Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Tables)

3 Months Ended

Mar. 31, 2020

Financing Receivable, Allowance for Credit Loss [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the ACL for the three months ended March 31, 2020 and 2019:

	Prior Year Ending Balance		Impact of Adopting ASC 326			Beginning Balance		Charge-offs			Recoveries		Provision		Ending Balance		Allowance on Individually Measured Loans		Allowance on Collectively Measured Loans
Three Months Ended March 31, 2020	(in thousands)
Commercial loans:
Commercial real estate	$	20,340	$	7,533		$	27,873	$	(101	)	$	14	$	9,336	$	37,122	$	—	$	37,122
Commercial business	30,292		762			31,054		(1,684		)	860		15,340		45,570		1,722		43,848
Agriculture	15,835		(9,325		)	6,510		(4,726		)	41		9,260		11,085		1,126		9,959
Construction	8,571		(1,750		)	6,821		—			442		1,582		8,845		—		8,845
Consumer loans:
One-to-four family residential real estate	7,435		4,237			11,672		(10		)	282		5,715		17,659		—		17,659
Other consumer	883		778			1,661		(268		)	124		127		1,644		—		1,644
Unallocated	612		(603		)	9		—			—		140		149		—		149
Total	$	83,968	$	1,632		$	85,600	$	(6,789	)	$	1,763	$	41,500	$	122,074	$	2,848	$	119,226

	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Allowance on Individually Measured Loans		Allowance on Collectively Measured Loans
Three Months Ended March 31, 2019	(in thousands)
Commercial loans:
Commercial real estate	$	14,766	$	(678	)	$	514	$	1,757		$	16,359	$	53	$	16,306
Commercial business	34,658		(1,506		)	527		866			34,545		2,826		31,719
Agriculture	9,589		(78		)	58		1,121			10,690		—		10,690
Construction	14,395		(195		)	83		(2,318		)	11,965		—		11,965
Consumer loans:
One-to-four family residential real estate	8,024		(481		)	334		434			8,311		31		8,280
Other consumer	787		(50		)	15		71			823		1		822
Unallocated	1,150		—			—		(569		)	581		—		581
Total	$	83,369	$	(2,988	)	$	1,531	$	1,362		$	83,274	$	2,911	$	80,363

Changes in the Allowance for Unfunded Commitments and Letters of Credit

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:

	Three Months Ended
	March 31,
	2020		2019
	(in thousands)
Prior year ending balance	$	3,430	$	4,330
Impact of adopting ASC 326	1,570		—
Beginning balance	5,000		4,330
Net changes in the allowance for unfunded commitments and letters of credit	1,000		(550		)
Ending balance	$	6,000	$	3,780

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our loan portfolio, as of March 31, 2020 and December 31, 2019:

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior						Total
March 31, 2020	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	164,265	$	690,076	$	526,063	$	611,317	$	509,264	$	1,198,213	$	59,709	$	1,637	$	3,760,544
Special mention	6,889		26,718		5,889		5,249		37,070		27,729		—		—		109,544
Substandard	—		933		21,263		7,465		39,988		30,237		—		—		99,886
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	171,154	$	717,727	$	553,215	$	624,031	$	586,322	$	1,256,179	$	59,709	$	1,637	$	3,969,974
Commercial business
Pass	$	144,819	$	454,524	$	379,756	$	282,662	$	249,772	$	305,401	$	1,056,278	$	1,547	$	2,874,759
Special mention	1,119		44,237		31,717		24,361		27,597		14,953		53,274		—		197,258
Substandard	—		1,370		23,399		2,473		8,345		11,336		47,685		3,043		97,651
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial business	$	145,938	$	500,131	$	434,872	$	309,496	$	285,714	$	331,690	$	1,157,237	$	4,590	$	3,169,668
Agriculture
Pass	$	23,639	$	105,950	$	48,643	$	64,450	$	65,316	$	84,182	$	249,785	$	7,026	$	648,991
Special mention	—		189		670		747		1,687		64		5,207		—		8,564
Substandard	900		17,957		5,537		5,838		6,599		6,236		51,350		2,519		96,936
Doubtful	—		—		—		—		—		—		—		—		—
Total agriculture	$	24,539	$	124,096	$	54,850	$	71,035	$	73,602	$	90,482	$	306,342	$	9,545	$	754,491
Construction
Pass	$	23,340	$	173,088	$	61,777	$	18,838	$	1,046	$	2,322	$	12,846	$	14,121	$	307,378
Special mention	—		—		492		—		—		—		41		—		533
Substandard	—		217		—		—		—		58		—		—		275
Doubtful	—		—		—		—		—		—		—		—		—
Total construction	$	23,340	$	173,305	$	62,269	$	18,838	$	1,046	$	2,380	$	12,887	$	14,121	$	308,186
Consumer loans:
One-to-four family residential real estate
Pass	$	21,809	$	104,274	$	88,655	$	37,480	$	27,379	$	110,624	$	294,074	$	80	$	684,375
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		742		227		898		399		2,960		890		15		6,131
Doubtful	—		—		—		—		—		—		—		—		—
Total one-to-four family real estate	$	21,809	$	105,016	$	88,882	$	38,378	$	27,778	$	113,584	$	294,964	$	95	$	690,506
Other consumer
Pass	$	2,885	$	4,782	$	5,469	$	1,669	$	538	$	1,863	$	22,747	$	442	$	40,395
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		69		32		—		101
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer	$	2,885	$	4,782	$	5,469	$	1,669	$	538	$	1,932	$	22,779	$	442	$	40,496
Total	$	389,665	$	1,625,057	$	1,199,557	$	1,063,447	$	975,000	$	1,796,247	$	1,853,918	$	30,430	$	8,933,321
Less:
Allowance for credit losses																	122,074
Loans, net																	$	8,811,247

