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Loans
12 Months Ended
Dec. 31, 2016
Receivables [Abstract]  
Loans
LOANS
    
The following table presents loans by class as of the dates indicated:
December 31,
2016
 
2015
Real estate loans:
 
 
 
Commercial
$
1,834,445

 
$
1,793,258

Construction:
 
 
 
Land acquisition & development
208,512

 
224,066

Residential
147,896

 
111,763

Commercial
125,589

 
94,890

Total construction loans
481,997

 
430,719

Residential
1,027,393

 
1,032,851

Agricultural
170,248

 
156,234

Total real estate loans
3,514,083

 
3,413,062

Consumer:
 
 
 
Indirect consumer
752,409

 
622,529

Other consumer
148,087

 
153,717

Credit card
69,770

 
68,107

Total consumer loans
970,266

 
844,353

Commercial
797,942

 
792,416

Agricultural
132,858

 
142,151

Other, including overdrafts
1,601

 
1,339

Loans held for investment
5,416,750

 
5,193,321

Mortgage loans held for sale
61,794

 
52,875

Total loans
$
5,478,544

 
$
5,246,196


    
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 $321,481 and $298,661 as of December 31, 2016 and 2015, 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, 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, 2016 and 2015.    
December 31,
2016
 
2015
 
 
 
 
Outstanding balance
$
35,755

 
$
33,755

Carrying value:
 
 
 
Loans on accrual status
21,925

 
21,507

Loans on non-accrual status

 

Total carrying value
$
21,925

 
$
21,507

    
The following table summarizes changes in the accretable yield for loans acquired credit impaired for year ended December 31, 2016 and 2015:
Year Ended December 31,
2016
 
2015
 
 
 
 
Beginning balance
$
6,713

 
$
5,781

Acquisitions
1,113

 
432

Accretion income
(2,524
)
 
(2,884
)
Additions
2

 
594

Reductions due to exit events
(1,095
)
 
(517
)
Reclassifications from nonaccretable differences
2,594

 
3,307

Ending balance
$
6,803

 
$
6,713



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, 2016
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
7,307

$
1,099

$
303

$
8,709

$
1,799,525

$
26,211

$
1,834,445

Construction:
 
 
 
 
 
 

 

Land acquisition & development
633

352

279

1,264

202,223

5,025

208,512

Residential
931

264


1,195

146,245

456

147,896

Commercial




124,827

762

125,589

Total construction loans
1,564

616

279

2,459

473,295

6,243

481,997

Residential
3,986

1,280

702

5,968

1,014,990

6,435

1,027,393

Agricultural
341

287


628

165,293

4,327

170,248

Total real estate loans
13,198

3,282

1,284

17,764

3,453,103

43,216

3,514,083

Consumer:
 
 
 
 


 

 

Indirect consumer
8,425

2,329

712

11,466

740,163

780

752,409

Other consumer
1,322

235

167

1,724

146,006

357

148,087

Credit card
504

333

567

1,404

68,366


69,770

Total consumer loans
10,251

2,897

1,446

14,594

954,535

1,137

970,266

Commercial
3,171

727

734

4,632

767,878

25,432

797,942

Agricultural
1,518

362

14

1,894

127,956

3,008

132,858

Other, including overdrafts

1

311

312

1,289


1,601

Loans held for investment
28,138

7,269

3,789

39,196

5,304,761

72,793

5,416,750

Mortgage loans originated for sale




61,794


61,794

Total loans
$
28,138

$
7,269

$
3,789

$
39,196

$
5,366,555

$
72,793

$
5,478,544


 
 
 
 
Total Loans
 
 
 
 
30 - 59
60 - 89
> 90
30 or More
 
 
 
 
Days
Days
Days
Days
Current
Non-accrual
Total
As of December 31, 2015
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
6,051

$
724

$
418

$
7,193

$
1,762,294

$
23,771

$
1,793,258

Construction:
 
 
 
 
 
 

 

Land acquisition & development
3,190

163

1,325

4,678

212,757

6,631

224,066

Residential
1,288



1,288

110,182

293

111,763

Commercial
3,232



3,232

90,703

955

94,890

Total construction loans
7,710

163

1,325

9,198

413,642

7,879

430,719

Residential
5,991

1,196

2,063

9,250

1,018,359

5,242

1,032,851

Agricultural
176

17


193

150,686

5,355

156,234

Total real estate loans
19,928

2,100

3,806

25,834

3,344,981

42,247

3,413,062

Consumer:
 
 
 




 

 

Indirect consumer
6,675

1,089

210

7,974

614,029

526

622,529

Other consumer
1,312

331

34

1,677

151,381

659

153,717

Credit card
533

317

477

1,327

66,768

12

68,107

Total consumer loans
8,520

1,737

721

10,978

832,178

1,197

844,353

Commercial
8,493

1,060

699

10,252

759,851

22,313

792,416

Agricultural
879

152

62

1,093

140,430

628

142,151

Other, including overdrafts


314

314

1,025


1,339

Loans held for investment
37,820

5,049

5,602

48,471

5,078,465

66,385

5,193,321

Mortgage loans originated for sale




52,875


52,875

Total loans
$
37,820

$
5,049

$
5,602

$
48,471

$
5,131,340

$
66,385

$
5,246,196


        
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 $3,389, $3,150 and $3,970 during the years ended December 31, 2016, 2015 and 2014, 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, 2016
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
57,017

$
24,410

$
21,420

$
45,830

$
2,847

Construction:
 
 
 
 
 
