Loans and Allowance for Loan Losses |
NOTE 3 – LOANS AND ALLOWANCE FOR LOAN LOSSES
The following table lists categories of loans at June 30, 2018 and December 31, 2017.
|
|
June 30,
2018 |
|
|
December 31,
2017 |
|
Commercial real estate |
|
$ |
1,226,397 |
|
|
$ |
987,661 |
|
Commercial and industrial |
|
|
503,716 |
|
|
|
507,519 |
|
Residential real estate |
|
|
409,571 |
|
|
|
376,705 |
|
Agricultural real estate |
|
|
118,241 |
|
|
|
86,486 |
|
Consumer |
|
|
54,464 |
|
|
|
49,361 |
|
Agricultural |
|
|
99,082 |
|
|
|
95,547 |
|
Total loans |
|
|
2,411,471 |
|
|
|
2,103,279 |
|
Allowance for loan losses |
|
|
(10,083 |
) |
|
|
(8,498 |
) |
Net loans |
|
$ |
2,401,388 |
|
|
$ |
2,094,781 |
|
The Company has participated in mortgage finance loans with another institution, (the “originator”). These mortgage finance loans consist of ownership interests purchased in single family residential mortgages funded through the originator’s mortgage finance group. These loans are typically on the Company’s balance sheet for 10 to 20 days. As of June 30, 2018 and December 31, 2017, the Company had balances of $10,000 and $10,000 in mortgage finance loans classified as commercial and industrial.
From time to time the Company has purchased pools of residential real estate loans originated by other financial institutions to hold for investment with the intent to diversify the residential real estate portfolio. As of June 30, 2018 and December 31, 2017, residential real estate loans include $74,944 and $85,868 of purchased residential real estate loans.
The unamortized balance of merger purchase accounting adjustments related to non-purchase credit impaired loans included in the loan totals above are $11,070 with related loans of $895,686 at June 30, 2018, and $6,842 with related loans of $796,064 at December 31, 2017.
Over-draft deposit accounts are reclassified and included in consumer loans above. These accounts totaled $1,367 at June 30, 2018 and $741 at December 31, 2017.
The following tables present the activity in the allowance for loan losses by class for the three-month periods ended June 30, 2018 and 2017.
June 30, 2018 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
3,010 |
|
|
$ |
2,388 |
|
|
$ |
2,442 |
|
|
$ |
267 |
|
|
$ |
878 |
|
|
$ |
331 |
|
|
$ |
9,316 |
|
Provision for loan losses |
|
|
216 |
|
|
|
(64 |
) |
|
|
185 |
|
|
|
147 |
|
|
|
247 |
|
|
|
19 |
|
|
|
750 |
|
Loans charged-off |
|
|
— |
|
|
|
(77 |
) |
|
|
(148 |
) |
|
|
(80 |
) |
|
|
(203 |
) |
|
|
(4 |
) |
|
|
(512 |
) |
Recoveries |
|
|
269 |
|
|
|
7 |
|
|
|
184 |
|
|
|
— |
|
|
|
61 |
|
|
|
8 |
|
|
|
529 |
|
Total ending allowance balance |
|
$ |
3,495 |
|
|
$ |
2,254 |
|
|
$ |
2,663 |
|
|
$ |
334 |
|
|
$ |
983 |
|
|
$ |
354 |
|
|
$ |
10,083 |
|
June 30, 2017 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
2,592 |
|
|
$ |
2,059 |
|
|
$ |
1,875 |
|
|
$ |
66 |
|
|
$ |
391 |
|
|
$ |
65 |
|
|
$ |
7,048 |
|
Provision for loan losses |
|
|
(245 |
) |
|
|
397 |
|
|
|
58 |
|
|
|
46 |
|
|
|
298 |
|
|
|
74 |
|
|
|
628 |
|
Loans charged-off |
|
|
(29 |
) |
|
|
(409 |
) |
|
|
(27 |
) |
|
|
(3 |
) |
|
|
(242 |
) |
|
|
— |
|
|
|
(710 |
) |
Recoveries |
|
|
406 |
|
|
|
23 |
|
|
|
93 |
|
|
|
— |
|
|
|
75 |
|
|
|
5 |
|
|
|
602 |
|
Total ending allowance balance |
|
$ |
2,724 |
|
|
$ |
2,070 |
|
|
$ |
1,999 |
|
|
$ |
109 |
|
|
$ |
522 |
|
|
$ |
144 |
|
|
$ |
7,568 |
|
The following tables present the activity in the allowance for loan losses by class for the six-month periods ended June 30, 2018 and 2017.
