Loans | Loans The following table presents loans by class as of the dates indicated: June 30, December 31, Real estate loans: Commercial $ 1,704,073 $ 1,639,422 Construction: Land acquisition & development 211,889 220,443 Residential 101,023 96,580 Commercial 90,316 101,246 Total construction loans 403,228 418,269 Residential 999,038 999,903 Agricultural 158,506 167,659 Total real estate loans 3,264,845 3,225,253 Consumer: Indirect consumer 589,479 552,863 Other consumer 144,919 144,141 Credit card 64,728 65,467 Total consumer loans 799,126 762,471 Commercial 819,119 740,073 Agricultural 142,629 124,859 Other, including overdrafts 2,905 3,959 Loans held for investment 5,028,624 4,856,615 Mortgage loans held for sale 75,322 40,828 Total loans $ 5,103,946 $ 4,897,443 Loans from business combinations included in the table above include certain loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The following table displays the outstanding unpaid principal balance, accrued interest receivable and accrual status of loans acquired with credit impairment as of June 30, 2015 and 2014 : As of June 30, 2015 2014 Outstanding balance $ 35,555 $ — Carrying value Loans on accrual status 22,293 — Loans on non-accrual status — — Total carrying value $ 22,293 $ — The following table summarizes changes in the accretable yield for loans acquired credit impaired for the three and six ended June 30, 2015 and 2014 : Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance $ 6,980 $ — $ 5,781 $ — Accretion income (807 ) — (1,355 ) — Reductions due to exit events — — (396 ) — Reclassifications from (to) nonaccretable differences 1,309 — 3,452 — Ending balance $ 7,482 $ — $ 7,482 $ — Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the dates indicated: Total Loans 30 - 59 60 - 89 > 90 30 or More Days Days Days Days Current Non-accrual Total As of June 30, 2015 Past Due Past Due Past Due Past Due Loans Loans Loans Real estate Commercial $ 5,123 $ 2,803 $ 111 $ 8,037 $ 1,669,445 $ 26,591 $ 1,704,073 Construction: Land acquisition & development 1,075 276 156 1,507 202,620 7,762 211,889 Residential 417 — — 417 100,274 332 101,023 Commercial — — — — 86,874 3,442 90,316 Total construction loans 1,492 276 156 1,924 389,768 11,536 403,228 Residential 3,563 1,524 929 6,016 990,453 2,569 999,038 Agricultural 875 261 — 1,136 150,586 6,784 158,506 Total real estate loans 11,053 4,864 1,196 17,113 3,200,252 47,480 3,264,845 Consumer: Indirect consumer 3,382 507 26 3,915 585,200 364 589,479 Other consumer 785 121 29 935 143,241 743 144,919 Credit card 415 224 391 1,030 63,684 14 64,728 Total consumer loans 4,582 852 446 5,880 792,125 1,121 799,126 Commercial 8,285 812 190 9,287 788,210 21,622 819,119 Agricultural 700 30 10 740 141,264 625 142,629 Other, including overdrafts — — 311 311 2,594 — 2,905 Loans held for investment 24,620 6,558 2,153 33,331 4,924,445 70,848 5,028,624 Mortgage loans originated for sale — — — — 75,322 — 75,322 Total loans $ 24,620 $ 6,558 $ 2,153 $ 33,331 $ 4,999,767 $ 70,848 $ 5,103,946 Total Loans 30 - 59 60 - 89 > 90 30 or More Days Days Days Days Current Non-accrual Total As of December 31, 2014 Past Due Past Due Past Due Past Due Loans Loans Loans Real estate Commercial $ 4,692 $ 1,609 $ 331 $ 6,632 $ 1,605,421 $ 27,369 $ 1,639,422 Construction: Land acquisition & development 839 383 — 1,222 210,969 8,252 220,443 Residential — 475 — 475 95,833 272 96,580 Commercial 100 — — 100 98,582 2,564 101,246 Total construction loans 939 858 — 1,797 405,384 11,088 418,269 Residential 6,969 645 1,762 9,376 987,735 2,792 999,903 Agricultural 1,624 236 — 1,860 158,957 6,842 167,659 Total real estate loans 14,224 3,348 2,093 19,665 3,157,497 48,091 3,225,253 Consumer: Indirect consumer 3,235 482 6 3,723 548,757 383 552,863 