Loans (Tables)

3 Months Ended

Mar. 31, 2020

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



	March 31, 2020			December 31, 2019
Real estate loans:
Commercial*	$	3,543.4		$	3,487.8
Construction loans:
Land acquisition & development	290.5			302.1
Residential	228.4			244.1
Commercial	459.4			431.5
Total construction loans	978.3			977.7
Residential*	1,231.0			1,246.1
Agricultural	224.6			226.6
Total real estate loans	5,977.3			5,938.2
Consumer loans:
Indirect	774.6			784.6
Direct and advance lines	175.0			179.0
Credit card	75.9			81.6
Total consumer loans	1,025.5			1,045.2
Commercial*	1,660.0			1,673.7
Agricultural	257.9			279.1
Other, including overdrafts	3.7			—
Net deferred loan fees and costs	(6.4		)	(5.5		)
Loans held for investment	8,918.0			8,930.7
Mortgage loans held for sale	94.4			100.9
Total loans	9,012.4			9,031.6
Allowance for credit losses	(129.1		)	(73.0		)
Total loans, net	$	8,883.3		$	8,958.6

*In conjunction with the adoption of ASC 326, the Company reclassified certain 2019 amounts in our multi-family loan portfolio from residential real estate to commercial real estate. Additionally, we reclassified certain 2019 amounts in our commercial 1-4 family and commercial home equity lines of credit from commercial real estate to commercial to conform 2019 amounts to the March 31, 2020 presentation. These reclassifications did not change previously reported total loans.

Schedule of Allowance for Loan Losses by Portfolio Segment

The following table represents, by loan portfolio segment, the activity in the allowance for credit losses for loans held for investment:



Three Months Ended March 31, 2020	Beginning Balance, Prior to Adoption of ASC 326		Impact of Adopting ASC 326			Provision for Credit Loss Expense			Loans Charged-Off			Recoveries Collected		Ending Balance
Allowance for credit losses⁽¹⁾
Real estate:
Commercial real estate:
Non-owner occupied	$	8.8	$	4.9		$	2.0		$	—		$	—	$	15.7
Owner occupied	10.0		3.5			2.2			—			—		15.7
Multi-family	0.7		6.9			0.5			—			—		8.1
Total commercial real estate	19.5		15.3			4.7			—			—		39.5
Construction:
Land acquisition & development	1.9		(0.1		)	0.1			(0.5		)	—		1.4
Residential construction	1.5		(0.9		)	0.5			—			—		1.1
Commercial construction	2.7		1.3			2.1			—			—		6.1
Total construction	6.1		0.3			2.7			(0.5		)	—		8.6
Residential real estate:
Residential 1-4 family	1.8		10.6			0.5			—			—		12.9
Home equity and HELOC	1.0		0.5			(0.1		)	—			—		1.4
Total residential real estate	2.8		11.1			0.4			—			—		14.3
Agricultural real estate	0.5		1.8			0.3			—			—		2.6
Total real estate	28.9		28.5			8.1			(0.5		)	—		65.0
Consumer:
Indirect	4.5		8.8			3.9			(1.2		)	0.7		16.7
Direct and advance lines	2.9		3.0			0.4			(1.0		)	0.2		5.5
Credit card	2.5		0.3			0.4			(0.8		)	0.2		2.6
Total consumer	9.9		12.1			4.7			(3.0		)	1.1		24.8
Commercial:
Commercial and floor plans	25.5		(5.1		)	13.5			(0.8		)	0.4		33.5
Commercial purpose secured by 1-4 family	5.9		(3.8		)	2.4			(0.1		)	—		4.4
Credit card	1.2		(1.1		)	0.4			(0.2		)	—		0.3
Total commercial	32.6		(10.0		)	16.3			(1.1		)	0.4		38.2
Agricultural:
Agricultural	1.6		(0.6		)	0.1			—			—		1.1
Total agricultural	1.6		(0.6		)	0.1			—			—		1.1
Total allowance for credit losses	$	73.0	$	30.0		$	29.2		$	(4.6	)	$	1.5	$	129.1

⁽¹⁾ Amounts presented above are exclusive of the allowance for credit losses related to unfunded commitments which are included in “Note 11 - Financial Instruments with Off-Balance Sheet Risk” included in this report.