June 30, 2018 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
2,740 |
|
|
$ |
2,136 |
|
|
$ |
2,262 |
|
|
$ |
319 |
|
|
$ |
768 |
|
|
$ |
273 |
|
|
$ |
8,498 |
|
Provision for loan losses |
|
|
507 |
|
|
|
196 |
|
|
|
475 |
|
|
|
92 |
|
|
|
535 |
|
|
|
115 |
|
|
|
1,920 |
|
Loans charged-off |
|
|
(29 |
) |
|
|
(86 |
) |
|
|
(271 |
) |
|
|
(80 |
) |
|
|
(509 |
) |
|
|
(43 |
) |
|
|
(1,018 |
) |
Recoveries |
|
|
277 |
|
|
|
8 |
|
|
|
197 |
|
|
|
3 |
|
|
|
189 |
|
|
|
9 |
|
|
|
683 |
|
Total ending allowance balance |
|
$ |
3,495 |
|
|
$ |
2,254 |
|
|
$ |
2,663 |
|
|
$ |
334 |
|
|
$ |
983 |
|
|
$ |
354 |
|
|
$ |
10,083 |
|
June 30, 2017 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
|
$ |
2,420 |
|
|
$ |
1,881 |
|
|
$ |
1,765 |
|
|
$ |
35 |
|
|
$ |
266 |
|
|
$ |
65 |
|
|
$ |
6,432 |
|
Provision for loan losses |
|
|
(78 |
) |
|
|
585 |
|
|
|
374 |
|
|
|
77 |
|
|
|
650 |
|
|
|
115 |
|
|
|
1,723 |
|
Loans charged-off |
|
|
(92 |
) |
|
|
(422 |
) |
|
|
(238 |
) |
|
|
(3 |
) |
|
|
(601 |
) |
|
|
(41 |
) |
|
|
(1,397 |
) |
Recoveries |
|
|
474 |
|
|
|
26 |
|
|
|
98 |
|
|
|
— |
|
|
|
207 |
|
|
|
5 |
|
|
|
810 |
|
Total ending allowance balance |
|
$ |
2,724 |
|
|
$ |
2,070 |
|
|
$ |
1,999 |
|
|
$ |
109 |
|
|
$ |
522 |
|
|
$ |
144 |
|
|
$ |
7,568 |
|
The following tables present the recorded investment in loans and the balance in the allowance for loan losses by portfolio and class based on impairment method as of June 30, 2018 and December 31, 2017.
June 30, 2018 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment |
|
$ |
28 |
|
|
$ |
27 |
|
|
$ |
411 |
|
|
$ |
25 |
|
|
$ |
49 |
|
|
$ |
12 |
|
|
$ |
552 |
|
Collectively evaluated for impairment |
|
|
3,460 |
|
|
|
2,212 |
|
|
|
2,235 |
|
|
|
306 |
|
|
|
934 |
|
|
|
336 |
|
|
|
9,483 |
|
Purchase credit impaired loans |
|
|
7 |
|
|
|
15 |
|
|
|
17 |
|
|
|
3 |
|
|
|
— |
|
|
|
6 |
|
|
|
48 |
|
Total |
|
$ |
3,495 |
|
|
$ |
2,254 |
|
|
$ |
2,663 |
|
|
$ |
334 |
|
|
$ |
983 |
|
|
$ |
354 |
|
|
$ |
10,083 |
|
Loan Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment |
|
$ |
2,029 |
|
|
$ |
5,242 |
|
|
$ |
4,851 |
|
|
$ |
2,496 |
|
|
$ |
523 |
|
|
$ |
280 |
|
|
$ |
15,421 |
|
Collectively evaluated for impairment |
|
|
1,209,070 |
|
|
|
491,874 |
|
|
|
402,324 |
|
|
|
110,974 |
|
|
|
53,936 |
|
|
|
96,436 |
|
|
|
2,364,614 |
|
Purchase credit impaired loans |
|
|
15,298 |
|
|
|
6,600 |
|
|
|
2,396 |
|
|
|
4,771 |
|
|
|
5 |
|
|
|
2,366 |
|
|
|
31,436 |
|
Total |
|
$ |
1,226,397 |
|
|
$ |
503,716 |
|
|
$ |
409,571 |
|
|
$ |
118,241 |
|
|
$ |
54,464 |
|
|
$ |
99,082 |
|
|
$ |
2,411,471 |
|
December 31, 2017 |
|
Commercial
Real Estate |
|
|
Commercial
and
Industrial |
|
|
Residential
Real
Estate |
|
|
Agricultural
Real
Estate |
|
|
Consumer |
|
|
Agricultural |
|
|
Total |
|
Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment |
|
$ |
130 |
|
|
$ |
