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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________ 
FORM 10-Q
_____________________________________________ 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020.
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            
Commission File Number 000-20288
 _________________________________________________________________________
COLUMBIA BANKING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
 _______________________________________________________________
Washington
 
91-1422237
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
1301 A Street
Tacoma, Washington 98402-2156
(Address of principal executive offices and zip code)
(253) 305-1900
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Common Stock, No Par Value
 
COLB
 
The Nasdaq Stock Market LLC
(Title of each class)
 
(Trading symbol)
 
(Name of each exchange on which registered)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No ¨ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
 
 
 
 
 
 
Large accelerated filer
 
☒
 
Accelerated filer
 
☐
 
 
 
 
 
 
 
Non-accelerated filer
 
☐
 
Smaller reporting company
 
☐
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
Yes ☐  No x
The number of shares of common stock outstanding at July 27, 2020 was 71,618,641.
 


TABLE OF CONTENTS
 
 
 
Page
 
PART I — FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
PART II — OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 


i

Glossary of Acronyms, Abbreviations, and Terms

The acronyms, abbreviations, and terms listed below are used in various sections of the Form 10-Q, including “Item 1. Financial Statements” and “Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations.”
ACL
Allowance for Credit Losses
 
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
ALLL
Allowance for Loan and Lease Losses
 
EPS
Earnings Per Share
ASC
Accounting Standards Codification
 
FASB
Financial Accounting Standards Board
ASC 326
Codification related to measurement of credit losses on financial instruments
 
FDIC
Federal Deposit Insurance Corporation
ASU
Accounting Standards Update
 
FHLB
Federal Home Loan Bank of Des Moines
ATM
Automated Teller Machine
 
FRB
Federal Reserve Bank
B&O
Business and Occupation
 
GAAP
Generally Accepted Accounting Principles
Basel III
A comprehensive capital framework and rules for U.S. banking organizations approved by the FRB and the FDIC in 2013
 
GDP
Gross Domestic Product
BOLI
Bank Owned Life Insurance
 
LIBOR
London Interbank Offering Rate
CARES Act
Coronavirus Aid Relief and Economic Security Act
 
OPPO
Other Personal Property Owned
CDARS®
Certificate of Deposit Account Registry Service
 
OREO
Other Real Estate Owned
CDI
Core Deposit Intangible
 
Pacific Continental
Pacific Continental Corporation
CECL
Current Expected Credit Losses
 
PCI
Purchased Credit Impaired
CEO
Chief Executive Officer
 
PPP
Paycheck Protection Program
CET1
Common Equity Tier 1
 
SBA
Small Business Administration
CFO
Chief Financial Officer
 
SEC
Securities and Exchange Commission
COVID-19
Novel Coronavirus
 
TDRs
Troubled Debt Restructurings
DCF
Discounted Cash Flow
 
 
 


ii
Table of Contents

PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
 
 
 
 
 
June 30,
2020
 
December 31,
2019
ASSETS
 
(in thousands)
Cash and due from banks
 
$
217,461

 
$
223,541

Interest-earning deposits with banks
 
880,232

 
24,132

Total cash and cash equivalents
 
1,097,693

 
247,673

Debt securities available for sale at fair value (amortized cost of $3,491,307 and $3,703,096, respectively)
 
3,693,787

 
3,746,142

Equity securities
 
13,425

 
—

FHLB stock at cost
 
16,280

 
48,120

Loans held for sale
 
28,803

 
17,718

Loans, net of unearned income
 
9,771,898

 
8,743,465

Less: ACL
 
151,546

 
83,968

Loans, net
 
9,620,352

 
8,659,497

Interest receivable
 
59,149

 
46,839

Premises and equipment, net
 
164,362

 
165,408

OREO
 
747

 
552

Goodwill
 
765,842

 
765,842

Other intangible assets, net
 
30,938

 
35,458

Other assets
 
429,566

 
346,275

Total assets
 
$
15,920,944

 
$
14,079,524

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Deposits:
 
 
 
 
Noninterest-bearing
 
$
6,719,437

 
$
5,328,146

Interest-bearing
 
6,412,040

 
5,356,562

Total deposits
 
13,131,477

 
10,684,708

FHLB advances and FRB borrowings
 
157,441

 
953,469

Securities sold under agreements to repurchase
 
51,479

 
64,437

Subordinated debentures
 
35,185

 
35,277

Other liabilities
 
268,607

 
181,671

Total liabilities
 
13,644,189

 
11,919,562

Commitments and contingent liabilities (Note 10)
 


 


Shareholders’ equity:
 
 
 
 
 
 
 
 
June 30,
2020
 
December 31,
2019
 
 
 
 
 
(in thousands)
 
 
 
 
Preferred stock (no par value)
 
 
 
 
 
 
 
Authorized shares
2,000

 
2,000

 
 
 
 
Common stock (no par value)
 
 
 
 
 
 
 
Authorized shares
115,000

 
115,000

 
 
 
 
Issued
73,770

 
73,577

 
1,654,129

 
1,650,753

Outstanding
71,586

 
72,124

 
 
 
 
Retained earnings
 
512,383

 
519,676

Accumulated other comprehensive income
 
181,077

 
40,367

Treasury stock at cost
2,184

 
1,453

 
(70,834
)
 
(50,834
)
Total shareholders’ equity
 
2,276,755

 
2,159,962

Total liabilities and shareholders’ equity
 
$
15,920,944

 
$
14,079,524



 
See accompanying Notes to unaudited Consolidated Financial Statements.

1

Table of Contents

CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands except per share amounts)
Interest Income
 
 
 
 
 
 
 
 
Loans
 
$
105,496

 
$
116,585

 
$
212,862

 
$
225,001

Taxable securities
 
18,343

 
15,918

 
39,431

 
33,333

Tax-exempt securities
 
2,257

 
2,712

 
4,559

 
5,681

Deposits in banks
 
136

 
207

 
277

 
295

Total interest income
 
126,232

 
135,422

 
257,129

 
264,310

Interest Expense
 
 
 
 
 
 
 
 
Deposits
 
2,094

 
4,976

 
5,736

 
9,474

FHLB advances and FRB borrowings
 
1,796

 
4,708

 
6,025

 
7,393

Subordinated debentures
 
468

 
468

 
936

 
936

Other borrowings
 
23

 
154

 
159

 
369

Total interest expense
 
4,381

 
10,306

 
12,856

 
18,172

Net Interest Income
 
121,851

 
125,116

 
244,273

 
246,138

Provision for credit losses
 
33,500

 
218

 
75,000

 
1,580

Net interest income after provision for credit losses
 
88,351

 
124,898

 
169,273

 
244,558

Noninterest Income
 
 
 
 
 
 
 
 
Deposit account and treasury management fees
 
6,092

 
9,035

 
13,880

 
18,015

Card revenue
 
3,079

 
3,763

 
6,597

 
7,425

Financial services and trust revenue
 
3,163

 
3,425

 
6,228

 
6,382

Loan revenue
 
5,607

 
3,596

 
10,197

 
5,985

Bank owned life insurance
 
1,618

 
1,597

 
3,214

 
3,116

Investment securities gains, net
 
16,425

 
285

 
16,674

 
2,132

Other
 
1,275

 
3,947

 
1,676

 
4,289

Total noninterest income
 
37,259

 
25,648

 
58,466

 
47,344

Noninterest Expense
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
46,043

 
52,015

 
100,885

 
104,100

Occupancy
 
8,812

 
8,712

 
18,009

 
17,521

Data processing
 
5,454

 
4,601

 
10,294

 
9,270

Legal and professional fees
 
3,483

 
6,554

 
5,585

 
11,127

Amortization of intangibles
 
2,210

 
2,649

 
4,520

 
5,397

B&O taxes
 
1,244

 
1,411

 
1,868

 
3,287

Advertising and promotion
 
837

 
870

 
2,142

 
1,844

Regulatory premiums
 
1,034

 
956

 
1,068

 
1,940

Net benefit of operation of OREO
 
(200
)
 
(705
)
 
(188
)
 
(592
)
Other
 
11,916

 
9,665

 
20,921

 
17,534

Total noninterest expense
 
80,833

 
86,728

 
165,104

 
171,428

Income before income taxes
 
44,777

 
63,818

 
62,635

 
120,474

Income tax provision
 
8,195

 
12,094

 
11,425

 
22,879

Net Income
 
$
36,582

 
$
51,724

 
$
51,210

 
$
97,595

Earnings per common share
 
 
 
 
 
 
 
 
Basic
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Diluted
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Weighted average number of common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Weighted average number of diluted common shares outstanding
 
70,711

 
72,451

 
70,981

 
72,487




See accompanying Notes to unaudited Consolidated Financial Statements.

2

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Columbia Banking System, Inc.
(Unaudited) 
 
 
Three Months Ended
 
 
June 30,
 
 
2020
 
2019
 
 
(in thousands)
Net income
 
$
36,582

 
$
51,724

Other comprehensive income, net of tax:
 
 
 
 
Unrealized gain from securities:
 
 
 
 
Net unrealized holding gain from available for sale debt securities arising during the period, net of tax of ($12,984) and ($11,217)
 
42,860

 
37,029

Reclassification adjustment of net gain from available for sale debt securities arising during the period, net of tax of $0 and $66
 
—

 
(219
)
Net unrealized gain from securities, net of reclassification adjustment
 
42,860

 
36,810

Pension plan liability adjustment:
 
 
 
 
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($24) and ($19)
 
79

 
61

Pension plan liability adjustment, net
 
79

 
61

Unrealized gain from cash flow hedging instruments:
 
 
 
 
Net unrealized gain in cash flow hedging instruments arising during the period, net of tax of ($791) and ($2,191)
 
2,611

 
7,233

Reclassification adjustment for net gain in cash flow hedging instruments included in income, net of tax of $510 and $0
 
(1,680
)
 
—

Net unrealized gain from cash flow hedging instruments, net of reclassification adjustment
 
931

 
7,233

Other comprehensive income
 
43,870

 
44,104

Total comprehensive income
 
$
80,452

 
$
95,828

 
 
 
 
 
 
 
Six Months Ended
 
 
June 30,
 
 
2020
 
2019
 
 
(in thousands)
Net income
 
$
51,210

 
$
97,595

Other comprehensive income, net of tax:
 
 
 
 
Unrealized gain from securities:
 
 
 
 
Net unrealized holding gain from available for sale debt securities arising during the period, net of tax of ($37,126) and ($21,788)
 
122,556

 
71,926

Reclassification adjustment of net gain from available for sale debt securities arising during the period, net of tax of $58 and $496
 
(191
)
 
(1,636
)
Net unrealized gain from securities, net of reclassification adjustment
 
122,365

 
70,290

Pension plan liability adjustment:
 
 
 
 
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($48) and ($37)
 
159

 
122

Pension plan liability adjustment, net
 
159

 
122

Unrealized gain from cash flow hedging instruments:
 
 
 
 
Net unrealized gain in cash flow hedging instruments arising during the period, net of tax of ($6,237) and ($3,648)
 
20,588

 
12,043

Reclassification adjustment for net gain in cash flow hedging instruments included in income, net of tax of $728 and $0
 
(2,402
)
 
—

Net unrealized gain from cash flow hedging instruments, net of reclassification adjustment
 
18,186

 
12,043

Other comprehensive income
 
140,710

 
82,455

Total comprehensive income
 
$
191,920

 
$
180,050

See accompanying Notes to unaudited Consolidated Financial Statements.

