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Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2019

At December 31, 2019, the Company’s loan portfolio was $14.43 billion, compared to $11.72 billion at December 31, 2018. The various categories of loans are summarized as follows:



(In thousands)	2019		2018
Consumer:
Credit cards	$	204,802	$	204,173
Other consumer	191,946		201,297
Total consumer	396,748		405,470
Real estate:
Construction and development	1,760,894		1,300,723
Single family residential	1,444,620		1,440,443
Other commercial	3,678,908		3,225,287
Total real estate	6,884,422		5,966,453
Commercial:
Commercial	1,909,796		1,774,909
Agricultural	163,396		164,514
Total commercial	2,073,192		1,939,423
Other	275,714		119,042
Loans	9,630,076		8,430,388
Loans acquired, net of discount and allowance ⁽¹⁾	4,795,184		3,292,783
Total loans	$	14,425,260	$	11,723,171

_________________________

(1) See Note 6, Loans Acquired, for segregation of loans acquired by loan class.

The following table reflects the carrying value of all loans acquired as of December 31, 2019 and 2018:



	Loans Acquired At December 31,
(In thousands)	2019		2018
Consumer:
Other consumer	$	57,748	$	15,658
Real estate:
Construction and development	475,967		429,605
Single family residential	997,444		566,188
Other commercial	2,526,247		1,848,679
Total real estate	3,999,658		2,844,472
Commercial:
Commercial	585,720		430,914
Agricultural	152,058		1,739
Total commercial	737,778		432,653
Total loans acquired ⁽¹⁾	$	4,795,184	$	3,292,783

_________________________

(1) Loans acquired are reported net of a $444,000 and $95,000 allowance as of December 31, 2019 and 2018, respectively.

Schedule of Nonaccrual Loans, Excluding Loans Acquired

Nonaccrual loans, excluding loans acquired, at December 31, 2019 and 2018, segregated by class of loans, are as follows:



(In thousands)	2019		2018
Consumer:
Credit cards	$	382	$	296
Other consumer	1,378		2,159
Total consumer	1,760		2,455
Real estate:
Construction and development	4,538		1,269
Single family residential	18,102		11,939
Other commercial	9,361		7,205
Total real estate	32,001		20,413
Commercial:
Commercial	36,575		10,049
Agricultural	500		1,284
Total commercial	37,075		11,333
Total	$	70,836	$	34,201

Nonaccrual loans acquired, excluding purchased credit impaired loans accounted for under ASC Topic 310-30, segregated by class of loans, are as follows (see Note 5, Loans and Allowance for Loan Losses, for discussion of nonaccrual loans):



(In thousands)	December 31, 2019		December 31, 2018
Consumer:
Other consumer	$	327	$	140
Real estate:
Construction and development	751		114
Single family residential	9,593		6,603
Other commercial	7,221		1,167
Total real estate	17,565		7,884
Commercial:
Commercial	4,349		13,578
Agricultural	253		38
Total commercial	4,602		13,616
Total	$	22,494	$	21,640

Schedule of Aging Analysis of Past Due Loans, Excluding Loans Acquired

An age analysis of past due loans, excluding loans acquired, segregated by class of loans, is as follows:



(In thousands)	Gross 30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90 Days Past Due & Accruing
December 31, 2019
Consumer:
Credit cards	$	848	$	641	$	1,489	$	203,313	$	204,802	$	259
Other consumer	4,057		595		4,652		187,294		191,946		—
Total consumer	4,905		1,236		6,141		390,607		396,748		259
Real estate:
Construction and development	4,968		605		5,573		1,755,321		1,760,894		—
Single family residential	13,414		8,769		22,183		1,422,437		1,444,620		—
Other commercial	4,302		3,969		8,271		3,670,637		3,678,908		—
Total real estate	22,684		13,343		36,027		6,848,395		6,884,422		—
Commercial:
Commercial	6,253		12,174		18,427		1,891,369		1,909,796		—
Agricultural	207		450		657		162,739		163,396		—
Total commercial	6,460		12,624		19,084		2,054,108		2,073,192		—
Other	—		—		—		275,714		275,714		—
Total	$	34,049	$	27,203	$	61,252	$	9,568,824	$	9,630,076	$	259

