98,484	$	18,853



As of December 31, 2015	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	58,179	$	27,882	$	17,614	$	45,496	$	3,401
Construction:
Land acquisition & development	15,503		7,245		778		8,023		282
Residential	992		293		—		293		—
Commercial	1,264		340		739		1,079		739
Total construction loans	17,759		7,878		1,517		9,395		1,021
Residential	7,073		3,547		2,317		5,864		367
Agricultural	6,434		5,563		198		5,761		5
Total real estate loans	89,445		44,870		21,646		66,516		4,794
Commercial	29,593		10,744		13,727		24,471		6,487
Agricultural	1,349		622		356		978		294
Total	$	120,387	$	56,236	$	35,729	$	91,965	$	11,575

The following table presents the average recorded investment in and income recognized on impaired loans for the periods indicated:



	Three Months Ended June 30,
	2016				2015
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized


Real estate:
Commercial	$	34,576	$	105	$	39,513	$	211
Construction:
Land acquisition & development	7,096		12		8,664		12
Residential	277		—		338		—
Commercial	1,421		2		3,492		—
Total construction loans	8,794		14		12,494		12
Residential	3,067		2		3,014		1
Agricultural	5,857		—		8,572		13
Total real estate loans	52,294		121		63,593		237
Commercial	28,074		41		21,841		112
Agricultural	753		—		1,004		8
Total	$	81,121	$	162	$	86,438	$	357



	Six Months Ended June 30,
	2016				2015
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized


Real estate:
Commercial	$	36,342	$	141	$	40,652	$	361
Construction:
Land acquisition & development	7,277		19		8,720		22
Residential	282		—		302		—
Commercial	1,433		2		3,133		2
Total construction loans	8,992		21		12,155		24
Residential	4,138		3		2,719		2
Agricultural	5,671		1		8,666		35
Total real estate loans	55,143		166		64,192		422
Commercial	28,133		56		17,874		120
Agricultural	846		—		857		13
Total	$	84,122	$	222	$	82,923	$	555

The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $964 and $1,045 for the three months ended June 30, 2016 and 2015, respectively, and approximately $2,020 and $2,011 for the six months ended June 30, 2016 and 2015, respectively.

Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.

Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume.

The Company had loans renegotiated in troubled debt restructurings of $44,957 as of June 30, 2016, of which $28,549 were included in non-accrual loans and $16,408 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $40,330 as of December 31, 2015, of which $24,911 were included in non-accrual loans and $15,419 were on accrual status.

The following table presents information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2016:



	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended June 30, 2016	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Commercial real estate	4	$	113	$	121	$	—	$	250	$	484
Commercial	10	4,240		947		46		2,805		8,038
Total loans restructured during period	14	$	4,353	$	1,068	$	46	$	3,055	$	8,522




	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Six Months Ended June 30, 2016	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Commercial real estate	7	$	689	$	325	$	—	$	250	$	1,264
Commercial	10	4,240		947		46		2,805		8,038
Total loans restructured during period	17	$	4,929	$	1,272	$	46	$	3,055	$	9,302
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories.

For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three and six months ended June 30, 2016 or 2015.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the three and six months ended June 30, 2016. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.



	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	Number of Notes	Balance		Number of Notes	Balance
Commercial real estate	—	$	—	1	$	203
Total	—	$	—	1	$	203

At June 30, 2016, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a substandard loan is not currently sufficient, collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

Company management undertakes the same process for assigning risk ratings to acquired loans as it does for originated loans. Acquired loans rated as substandard or lower or that were on non-accrual status or designated as troubled debt restructurings at the time of acquisition are deemed to be acquired credit impaired loans accounted for under ASC Topic 310-30, regardless of whether they are classified as performing or non-performing loans.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:



As of June 30, 2016	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	73,383	$	87,756	$	18,351	$	179,490
Construction:
Land acquisition & development	12,843		9,462		1,709		24,014
Residential	1,835		754		—		2,589
Commercial	—		4,104		1,481		5,585
Total construction loans	14,678		14,320		3,190		32,188
Residential	6,885		9,862		517		17,264
Agricultural	6,459		21,756		—		28,215
Total real estate loans	101,405		133,694		22,058		257,157
Consumer:
Indirect consumer	760		1,159		130		2,049
Other consumer	1,006		776		192		1,974
Total consumer loans	1,766		1,935		322		4,023
Commercial	33,934		33,771		18,435		86,140
Agricultural	5,455		6,621		529		12,605
Total	$	142,560	$	176,021	$	41,344	$	359,925



As of December 31, 2015	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	61,787	$	84,556	$	10,609	$	156,952
Construction:
Land acquisition & development	16,593		12,482		591		29,666
Residential	1,640		1,886		—		3,526
Commercial	166		323		756		1,245
Total construction loans	18,399		14,691		1,347		34,437
Residential	4,453		9,661		2,540		16,654
Agricultural	6,114		16,529		—		22,643
Total real estate loans	90,753		125,437		14,496		230,686
Consumer:
Indirect consumer	644		1,131		154		1,929
Other consumer	651		1,130		198		1,979
Total consumer loans	1,295		2,261		352		3,908
Commercial	32,975		27,982		15,085		76,042
Agricultural	2,247		7,105		417		9,769
Total	$	127,270	$	162,785	$	30,350	$	320,405

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures.

Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.