LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Loans Receivable, Including Loans Held for Sale

Loans receivable at September 30, 2018 and December 31, 2017 are summarized as follows (dollars in thousands):



	September 30, 2018					December 31, 2017
	Amount			Percent of Total		Amount			Percent of Total
Commercial real estate:
Owner-occupied	$	1,271,363		16.2	%	$	1,284,363		16.9	%
Investment properties	1,943,793			24.8		1,937,423			25.5
Multifamily real estate	309,809			3.9		314,188			4.1
Commercial construction	154,071			2.0		148,435			2.0
Multifamily construction	172,433			2.2		154,662			2.0
One- to four-family construction	498,549			6.4		415,327			5.5
Land and land development:
Residential	171,610			2.2		164,516			2.2
Commercial	22,382			0.3		24,583			0.3
Commercial business	1,358,149			17.4		1,279,894			16.8
Agricultural business, including secured by farmland	359,966			4.6		338,388			4.4
One- to four-family residential	849,928			10.9		848,289			11.2
Consumer:
Consumer secured by one- to four-family	539,143			6.9		522,931			6.9
Consumer—other	171,323			2.2		165,885			2.2
Total loans	7,822,519			100.0	%	7,598,884			100.0	%
Less allowance for loan losses	(95,263		)			(89,028		)
Net loans	$	7,727,256				$	7,509,856

Loan amounts are net of unearned loan fees in excess of unamortized costs of $1.7 million as of September 30, 2018 and were net of unamortized costs of $158,000 as of December 31, 2017. Net loans include net discounts on acquired loans of $15.4 million and $21.1 million as of September 30, 2018 and December 31, 2017, respectively.

Schedule of Purchased Credit-Impaired Loans, Changes in Accretable Yield

The following table presents the changes in the accretable yield for PCI loans for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Balance, beginning of period	$	6,109		$	7,666		$	6,520		$	8,717
Accretion to interest income	(2,907		)	(1,720		)	(4,738		)	(5,210		)
Disposals	—			—			58			(497		)
Reclassifications from non-accretable difference	1,873			918			3,235			3,854
Balance, end of period	$	5,075		$	6,864		$	5,075		$	6,864

Impaired loans excluding purchased credit impaired loans [Table Text Block]

The following tables provide information on impaired loans, excluding PCI loans, with and without allowance reserves at September 30, 2018 and December 31, 2017. Recorded investment includes the unpaid principal balance or the carrying amount of loans less charge-offs and net deferred loan fees (in thousands):



	September 30, 2018
	Unpaid Principal Balance		Recorded Investment				Related Allowance
	Unpaid Principal Balance		Without Allowance ⁽¹⁾		With Allowance ⁽²⁾		Related Allowance
Commercial real estate:
Owner-occupied	$	3,333	$	2,907	$	201	$	20
Investment properties	7,247		1,249		5,637		277
Multifamily construction	479		—		—		—
One- to four-family construction	1,297		1,297		—		—
Land and land development:
Residential	1,134		798		—		—
Commercial business	3,925		3,008		384		17
Agricultural business/farmland	4,546		1,645		2,560		71
One- to four-family residential	7,302		3,227		4,021		64
Consumer:
Consumer secured by one- to four-family	2,075		1,893		135		6
Consumer—other	191		106		66		2
	$	31,529	$	16,130	$	13,004	$	457

	December 31, 2017
	Unpaid Principal Balance		Recorded Investment				Related Allowance
	Unpaid Principal Balance		Without Allowance ⁽¹⁾		With Allowance ⁽²⁾		Related Allowance
Commercial real estate:
Owner-occupied	$	7,807	$	6,447	$	199	$	18
Investment properties	11,296		4,200		6,884		263
One- to four-family construction	298		298		—		—
Land and land development:
Residential	1,134		798		—		—
Commercial business	4,441		3,424		555		50
Agricultural business/farmland	9,388		6,230		3,031		264
One- to four-family residential	9,547		3,709		5,775		178
Consumer:
Consumer secured by one- to four-family	1,498		1,324		139		7
Consumer—other	134		58		73		2
	$	45,543	$	26,488	$	16,656	$	782


⁽¹⁾	Includes loans without an allowance reserve that have been individually evaluated for impairment and that evaluation concluded that no reserve was needed, and $10.3 million and $10.6 million, respectively, of homogenous and small balance loans as of September 30, 2018 and December 31, 2017, that are collectively evaluated for impairment for which a general reserve has been established.


⁽²⁾	Loans with a specific allowance reserve have been individually evaluated for impairment using either a discounted cash flow analysis or, for collateral dependent loans, current appraisals less costs to sell to establish realizable value.