December 31, 2018
Consumer:
Credit cards	$	1,033	$	506	$	1,539	$	202,634	$	204,173	$	209
Other consumer	4,264		896		5,160		196,137		201,297		4
Total consumer	5,297		1,402		6,699		398,771		405,470		213
Real estate:
Construction and development	533		308		841		1,299,882		1,300,723		—
Single family residential	7,769		4,127		11,896		1,428,547		1,440,443		—
Other commercial	3,379		2,773		6,152		3,219,135		3,225,287		—
Total real estate	11,681		7,208		18,889		5,947,564		5,966,453		—
Commercial:
Commercial	4,472		5,105		9,577		1,765,332		1,774,909		11
Agricultural	467		1,055		1,522		162,992		164,514		—
Total commercial	4,939		6,160		11,099		1,928,324		1,939,423		11
Other	—		—		—		119,042		119,042		—
Total	$	21,917	$	14,770	$	36,687	$	8,393,701	$	8,430,388	$	224

An age analysis of past due loans acquired segregated by class of loans, is as follows (see Note 5, Loans and Allowance for Loan Losses, for discussion of past due loans):



(In thousands)	Gross 30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90 Days Past Due & Accruing
December 31, 2019
Consumer:
Other consumer	$	827	$	140	$	967	$	56,781	$	57,748	$	—
Real estate:
Construction and development	824		473		1,297		474,670		475,967		—
Single family residential	12,904		5,020		17,924		979,520		997,444		597
Other commercial	3,343		2,481		5,824		2,520,423		2,526,247		—
Total real estate	17,071		7,974		25,045		3,974,613		3,999,658		597
Commercial:
Commercial	4,326		1,377		5,703		580,017		585,720		—
Agricultural	1,016		6		1,022		151,036		152,058		—
Total commercial	5,342		1,383		6,725		731,053		737,778		—

Total	$	23,240	$	9,497	$	32,737	$	4,762,447	$	4,795,184	$	597



December 31, 2018
Consumer:
Other consumer	$	337	$	49	$	386	$	15,272	$	15,658	$	2
Real estate:
Construction and development	8,283		27		8,310		421,295		429,605		—
Single family residential	4,706		3,049		7,755		558,433		566,188		—
Other commercial	168		577		745		1,847,934		1,848,679		—
Total real estate	13,157		3,653		16,810		2,827,662		2,844,472		—
Commercial:
Commercial	1,302		9,542		10,844		420,070		430,914		—
Agricultural	31		5		36		1,703		1,739		—
Total commercial	1,333		9,547		10,880		421,773		432,653		—

Total	$	14,827	$	13,249	$	28,076	$	3,264,707	$	3,292,783	$	2

Schedule of Impaired Loans

Impaired loans, net of government guarantees and excluding loans acquired, segregated by class of loans, are as follows:



(In thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Investment in Impaired Loans		Interest Income Recognized
December 31, 2019
Consumer:
Credit cards	$	382	$	382	$	—	$	382	$	—	$	373	$	50
Other consumer	1,537		1,378		—		1,378		—		1,659		41
Total consumer	1,919		1,760		—		1,760		—		2,032		91
Real estate:
Construction and development	4,648		4,466		72		4,538		4		2,464		61
Single family residential	19,466		15,139		2,963		18,102		42		15,470		382
Other commercial	10,645		4,713		3,740		8,453		694		9,983		247
Total real estate	34,759		24,318		6,775		31,093		740		27,917		690
Commercial:
Commercial	53,436		6,582		28,998		35,580		5,007		28,219		697
Agricultural	525		383		116		499		—		908		22
Total commercial	53,961		6,965		29,114		36,079		5,007		29,127		719
Total	$	90,639	$	33,043	$	35,889	$	68,932	$	5,747	$	59,076	$	1,500

December 31, 2018
Consumer:
Credit cards	$	296	$	296	$	—	$	296	$	—	$	266	$	85
Other consumer	2,311		2,159		—		2,159		—		3,719		112
Total consumer	2,607		2,455		—		2,455		—		3,985		197
Real estate:
Construction and development	1,344		784		485		1,269		211		1,651		50
Single family residential	12,906		11,468		616		12,084		36		13,257		399
Other commercial	8,434		2,976		5,458		8,434		—		13,608		410
Total real estate	22,684		15,228		6,559		21,787		247		28,516		859
Commercial:
Commercial	10,361		5,733		4,628		10,361		437		10,003		301
Agricultural	2,419		1,180		—		1,180		—		1,412		43
Total commercial	12,780		6,913		4,628		11,541		437		11,415		344
Total	$	38,071	$	24,596	$	11,187	$	35,783	$	684	$	43,916	$	1,400

Schedule of Troubled Debt Restructuring

The following table presents a summary of TDRs, excluding loans acquired, segregated by class of loans.



