Loans | Loans The following table presents loans by class as of the dates indicated: September 30, December 31, Real estate loans: Commercial $ 1,843,120 $ 1,793,258 Construction: Land acquisition & development 212,680 224,066 Residential 137,014 111,763 Commercial 128,154 94,890 Total construction loans 477,848 430,719 Residential 1,047,150 1,032,851 Agricultural 172,949 156,234 Total real estate loans 3,541,067 3,413,062 Consumer: Indirect consumer 731,901 622,529 Other consumer 153,624 153,717 Credit card 66,860 68,107 Total consumer loans 952,385 844,353 Commercial 814,392 792,416 Agricultural 152,800 142,151 Other, including overdrafts 2,292 1,339 Loans held for investment 5,462,936 5,193,321 Mortgage loans held for sale 67,979 52,875 Total loans $ 5,530,915 $ 5,246,196 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 September 30, 2016 Past Due Past Due Past Due Past Due Loans Loans Loans Real estate Commercial $ 8,023 $ 484 $ 727 $ 9,234 $ 1,806,929 $ 26,957 $ 1,843,120 Construction: Land acquisition & development 500 424 50 974 206,388 5,318 212,680 Residential 592 — 237 829 135,919 266 137,014 Commercial 3,375 57 — 3,432 123,905 817 128,154 Total construction loans 4,467 481 287 5,235 466,212 6,401 477,848 Residential 4,019 1,870 2,837 8,726 1,035,626 2,798 1,047,150 Agricultural 10 — 830 840 168,773 3,336 172,949 Total real estate loans 16,519 2,835 4,681 24,035 3,477,540 39,492 3,541,067 Consumer: Indirect consumer 5,707 1,735 622 8,064 723,048 789 731,901 Other consumer 1,029 329 20 1,378 151,886 360 153,624 Credit card 711 261 565 1,537 65,323 — 66,860 Total consumer loans 7,447 2,325 1,207 10,979 940,257 1,149 952,385 Commercial 2,366 640 1,915 4,921 782,378 27,093 814,392 Agricultural 219 88 17 324 148,741 3,735 152,800 Other, including overdrafts — — 311 311 1,981 — 2,292 Loans held for investment 26,551 5,888 8,131 40,570 5,350,897 71,469 5,462,936 Mortgage loans originated for sale — — — — 67,979 — 67,979 Total loans $ 26,551 $ 5,888 $ 8,131 $ 40,570 $ 5,418,876 $ 71,469 $ 5,530,915 Total Loans 30 - 59 60 - 89 > 90 30 or More Days Days Days Days Current Non-accrual Total As of December 31, 2015 Past Due Past Due Past Due Past Due Loans Loans Loans Real estate Commercial $ 6,051 $ 724 $ 418 $ 7,193 $ 1,762,294 $ 23,771 $ 1,793,258 Construction: Land acquisition & development 3,190 163 1,325 4,678 212,757 6,631 224,066 Residential 1,288 — — 1,288 110,182 293 111,763 Commercial 3,232 — — 3,232 90,703 955 94,890 Total construction loans 7,710 163 1,325 9,198 413,642 7,879 430,719 Residential 5,991 1,196 2,063 9,250 1,018,359 5,242 1,032,851 Agricultural 176 17 — 193 150,686 5,355 156,234 Total real estate loans 19,928 2,100 3,806 25,834 3,344,981 42,247 3,413,062 Consumer: Indirect consumer 6,675 1,089 210 7,974 614,029 526 622,529 Other consumer 1,312 331 34 1,677 151,381 659 153,717 Credit card 533 317 477 1,327 66,768 12 68,107 Total consumer loans 8,520 1,737 721 10,978 832,178 1,197 844,353 Commercial 8,493 1,060 699 10,252 759,851 22,313 792,416 Agricultural 879 152 62 1,093 140,430 628 142,151 Other, including overdrafts — — 314 314 1,025 — 1,339 Loans held for investment 37,820 5,049 5,602 48,471 5,078,465 66,385 5,193,321 Mortgage loans originated for sale — — — — 52,875 — 52,875 Total loans $ 37,820 $ 5,049 $ 5,602 $ 48,471 $ 5,131,340 $ 66,385 $ 5,246,196 Loans from business combinations included in the tables 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 September 30, 2016 and 2015 : As of September 30, 2016 2015 Outstanding