Other consumer 988 140 32 1,160 142,432 549 144,141 Credit card 369 284 315 968 64,484 15 65,467 Total consumer loans 4,592 906 353 5,851 755,673 947 762,471 Commercial 3,659 994 147 4,800 722,575 12,698 740,073 Agricultural 1,125 — — 1,125 123,288 446 124,859 Other, including overdrafts — — — — 3,959 — 3,959 Loans held for investment 23,600 5,248 2,593 31,441 4,762,992 62,182 4,856,615 Mortgage loans originated for sale — — — — 40,828 — 40,828 Total loans $ 23,600 $ 5,248 $ 2,593 $ 31,441 $ 4,803,820 $ 62,182 $ 4,897,443 Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition were considered performing upon acquisition. If interest on non-accrual loans had been accrued, such income would have been approximately $ 875 and $ 1,061 for the three months ended June 30, 2015 and 2014 , respectively, and approximately $1,613 and $2,182 for the six months ended June 30, 2015 and 2014 respectively. The Company considers impaired loans to include all loans, except consumer loans, that are risk rated as doubtful, or have been placed on non-accrual status or renegotiated in troubled debt restructurings. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated: As of June 30, 2015 Unpaid Total Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Real estate: Commercial $ 60,786 $ 31,201 $ 17,201 $ 48,402 $ 1,810 Construction: Land acquisition & development 22,630 6,452 5,915 12,367 569 Residential 969 332 — 332 — Commercial 3,796 426 1,590 2,016 1,606 Total construction loans 27,395 7,210 7,505 14,715 2,175 Residential 5,442 2,291 1,429 3,720 127 Agricultural 9,094 6,396 2,202 8,598 712 Total real estate loans 102,717 47,098 28,337 75,435 4,824 Commercial 28,472 11,275 12,298 23,573 3,279 Agricultural 2,110 427 1,058 1,485 618 Total $ 133,299 $ 58,800 $ 41,693 $ 100,493 $ 8,721 As of December 31, 2014 Unpaid Total Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Real estate: Commercial $ 41,603 $ 28,143 $ 11,246 $ 39,389 $ 1,608 Construction: Land acquisition & development 12,511 7,262 1,615 8,877 574 Residential 459 272 — 272 — Commercial 2,729 253 2,442 2,695 904 Total construction loans 15,699 7,787 4,057 11,844 1,478 Residential 2,959 2,452 341 2,793 143 Agricultural 8,844 6,444 2,305 8,749 732 Total real estate loans 69,105 44,826 17,949 62,775 3,961 Commercial 16,904 11,882 2,644 14,526 1,190 Agricultural 1,231 342 837 1,179 641 Total $ 87,240 $ 57,050 $ 21,430 $ 78,480 $ 5,792 The following table presents the average recorded investment in and income recognized on impaired loans for the periods indicated: Three Months Ended June 30, 2015 2014 Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized Real estate: Commercial $ 39,513 $ 211 $ 57,588 $ 241 Construction: Land acquisition & development 8,664 12 13,563 11 Residential 338 — 785 — Commercial 3,492 — 1,471 2 Total construction loans 12,494 12 15,819 13 Residential 3,014 1 5,852 1 Agricultural 8,572 13 9,747 25 Total real estate loans 63,593 237 89,006 280 Commercial 21,841 112 14,162 14 Agricultural 1,004 8 742 6 Total $ 86,438 $ 357 $ 103,910 $ 300 Six Months Ended June 30, 2015 2014 Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized Real estate: Commercial $ 40,652 $ 361 $ 60,870 $ 457 Construction: Land acquisition & development 8,720 22 14,554 22 Residential 302 — 1,051 — Commercial 3,133 2 918 4 Total construction loans 12,155 24 16,523 26 Residential 2,719 2 5,969 3 Agricultural 8,666 35 9,830 29 Total real estate loans 64,192 422 93,192 515 Commercial 17,874 120 14,231 28 Agricultural 857 13 538 12 Total $ 82,923 $ 555 $ 107,961 $ 555 The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $ 1,045 and $ 1,301 for the three months ended June 30, 2015 and 2014 , respectively, and approximately $2,011 and $2,412 for the six months ended June 30, 2015 and 2014 respectively. Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized. Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume. The Company had loans renegotiated in troubled debt restructurings of $ 37,363 as of June 30, 2015 , of which $ 22,236 were included in non-accrual loans and $ 15,127 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $ 44,227 as of December 31, 2014 , of which $ 23,275 were included in non-accrual loans and $ 20,952 were on accrual status. No troubled debt restructurings occurred during the three months ended June 30, 2015 . The following table presents information on the Company's troubled debt restructurings that occurred during the six months ended June 30, 2015 : Number of Notes Type of Concession Principal Balance at Restructure Date Six Months Ended June 30, 2015 Interest only period Extension of terms or maturity Interest rate adjustment Other Commercial 1 $ — $ 10 $ — $ — $ 10 Total loans restructured during period 1 $ — $ 10 $ — $ — $ 10 For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three or six months ended June 30, 2015 or 2014 . The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification. Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Number of Notes Balance Number of Notes Balance Commercial Real Estate — $ — 1 $ 1,822 At June 30, 2015 , there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual. As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators: Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements. Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a substandard loan is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit. Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure. Company management undertakes the same process for assigning risk ratings to acquired loans as it does for originated loans. Acquired loans rated as substandard or lower or that were on non-accrual status or designated as troubled debt restructurings at the time of acquisition are deemed to be acquired credit impaired loans accounted for under ASC Topic 310-30, regardless of whether they are classified as performing or non-performing loans. The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated: As of June 30, 2015 Other Assets Especially Mentioned Substandard Doubtful Total Criticized Loans Real estate: Commercial $ 83,194 $ 85,323 $ 7,952 $ 176,469 Construction: Land acquisition & development 13,426 14,190 2,031 29,647 Residential 857 2,165 29 3,051 Commercial — 409 3,161 3,570 Total construction loans 14,283 16,764 5,221 36,268 Residential 8,434 9,387 1,002 18,823 Agricultural 9,826 14,838 595 25,259 Total real estate loans 115,737 126,312 14,770 256,819 Consumer: Indirect consumer 843 1,454 161 2,458 Other consumer 557 930 349 1,836 Credit card — — — — Total consumer loans 1,400 2,384 510 4,294 Commercial 34,776 24,519 15,691 74,986 Agricultural 3,794 6,684 730 11,208 Total $ 155,707 $ 159,899 $ 31,701 $ 347,307 As of December 31, 2014 Other Assets Especially Mentioned Substandard Doubtful Total Criticized Loans Real estate: Commercial $ 84,533 $ 83,448 $ 15,246 $ 183,227 Construction: Land acquisition & development 11,826 15,016 2,507 29,349 Residential 2,029 2,666 — 4,695 Commercial 39 253 2,442 2,734 Total construction loans 13,894 17,935 4,949 36,778 Residential 10,473 10,848 1,121 22,442 Agricultural 10,122 12,328 612 23,062 Total real estate loans 119,022 124,559 21,928 265,509 Consumer: Indirect consumer 916 1,590 121 2,627 Other consumer 553 1,085 432 2,070 Credit card — 348 1,263 1,611 Total consumer loans 1,469 3,023 1,816 6,308 Commercial 25,766 32,433 10,273 68,472 Agricultural 7,827 3,660 837 12,324 Total $ 154,084 $ 163,675 $ 34,854 $ 352,613 The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans. |