	Accruing TDR Loans			Nonaccrual TDR Loans			Total TDR Loans
(Dollars in thousands)	Number	Balance		Number	Balance		Number	Balance
December 31, 2019
Real estate:
Construction and development	—	$	—	1	$	72	1	$	72
Single-family residential	7	1,151		12	671		19	1,822
Other commercial	1	476		2	80		3	556
Total real estate	8	1,627		15	823		23	2,450
Commercial:
Commercial	4	2,784		3	79		7	2,863
Total commercial	4	2,784		3	79		7	2,863
Total	12	$	4,411	18	$	902	30	$	5,313

December 31, 2018
Real estate:
Construction and development	—	$	—	3	$	485	3	$	485
Single-family residential	6	230		10	616		16	846
Other commercial	2	3,306		2	1,027		4	4,333
Total real estate	8	3,536		15	2,128		23	5,664
Commercial:
Commercial	4	2,833		6	718		10	3,551
Total commercial	4	2,833		6	718		10	3,551
Total	12	$	6,369	21	$	2,846	33	$	9,215

The following table presents loans that were restructured as TDRs during the years ended December 31, 2019 and 2018, excluding loans acquired, segregated by class of loans.



						Modification Type
(Dollars in thousands)	Number of Loans	Balance Prior to TDR		Balance at December 31,		Change in Maturity Date		Change in Rate		Financial Impact on Date of Restructure
Year Ended December 31, 2019
Real estate:
Single-family residential	4	$	997	$	996	$	996	$	—	$	—
Total real estate	4	997		996		996		—		—
Total	4	$	997	$	996	$	996	$	—	$	—

Year Ended December 31, 2018
Consumer:
Other consumer	1	$	91	$	91	$	91	$	—	$	—
Total consumer	1	91		91		91		—		—
Real estate:
Construction and development	1	99		98		98		—		—
Single-family residential	1	61		62		62		—		—
Other commercial	2	392		390		390		—		212
Total real estate	4	552		550		550		—		212
Commercial:
Commercial	3	2,363		2,358		2,358		—		190
Total commercial	3	2,363		2,358		2,358		—		190
Total	8	$	3,006	$	2,999	$	2,999	$	—	$	402

Summary of Loans by Credit Risk Rating

The following table presents a summary of loans by credit risk rating, segregated by class of loans.



(In thousands)	Risk Rate 1-4		Risk Rate 5		Risk Rate 6		Risk Rate 7		Risk Rate 8		Total
December 31, 2019
Consumer:
Credit cards	$	204,161	$	—	$	641	$	—	$	—	$	204,802
Other consumer	190,350		—		1,596		—		—		191,946
Total consumer	394,511		—		2,237		—		—		396,748
Real estate:
Construction and development	1,754,269		49		6,576		—		—		1,760,894
Single family residential	1,415,603		4,868		24,146		3		—		1,444,620
Other commercial	3,621,296		28,873		28,739		—		—		3,678,908
Total real estate	6,791,168		33,790		59,461		3		—		6,884,422
Commercial:
Commercial	1,835,335		25,185		49,276		—		—		1,909,796
Agricultural	162,808		41		547		—		—		163,396
Total commercial	1,998,143		25,226		49,823		—		—		2,073,192
Other	275,714		—		—		—		—		275,714
Loans acquired	4,653,295		43,602		97,900		170		217		4,795,184
Total	$	14,112,831	$	102,618	$	209,421	$	173	$	217	$	14,425,260