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Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Columbia Banking System, Inc.
(Unaudited)
 
 
Common Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury Stock
 
Total
Shareholders’
Equity
 
 
Shares Outstanding
 
Amount
 
For the Three Months Ended June 30, 2020
 
(in thousands except per share amounts)
Balance at April 1, 2020
 
71,575

 
$
1,651,399

 
$
495,830

 
$
137,207

 
$
(70,834
)
 
$
2,213,602

Net income
 
—

 
—

 
36,582

 
—

 
—

 
36,582

Other comprehensive income
 
—

 
—

 
—

 
43,870

 
—

 
43,870

Issuance of common stock - stock option and other plans
 
—

 
—

 
—

 
—

 
—

 
—

Activity in deferred compensation plan
 
—

 
1

 
—

 
—

 
—

 
1

Issuance of common stock - restricted stock awards, net of canceled awards
 
12

 
2,737

 
—

 
—

 
—

 
2,737

Purchase and retirement of common stock
 
(1
)
 
(8
)
 
—

 
—

 
—

 
(8
)
Cash dividends declared on common stock ($0.28 per share)
 
—

 
—

 
(20,029
)
 
—

 
—

 
(20,029
)
Balance at June 30, 2020
 
71,586

 
$
1,654,129

 
$
512,383

 
$
181,077

 
$
(70,834
)
 
$
2,276,755

For the Six Months Ended June 30, 2020
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2020
 
72,124

 
$
1,650,753

 
$
519,676

 
$
40,367

 
$
(50,834
)
 
$
2,159,962

Adjustment to opening retained earnings pursuant to adoption of ASU 2016-13
 
—

 
—

 
(2,457
)
 
—

 
—

 
(2,457
)
Net income
 
—

 
—

 
51,210

 
—

 
—

 
51,210

Other comprehensive income
 
—

 
—

 
—

 
140,710

 
—

 
140,710

Issuance of common stock - stock option and other plans
 
26

 
945

 
—

 
—

 
—

 
945

Activity in deferred compensation plan
 
—

 
4

 
—

 
—

 
—

 
4

Issuance of common stock - restricted stock awards, net of canceled awards
 
234

 
4,909

 
—

 
—

 
—

 
4,909

Purchase and retirement of common stock
 
(67
)
 
(2,482
)
 
—

 
—

 
—

 
(2,482
)
Cash dividends declared on common stock ($0.78 per share)
 
—

 
—

 
(56,046
)
 
—

 
—

 
(56,046
)
Purchase of treasury stock
 
(731
)
 
—

 
—

 
—

 
(20,000
)
 
(20,000
)
Balance at June 30, 2020
 
71,586

 
$
1,654,129

 
$
512,383

 
$
181,077

 
$
(70,834
)
 
$
2,276,755


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Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY, Continued
Columbia Banking System, Inc.
(Unaudited)
 
 
Common Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury Stock
 
Total
Shareholders’
Equity
 
 
Shares Outstanding
 
Amount
 
For the Three Months Ended June 30, 2019
 
(in thousands except per share amounts)
Balance at April 1, 2019
 
73,565

 
$
1,642,977

 
$
442,597

 
$
3,046

 
$
—

 
$
2,088,620

Net income
 
—

 
—

 
51,724

 
—

 
—

 
51,724

Other comprehensive income
 
—

 
—

 
—

 
44,104

 
—

 
44,104

Issuance of common stock - stock option and other plans
 
2

 
15

 
—

 
—

 
—

 
15

Activity in deferred compensation plan
 
—

 
1

 
—

 
—

 
—

 
1

Issuance of common stock - restricted stock awards, net of canceled awards
 
(10
)
 
2,243

 
—

 
—

 
—

 
2,243

Purchase and retirement of common stock
 
(9
)
 
(314
)
 
—

 
—

 
—

 
(314
)
Cash dividends declared on common stock ($0.42 per share)
 
—

 
—

 
(30,892
)
 
—

 
—

 
(30,892
)
Purchase of treasury stock
 
(624
)
 
—

 
—

 
—

 
(21,863
)
 
(21,863
)
Balance at June 30, 2019
 
72,924

 
$
1,644,922

 
$
463,429

 
$
47,150

 
$
(21,863
)
 
$
2,133,638

For the Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2019
 
73,249

 
$
1,642,246

 
$
426,708

 
$
(35,305
)
 
$
—

 
$
2,033,649

Adjustment to opening retained earnings pursuant to adoption of ASU 2016-02
 
—

 
—

 
782

 
—

 
—

 
782

Net income
 
—

 
—

 
97,595

 
—

 
—

 
97,595

Other comprehensive income
 
—

 
—

 
—

 
82,455

 
—

 
82,455

Issuance of common stock - stock option and other plans
 
27

 
893

 
—

 
—

 
—

 
893

Activity in deferred compensation plan
 
—

 
1

 
—

 
—

 
—

 
1

Issuance of common stock - restricted stock awards, net of canceled awards
 
345

 
4,528

 
—

 
—

 
—

 
4,528

Purchase and retirement of common stock
 
(73
)
 
(2,746
)
 
—

 
—

 
—

 
(2,746
)
Cash dividends declared on common stock ($0.84 per share)
 
—

 
—

 
(61,656
)
 
—

 
—

 
(61,656
)
Purchase of treasury stock
 
(624
)
 
—

 
—

 
—

 
(21,863
)
 
(21,863
)
Balance at June 30, 2019
 
72,924

 
$
1,644,922

 
$
463,429

 
$
47,150

 
$
(21,863
)
 
$
2,133,638


See accompanying Notes to unaudited Consolidated Financial Statements.

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Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS
Columbia Banking System, Inc.
(Unaudited)
 
 
Six Months Ended June 30,
 
 
2020
 
2019
 
 
(in thousands)
Cash Flows From Operating Activities
 
 
 
 
Net income
 
$
51,210

 
$
97,595

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
Provision for credit losses
 
75,000

 
1,580

Stock-based compensation expense
 
4,909

 
4,528

Depreciation, amortization and accretion
 
10,382

 
17,298

Investment securities gain, net
 
(16,674
)
 
(2,132
)
Net realized gain on sale of premises and equipment and OPPO
 
(705
)
 
(666
)
Net realized loss (gain) on sale and valuation adjustments of OREO
 
18

 
(507
)
Gain on bank owned life insurance death benefit
 
—

 
(2,975
)
Originations of loans held for sale
 
(217,017
)
 
(68,722
)
Proceeds from sales of loans held for sale
 
205,932

 
60,382

Net change in:
 
 
 
 
Interest receivable
 
(12,310
)
 
(1,555
)
Interest payable
 
(219
)
 
1,608

Other assets
 
(93,919
)
 
(16,484
)
Other liabilities
 
76,500

 
8,560

Net cash provided by operating activities
 
83,107

 
98,510

Cash Flows From Investing Activities
 
 
 
 
Loans originated, net of principal collected
 
(1,026,250
)
 
(207,641
)
Purchases of:
 
 
 
 
Debt securities available for sale
 
(259,236
)
 
(54,405
)
Loans held for investment
 
—

 
(49,039
)
Premises and equipment
 
(4,490
)
 
(3,540
)
FHLB stock
 
(53,240
)
 
(117,240
)
Proceeds from:
 
 
 
 
Sales of debt securities available for sale
 
194,105

 
259,554

Sales of equity securities
 
3,000

 
—

Principal repayments and maturities of debt securities available for sale
 
265,072

 
182,125

Sales of premises and equipment
 
932

 
24

Redemption of FHLB stock
 
85,080

 
113,400

Sales of OREO and OPPO
 
353

 
5,823

Bank owned life insurance death benefit
 
1,050

 
—

Net cash provided by (used in) investing activities
 
(793,624
)
 
129,061

Cash Flows From Financing Activities
 
 
 
 
Net increase (decrease) in deposits
 
2,446,782

 
(246,404
)
Net decrease in sweep repurchase agreements
 
(12,958
)
 
(10,868
)
Proceeds from:
 
 
 
 
FHLB advances
 
1,331,000

 
2,931,000

FRB borrowings
 
222,010

 
36,000

Other borrowings
 
9,222

 
100

Exercise of stock options and employee stock purchase plan
 
945

 
893

Payments for:
 
 
 
 
Repayment of FHLB advances
 
(2,127,000
)
 
(2,835,000
)
Repayment of FRB borrowings
 
(222,010
)
 
(36,000
)
Repayment of other borrowings
 
(9,222
)
 
(100
)
Common stock dividends
 
(55,750
)
 
(61,511
)
Purchase of treasury stock
 
(20,000
)
 
(21,863
)
Purchase and retirement of common stock
 
(2,482
)
 
(2,746
)
Net cash provided by (used in) financing activities
 
1,560,537

 
(246,499
)
Increase (decrease) in cash and cash equivalents
 
850,020

 
(18,928
)
Cash and cash equivalents at beginning of period
 
247,673

 
277,587

Cash and cash equivalents at end of period
 
$
1,097,693

 
$
258,659

 
 
 
 
 


6

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
Columbia Banking System, Inc.
(Unaudited)
 
 
Six Months Ended June 30,
 
 
2020
 
2019
 
 
(in thousands)
Supplemental Information:
 
 
 
 
Interest paid
 
$
13,075

 
$
16,564

Income taxes paid, net of refunds
 
$
21,501

 
$
20,940

Non-cash investing and financing activities
 
 
 
 
Loans transferred to OREO
 
$
558

 
$
386

Premises and equipment expenditures incurred but not yet paid
 
$
9

 
$
56

Change in dividends payable on unvested shares included in other liabilities
 
$
296

 
$
145



See accompanying Notes to unaudited Consolidated Financial Statements.

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Table of Contents

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Columbia Banking System, Inc.
1.
Basis of Presentation, Significant Accounting Policies and Reclassifications
Basis of Presentation
The interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The Consolidated Financial Statements include the accounts of Columbia Banking System, Inc. (“we”, “our”, “Columbia” or the “Company”) and its subsidiaries, including its wholly owned banking subsidiary Columbia State Bank (“Columbia Bank” or the “Bank”) and Columbia Trust Company (“Columbia Trust”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of results to be anticipated for the year ending December 31, 2020. The accompanying interim unaudited Consolidated Financial Statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2019 Annual Report on Form 10-K.
Significant Accounting Policies
The significant accounting policies used in preparation of our Consolidated Financial Statements are disclosed in our 2019 Annual Report on Form 10-K. In addition to the changes already disclosed in the Annual Report on Form 10-K regarding ASC 326, this ASC also made changes to the accounting for available for sale securities. One such change is to require credit losses to be presented as an allowance rather than a write-down on available for sale securities, which refers to securities management does not intend to sell or with respect to which management believes that it is more likely than not they will not be required to sell. With the exception of that change, there have not been any changes in our significant accounting policies compared to those contained in our 2019 Form 10-K disclosure for the year ended December 31, 2019.
Reclassifications
Certain amounts reported in prior periods have been reclassified in the Consolidated Financial Statements to conform to the current presentation. The reclassifications have no effect on net income or shareholders’ equity as previously reported.
2.
Accounting Pronouncements Recently Adopted or Issued
Accounting Standards Adopted in 2020
In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments in this ASU clarify certain aspects of accounting for credit losses, hedging activities, and financial instruments (addressed by ASUs 2016-01, 2016-13, and 2017-12). Many of the amendments reflect decisions reached at FASB meetings or meetings of the Board’s credit losses transition resource group. Topics covered in this ASU include: accrued interest, transfers between classifications or categories for loans and debt securities, recoveries, reinsurance recoverables, projections of interest rate environments for variable-rate financial instruments, costs to sell when foreclosure is probable, consideration of expected prepayments when determining the effective interest rate, vintage disclosures, extension and renewal options, etc. As the ASU focused on clarifying certain aspects of accounting, adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. The amendments included in this ASU require an entity to reflect its current estimate of all expected credit losses for assets held at an amortized cost basis. For available for sale debt securities, credit losses will be measured in a manner similar to current GAAP, however, this ASU requires that credit losses be presented as an allowance rather than as a write-down. In November 2019, the FASB subsequently issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. The amendments in the update require entities to include expected recoveries of the amortized cost basis previously written-off or expected to be written-off in the valuation account for purchased financial assets with credit deterioration. In addition, the amendments in this update clarify and improve various aspects of the guidance for ASU 2016-13.