Schedule of Impaired Loans With and Without Specific Reserves

The following tables summarize our average recorded investment and interest income recognized on impaired loans by loan class for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial real estate:
Owner-occupied	$	3,281	$	3	$	3,657	$	3
Investment properties	6,808		79		8,849		37
Multifamily real estate	—		—		115		1
One- to four-family construction	991		—		—		—
Land and land development:
Residential	798		—		1,095		6
Commercial	—		—		928		—
Commercial business	3,210		5		8,128		6
Agricultural business/farmland	4,218		23		6,196		69
One- to four-family residential	7,667		77		8,899		73
Consumer:
Consumer secured by one- to four-family	1,841		5		1,608		2
Consumer—other	164		1		140		1
	$	28,978	$	193	$	39,615	$	198

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial real estate:
Owner-occupied	$	4,070	$	8	$	3,079	$	7
Investment properties	8,114		237		8,393		124
Multifamily real estate	—		—		335		10
One- to four-family construction	637		4		524		27
Land and land development:
Residential	1,059		10		1,574		42
Commercial	—		—		950		—
Commercial business	3,474		17		5,838		63
Agricultural business/farmland	5,895		79		5,605		131
One- to four-family residential	8,261		237		9,602		240
Consumer:
Consumer secured by one- to four-family	1,530		10		1,647		7
Consumer—other	151		3		194		5
	$	33,191	$	605	$	37,741	$	656

Schedule of Troubled Debt Restructurings

The following table presents TDRs by accrual and nonaccrual status at September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018						December 31, 2017
	Accrual Status		Nonaccrual Status		Total TDRs		Accrual Status		Nonaccrual Status		Total TDRs
Commercial real estate:
Owner-occupied	$	201	$	80	$	281	$	199	$	87	$	286
Investment properties	5,637		—		5,637		6,884		—		6,884
Commercial business	384		—		384		555		—		555
Agricultural business, including secured by farmland	2,560		—		2,560		3,129		29		3,158
One- to four-family residential	4,498		240		4,738		5,136		801		5,937
Consumer:
Consumer secured by one- to four-family	135		—		135		139		—		139
Consumer—other	66		—		66		73		—		73
	$	13,481	$	320	$	13,801	$	16,115	$	917	$	17,032

As of both September 30, 2018 and December 31, 2017, the Company had commitments to advance additional funds related to TDRs up to $7,000 and $45,000, respectively.

Schedule of Risk-Rated Loans and Non-Risk Rated Loans by Grade and Other Characteristics

The following tables present the Company’s portfolio of risk-rated loans and non-risk-rated loans by grade or other characteristics as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018
By class:	Pass (Risk Ratings 1-5)⁽¹⁾		Special Mention		Substandard		Doubtful		Loss		Total Loans
Commercial real estate:
Owner-occupied	$	1,246,900	$	10,037	$	14,426	$	—	$	—	$	1,271,363
Investment properties	1,935,890		—		7,903		—		—		1,943,793
Multifamily real estate	309,490		—		319		—		—		309,809
Commercial construction	154,071		—		—		—		—		154,071
Multifamily construction	172,433		—		—		—		—		172,433
One- to four-family construction	495,941		—		2,608		—		—		498,549
Land and land development:
Residential	160,046		10,766		798		—		—		171,610
Commercial	19,607		—		2,775		—		—		22,382
Commercial business	1,316,610		7,324		34,122		93		—		1,358,149
Agricultural business, including secured by farmland	346,176		4,589		9,201		—		—		359,966
One- to four-family residential	844,853		518		4,557		—		—		849,928
Consumer:
Consumer secured by one- to four-family	534,780		900		3,463		—		—		539,143
Consumer—other	171,016		10		297		—		—		171,323
Total	$	7,707,813	$	34,144	$	80,469	$	93	$	—	$	7,822,519



	December 31, 2017
By class:	Pass (Risk Ratings 1-5)⁽¹⁾		Special Mention		Substandard		Doubtful		Loss		Total Loans
Commercial real estate:
Owner-occupied	$	1,246,125	$	12,227	$	26,011	$	—	$	—	$	1,284,363
Investment properties	1,918,940		9,118		9,365		—		—		1,937,423
Multifamily real estate	313,432		—		756		—		—		314,188
Commercial construction	148,435		—		—		—		—		148,435
Multifamily construction	154,662		—		—		—		—		154,662
One- to four-family construction	411,802		—		3,525		—		—		415,327
Land and land development:
Residential	153,073		10,554		889		—		—		164,516
Commercial	21,665		—		2,918		—		—		24,583
Commercial business	1,213,365		12,135		54,282		112		—		1,279,894
Agricultural business, including secured by farmland	321,110		3,852		13,426		—		—		338,388
One- to four-family residential	842,304		569		5,416		—		—		848,289
Consumer:
Consumer secured by one- to four-family	520,675		—		2,256		—		—		522,931
Consumer—other	165,594		13		278		—		—		165,885
Total	$	7,431,182	$	48,468	$	119,122	$	112	$	—	$	7,598,884