balance $ 38,505 $ 35,265 Carrying value Loans on accrual status 23,665 22,867 Total carrying value $ 23,665 $ 22,867 The following table summarizes changes in the accretable yield for loans acquired credit impaired for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning balance $ 5,905 $ 7,482 $ 6,713 $ 5,781 Additions 1,114 624 1,114 1,073 Accretion income (670 ) (845 ) (1,899 ) (2,200 ) Reductions due to exit events (595 ) (143 ) (900 ) (539 ) Reclassifications from nonaccretable differences 729 347 1,455 3,350 Ending balance $ 6,483 $ 7,465 $ 6,483 $ 7,465 Acquired loans that met the criteria for nonaccrual of interest prior to acquisition were considered performing upon acquisition. If interest on non-accrual loans had been accrued, such income would have been approximately $ 820 and $ 828 for the three months ended September 30, 2016 and 2015 , respectively, and approximately $2,492 and $2,331 for the nine months ended September 30, 2016 and 2015 respectively. The Company considers impaired loans to include all originated and acquired 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 September 30, 2016 Unpaid Total Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Real estate: Commercial $ 58,137 $ 16,518 $ 29,451 $ 45,969 $ 5,868 Construction: Land acquisition & development 12,922 4,774 1,785 6,559 828 Residential 977 266 — 266 — Commercial 1,154 232 703 935 737 Total construction loans 15,053 5,272 2,488 7,760 1,565 Residential 5,229 2,774 1,043 3,817 142 Agricultural 3,988 3,646 26 3,672 1 Total real estate loans 82,407 28,210 33,008 61,218 7,576 Commercial 39,349 15,296 18,893 34,189 10,912 Agricultural 3,925 3,294 441 3,735 77 Total $ 125,681 $ 46,800 $ 52,342 $ 99,142 $ 18,565 As of December 31, 2015 Unpaid Total Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Real estate: Commercial $ 58,179 $ 27,882 $ 17,614 $ 45,496 $ 3,401 Construction: Land acquisition & development 15,503 7,245 778 8,023 282 Residential 992 293 — 293 — Commercial 1,264 340 739 1,079 739 Total construction loans 17,759 7,878 1,517 9,395 1,021 Residential 7,073 3,547 2,317 5,864 367 Agricultural 6,434 5,563 198 5,761 5 Total real estate loans 89,445 44,870 21,646 66,516 4,794 Commercial 29,593 10,744 13,727 24,471 6,487 Agricultural 1,349 622 356 978 294 Total $ 120,387 $ 56,236 $ 35,729 $ 91,965 $ 11,575 The following table presents the average recorded investment in and income recognized on impaired loans for the periods indicated: Three Months Ended September 30, 2016 2015 Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized Real estate: Commercial $ 33,408 $ 100 $ 36,075 $ 226 Construction: Land acquisition & development 6,797 13 9,325 29 Residential 274 — 330 — Commercial 1,055 1 2,339 4 Total construction loans 8,126 14 11,994 33 Residential 3,282 4 2,607 4 Agricultural 4,786 2 8,578 27 Total real estate loans 49,602 120 59,254 290 Commercial 30,123 72 22,483 2 Agricultural 2,249 — 937 13 Total $ 81,974 $ 192 $ 82,674 $ 305 Nine Months Ended September 30, 2016 2015 Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized Real estate: Commercial $ 35,572 $ 241 $ 38,639 $ 587 Construction: Land acquisition & development 6,992 32 9,591 51 Residential 279 — 300 — Commercial 1,007 3 1,902 6 Total construction loans 8,278 35 11,793 57 Residential 4,219 7 2,720 6 Agricultural 4,607 3 8,661 62 Total real estate loans 52,676 286 61,813 712 Commercial 27,781 128 18,175 122 Agricultural 2,341 — 848 26 Total $ 82,798 $ 414 $ 80,836 $ 860 