8

Table of Contents

Unlike the incurred loss models, the CECL model in ASU 2016-13 does not specify a threshold for the recognition of an impairment allowance. Rather, the Company recognizes an impairment allowance equal to its estimate of lifetime expected credit losses, adjusted for prepayments, for in-scope financial instruments. Accordingly, the impairment allowance measured under the CECL model is expected to change significantly from the impairment allowance measured under the Company’s incurred loss model. The Company engaged a third-party vendor to assist in the CECL calculation and has developed and implemented an internal governance framework. The amendments in ASU 2016-13 and the above ASUs related to credit losses are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption was permitted, including adoption in any interim period. The Company adopted the new standards, using a modified retrospective approach, effective January 1, 2020, which resulted in an increase of $1.6 million to its allowance for credit losses, an increase of $1.6 million to its allowance for unfunded commitments and letters of credit and a net-of-tax cumulative-effect adjustment of $2.5 million to decrease the beginning balance of retained earnings.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU adds, eliminates and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. Entities are also allowed to elect early adoption of the eliminated or modified disclosure requirements and delay adoption of the added disclosure requirements until their effective date. The Company adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
Recently Issued Accounting Standards, Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In response to concerns about structural risks of the cessation of LIBOR, the amendments in this ASU provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this ASU are elective and are effective March 12, 2020 for all entities. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The guidance issued in this ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. This ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The ASU is effective for interim and annual reporting periods beginning after December 15, 2020; early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

9

Table of Contents

3.
Securities
The following table summarizes the amortized cost, gross unrealized gains and losses, the allowance for credit losses and the resulting fair value of debt securities available for sale:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Allowance for Credit
Losses
 
Fair Value
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,698,160

 
$
168,231

 
$
(1,361
)
 
$
—

 
$
2,865,030

Other asset-backed securities
 
215,620

 
8,729

 
(73
)
 
—

 
224,276

State and municipal securities
 
448,923

 
19,749

 
(57
)
 
—

 
468,615

U.S. government agency and government-sponsored enterprise securities
 
128,604

 
7,262

 
—

 
—

 
135,866

Total
 
$
3,491,307

 
$
203,971

 
$
(1,491
)
 
$
—

 
$
3,693,787

December 31, 2019
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,864,949

 
$
47,223

 
$
(19,222
)
 
$
—

 
$
2,892,950

Other asset-backed securities
 
194,563

 
2,476

 
(989
)
 
—

 
196,050

State and municipal securities
 
478,366

 
10,660

 
(224
)
 
—

 
488,802

U.S. government agency and government-sponsored enterprise securities
 
165,218

 
3,127

 
(5
)
 
—

 
168,340

Total
 
$
3,703,096

 
$
63,486

 
$
(20,440
)
 
$
—

 
$
3,746,142


A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. There were no amounts of accrued interest reversed against interest income for the three and six months ended June 30, 2020 and 2019.
Accrued interest receivable for securities available for sale is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2020 and December 31, 2019, accrued interest receivable for securities was $12.6 million and $13.9 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.
The following table provides the proceeds and both gross realized gains and losses on sales of debt securities available for sale as well as other securities gains and losses for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Proceeds from sales of debt securities available for sale
 
$
—

 
$
175,586

 
$
194,105

 
$
259,554

 
 
 
 
 
 
 
 
 
Gross realized gains from sales of debt securities available for sale
 
$
—

 
$
1,510

 
$
435

 
$
3,357

Gross realized losses from sales of debt securities available for sale
 
—

 
(1,225
)
 
(186
)
 
(1,225
)
Other securities gains (1)
 
16,425

 
—

 
16,425

 
—

Investment securities gains, net
 
$
16,425

 
$
285

 
$
16,674

 
$
2,132


__________
(1) Other securities gains includes gain from sale of Visa Class B restricted stock and subsequent write up to fair value of remaining Visa Class B shares. For additional information, please see Note 13 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.

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Table of Contents

The following table provides the unrealized gains and losses on equity securities at the reporting date:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Gains recognized during the period on equity securities (1)
 
$
16,425

 
$
—

 
$
16,425

 
$
—

Less: Gains recognized during the period on equity securities sold during the period (1)
 
(3,000
)
 
—

 
(3,000
)
 
—

Unrealized gains recognized during the reporting period on equity securities still held at the reporting date (1)
 
$
13,425

 
$
—

 
$
13,425

 
$
—

__________
(1) Visa Class B restricted stock owned by the Company was previously carried at a zero-cost basis due to existing transfer restrictions and uncertainty of covered litigation. The sale of shares by the Company of Visa Class B restricted shares during the three months ended June 30, 2020 resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining shares of Visa Class B restricted shares upward to this observable market price.
The scheduled contractual maturities of debt securities available for sale at June 30, 2020 are presented as follows:
 
 
June 30, 2020
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
53,099

 
$
53,800

Due after one year through five years
 
389,269

 
409,099

Due after five years through ten years
 
1,894,385

 
2,038,033

Due after ten years
 
1,154,554

 
1,192,855

Total debt securities available for sale
 
$
3,491,307

 
$
3,693,787


The following table summarizes the carrying value of securities pledged as collateral to secure public funds, borrowings and other purposes as permitted or required by law:
 
 
June 30, 2020
 
 
(in thousands)
To secure public funds
 
$
449,497

To secure borrowings
 
111,873

Other securities pledged
 
150,587

Total securities pledged as collateral
 
$
711,957



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Table of Contents

The following table shows the gross unrealized losses and fair value of the Company’s debt securities available for sale for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2020 and December 31, 2019:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
49,116

 
$
(317
)
 
$
47,175

 
$
(1,044
)
 
$
96,291

 
$
(1,361
)
Other asset-backed securities
 
20,703

 
(73
)
 
95

 
—

 
20,798

 
(73
)
State and municipal securities
 
6,937

 
(57
)
 
—

 
—

 
6,937

 
(57
)
Total
 
$
76,756

 
$
(447
)
 
$
47,270

 
$
(1,044
)
 
$
124,026

 
$
(1,491
)
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
1,055,903

 
$
(12,424
)
 
$
491,539

 
$
(6,798
)
 
$
1,547,442

 
$
(19,222
)
Other asset-backed securities
 
89,508

 
(880
)
 
6,799

 
(109
)
 
96,307

 
(989
)
State and municipal securities
 
12,363

 
(142
)
 
12,587

 
(82
)
 
24,950

 
(224
)
U.S. government agency and government-sponsored enterprise securities
 
—

 
—

 
10,495

 
(5
)
 
10,495

 
(5
)
Total
 
$
1,157,774

 
$
(13,446
)
 
$
521,420

 
$
(6,994
)
 
$
1,679,194

 
$
(20,440
)

At June 30, 2020, there were 57 U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligation securities in an unrealized loss position. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
At June 30, 2020, there were two other asset-backed securities in an unrealized loss position. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
At June 30, 2020, there were five state and municipal government securities in an unrealized loss position. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of June 30, 2020, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
Equity Securities without Readily Determinable Fair Values
Visa Class B Restricted Shares

In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into publicly traded Visa Class A common shares. This conversion will not occur until the settlement of certain litigation which is indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account not be sufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Visa Class B conversion ratio to unrestricted Visa Class A shares.

During the three months ended June 30, 2020, the Company sold 17,360 shares of Visa Class B restricted stock for a gain of $3.0 million, which resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining Visa Class B restricted shares upward to this observable market price. At June 30, 2020, the Company owned 77,683 Visa Class B shares, which had a carrying value of $13.4 million.

12

Table of Contents

4.
Loans
The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):
 
 
June 30, 2020
 
December 31, 2019
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,032,643

 
$
3,945,853

Commercial business
 
3,859,513

 
2,989,613

Agriculture
 
845,950

 
765,371

Construction
 
304,015

 
361,533

Consumer loans:
 
 
 
 
One-to-four family residential real estate
 
692,837

 
637,325

Other consumer
 
36,940

 
43,770

Total loans
 
9,771,898

 
8,743,465

Less: Allowance for credit losses
 
(151,546
)
 
(83,968
)
Total loans, net
 
$
9,620,352

 
$
8,659,497

Loans held for sale
 
$
28,803

 
$
17,718


At June 30, 2020 and December 31, 2019, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon and Idaho.
At June 30, 2020 and December 31, 2019, $3.43 billion and $3.24 billion of commercial and residential real estate loans were pledged as collateral on FHLB borrowings and additional borrowing capacity. The Company has also pledged $199.7 million and $151.3 million of commercial loans to the FRB for additional borrowing capacity at June 30, 2020 and December 31, 2019, respectively.
Accrued interest receivable for loans is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2020 and December 31, 2019, accrued interest receivable for loans was $46.5 million and $33.0 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.

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Table of Contents

The following is an aging of the recorded investment of the loan portfolio as of June 30, 2020 and December 31, 2019:
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,011,604

 
$
7,402

 
$
2,482

 
$
—

 
$
9,884

 
$
11,155

 
$
4,032,643

Commercial business
 
3,833,606

 
4,756

 
626

 
—

 
5,382

 
20,525

 
3,859,513

Agriculture
 
823,226

 
1,197

 
2,365

 
—

 
3,562

 
19,162

 
845,950

Construction
 
303,798

 
—

 
—

 
—

 
—

 
217

 
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
684,729

 
5,015

 
431

 
—

 
5,446

 
2,662

 
692,837

Other consumer
 
36,844

 
63

 
22

 
—

 
85

 
11

 
36,940

Total
 
$
9,693,807

 
$
18,433

 
$
5,926

 
$
—

 
$
24,359

 
$
53,732

 
$
9,771,898

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
3,935,633

 
$
6,421

 
$
—

 
—

 
$
6,421

 
$
3,799

 
$
3,945,853

Commercial business
 
2,959,826

 
6,081

 
2,769

 
—

 
8,850

 
20,937

 
2,989,613

Agriculture
 
755,719

 
2,283

 
2,346

 
—

 
4,629

 
5,023

 
765,371

Construction
 
360,582

 
951

 
—

 
—

 
951

 
—

 
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
631,109

 
2,516

 
408

 
—

 
2,924

 
3,292

 
637,325

Other consumer
 
43,654

 
80

 
27

 
—

 
107

 
9

 
43,770

Total
 
$
8,686,523

 
$
18,332

 
$
5,550

 
$
—

 
$
23,882

 
$
33,060

 
$
8,743,465


Loan payments are considered timely when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof is received on the due date of the scheduled payment. In addition, the risk rating on COVID-19 modified loans did not change. These loans are not considered past due until after the deferral period is over and scheduled payments resume. Accrued interest on these COVID-19 modified loans is due, in full, when the deferral period ends. The credit quality of these loans will be reevaluated after the deferral period ends.
Nonaccrual loans are generally loans placed on a nonaccrual basis when they become 90 days past due or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan. The Company’s policy is to write-off all accrued interest on loans when they are placed on nonaccrual status.
The following table summarizes written off interest on nonaccrual loans for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Commercial loans
 
$
665

 
$
623

 
$
1,448

 
$
1,168

Consumer loans
 
8

 
39

 
13

 
120

Total
 
$
673

 
$
662

 
$
1,461

 
$
1,288



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Table of Contents

The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
 
 
(in thousands)
Commercial loans:
 
 
 
 
Commercial real estate
 
$
9,609

 
$
1,715

Commercial business
 
5,932

 
15,762

Agriculture
 
14,387

 
1,798

Total
 
$
29,928

 
$
19,275


The following is an analysis of loans classified as TDR during the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30, 2020
 
Three Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
4

 
$
1,690

 
$
1,690

 
3

 
$
918

 
$
918

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
1

 
128

 
128

 
4

 
118

 
118

Total
 
5

 
$
1,818

 
$
1,818

 
7

 
$
1,036

 
$
1,036


 
 
Six Months Ended June 30, 2020
 
Six Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
6

 
$
1,962

 
$
1,962

 
5

 
$
1,534

 
$
1,534

Agriculture
 
1

 
895

 
895

 
—

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
2

 
196

 
196

 
5

 
335

 
335

Total
 
9

 
$
3,053

 
$
3,053

 
10

 
$
1,869

 
$
1,869


The Company’s loans classified as TDR are loans that have been modified or with respect to which the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. The concessions granted in the restructurings, summarized in the table above, largely consisted of maturity extensions, interest rate modifications or a combination of both. In limited circumstances, a reduction in the principal balance of the loan could also be made as a concession. Loans classified as TDR are included with the loans collectively measured for credit losses.
The Company had commitments to lend $625 thousand of additional funds on loans classified as TDR as of June 30, 2020. The Company had $1.1 million of such commitments at December 31, 2019. The Company did not have any loans modified as TDR that defaulted within 12 months of being modified as TDR during the three and six months ended June 30, 2020. During the three and six months ended June 30, 2019, the Company had one $26 thousand consumer loan that defaulted within 12 months of being modified as a TDR. The defaulted TDR loan was collateralized and included with the loans individually measured for credit loss.

