Loans | Loans The following table presents the composition of loans as of March 31, 2019 and September 30, 2018 . March 31, September 30, 2019 2018 (dollars in thousands) Commercial real estate $ 5,049,792 $ 4,629,330 Agriculture 2,121,872 2,182,688 Commercial non-real estate 1,721,095 1,699,987 Residential real estate 815,212 837,569 Consumer 44,504 49,689 Other 46,163 46,487 Ending balance 9,798,638 9,445,750 Less: Unamortized discount on acquired loans (15,255 ) (18,283 ) Unearned net deferred fees and costs and loans in process (12,472 ) (11,543 ) Total $ 9,770,911 $ 9,415,924 The loan segments above include loans covered by a FDIC loss sharing agreement totaling $37.0 million and $42.6 million as of March 31, 2019 and September 30, 2018 , respectively, residential real estate loans held for sale totaling $3.6 million and $5.5 million at March 31, 2019 and September 30, 2018 , respectively, and $835.8 million and $865.4 million of loans accounted for at fair value at March 31, 2019 and September 30, 2018 , respectively. Unearned net deferred fees and costs totaled $13.5 million and $13.0 million as of March 31, 2019 and September 30, 2018 , respectively. Loans in process represent loans that have been funded as of the balance sheet dates but not classified into a loan category and loan payments received as of the balance sheet dates that have not been applied to individual loan accounts. Loans in process totaled $(1.0) million and $(1.5) million at March 31, 2019 and September 30, 2018 , respectively. Loans guaranteed by agencies of the U.S. government totaled $164.5 million and $168.6 million at March 31, 2019 and September 30, 2018 , respectively. Principal balances of residential real estate loans sold totaled $46.8 million and $67.6 million for the three months March 31, 2019 and 2018 , respectively, and $100.7 million and $117.8 million for the six months ended March 31, 2019 and 2018 , respectively. Nonaccrual Interest income on loans is accrued daily on the outstanding balances. A loan is placed on nonaccrual status and accrual of interest is discontinued when principal or interest becomes 90 days past due unless it is well secured and is in the process of collection, or earlier when concern exists as to the ultimate collectibility of principal or interest. When loans are placed on nonaccrual status, interest receivable is reversed against interest income in the current period. Interest payments received thereafter are applied as a reduction to the remaining principal balance as long as concern exists as to the ultimate collection of the principal. Loans are removed from nonaccrual status when they become current as to both principal and interest and concern no longer exists as to the collectability of principal and interest. The following table presents the Company’s nonaccrual loans at March 31, 2019 and September 30, 2018 , excluding ASC 310-30 loans. Loans greater than 90 days past due and still accruing interest as of March 31, 2019 and September 30, 2018 , were $0.0 million and $0.2 million , respectively. March 31, September 30, 2019 2018 (dollars in thousands) Nonaccrual loans Commercial real estate $ 17,929 $ 22,871 Agriculture 91,771 107,198 Commercial non-real estate 6,868 6,887 Residential real estate 2,499 3,549 Consumer 87 61 Total $ 119,154 $ 140,566 Credit Quality Information The Company assigns all non-consumer loans a credit quality risk rating. These ratings are Pass, Watch, Substandard, Doubtful, and Loss. Loans with a Pass and Watch rating represent those loans not classified on the Company’s rating scale as problem credits, with loans with a Watch rating being monitored and updated at least quarterly by management. Substandard loans are those where a well-defined weakness has been identified that may put full collection of contractual debt at risk. Doubtful loans are those where a well-defined weakness has been identified and a loss of contractual debt is probable. Substandard and doubtful loans are monitored and updated monthly. All loan risk ratings are updated and monitored on a continuous basis. The Company generally does not risk rate residential real estate or consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of consumer loans. The following table presents the composition of the loan portfolio by internally assigned grade as of March 31, 2019 and September 30, 2018 . This table is presented net of unamortized discount on acquired loans and excludes loans measured at fair value with changes in fair value reported in earnings of $835.8 million at March 31, 2019 and $865.4 million at September 30, 2018 . As of March 31, 2019 Commercial Real Estate Agriculture Commercial Residential Real Estate ¹ Consumer ¹ Other Total (dollars in thousands) Credit Risk Profile by Internally Assigned Grade Grade: Pass $ 4,455,347 $ 1,584,602 $ 1,512,883 $ 762,495 $ 44,013 $ 46,163 $ 8,405,503 Watchlist 47,424 199,585 32,402 5,450 102 — 284,963 Substandard 32,938 158,061 20,926 6,435 210 — 