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LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Loans Receivable, Including Loans Held for Sale

Loans receivable at June 30, 2019 and December 31, 2018 are summarized as follows (dollars in thousands):



	June 30, 2019					December 31, 2018
	Amount			Percent of Total		Amount			Percent of Total
Commercial real estate:
Owner-occupied	$	1,433,995		16.4	%	$	1,430,097		16.4	%
Investment properties	2,116,306			24.2		2,131,059			24.5
Multifamily real estate	402,241			4.6		368,836			4.2
Commercial construction	172,931			2.0		172,410			2.0
Multifamily construction	189,160			2.2		184,630			2.1
One- to four-family construction	503,061			5.7		534,678			6.2
Land and land development:
Residential	187,180			2.1		188,508			2.2
Commercial	27,470			0.3		27,278			0.3
Commercial business	1,598,788			18.3		1,483,614			17.1
Agricultural business, including secured by farmland	380,805			4.3		404,873			4.7
One- to four-family residential	944,617			10.8		973,616			11.2
Consumer:
Consumer secured by one- to four-family	575,658			6.6		568,979			6.6
Consumer—other	214,338			2.5		216,017			2.5
Total loans	8,746,550			100.0	%	8,684,595			100.0	%
Less allowance for loan losses	(98,254		)			(96,485		)
Net loans	$	8,648,296				$	8,588,110

Loan amounts are net of unearned loan fees in excess of unamortized costs of $847,000 as of June 30, 2019 and $1.4 million as of December 31, 2018. Net loans include net discounts on acquired loans of $22.6 million and $25.7 million as of June 30, 2019 and December 31, 2018, 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 six months ended June 30, 2019 and 2018 (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Balance, beginning of period	$	4,778		$	6,288		$	5,216		$	6,520
Accretion to interest income	(456		)	(734		)	(949		)	(1,831		)
Disposals	—			—			—			58
Reclassifications from non-accretable difference	421			555			476			1,362
Balance, end of period	$	4,743		$	6,109		$	4,743		$	6,109

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 June 30, 2019 and December 31, 2018. Recorded investment includes the unpaid principal balance or the carrying amount of loans less charge-offs and net deferred loan fees (in thousands):



	June 30, 2019
	Unpaid Principal Balance		Recorded Investment				Related Allowance
	Unpaid Principal Balance		Without Allowance ⁽¹⁾		With Allowance ⁽²⁾		Related Allowance
Commercial real estate:
Owner-occupied	$	3,171	$	2,792	$	200	$	20
Investment properties	2,961		1,612		699		44
Multifamily construction	1,079		605		—		—
One- to four-family construction	1,181		1,181		—		—
Land and land development:
Residential	1,026		690		—		—
Commercial business	4,393		2,984		550		21
Agricultural business/farmland	3,903		1,359		2,320		147
One- to four-family residential	6,513		4,188		2,307		58
Consumer:
Consumer secured by one- to four-family	3,269		2,983		130		5
Consumer—other	430		344		59		2
	$	27,926	$	18,738	$	6,265	$	297

	December 31, 2018
	Unpaid Principal Balance		Recorded Investment				Related Allowance
	Unpaid Principal Balance		Without Allowance ⁽¹⁾		With Allowance ⁽²⁾		Related Allowance
Commercial real estate:
Owner-occupied	$	3,193	$	2,768	$	200	$	19
Investment properties	7,287		1,320		5,606		226
Multifamily real estate	1,901		1,427		—		—
One- to four-family construction	919		919		—		—
Land and land development:
Residential	1,134		798		—		—
Commercial	44		44		—		—
Commercial business	4,014		2,937		391		16
Agricultural business/farmland	4,863		1,751		2,561		96
One- to four-family residential	6,724		4,314		2,358		51
Consumer:
Consumer secured by one- to four-family	1,622		1,438		133		6
Consumer—other	112		49		62		2
	$	31,813	$	17,765	$	11,311	$	416


⁽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 $9.0 million, respectively, of homogenous and small balance loans as of June 30, 2019 and December 31, 2018, 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 six months ended June 30, 2019 and 2018 (in thousands):



