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

9 Months Ended

Sep. 30, 2022

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 periods indicated:

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Three Months Ended September 30, 2022	(in thousands)
Commercial loans:
Commercial real estate	$	57,119	$	—	$	11	$	251	$	57,381
Commercial business	51,985		(295)		482		1,913		54,085
Agriculture	8,895		(706)		98		1,146		9,433
Construction	5,914		—		9		2,224		8,147
Consumer loans:
One-to-four family residential real estate	24,626		—		331		(943)		24,014
Other consumer	1,396		(431)		187		659		1,811
Total	$	149,935	$	(1,432)	$	1,118	$	5,250	$	154,871

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Nine Months Ended September 30, 2022
Commercial loans:
Commercial real estate	$	61,254	$	(299)	$	172	$	(3,746)	$	57,381
Commercial business	54,712		(2,019)		1,570		(178)		54,085
Agriculture	8,148		(730)		247		1,768		9,433
Construction	5,397		—		153		2,597		8,147
Consumer loans:
One-to-four family residential real estate	24,123		(3)		916		(1,022)		24,014
Other consumer	1,944		(918)		654		131		1,811
Total	$	155,578	$	(3,969)	$	3,712	$	(450)	$	154,871

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Three Months Ended September 30, 2021	(in thousands)
Commercial loans:
Commercial real estate	$	53,250	$	—	$	518	$	(2,016)	$	51,752
Commercial business	57,554		(1,183)		328		(1,138)		55,561
Agriculture	7,920		—		6		1,039		8,965
Construction	6,559		—		8		(200)		6,367
Consumer loans:
One-to-four family residential real estate	16,519		—		203		2,133		18,855
Other consumer	1,186		(296)		213		182		1,285
Total	$	142,988	$	(1,479)	$	1,276	$	—	$	142,785

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Nine Months Ended September 30, 2021
Commercial loans:
Commercial real estate	$	68,934	$	(316)	$	570	$	(17,436)	$	51,752
Commercial business	45,250		(5,493)		4,416		11,388		55,561
Agriculture	9,052		(122)		23		12		8,965
Construction	7,636		—		575		(1,844)		6,367
Consumer loans:
One-to-four family residential real estate	16,875		(146)		757		1,369		18,855
Other consumer	1,393		(808)		489		211		1,285
Total	$	149,140	$	(6,885)	$	6,830	$	(6,300)	$	142,785

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Beginning balance	$	9,000	$	10,000	$	8,500	$	8,300
Net changes in the allowance for unfunded commitments and letters of credit	(500)		500		—		2,200
Ending balance	$	8,500	$	10,500	$	8,500	$	10,500

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our loan portfolio as of the periods indicated:

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior						Total
September 30, 2022	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	983,823	$	1,021,822	$	688,119	$	603,943	$	431,582	$	1,402,281	$	71,235	$	8,932	$	5,211,737
Special mention	—		1,865		3,566		19,591		—		11,763		—		—		36,785
Substandard	—		7,519		7,393		33,951		4,258		69,411		3,997		—		126,529
Total commercial real estate	$	983,823	$	1,031,206	$	699,078	$	657,485	$	435,840	$	1,483,455	$	75,232	$	8,932	$	5,375,051
Commercial business
Pass	$	436,851	$	713,165	$	364,061	$	224,851	$	180,781	$	272,401	$	1,413,129	$	6,807	$	3,612,046
Special mention	2,362		10,652		1,564		6,588		392		653		28,105		425		50,741
Substandard	93		3,297		3,823		17,399		21,636		28,945		44,645		1,071		120,909
Total commercial business	$	439,306	$	727,114	$	369,448	$	248,838	$	202,809	$	301,999	$	1,485,879	$	8,303	$	3,783,696
Agriculture
Pass	$	113,968	$	129,433	$	72,571	$	69,576	$	24,244	$	103,310	$	346,565	$	1,160	$	860,827
Special mention	—		140		—		4,306		—		—		899		—		5,345
Substandard	548		1,343		5,126		524		20		1,761		27,766		—		37,088
Total agriculture	$	114,516	$	130,916	$	77,697	$	74,406	$	24,264	$	105,071	$	375,230	$	1,160	$	903,260
Construction
Pass	$	176,863	$	221,956	$	27,571	$	14,115	$	2,618	$	3,466	$	55,628	$	7,121	$	509,338
Special mention	—		745		—		—		—		—		—		—		745
Substandard	—		—		—		1,727		448		50		—		—		2,225
Total construction	$	176,863	$	222,701	$	27,571	$	15,842	$	3,066	$	3,516	$	55,628	$	7,121	$	512,308
Consumer loans:
One-to-four family residential real estate
Pass	$	126,882	$	364,441	$	126,287	$	39,728	$	40,319	$	91,542	$	278,903	$	856	$	1,068,958
Substandard	—		—		76		—		543		1,141		260		244		2,264
Total one-to-four family real estate	$	126,882	$	364,441	$	126,363	$	39,728	$	40,862	$	92,683	$	279,163	$	1,100	$	1,071,222
Other consumer
Pass	$	7,115	$	3,121	$	1,479	$	994	$	1,579	$	8,969	$	23,328	$	107	$	46,692
Substandard	—		20		—		—		—		10		2		—		32
Total consumer	$	7,115	$	3,141	$	1,479	$	994	$	1,579	$	8,979	$	23,330	$	107	$	46,724
Total	$	1,848,505	$	2,479,519	$	1,301,636	$	1,037,293	$	708,420	$	1,995,703	$	2,294,462	$	26,723	$	11,692,261
Less:
Allowance for credit losses																	154,871
Loans, net																	$	11,537,390