218,570 Doubtful 61 137 1,325 29 — — 1,552 Loss — — — — — — — Ending balance 4,535,770 1,942,385 1,567,536 774,409 44,325 46,163 8,910,588 Loans covered by a FDIC loss sharing agreement — — — 36,975 — — 36,975 Total $ 4,535,770 $ 1,942,385 $ 1,567,536 $ 811,384 $ 44,325 $ 46,163 $ 8,947,563 1 The Company generally does not risk rate residential real estate or consumer loans unless a default event such as a bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of residential real estate and consumer loans. As of September 30, 2018 Commercial Real Estate Agriculture Commercial Residential Real Estate ¹ Consumer ¹ Other Total (dollars in thousands) Credit Risk Profile by Internally Assigned Grade Grade: Pass $ 4,108,314 $ 1,610,291 $ 1,401,418 $ 779,610 $ 48,979 $ 46,487 $ 7,995,099 Watchlist 53,150 239,392 19,503 4,548 322 — 316,915 Substandard 41,184 137,205 20,117 6,366 159 — 205,031 Doubtful 93 2 2,277 37 — — 2,409 Loss — — — — — — — Ending balance 4,202,741 1,986,890 1,443,315 790,561 49,460 46,487 8,519,454 Loans covered by a FDIC loss sharing agreement — — — 42,627 — — 42,627 Total $ 4,202,741 $ 1,986,890 $ 1,443,315 $ 833,188 $ 49,460 $ 46,487 $ 8,562,081 1 The Company generally does not risk rate residential real estate or consumer loans unless a default event such as a bankruptcy or extended nonperformance takes place. Alternatively, standard credit scoring systems are used to assess credit risks of residential real estate and consumer loans. Past Due Loans The following table presents the Company’s past due loans at March 31, 2019 and September 30, 2018 . This table is presented net of unamortized discount on acquired loans and excludes loans measured at fair value with changes in fair value reported in earnings of $835.8 million at March 31, 2019 and $865.4 million at September 30, 2018 . 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Current Total Financing Receivables (dollars in thousands) As of March 31, 2019 Commercial real estate $ 3,051 $ 95 $ 5,519 $ 8,665 $ 4,527,105 $ 4,535,770 Agriculture 11,558 8,985 37,075 57,618 1,884,767 1,942,385 Commercial non-real estate 2,161 4,134 3,452 9,747 1,557,789 1,567,536 Residential real estate 2,341 700 803 3,844 770,565 774,409 Consumer 208 15 — 223 44,102 44,325 Other — — — — 46,163 46,163 Ending balance 19,319 13,929 46,849 80,097 8,830,491 8,910,588 Loans covered by a FDIC loss sharing agreement 1,955 78 214 2,247 34,728 36,975 Total $ 21,274 $ 14,007 $ 47,063 $ 82,344 $ 8,865,219 $ 8,947,563 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Current Total Financing Receivables (dollars in thousands) As of September 30, 2018 Commercial real estate $ 920 $ 551 $ 9,135 $ 10,606 $ 4,192,135 $ 4,202,741 Agriculture 1,243 2,042 51,579 54,864 1,932,026 1,986,890 Commercial non-real estate 551 16 4,068 4,635 1,438,680 1,443,315 Residential real estate 913 200 1,747 2,860 787,701 790,561 Consumer 83 47 1 131 49,329 49,460 Other — — — — 46,487 46,487 Ending balance 3,710 2,856 66,530 73,096 8,446,358 8,519,454 Loans covered by a FDIC loss sharing agreement 30 233 471 734 41,893 42,627 Total $ 3,740 $ 3,089 $ 67,001 $ 73,830 $ 8,488,251 $ 8,562,081 Impaired Loans The following table presents the Company’s impaired loans. This table excludes purchased credit impaired loans and loans measured at fair value with changes in fair value reported in earnings of $835.8 million at March 31, 2019 and $865.4 million at September 30, 2018 . March 31, 2019 September 30, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance (dollars in thousands) Impaired loans: With an allowance recorded: Commercial real estate $ 22,058 $ 22,102 $ 2,258 $ 25,136 $ 25,223 $ 3,668 Agriculture 67,476 81,601 14,281 60,053 76,874 9,590 Commercial non-real estate 14,214 16,933 3,338 14,177 17,241 4,508 Residential real estate 3,093 3,678 1,562 4,509 5,153 2,210 Consumer 209 213 123 160 165 61 Total impaired loans with an allowance recorded 107,050 124,527 21,562 104,035 124,656 20,037 With no allowance recorded: Commercial real estate 10,595 50,487 — 15,764 58,141 — Agriculture 92,021 102,968 — 77,172 80,355 — Commercial non-real estate 8,669 17,809 — 8,905 18,047 — Residential real estate 3,539 5,969 — 2,177 4,574 — Consumer — 117 — 1 118 — Total impaired loans with no allowance recorded 114,824 177,350 — 104,019 161,235 — Total impaired loans $ 221,874 $ 301,877 $ 21,562 $ 208,054 $ 285,891 $ 20,037 The following table presents the average recorded investment on impaired loans and interest income recognized on impaired loans for the three and six months ended March 31, 2019 and 2018 . Three Months Ended Six Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status (dollars in thousands) Commercial real estate $ 34,475 $ 345 $ 66,577 $ 477 $ 36,616 $ 697 $ 56,875 $ 2,053 Agriculture 151,021 2,203 121,062 1,189 146,423 3,202 124,200 2,171 Commercial non-real estate 22,556 312 30,350 325 22,731 678 30,878 776 Residential real estate 6,724 93 7,578 116 6,711 182 7,636 281 Consumer 237 6 238 4 