The following table represents activity in the allowance for credit losses for loans held for investment under historical GAAP:



Three Months Ended March 31, 2019	Beginning Balance		Provision for Credit Loss Expense			Loans Charged-Off			Recoveries Collected		Ending Balance
Allowance for credit losses
Real estate	$	31.0	$	(1.7	)	$	(2.1	)	$	0.2	$	27.4
Consumer	8.7		2.0			(3.0		)	1.1		8.8
Commercial	31.3		3.6			(0.8		)	0.4		34.5
Agricultural	2.0		(0.2		)	(0.1		)	—		1.7
Total allowance for credit losses	$	73.0	$	3.7		$	(6.0	)	$	1.7	$	72.4

Schedule of Recorded Investment in Impaired Loans

The following tables present the amortized cost basis of collateral dependent loans by class of loans as of March 31, 2020. The comparable period is not presented as collateral dependent type loans did not exist under prior GAAP. Under historical guidance, the recorded investment of impaired loans and the related specific reserve was $64.7 million and $3.6 million, respectively, as of December 31, 2019.



	Collateral Type
As of March 31, 2020	Business Assets		Real Property		Other		Total
Real estate	$	0.3	$	1.0	$	0.1	$	1.4
Commercial	3.5		0.5		0.4		4.4
Agricultural	—		0.1		—		0.1
Total collateral-dependent	$	3.8	$	1.6	$	0.5	$	5.9

Schedule of Recorded Investment in Past Due Loans by Class

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans included in the following table as greater than 90 days past due are still accruing interest. The following tables present the contractual aging of the Company’s recorded amortized cost basis in loans by portfolio 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 March 31, 2020	Past Due		Past Due		Past Due		Past Due		Loans		Loans ⁽¹⁾		Loans
Real estate
Commercial	$	7.1	$	1.2	$	1.0	$	9.3	$	3,519.9	$	14.2	$	3,543.4
Construction:
Land acquisition & development	2.2		0.3		0.4		2.9		286.9		0.7		290.5
Residential	3.0		—		0.7		3.7		224.3		0.4		228.4
Commercial	0.1		—		—		0.1		458.8		0.5		459.4
Total construction loans	5.3		0.3		1.1		6.7		970.0		1.6		978.3
Residential	2.3		0.8		0.2		3.3		1,222.9		4.8		1,231.0
Agricultural	0.8		—		2.9		3.7		213.3		7.6		224.6
Total real estate loans	15.5		2.3		5.2		23.0		5,926.1		28.2		5,977.3
Consumer:
Indirect consumer	7.3		2.2		0.5		10.0		762.6		2.0		774.6
Other consumer	1.3		0.5		0.1		1.9		172.5		0.6		175.0
Credit card	0.8		0.3		0.9		2.0		73.9		—		75.9
Total consumer loans	9.4		3.0		1.5		13.9		1,009.0		2.6		1,025.5
Commercial	12.6		6.6		4.3		23.5		1,619.5		17.0		1,660.0
Agricultural	2.9		0.8		1.0		4.7		249.9		3.3		257.9
Other, including overdrafts	—		—		—		—		3.7		—		3.7
Loans held for investment	$	40.4	$	12.7	$	12.0	$	65.1	$	8,808.2	$	51.1	$	8,924.4



							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2019	Past Due		Past Due		Past Due		Past Due		Loans		Loans⁽¹⁾		Loans
Real estate
Commercial	$	5.5	$	1.1	$	0.6	$	7.2	$	3,467.6	$	13.0	$	3,487.8
Construction:
Land acquisition & development	0.7		0.8		0.3		1.8		298.9		1.4		302.1
Residential	1.5		0.8		—		2.3		241.8		—		244.1
Commercial	—		—		—		—		431.0		0.5		431.5
Total construction loans	2.2		1.6		0.3		4.1		971.7		1.9		977.7
Residential	3.8		1.4		1.1		6.3		1,235.2		4.6		1,246.1
Agricultural	0.8		0.5		—		1.3		220.1		5.2		226.6
Total real estate loans	12.3		4.6		2.0		18.9		5,894.6		24.7		5,938.2
Consumer:
Indirect consumer	7.6		1.9		0.5		10.0		773.0		1.6		784.6
Other consumer	1.2		0.5		0.1		1.8		176.7		0.5		179.0
Credit card	0.8		0.5		0.8		2.1		79.5		—		81.6
Total consumer loans	9.6		2.9		1.4		13.9		1,029.2		2.1		1,045.2
Commercial	4.8		2.6		2.3		9.7		1,650.3		13.7		1,673.7
Agricultural	0.9		0.1		—		1.0		275.7		2.4		279.1
Other, including overdrafts	—		—		—		—		—		—		—
Loans held for investment	$	27.6	$	10.2	$	5.7	$	43.5	$	8,849.8	$	42.9	$	8,936.2

⁽¹⁾ As of March 31, 2020 and December 31, 2019, none of our non-accrual loans were earning interest income. Additionally, no material interest income was recognized on non-accrual loans during the three months ended March 31, 2020 and 2019, respectively. Accrued interest of $0.2 million and $0.6 million was reversed during the three months ended March 31, 2020 and 2019, respectively.