87 |
|
|
$ |
386 |
|
|
$ |
46 |
|
|
$ |
56 |
|
|
$ |
36 |
|
|
$ |
741 |
|
Collectively evaluated for impairment |
|
|
2,582 |
|
|
|
2,028 |
|
|
|
1,815 |
|
|
|
190 |
|
|
|
712 |
|
|
|
236 |
|
|
|
7,563 |
|
Purchase credit impaired loans |
|
|
28 |
|
|
|
21 |
|
|
|
61 |
|
|
|
83 |
|
|
|
— |
|
|
|
1 |
|
|
|
194 |
|
Total |
|
$ |
2,740 |
|
|
$ |
2,136 |
|
|
$ |
2,262 |
|
|
$ |
319 |
|
|
$ |
768 |
|
|
$ |
273 |
|
|
$ |
8,498 |
|
Loan Balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated for impairment |
|
$ |
2,728 |
|
|
$ |
7,886 |
|
|
$ |
4,829 |
|
|
$ |
533 |
|
|
$ |
556 |
|
|
$ |
1,050 |
|
|
$ |
17,582 |
|
Collectively evaluated for impairment |
|
|
971,376 |
|
|
|
493,903 |
|
|
|
369,471 |
|
|
|
82,493 |
|
|
|
48,802 |
|
|
|
90,795 |
|
|
|
2,056,840 |
|
Purchase credit impaired loans |
|
|
13,557 |
|
|
|
5,730 |
|
|
|
2,405 |
|
|
|
3,460 |
|
|
|
3 |
|
|
|
3,702 |
|
|
|
28,857 |
|
Total |
|
$ |
987,661 |
|
|
$ |
507,519 |
|
|
$ |
376,705 |
|
|
$ |
86,486 |
|
|
$ |
49,361 |
|
|
$ |
95,547 |
|
|
$ |
2,103,279 |
|
The following table presents information related to impaired loans, excluding purchased credit impaired loans which have not deteriorated since acquisition, by class of loans as of June 30, 2018 and December 31, 2017. The recorded investment in loans excludes accrued interest receivable due to immateriality.
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
|
|
Unpaid
Principal
Balance |
|
|
Recorded
Investment |
|
|
Allowance for
Loan Losses
Allocated |
|
|
Unpaid
Principal
Balance |
|
|
Recorded
Investment |
|
|
Allowance for
Loan Losses
Allocated |
|
With no related allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,690 |
|
|
$ |
1,629 |
|
|
$ |
— |
|
|
$ |
1,878 |
|
|
$ |
1,567 |
|
|
$ |
— |
|
Commercial and industrial |
|
|
6,271 |
|
|
|
4,970 |
|
|
|
— |
|
|
|
8,679 |
|
|
|
8,020 |
|
|
|
— |
|
Residential real estate |
|
|
747 |
|
|
|
742 |
|
|
|
— |
|
|
|
1,230 |
|
|
|
969 |
|
|
|
— |
|
Agricultural real estate |
|
|
2,273 |
|
|
|
2,242 |
|
|
|
— |
|
|
|
52 |
|
|
|
52 |
|
|
|
— |
|
Consumer |
|
|
41 |
|
|
|
38 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
Agricultural |
|
|
162 |
|
|
|
158 |
|
|
|
— |
|
|
|
7 |
|
|
|
7 |
|
|
|
— |
|
Subtotal |
|
|
11,184 |
|
|
|
9,779 |
|
|
|
— |
|
|
|
11,847 |
|
|
|
10,615 |
|
|
|
— |
|
With an allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
|
628 |
|
|
|
466 |
|
|
|
35 |
|
|
|
4,049 |
|
|
|
1,597 |
|
|
|
158 |
|
Commercial and industrial |
|
|
511 |
|
|
|
423 |
|
|
|
42 |
|
|
|
1,310 |
|
|
|
1,113 |
|
|
|
108 |
|
Residential real estate |
|
|
4,492 |
|
|
|
4,276 |
|
|
|
428 |
|
|
|
4,868 |
|
|
|
4,468 |
|
|
|
447 |
|
Agricultural real estate |
|
|
300 |
|
|
|
283 |
|
|
|
28 |
|
|
|
1,266 |
|
|
|
1,034 |
|
|
|
129 |
|
Consumer |
|
|
592 |
|
|
|
486 |
|
|
|
49 |
|
|
|
677 |
|
|
|
559 |
|
|
|
56 |
|
Agricultural |
|
|
210 |
