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Loans
12 Months Ended
Dec. 31, 2014
Receivables [Abstract]  
Loans
LOANS
    
The following table presents loans by class as of the dates indicated:
December 31,
2014
 
2013
Real estate loans:
 
 
 
Commercial
$
1,639,422

 
$
1,449,174

Construction:
 
 
 
Land acquisition & development
220,443

 
205,911

Residential
96,580

 
76,488

Commercial
101,246

 
69,236

Total construction loans
418,269

 
351,635

Residential
999,903

 
867,912

Agricultural
167,659

 
173,534

Total real estate loans
3,225,253

 
2,842,255

Consumer:
 
 
 
Indirect consumer
552,863

 
476,012

Other consumer
144,141

 
133,039

Credit card
65,467

 
62,536

Total consumer loans
762,471

 
671,587

Commercial
740,073

 
676,544

Agricultural
124,859

 
111,872

Other, including overdrafts
3,959

 
1,734

Loans held for investment
4,856,615

 
4,303,992

Mortgage loans held for sale
40,828

 
40,861

Total loans
$
4,897,443

 
$
4,344,853


    
The Company has lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and internally risk-classified loans.
    
Real estate loans include construction and permanent financing for both single-family and multi-unit properties, term loans for commercial, agricultural and industrial property and/or buildings and home equity loans and lines of credit secured by real estate. Longer-term residential real estate loans are generally sold in the secondary market. Those residential real estate loans not sold are typically secured by first liens on the financed property and generally mature in less than fifteen years. Home equity loans and lines of credit are typically secured by first or second liens on residential real estate and generally do not exceed a loan to value ratio of 80%. The Company had home equity loans and lines of credit of $298,692 and $272,415 as of December 31, 2014 and 2013, respectively. Commercial and agricultural real estate loans are generally secured by first liens on income-producing real estate and generally mature in less than 5 years.
    
Construction loans are primarily to commercial builders for residential lot development and the construction of single-family residences and commercial real estate properties. Construction loans are generally underwritten pursuant to pre-approved permanent financing. During the construction phase the borrower pays interest only.
    
Consumer loans include direct personal loans, credit card loans and lines of credit; and indirect dealer loans for the purchase of automobiles, recreational vehicles, boats and other consumer goods. Personal loans and indirect dealer loans are generally secured by automobiles, boats and other types of personal property and are made on an installment basis. Credit cards are offered to individuals in our market areas. Lines of credit are generally floating rate loans that are unsecured or secured by personal property.

Commercial loans include a mix of variable and fixed rate loans made to small and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs and business expansions. Commercial loans generally include lines of credit, business credit cards and loans with maturities of five years or less. The loans are generally made with business operations as the primary source of repayment, but also include collateralization by inventory, accounts receivable, equipment and/or personal guarantees.
    
Agricultural loans generally consist of short and medium-term loans and lines of credit that are primarily used for crops, livestock, equipment and general operations. Agricultural loans are ordinarily secured by assets such as livestock or equipment and are repaid from the operations of the farm or ranch. Agricultural loans generally have maturities of five years or less, with operating lines for one production season.
    
Included in the loan table above, are loans acquired in business combinations including certain loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The following table displays the outstanding unpaid principal balance, accrued interest receivable and accrual status of loans acquired with credit impairment as of December 31, 2014 and 2013.    
December 31,
2014
2013
 
 
 
Outstanding balance
$
41,910

$

 
 
 
Carrying value
 
 
Loans on accrual status
31,870


Loans on non-accrual status


Total carrying value
$
31,870

$

    
The following table summarizes changes in the accretable yield for loans acquired credit impaired for year ended December 31, 2014 and 2013:
Year Ended December 31,
2014
2013
 
 
 
Beginning balance
$

$

Acquisition
5,233


Accretion income
(735
)

Reductions due to exit events
(201
)

Reclassifications from (to) nonaccretable differences
1,484


Ending balance
$
5,781

$



Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:
 
 
 
 
Total Loans
 
 
 
 
30 - 59
60 - 89
> 90
30 or More
 
 
 
 
Days
Days
Days
Days
Current
Non-accrual
Total
As of December 31, 2014
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
4,692