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 $ 993 and $ 998 for the three months ended September 30, 2016 and 2015 , respectively, and approximately $2,994 and $2,932 for the nine months ended September 30, 2016 and 2015, 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 $ 44,704 as of September 30, 2016 , of which $ 27,541 were included in non-accrual loans and $ 17,163 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $ 40,330 as of December 31, 2015 , of which $ 24,911 were included in non-accrual loans and $ 15,419 were on accrual status. The following table presents information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2016 : Number of Notes Type of Concession Principal Balance at Restructure Date Three Months Ended September 30, 2016 Interest only period Extension of terms or maturity Interest rate adjustment Other (1) Commercial real estate 4 $ — $ 841 $ — $ 983 $ 1,824 Residential real estate 1 — 64 — — 64 Agriculture 1 — 121 — — 121 Total loans restructured during period 6 $ — $ 1,026 $ — $ 983 $ 2,009 Number of Notes Type of Concession Principal Balance at Restructure Date Nine Months Ended September 30, 2016 Interest only period Extension of terms or maturity Interest rate adjustment Other (1) Commercial real estate 11 $ 689 $ 1,166 $ — $ 1,233 $ 3,088 Residential real estate 1 — 64 — — 64 Commercial 10 4,240 947 46 2,805 8,038 Agriculture 1 — 121 — — 121 Total loans restructured during period 23 $ 4,929 $ 2,298 $ 46 $ 4,038 $ 11,311 (1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories. 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 and nine months ended September 30, 2016 or 2015 . 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 three and nine months ended September 30, 2016 . 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 September 30, 2016 Nine Months Ended September 30, 2016 Number of Notes Balance Number of Notes Balance Commercial real estate — $ — 1 $ 194 Total — $ — 1 $ 194 At September 30, 2016 , 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 September 30, 2016 Other Assets Especially Mentioned Substandard Doubtful Total Criticized Loans Real estate: Commercial $ 76,913 $ 88,580 $ 17,991 $ 183,484 Construction: Land acquisition & development 11,597 7,377 1,383 20,357 Residential 1,615 1,482 664 3,761 Commercial 1,616 5,891 720 8,227 Total construction loans 14,828 14,750 2,767 32,345 Residential 5,461 13,195 214 18,870 Agricultural 6,511 16,605 — 23,116 Total real estate loans 103,713 133,130 20,972 257,815 Consumer: Indirect consumer 847 1,572 121 2,540 Other consumer 665 1,130 217 2,012 Total consumer loans 1,512 2,702 338 4,552 Commercial 42,080 31,931 19,758 93,769 Agricultural 5,563 7,792 472 13,827 Total $ 152,868 $ 175,555 $ 41,540 $ 369,963 As of December 31, 2015 Other Assets Especially Mentioned Substandard Doubtful Total Criticized Loans Real estate: Commercial $ 61,787 $ 84,556 $ 10,609 $ 156,952 Construction: Land acquisition & development 16,593 12,482 591 29,666 Residential 1,640 1,886 — 3,526 Commercial 166 323 756 1,245 Total construction loans 18,399 14,691 1,347 34,437 Residential 4,453 9,661 2,540 16,654 Agricultural 6,114 16,529 — 22,643 Total real estate loans 90,753 125,437 14,496 230,686 Consumer: Indirect consumer 644 1,131 154 1,929 Other consumer 651 1,130 198 1,979 Total consumer loans 1,295 2,261 352 3,908 Commercial 32,975 27,982 15,085 76,042 Agricultural 2,247 7,105 417 9,769 Total $ 127,270 $ 162,785 $ 30,350 $ 320,405 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. |