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2019		2018		2017		2016		2015		Prior						Total
December 31, 2019	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	699,336	$	562,992	$	621,113	$	565,928	$	441,220	$	873,687	$	52,276	$	19,986	$	3,836,538
Special mention	1,824		305		7,019		3,360		—		3,426		—		—		15,934
Substandard	47		10,698		9,320		36,229		20,278		11,738		—		5,071		93,381
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	701,207	$	573,995	$	637,452	$	605,517	$	461,498	$	888,851	$	52,276	$	25,057	$	3,945,853
Commercial business
Pass	$	479,481	$	442,222	$	330,934	$	301,337	$	157,436	$	199,089	$	963,663	$	25,577	$	2,899,739
Special mention	2,241		6,673		56		2,006		52		585		12,710		—		24,323
Substandard	85		17,240		3,458		9,534		3,227		3,972		26,639		1,396		65,551
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial business	$	481,807	$	466,135	$	334,448	$	312,877	$	160,715	$	203,646	$	1,003,012	$	26,973	$	2,989,613
Agriculture
Pass	$	107,152	$	54,950	$	70,337	$	71,874	$	33,597	$	56,342	$	280,984	$	10,036	$	685,272
Special mention	557		2,535		1,381		—		64		576		5,336		—		10,449
Substandard	7,291		6,047		6,173		5,907		1,477		5,698		30,669		6,388		69,650
Doubtful	—		—		—		—		—		—		—		—		—
Total agriculture	$	115,000	$	63,532	$	77,891	$	77,781	$	35,138	$	62,616	$	316,989	$	16,424	$	765,371
Construction
Pass	$	183,525	$	91,342	$	40,514	$	1,067	$	939	$	1,601	$	33,388	$	7,793	$	360,169
Special mention	—		1,264		—		—		—		—		41		—		1,305
Substandard	—		—		—		—		—		59		—		—		59
Doubtful	—		—		—		—		—		—		—		—		—
Total construction	$	183,525	$	92,606	$	40,514	$	1,067	$	939	$	1,660	$	33,429	$	7,793	$	361,533
Consumer loans:
One-to-four family real estate
Pass	$	103,315	$	77,877	$	32,440	$	25,052	$	27,294	$	80,370	$	283,830	$	554	$	630,732
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		228		800		400		623		3,156		905		481		6,593
Doubtful	—		—		—		—		—		—		—		—		—
Total one-to-four family real estate	$	103,315	$	78,105	$	33,240	$	25,452	$	27,917	$	83,526	$	284,735	$	1,035	$	637,325
Other consumer
Pass	$	9,276	$	5,713	$	1,974	$	758	$	848	$	1,306	$	23,351	$	508	$	43,734
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		1		—		—		8		27		—		36
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer	$	9,276	$	5,713	$	1,975	$	758	$	848	$	1,314	$	23,378	$	508	$	43,770
Total	$	1,594,130	$	1,280,086	$	1,125,520	$	1,023,452	$	687,055	$	1,241,613	$	1,713,819	$	77,790	$	8,743,465
Less:
Allowance for credit losses																	83,968
Loans, net																	$	8,659,497