|
|
|
182 |
|
|
|
18 |
|
|
|
1,798 |
|
|
|
1,444 |
|
|
|
37 |
|
Subtotal |
|
|
6,733 |
|
|
|
6,116 |
|
|
|
600 |
|
|
|
13,968 |
|
|
|
10,215 |
|
|
|
935 |
|
Total |
|
$ |
17,917 |
|
|
$ |
15,895 |
|
|
$ |
600 |
|
|
$ |
25,815 |
|
|
$ |
20,830 |
|
|
$ |
935 |
|
The tables below present average recorded investment and interest income related to impaired loans for the three months and six months ended June 30, 2018 and 2017. Interest income recognized in the following table was substantially recognized on the cash basis. The recorded investment in loans excludes accrued interest receivable due to immateriality.
|
|
As of and for the three months ended |
|
|
|
June 30, 2018 |
|
|
June 30, 2017 |
|
|
|
Average
Recorded
Investment |
|
|
Interest
Income
Recognized |
|
|
Average
Recorded
Investment |
|
|
Interest
Income
Recognized |
|
With no related allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,773 |
|
|
$ |
118 |
|
|
$ |
1,099 |
|
|
$ |
— |
|
Commercial and industrial |
|
|
6,186 |
|
|
|
56 |
|
|
|
1,034 |
|
|
|
— |
|
Residential real estate |
|
|
565 |
|
|
|
9 |
|
|
|
330 |
|
|
|
1 |
|
Agricultural real estate |
|
|
1,189 |
|
|
|
11 |
|
|
|
31 |
|
|
|
12 |
|
Consumer |
|
|
19 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Agricultural |
|
|
307 |
|
|
|
18 |
|
|
|
7 |
|
|
|
— |
|
Subtotal |
|
|
10,039 |
|
|
|
212 |
|
|
|
2,501 |
|
|
|
13 |
|
With an allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
|
665 |
|
|
|
1 |
|
|
|
2,229 |
|
|
|
7 |
|
Commercial and industrial |
|
|
514 |
|
|
|
— |
|
|
|
558 |
|
|
|
— |
|
Residential real estate |
|
|
3,774 |
|
|
|
22 |
|
|
|
3,563 |
|
|
|
13 |
|
Agricultural real estate |
|
|
313 |
|
|
|
2 |
|
|
|
339 |
|
|
|
— |
|
Consumer |
|
|
473 |
|
|
|
3 |
|
|
|
383 |
|
|
|
2 |
|
Agricultural |
|
|
218 |
|
|
|
4 |
|
|
|
150 |
|
|
|
— |
|
Subtotal |
|
|
5,957 |
|
|
|
32 |
|
|
|
7,222 |
|
|
|
22 |
|
Total |
|
$ |
15,996 |
|
|
$ |
244 |
|
|
$ |
9,723 |
|
|
$ |
35 |
|
|
|
As of and for the six months ended |
|
|
|
June 30, 2018 |
|
|
June 30, 2017 |
|
|
|
Average
Recorded
Investment |
|
|
Interest
Income
Recognized |
|
|
Average
Recorded
Investment |
|
|
Interest
Income
Recognized |
|
With no related allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
$ |
1,704 |
|
|
$ |
118 |
|
|
$ |
841 |
|
|
$ |
7 |
|
Commercial and industrial |
|
|
6,797 |
|
|
|
66 |
|
|
|
667 |
|
|
|
3 |
|
Residential real estate |
|
|
700 |
|
|
|
10 |
|
|
|
688 |
|
|
|
1 |
|
Agricultural real estate |
|
|
810 |
|
|
|
12 |
|
|
|
437 |
|
|
|
12 |
|
Consumer |
|
|
13 |
|
|
|
— |
|
|
|
26 |
|
|
|
— |
|
Agricultural |
|
|
207 |
|
|
|
18 |
|
|
|
6 |
|
|
|
— |
|
Subtotal |
|
|
10,231 |
|
|
|
224 |
|
|
|
2,665 |
|
|
|
23 |
|
With an allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
|
975 |
|
|
|
2 |
|
|
|
2,195 |
|
|
|
9 |
|
Commercial and industrial |
|
|
714 |
|
|
|
— |
|
|
|
378 |
|