$
1,609

$
331

$
6,632

$
1,605,421

$
27,369

$
1,639,422

Construction:
 
 
 
 
 
 

 

Land acquisition & development
839

383


1,222

210,969

8,252

220,443

Residential

475


475

95,833

272

96,580

Commercial
100



100

98,582

2,564

101,246

Total construction loans
939

858


1,797

405,384

11,088

418,269

Residential
6,969

645

1,762

9,376

987,735

2,792

999,903

Agricultural
1,624

236


1,860

158,957

6,842

167,659

Total real estate loans
14,224

3,348

2,093

19,665

3,157,497

48,091

3,225,253

Consumer:
 
 
 
 


 

 

Indirect consumer
3,235

482

6

3,723

548,757

383

552,863

Other consumer
988

140

32

1,160

142,432

549

144,141

Credit card
369

284

315

968

64,484

15

65,467

Total consumer loans
4,592

906

353

5,851

755,673

947

762,471

Commercial
3,659

994

147

4,800

722,575

12,698

740,073

Agricultural
1,125



1,125

123,288

446

124,859

Other, including overdrafts




3,959


3,959

Loans held for investment
23,600

5,248

2,593

31,441

4,762,992

62,182

4,856,615

Mortgage loans originated for sale




40,828


40,828

Total loans
$
23,600

$
5,248

$
2,593

$
31,441

$
4,803,820

$
62,182

$
4,897,443


 
 
 
 
Total Loans
 
 
 
 
30 - 59
60 - 89
> 90
30 or More
 
 
 
 
Days
Days
Days
Days
Current
Non-accrual
Total
As of December 31, 2013
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
5,924

$
2,472

$
22

$
8,418

$
1,391,823

$
48,933

$
1,449,174

Construction:
 
 
 
 
 
 

 

Land acquisition & development
1,062

468

38

1,568

188,074

16,269

205,911

Residential
933

250


1,183

73,933

1,372

76,488

Commercial
584



584

68,427

225

69,236

Total construction loans
2,579

718

38

3,335

330,434

17,866

351,635

Residential
3,630

206

1,162

4,998

856,800

6,114

867,912

Agricultural
328

646


974

163,986

8,574

173,534

Total real estate loans
12,461

4,042

1,222

17,725

2,743,043

81,487

2,842,255

Consumer:
 
 
 




 

 

Indirect consumer
3,303

430

9

3,742

471,906

364

476,012

Other consumer
925

130

1

1,056

131,508

475

133,039

Credit card
364

187

515

1,066

61,451

19

62,536

Total consumer loans
4,592

747

525

5,864

664,865

858

671,587

Commercial
2,791

1,186

563

4,540

660,035

11,969

676,544

Agricultural
453

672


1,125

110,622

125

111,872

Other, including overdrafts




1,734


1,734

Loans held for investment
20,297

6,647

2,310

29,254

4,180,299

94,439

4,303,992

Mortgage loans originated for sale




40,861


40,861

Total loans
$
20,297

$
6,647

$
2,310

$
29,254

$
4,221,160

$
94,439

$
4,344,853


        
Acquired loans that meet the criteria for non-accrual of interest prior to the acquisition were considered performing upon acquisition. If interest on non-accrual loans had been accrued, such income would have approximated $3,970, $4,630 and $8,537 during the years ended December 31, 2014, 2013 and 2012, respectively.
    
The Company considers impaired loans to include all loans, except consumer loans, that are risk rated as doubtful, or have been placed on non-accrual status or renegotiated in troubled debt restructurings. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:
 
December 31, 2014
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
41,603

$
28,143

$
11,246

$
39,389

$
1,608

Construction:
 
 
 
 
 
Land acquisition & development
12,511

7,262

1,615

8,877

574

Residential
459

272


272


Commercial
2,729

253

2,442

2,695

904

Total construction loans
15,699

7,787

4,057

11,844

1,478

Residential
2,959

2,452

341

2,793

143

Agricultural
8,844

6,444

2,305

8,749

732

Total real estate loans
69,105

44,826

17,949

62,775

3,961

Commercial
16,904

11,882

2,644

14,526

1,190

Agricultural
1,231

342

837

1,179

641

Total
$
87,240

$
57,050

$
21,430

$
78,480

$
5,792

 
December 31, 2013
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
64,780

$
29,216

$
33,937

$
63,153

$
5,210

Construction:
 
