Note 7: Fdic Acquired Loans, Loss Sharing Agreements and FDIC Indemnification Assets

3 Months Ended

Jun. 30, 2016

Notes

Note 7: Fdic Acquired Loans, Loss Sharing Agreements and FDIC Indemnification Assets

NOTE 7: FDIC ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS

On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. 

The loans, commitments and foreclosed assets purchased in the TeamBank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank.  Under the loss sharing agreement, the Bank shared in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $115.0 million, the FDIC agreed to reimburse the Bank for 80% of the losses. On losses exceeding $115.0 million, the FDIC agreed to reimburse the Bank for 95% of the losses.  Realized losses covered by the loss sharing agreement included loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by the Bank.  This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five-year period ended March 31, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC.  See “Loss Sharing Agreements” below.  The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired.  The loss sharing agreement was subject to the Bank following servicing procedures as specified in the agreement.  The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date.  Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. 

On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. 

The loans, commitments and foreclosed assets purchased in the Vantus Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank.  Under the loss sharing agreement, the Bank shared in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $102.0 million, the FDIC agreed to reimburse the Bank for 80% of the losses. On losses exceeding $102.0 million, the FDIC agreed to reimburse the Bank for 95% of the losses. Realized losses covered by the loss sharing agreement included loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by the Bank.  This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five year period ended on September 30, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC.  See “Loss Sharing Agreements” below.  The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired.  The loss sharing agreement was subject to the Bank following servicing procedures as specified in the agreement.  The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date.  Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.

On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri. 

The loans and foreclosed assets purchased in the Sun Security Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank.  Under the loss sharing agreement, the FDIC agreed to cover 80% of the losses on the loans (excluding approximately $4 million of consumer loans at the date of the acquisition) and foreclosed assets purchased subject to certain limitations.  Realized losses covered by the loss sharing agreement included loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern.  This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans but was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC.  See “Loss Sharing Agreements” below.  The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired.  The loss sharing agreement was subject to the Bank following servicing procedures as specified in the agreement.  The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date.  Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.

On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (“InterBank”), a full service bank headquartered in Maple Grove, Minnesota. 

The loans and foreclosed assets purchased in the InterBank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank.  Under the loss sharing agreement, the FDIC agreed to cover 80% of the losses on the loans (excluding approximately $60,000 of consumer loans) and foreclosed assets purchased subject to certain limitations.  Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by Great Southern.  This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans.  The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired.  The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC.  The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date.  Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.  A premium was recorded in conjunction with the fair value of the acquired loans and the amount amortized to yield during the three and six months ended June 30, 2016 was $93,000 and $191,000, respectively.  The amount amortized to yield during the three and six months ended June 30, 2015 was $116,000 and $238,000, respectively. 

On June 20, 2014, Great Southern Bank entered into a purchase and assumption agreement with the FDIC to purchase a substantial portion of the loans and investment securities, as well as certain other assets, and assume all of the deposits, as well as certain other liabilities, of Valley Bank (“Valley”), a full-service bank headquartered in Moline, Illinois, with significant operations in Iowa.  This transaction did not include a loss sharing agreement. 

Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. A premium was recorded in conjunction with the fair value of the acquired loans and the amount amortized to yield during the three and six months ended June 30, 2016 was $131,000 and $280,000, respectively.  The amount amortized to yield during the three and six months ended June 30, 2015 was $201,000 and $420,000, respectively. 

Loss Sharing Agreements.  On April 26, 2016, Great Southern Bank executed an agreement with the FDIC to terminate the loss sharing agreements for Team Bank, Vantus Bank and Sun Security Bank, effective immediately.  The agreement required the FDIC to pay $4.4 million to settle all outstanding items related to the terminated loss sharing agreements.  As a result of entering into the agreement, assets that were covered by the terminated loss sharing agreements, including covered loans in the amount of $61.5 million and covered other real estate owned in the amount of $468,000 as of June 30, 2016, were reclassified as non-covered assets effective April 26, 2016.  In anticipation of terminating the loss sharing agreements, an impairment of the related indemnification assets was recorded during the three months ended March 31, 2016 in the amount of $584,000.  On the date of the termination, the indemnification asset balances (and certain other receivables from the FDIC) related to Team Bank, Vantus Bank and Sun Security Bank, which totaled $4.4 million, net of impairment, at March 31, 2016, became $0 as a result of the receipt of funds from the FDIC as outlined in the termination agreement.  There will be no future effects on non-interest income (expense) related to adjustments or amortization of the indemnification assets for Team Bank, Vantus Bank or Sun Security Bank; however, adjustments and amortization related to the InterBank indemnification asset and loss sharing agreement will continue.  The remaining accretable yield adjustments that affect interest income are not changed by this transaction and will continue to be recognized for all FDIC-assisted transactions in the same manner as they have been previously. 