⁽¹⁾

The Pass category includes some performing loans that are part of homogenous pools which are not individually risk-rated. This includes all consumer loans, all one- to four-family residential loans and, as of September 30, 2018 and December 31, 2017, in the commercial business category, $583.7 million and $296.8 million, respectively, of credit-scored small business loans. As loans in these pools become non-performing, they are individually risk-rated.

Schedule of Age Analysis of the Company's Past Due Loans

The following tables provide additional detail on the age analysis of the Company’s past due loans as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Purchased Credit-Impaired		Current		Total Loans		Loans 90 Days or More Past Due and Accruing		Non-accrual
Commercial real estate:
Owner-occupied	$	—	$	160	$	2,334	$	2,494	$	5,369	$	1,263,500	$	1,271,363	$	23	$	2,884
Investment properties	309		233		1,155		1,697		3,000		1,939,096		1,943,793		405		844
Multifamily real estate	—		—		—		—		142		309,667		309,809		—		—
Commercial construction	—		—		—		—		—		154,071		154,071		—		—
Multifamily construction	—		—		—		—		—		172,433		172,433		—		—
One-to-four-family construction	—		1,208		378		1,586		461		496,502		498,549		—		1,297
Land and land development:
Residential	703		—		798		1,501		—		170,109		171,610		—		798
Commercial	—		—		—		—		2,775		19,607		22,382		—		—
Commercial business	2,100		480		1,821		4,401		621		1,353,127		1,358,149		87		2,921
Agricultural business, including secured by farmland	165		—		1,639		1,804		398		357,764		359,966		—		1,645
One- to four-family residential	95		586		2,011		2,692		111		847,125		849,928		1,076		1,827
Consumer:
Consumer secured by one- to four-family	1,878		693		1,294		3,865		—		535,278		539,143		282		1,611
Consumer—other	351		173		60		584		67		170,672		171,323		14		92
Total	$	5,601	$	3,533	$	11,490	$	20,624	$	12,944	$	7,788,951	$	7,822,519	$	1,887	$	13,919



	December 31, 2017
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Purchased Credit-Impaired		Current		Total Loans		Loans 90 Days or More Past Due and Accruing		Non-accrual
Commercial real estate:
Owner-occupied	$	5,323	$	76	$	5,490	$	10,889	$	7,682	$	1,265,792	$	1,284,363	$	—	$	6,447
Investment properties	1,737		—		4,096		5,833		7,166		1,924,424		1,937,423		—		4,199
Multifamily real estate	105		—		—		105		169		313,914		314,188		—		—
Commercial construction	—		—		—		—		—		148,435		148,435		—		—
Multifamily construction	3,416		—		—		3,416		—		151,246		154,662		—		—
One-to-four-family construction	4,892		725		298		5,915		446		408,966		415,327		298		—
Land and land development:
Residential	—		—		798		798		—		163,718		164,516		—		798
Commercial	—		—		—		—		2,919		21,664		24,583		—		—
Commercial business	1,574		404		2,577		4,555		2,159		1,273,180		1,279,894		18		3,406
Agricultural business, including secured by farmland	598		533		2,017		3,148		565		334,675		338,388		—		6,132
One-to four-family residential	4,475		1,241		2,715		8,431		136		839,722		848,289		1,085		3,264
Consumer:
Consumer secured by one- to four-family	1,355		62		713		2,130		—		520,801		522,931		85		1,239
Consumer—other	609		136		15		760		68		165,057		165,885		—		58
Total	$	24,084	$	3,177	$	18,719	$	45,980	$	21,310	$	7,531,594	$	7,598,884	$	1,486	$	25,543

Allowance for Credit Losses on Financing Receivables

The following tables provide additional information on the allowance for loan losses and loan balances individually and collectively evaluated for impairment at or for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	For the Three Months Ended September 30, 2018
	Commercial Real Estate			Multifamily Real Estate		Construction and Land			Commercial Business			Agricultural Business			One- to Four-Family Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	24,413		$	3,718	$	27,034		$	19,141		$	3,162		$	3,932		$	5,725		$	6,750		$	93,875
Provision for loan losses	824			27		(1,996		)	(1,306		)	348			432			2,600			1,071			2,000
Recoveries	12			—		5			586			—			86			46			—			735
Charge-offs	(102		)	—		(479		)	(473		)	(5		)	(27		)	(261		)	—			(1,347		)
Ending balance	$	25,147		$	3,745	$	24,564		$	17,948		$	3,505		$	4,423		$	8,110		$	7,821		$	95,263