15

Table of Contents

Loan modifications and PPP loans in response to COVID-19
Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. At June 30, 2020, the Company granted approximately 3,050 short–term deferments on loan balances of $1.58 billion, which represented 16% of total loan balances as of June 30, 2020. These short–term deferments are not classified as TDRs and will not be reported as past due provided that they are performing in accordance with the modified terms.
The Company offered PPP loans to provide financial support to small and medium-size businesses to cover payroll and certain other expenses during the COVID-19 pandemic. The PPP was established by the CARES Act and is implemented by the U.S. SBA with support from the U.S. Department of Treasury. The program, which was amended by the Paycheck Protection Flexibility Act of 2020, provides small businesses with funds to pay up to 24 weeks of payroll costs including benefits, as well as interest on mortgages, rent and utilities. Funds are provided to small businesses in the form of loans that will be fully forgiven when used for permitted purposes and when at least 60% of the funds are used for payroll costs in accordance with the requirements of the amended PPP. At June 30, 2020, we had $941.4 million of PPP loans outstanding, which are included in commercial business loans.
5.
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit
The ACL is determined through quarterly assessments of expected credit losses within the loan portfolio and is deducted from the loan’s amortized cost basis to present the net amount of loans expected to be collected. We estimate the ACL using relevant and reliable available information, which is derived from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Additions to and recaptures from the ACL are charged to current period earnings through the provision for credit losses. Loan amounts that are determined to be uncollectable are charged directly against the ACL and netted against amounts recovered on previously charged-off loans.
For the purpose of calculating portfolio level reserves, we have segmented our loan portfolio into two portfolio segments (Commercial and Consumer). The Commercial and Consumer portfolio segments are then further broken down into loan classes by risk characteristics. The risk characteristics include regulatory call codes, type of industry and collateral type.
The ACL is comprised of reserves measured on a collective (pool) basis using a quantitative DCF model for all loan classes with similar risk characteristics and then qualitatively adjusted for large loan concentrations, trends in problem loans, policy exemptions granted, and other factors. The quantitative DCF model utilizes anticipated period cash flows determined on a loan-level basis. The anticipated cash flows take into account contractual principal and interest payments, anticipated segment level prepayments, probability of defaults and historical loss given defaults. The majority of our loan classes utilize regression models to calculate probability of defaults, in which macroeconomic factors are correlated to historical quarterly defaults. The Commercial segment two-factor models utilize a mix of seven macroeconomic factors, including the four most commonly used factors: Real GDP, National Unemployment Rate, Home Price Index and Commercial Real Estate Index. The three additional factors are Nominal GDP, Producer Price Index and Core Consumer Price Index. The Consumer segment two-factor models utilize a mix of three macroeconomic factors: National Unemployment Rate, Home Price Index and Prime Rate. The Company utilizes an 18 month reasonable and supportable forecast for the macroeconomic factors, after which they revert to their historical mean using a straight-line basis constructed on their absolute historical quarterly change.

16

Table of Contents

Loans are individually measured for credit losses if they do not share similar risk characteristics of other loans within their respective pools. Individually measured loans are primarily nonaccrual and collateral dependent with balances equal to or greater than $500,000 and for which foreclosure is probable. Commercial real estate loans are secured by commercial real estate, including owner occupied and non-owner occupied commercial real estate, as well as multifamily residential real estate. Commercial business loans are primarily secured by non-real estate collateral, including equipment and other non-real estate fixed assets, inventory, receivables, and cash. Agricultural loans are secured by farmland and other agricultural real estate, as well as equipment, inventory, such as crops and livestock, non-real estate fixed assets, and cash. Construction loans are secured by one-to-four family residential real estate and commercial real estate in varying stages of development. One-to-four family residential real estate loans are secured by one-to-four family residential properties. Other consumer loans are secured by personal property. For loans measured on an individual basis, the Company calculates the allowance as the difference between the amortized cost of the loan and the fair market value of the collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. If the fair value of the collateral is greater than the amortized cost of the loan, no reserve is recorded.
The Company also records an allowance for credit losses on unfunded loan commitments and letters of credit. We estimate expected credit losses on unfunded commitments in which we are exposed to credit risk, unless we have the option to unconditionally cancel the obligation. Expected credit losses are calculated based on the likelihood that funding will occur and an estimate of what will be funded by analyzing the most recent four-quarter utilization rates, current utilization, and our quantitative ACL rate. The allowance for unfunded commitments and letters of credit is included in “Other Liabilities” on the Consolidated Balance Sheets, with changes to the balance being charged to noninterest expense.
We do not measure an allowance for credit losses on accrued interest receivable balances because these balances are written-off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.

17

Table of Contents

The following tables show a detailed analysis of the ACL for the three and six months ended June 30, 2020:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
37,122

 
$
—

 
$
13

 
$
13,098

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
45,570

 
(5,442
)
 
811

 
12,247

 
53,186

 
3,208

 
49,978

Agriculture
 
11,085

 
—

 
1

 
3,782

 
14,868

 
828

 
14,040

Construction
 
8,845

 
—

 
235

 
(1,127
)
 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
17,659

 
—

 
422

 
5,630

 
23,711

 
—

 
23,711

Other consumer
 
1,644

 
(198
)
 
130

 
19

 
1,595

 
—

 
1,595

Unallocated
 
149

 
—

 
—

 
(149
)
 
—

 
—

 
—

Total
 
$
122,074

 
$
(5,640
)
 
$
1,612

 
$
33,500

 
$
151,546

 
$
4,036

 
$
147,510

 
 
Prior Year
Ending Balance
 
Impact of Adopting ASC 326
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
20,340

 
$
7,533

 
$
27,873

 
$
(101
)
 
$
27

 
$
22,434

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
30,292

 
762

 
31,054

 
(7,126
)
 
1,671

 
27,587

 
53,186

 
3,208

 
49,978

Agriculture
 
15,835

 
(9,325
)
 
6,510

 
(4,726
)
 
42

 
13,042

 
14,868

 
828

 
14,040

Construction
 
8,571

 
(1,750
)
 
6,821

 
—

 
677

 
455

 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
7,435

 
4,237

 
11,672

 
(10
)
 
704

 
11,345

 
23,711

 
—

 
23,711

Other consumer
 
883

 
778

 
1,661

 
(466
)
 
254

 
146

 
1,595

 
—

 
1,595

Unallocated
 
612

 
(603
)
 
9

 
—

 
—

 
(9
)
 
—

 
—

 
—

Total
 
$
83,968

 
$
1,632

 
$
85,600

 
$
(12,429
)
 
$
3,375

 
$
75,000

 
$
151,546

 
$
4,036

 
$
147,510


18

Table of Contents

The following tables show a detailed analysis of the ALLL for the three and six months ended June 30, 2019:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
16,359

 
$
(564
)
 
$
556

 
$
(703
)
 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,545

 
(4,316
)
 
492

 
(1,021
)
 
29,700

 
691

 
29,009

Agriculture
 
10,690

 
(61
)
 
64

 
1,978

 
12,671

 
712

 
11,959

Construction
 
11,965

 
(20
)
 
691

 
(179
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,311

 
(321
)
 
450

 
(821
)
 
7,619

 
27

 
7,592

Other consumer
 
823

 
(5
)
 
59

 
(162
)
 
715

 
1

 
714

Unallocated
 
581

 
—

 
—

 
1,126

 
1,707

 
—

 
1,707

Total
 
$
83,274

 
$
(5,287
)
 
$
2,312

 
$
218

 
$
80,517

 
$
1,475

 
$
79,042

 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
14,766

 
$
(1,242
)
 
$
1,070

 
$
1,054

 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,658

 
(5,822
)
 
1,019

 
(155
)
 
29,700

 
691

 
29,009

Agriculture
 
9,589

 
(139
)
 
122

 
3,099

 
12,671

 
712

 
11,959

Construction
 
14,395

 
(215
)
 
774

 
(2,497
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,024

 
(802
)
 
784

 
(387
)
 
7,619

 
27

 
7,592

Other consumer
 
787

 
(55
)
 
74

 
(91
)
 
715

 
1

 
714

Unallocated
 
1,150

 
—

 
—

 
557

 
1,707

 
—

 
1,707

Total
 
83,369

 
(8,275
)
 
3,843

 
1,580

 
80,517

 
1,475

 
79,042


The $67.6 million increase in the ACL at June 30, 2020 compared to the ALLL at December 31, 2019 was primarily the result of COVID-19 and the corresponding downturn in the national and world economies. The ACL at June 30, 2020 does not include a reserve for the PPP loans as these loans are fully guaranteed by the SBA.

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Beginning balance
 
$
6,000

 
$
3,780

 
$
3,430

 
$
4,330

Impact of adopting ASC 326
 
—

 
—

 
1,570

 
$
—

Net changes in the allowance for unfunded commitments and letters of credit
 
2,800

 
200

 
3,800

 
(350
)
Ending balance
 
$
8,800

 
$
3,980

 
$
8,800

 
$
3,980



19

Table of Contents

Credit Quality Indicators
The extension of credit in the form of loans or other credit products to consumer and commercial clients is one of our principal business activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry and type of borrower and by limiting the aggregation of debt to a single borrower.
We evaluate the credit quality of our loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial condition, historical payment experience, credit documentation and current economic trends. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of the loss on the loan increases. All loans risk rated special mention or worse with amortized costs exceeding $100,000 are reviewed at least quarterly with more frequent review for specific loans.
Pass rated loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special Mention rated loans have potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Loans with a risk rating of Substandard or worse are reviewed to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating or accrual status may be adjusted accordingly. Loans risk rated as Substandard reflect loans where a loss is possible if loan weaknesses are not corrected. Doubtful rated loans have a high probability of loss; however, the amount of loss has not yet been determined. Loss rated loans are considered uncollectable and when identified, are charged-off.

20

Table of Contents

The following is an analysis of the credit quality of our loan portfolio, as of June 30, 2020 and December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
 
Total (1)
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
332,517

 
$
650,893

 
$
521,112

 
$
569,062

 
$
483,908

 
$
1,121,467

 
$
48,813

 
$
2,424

 
$
3,730,196

Special mention
 
10,217

 
64,490

 
18,809

 
13,462

 
44,503

 
44,766

 
—

 
—

 
196,247

Substandard
 
—

 
2,050

 
23,736

 
6,535

 
39,711

 
33,096

 
—

 
1,072

 
106,200

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
342,734

 
$
717,433

 
$
563,657

 
$
589,059

 
$
568,122

 
$
1,199,329

 
$
48,813

 
$
3,496

 
$
4,032,643

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
1,075,991

 
$
440,684

 
$
355,598

 
$
259,075

 
$
256,579

 
$
284,232

 
$
920,762

 
$
5,951

 
$
3,598,872

Special mention
 
4,944

 
47,663

 
36,645

 
26,728

 
6,702

 
11,349

 
34,348

 
—

 
168,379

Substandard
 
923

 
4,340

 
21,141

 
6,358

 
8,679

 
7,581

 
40,155

 
3,085

 
92,262

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
1,081,858

 
$
492,687

 
$
413,384

 
$
292,161

 
$
271,960

 
$
303,162

 
$
995,265

 
$
9,036

 
$
3,859,513

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
118,361

 
$
103,163

 
$
44,586

 
$
60,678

 
$
60,533

 
$
69,132

 
$
274,960

 
$
17,136

 
$
748,549

Special mention
 
—

 
521

 
—

 
—

 
271

 
275

 
1,429

 
—

 
2,496

Substandard
 
1,977

 
12,736

 
5,684

 
5,662

 
7,985

 
6,209

 
51,994

 
2,658

 
94,905

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
120,338

 
$
116,420

 
$
50,270

 
$
66,340

 
$
68,789

 
$
75,616

 
$
328,383

 
$
19,794

 
$
845,950

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
58,564

 
$
140,987

 
$
32,706

 
$
9,610

 
$
1,025

 
$
1,999

 
$
32,630

 
$
—

 
$
277,521

Special mention
 
—

 
17,912

 
488

 
—

 
—

 
—

 
—

 
—

 
18,400

Substandard
 
—

 
2,472

 
5,526

 
—

 
—

 
58

 
38

 
—

 
8,094

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
58,564

 
$
161,371

 
$
38,720

 
$
9,610

 
$
1,025

 
$
2,057

 
$
32,668

 
$
—

 
$
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
75,255

 
$
90,453

 
$
82,106

 
$
35,033

 
$
25,963

 
$
97,256

 
$
278,444

 
$
790

 
$
685,300

Special mention
 
—

 
—

 
—

 
—

 
—

 
219

 
—

 
—

 
219

Substandard
 
442

 
739

 
227

 
1,215

 
397

 
2,532

 
1,011

 
755

 
7,318

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
75,697

 
$
91,192

 
$
82,333

 
$
36,248

 
$
26,360

 
$
100,007

 
$
279,455

 
$
1,545

 
$
692,837

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
3,500

 
$
4,237

 
$
4,734

 
$
1,409

 
$
420

 
$
1,536

 
$
20,611

 
$
439

 
$
36,886

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
11

 
—

 
—

 
4

 
7

 
32

 
—

 
54

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
3,500

 
$
4,248

 
$
4,734

 
$
1,409

 
$
424

 
$
1,543

 
$
20,643

 
$
439

 
$
36,940

Total
 
$
1,682,691

 
$
1,583,351

 
$
1,153,098

 
$
994,827

 
$
936,680

 
$
1,681,714

 
$
1,705,227

 
$
34,310

 
$
9,771,898

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
151,546

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,620,352

__________
(1) Loans that are on short-term deferments are treated as Pass loans and will not be reported as past due provided that they are performing in accordance with the modified terms.