The termination of the loss sharing agreements for the TeamBank, Vantus Bank and Sun Security Bank transactions have no impact on the yields for the loans that were previously covered under these agreements. All future recoveries, gains, losses and expenses related to these previously covered assets will now be recognized entirely by Great Southern Bank since the FDIC will no longer be sharing in such gains or losses. Accordingly, the Company’s future earnings will be positively impacted to the extent the Company recognizes gains on any sales or recoveries in excess of the carrying value of such assets. Similarly, the Company’s future earnings will be negatively impacted to the extent the Company recognizes expenses, losses or charge-offs related to such assets.

Fair Value and Expected Cash Flows.  At the time of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For non-performing loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. This valuation of the acquired loans is a significant component leading to the valuation of the loss sharing assets recorded. 

The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield.  The accretable yield is recognized as interest income over the estimated lives of the loans.  The Company continues to evaluate the fair value of the loans including cash flows expected to be collected.  Increases in the Company’s cash flow expectations are recognized as increases to the accretable yield while decreases are recognized as impairments through the allowance for loan losses.  During the three and six months ended June 30, 2016, improvements in expected cash flows related to the acquired loan portfolios resulted in adjustments of $725,000 and $5.0 million, respectively, to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis. During the three and six months ended June 30, 2015, similar such adjustments totaling $900,000 and $8.2 million, respectively, were made to the accretable yield.  The increases in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements.  During the three and six months ended June 30, 2016, this resulted in corresponding adjustments of $160,000 and $1.9 million, respectively, to the indemnification assets to be amortized on a level-yield basis over the remainder of the loss sharing agreements or the remaining expected lives of the loan pools, whichever is shorter.  During the three and six months ended June 30, 2015, corresponding adjustments of $-0- and $4.4 million, respectively, were made to the indemnification assets. 

Because these adjustments will be recognized over the remaining lives of the loan pools and the remainder of the loss sharing agreement, respectively, they will impact future periods as well.  The remaining accretable yield adjustment that will affect interest income is $8.3 million and the remaining adjustment to the indemnification asset related to InterBank, including the effects of the clawback liability, that will affect non-interest income (expense) is $(4.0) million.  The $8.3 million of accretable yield adjustment relates to Team Bank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank, and this income is not affected by the termination of the loss sharing agreements for Team Bank, Vantus Bank and Sun Security Bank.  The expense, as noted, is only related to InterBank, as there is no longer, nor will there be in the future, indemnification asset amortization expense related to Team Bank, Vantus Bank, or Sun Security Bank due to the termination of the related loss sharing agreements in April 2016.  Of the remaining adjustments, we expect to recognize $4.0 million of interest income and $(1.8) million of non-interest income (expense) during the remainder of 2016.  Additional adjustments may be recorded in future periods from the FDIC-assisted transactions, as the Company continues to estimate expected cash flows from the acquired loan pools. 