 
 
 
 
Land acquisition & development
23,906

9,901

7,226

17,127

1,434

Residential
1,816

1,095

277

1,372

26

Commercial
397

279

84

363

85

Total construction loans
26,119

11,275

7,587

18,862

1,545

Residential
9,448

5,081

967

6,048

249

Agricultural
8,895

6,429

2,370

8,799

335

Total real estate loans
109,242

52,001

44,861

96,862

7,339

Commercial
15,448

10,684

2,901

13,585

1,504

Agricultural
177

39

86

125

86

Total
$
124,867

$
62,724

$
47,848

$
110,572

$
8,929


 
December 31, 2012
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
84,300

$
39,049

$
34,774

$
73,823

$
4,112

Construction:
 
 
 
 
 
Land acquisition & development
28,558

15,891

7,173

23,064

1,457

Residential
3,018

1,976

710

2,686

251

Commercial
10,447

7,785

340

8,125

69

Total construction loans
42,023

25,652

8,223

33,875

1,777

Residential
13,271

6,152

4,495

10,647

1,677

Agricultural
5,559

1,834

3,227

5,061

784

Total real estate loans
145,153

72,687

50,719

123,406

8,350

Commercial
12,770

9,036

3,206

12,242

1,919

Agricultural
589

509

28

537

28

Total
$
158,512

$
82,232

$
53,953

$
136,185

$
10,297


    
The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:
 
Year Ended December 31,
 
2014
 
2013
 
2012
 
Average Recorded Investment
Income Recognized
 
Average Recorded Investment
Income Recognized
 
Average Recorded Investment
Income Recognized
Real estate:
 
 
 
 
 
 
 
 
Commercial
$
54,701

$
876

 
$
66,330

$
1,092

 
$
78,670

$
1,339

Construction:
 
 
 
 
 
 
 
 
Land acquisition & development
13,056

43

 
19,523

487

 
44,457

110

Residential
822


 
1,893


 
8,431

4

Commercial
1,529

8

 
3,936

4

 
16,401


Total construction loans
15,407

51

 
25,352

491

 
69,289

114

Residential
4,537

5

 
8,104

17

 
13,703

26

Agricultural
8,774

78

 
8,230

8

 
6,936

41

Total real estate loans
83,419

1,010

 
108,016

1,608

 
168,598

1,520

Commercial
13,789

50

 
15,047

68

 
15,741

84

Agricultural
447

23

 
313

16

 
942

27

Total
$
97,655

$
1,083

 
$
123,376

$
1,692

 
$
185,281

$
1,631



The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in troubled debt restructurings that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans during 2014, 2013 and 2012 would have been approximately $4,951, $5,786 and $8,463, respectively.
    
Collateral dependent impaired loans are recorded at the fair value of the underlying collateral determined using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.
    
Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate changes, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and may be returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume, although they continue to be individually evaluated for impairment and disclosed as impaired loans.
    
The Company had loans renegotiated in troubled debt restructurings of $44,227 as of December 31, 2014, of which $23,275 were included in non-accrual loans and $20,952 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $59,792 as of December 31, 2013, of which $38,011 were included in non-accrual loans and $21,781 were on accrual status.

The following table presents information on the Company's troubled debt restructurings that occurred during the periods indicated:
 
 
Number of Notes
 
Type of Concession
Principal Balance at Restructure Date
Year Ended December 31, 2014
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Real estate:
 
 
 
 
 
 
 
 
Commercial
 
13

 
$
4,753

$
672

$
84

$
1,047

$
6,556

Residential
 
1

 



15

15

Total real estate loans
 
14

 
4,753

672

84

1,062

6,571

Consumer
 
1

 

113



113

Commercial
 
5

 
476



30

506

Total
 
20

 
$
5,229

$
785

$
84

$
1,092

$
7,190

 
 
Number of Notes
 
Type of Concession
Principal Balance at Restructure Date
Year ended December 31, 2013
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Real estate:
 
 
 
 
 
 
 
 
Commercial
 
19

 
$
543

$
1,378

$
11,420

$
2,310

$
15,651

Construction:
 
