ALLOWANCE FOR LOAN LOSSES

The following tables present a summary of changes in the allowance for loan losses by portfolio segment:



Year Ended December 31, 2018	Real Estate			Consumer			Commercial			Agriculture		Other		Total
Allowance for loan losses:
Beginning balance	$	31.7		$	8.7		$	30.5		$	1.2	$	—	$	72.1
Provision charged (credited) to operating expense	(0.7		)	6.8			1.9			0.6		—		8.6
Less loans charged-off	(3.7		)	(11.3		)	(4.7		)	—		—		(19.7		)
Add back recoveries of loans previously charged-off	3.7			4.5			3.6			0.2		—		12.0
Ending balance	$	31.0		$	8.7		$	31.3		$	2.0	$	—	$	73.0

Individually evaluated for impairment	$	1.3		$	—		$	5.2		$	0.3	$	—	$	6.8
Collectively evaluated for impairment	29.7			8.7			26.1			1.7		—		66.2
Ending balance	$	31.0		$	8.7		$	31.3		$	2.0	$	—	$	73.0

Total loans:
Individually evaluated for impairment	$	41.8		$	—		$	19.9		$	3.1	$	—	$	64.8
Collectively evaluated for impairment	5,791.7			1,070.2			1,290.4			251.7		1.6		8,405.6
Total loans held for investment	$	5,833.5		$	1,070.2		$	1,310.3		$	254.8	$	1.6	$	8,470.4



Year Ended December 31, 2017	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	28.6		$	7.7		$	38.1		$	1.8		$	—	$	76.2
Provision charged (credited) to operating expense	6.0			8.1			(2.9		)	(0.2		)	—		11.0
Less loans charged-off	(4.3		)	(11.3		)	(6.8		)	(0.4		)	—		(22.8		)
Add back recoveries of loans previously charged-off	1.4			4.2			2.1			—			—		7.7
Ending balance	$	31.7		$	8.7		$	30.5		$	1.2		$	—	$	72.1

Individually evaluated for impairment	$	6.2		$	—		$	4.4		$	0.2		$	—	$	10.8
Collectively evaluated for impairment	25.5			8.7			26.1			1.0			—		61.3
Ending balance	$	31.7		$	8.7		$	30.5		$	1.2		$	—	$	72.1

Total loans:
Individually evaluated for impairment	$	58.3		$	—		$	23.8		$	1.1		$	—	$	83.2
Collectively evaluated for impairment	5,118.5			1,034.4			1,191.6			135.1			4.9		7,484.5
Total loans held for investment	$	5,176.8		$	1,034.4		$	1,215.4		$	136.2		$	4.9	$	7,567.7



Year Ended December 31, 2016	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	52.3		$	5.1		$	18.8		$	0.6		$	—	$	76.8
Provision charged (credited) to operating expense	(21.7		)	8.4			21.9			1.4			—		10.0
Less loans charged-off	(5.2		)	(8.6		)	(5.8		)	(0.2		)	—		(19.8		)
Add back recoveries of loans previously charged-off	3.2			2.8			3.2			—			—		9.2
Ending balance	$	28.6		$	7.7		$	38.1		$	1.8		$	—	$	76.2

Individually evaluated for impairment	$	4.6		$	—		$	9.3		$	0.1		$	—	$	14.0
Collectively evaluated for impairment	24.0			7.7			28.8			1.7			—		62.2
Ending balance	$	28.6		$	7.7		$	38.1		$	1.8		$	—	$	76.2

Total loans:
Individually evaluated for impairment	$	68.6		$	—		$	32.4		$	3.7		$	—	$	104.7
Collectively evaluated for impairment	3,445.4			970.3			765.5			129.2			1.6		5,312.0
Total loans held for investment	$	3,514.0		$	970.3		$	797.9		$	132.9		$	1.6	$	5,416.7

The Company performs a quarterly assessment of the adequacy of its allowance for loan losses in accordance with GAAP. The methodology used to assess the adequacy is consistently applied to the Company’s loan portfolio and consists of three elements: (1) specific valuation allowances based on probable losses on impaired loans; (2) historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends; and (3) general valuation allowances determined based on changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, general economic conditions and other qualitative risk factors both internal and external to the Company.

Specific allowances are established for loans where management has determined that probability of a loss exists by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies and any relevant qualitative or economic factors impacting the loan. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, the loss factor percentages are based on a three-year loss history for the 2018 period and on a one-year loss history for the comparable periods. The loan loss rates for 2018 also incorporate the available loss history data from BOTC prior to the merger date to represent a consolidated institutional loss rate for both originated and acquired portfolios. General valuation allowances are determined by evaluating, on a quarterly basis, changes in the nature and volume of the loan portfolio, overall portfolio quality, industry concentrations, current economic and regulatory conditions and the estimated impact of these factors on historical loss rates.

An allowance for loan losses is established for loans acquired deemed credit impaired and for which the Company projects a decrease in the expected cash flows in periods subsequent to the acquisition of such loans. As of December 31, 2018 and 2017, the Company’s allowance for loan losses included $0.8 million and $1.0 million, respectively, related to loans acquired credit impaired.