The impact of adjustments on the Company’s financial results is shown below:

	Three Months Ended		Three Months Ended
	June 30, 2016		June 30, 2015
	(In Thousands, Except Per Share Data
	and Basis Points Data)
Impact on net interest income/
net interest margin (in basis points)	$3,858	39 bps	$7,259	78 bps
Non-interest income	(1,774)		(5,374)
Net impact to pre-tax income	$2,084		$1,885
Net impact net of taxes	$1,355		$1,225
Impact to diluted earnings per common share	$0.10		$0.09

	Six Months Ended		Six Months Ended
	June 30, 2016		June 30, 2015
	(In Thousands, Except Per Share Data
	and Basis Points Data)
Impact on net interest income/
net interest margin (in basis points)	$9,240	47 bps	$16,221	88 bps
Non-interest income	(4,708)		(12,052)
Net impact to pre-tax income	$4,532		$4,169
Net impact net of taxes	$2,946		$2,710
Impact to diluted earnings per common share	$0.21		$0.19

The loss sharing asset is measured separately from the loan portfolio because it is not contractually embedded in the loans and is not transferable with the loans should the Bank choose to dispose of them. Fair value was estimated using projected cash flows available for loss sharing based on the credit adjustments estimated for each loan pool (as discussed above) and the loss sharing percentages outlined in the applicable Purchase and Assumption Agreement with the FDIC. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. The loss sharing asset is also separately measured from the related foreclosed real estate.

The loss sharing agreement on the InterBank transaction includes a clawback provision whereby if credit loss performance is better than certain pre-established thresholds, then a portion of the monetary benefit is shared with the FDIC.  The pre-established threshold for credit losses is $115.7 million for this transaction.  The monetary benefit required to be paid to the FDIC under the clawback provision, if any, will occur shortly after the termination of the loss sharing agreement, which in the case of InterBank is 10 years from the acquisition date.

At June 30, 2016 and December 31, 2015, the Bank’s internal estimate of credit performance was expected to be better than the threshold set by the FDIC in the loss sharing agreement.  Therefore, a separate clawback liability totaling $6.6 million and $6.6 million was recorded as of June 30, 2016 and December 31, 2015, respectively.  As changes in the fair values of the loans and foreclosed assets are determined due to changes in expected cash flows, changes in the amount of the clawback liability will occur.

In addition, the Company's net interest margin has been impacted by additional yield accretion recognized in conjunction with updated estimates of the fair value of the loan pools acquired in the June 2014 Valley Bank FDIC-assisted transaction. Beginning with the three months ended December 31, 2014, the cash flow estimates have increased for certain of the Valley Bank loan pools primarily based on significant loan repayments and also due to collection of certain loans, thereby reducing loss expectations on certain of the loan pools. This resulted in increased income that was spread on a level-yield basis over the remaining expected lives of these loan pools. The Valley Bank transaction does not include a loss sharing agreement with the FDIC. Therefore, there is no related indemnification asset. The entire amount of the discount adjustment will be accreted to interest income over time with no offsetting impact to non-interest income.  The amount of the Valley Bank discount adjustment accreted to interest income for the three and six months ended June 30, 2016 was $1.7 million and $3.7 million, respectively, and is included in the impact on net interest income/net interest margin amount in the table above.  Based on current estimates, we anticipate recording additional interest income accretion of $1.8 million in the remainder of 2016 related to these Valley Bank loans, which is included in the $4.0 million discussed above.

TeamBank Loans, Foreclosed Assets and Indemnification Asset.  The following tables present the balances of the acquired loans, foreclosed assets and FDIC indemnification asset related to the TeamBank transaction at June 30, 2016 and December 31, 2015. Gross loan balances (due from the borrower) were reduced approximately $413.3 million since the transaction date because of $280.4 million of repayments from borrowers, $61.7 million in transfers to foreclosed assets and $71.2 million in charge-offs to customer loan balances.  Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations in this regard.  As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.

	June 30, 2016
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$22,877	$--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(1,038)	--
Original estimated fair value of assets, net of activity since
acquisition date	(21,669)	--
Expected loss remaining	$170	$--

	December 31, 2015
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$29,115	$--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(1,285)	--
Original estimated fair value of assets, net of activity since
acquisition date	(27,660)	--
Expected loss remaining	170	--
Assumed loss sharing recovery percentage	90%	0%
Estimated loss sharing value	154	--
Indemnification asset to be amortized resulting from
change in expected losses	241	--
FDIC indemnification asset	$395	$--

Vantus Bank Loans, Foreclosed Assets and Indemnification Asset.  The following tables present the balances of the acquired loans, foreclosed assets and FDIC indemnification asset related to the Vantus Bank transaction at June 30, 2016 and December 31, 2015. Gross loan balances (due from the borrower) were reduced approximately $303.0 million since the transaction date because of $257.1 million of repayments from borrowers, $16.7 million in transfers to foreclosed assets and $29.2 million in charge-offs to customer loan balances.  Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations in this regard.  As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.

