Note 4. Loans Receivable, Net

The Company’s loan portfolio is comprised of three segments: residential real estate, commercial and consumer and other loans. The loan portfolio is managed at the class level which is comprised of the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following tables are presented for each portfolio class of loans receivable and provide information about the ALLL, loans receivable, impaired loans and TDRs.

The following schedules summarize the activity in the ALLL:



	Year ended December 31, 2013
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	130,854		15,482		74,398		21,567		10,659		8,748
Provision for loan losses	6,887			(921	)	(3,670	)	10,271		868		339
Charge-offs	(13,643		)	(793	)	(3,736	)	(4,671	)	(2,594	)	(1,849	)
Recoveries	6,253			299		3,340		1,463		366		785
Balance at end of period	$	130,351		14,067		70,332		28,630		9,299		8,023



	Year ended December 31, 2012
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,516		17,227		76,920		20,833		13,616		8,920
Provision for loan losses	21,525			2,879		11,012		4,690		324		2,620
Charge-offs	(34,672		)	(5,267	)	(16,339	)	(5,239	)	(4,369	)	(3,458	)
Recoveries	6,485			643		2,805		1,283		1,088		666
Balance at end of period	$	130,854		15,482		74,398		21,567		10,659		8,748



	Year ended December 31, 2011
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,107		20,957		76,147		19,932		13,334		6,737
Provision for loan losses	64,500			1,455		39,563		10,709		4,450		8,323
Charge-offs	(69,366		)	(5,671	)	(42,042	)	(10,386	)	(4,644	)	(6,623	)
Recoveries	5,275			486		3,252		578		476		483
Balance at end of period	$	137,516		17,227		76,920		20,833		13,616		8,920

Note 4. Loans Receivable, Net (continued)

The following schedules disclose the ALLL and loans receivable:



	December 31, 2013
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	11,949	990	3,763	6,155	265	776
Collectively evaluated for impairment	118,402		13,077	66,569	22,475	9,034	7,247
Total allowance for loan and lease losses	$	130,351	14,067	70,332	28,630	9,299	8,023
Loans receivable
Individually evaluated for impairment	$	199,680	24,070	119,526	41,504	9,039	5,541
Collectively evaluated for impairment	3,863,158		553,519	1,929,721	810,532	357,426	211,960
Total loans receivable	$	4,062,838	577,589	2,049,247	852,036	366,465	217,501



	December 31, 2012
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	15,534	1,680	7,716	3,859	870	1,409
Collectively evaluated for impairment	115,320		13,802	66,682	17,708	9,789	7,339
Total allowance for loan and lease losses	$	130,854	15,482	74,398	21,567	10,659	8,748
Loans receivable
Individually evaluated for impairment	$	201,735	25,862	125,282	33,593	11,074	5,924
Collectively evaluated for impairment	3,195,690		490,605	1,530,226	589,804	392,851	192,204
Total loans receivable	$	3,397,425	516,467	1,655,508	623,397	403,925	198,128

Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas. The Company is subject to regulatory limits for the amount of loans to any individual borrower and the Company is in compliance with this regulation as of December 31, 2013 and 2012. No borrower had outstanding loans or commitments exceeding 10 percent of the Company’s consolidated stockholders’ equity as of December 31, 2013.

Net deferred fees, costs, premiums and discounts of $10,662,000 and $1,379,000 were included in the loans receivable balance at December 31, 2013 and 2012, respectively. The increase in net deferred fees, costs, premiums and discounts from the prior year was primarily due to the acquisitions of Wheatland and NCBI. For additional information relating to acquisitions, see Note 22. At December 31, 2013, the Company had $2,566,042,000 in variable rate loans and $1,496,796,000 in fixed rate loans. The weighted-average interest rate on loans was 5.04 percent and 5.33 percent at December 31, 2013 and 2012, respectively. At December 31, 2013, 2012, and 2011, loans sold and serviced for others were $148,376,000, $116,439,000, and $160,465,000, respectively. At December 31, 2013, the Company had loans of $2,579,874,000 pledged as collateral for FHLB advances and FRB discount window. There were no significant purchases or sales of loans designated held-to-maturity during 2013 and 2012.

The Company has entered into transactions with its executive officers and directors and their affiliates. The aggregate amount of loans outstanding to such related parties at December 31, 2013 and 2012 was $35,224,000 and $33,869,000, respectively. During 2013, new loans to such related parties were $4,311,000 and repayments were $2,956,000. In management’s opinion, such loans were made in the ordinary course of business and were made on substantially the same terms as those prevailing at the time for comparable transaction with other persons.