212 11 256 8 Total $ 215,013 $ 2,959 $ 225,805 $ 2,111 $ 212,693 $ 4,770 $ 219,845 $ 5,289 Valuation adjustments made to repossessed properties totaled $0.1 million and $0.7 million for the three months ended March 31, 2019 and 2018 , respectively, and $2.0 million and $0.7 million for the six months ended March 31, 2019 and 2018 , respectively. The adjustments are included in net loss on repossessed property and other related expenses in noninterest expense. Troubled Debt Restructurings Included in certain loan categories in the impaired loans are TDRs that were classified as impaired. These TDRs do not include purchased credit impaired loans. When the Company grants concessions to borrowers such as reduced interest rates or extensions of loan periods that would not be considered other than because of borrowers’ financial difficulties, the modification is considered a TDR. Specific reserves included in the allowance for loan and lease losses for TDRs were $7.4 million and $9.2 million at March 31, 2019 and September 30, 2018 , respectively. There were $0.6 million of commitments to lend additional funds to borrowers whose loans were modified in a TDR as of March 31, 2019 and $0.3 million commitments to lend additional funds to borrowers whose loans were modified in a TDR as of September 30, 2018 . The following table presents the recorded value of the Company’s TDR balances as of March 31, 2019 and September 30, 2018 . March 31, 2019 September 30, 2018 Accruing Nonaccrual Accruing Nonaccrual (dollars in thousands) Commercial real estate $ 1,930 $ 1,068 $ 2,649 $ 2,616 Agriculture 12,377 46,592 13,248 73,741 Commercial non-real estate 2,498 705 3,420 656 Residential real estate 347 115 389 143 Consumer 91 61 77 — Total $ 17,243 $ 48,541 $ 19,783 $ 77,156 TDRs are generally restructured through either a rate modification, term extension, payment modification or due to a bankruptcy. The following table presents a summary of all accruing loans restructured in TDRs for the three and six months ended March 31, 2019 and 2018 . Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Recorded Investment Recorded Investment Recorded Investment Recorded Investment Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification (dollars in thousands) Commercial real estate — $ — $ — — $ — $ — — $ — $ — — $ — $ — Agriculture — — — 2 6,073 6,073 — $ — — 2 6,073 6,073 Commercial non-real estate — — — — — — — $ — — — — — Residential real estate — — — — — — — — — — — — Consumer — — — 1 73 73 1 $ 89 89 1 73 73 Total accruing — $ — $ — 3 $ 6,146 $ 6,146 1 $ 89 $ 89 3 $ 6,146 $ 6,146 Change in recorded investment due to principal paydown at time of modification — $ — $ — — $ — $ — — $ — $ — — $ — $ — Change in recorded investment due to chargeoffs at time of modification — — — — — — — — — — — — The following table presents a summary of all nonaccruing loans restructured in TDRs for the three and six months ended March 31, 2019 and 2018 . Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Recorded Investment Recorded Investment Recorded Investment Recorded Investment Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification Number Pre-Modification Post-Modification (dollars in thousands) Commercial real estate — $ — $ — — $ — $ — — $ — $ — — $ — $ — Agriculture — — — 6 8,374 8,374 — $ — — 6 8,374 8,374 Commercial non-real estate — — — — — — — $ — — — — — Residential real estate — — — — — — — — — — — — Consumer — — — — — — — $ — — — — — Total nonaccruing — $ — $ — 6 $ 8,374 $ 8,374 — $ — $ — 6 $ 8,374 $ 8,374 Change in recorded investment due to principal paydown at time of modification — $ — $ — — $ — $ — — $ — $ — — $ — $ — Change in recorded investment due to chargeoffs at time of modification — — — — — — — — — — — — The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default for the three and six months ended March 31, 2019 and 2018 , respectively. Three Months Ended March 31, Six Months Ended March 31, 2019 2018 2019 2018 Number of Loans Recorded Investment Number of Loans Recorded Investment Number of Loans Recorded Investment Number of Loans Recorded Investment (dollars in thousands) Commercial real estate — $ — — $ — — $ — 1 $ 1,012 Agriculture — — 3 4,264 — — 4 5,011 Commercial non-real estate — — — — — — — — Residential real estate — — — — — — — — Consumer — — — — — — — — Total — $ — 3 $ 4,264 — $ — 5 $ 6,023 For purposes of the table above, a loan is considered to be in payment default once it is 90 days or more contractually past due under the modified terms. The table includes loans that experienced a payment default during the period, but may be performing in accordance with the modified terms as of the balance sheet date. There were $0.0 million and $0.1 million for the three months ended March 31, 2019 and 2018 , respectively, and $0.0 million and $0.6 million for the six months ended March 31, 2019 and 2018 , respectively, of loans removed from TDR status as they were restructured at market terms and are performing. |