	June 30, 2016
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$28,562	$608
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(333)	--
Original estimated fair value of assets, net of activity since
acquisition date	(27,973)	(418)
Expected loss remaining	$256	$190

	December 31, 2015
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$31,818	$608
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(470)	--
Original estimated fair value of assets, net of activity since
acquisition date	(31,092)	(418)
Expected loss remaining	256	190
Assumed loss sharing recovery percentage	61%	--%
Estimated loss sharing value	156	--
Indemnification asset to be amortized resulting from
change in expected losses	319	--
FDIC indemnification asset	$475	$--

Sun Security Bank Loans, Foreclosed Assets and Indemnification Asset.  The following tables present the balances of the acquired loans, foreclosed assets and FDIC indemnification asset related to the Sun Security Bank transaction at June 30, 2016 and December 31, 2015.  Gross loan balances (due from the borrower) were reduced approximately $196.2 million since the transaction date because of $136.9 million of repayments from borrowers, $28.3 million in transfers to foreclosed assets and $31.0 million of charge-offs to customer loan balances.  Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations in this regard.  As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above. 

	June 30, 2016
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$38,247	$372
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(1,443)	--
Original estimated fair value of assets, net of activity since
acquisition date	(35,558)	(303)
Expected loss remaining	$1,246	$69

	December 31, 2015
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$43,855	$557
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(2,171)	--
Original estimated fair value of assets, net of activity since
acquisition date	(40,349)	(461)
Expected loss remaining	1,335	96
Assumed loss sharing recovery percentage	34%	80%
Estimated loss sharing value	456	77
Indemnification asset to be amortized resulting from
change in expected losses	1,725	--
Accretable discount on FDIC indemnification asset	(36)	(63)
FDIC indemnification asset	$2,145	$14

InterBank Loans, Foreclosed Assets and Indemnification Asset.  The following table presents the balances of the acquired loans, foreclosed assets and FDIC indemnification asset related to the InterBank transaction at June 30, 2016 and December 31, 2015.  Gross loan balances (due from the borrower) were reduced approximately $221.2 million since the transaction date because of $184.5 million of repayments by the borrower, $15.1 million in transfers to foreclosed assets and $21.6 million of charge-offs to customer loan balances.  Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations in this regard.  As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.

	June 30, 2016
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$172,104	$1,062
Non-credit premium/(discount), net of activity since acquisition date	711	--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(3,043)	--
Original estimated fair value of assets, net of activity since
acquisition date	(153,306)	(794)
Expected loss remaining	16,466	268
Assumed loss sharing recovery percentage	83%	80%
Estimated loss sharing value(1)	13,728	214
FDIC loss share clawback	1,563	--
Indemnification asset to be amortized resulting from
change in expected losses	2,434	--
Accretable discount on FDIC indemnification asset	(1,372)	(33)
FDIC indemnification asset	$16,353	$181

(1) Includes $400,000 impairment of indemnification asset for loans

	December 31, 2015
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis for loss sharing determination,
net of activity since acquisition date	$193,654	$2,110
Non-credit premium/(discount), net of activity since acquisition date	902	--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(4,901)	--
Original estimated fair value of assets, net of activity since
acquisition date	(170,308)	(1,392)
Expected loss remaining	19,347	718
Assumed loss sharing recovery percentage	83%	80%
Estimated loss sharing value	16,032	575
FDIC loss share clawback	2,360	--
Indemnification asset to be amortized resulting from
change in expected losses	3,920	--
Accretable discount on FDIC indemnification asset	(1,801)	(33)
FDIC indemnification asset	$20,511	$542

Valley Bank Loans and Foreclosed Assets.  The following tables present the balances of the loans and discount related to the Valley Bank transaction at June 30, 2016 and December 31, 2015.  Gross loan balances (due from the borrower) were reduced approximately $96.7 million since the transaction date because of $87.7 million of repayments by the borrower, $6.8 million of charge-offs to customer loan balances and $2.2 million in transfers to foreclosed assets.  The Valley Bank transaction did not include a loss sharing agreement; however, the loans were recorded at a discount, which is accreted to yield over the life of the loans.  Based upon the collectability analyses performed during the acquisition, we expected certain levels of foreclosures and charge-offs and actual results have been better than our expectations in this regard. As a result, cash flows expected to be received from the acquired loan pools have increased, resulting in adjustments that were made to the related accretable yield as described above.