|
|
1 |
|
Residential real estate |
|
|
4,005 |
|
|
|
22 |
|
|
|
3,207 |
|
|
|
15 |
|
Agricultural real estate |
|
|
553 |
|
|
|
2 |
|
|
|
211 |
|
|
|
— |
|
Consumer |
|
|
502 |
|
|
|
3 |
|
|
|
368 |
|
|
|
2 |
|
Agricultural |
|
|
627 |
|
|
|
4 |
|
|
|
141 |
|
|
|
— |
|
Subtotal |
|
|
7,376 |
|
|
|
33 |
|
|
|
6,500 |
|
|
|
27 |
|
Total |
|
$ |
17,607 |
|
|
$ |
257 |
|
|
$ |
9,165 |
|
|
$ |
50 |
|
The following tables present the aging of the recorded investment in past due loans as of June 30, 2018 and December 31, 2017, by portfolio and class of loans.
June 30, 2018 |
|
30 - 59
Days
Past Due |
|
|
60 - 89
Days
Past Due |
|
|
Greater
Than
90 Days
Past
Due Still On
Accrual |
|
|
Nonaccrual |
|
|
Loans Not
Past Due |
|
|
Total |
|
Commercial real estate |
|
$ |
1,762 |
|
|
$ |
301 |
|
|
$ |
— |
|
|
$ |
12,603 |
|
|
$ |
1,211,731 |
|
|
$ |
1,226,397 |
|
Commercial and industrial |
|
|
208 |
|
|
|
754 |
|
|
|
302 |
|
|
|
11,114 |
|
|
|
491,338 |
|
|
|
503,716 |
|
Residential real estate |
|
|
710 |
|
|
|
627 |
|
|
|
— |
|
|
|
5,371 |
|
|
|
402,863 |
|
|
|
409,571 |
|
Agricultural real estate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,690 |
|
|
|
112,551 |
|
|
|
118,241 |
|
Consumer |
|
|
336 |
|
|
|
62 |
|
|
|
— |
|
|
|
524 |
|
|
|
53,542 |
|
|
|
54,464 |
|
Agricultural |
|
|
52 |
|
|
|
99 |
|
|
|
— |
|
|
|
2,646 |
|
|
|
96,285 |
|
|
|
99,082 |
|
Total |
|
$ |
3,068 |
|
|
$ |
1,843 |
|
|
$ |
302 |
|
|
$ |
37,948 |
|
|
$ |
2,368,310 |
|
|
$ |
2,411,471 |
|
December 31, 2017 |
|
30 - 59
Days
Past Due |
|
|
60 - 89
Days
Past Due |
|
|
Greater
Than
90 Days
Past
Due Still On
Accrual |
|
|
Nonaccrual |
|
|
Loans Not
Past Due |
|
|
Total |
|
Commercial real estate |
|
$ |
1,284 |
|
|
$ |
22 |
|
|
$ |
— |
|
|
$ |
11,607 |
|
|
$ |
974,748 |
|
|
$ |
987,661 |
|
Commercial and industrial |
|
|
251 |
|
|
|
6 |
|
|
|
— |
|
|
|
13,217 |
|
|
|
494,045 |
|
|
|
507,519 |
|
Residential real estate |
|
|
1,457 |
|
|
|
1,176 |
|
|
|
— |
|
|
|
6,148 |
|
|
|
367,924 |
|
|
|
376,705 |
|
Agricultural real estate |
|
|
123 |
|
|
|
— |
|
|
|
— |
|
|
|
3,993 |
|
|
|
82,370 |
|
|
|
86,486 |
|
Consumer |
|
|
359 |
|
|
|
112 |
|
|
|
— |
|
|
|
559 |
|
|
|
48,331 |
|
|
|
49,361 |
|
Agricultural |
|
|
415 |
|
|
|
— |
|
|
|
— |
|
|
|
4,752 |
|
|
|
90,380 |
|
|
|
95,547 |
|
Total |
|
$ |
3,889 |
|
|
$ |
1,316 |
|
|
$ |
— |
|
|
$ |
40,276 |
|
|
$ |
2,057,798 |
|
|
$ |
2,103,279 |
|
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers 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 loans individually by classifying the loans as to credit risk. Consumer loans are considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship. The Company uses the following definitions for risk ratings:
Pass: Loans classified as pass do not have any noted weaknesses and repayment of the loan is expected. These loans are considered unclassified.