(In thousands)	Risk Rate 1-4		Risk Rate 5		Risk Rate 6		Risk Rate 7		Risk Rate 8		Total
December 31, 2018
Consumer:
Credit cards	$	203,667	$	—	$	506	$	—	$	—	$	204,173
Other consumer	198,840		—		2,457		—		—		201,297
Total consumer	402,507		—		2,963		—		—		405,470
Real estate:
Construction and development	1,296,988		1,910		1,825		—		—		1,300,723
Single family residential	1,420,052		1,628		18,528		235		—		1,440,443
Other commercial	3,193,289		17,169		14,829		—		—		3,225,287
Total real estate	5,910,329		20,707		35,182		235		—		5,966,453
Commercial:
Commercial	1,742,002		8,357		24,550		—		—		1,774,909
Agricultural	162,824		75		1,615		—		—		164,514
Total commercial	1,904,826		8,432		26,165		—		—		1,939,423
Other	119,042		—		—		—		—		119,042
Loans acquired	3,187,083		51,255		54,097		348		—		3,292,783
Total	$	11,523,787	$	80,394	$	118,407	$	583	$	—	$	11,723,171

The following table presents a summary of loans acquired by credit risk rating, segregated by class of loans (see Note 5, Loans and Allowance for Loan Losses, for discussion of loan risk rating). Loans accounted for under ASC Topic 310-30 are all included in Risk Rate 1-4 in this table.



(In thousands)	Risk Rate 1-4		Risk Rate 5		Risk Rate 6		Risk Rate 7		Risk Rate 8		Total
December 31, 2019
Consumer:
Other consumer	$	57,318	$	—	$	430	$	—	$	—	$	57,748
Real estate:
Construction and development	474,750		21		1,159		—		37		475,967
Single family residential	978,681		1,181		17,455		127		—		997,444
Other commercial	2,446,685		40,872		38,690		—		—		2,526,247
Total real estate	3,900,116		42,074		57,304		127		37		3,999,658
Commercial:
Commercial	548,928		1,528		35,041		43		180		585,720
Agricultural	146,933		—		5,125		—		—		152,058
Total commercial	695,861		1,528		40,166		43		180		737,778

Total	$	4,653,295	$	43,602	$	97,900	$	170	$	217	$	4,795,184

December 31, 2018
Consumer:
Other consumer	$	15,380	$	—	$	278	$	—	$	—	$	15,658
Real estate:
Construction and development	393,122		27,621		8,862		—		—		429,605
Single family residential	553,460		2,081		10,299		348		—		566,188
Other commercial	1,822,179		9,137		17,363		—		—		1,848,679
Total real estate	2,768,761		38,839		36,524		348		—		2,844,472
Commercial:
Commercial	401,300		12,416		17,198		—		—		430,914
Agricultural	1,642		—		97		—		—		1,739
Total commercial	402,942		12,416		17,295		—		—		432,653

Total	$	3,187,083	$	51,255	$	54,097	$	348	$	—	$	3,292,783

Schedule of the Activity in the Allowance for Loan Losses

The Company’s recorded investment in loans, excluding loans acquired, as of December 31, 2019 and 2018 related to each balance in the allowance for loan losses by portfolio segment on the basis of the Company’s impairment methodology was as follows:



(In thousands)	Commercial		Real Estate		Credit Card		Other Consumer and Other		Total
December 31, 2019
Loans individually evaluated for impairment	$	36,079	$	31,093	$	382	$	1,378	$	68,932
Loans collectively evaluated for impairment	2,037,113		6,853,329		204,420		466,282		9,561,144
Balance, end of period	$	2,073,192	$	6,884,422	$	204,802	$	467,660	$	9,630,076

December 31, 2018
Loans individually evaluated for impairment	$	13,062	$	24,253	$	296	$	2,159	$	39,770
Loans collectively evaluated for impairment	1,926,361		5,942,200		203,877		318,180		8,390,618
Balance, end of period	$	1,939,423	$	5,966,453	$	204,173	$	320,339	$	8,430,388

Net (charge-offs)/recoveries for the years ended December 31, 2019 and 2018, excluding loans acquired, segregated by class of loans, were as follows:



(In thousands)	2019			2018
Consumer:
Credit cards	$	(3,564	)	$	(3,046	)
Other consumer	(2,537		)	(6,080		)
Total consumer	(6,101		)	(9,126		)
Real estate:
Construction and development	(375		)	(1,775		)
Single family residential	(703		)	(494		)
Other commercial	(745		)	(2,645		)
Total real estate	(1,823		)	(4,914		)
Commercial:
Commercial	(21,651		)	(5,878		)
Agricultural	—			—
Total commercial	(21,651		)	(5,878		)
Total	$	(29,575	)	$	(19,918	)

The following table details activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2019 and 2018. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.