Schedule of Acquired Loans with Credit Impairment

Information regarding IIBK loans acquired deemed credit impaired as of the April 8, 2019 acquisition date are as follows:



Contractually required principal and interest payments	$	24.1
Contractual cash flows not expected to be collected (“non-accretable discount”)	3.9
Cash flows expected to be collected	20.2
Interest component of cash flows expected to be collected (“accretable discount”)	3.4
Fair value of acquired credit-impaired loans	$	16.8

Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator

The Company evaluates the credit quality and loan performance for the allowance for credit loan losses of the following segments based on the aforementioned risk scale. Based on the most recent analysis performed, the risk category of loans by segment is as follows:



	March 31, 2020
	Term Loans Amortized Cost Basis by Origination Year
Risk by Collateral	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial real estate non-owner occupied:
Pass	$	99.7	$	349.3	$	259.5	$	133.6	$	176.3	$	446.4	$	20.5	$	1,485.3
Special mention	15.4		3.7		0.7		0.9		1.7		13.2		—		35.6
Substandard	0.2		2.9		0.5		1.3		1.1		15.0		—		21.0
Doubtful	—		—		0.2		—		—		0.1		—		0.3
Total	$	115.3	$	355.9	$	260.9	$	135.8	$	179.1	$	474.7	$	20.5	$	1,542.2

Commercial real estate owner occupied:
Pass	$	100.5	$	348.8	$	283.6	$	170.0	$	194.2	$	459.0	$	17.6	$	1,573.7
Special mention	2.1		1.7		9.8		4.7		14.0		17.4		0.5		50.2
Substandard	6.6		10.1		9.7		5.6		19.3		19.9		0.6		71.8
Doubtful	0.2		—		0.2		0.1		0.5		0.5		—		1.5
Total	$	109.4	$	360.6	$	303.3	$	180.4	$	228.0	$	496.8	$	18.7	$	1,697.2

Land, acquisition and development:
Pass	$	38.3	$	93.6	$	53.9	$	38.9	$	12.4	$	42.1	$	5.9	$	285.1
Special mention	—		0.4		0.1		1.0		—		1.5		0.3		3.3
Substandard	0.1		0.1		0.3		0.5		—		0.5		0.4		1.9
Doubtful	—		—		—		—		—		0.2		—		0.2
Total	$	38.4	$	94.1	$	54.3	$	40.4	$	12.4	$	44.3	$	6.6	$	290.5

Residential construction:
Pass	$	22.5	$	121.8	$	27.5	$	6.9	$	0.3	$	0.4	$	47.2	$	226.6
Special mention	—		—		0.2		—		—		—		—		0.2
Substandard	—		—		1.2		—		—		—		—		1.2
Doubtful	—		—		0.4		—		—		—		—		0.4
Total	$	22.5	$	121.8	$	29.3	$	6.9	$	0.3	$	0.4	$	47.2	$	228.4

Commercial construction:
Pass	$	51.9	$	222.3	$	139.3	$	24.4	$	10.0	$	0.6	$	7.7	$	456.2
Special mention	—		—		1.5		—		—		—		0.2		1.7
Substandard	—		1.0		0.4		—		—		0.1		—		1.5
Doubtful	—		—		—		—		—		—		—		—
Total	$	51.9	$	223.3	$	141.2	$	24.4	$	10.0	$	0.7	$	7.9	$	459.4

Agricultural real estate:
Pass	$	11.1	$	57.1	$	35.2	$	22.3	$	16.1	$	36.7	$	7.8	$	186.3
Special mention	0.6		2.2		1.0		1.4		0.1		5.0		0.6		10.9
Substandard	—		10.5		4.5		1.1		3.6		5.8		1.9		27.4
Doubtful	—		—		—		—		—		—		—		—
Total	$	11.7	$	69.8	$	40.7	$	24.8	$	19.8	$	47.5	$	10.3	$	224.6



	March 31, 2020
	Term Loans Amortized Cost Basis by Origination Year
Risk by Collateral	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and floor plans:
Pass	$	116.6	$	247.2	$	186.4	$	120.9	$	58.9	$	118.1	$	329.4	$	1,177.5
Special mention	4.3		3.6		5.2		2.6		4.5		0.6		7.4		28.2
Substandard	10.5		21.7		8.8		0.9		5.2		5.7		18.7		71.5
Doubtful	0.1		1.7		0.4		0.2		—		0.4		0.4		3.2
Total	$	131.5	$	274.2	$	200.8	$	124.6	$	68.6	$	124.8	$	355.9	$	1,280.4