21

Table of Contents

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2019
 
2018
 
2017
 
2016
 
2015
 
Prior
 
 
Total
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
699,336

 
$
562,992

 
$
621,113

 
$
565,928

 
$
441,220

 
$
873,687

 
$
52,276

 
$
19,986

 
$
3,836,538

Special mention
 
1,824

 
305

 
7,019

 
3,360

 
—

 
3,426

 
—

 
—

 
15,934

Substandard
 
47

 
10,698

 
9,320

 
36,229

 
20,278

 
11,738

 
—

 
5,071

 
93,381

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
701,207

 
$
573,995

 
$
637,452

 
$
605,517

 
$
461,498

 
$
888,851

 
$
52,276

 
$
25,057

 
$
3,945,853

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
479,481

 
$
442,222

 
$
330,934

 
$
301,337

 
$
157,436

 
$
199,089

 
$
963,663

 
$
25,577

 
$
2,899,739

Special mention
 
2,241

 
6,673

 
56

 
2,006

 
52

 
585

 
12,710

 
—

 
24,323

Substandard
 
85

 
17,240

 
3,458

 
9,534

 
3,227

 
3,972

 
26,639

 
1,396

 
65,551

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
481,807

 
$
466,135

 
$
334,448

 
$
312,877

 
$
160,715

 
$
203,646

 
$
1,003,012

 
$
26,973

 
$
2,989,613

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
107,152

 
$
54,950

 
$
70,337

 
$
71,874

 
$
33,597

 
$
56,342

 
$
280,984

 
$
10,036

 
$
685,272

Special mention
 
557

 
2,535

 
1,381

 
—

 
64

 
576

 
5,336

 
—

 
10,449

Substandard
 
7,291

 
6,047

 
6,173

 
5,907

 
1,477

 
5,698

 
30,669

 
6,388

 
69,650

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
115,000

 
$
63,532

 
$
77,891

 
$
77,781

 
$
35,138

 
$
62,616

 
$
316,989

 
$
16,424

 
$
765,371

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
183,525

 
$
91,342

 
$
40,514

 
$
1,067

 
$
939

 
$
1,601

 
$
33,388

 
$
7,793

 
$
360,169

Special mention
 
—

 
1,264

 
—

 
—

 
—

 
—

 
41

 
—

 
1,305

Substandard
 
—

 
—

 
—

 
—

 
—

 
59

 
—

 
—

 
59

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
183,525

 
$
92,606

 
$
40,514

 
$
1,067

 
$
939

 
$
1,660

 
$
33,429

 
$
7,793

 
$
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
103,315

 
$
77,877

 
$
32,440

 
$
25,052

 
$
27,294

 
$
80,370

 
$
283,830

 
$
554

 
$
630,732

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
228

 
800

 
400

 
623

 
3,156

 
905

 
481

 
6,593

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
103,315

 
$
78,105

 
$
33,240

 
$
25,452

 
$
27,917

 
$
83,526

 
$
284,735

 
$
1,035

 
$
637,325

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
9,276

 
$
5,713

 
$
1,974

 
$
758

 
$
848

 
$
1,306

 
$
23,351

 
$
508

 
$
43,734

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
—

 
1

 
—

 
—

 
8

 
27

 
—

 
36

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
9,276

 
$
5,713

 
$
1,975

 
$
758

 
$
848

 
$
1,314

 
$
23,378

 
$
508

 
$
43,770

Total
 
$
1,594,130

 
$
1,280,086

 
$
1,125,520

 
$
1,023,452

 
$
687,055

 
$
1,241,613

 
$
1,713,819

 
$
77,790

 
$
8,743,465

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,968

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
8,659,497




22

Table of Contents

6.
Other Real Estate Owned
The following tables set forth activity in OREO for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Balance, beginning of period
 
$
510

 
$
6,075

 
$
552

 
$
6,019

Transfers in
 
558

 
—

 
558

 
386

Valuation adjustments
 
—

 
—

 
—

 
(195
)
Proceeds from sale of OREO property
 
(303
)
 
(5,673
)
 
(345
)
 
(5,794
)
Gain (loss) on sale of OREO, net
 
(18
)
 
716

 
(18
)
 
702

Balance, end of period
 
$
747

 
$
1,118

 
$
747

 
$
1,118


At June 30, 2020, there were $60 thousand in foreclosed residential real estate properties held as OREO. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $451 thousand.
7.
Goodwill and Other Intangible Assets
In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. The Company performed an annual impairment assessment as of July 31, 2019 and concluded that there was no impairment. As of June 30, 2020, we evaluated potential triggering events that might be indicators that our goodwill was impaired. The events include the economic disruption and uncertainty surrounding the COVID-19 pandemic and the recent volatility in stock prices. Based on our evaluation, we concluded that our goodwill was not more than likely impaired.
The CDI is evaluated for impairment if events and circumstances indicate a possible impairment. The CDI is amortized on an accelerated basis over an estimated life of 10 years.
The following table sets forth activity for goodwill and other intangible assets for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Goodwill
 
 
 
 
 
 
 
 
Total goodwill
 
$
765,842

 
$
765,842

 
$
765,842

 
$
765,842

Other intangible assets, net
 
 
 
 
 
 
 
 
CDI:
 
 
 
 
 
 
 
 
Gross CDI balance at beginning of period
 
105,473

 
105,473

 
105,473

 
105,473

Accumulated amortization at beginning of period
 
(73,244
)
 
(63,203
)
 
(70,934
)
 
(60,455
)
CDI, net at beginning of period
 
32,229

 
42,270

 
34,539

 
45,018

CDI current period amortization
 
(2,210
)
 
(2,649
)
 
(4,520
)
 
(5,397
)
Total CDI, net at end of period
 
30,019

 
39,621

 
30,019

 
39,621

Intangible assets not subject to amortization
 
919

 
919

 
919

 
919

Other intangible assets, net at end of period
 
30,938

 
40,540

 
30,938

 
40,540

Total goodwill and other intangible assets at end of period
 
$
796,780

 
$
806,382

 
$
796,780

 
$
806,382



23

Table of Contents

The following table provides the estimated future amortization expense of our CDI for the remaining six months ending December 31, 2020 and the succeeding four years:
 
 
Year ending December 31,
 
 
(in thousands)
2020
 
$
4,204

2021
 
7,264

2022
 
5,880

2023
 
4,552

2024
 
3,432


8.
Revolving Line of Credit
The Company has a $15.0 million short-term credit facility with an unaffiliated bank that expires May 27, 2021. This facility has a variable interest rate and provides the Company additional liquidity, if needed, for various corporate activities including the repurchase of shares of Columbia Banking System, Inc. common stock. There was no outstanding balance at both June 30, 2020 and December 31, 2019. The credit agreement requires the Company to comply with certain covenants including those related to asset quality and capital levels. The Company was in compliance with all covenants associated with this facility at June 30, 2020.
9.
Derivatives, Hedging Activities and Balance Sheet Offsetting
The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio.
The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate collars as part of its interest rate risk management strategy. Interest rate collars designated as cash flow hedges involve the payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and receipts of variable-rate amounts if interest rates fall below the floor strike rate on the contract. These derivative contracts are used to hedge the variable cash flows associated with existing variable-rate assets.
With respect to derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate assets. During the next 12 months, the Company estimates that there will be $10.6 million reclassified as an increase to interest income.
In addition, the Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third-party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at June 30, 2020 and December 31, 2019 was $533.8 million and $428.6 million, respectively. During both the three and six month periods ended June 30, 2020, there was mark-to-market loss of $473 thousand recorded to “Other” noninterest expense. During both the three and six months ended June 30, 2019, there was mark-to-market loss of $2 thousand recorded to “Other” noninterest expense.

24

Table of Contents

The following table presents the fair value of derivatives, as well as their classification on the Consolidated Balance Sheet at June 30, 2020 and December 31, 2019:
 
Asset Derivatives
 
Liability Derivatives
 
June 30, 2020
 
December 31, 2019
 
June 30, 2020
 
December 31, 2019
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
(in thousands)
Derivatives designated as hedging instruments:
Interest rate collar
Other assets
 
$
38,421

 
Other assets
 
$
14,727

 
Other liabilities
 
$
—

 
Other liabilities
 
$
—

Derivatives not designated as hedging instruments:
Interest rate swap contracts
Other assets
 
$
54,424

 
Other assets
 
$
19,144

 
Other liabilities
 
$
54,898

 
Other liabilities
 
$
19,145


The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss) at June 30, 2020 and 2019:
 
Amount of Gain or (Loss) Recognized in Accumulated Other Comprehensive Income on Derivative
 
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Three Months Ended June 30,
 
 
 
Three Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
(in thousands)
Interest rate collar
$
3,402

 
$
9,423

 
 Interest income
 
$
2,190

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
Interest rate collar
$
26,825

 
$
15,691

 
 Interest income
 
$
3,130

 
$
—



The notional amount of the interest rate collar was $500.0 million at June 30, 2020. The cash flow hedge was determined to be effective during the periods presented and, as a result, qualifies for hedge accounting treatment.

The Company is party to interest rate swap contracts, interest rate collar and repurchase agreements that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.

25

Table of Contents

The following tables show the gross interest rate swap contracts, collar agreements and repurchase agreements in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of overcollateralization are not shown.
 
Gross Amounts of Recognized Assets/Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
 
Collateral Pledged/Received
 
Net Amount
June 30, 2020
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,424

 
$
—

 
$
54,424

 
$
—

 
$
54,424

Interest rate collar
$
38,421

 
$
—

 
$
38,421

 
$
(38,421
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,898

 
$
—

 
$
54,898

 
$
(53,320
)
 
$
1,578

Repurchase agreements
$
51,479

 
$
—

 
$
51,479

 
$
(51,479
)
 
$
—

 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,144

 
$
—

 
$
19,144

 
$
—

 
$
19,144

Interest rate collar
$
14,727

 
$
—

 
$
14,727

 
$
(14,727
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,145

 
$
—

 
$
19,145

 
$
(19,145
)
 
$
—

Repurchase agreements
$
64,437

 
$
—

 
$
64,437

 
$
(64,437
)
 
$
—


The Company’s agreements with each of its derivative counterparties provide that if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
The following table presents the class of collateral pledged for repurchase agreements as well as the remaining contractual maturity of the repurchase agreements:
 
 
Remaining contractual maturity of the agreements
 
 
Overnight and continuous
 
Up to 30 days
 
30 - 90 days
 
Greater than 90 days
 
Total
June 30, 2020
 
(in thousands)
Class of collateral pledged for repurchase agreements
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
51,479

 
$
—

 
$
—

 
$
—

 
$
51,479

Gross amount of recognized liabilities for repurchase agreements
 
 
 
 
 
 
 
 
 
51,479

Amounts related to agreements not included in offsetting disclosure
 
 
 
 
 
 
 
 
 
$
—


The collateral utilized for the Company’s repurchase agreements is subject to market fluctuations as well as prepayments of principal. The Company monitors the risk of the fair value of its pledged collateral falling below acceptable amounts based on the type of the underlying repurchase agreement. The pledged collateral related to the Company’s $51.5 million sweep repurchase agreements, which mature on an overnight basis, is monitored on a daily basis as the underlying sweep accounts can have frequent transaction activity and the amount of pledged collateral is adjusted as necessary.
10.
Commitments and Contingent Liabilities
Lease Commitments: The Company’s lease commitments consist primarily of leased locations under various non-cancellable operating leases that expire between 2020 and 2043. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule.