	For the Nine Months Ended September 30, 2018
	Commercial Real Estate			Multifamily Real Estate		Construction and Land			Commercial Business			Agricultural Business			One- to Four-Family Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	22,824		$	1,633	$	27,568		$	18,311		$	4,053		$	2,055		$	3,866		$	8,718		$	89,028
Provision for loan losses	1,144			2,112		(2,715		)	148			(248		)	1,679			4,777			(897		)	6,000
Recoveries	1,580			—		190			856			41			732			264			—			3,663
Charge-offs	(401		)	—		(479		)	(1,367		)	(341		)	(43		)	(797		)	—			(3,428		)
Ending balance	$	25,147		$	3,745	$	24,564		$	17,948		$	3,505		$	4,423		$	8,110		$	7,821		$	95,263



	September 30, 2018
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	297	$	—	$	—	$	17	$	71	$	64	$	8	$	—	$	457
Collectively evaluated for impairment	24,850		3,745		24,564		17,908		3,372		4,359		8,102		7,821		94,721
Purchased credit-impaired loans	—		—		—		23		62		—		—		—		85
Total allowance for loan losses	$	25,147	$	3,745	$	24,564	$	17,948	$	3,505	$	4,423	$	8,110	$	7,821	$	95,263



Loan balances:
Individually evaluated for impairment	$	8,769	$	—	$	1,669	$	384	$	3,298	$	4,497	$	201	$	—	$	18,818
Collectively evaluated for impairment	3,198,018		309,667		1,014,140		1,357,144		356,270		845,320		710,198		—		7,790,757
Purchased credit-impaired loans	8,369		142		3,236		621		398		111		67		—		12,944
Total loans	$	3,215,156	$	309,809	$	1,019,045	$	1,358,149	$	359,966	$	849,928	$	710,466	$	—	$	7,822,519



	For the Three Months Ended September 30, 2017
	Commercial Real Estate			Multifamily Real Estate		Construction and Land			Commercial Business			Agricultural Business			One- to Four-Family Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	24,232		$	1,562	$	27,312		$	19,126		$	3,808		$	2,010		$	3,987		$	6,549		$	88,586
Provision for loan losses	(236		)	63		2,037			(555		)	1,141			22			117			(589		)	2,000
Recoveries	19			—		73			577			1			8			98			—			776
Charge-offs	(584		)	—		—			(491		)	(1,001		)	—			(186		)	—			(2,262		)
Ending balance	$	23,431		$	1,625	$	29,422		$	18,657		$	3,949		$	2,040		$	4,016		$	5,960		$	89,100

	For the Nine Months Ended September 30, 2017
	Commercial Real Estate			Multifamily Real Estate		Construction and Land			Commercial Business			Agricultural Business			One- to Four-Family Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	20,993		$	1,360	$	34,252		$	16,533		$	2,967		$	2,238		$	4,104		$	3,550		$	85,997
Provision for loan losses	2,716			254		(6,010		)	4,489			2,113			(460		)	488			2,410			6,000
Recoveries	353			11		1,180			921			133			262			293			—			3,153
Charge-offs	(631		)	—		—			(3,286		)	(1,264		)	—			(869		)	—			(6,050		)
Ending balance	$	23,431		$	1,625	$	29,422		$	18,657		$	3,949		$	2,040		$	4,016		$	5,960		$	89,100



	September 30, 2017
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	263	$	—	$	67	$	52	$	196	$	184	$	11	$	—	$	773
Collectively evaluated for impairment	23,168		1,625		29,348		18,605		3,753		1,856		4,005		5,960		88,320
Purchased credit-impaired loans	—		—		7		—		—		—		—		—		7
Total allowance for loan losses	$	23,431	$	1,625	$	29,422	$	18,657	$	3,949	$	2,040	$	4,016	$	5,960	$	89,100



Loan balances:
Individually evaluated for impairment	$	13,866	$	—	$	1,871	$	5,899	$	6,495	$	5,182	$	218	$	—	$	33,531
Collectively evaluated for impairment	3,332,724		311,533		872,783		1,302,902		332,754		864,109		700,892		—		7,717,697
Purchased credit impaired loans	15,684		173		3,759		2,608		683		265		49		—		23,221
Total loans	$	3,362,274	$	311,706	$	878,413	$	1,311,409	$	339,932	$	869,556	$	701,159	$	—	$	7,774,449