Commercial purpose secured by 1-4 family:
Pass	$	22.9	$	74.1	$	49.2	$	29.4	$	19.6	$	63.5	$	25.7	$	284.4
Special mention	0.3		2.5		0.8		0.8		0.5		1.2		0.7		6.8
Substandard	0.3		3.7		6.2		0.5		1.3		1.7		0.1		13.8
Doubtful	—		0.1		0.1		—		—		0.2		—		0.4
Total	$	23.5	$	80.4	$	56.3	$	30.7	$	21.4	$	66.6	$	26.5	$	305.4

Agricultural:
Pass	$	19.3	$	40.9	$	18.8	$	7.4	$	4.5	$	1.8	$	131.2	$	223.9
Special mention	1.1		0.4		1.8		—		0.1		—		6.0		9.4
Substandard	5.4		2.0		5.1		1.4		0.3		0.5		8.2		22.9
Doubtful	—		—		—		—		—		—		—		—
Total	$	25.8	$	43.3	$	25.7	$	8.8	$	4.9	$	2.3	$	145.4	$	256.2

The following table presents the recorded investment in credit card loans based on payment activity:



As of March 31, 2020	Consumer		Commercial		Agricultural		Total
Credit Card:
Performing	$	75.7	$	73.4	$	1.7	$	150.8
Nonperforming	0.9		0.8		—		1.7
Total	$	76.6	$	74.2	$	1.7	$	152.5

The following presents the recorded investment in the Company’s loans by risk grades and loan class as of the date shown below:



As of December 31, 2019	Pass		Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans		Total Loans
Real estate:
Commercial	$	3,305.0	$	84.7	$	97.3	$	0.8	$	182.8	$	3,487.8
Construction:
Land acquisition & development	295.4		3.8		1.9		1.0		6.7		302.1
Residential	241.0		0.9		2.2		—		3.1		244.1
Commercial	428.3		1.7		1.5		—		3.2		431.5
Total construction loans	964.7		6.4		5.6		1.0		13.0		977.7
Residential	1,235.4		2.6		7.8		0.3		10.7		1,246.1
Agricultural	185.7		14.3		26.6		—		40.9		226.6
Total real estate loans	5,690.8		108.0		137.3		2.1		247.4		5,938.2
Consumer:
Indirect consumer	781.5		0.2		2.9		—		3.1		784.6
Direct consumer	177.7		0.4		0.8		0.1		1.3		179.0
Credit card	81.6		—		—		—		—		81.6
Total consumer loans	1,040.8		0.6		3.7		0.1		4.4		1,045.2
Commercial	1,569.4		40.4		60.3		3.6		104.3		1,673.7
Agricultural	247.8		8.5		22.7		0.1		31.3		279.1
Total	$	8,548.8	$	157.5	$	224.0	$	5.9	$	387.4	$	8,936.2

The following tables present the recorded investment of our other loan portfolios based on the credit risk profile of loans that are performing and loans that are nonperforming as of the periods indicated:



	March 31, 2020
	Term Loans Amortized Cost Basis by Origination Year
Risk by Collateral	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial multi-family:
Performing	$	28.9	$	78.5	$	31.3	$	32.4	$	28.9	$	102.9	$	1.1	$	304.0
Nonperforming	—		—		—		—		—		—		—		—
Total	$	28.9	$	78.5	$	31.3	$	32.4	$	28.9	$	102.9	$	1.1	$	304.0

Residential 1-4 family:
Performing	$	33.8	$	139.1	$	103.1	$	81.8	$	96.5	$	346.4	$	0.2	$	800.9
Nonperforming	—		0.2		—		—		0.6		1.2		—		2.0
Total	$	33.8	$	139.3	$	103.1	$	81.8	$	97.1	$	347.6	$	0.2	$	802.9

Consumer home equity and HELOC:
Performing	$	3.4	$	12.4	$	11.1	$	14.6	$	5.9	$	22.0	$	358.0	$	427.4
Nonperforming	—		—		0.1		0.2		0.3		0.1		—		0.7
Total	$	3.4	$	12.4	$	11.2	$	14.8	$	6.2	$	22.1	$	358.0	$	428.1



	March 31, 2020
	Term Loans Amortized Cost Basis by Origination Year
Risk by Collateral	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer indirect:
Performing	$	70.3	$	267.3	$	174.5	$	115.6	$	79.4	$	66.3	$	—	$	773.4
Nonperforming	—		0.4		0.4		0.1		0.1		0.2		—		1.2
Total	$	70.3	$	267.7	$	174.9	$	115.7	$	79.5	$	66.5	$	—	$	774.6

Consumer direct and advance line:
Performing	$	13.6	$	44.9	$	46.6	$	20.0	$	9.4	$	13.4	$	26.7	$	174.6
Nonperforming	—		0.1		0.1		0.1		0.1		—		—		0.4
Total	$	13.6	$	45.0	$	46.7	$	20.1	$	9.5	$	13.4	$	26.7	$	175.0