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior						Total
December 31, 2021	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	1,068,493	$	760,545	$	650,593	$	492,348	$	515,233	$	1,180,115	$	74,754	$	3,644	$	4,745,725
Special mention	2,252		—		19,016		6,196		163		27,270		—		2,199		57,096
Substandard	4,119		5,897		45,769		9,112		29,917		82,599		1,029		—		178,442
Total commercial real estate	$	1,074,864	$	766,442	$	715,378	$	507,656	$	545,313	$	1,289,984	$	75,783	$	5,843	$	4,981,263
Commercial business
Pass	$	891,957	$	426,004	$	280,823	$	217,605	$	144,363	$	232,356	$	1,028,616	$	35,411	$	3,257,135
Special mention	621		135		6,097		747		105		51		34,256		236		42,248
Substandard	4,329		4,610		18,393		28,066		20,568		27,462		18,796		1,661		123,885
Total commercial business	$	896,907	$	430,749	$	305,313	$	246,418	$	165,036	$	259,869	$	1,081,668	$	37,308	$	3,423,268
Agriculture
Pass	$	147,561	$	87,964	$	74,658	$	29,739	$	46,058	$	79,693	$	266,573	$	5,448	$	737,694
Special mention	162		—		445		—		—		—		565		—		1,172
Substandard	—		7,717		9,148		1,616		5,532		1,833		29,125		1,878		56,849
Total agriculture	$	147,723	$	95,681	$	84,251	$	31,355	$	51,590	$	81,526	$	296,263	$	7,326	$	795,715
Construction
Pass	$	228,661	$	53,880	$	35,795	$	3,183	$	3,285	$	2,189	$	55,765	$	—	$	382,758
Substandard	—		—		1,748		—		—		249		—		—		1,997
Total construction	$	228,661	$	53,880	$	37,543	$	3,183	$	3,285	$	2,438	$	55,765	$	—	$	384,755
Consumer loans:
One-to-four family real estate
Pass	$	390,153	$	140,799	$	56,520	$	51,549	$	32,447	$	111,307	$	222,747	$	1,347	$	1,006,869
Substandard	85		470		183		562		234		4,736		485		284		7,039
Total one-to-four family real estate	$	390,238	$	141,269	$	56,703	$	52,111	$	32,681	$	116,043	$	223,232	$	1,631	$	1,013,908
Other consumer
Pass	$	7,045	$	2,711	$	1,950	$	13,489	$	560	$	1,277	$	15,853	$	97	$	42,982
Substandard	—		—		—		—		1		13		23		9		46
Total consumer	$	7,045	$	2,711	$	1,950	$	13,489	$	561	$	1,290	$	15,876	$	106	$	43,028
Total	$	2,745,438	$	1,490,732	$	1,201,138	$	854,212	$	798,466	$	1,751,150	$	1,748,587	$	52,214	$	10,641,937
Less:
Allowance for credit losses																	155,578
Loans, net																	$	10,486,359