ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2020

ALLOWANCE FOR LOAN 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 loan losses by portfolio segment for the three-month periods ended September 30, 2020 and 2019:

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		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 loan 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

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2019
Beginning balance, July 1	$	25,024	$	15,492	$	3,906	$	355	$	2,153	$	289	$	3,345	$	50,564
Provision for loan losses		943		474		(4)		28		(93)		67		(415)		1,000
Loans charged-off		(1,123)		0		0		0		(23)		(75)		0		(1,221)
Recoveries		133		44		2		0		83		23		0		285
Net loans charged-off		(990)		44		2		0		60		(52)		0		(936)
Ending balance	$	24,977	$	16,010	$	3,904	$	383	$	2,120	$	304	$	2,930	$	50,628

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2020 and 2019:

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		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 loan 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

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Nine Months Ended September 30, 2019
Beginning balance, January 1	$	22,518	$	15,393	$	4,305	$	368	$	2,292	$	283	$	3,294	$	48,453
Provision for loan losses		3,260		461		(407)		15		(172)		192		(364)		2,985
Loans charged-off		(1,223)		0		0		0		(110)		(256)		0		(1,589)
Recoveries		422		156		6		0		110		85		0		779
Net loans charged-off		(801)		156		6		0		0		(171)		0		(810)
Ending balance	$	24,977	$	16,010	$	3,904	$	383	$	2,120	$	304	$	2,930	$	50,628

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2020 and December 31, 2019:

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
September 30, 2020
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	6,345	$	1,313	$	64	$	0	$	328	$	0	$	0	$	8,050
Collectively evaluated for impairment		22,018		20,102		3,033		572		2,990		830		3,152		52,697
Total ending allowance balance	$	28,363	$	21,415	$	3,097	$	572	$	3,318	$	830	$	3,152	$	60,747
Loans:
Loans individually evaluated for impairment	$	13,591	$	6,030	$	428	$	0	$	2,437	$	0	$	0	$	22,486
Loans collectively evaluated for impairment		1,824,156		1,851,790		337,736		97,428		351,287		105,041		0		4,567,438
Total ending loans balance	$	1,837,747	$	1,857,820	$	338,164	$	97,428	$	353,724	$	105,041	$	0	$	4,589,924

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
December 31, 2019
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	9,324	$	538	$	90	$	0	$	426	$	6	$	0	$	10,384
Collectively evaluated for impairment		16,465		15,258		3,779		447		1,660		339		2,320		40,268
Total ending allowance balance	$	25,789	$	15,796	$	3,869	$	447	$	2,086	$	345	$	2,320	$	50,652
Loans:
Loans individually evaluated for impairment	$	19,580	$	4,998	$	445	$	0	$	2,789	$	17	$	0	$	27,829
Loans collectively evaluated for impairment		1,407,246		1,665,842		379,186		112,166		375,210		98,349		0		4,037,999
Total ending loans balance	$	1,426,826	$	1,670,840	$	379,631	$	112,166	$	377,999	$	98,366	$	0	$	4,065,828

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2020:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	2,053	$	174	$	0
Non-working capital loans		3,070		974		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,039		2,039		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		339		258		0
Open end and junior lien loans		91		64		0
Residential construction loans		25		25		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		877		876		444
Non-working capital loans		12,252		11,567		5,901
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,990		3,991		1,313
Agri-business and agricultural loans:
Loans secured by farmland		145		145		64
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,468		1,470		293
Open end and junior lien loans		621		620		35
Total	$	27,573	$	22,486	$	8,050

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2019:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	22	$	22	$	0
Non-working capital loans		2,130		735		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,189		3,010		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Loans for ag production		15		15		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		411		330		0
Open end and junior lien loans		121		121		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,214		6,214		3,089
Non-working capital loans		13,230		12,609		6,235
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,988		1,988		538
Agri-business and agricultural loans:
Loans secured by farmland		147		147		90
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,643		1,646		363
Open end and junior lien loans		641		640		53
Residential construction loans		51		52		10
Other consumer loans		17		17		6
Total	$	30,422	$	27,829	$	10,384

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:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		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 three-month period ended September 30, 2019:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	165	$	2	$	2
Non-working capital loans		1,394		1		1
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,266		7		7
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		211		0		0
Open end and junior lien loans		137		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,313		0		0
Non-working capital loans		12,088		96		96
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,676		8		8
Agri-business and agricultural loans:
Loans secured by farmland		147		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,625		10		9
Open end and junior lien loans		433		0		0
Total	$	27,738	$	124	$	123

Aging of the Recorded Investment in Past Due Loans

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		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

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2019:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	203	$	7	$	8
Non-working capital loans		1,292		39		29
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,112		28		28
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		251		2		3
Open end and junior lien loans		141		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,375		143		81
Non-working capital loans		11,536		355		326
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,840		37		31
Agri-business and agricultural loans:
Loans secured by farmland		147		3		1
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,634		35		34
Open end and junior lien loans		145		0		0
Other consumer loans		24		2		1
Total	$	25,983	$	651	$	542

The following table presents the aging of the recorded investment in past due loans as of September 30, 2020 by class of loans:

					Greater than
			30‑89		90 Days				Total Past
	Loans Not		Days		Past				Due and
(dollars in thousands)	Past Due		Past Due		Due		Nonaccrual		Nonaccrual		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	591,549	$	41	$	0	$	1,050	$	1,091	$	592,640
Non-working capital loans		1,239,596		3		0		5,508		5,511		1,245,107
Commercial real estate and multi-family residential loans:
Construction and land development loans		392,078		0		0		0		0		392,078
Owner occupied loans		614,264		0		0		5,143		5,143		619,407
Nonowner occupied loans		567,009		18		0		0		18		567,027
Multifamily loans		279,308		0		0		0		0		279,308
Agri-business and agricultural loans:
Loans secured by farmland		150,020		0		0		428		428		150,448
Loans for agricultural production		187,716		0		0		0		0		187,716
Other commercial loans		97,428		0		0		0		0		97,428
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		168,835		813		19		640		1,472		170,307
Open end and junior lien loans		171,669		99		0		684		783		172,452
Residential construction loans		10,940		0		0		25		25		10,965
Other consumer loans		104,905		136		0		0		136		105,041
Total	$	4,575,317	$	1,110	$	19	$	13,478	$	14,607	$	4,589,924

The following table presents the aging of the recorded investment in past due loans as of December 31, 2019 by class of loans:

					Greater than
			30‑89		90 Days				Total Past
	Loans Not		Days		Past				Due and
(dollars in thousands)	Past Due		Past Due		Due		Nonaccrual		Nonaccrual		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	703,737	$	10	$	0	$	6,236	$	6,246	$	709,983
Non-working capital loans		710,557		4		0		6,282		6,286		716,843
Commercial real estate and multi-family residential loans:
Construction and land development loans		286,534		0		0		0		0		286,534
Owner occupied loans		569,303		0		0		4,056		4,056		573,359
Nonowner occupied loans		570,687		0		0		0		0		570,687
Multifamily loans		240,260		0		0		0		0		240,260
Agri-business and agricultural loans:
Loans secured by farmland		173,959		0		0		430		430		174,389
Loans for agricultural production		205,228		0		0		14		14		205,242
Other commercial loans		112,166		0		0		0		0		112,166
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		174,902		1,099		45		827		1,971		176,873
Open end and junior lien loans		187,255		188		0		761		949		188,204
Residential construction loans		12,870		0		0		52		52		12,922
Other consumer loans		98,176		173		0		17		190		98,366
Total	$	4,045,634	$	1,474	$	45	$	18,675	$	20,194	$	4,065,828

Troubled Debt Restructuring

	September 30		December 31
(dollars in thousands)	2020		2019
Accruing troubled debt restructured loans	$	5,658	$	5,909
Nonaccrual troubled debt restructured loans		6,547		3,188
Total troubled debt restructured loans	$	12,205	$	9,097

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
		Pre-Modification		Post-Modification			Extension
		Outstanding		Outstanding			Period or
	Number of	Recorded		Recorded		Number of	Range
(dollars in thousands)	Loans	Investment		Investment		Loans	(in months)
Troubled Debt Restructurings Commercial and industrial loans:
Working capital lines of credit loans	1	$	250	$	315	1	0
Non-working capital 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

The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 30, 2019:

						Modified Repayment Terms
		Pre-Modification		Post-Modification			Extension
		Outstanding		Outstanding			Period or
	Number of	Recorded		Recorded		Number of	Range
(dollars in thousands)	Loans	Investment		Investment		Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	1		35		35	1	0
Total	1	$	35	$	35	1	0

Credit Quality Indicators

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	526,206	$	47,016	$	19,159	$	0	$	259	$	592,640
Non-working capital loans		1,195,861		25,294		18,747		0		5,205		1,245,107
Commercial real estate and multi-family residential loans:
Construction and land development loans		392,078		0		0		0		0		392,078
Owner occupied loans		579,800		27,945		11,662		0		0		619,407
Nonowner occupied loans		560,424		6,603		0		0		0		567,027
Multifamily loans		279,308		0		0		0		0		279,308
Agri-business and agricultural loans:
Loans secured by farmland		139,013		10,778		657		0		0		150,448
Loans for agricultural production		136,682		51,034		0		0		0		187,716
Other commercial loans		97,428		0		0		0		0		97,428
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		42,213		0		1,728		0		126,366		170,307
Open end and junior lien loans		9,058		0		684		0		162,710		172,452
Residential construction loans		0		0		25		0		10,940		10,965
Other consumer loans		37,042		0		0		0		67,999		105,041
Total	$	3,995,113	$	168,670	$	52,662	$	0	$	373,479	$	4,589,924

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	631,728	$	40,551	$	37,278	$	0	$	426	$	709,983
Non-working capital loans		673,370		18,782		19,381		0		5,310		716,843
Commercial real estate and multi-family residential loans:
Construction and land development loans		286,534		0		0		0		0		286,534
Owner occupied loans		535,496		14,804		23,059		0		0		573,359
Nonowner occupied loans		569,315		781		591		0		0		570,687
Multifamily loans		240,260		0		0		0		0		240,260
Agri-business and agricultural loans:
Loans secured by farmland		165,005		7,952		1,432		0		0		174,389
Loans for agricultural production		191,489		13,738		15		0		0		205,242
Other commercial loans		112,166		0		0		0		0		112,166
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		47,405		0		1,976		0		127,492		176,873
Open end and junior lien loans		10,845		0		762		0		176,597		188,204
Residential construction loans		0		0		51		0		12,871		12,922
Other consumer loans		27,250		0		17		0		71,099		98,366
Total	$	3,490,863	$	96,608	$	84,562	$	0	$	393,795	$	4,065,828