Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2014

Loans Held-For-Investment by Class of Financing Receivables

Loans held-for-investment by class of financing receivables are as follows (in thousands):


	March 31,				December 31,
	2014		2013		2013
Commercial	$	607,281	$	513,422	$	596,730
Agricultural		65,121		55,247		75,928
Real estate		1,680,807		1,275,564		1,678,514
Consumer		335,079		283,782		333,113


Total loans held-for-investment	$	2,688,288	$	2,128,015	$	2,684,285

Non-Accrual Loans, Loans Still Accruing and Past Due 90 Days or More and Restructured Loans

The Company’s non-accrual loans, loans still accruing and past due 90 days or more and restructured loans are as follows (in thousands):


	March 31,				December 31,
	2014		2013		2013
Non-accrual loans*	$	24,710	$	22,509	$	27,926
Loans still accruing and past due 90 days or more		30		24		133
Restructured loans**		—		—		—


Total	$	24,740	$	22,533	$	28,059

*	Includes $2,605,000 and $2,707,000 of purchased credit impaired loans as of March 31, 2014 and December 31, 2013, respectively. There were no purchased credit impaired loan balances at March 31, 2013.

**	Restructured loans whose interest collection, after considering economic and business conditions and collection efforts, is doubtful are included in non-accrual loans. All of our restructured loans are included in non-accrual loans.

Recorded Investment in Impaired Loans and Related Valuation Allowance

The Company’s recorded investment in impaired loans and the related valuation allowance are as follows (in thousands):


March 31, 2014				March 31, 2013				December 31, 2013
Recorded		Valuation		Recorded		Valuation		Recorded		Valuation
Investment		Allowance		Investment		Allowance		Investment		Allowance
$	24,710	$	5,283	$	22,509	$	5,793	$	27,926	$	5,338

Schedule of Non-Accrual Loans

Non-accrual loans totaled $24,710,000, $22,509,000 and $27,926,000 at March 31, 2014 and 2013, and December 31, 2013, respectively, and consisted of the following amounts by class of financing receivables (in thousands):


	March 31,				December 31,
	2014		2013		2013
Commercial	$	2,809	$	1,133	$	4,281
Agricultural		109		473		131
Real estate		20,921		20,502		22,548
Consumer		871		401		966


Total	$	24,710	$	22,509	$	27,926

Schedule of Impaired Loans and Related Allowance

The Company’s impaired loans and related allowance as of March 31, 2014 and 2013, and December 31, 2013, are summarized in the following table by class of financing receivables (in thousands). No interest income was recognized on impaired loans subsequent to their classification as impaired.


March 31, 2014	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance*		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three- month Average Recorded Investment
Commercial	$	3,250	$	258	$	2,551	$	2,809	$	1,200	$	2,956
Agricultural		123		15		94		109		36		111
Real Estate		28,028		5,387		15,534		20,921		3,865		22,764
Consumer		1,062		494		377		871		182		939

Total	$	32,463	$	6,154	$	18,556	$	24,710	$	5,283	$	26,770

*	Includes $2,605,000 of purchased credit impaired loans.


March 31, 2013	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three- month Average Recorded Investment
Commercial	$	1,555	$	25	$	1,108	$	1,133	$	555	$	1,232
Agricultural		489		25		448		473		169		483
Real Estate		24,937		1,956		18,546		20,502		4,901		21,028
Consumer		466		77		324		401		168		420

Total	$	27,447	$	2,083	$	20,426	$	22,509	$	5,793	$	23,163

December 31, 2013	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance*		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial	$	4,764	$	934	$	3,348	$	4,282	$	1,079	$	5,017
Agricultural		139		17		114		131		41		144
Real Estate		31,704		5,794		16,753		22,547		4,006		25,060
Consumer		1,117		545		421		966		212		1,072

Total	$	37,724	$	7,290	$	20,636	$	27,926	$	5,338	$	31,293

*	Includes $2,707,000 of purchased credit impaired loans.

Schedule of Internal Ratings of Loans

The following summarizes the Company’s internal ratings of its loans held-for-investment by class of financing receivables and portfolio segments, which are the same, at March 31, 2014 and December 31, 2013 (in thousands):


March 31, 2014	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	595,060	$	5,079	$	7,142	$	—	$	607,281
Agricultural		64,755		103		261		2		65,121
Real Estate		1,614,094		19,043		47,529		141		1,680,807
Consumer		332,817		563		1,692		7		335,079

Total	$	2,606,726	$	24,788	$	56,624	$	150	$	2,688,288

December 31, 2013	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	584,547	$	3,032	$	9,151	$	—	$	596,730
Agricultural		75,382		245		298		3		75,928
Real Estate		1,609,242		20,773		48,352		147		1,678,514
Consumer		330,870		639		1,595		9		333,113

Total	$	2,600,041	$	24,689	$	59,396	$	159	$	2,684,285

Schedule of Past Due Loans

At March 31, 2014 and December 31, 2013, the Company’s past due loans are as follows (in thousands):


March 31, 2014	15-59 Days Past Due*		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		90 Days Past Due Still Accruing
Commercial	$	3,903	$	187	$	177	$	4,267	$	603,014	$	607,281	$	—
Agricultural		535		58		5		598		64,523		65,121		4
Real Estate		16,515		1,192		1,991		19,698		1,661,109		1,680,807		11
Consumer		1,624		343		146		2,113		332,966		335,079		15

Total	$	22,577	$	1,780	$	2,319	$	26,676	$	2,661,612	$	2,688,288	$	30


December 31, 2013	15-59 Days Past Due*		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		90 Days Past Due Still Accruing
Commercial	$	5,303	$	287	$	420	$	6,010	$	590,720	$	596,730	$	—
Agricultural		355		—		—		355		75,573		75,928		—
Real Estate		13,787		2,489		1,876		18,152		1,660,362		1,678,514		55
Consumer		2,708		582		277		3,567		329,546		333,113		78

Total	$	22,153	$	3,358	$	2,573	$	28,084	$	2,656,201	$	2,684,285	$	133

*	The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due.