26

Table of Contents

Financial Instruments with Off-Balance Sheet Risk: In the normal course of business, the Company makes loan commitments (typically unfunded loans and unused lines of credit) and issues standby letters of credit to accommodate the financial needs of its customers. At June 30, 2020 and December 31, 2019, the Company’s loan commitments amounted to $2.65 billion and $2.67 billion, respectively.
Standby letters of credit commit the Company to make payments on behalf of customers under specified conditions. Historically, no significant losses have been incurred by the Company under standby letters of credit. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including collateral requirements, where appropriate. Standby letters of credit were $24.1 million and $25.7 million at June 30, 2020 and December 31, 2019, respectively. In addition, there were no commitments under commercial letters of credit used to facilitate customers’ trade transactions and other off-balance sheet liabilities at both June 30, 2020 and December 31, 2019.
Legal Proceedings: The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from their regular business activities. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the financial statements of the Company.
11.
Shareholders’ Equity
Dividends:
The following table summarizes year-to-date dividend activity as of June 30, 2020:
Declared
 
Regular Cash Dividends Per Common Share
 
Special Cash Dividends Per Common Share
 
Record Date
 
Paid Date
January 23, 2020
 
$
0.28

 
$
0.22

 
February 5, 2020
 
February 19, 2020
April 30, 2020
 
$
0.28

 
$
—

 
May 14, 2020
 
May 28, 2020

Subsequent to quarter end, on July 23, 2020, the Company declared a regular quarterly cash dividend of $0.28 per common share payable on August 19, 2020 to shareholders of record at the close of business on August 5, 2020.
The payment of cash dividends is subject to federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both federal and state regulatory requirements.
Share Repurchase Program:
For the three months ended June 30, 2020, the Company did not purchase any common shares under the share repurchase program. For the six months ended June 30, 2020, the Company repurchased 731 thousand shares of common stock at an average price of $27.36 per share. The Company’s share repurchase authorization expired in May of 2020.

27

Table of Contents

12.
Accumulated Other Comprehensive Income
The following table shows changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2020 and 2019:
 
 
Unrealized Gains and Losses on Available for Sale Securities (1)
 
Unrealized Gains and Losses on Pension Plan Liability (1)
 
Unrealized Gains and Losses on Hedging Instruments (1)
 
Total (1)
Three Months Ended June 30, 2020
 
(in thousands)
Beginning balance
 
$
112,543

 
$
(3,894
)
 
$
28,558

 
$
137,207

Other comprehensive income before reclassifications
 
42,860

 
—

 
2,611

 
45,471

Amounts reclassified from accumulated other comprehensive income (2)
 
—

 
79

 
(1,680
)
 
(1,601
)
Net current-period other comprehensive income
 
42,860

 
79

 
931

 
43,870

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
352

 
$
(2,116
)
 
$
4,810

 
$
3,046

Other comprehensive income before reclassifications
 
37,029

 
—

 
7,233

 
44,262

Amounts reclassified from accumulated other comprehensive income (2)
 
(219
)
 
61

 
—

 
(158
)
Net current-period other comprehensive income
 
36,810

 
61

 
7,233

 
44,104

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

Six Months Ended June 30, 2020
 
 
 
 
 
 
 
 
Beginning balance
 
$
33,038

 
$
(3,974
)
 
$
11,303

 
$
40,367

Other comprehensive income before reclassifications
 
122,556

 
—

 
20,588

 
143,144

Amounts reclassified from accumulated other comprehensive income (2)
 
(191
)
 
159

 
(2,402
)
 
(2,434
)
Net current-period other comprehensive income
 
122,365

 
159

 
18,186

 
140,710

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
(33,128
)
 
$
(2,177
)
 
$
—

 
$
(35,305
)
Other comprehensive income before reclassifications
 
71,926

 
—

 
12,043

 
83,969

Amounts reclassified from accumulated other comprehensive loss (2)
 
(1,636
)
 
122

 
—

 
(1,514
)
Net current-period other comprehensive income
 
70,290

 
122

 
12,043

 
82,455

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

__________
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See following table for details about these reclassifications.


28

Table of Contents

The following table shows details regarding the reclassifications from accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019:
 
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Affected line Item in the Consolidated
 
 
2020
 
2019
 
2020
 
2019
 
Statement of Income
 
 
(in thousands)
 
 
Unrealized gains on available for sale debt securities
 
$
—

 
$
285

 
$
249

 
$
2,132

 
Investment securities gains, net
 
 
—

 
285

 
249

 
2,132

 
Total before tax
 
 
—

 
(66
)
 
(58
)
 
(496
)
 
Income tax provision
 
 
$
—

 
$
219

 
$
191

 
$
1,636

 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Amortization of pension plan liability actuarial losses
 
$
(103
)
 
$
(80
)
 
$
(207
)
 
$
(159
)
 
Compensation and employee benefits
 
 
(103
)
 
(80
)
 
(207
)
 
(159
)
 
Total before tax
 
 
24

 
19

 
48

 
37

 
Income tax provision
 
 
$
(79
)
 
$
(61
)
 
$
(159
)
 
$
(122
)
 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains from hedging instruments
 
$
2,190

 
$
—

 
$
3,130

 
$
—

 
Loans
 
 
2,190

 
—

 
3,130

 
—

 
Total before tax
 
 
(510
)
 
—

 
(728
)
 
—

 
Income tax provision
 
 
$
1,680

 
$
—

 
$
2,402

 
$
—

 
Net of tax

13.
Fair Value Accounting and Measurement
The Fair Value Measurements and Disclosures topic of the FASB ASC defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value. We hold fixed and variable rate interest-bearing securities, investments in marketable equity securities and certain other financial instruments, which are carried at fair value. Fair value is determined based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available.
The valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy:
Level 1 – Quoted prices for identical instruments in active markets that are accessible at the measurement date.
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
Fair values are determined as follows:
Debt securities available for sale at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors. These fair value calculations are considered a Level 2 input method under the provisions of the Fair Value Measurements and Disclosures topic of the FASB ASC for all debt securities available for sale.
Interest rate contracts and the interest rate collar are valued in models, which use as their basis, readily observable market parameters and are classified within Level 2 of the valuation hierarchy.

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Table of Contents

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2020 and December 31, 2019 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
June 30, 2020
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,865,030

 
$
—

 
$
2,865,030

 
$
—

Other asset-backed securities
 
224,276

 
—

 
224,276

 
—

State and municipal securities
 
468,615

 
—

 
468,615

 
—

U.S. government agency and government-sponsored enterprise securities
 
135,866

 
—

 
135,866

 
—

Total debt securities available for sale
 
$
3,693,787

 
$
—

 
$
3,693,787

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,424

 
$
—

 
$
54,424

 
$
—

Interest rate collar
 
$
38,421

 
$
—

 
$
38,421

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,898

 
$
—

 
$
54,898

 
$
—

 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
December 31, 2019
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,892,950

 
$
—

 
$
2,892,950

 
$
—

Other asset-backed securities
 
196,050

 
—

 
196,050

 
—

State and municipal securities
 
488,802

 
—

 
488,802

 
—

U.S. government agency and government-sponsored enterprise securities
 
168,340

 
—

 
168,340

 
—

Total debt securities available for sale
 
$
3,746,142

 
$
—

 
$
3,746,142

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,144

 
$
—

 
$
19,144

 
$
—

Interest rate collar
 
$
14,727

 
$
—

 
$
14,727

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,145

 
$
—

 
$
19,145

 
$
—



30

Table of Contents

Nonrecurring Measurements
Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as collateral dependent loans. The following valuation techniques and inputs were used to estimate the fair value of collateral dependent loans.
Collateral dependent loans - A collateral dependent loan is a loan in which repayment is expected to be provided solely by the underlying collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. The collateral dependent loan valuations are performed in conjunction with the allowance for credit losses process on a quarterly basis.
Equity securities without readily determinable fair value - The Company measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with such changes recognized in earnings. Our equity securities without readily determinable fair value consist of 77,683 Visa Class B shares. These shares are currently subject to certain transfer restrictions and will be convertible into Visa Class A shares upon final resolution of certain litigation matters involving Visa. For additional information, please see Note 3 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
The following table presents the carrying value of equity securities, without readily determinable fair values, still held as of June 30, 2020, that are measured under the measurement alternative and related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
Equity securities without readily determinable fair values
 
(in thousands)
Carrying value, beginning of period
 
$
—

 
$
—

 
$
—

 
$
—

Upward carrying value changes
 
13,425

 
—

 
13,425

 
—

Carrying value, end of period
 
$
13,425

 
$
—

 
$
13,425

 
$
—


The following tables set forth information related to the Company’s assets that were measured using fair value estimates on a nonrecurring basis during the current and prior year quarterly periods:
 
 
Fair Value at June 30, 2020
 
Fair Value Measurements at Reporting Date Using
 
Gains(Losses) During the Three Months Ended June 30, 2020
 
Gains(Losses) During the Six Months Ended June 30, 2020
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
7,976

 
$
—

 
$
—

 
$
7,976

 
$
(6,946
)
 
$
(7,745
)
Equity securities
 
$
13,425

 
$
—

 
$
—

 
$
13,425

 
$
13,425

 
$
13,425

 
 
Fair Value at June 30, 2019
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Three Months Ended June 30, 2019
 
Losses During the Six Months Ended June 30, 2019
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
4,837

 
$
—

 
$
—

 
$
4,837

 
$
(2,124
)
 
$
(2,525
)

The losses on collateral dependent loans disclosed above represent the amount of the allowance for credit losses and/or charge-offs during the period applicable to loans held at period-end. The amount of the allowance is included in the ACL.

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Table of Contents

Quantitative information about Level 3 fair value measurements
The range and weighted average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:
 
 
Fair Value at June 30, 2020
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
7,976

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (56.22%)

__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of accounts receivable, fixed assets, inventory and real estate.
 
 
Fair Value at June 30, 2019
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
4,837

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (35.67%)
__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of cash, accounts receivable, fixed assets, inventory and real estate.

32

Table of Contents

The following tables summarize carrying amounts and estimated fair values of selected financial instruments by level within the fair value hierarchy at June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
217,461

 
$
217,461

 
$
217,461

 
$
—

 
$
—

Interest-earning deposits with banks
 
880,232

 
880,232

 
880,232

 
—

 
—

Debt securities available for sale
 
3,693,787

 
3,693,787

 
—

 
3,693,787

 
—

Equity securities without readily determinable fair values
 
13,425

 
13,425

 
—

 
—

 
13,425

FHLB stock
 
16,280

 
16,280

 
—

 
16,280

 
—

Loans held for sale
 
28,803

 
28,803

 
—

 
28,803

 
—

Loans
 
9,620,352

 
10,061,835

 
—

 
—

 
10,061,835

Interest rate contracts
 
54,424

 
54,424

 
—

 
54,424

 
—

Interest rate collar
 
38,421

 
38,421

 
—

 
38,421

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
340,192

 
$
340,419

 
$
—

 
$
340,419

 
$
—

FHLB advances and FRB borrowings
 
157,441

 
159,400

 
—

 
159,400

 
—

Repurchase agreements
 
51,479

 
51,479

 
—

 
51,479

 
—

Subordinated debentures
 
35,185

 
35,227

 
—

 
35,227

 
—

Interest rate contracts
 
54,898

 
54,898

 
—

 
54,898

 
—


 
 
December 31, 2019
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
223,541

 
$
223,541

 
$
223,541

 
$
—

 
$
—

Interest-earning deposits with banks
 
24,132

 
24,132

 
24,132

 
—

 
—

Debt securities available for sale
 
3,746,142

 
3,746,142

 
—

 
3,746,142

 
—

FHLB stock
 
48,120

 
48,120

 
—

 
48,120

 
—

Loans held for sale
 
17,718

 
17,718

 
—

 
17,718

 
—

Loans
 
8,659,497

 
8,883,865

 
—

 
—

 
8,883,865

Interest rate contracts
 
19,144

 
19,144

 
—

 
19,144

 
—

Interest rate collar
 
14,727

 
14,727

 
—

 
14,727

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
400,070

 
$
397,736

 
$
—

 
$
397,736

 
$
—

FHLB advances
 
953,469

 
952,762

 
—

 
952,762

 
—

Repurchase agreements
 
64,437

 
64,437

 
—

 
64,437

 
—

Subordinated debentures
 
35,277

 
35,491

 
—

 
35,491

 
—

Interest rate contracts
 
19,145

 
19,145

 
—

 
19,145

 
—



33

Table of Contents

14.
Earnings Per Common Share
The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company issues restricted shares under share-based compensation plans which qualify as participating securities.
The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands except per share amounts)
Basic EPS:
 
 
 
 
 
 
 
 
Net income
 
$
36,582

 
$
51,724

 
$
51,210

 
$
97,595

Less: Earnings allocated to participating securities:
 
 
 
 
 
 
 
 
Nonvested restricted shares
 
139

 
378

 
325

 
838

Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Basic earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Diluted EPS:
 
 
 
 
 
 
 
 
Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Dilutive effect of equity awards
 
32

 
—

 
39

 
1

Weighted average diluted common shares outstanding
 
70,711

 
72,451

 
70,981

 
72,487

Diluted earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive
 
571

 
—

 
450

 
—


15.
Revenue from Contracts with Customers
Revenue in the scope of Topic 606, Revenue from Contracts with Customers is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The vast majority of the Company’s revenue is specifically outside the scope of Topic 606. For in-scope revenue, the following is a description of principal activities, separated by the timing of revenue recognition from which the Company generates its revenue from contracts with customers.
a.
Revenue earned at a point in time - Examples of revenue earned at a point in time are ATM transaction fees, wire transfer fees, overdraft fees, interchange fees and foreign exchange transaction fees. Revenue is primarily based on the number and type of transactions and is generally derived from transactional information accumulated by our systems and is recognized immediately as the transactions occur or upon providing the service to complete the customer’s transaction. The Company is the principal in each of these contracts, with the exception of interchange fees, in which case we are acting as the agent and record revenue net of expenses paid to the principal.
b.
Revenue earned over time - The Company earns revenue from contracts with customers in a variety of ways where the revenue is earned over a period of time - generally monthly. Examples of this type of revenue are deposit account maintenance fees, investment advisory fees, merchant revenue and safe deposit box fees. Revenue is generally derived from transactional information accumulated by our systems or those of third-parties and is recognized as the related transactions occur or services are rendered to the customer.