	June 30, 2016
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis, net of activity since acquisition date	$96,425	$1,502
Non-credit premium/(discount), net of activity since acquisition date	440	--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(2,444)	--
Original estimated fair value of assets, net of activity since
acquisition date	(84,019)	(1,481)
Expected loss remaining	$10,402	$21

	December 31, 2015
		Foreclosed
	Loans	Assets
	(In Thousands)
Initial basis, net of activity since acquisition date	$109,791	$1,017
Non-credit premium/(discount), net of activity since acquisition date	719	--
Reclassification from nonaccretable discount to accretable discount
due to change in expected losses (net of accretion to date)	(3,213)	--
Original estimated fair value of assets, net of activity since
acquisition date	(93,436)	(995)
Expected loss remaining	$13,861	$22

Changes in the accretable yield for acquired loan pools were as follows for the three months ended June 30, 2016 and 2015:

			Sun Security
	TeamBank	Vantus Bank	Bank	InterBank	Valley Bank
	(In Thousands)
Balance, April 1, 2015	$5,949	$4,531	$7,400	$31,808	$11,087
Accretion	(713)	(710)	(1,365)	(7,797)	(2,357)
Reclassification from
nonaccretable yield(1)	(496)	154	649	716	636
Balance, June 30, 2015	$4,740	$3,975	$6,684	$24,727	$9,366
Balance April 1, 2016	$3,486	$3,236	$5,323	$14,555	$8,232
Accretion	(550)	(502)	(979)	(3,475)	(2,717)
Reclassification from
nonaccretable yield(1)	(50)	483	670	738	1,009
Balance, June 30, 2016	$2,886	$3,217	$5,014	$11,818	$6,524

(1) Represents increases in estimated cash flows expected to be received from the acquired loan pools, primarily due to lower estimated credit losses.  The amounts also include changes in expected accretion of the loan pools for TeamBank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank for the three months ended June 30, 2016, totaling $(50,000), $483,000, $670,000, $538,000 and $484,000, respectively, and for the three months ended June 30, 2015, totaling $(496,000), $154,000, $649,000, $716,000 and $(264,000), respectively. 

Changes in the accretable yield for acquired loan pools were as follows for the six months ended June 30, 2016 and

2015:

			Sun Security
	TeamBank	Vantus Bank	Bank	InterBank	Valley Bank
	(In Thousands)
Balance, January 1, 2015	$6,865	$4,453	$7,952	$36,092	$11,132
Accretion	(2,114)	(1,391)	(3,318)	(16,997)	(4,860)
Reclassification from
nonaccretable yield(1)	(11)	913	2,050	5,632	3,094
Balance, June 30, 2015	$4,740	$3,975	$6,684	$24,727	$9,366
Balance January 1, 2016	$3,805	$3,360	$5,924	$16,347	$8,316
Accretion	(1,031)	(991)	(2,051)	(8,116)	(5,863)
Reclassification from
nonaccretable yield(1)	112	848	1,141	3,587	4,071
Balance, June 30, 2016	$2,886	$3,217	$5,014	$11,818	$6,524

(1) Represents increases in estimated cash flows expected to be received from the acquired loan pools, primarily due to lower estimated credit losses.  The amounts also include changes in expected accretion of the loan pools for TeamBank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank for the six months ended June 30, 2016, totaling $112,000, $848,000, $974,000, $1.2 million and $1.1 million, respectively, and for the six months ended June 30, 2015, totaling $(176,000), $527,000, $1.1 million, $1.6 million and $344,000, respectively.