	Three Months Ended June 30, 2019				Three Months Ended June 30, 2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial real estate:
Owner-occupied	$	3,072	$	2	$	3,544	$	2
Investment properties	3,283		22		7,561		75
Commercial construction	1,153		—		—		—
One- to four-family construction	1,006		1		314		—
Land and land development:
Residential	690		—		1,582		10
Commercial business	3,762		6		3,206		5
Agricultural business/farmland	4,590		29		4,357		23
One- to four-family residential	6,449		57		8,226		59
Consumer:
Consumer secured by one- to four-family	3,129		3		1,360		3
Consumer—other	372		1		141		1
	$	27,506	$	121	$	30,291	$	178

	Six Months Ended June 30, 2019				Six Months Ended June 30, 2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial real estate:
Owner-occupied	$	3,261	$	4	$	4,464	$	5
Investment properties	5,255		98		8,767		158
Commercial construction	1,290		—		—		—
One- to four-family construction	963		1		459		4
Land and land development:
Residential	708		—		1,190		10
Commercial business	3,782		11		3,606		12
Agricultural business/farmland	4,854		56		6,733		56
One- to four-family residential	6,448		122		8,559		160
Consumer:
Consumer secured by one- to four-family	2,596		8		1,375		5
Consumer—other	345		2		145		2
	$	29,502	$	302	$	35,298	$	412

Schedule of Troubled Debt Restructurings

The following table presents TDRs by accrual and nonaccrual status at June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019						December 31, 2018
	Accrual Status		Nonaccrual Status		Total TDRs		Accrual Status		Nonaccrual Status		Total TDRs
Commercial real estate:
Owner-occupied	$	—	$	273	$	273	$	200	$	78	$	278
Investment properties	699		1,077		1,776		5,606		—		5,606
Commercial business	550		—		550		391		—		391
Agricultural business, including secured by farmland	2,320		—		2,320		2,561		—		2,561
One- to four-family residential	2,836		202		3,038		4,469		239		4,708
Consumer:
Consumer secured by one- to four-family	130		—		130		133		—		133
Consumer—other	59		—		59		62		—		62
	$	6,594	$	1,552	$	8,146	$	13,422	$	317	$	13,739

As of June 30, 2019 and December 31, 2018, the Company had commitments to advance additional funds related to TDRs up to $49,000 and none, 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 June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019
By class:	Pass (Risk Ratings 1-5)⁽¹⁾		Special Mention		Substandard		Doubtful		Loss		Total Loans
Commercial real estate:
Owner-occupied	$	1,409,358	$	7,880	$	16,757	$	—	$	—	$	1,433,995
Investment properties	2,107,989		—		8,317		—		—		2,116,306
Multifamily real estate	401,810		—		431		—		—		402,241
Commercial construction	160,616		—		12,315		—		—		172,931
Multifamily construction	189,160		—		—		—		—		189,160
One- to four-family construction	502,142		—		919		—		—		503,061
Land and land development:
Residential	186,490		—		690		—		—		187,180
Commercial	27,434		—		36		—		—		27,470
Commercial business	1,549,519		21,832		27,359		78		—		1,598,788
Agricultural business, including secured by farmland	368,172		7,109		5,524		—		—		380,805
One- to four-family residential	940,607		434		3,576		—		—		944,617
Consumer:
Consumer secured by one- to four-family	571,458		—		4,200		—		—		575,658
Consumer—other	213,777		6		555		—		—		214,338
Total	$	8,628,532	$	37,261	$	80,679	$	78	$	—	$	8,746,550