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The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are typically satisfied as services are rendered and our contracts generally do not include multiple performance obligations. As a result, there are no contract balances as payments and services are rendered simultaneously. Payment is generally collected at the time services are rendered, monthly or quarterly. Unsatisfied performance obligations at the report date are not material to our Consolidated Financial Statements.
In certain cases, other parties are involved with providing products and services to our customers. If the Company is principal in the transaction (providing goods or services itself), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (arranging for another party to provide goods or services), the Company reports its net fee or commission retained as revenue.
Rebates, waivers and reversals are recorded as a reduction of the transaction price either when the revenue is recognized by the Company or at the time the rebate, waiver or reversal is earned by the customer.
Practical expedients
The Company applies the practical expedient in paragraph 606-10-32-18 and does not adjust the consideration from customers for the effects of a significant financing component if at contract inception the period between when the entity transfers the goods or services and when the customer pays for that good or service will be one year or less.
The Company pays sales commissions to its employees in accordance with certain incentive plans and in connection with obtaining certain contracts with customers. The Company applies the practical expedient in paragraph 340-40-25-4 and expenses such sales commissions when incurred if the amortization period of the asset the Company otherwise would have recognized is one year or less. Sales commissions are included in compensation and employee benefits expense.
For the Company’s contracts that have an original expected duration of one year or less, the Company uses the practical expedient in paragraph 606-10-50-14 and has not disclosed the amount of the transaction price allocated to unsatisfied performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue.
Disaggregation of revenue
The following table shows the disaggregation of revenue from contracts with customers for the three and six month periods ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Noninterest income:
 
 
 
 
 
 
 
 
Revenue from contracts with customers:
 
 
 
 
 
 
 
 
Deposit account and treasury management fees
 
$
6,092

 
$
9,035

 
$
13,880

 
$
18,015

Card revenue
 
3,079

 
3,763

 
6,597

 
7,425

Financial services and trust revenue
 
3,163

 
3,425

 
6,228

 
6,382

Total revenue from contracts with customers
 
12,334

 
16,223

 
26,705

 
31,822

Other sources of noninterest income
 
24,925

 
9,425

 
31,761

 
15,522

Total noninterest income
 
$
37,259

 
$
25,648

 
$
58,466

 
$
47,344


Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the unaudited Consolidated Financial Statements of Columbia Banking System, Inc. (referred to in this report as “we”, “our”, “Columbia” and “the Company”) and notes thereto presented elsewhere in this report and with the December 31, 2019 audited Consolidated Financial Statements and its accompanying notes included in our Annual Report on Form 10-K. In the following discussion, unless otherwise noted, references to increases or decreases in average balances in items of income and expense for a particular period and balances at a particular date refer to the comparison with corresponding amounts for the period or date one year earlier.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, as well as the potential effects of the COVID-19 pandemic on the Company’s business, operations, financial performance and prospects. Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. In addition to the factors set forth in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and the factors set forth in the section titled “Risk Factors” in the Company’s Form 10-K, the following factors, among others, could cause actual results to differ materially from the anticipated results expressed or implied by forward-looking statements:
•
national and global economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth and maintain the quality of our earning assets;
•
the markets where we operate and make loans could face challenges;
•
the risks presented by the economy, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;
•
the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions, and infrastructure may not be realized;
•
interest rate changes could significantly reduce net interest income and negatively affect asset yields and funding sources;
•
the effect of the discontinuation or replacement of LIBOR;
•
projected business increases following strategic expansion could be lower than expected;
•
changes in the scope and cost of FDIC insurance and other coverages;
•
the impact of acquired loans on our earnings;
•
changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analysis relating to how such changes will affect our financial results could prove incorrect;
•
changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and regulatory agencies;
•
competition among financial institutions and nontraditional providers of financial services could increase significantly;
•
continued consolidation in the Northwest financial services industry resulting in the creation of larger financial institutions that may have greater resources could change the competitive landscape;
•
the goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital;
•
our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft;
•
any material failure or interruption of our information and communications systems;
•
our ability to keep pace with technological changes;
•
our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk and regulatory and compliance risk;
•
failure to maintain effective internal control over financial reporting or disclosure controls and procedures;
•
the effect of geopolitical instability, including wars, conflicts and terrorist attacks;
•
our profitability measures could be adversely affected if we are unable to effectively manage our capital;
•
natural disasters, including earthquakes, tsunamis, flooding, fires and other unexpected events;
•
the effect of COVID-19 and other infectious illness outbreaks that may arise in the future, which has created significant impacts and uncertainties in U.S. and global markets;
•
changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, including with regard to COVID-19; and
•
the effects of any damage to our reputation resulting from developments related to any of the items identified above.
You should take into account that forward-looking statements speak only as of the date of this report. Given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under federal securities laws.

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CRITICAL ACCOUNTING POLICIES
Management has identified the accounting policies related to the ACL, business combinations and the valuation and recoverability of goodwill as critical to an understanding of our financial statements. These policies and related estimates are discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Adoption of Allowance for Credit Losses - ASC 326,” “Business Combinations” and “Valuation and Recoverability of Goodwill” in our 2019 Annual Report on Form 10-K. There have not been any material changes in our critical accounting policies as compared to those disclosed in our 2019 Annual Report on Form 10-K.
RESULTS OF OPERATIONS
Our results of operations are dependent to a large degree on our net interest income. We also generate noninterest income from our broad range of products and services including treasury management, wealth management and debit and credit cards. Our operating expenses consist primarily of compensation and employee benefits, occupancy, data processing and legal and professional fees. Like most financial institutions, our interest income and cost of funds are affected significantly by general economic conditions, particularly changes in market interest rates, and by government policies and actions of regulatory authorities.
COVID-19 Update

We continue to closely monitor the progress of COVID-19 and to adapt our business in response to the pandemic to provide support for our team members and clients. We are staying in close contact with team members who have concerns or potential exposure in order to determine the best actions to maintain employee and client safety. Team members with the ability to work remotely have been encouraged to continue doing so while branches and offices have implemented disinfecting protocols and social distancing policies. Our comprehensive disinfecting protocols and social distancing and face-covering guidance meet or exceed requirements of all of our health department jurisdictions, and we are updating and adjusting those requirements as the situation evolves, and communicating expectations across our footprint. Our multi-layered safety plan incorporates a lot of flexibility, including remote work when practical, and it is working well to minimize opportunities for infection within the bank.

Our branch lobbies have remained open and we have encouraged the use of the drive through for social distancing purposes. Branch hours have been adjusted on a case by case basis depending upon employee availability. No branch has had their hours changed or closed for an extended period of time. Our clients have received support through payment deferral programs as well as a variety of options from the SBA including the PPP, the Economic Injury Disaster Loan and other deferral and automatic debt relief programs. Our participation in the PPP will increase our loan balances and loan interest income over the period those loans are outstanding. As of June 30, 2020, we had $941.4 million of PPP loans outstanding and had granted short-term payment deferrals on $1.58 billion of loans.

We have launched two community focused initiatives in response to the pandemic, putting more than $1 million to work in support of our local communities. The Pass It On Project is designed to provide small businesses more than $500,000 to perform services for community members whose lives have been adversely impacted by the pandemic or the economic downturn it caused. The program will support more than 350 small businesses and many more individuals in the Northwest as we continue to manage through the pandemic and economic recovery. The COVID-19 Community Relief fund put more than $500,000 in the hands of 25 non-profit organizations working to provide relief for those affected by the pandemic in the Northwest. We have also been working with our non-profit community partners by lifting restrictions on sponsorships and contributions to allow organizations to rededicate the funds to COVID-19 response and recovery.
The measures we have taken in response to the pandemic have enabled us to continue all operations as COVID-19 spread in the Northwest. We continue to monitor the pandemic and adjust our response in concert with local government and healthcare officials.
For additional information on the impact and potential impact of COVID-19 on our business, financial condition, liquidity, capital and results of operations, see Part II Item 1A “Risk Factors” of this report.

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Earnings Summary
Comparison of current quarter to prior year period
The Company reported net income for the second quarter of $36.6 million or $0.52 per diluted common share, compared to $51.7 million or $0.71 per diluted common share for the second quarter of 2019. Net interest income for the three months ended June 30, 2020 was $121.9 million, a decrease of $3.3 million from the prior year period. The decrease was a result of a reduction in interest income on loans due to the lower rate environment partially offset by an increase in interest income on loans and securities due to higher average balances. The decrease in interest income was also partially offset by favorable decreases in interest expense from interest-bearing deposits and FHLB advances resulting from lower rates.
The provision for credit losses for the second quarter of 2020 was $33.5 million compared to $218 thousand for the second quarter of 2019. The increase in provision expense for the second quarter of 2020 compared to one year ago was principally the result of COVID-19 and the corresponding downturn in local, national and world economies as well as increased unemployment rates.
Noninterest income for the current quarter was $37.3 million, an increase of $11.6 million from the prior year period. The increase was principally due to the sale of Visa Class B restricted stock that resulted in an observable market price and subsequent upward adjustment to the carrying value of remaining shares for a total gain of $16.4 million. Partially offsetting these gains were decreases in deposit account and treasury management fees and a BOLI benefit that was recognized during the second quarter of 2019.
Total noninterest expense for the quarter ended June 30, 2020 was $80.8 million, a decrease of $5.9 million from the prior year period. This decrease was primarily driven by the lower compensation and benefits expense related to the deferral of labor costs for the PPP loans. Legal and professional fees also declined but were partially offset by an increase in other expenses.
Comparison of current year-to-date to prior year period
The Company reported net income for the six months ended June 30, 2020 of $51.2 million or $0.72 per diluted common share, compared to $97.6 million or $1.33 per diluted common share for the same period in 2019. Net interest income for the six months ended June 30, 2020 was $244.3 million, a decrease of $1.9 million from the prior year period. The decrease was a result of a reduction in interest income on loans due to the lower rate environment partially offset by increases in interest income on loans and securities due to higher average balances. The decrease in interest income was also partially offset by favorable decreases in interest expense from interest-bearing deposits and FHLB advances primarily resulting from lower rates.
The provision for credit losses for the six months ended June 30, 2020 was $75.0 million compared to a provision of $1.6 million for the first six months of 2019. The increase in the provision for the first six months of 2020 compared to the same period in 2019 was due to the ongoing COVID-19 pandemic which has negatively affected the economy and increased unemployment rates, similar to the quarterly results above.
Noninterest income for the six months ended June 30, 2020 was $58.5 million, an increase of $11.1 million from the prior year period. The increase was primarily due to the previously noted $16.4 million gain from the sale and upward adjustment to the carrying value of the Visa Class B restricted shares to the market price and loan revenue. These increases were partially offset by decreases in deposit account and treasury management fees.
For the six months ended June 30, 2020, noninterest expense was $165.1 million, a decrease of $6.3 million from $171.4 million for the same period in 2019. The decrease from the prior year period was driven by lower legal and professional fees, compensation and employee benefits and B&O tax expenses which were partially offset by higher other expenses.