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. These loans are considered classified.
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 characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. These loans are considered classified.
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. These loans are considered classified.
The risk category of loans by class of loans is as follows as of June 30, 2018 and December 31, 2017.
June 30, 2018 |
|
Unclassified |
|
|
Classified |
|
|
Total |
|
Commercial real estate |
|
$ |
1,211,285 |
|
|
$ |
15,112 |
|
|
$ |
1,226,397 |
|
Commercial and industrial |
|
|
486,469 |
|
|
|
17,247 |
|
|
|
503,716 |
|
Residential real estate |
|
|
403,988 |
|
|
|
5,583 |
|
|
|
409,571 |
|
Agricultural real estate |
|
|
108,349 |
|
|
|
9,892 |
|
|
|
118,241 |
|
Consumer |
|
|
53,931 |
|
|
|
533 |
|
|
|
54,464 |
|
Agricultural |
|
|
92,555 |
|
|
|
6,527 |
|
|
|
99,082 |
|
Total |
|
$ |
2,356,577 |
|
|
$ |
54,894 |
|
|
$ |
2,411,471 |
|
December 31, 2017 |
|
Unclassified |
|
|
Classified |
|
|
Total |
|
Commercial real estate |
|
$ |
971,458 |
|
|
$ |
16,203 |
|
|
$ |
987,661 |
|
Commercial and industrial |
|
|
486,150 |
|
|
|
21,369 |
|
|
|
507,519 |
|
Residential real estate |
|
|
370,151 |
|
|
|
6,554 |
|
|
|
376,705 |
|
Agricultural real estate |
|
|
77,084 |
|
|
|
9,402 |
|
|
|
86,486 |
|
Consumer |
|
|
48,777 |
|
|
|
584 |
|
|
|
49,361 |
|
Agricultural |
|
|
88,261 |
|
|
|
7,286 |
|
|
|
95,547 |
|
Total |
|
$ |
2,041,881 |
|
|
$ |
61,398 |
|
|
$ |
2,103,279 |
|
Purchased Credit Impaired Loans
The Company has acquired loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The table below lists recorded investments in purchase credit impaired loans as of June 30, 2018 and December 31, 2017.
|
|
June 30,
2018 |
|
|
December 31,
2017 |
|
Contractually required principal payments |
|
$ |
43,601 |
|
|
$ |
41,349 |
|
Discount |
|
|
(12,165 |
) |
|
|
(12,492 |
) |
Recorded investment |
|
$ |
31,436 |
|
|
$ |
28,857 |
|
The accretable yield associated with these loans was $2,537 and $1,980 as of June 30, 2018 and December 31, 2017. The interest income recognized on these loans for the three-month and six-month periods ended June 30, 2018 and 2017 was $813, $1,378, $699 and $1,412. For the three month period ended June 30, 2018 there was a $25 provision for loan loss recorded for these loans and for the six month period ended June 30, 2018 there was a provision for loan loss reversal of $146 for these loans. For the three and six-month periods ended June 30, 2017, there was a provision for loan losses of $8 and $61 recorded for these loans.
Troubled Debt Restructurings
The Company had no loans modified under troubled debt restructurings as of June 30, 2018 or December 31, 2017.
|