	December 31, 2018
By class:	Pass (Risk Ratings 1-5)⁽¹⁾		Special Mention		Substandard		Doubtful		Loss		Total Loans
Commercial real estate:
Owner-occupied	$	1,396,721	$	6,963	$	26,413	$	—	$	—	$	1,430,097
Investment properties	2,122,621		—		8,438		—		—		2,131,059
Multifamily real estate	368,262		—		574		—		—		368,836
Commercial construction	159,167		11,816		1,427		—		—		172,410
Multifamily construction	184,630		—		—		—		—		184,630
One- to four-family construction	533,759		—		919		—		—		534,678
Land and land development:
Residential	187,710		—		798		—		—		188,508
Commercial	27,200		—		78		—		—		27,278
Commercial business	1,436,733		7,661		39,133		87		—		1,483,614
Agricultural business, including secured by farmland	392,318		4,214		8,341		—		—		404,873
One- to four-family residential	969,011		499		4,106		—		—		973,616
Consumer:
Consumer secured by one- to four-family	564,001		—		4,978		—		—		568,979
Consumer—other	215,706		9		302		—		—		216,017
Total	$	8,557,839	$	31,162	$	95,507	$	87	$	—	$	8,684,595

⁽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 June 30, 2019 and December 31, 2018, in the commercial business category, $744.8 million and $590.9 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 June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019
	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	$	1,024	$	146	$	2,474	$	3,644	$	8,413	$	1,421,938	$	1,433,995	$	—	$	2,991
Investment properties	148		—		1,612		1,760		3,301		2,111,245		2,116,306		—		1,612
Multifamily real estate	91		—		—		91		6		402,144		402,241		—		—
Commercial construction	—		—		605		605		—		172,326		172,931		—		605
Multifamily construction	—		—		—		—		—		189,160		189,160		—		—
One-to-four-family construction	—		2,454		1,181		3,635		—		499,426		503,061		262		919
Land and land development:
Residential	—		—		690		690		—		186,490		187,180		—		690
Commercial	—		—		—		—		—		27,470		27,470		—		—
Commercial business	8,982		895		2,211		12,088		526		1,586,174		1,598,788		1		2,983
Agricultural business, including secured by farmland	131		30		1,359		1,520		414		378,871		380,805		—		1,359
One- to four-family residential	826		1,496		3,219		5,541		87		938,989		944,617		995		2,665
Consumer:
Consumer secured by one- to four-family	1,324		346		2,233		3,903		113		571,642		575,658		66		2,917
Consumer—other	558		129		255		942		85		213,311		214,338		31		313
Total	$	13,084	$	5,496	$	15,839	$	34,419	$	12,945	$	8,699,186	$	8,746,550	$	1,355	$	17,054



	December 31, 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	$	785	$	519	$	2,223	$	3,527	$	8,531	$	1,418,039	$	1,430,097	$	—	$	2,768
Investment properties	91		498		934		1,523		3,462		2,126,074		2,131,059		—		1,320
Multifamily real estate	317		—		—		317		138		368,381		368,836		—		—
Commercial construction	—		—		1,427		1,427		—		170,983		172,410		—		1,427
Multifamily construction	—		—		—		—		—		184,630		184,630		—		—
One-to-four-family construction	4,781		1,078		919		6,778		137		527,763		534,678		—		919
Land and land development:
Residential	450		—		798		1,248		—		187,260		188,508		—		798
Commercial	34		—		44		78		—		27,200		27,278		—		44
Commercial business	3,982		1,305		1,756		7,043		1,028		1,475,543		1,483,614		1		2,936
Agricultural business, including secured by farmland	343		1,518		1,601		3,462		493		400,918		404,873		—		1,751
One-to four-family residential	5,440		1,790		1,657		8,887		101		964,628		973,616		658		1,544
Consumer:
Consumer secured by one- to four-family	1,136		765		706		2,607		432		565,940		568,979		238		1,201
Consumer—other	911		385		9		1,305		91		214,621		216,017		9		40
Total	$	18,270	$	7,858	$	12,074	$	38,202	$	14,413	$	8,631,980	$	8,684,595	$	906	$	14,748

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 six months ended June 30, 2019 and 2018 (in thousands):



