ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2021

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

In Allowance For Loan Losses and Recorded Investment In Loans By Portfolio Segment

The following tables present the activity in the allowance for credit losses by portfolio segment for the three-month period ended September 30, 2021:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended September 30, 2021
Beginning balance, July 1	$	33,130	$	28,291	$	3,930	$	1,298	$	3,165	$	1,393	$	506	$	71,713
Provision for credit losses	3,507		(1,545)		(244)		89		(265)		(116)		(126)		1,300
Loans charged-off	(5)		0		0		0		(13)		(72)		0		(90)
Recoveries	44		0		0		0		14		67		0		125
Net loans (charged-off) recovered	39		0		0		0		1		(5)		0		35
Ending balance	$	36,676	$	26,746	$	3,686	$	1,387	$	2,901	$	1,272	$	380	$	73,048

The following tables present the activity in the allowance for credit losses by portfolio segment for the nine-month period ended September 30, 2021:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Nine Months Ended September 30, 2021
Beginning balance, January 1	$	28,333	$	22,907	$	3,043	$	416	$	2,619	$	951	$	3,139	$	61,408
Impact of adopting ASC 326	4,312		4,316		1,060		941		953		349		(2,881)		9,050
Provision for credit losses	2,780		(420)		(737)		30		(719)		21		122		1,077
Loans charged-off	(254)		(71)		0		0		(51)		(217)		0		(593)
Recoveries	1,505		14		320		0		99		168		0		2,106
Net loans (charged-off) recovered	1,251		(57)		320		0		48		(49)		0		1,513
Ending balance	$	36,676	$	26,746	$	3,686	$	1,387	$	2,901	$	1,272	$	380	$	73,048

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month period ended September 30, 2020:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multfamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended September 30, 2020
Beginning balance, July 1	$	26,744	$	21,063	$	3,408	$	542	$	3,434	$	774	$	3,054	$	59,019
Provision for credit losses	1,574		175		(314)		30		(50)		237		98		1,750
Loans charged-off	(6)		0		0		0		(70)		(229)		0		(305)
Recoveries	51		177		3		0		4		48		0		283
Net loans charged-off	45		177		3		0		(66)		(181)		0		(22)
Ending balance	$	28,363	$	21,415	$	3,097	$	572	$	3,318	$	830	$	3,152	$	60,747

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month period ended September 30, 2020:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multfamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Nine Months Ended September 30, 2020
Beginning balance, January 1	$	25,789	$	15,796	$	3,869	$	447	$	2,086	$	345	$	2,320	$	50,652
Provision for credit losses	6,264		5,312		(780)		125		1,298		799		832		13,850
Loans charged-off	(4,037)		0		0		0		(83)		(445)		0		(4,565)
Recoveries	347		307		8		0		17		131		0		810
Net loans charged-off	(3,690)		307		8		0		(66)		(314)		0		(3,755)
Ending balance	$	28,363	$	21,415	$	3,097	$	572	$	3,318	$	830	$	3,152	$	60,747

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multfamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
December 31, 2020
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	6,310	$	1,377	$	84	$	0	$	270	$	0	$	0	$	8,041
Collectively evaluated for impairment	22,023		21,530		2,959		416		2,349		951		3,139		53,367
Total ending allowance balance	$	28,333	$	22,907	$	3,043	$	416	$	2,619	$	951	$	3,139	$	61,408
Loans:
Loans individually evaluated for impairment	$	12,533	$	5,518	$	428	$	0	$	1,700	$	0	$	0	$	20,179
Loans collectively evaluated for impairment	1,772,393		1,887,054		429,234		93,912		342,999		103,385		0		4,628,977
Total ending loans balance	$	1,784,926	$	1,892,572	$	429,662	$	93,912	$	344,699	$	103,385	$	0	$	4,649,156

Summary of Risk Category of Loans by Loan Segment and Origination Date and Credit Quality Indicators

The following table summarizes the risk category of loans by loan segment and origination date as of September 30, 2021:

(dollars in thousands)	2021		2020		2019		2018		2017		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	8,755	$	6,467	$	11,643	$	1,646	$	834	$	82	$	29,427	$	533,140	$	562,567
Special Mention	0		0		0		0		0		0		0		64,240		64,240
Substandard	0		0		85		0		0		0		85		32,382		32,467
Total	8,755		6,467		11,728		1,646		834		82		29,512		629,762		659,274
Non-working capital loans:
Pass	184,286		172,825		87,892		68,814		23,713		20,548		558,078		163,413		721,491
Special Mention	17,614		0		630		1,112		2,466		1,185		23,007		2,426		25,433
Substandard	4,908		7,022		1,225		4,681		5,723		512		24,071		3,208		27,279
Not Rated	1,695		1,915		920		719		191		22		5,462		0		5,462
Total	208,503		181,762		90,667		75,326		32,093		22,267		610,618		169,047		779,665
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	13,305		40,841		4,679		30,875		0		16,870		106,570		270,801		377,371
Owner occupied loans:
Pass	93,789		174,606		127,573		94,853		82,439		105,570		678,830		36,226		715,056
Special Mention	6,829		0		1,809		966		7,715		1,273		18,592		0		18,592
Substandard	506		1,946		929		2,101		707		408		6,597		0		6,597
Total	101,124		176,552		130,311		97,920		90,861		107,251		704,019		36,226		740,245
Nonowner occupied loans:
Pass	75,760		160,552		118,333		26,642		41,494		69,129		491,910		59,107		551,017
Special Mention	11,937		349		620		0		0		14,341		27,247		0		27,247
Substandard	0		0		0		3,354		0		0		3,354		0		3,354
Total	87,697		160,901		118,953		29,996		41,494		83,470		522,511		59,107		581,618
Multifamily loans:
Pass	79,260		53,500		36,784		14,372		14,688		18,696		217,300		12,997		230,297
Special Mention	0		0		0		0		22,252		0		22,252		0		22,252
Total	79,260		53,500		36,784		14,372		36,940		18,696		239,552		12,997		252,549
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	35,548		37,854		17,533		13,327		9,841		19,776		133,879		12,345		146,224
Special Mention	0		1,985		2,336		0		190		30		4,541		938		5,479
Substandard	212		0		0		0		0		145		357		0		357
Total	35,760		39,839		19,869		13,327		10,031		19,951		138,777		13,283		152,060
Loans for agricultural production:
Pass	27,116		27,959		4,415		11,399		1,478		4,393		76,760		76,860		153,620
Special Mention	464		8,644		1,250		0		43		19		10,420		8,014		18,434
Total	27,580		36,603		5,665		11,399		1,521		4,412		87,180		84,874		172,054
Other commercial loans:
Pass	1,488		30,130		3,541		1,328		8,897		8,772		54,156		25,162		79,318
Special Mention	0		0		0		0		0		3,945		3,945		0		3,945
Total	1,488		30,130		3,541		1,328		8,897		12,717		58,101		25,162		83,263
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans
Pass	13,332		17,484		5,487		6,502		3,216		2,145		48,166		2,183		50,349
Substandard	0		0		0		0		0		1,821		1,821		0		1,821
Not Rated	35,165		28,684		10,088		7,868		9,343		29,513		120,661		562		121,223
Total	48,497		46,168		15,575		14,370		12,559		33,479		170,648		2,745		173,393
Open end and junior lien loans
Pass	193		379		162		317		0		0		1,051		10,733		11,784
Substandard	0		0		0		0		0		0		0		0		0
Not Rated	17,212		6,732		6,885		4,814		2,394		1,678		39,715		112,024		151,739
Total	17,405		7,111		7,047		5,131		2,394		1,678		40,766		122,757		163,523
Residential construction loans
Not Rated	7,164		2,842		982		140		173		1,177		12,478		13		12,491
Other consumer loans
Pass	584		1,181		1,579		0		1,253		0		4,597		22,084		26,681
Substandard	36		0		257		0		0		0		293		0		293
Not Rated	18,262		17,058		8,678		6,945		2,531		1,418		54,892		10,081		64,973
Total	18,882		18,239		10,514		6,945		3,784		1,418		59,782		32,165		91,947
TOTAL	$	655,420	$	800,955	$	456,315	$	302,775	$	241,581	$	323,468	$	2,780,514	$	1,458,939	$	4,239,453

As of December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	535,071	$	81,095	$	9,718	$	0	$	215	$	626,099
Non-working capital loans	1,111,989		26,523		14,820		0		5,495		1,158,827
Commercial real estate and multi-family residential loans:
Construction and land development loans	361,664		0		0		0		0		361,664
Owner occupied loans	608,845		31,355		7,374		0		0		647,574
Nonowner occupied loans	547,790		31,260		0		0		0		579,050
Multi-family loans	282,031		22,253		0		0		0		304,284
Agri-business and agricultural loans:
Loans secured by farmland	183,983		10,728		652		0		0		195,363
Loans for agricultural production	185,875		48,424		0		0		0		234,299
Other commercial loans	93,912		0		0		0		0		93,912
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	40,682		0		1,695		0		125,124		167,501
Open end and junior lien loans	8,424		0		5		0		156,807		165,236
Residential construction loans	0		0		0		0		11,962		11,962
Other consumer loans	36,979		253		0		0		66,153		103,385
Total	$	3,997,245	$	251,891	$	34,264	$	0	$	365,756	$	4,649,156

Schedule of Amortized Cost Basis In Past Due Loans

The following table presents the aging of the amortized cost basis in past due loans as of September 30, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:

(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	659,160	$	114	$	0	$	645,093	$	14,181	$	1	$	659,274
Non-working capital loans	779,551		114		0		770,709		8,956		232		779,665
Commercial real estate and multi-family residential loans:
Construction and land development loans	377,371		0		0		377,371		0		0		377,371
Owner occupied loans	740,245		0		0		736,423		3,822		986		740,245
Nonowner occupied loans	581,618		0		0		578,260		3,358		0		581,618
Multifamily loans	252,549		0		0		252,549		0		0		252,549
Agri-business and agricultural loans:
Loans secured by farmland	152,060		0		0		151,915		145		0		152,060
Loans for agricultural production	172,054		0		0		172,054		0		0		172,054
Other commercial loans	83,263		0		0		83,263		0		0		83,263
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	172,515		860		18		173,293		100		56		173,393
Open end and junior lien loans	163,489		34		0		163,425		98		98		163,523
Residential construction loans	12,491		0		0		12,491		0		0		12,491
Other consumer loans	91,829		118		0		91,629		318		0		91,947
Total	$	4,238,195	$	1,240	$	18	$	4,208,475	$	30,978	$	1,373	$	4,239,453

Schedule of Amortized Cost Basis Of Collateral Dependent Loans

The following table presents the amortized cost basis of collateral dependent loans by class of loan as of September 30, 2021:

(dollars in thousands)	Real Estate		General Business  Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	14,181	$	0	$	14,181
Non-working capital loans	1,632		13,757		229		15,618
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,456		1,675		1,161		4,292
Nonowner occupied loans	3,358		0		0		3,358
Agri-business and agricultural loans:
Loans secured by farmland	0		145		0		145
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	3,056		0		0		3,056
Other consumer loans	0		0		51		51
Total	9,502		29,758		1,441		40,701

Troubled Debt Restructuring

(dollars in thousands)	September 30, 2021		December 31, 2020
Accruing troubled debt restructured loans	$	4,973	$	5,237
Nonaccrual troubled debt restructured loans	6,093		6,476
Total troubled debt restructured loans	$	11,066	$	11,713

Loans by Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 30, 2020:

						Modified Repayment Terms
(dollars in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Extension Period or Range (in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	1	$	250	$	315	1	0
Non-working capital lines of credit loans	2	4,288		3,691		2	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	1	1,528		1,527		1	0
Total	4	$	6,066	$	5,533	4	0

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2020:

(dollars in thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	346	$	173	$	0
Non-working capital loans	2,399		968		0
Commercial real estate and multi-family residential loans:
Owner occupied loans	3,002		2,930		0
Agri-business and agricultural loans:
Loans secured by farmland	603		283		0
Consumer 1‑4 family loans:
Closed end first mortgage loans	316		236		0
Open end and junior lien loans	5		5		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	433		433		255
Non-working capital loans	11,644		10,959		6,055
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,589		2,588		1,377
Agri-business and agricultural loans:
Loans secured by farmland	145		145		84
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	1,457		1,459		270
Total	$	22,939	$	20,179	$	8,041

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2020:

(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	174	$	0	$	0
Non-working capital loans	995		5		5
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,054		4		4
Agri-business and agricultural loans:
Loans secured by farmland	283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans	274		0		0
Open end and junior lien loans	54		0		0
Residential construction loans	8		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,546		0		0
Non-working capital loans	11,970		63		63
Commercial real estate and multi-family residential loans:
Owner occupied loans	3,994		0		0
Agri-business and agricultural loans:
Loans secured by farmland	146		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	1,520		9		9
Open end and junior lien loans	648		0		0
Residential construction loans	35		0		0
Total	$	23,701	$	81	$	81

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2020:

(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	442	$	0	$	0
Non-working capital loans	766		16		16
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,101		13		13
Agri-business and agricultural loans:
Loans secured by farmland	283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans	304		2		2
Open end and junior lien loans	63		0		0
Residential construction loans	3		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	3,001		0		0
Non-working capital loans	11,763		216		216
Commercial real estate and multi-family residential loans:
Owner occupied loans	3,034		30		30
Agri-business and agricultural loans:
Loans secured by farmland	147		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	1,589		28		28
Open end and junior lien loans	642		0		0
Residential construction loans	46		0		0
Total	$	24,184	$	305	$	305

Aging of the Recorded Investment in Past Due Loans

The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 by class of loans:

(dollars in thousands)	Loans Not Past Due		30‑89  Days Past Due		Greater than 90 Days Past Due		Nonaccrual		Total Past Due and Nonaccrual		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	625,493	$	0	$	0	$	606	$	606	$	626,099
Non-working capital loans	1,153,540		0		0		5,287		5,287		1,158,827
Commercial real estate and multi-family residential loans:
Construction and land development loans	361,664		0		0		0		0		361,664
Owner occupied loans	642,527		0		0		5,047		5,047		647,574
Nonowner occupied loans	579,050		0		0		0		0		579,050
Multifamily loans	304,284		0		0		0		0		304,284
Agri-business and agricultural loans:
Loans secured by farmland	194,935		0		0		428		428		195,363
Loans for agricultural production	234,191		108		0		0		108		234,299
Other commercial loans	93,912		0		0		0		0		93,912
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	165,895		877		116		613		1,606		167,501
Open end and junior lien loans	165,094		137		0		5		142		165,236
Residential construction loans	11,962		0		0		0		0		11,962
Other consumer loans	103,240		145		0		0		145		103,385
Total	$	4,635,787	$	1,267	$	116	$	11,986	$	13,369	$	4,649,156