Note 4. Loans Receivable, Net (continued)

The following schedules disclose the impaired loans:



	At or for the Year ended December 31, 2013
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	61,503	7,233	23,917	27,015	886	2,452
Unpaid principal balance	63,406		7,394	25,331	27,238	949	2,494
Specific valuation allowance	11,949		990	3,763	6,155	265	776
Average balance	59,823		7,237	26,105	22,460	767	3,254
Loans without a specific valuation allowance
Recorded balance	$	138,177	16,837	95,609	14,489	8,153	3,089
Unpaid principal balance	169,082		18,033	119,017	19,156	9,631	3,245
Average balance	139,129		18,103	95,808	14,106	8,844	2,268
Totals
Recorded balance	$	199,680	24,070	119,526	41,504	9,039	5,541
Unpaid principal balance	232,488		25,427	144,348	46,394	10,580	5,739
Specific valuation allowance	11,949		990	3,763	6,155	265	776
Average balance	198,952		25,340	121,913	36,566	9,611	5,522



	At or for the Year ended December 31, 2012
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	62,759	7,334	29,595	21,205	1,354	3,271
Unpaid principal balance	70,261		7,459	36,887	21,278	1,362	3,275
Specific valuation allowance	15,534		1,680	7,716	3,859	870	1,409
Average balance	76,656		12,797	36,164	22,665	1,390	3,640
Loans without a specific valuation allowance
Recorded balance	$	138,976	18,528	95,687	12,388	9,720	2,653
Unpaid principal balance	149,412		19,613	102,798	14,318	9,965	2,718
Average balance	162,505		16,034	111,554	19,733	11,993	3,191
Totals
Recorded balance	$	201,735	25,862	125,282	33,593	11,074	5,924
Unpaid principal balance	219,673		27,072	139,685	35,596	11,327	5,993
Specific valuation allowance	15,534		1,680	7,716	3,859	870	1,409
Average balance	239,161		28,831	147,718	42,398	13,383	6,831

Interest income recognized on impaired loans for the years ended December 31, 2013, 2012, and 2011 was not significant.

Note 4. Loans Receivable, Net (continued)

The following is a loans receivable aging analysis:



	December 31, 2013
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	25,761	10,367	7,016	3,673	2,432	2,273
Accruing loans 60-89 days past due	6,355		1,055	2,709	1,421	668	502
Accruing loans 90 days or more past due	604		429	—	160	5	10
Non-accrual loans	81,956		10,702	51,438	10,139	7,950	1,727
Total past due and non-accrual loans	114,676		22,553	61,163	15,393	11,055	4,512
Current loans receivable	3,948,162		555,036	1,988,084	836,643	355,410	212,989
Total loans receivable	$	4,062,838	577,589	2,049,247	852,036	366,465	217,501



	December 31, 2012
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	17,454	3,897	7,424	2,020	2,872	1,241
Accruing loans 60-89 days past due	9,643		1,870	3,745	645	2,980	403
Accruing loans 90 days or more past due	1,479		451	594	197	188	49
Non-accrual loans	96,933		14,237	55,687	13,200	11,241	2,568
Total past due and non-accrual loans	125,509		20,455	67,450	16,062	17,281	4,261
Current loans receivable	3,271,916		496,012	1,588,058	607,335	386,644	193,867
Total loans receivable	$	3,397,425	516,467	1,655,508	623,397	403,925	198,128

Interest income that would have been recorded on non-accrual loans if such loans had been current for the entire period would have been approximately $4,122,000, $5,161,000, and $7,441,000 for the years ended December 31, 2013, 2012, and 2011, respectively.

The following is a summary of the TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:



	Year ended December 31, 2013
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Troubled debt restructurings
Number of loans	63		9	21	23	2	8
Pre-modification recorded balance	$	29,046	1,907	20,334	6,087	147	571
Post-modification recorded balance	$	29,359	2,293	20,334	6,087	147	498
Troubled debt restructurings that subsequently defaulted
Number of loans	5		1	1	3	—	—
Recorded balance	$	849	265	79	505	—	—

Note 4. Loans Receivable, Net (continued)



	Year ended December 31, 2012
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Troubled debt restructurings
Number of loans	198		11	85	75	10	17
Pre-modification recorded balance	$	90,747	2,280	57,382	28,639	1,358	1,088
Post-modification recorded balance	$	89,558	2,281	56,120	28,711	1,358	1,088
Troubled debt restructurings that subsequently defaulted
Number of loans	14		—	4	6	3	1
Recorded balance	$	8,304	—	6,192	1,753	301	58



	Year ended December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Troubled debt restructurings
Number of loans	338		20	120	149	22	27
Pre-modification recorded balance	$	158,295	13,500	109,593	20,446	9,198	5,558
Post-modification recorded balance	$	155,827	13,452	107,778	20,434	9,200	4,963
Troubled debt restructurings that subsequently defaulted
Number of loans	66		4	29	22	7	4
Recorded balance	$	41,236	2,291	32,615	2,718	3,202	410

For the years ended December 31, 2013, 2012 and 2011 the majority of TDRs occurring in most loan classes was a result of an extension of the maturity date which aggregated 71 percent, 49 percent and 58 percent, respectively, of total TDRs. For commercial real estate, the class with the largest dollar amount of TDRs, approximately 87 percent, 36 percent and 56 percent, respectively, was a result of an extension of the maturity date and 9 percent, 30 percent and 31 percent, respectively, was due to a combination of an interest rate reduction, extension of the maturity date, or reduction in the face amount.

In addition to the TDRs that occurred during the period provided in the preceding table, the Company had TDRs with pre-modification loan balances of $18,345,000, $39,769,000 and $96,528,000 for the years ended December 31, 2013, 2012 and 2011, respectively, for which OREO was received in full or partial satisfaction of the loans. The majority of such TDRs for all years was in commercial real estate.

There were $2,024,000 and $4,534,000 of additional unfunded commitments on TDRs outstanding at December 31, 2013 and 2012, respectively. The amount of charge-offs on TDRs during 2013, 2012 and 2011 was $1,945,000, $6,271,000 and $8,792,000, respectively.