Land acquisition & development
12,084

4,330

1,813

6,143

826

Residential
1,555

219

619

838

1

Commercial
4,786

3,940

647

4,587

657

Total construction loans
18,425

8,489

3,079

11,568

1,484

Residential
8,222

4,074

2,470

6,544

253

Agricultural
5,069

4,509

181

4,690

4

Total real estate loans
88,733

41,482

27,150

68,632

4,588

Commercial
40,314

13,230

19,167

32,397

9,254

Agricultural
3,738

3,280

382

3,662

112

Total
$
132,785

$
57,992

$
46,699

$
104,691

$
13,954

 
December 31, 2015
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
58,179

$
27,882

$
17,614

$
45,496

$
3,401

Construction:
 
 
 
 
 
Land acquisition & development
15,503

7,245

778

8,023

282

Residential
992

293


293


Commercial
1,264

340

739

1,079

739

Total construction loans
17,759

7,878

1,517

9,395

1,021

Residential
7,073

3,547

2,317

5,864

367

Agricultural
6,434

5,563

198

5,761

5

Total real estate loans
89,445

44,870

21,646

66,516

4,794

Commercial
29,593

10,744

13,727

24,471

6,487

Agricultural
1,349

622

356

978

294

Total
$
120,387

$
56,236

$
35,729

$
91,965

$
11,575


 
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


    
The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
Average Recorded Investment
Income Recognized
 
Average Recorded Investment
Income Recognized
 
Average Recorded Investment
Income Recognized
Real estate:
 
 
 
 
 
 
 
 
Commercial
$
46,870

$
239

 
$
39,233

$
784

 
$
54,701

$
876

Construction:
 
 
 
 
 
 
 
 
Land acquisition & development
8,026

40

 
8,337

54

 
13,056

43

Residential
829


 
282


 
822


Commercial
2,882

24

 
1,887

7

 
1,529

8

Total construction loans
11,737

64

 
10,506

61

 
15,407

51

Residential
6,220

11

 
4,055

1

 
4,537

5

Agricultural
4,365

16

 
7,156

39

 
8,774

78

Total real estate loans
69,192

330

 
60,950

885

 
83,419

1,010

Commercial
30,089

307

 
18,502

123

 
13,789

50

Agricultural
1,827

35

 
858

26

 
447

23

Total
$
101,108

$
672

 
$
80,310

$
1,034

 
$
97,655

$
1,083



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 2016, 2015 and 2014 would have been approximately $4,203, $3,935 and $4,951, respectively.
    
Collateral dependent impaired loans are recorded at the fair value less selling costs 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 $49,652 as of December 31, 2016, of which $27,309 were included in non-accrual loans and $22,343 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $40,330 as of December 31, 2015, of which $24,911 were included in non-accrual loans and $15,419 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, 2016
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Real estate:
 
 
 
 
 
 
 
 
Commercial
 
18

 
$
437

$
5,452

$
171

$
1,777

$
7,837

Commercial construction
 
1

 

3,749



3,749

Residential
 
1

 

64



64

Total real estate loans
 
20

 
437

9,265

171

1,777

11,650

Commercial
 
13

 
4,426

381


3,269

8,076

Agriculture
 
2

 

340



340

Total
 
35

 
$
4,863

$
9,986

$
171

$
5,046

$
20,066

 
 
Number of Notes
 
Type of Concession
Principal Balance at Restructure Date
Year ended December 31, 2015
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Commercial real estate
 
2

 
$

$
628

$

$
54

$
682

Consumer
 
1

 



4

4

Commercial
 
12

 

8,689

3,318

455

12,462

Total
 
15

 
$

$
9,317

$
3,318

$
513

$
13,148



 
 
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


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 2016, 2015 or 2014.

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. The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default.
Year ended December 31, 2016
 
Number of Notes
 
Balance
Commercial real estate
 
1

 
$
194

Commercial
 
2

 
381

 
 
3

 
$
575



As of December 31, 2015 and 2014, 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, 2016, and 2015, 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, 2016, 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, 2016
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
Real estate:
 
 
 
 
Commercial
$
85,292

$
85,293

$
10,842

$
181,427

Construction:
 
 
 
 
Land acquisition & development
13,414

6,214

1,401

21,029

Residential
412

1,621

656

2,689

Commercial
1,555

6,344

664

8,563

Total construction loans
15,381

14,179

2,721

32,281

Residential
5,038

12,472

764

18,274

Agricultural
3,831

17,813


21,644

Total real estate loans
109,542

129,757

14,327

253,626

Consumer:
 
 
 
 
Indirect consumer
778

1,527

101

2,406

Other consumer
681

1,036

264

1,981

Total consumer loans
1,459

2,563

365

4,387

Commercial
46,402

29,281

21,240

96,923

Agricultural
6,178

10,724

404

17,306

Total
$
163,581

$
172,325

$
36,336

$
372,242

As of December 31, 2015
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
Real estate:
 
 
 
 
Commercial
$
61,787

$
84,556

$
10,609

$
156,952

Construction:
 
 
 
 
Land acquisition & development
16,593

12,482

591

29,666

Residential
1,640

1,886


3,526

Commercial
166

323

756

1,245

Total construction loans
18,399

14,691

1,347

34,437

Residential
4,453

9,661

2,540

16,654

Agricultural
6,114

16,529


22,643

Total real estate loans
90,753

125,437

14,496

230,686

Consumer:
 
 
 
 
Indirect consumer
644

1,131

154

1,929

Other consumer
651

1,130

198

1,979

Total consumer loans
1,295

2,261

352

3,908

Commercial
32,975

27,982

15,085

76,042

Agricultural
2,247

7,105

417

9,769

Total
$
127,270

$
162,785

$
30,350

$
320,405



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.