	For the Three Months Ended June 30, 2019
	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	$	27,091		$	4,020	$	23,713		$	18,662		$	3,596		$	4,711		$	7,980		$	7,535		$	97,308
Provision for loan losses	(117		)	324		(189		)	1,482			222			(240		)	828			(310		)	2,000
Recoveries	149			—		30			215			35			230			223			—			882
Charge-offs	(393		)	—		—			(802		)	(162		)	—			(579		)	—			(1,936		)
Ending balance	$	26,730		$	4,344	$	23,554		$	19,557		$	3,691		$	4,701		$	8,452		$	7,225		$	98,254

	For the Six Months Ended June 30, 2019
	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	$	27,132		$	3,818	$	24,442		$	19,438		$	3,778		$	4,714		$	7,972		$	5,191		$	96,485
Provision for loan losses	252			526		(940		)	1,273			44			(286		)	1,097			2,034			4,000
Recoveries	170			—		52			238			35			273			333			—			1,101
Charge-offs	(824		)	—		—			(1,392		)	(166		)	—			(950		)	—			(3,332		)
Ending balance	$	26,730		$	4,344	$	23,554		$	19,557		$	3,691		$	4,701		$	8,452		$	7,225		$	98,254



	June 30, 2019
	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	$	64	$	—	$	—	$	21	$	147	$	58	$	7	$	—	$	297
Collectively evaluated for impairment	26,666		4,344		23,554		19,513		3,487		4,643		8,445		7,225		97,877
Purchased credit-impaired loans	—		—		—		23		57		—		—		—		80
Total allowance for loan losses	$	26,730	$	4,344	$	23,554	$	19,557	$	3,691	$	4,701	$	8,452	$	7,225	$	98,254



Loan balances:
Individually evaluated for impairment	$	4,352	$	—	$	2,166	$	550	$	3,058	$	3,582	$	964	$	—	$	14,672
Collectively evaluated for impairment	3,534,235		402,235		1,077,636		1,597,712		377,333		940,948		788,834		—		8,718,933
Purchased credit-impaired loans	11,714		6		—		526		414		87		198		—		12,945
Total loans	$	3,550,301	$	402,241	$	1,079,802	$	1,598,788	$	380,805	$	944,617	$	789,996	$	—	$	8,746,550



	For the Three Months Ended June 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	$	23,461		$	2,592	$	28,766		$	19,885		$	2,999		$	3,779		$	5,514		$	5,211		$	92,207
Provision for loan losses	1,035			1,126		(1,743		)	(469		)	451			(203		)	264			1,539			2,000
Recoveries	216			—		11			100			41			356			106			—			830
Charge-offs	(299		)	—		—			(375		)	(329		)	—			(159		)	—			(1,162		)
Ending balance	$	24,413		$	3,718	$	27,034		$	19,141		$	3,162		$	3,932		$	5,725		$	6,750		$	93,875

	For the Six Months Ended June 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	320			2,085		(719		)	1,454			(596		)	1,247			2,177			(1,968		)	4,000
Recoveries	1,568			—		185			270			41			646			218			—			2,928
Charge-offs	(299		)	—		—			(894		)	(336		)	(16		)	(536		)	—			(2,081		)
Ending balance	$	24,413		$	3,718	$	27,034		$	19,141		$	3,162		$	3,932		$	5,725		$	6,750		$	93,875



	June 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	$	278	$	—	$	—	$	13	$	59	$	108	$	10	$	—	$	468
Collectively evaluated for impairment	24,135		3,718		27,034		19,095		3,043		3,824		5,715		6,750		93,314
Purchased credit-impaired loans	—		—		—		33		60		—		—		—		93
Total allowance for loan losses	$	24,413	$	3,718	$	27,034	$	19,141	$	3,162	$	3,932	$	5,725	$	6,750	$	93,875



Loan balances:
Individually evaluated for impairment	$	8,998	$	—	$	750	$	369	$	3,298	$	4,789	$	205	$	—	$	18,409
Collectively evaluated for impairment	3,155,917		330,220		976,435		1,310,601		333,015		835,560		706,512		—		7,648,260
Purchased credit impaired loans	12,605		164		3,255		1,454		396		121		68		—		18,063
Total loans	$	3,177,520	$	330,384	$	980,440	$	1,312,424	$	336,709	$	840,470	$	706,785	$	—	$	7,684,732