(In thousands)	Commercial			Real Estate			Credit Card			Other Consumer and Other			Total
December 31, 2019
Balance, beginning of year⁽²⁾	$	20,514		$	29,743		$	3,923		$	2,419		$	56,599
Provision for loan losses ⁽¹⁾	24,000			10,797			3,692			2,287			40,776
Charge-offs	(22,023		)	(2,319		)	(4,585		)	(4,894		)	(33,821		)
Recoveries	372			496			1,021			2,357			4,246
Net charge-offs	(21,651		)	(1,823		)	(3,564		)	(2,537		)	(29,575		)
Balance, end of year⁽²⁾	$	22,863		$	38,717		$	4,051		$	2,169		$	67,800

Period-end amount allocated to:
Loans individually evaluated for impairment	$	5,007		$	740		$	—		$	—		$	5,747
Loans collectively evaluated for impairment	17,856			37,977			4,051			2,169			62,053
Balance, end of year ⁽²⁾	$	22,863		$	38,717		$	4,051		$	2,169		$	67,800

December 31, 2018
Balance, beginning of year ⁽²⁾	$	7,007		$	27,281		$	3,784		$	3,596		$	41,668
Provision for loan losses ⁽¹⁾	19,385			7,376			3,185			4,903			34,849
Charge-offs	(6,623		)	(5,905		)	(4,051		)	(6,637		)	(23,216		)
Recoveries	745			991			1,005			557			3,298
Net charge-offs	(5,878		)	(4,914		)	(3,046		)	(6,080		)	(19,918		)
Balance, end of year⁽²⁾	$	20,514		$	29,743		$	3,923		$	2,419		$	56,599

Period-end amount allocated to:
Loans individually evaluated for impairment	$	437		$	247		$	—		$	—		$	684
Loans collectively evaluated for impairment	20,077			29,496			3,923			2,419			55,915
Balance, end of year⁽²⁾	$	20,514		$	29,743		$	3,923		$	2,419		$	56,599

_________________________

(1) Provision for loan losses of $2,464,000 attributable to loans acquired was excluded from this table for the year ended December 31, 2019 (total provision for loan losses for the year ended December 31, 2019 was $43,240,000). There were $3,015,000 in charge-offs for loans acquired and recoveries of $900,000 for loans acquired during the year ended December 31, 2019 resulting in an ending balance in the allowance related to loans acquired of $444,000. Provision for loan losses of $3,299,000 attributable to loans acquired was excluded from this table for the year ended December 31, 2018 (total provision for loan losses for the year ended December 31, 2018 was $38,148,000). There were $3,622,000 in charge-offs for loans acquired during the year ended December 31, 2018 resulting in an ending balance in the allowance related to loans acquired of $95,000.

(2) Allowance for loan losses at December 31, 2019 includes $444,000 of allowance for loans acquired (not shown in the table above). Allowance for loan losses at December 31, 2018 and 2017 includes $95,000 and $418,000 allowance for loans acquired, respectively. The total allowance for loan losses at December 31, 2019, 2018 and 2017 was $68,244,000, $56,694,000 and $42,086,000, respectively.

Activity in the allowance for loan losses for the year ended December 31, 2017 was as follows:



(In thousands)	Commercial			Real Estate			Credit Card			Other Consumer and Other			Total
December 31, 2017
Balance, beginning of year ⁽²⁾	$	7,739		$	21,817		$	3,779		$	2,951		$	36,286
Provision for loan losses ⁽¹⁾	7,002			12,463			2,889			2,173			24,527
Charge-offs	(7,837		)	(7,989		)	(3,905		)	(3,767		)	(23,498		)
Recoveries	103			990			1,021			2,239			4,353
Net charge-offs	(7,734		)	(6,999		)	(2,884		)	(1,528		)	(19,145		)
Balance, end of year⁽²⁾	$	7,007		$	27,281		$	3,784		$	3,596		$	41,668

_________________________

(1) Provision for loan losses of $1,866,000 attributable to loans acquired was excluded from this table for the year ended December 31, 2017 (total provision for loan losses for the year ended December 31, 2017 was $26,393,000). There were $2,402,000 in charge-offs for loans acquired during 2017 resulting in an ending balance in the allowance related to loans acquired of $418,000.

(2) Allowance for loan losses at December 31, 2017 includes $418,000 allowance for loans acquired (not shown in the table above). The total allowance for loan losses at December 31, 2017 was $42,086,000.