Allowance for Loan Losses by Estimating Losses in Various Categories of Loan Portfolio

The allowance for loan losses as of March 31, 2014 and 2013, and December 31, 2013, is presented below. Management has evaluated the appropriateness of the allowance for loan losses by estimating the probable losses in various categories of the loan portfolio, which are identified below (in thousands):


	March 31,				December 31,
	2014		2013		2013
Allowance for loan losses provided for:
Loans specifically evaluated as impaired	$	5,283	$	5,793	$	5,338
Remaining portfolio		29,410		28,879		28,562

Total allowance for loan losses	$	34,693	$	34,672	$	33,900

Schedule of Allowance for Loan Loss by Portfolio Segment

The following table details the allowance for loan losses at March 31, 2014 and December 31, 2013 by portfolio segment (in thousands). There were no allowances for purchased credit impaired loans at March 31, 2014 or December 31, 2013. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.


March 31, 2014	Commercial		Agricultural		Real Estate		Consumer		Total

Loans individually evaluated for impairment	$	2,743	$	83	$	7,299	$	351	$	10,476
Loans collectively evaluated for impairment		3,902		202		18,330		1,783		24,217

Total	$	6,645	$	285	$	25,629	$	2,134	$	34,693

December 31, 2013	Commercial		Agricultural		Real Estate		Consumer		Total

Loans individually evaluated for impairment	$	2,755	$	125	$	7,215	$	378	$	10,473
Loans collectively evaluated for impairment		3,685		258		17,725		1,759		23,427

Total	$	6,440	$	383	$	24,940	$	2,137	$	33,900

Changes in Allowance for Loan Losses

Changes in the allowance for loan losses for the three months ended March 31, 2014 and 2013 are summarized as follows by portfolio segment (in thousands):


Three months ended March 31, 2014	Commercial			Agricultural			Real Estate			Consumer			Total
Beginning balance	$	6,440		$	383		$	24,940		$	2,137		$	33,900
Provision for loan losses		335			(99	)		1,233			221			1,690
Recoveries		88			3			187			122			400
Charge-offs		(218	)		(2	)		(731	)		(346	)		(1,297	)


Ending balance	$	6,645		$	285		$	25,629		$	2,134		$	34,693


Three months ended March 31, 2013	Commercial			Agricultural			Real Estate			Consumer			Total
Beginning balance	$	7,343		$	1,541		$	24,063		$	1,892		$	34,839
Provision for loan losses		(672	)		(86	)		1,120			39			401
Recoveries		121			11			28			95			255
Charge-offs		(288	)		—			(350	)		(185	)		(823	)


Ending balance	$	6,504		$	1,466		$	24,861		$	1,841		$	34,672

Schedule of Investment in Loans Related to Balance in Allowance for Loan Losses on Basis of Company's Impairment Methodology

The Company’s recorded investment in loans as of March 31, 2014 and December 31, 2013 related to the balance in the allowance for loan losses on the basis of the Company’s impairment methodology was as follows (in thousands). Purchased credit impaired loans of $2,605,000 and $2,707,000 at March 31, 2014 and December 31, 2013, respectively, are included in loans individually evaluated for impairment.


March 31, 2014	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	12,221	$	366	$	66,713	$	2,262	$	81,562
Loans collectively evaluated for impairment		595,060		64,755		1,614,094		332,817		2,606,726

Total	$	607,281	$	65,121	$	1,680,807	$	335,079	$	2,688,288


December 31, 2013	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	12,183	$	546	$	69,272	$	2,243	$	84,244
Loans collectively evaluated for impairment		584,547		75,382		1,609,242		330,870		2,600,041

Total	$	596,730	$	75,928	$	1,678,514	$	333,113	$	2,684,285

Schedule of Loans Modified and Considered Troubled Debt Restructuring

The Company’s loans that were modified in the three months ended March 31, 2014 and 2013 and considered troubled debt restructurings are as follows (in thousands):


	Three Months Ended March 31, 2014						Three Months Ended March 31, 2013
			Pre- Modification		Post- Modification				Pre- Modification		Post- Modification
			Recorded		Recorded				Recorded		Recorded
	Number		Investment		Investment		Number		Investment		Investment
Commercial		4	$	97	$	97		2	$	120	$	120
Agricultural		—		—		—		1		24		24
Real Estate		1		76		76		4		796		796
Consumer		3		11		11		—		—		—

Total		8	$	184	$	184		7	$	940	$	940

Schedule of How Loans Were Modified as Troubled Debt Restructured Loans

The balances below provide information as to how the loans were modified as troubled debt restructured loans during the three months ended March 31, 2014 and 2013 (in thousands):


	Three Months Ended March 31, 2014						Three Months Ended March 31, 2013
	Adjusted Interest Rate		Extended Maturity		Combined Rate and Maturity		Adjusted Interest Rate		Extended Maturity		Combined Rate and Maturity
Commercial	$	—	$	97	$	—	$	—	$	120	$	—
Agricultural		—		—		—		—		24		—
Real Estate		—		76		—		272		350		174
Consumer		—		8		3		—		—		—

Total	$	—	$	181	$	3	$	272	$	494	$	174

Schedule of Troubled Debt Restructuring

The loans are as follows (dollars in thousands):


	Three Months Ended March 31, 2013
	Number		Balance
Commercial		5	$	217
Agriculture		—		—
Real Estate		5		931
Consumer		1		19

Total		11	$	1,167