 
 
 
 
 
 
 
Land acquisition & development
 
8

 
528

7,308

1,952


9,788

Residential
 
3

 

408

411


819

Total construction loans
 
11

 
528

7,716

2,363


10,607

Residential
 
5

 

708


79

787

Agriculture
 
1

 


188


188

Total real estate loans
 
36

 
1,071

9,802

13,971

2,389

27,233

Consumer
 
1

 


27


27

Commercial
 
6

 
613

178

265

87

1,143

Total
 
43

 
$
1,684

$
9,980

$
14,263

$
2,476

$
28,403



 
 
Number of Notes
 
Type of Concession
Principal Balance at Restructure Date
Year ended December 31, 2012
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Real estate:
 
 
 
 
 
 
 
 
Commercial
 
16

 
$

$
959

$
4,504

$
8,611

$
14,074

Construction:
 
 
 
 
 
 
 
 
Commercial
 
1

 



3,155

3,155

Land acquisition & development
 
5

 

1,000

1,757

623

3,380

Residential
 
2

 

280

233


513

Total construction loans
 
8

 

1,280

1,990

3,778

7,048

Residential
 
2

 
568

25



593

Agriculture
 
1

 

154



154

Total real estate loans
 
27

 
568

2,418

6,494

12,389

21,869

Consumer
 
1

 

69



69

Commercial
 
10

 
387

217


218

822

Total
 
38

 
$
955

$
2,704

$
6,494

$
12,607

$
22,760


Other concessions include payment reductions or deferrals for a specified period of time or the extension of amortization schedules. A specific reserve may have been previously recorded for loans modified in troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification. In periods subsequent to modification, the Company continues to evaluate all loans modified in troubled debt restructurings for possible impairment, which is recognized through the allowance for loan losses. Financial effects of modifications may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to loans modified in troubled debt restructurings taken at the time of restructuring during 2014, 2013 or 2012.

The Company considers a payment default to occur on loans modified in troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification. As of December 31, 2014, 2013 and 2012, loans modified in troubled debt restructurings within the previous 12 months for which there was a payment default during the period were not significant. As of December 31, 2014, and 2013, all of the loans modified in troubled debt restructurings with payment defaults during the previous twelve months were on non-accrual status.

At December 31, 2014, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:
As of December 31, 2014
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
Real estate:
 
 
 
 
Commercial
$
84,533

$
83,448

$
15,246

$
183,227

Construction:
 
 
 
 
Land acquisition & development
11,826

15,016

2,507

29,349

Residential
2,029

2,666


4,695

Commercial
39

253

2,442

2,734

Total construction loans
13,894

17,935

4,949

36,778

Residential
10,473

10,848

1,121

22,442

Agricultural
10,122

12,328

612

23,062

Total real estate loans
119,022

124,559

21,928

265,509

Consumer:
 
 
 
 
Indirect consumer
916

1,590

121

2,627

Other consumer
553

1,085

432

2,070

Credit card

348

1,263

1,611

Total consumer loans
1,469

3,023

1,816

6,308

Commercial
25,766

32,433

10,273

68,472

Agricultural
7,827

3,660

837

12,324

Total
$
154,084

$
163,675

$
34,854

$
352,613

As of December 31, 2013
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
Real estate:
 
 
 
 
Commercial
$
79,747

$
86,426

$
24,840

$
191,013

Construction:
 
 
 
 
Land acquisition & development
13,211

19,677

7,329

40,217

Residential
1,859

1,649

277

3,785

Commercial

409

84

493

Total construction loans
15,070

21,735

7,690

44,495

Residential
7,500

7,188

4,184

18,872

Agricultural
13,597

10,245

2,370

26,212

Total real estate loans
115,914

125,594

39,084

280,592

Consumer:
 
 
 
 
Indirect consumer
875

1,524

115

2,514

Other consumer
573

969

268

1,810

Credit card

392

2,010

2,402

Total consumer loans
1,448

2,885

2,393

6,726

Commercial
33,318

23,833

3,745

60,896

Agricultural
8,401

1,788

86

10,275

Total
$
159,081

$
154,100

$
45,308

$
358,489




The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.