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Net Interest Income
The following table sets forth the average balances of all major categories of interest-earning assets and interest-bearing liabilities, the total dollar amounts of interest income on interest-earning assets and interest expense on interest-bearing liabilities, the average yield earned on interest-earning assets and average cost of interest-bearing liabilities by category and, in total, net interest income and net interest margin:
 
 
Three Months Ended June 30,
 
Three Months Ended June 30,
 
 
2020
 
2019
 
 
Average
Balances
 
Interest
Earned / Paid
 
Average
Rate
 
Average
Balances
 
Interest
Earned / Paid
 
Average
Rate
 
 
(dollars in thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Loans, net (1)(2)
 
$
9,546,099

 
$
106,737

 
4.50
%
 
$
8,601,819

 
$
117,984

 
5.50
%
Taxable securities
 
3,189,805

 
18,343

 
2.31
%
 
2,506,672

 
15,918

 
2.55
%
Tax exempt securities (2)
 
401,888

 
2,857

 
2.86
%
 
463,077

 
3,433

 
2.97
%
Interest-earning deposits with banks
 
519,927

 
136

 
0.11
%
 
35,159

 
207

 
2.36
%
Total interest-earning assets
 
13,657,719

 
128,073

 
3.77
%
 
11,606,727

 
137,542

 
4.75
%
Other earning assets
 
234,019

 
 
 
 
 
233,273

 
 
 
 
Noninterest-earning assets
 
1,256,750

 
 
 
 
 
1,256,413

 
 
 
 
Total assets
 
$
15,148,488

 
 
 
 
 
$
13,096,413

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts (3)
 
2,939,657

 
974

 
0.13
%
 
2,539,757

 
2,896

 
0.46
%
Interest-bearing demand (3)
 
1,213,182

 
339

 
0.11
%
 
1,066,876

 
428

 
0.16
%
Savings accounts (3)
 
976,785

 
38

 
0.02
%
 
891,341

 
43

 
0.02
%
Interest-bearing public funds, other than certificates of deposit (3)
 
559,256

 
393

 
0.28
%
 
273,387

 
1,023

 
1.50
%
Certificates of deposit
 
348,227

 
350

 
0.40
%
 
403,514

 
586

 
0.58
%
Total interest-bearing deposits
 
6,037,107

 
2,094

 
0.14
%
 
5,174,875

 
4,976

 
0.39
%
FHLB advances and FRB borrowings
 
407,035

 
1,796

 
1.77
%
 
602,041

 
4,708

 
3.14
%
Subordinated debentures
 
35,207

 
468

 
5.35
%
 
35,392

 
468

 
5.30
%
Other borrowings and interest-bearing liabilities
 
34,663

 
23

 
0.27
%
 
29,117

 
154

 
2.12
%
Total interest-bearing liabilities
 
6,514,012

 
4,381

 
0.27
%
 
5,841,425

 
10,306

 
0.71
%
Noninterest-bearing deposits
 
6,183,308

 
 
 
 
 
5,011,496

 
 
 
 
Other noninterest-bearing liabilities
 
196,819

 
 
 
 
 
147,335

 
 
 
 
Shareholders’ equity
 
2,254,349

 
 
 
 
 
2,096,157

 
 
 
 
Total liabilities & shareholders’ equity
 
$
15,148,488

 
 
 
 
 
$
13,096,413

 
 
 
 
Net interest income (tax equivalent)
 
$
123,692

 
 
 
 
 
$
127,236

 
 
Net interest margin (tax equivalent)
 
3.64
%
 
 
 
 
 
4.40
%
__________
(1)
Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $5.1 million and $2.1 million for the three months ended June 30, 2020 and 2019, respectively. The incremental accretion income on acquired loans was $1.7 million and $2.7 million for the three months ended June 30, 2020 and 2019, respectively.
(2)
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.2 million and $1.4 million for the three months ended June 30, 2020 and 2019, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $600 thousand and $721 thousand for the three months ended June 30, 2020 and 2019, respectively.
(3)
Beginning July 2019, interest-bearing public funds, other than certificates of deposit are presented separately in this table. Prior period amounts have been reclassified to conform to current period presentation.

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The following table sets forth the average balances of all major categories of interest-earning assets and interest-bearing liabilities, the total dollar amounts of interest income on interest-earning assets and interest expense on interest-bearing liabilities, the average yield earned on interest-earning assets and average cost of interest-bearing liabilities by category and, in total, net interest income and net interest margin:
 
 
Six Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
 
Average
Balances
 
Interest
Earned / Paid
 
Average
Rate (3)
 
Average
Balances
 
Interest
Earned / Paid
 
Average
Rate (3)
 
 
(dollars in thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Loans, net (1)(2)
 
$
9,180,927

 
$
215,402

 
4.72
%
 
$
8,504,781

 
$
227,699

 
5.40
%
Taxable securities
 
3,199,458

 
39,431

 
2.48
%
 
2,571,692

 
33,333

 
2.61
%
Tax exempt securities (2)
 
405,673

 
5,771

 
2.86
%
 
482,812

 
7,191

 
3.00
%
Interest-earning deposits with banks
 
286,577

 
277

 
0.19
%
 
25,016

 
295

 
2.38
%
Total interest-earning assets
 
13,072,635

 
$
260,881

 
4.01
%
 
11,584,301

 
$
268,518

 
4.67
%
Other earning assets
 
233,190

 
 
 
 
 
232,678

 
 
 
 
Noninterest-earning assets
 
1,266,235

 
 
 
 
 
1,255,381

 
 
 
 
Total assets
 
$
14,572,060

 
 
 
 
 
$
13,072,360

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts (3)
 
2,786,794

 
2,702

 
0.19
%
 
2,562,742

 
5,481

 
0.43
%
Interest-bearing demand (3)
 
1,169,436

 
823

 
0.14
%
 
1,070,715

 
792

 
0.15
%
Savings accounts (3)
 
937,030

 
81

 
0.02
%
 
893,913

 
86

 
0.02
%
Interest-bearing public funds, other than certificates of deposit (3)
 
457,328

 
1,296

 
0.57
%
 
268,105

 
1,953

 
1.47
%
Certificates of deposit
 
359,567

 
834

 
0.47
%
 
405,018

 
1,162

 
0.58
%
Total interest-bearing deposits
 
5,710,155

 
5,736

 
0.20
%
 
5,200,493

 
9,474

 
0.37
%
FHLB advances and FRB borrowings
 
658,072

 
6,025

 
1.84
%
 
551,018

 
7,393

 
2.71
%
Subordinated debentures
 
35,230

 
936

 
5.34
%
 
35,415

 
936

 
5.33
%
Other borrowings and interest-bearing liabilities
 
41,514

 
159

 
0.77
%
 
35,375

 
369

 
2.10
%
Total interest-bearing liabilities
 
6,444,971

 
$
12,856

 
0.40
%
 
5,822,301

 
$
18,172

 
0.63
%
Noninterest-bearing deposits
 
5,711,242

 
 
 
 
 
5,027,966

 
 
 
 
Other noninterest-bearing liabilities
 
192,147

 
 
 
 
 
151,457

 
 
 
 
Shareholders’ equity
 
2,223,700

 
 
 
 
 
2,070,636

 
 
 
 
Total liabilities & shareholders’ equity
 
$
14,572,060

 
 
 
 
 
$
13,072,360

 
 
 
 
Net interest income (tax equivalent)
 
$
248,025

 
 
 
 
 
$
250,346

 
 
Net interest margin (tax equivalent)
 
3.82
%
 
 
 
 
 
4.36
%
__________
(1)
Nonaccrual loans have been included in the table as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $7.5 million and $4.3 million for the six months ended June 30, 2020 and 2019, respectively. The incremental accretion income on acquired loans was $3.2 million and $4.7 million for the six months ended June 30, 2020 and 2019, respectively.
(2)
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.5 million and $2.7 million for the six months ended June 30, 2020 and 2019, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.2 million and $1.5 million for the six months ended June 30, 2020 and 2019, respectively.
(3)
Beginning July 2019, interest-bearing public funds, other than certificates of deposit are presented separately in this table. Prior period amounts have been reclassified to conform to current period presentation.

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The following table sets forth the total dollar amount of change in interest income and interest expense. The changes have been segregated for each major category of interest-earning assets and interest-bearing liabilities into amounts attributable to changes in volume and changes in rates. Changes attributable to the combined effect of volume and interest rates have been allocated proportionately to the changes due to volume and the changes due to interest rates:
 
 
Three Months Ended June 30, 2020 Compared to 2019 Increase (Decrease) Due to
 
 
Volume
 
Rate
 
Total (1)
 
 
(in thousands)
Interest Income
 
 
 
 
 
 
Loans, net
 
$
12,060

 
$
(23,307
)
 
$
(11,247
)
Taxable securities
 
4,034

 
(1,609
)
 
2,425

Tax exempt securities
 
(439
)
 
(137
)
 
(576
)
Interest-earning deposits with banks
 
303

 
(374
)
 
(71
)
Interest income
 
$
15,958

 
$
(25,427
)
 
$
(9,469
)
Interest Expense
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Money market accounts
 
$
396

 
$
(2,318
)
 
$
(1,922
)
Interest-bearing demand
 
54

 
(143
)
 
(89
)
Savings accounts
 
5

 
(10
)
 
(5
)
Interest-bearing public funds, other than certificates of deposit
 
580

 
(1,210
)
 
(630
)
Certificates of deposit
 
(73
)
 
(163
)
 
(236
)
Total interest on deposits
 
962

 
(3,844
)
 
(2,882
)
FHLB advances and FRB borrowings
 
(1,242
)
 
(1,670
)
 
(2,912
)
Other borrowings and interest-bearing liabilities
 
37

 
(168
)
 
(131
)
Interest expense
 
$
(243
)
 
$
(5,682
)
 
$
(5,925
)
__________
(1) The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of the change in each.

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The following table sets forth the total dollar amount of change in interest income and interest expense. The changes have been segregated for each major category of interest-earning assets and interest-bearing liabilities into amounts attributable to changes in volume and changes in rates. Changes attributable to the combined effect of volume and interest rates have been allocated proportionately to the changes due to volume and the changes due to interest rates:
 
 
Six Months Ended June 30, 2020 Compared to 2019 Increase (Decrease) Due to
 
 
Volume
 
Rate
 
Total (1)
 
 
(in thousands)
Interest Income
 
 
 
 
 
 
Loans, net
 
$
17,226

 
$
(29,523
)
 
$
(12,297
)
Taxable securities
 
7,804

 
(1,706
)
 
6,098

Tax exempt securities
 
(1,109
)
 
(311
)
 
(1,420
)
Interest earning deposits with banks
 
481

 
(499
)
 
(18
)
Interest income
 
$
24,402

 
$
(32,039
)
 
$
(7,637
)
Interest Expense
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Money market accounts
 
443

 
(3,222
)
 
(2,779
)
Interest-bearing demand
 
71

 
(40
)
 
31

Savings accounts
 
5

 
(10
)
 
(5
)
Interest-bearing public funds, other than certificates of deposit
 
926

 
(1,583
)
 
(657
)
Certificates of deposit
 
(121
)
 
(207
)
 
(328
)
Total interest on deposits
 
1,324

 
(5,062
)
 
(3,738
)
FHLB advances and FRB borrowings
 
1,263

 
(2,631
)
 
(1,368
)
Other borrowings
 
79

 
(289
)
 
(210
)
Interest expense
 
$
2,666

 
$
(7,982
)
 
$
(5,316
)
__________
(1) The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of the change in each.


Comparison of current quarter to prior year period
Net interest income for the second quarter of 2020 was $121.9 million, down from $125.1 million for the same quarter in 2019. The decrease was a result of a reduction in interest income on loans due to the lower rate environment. This decrease was partially offset by the increase in the average balance of the loan portfolio, an increase in interest income from securities due to higher average balances and decreases in interest expense on interest-bearing deposits and FHLB advances due to lower rates.
The Company’s net interest margin (tax equivalent) decreased to 3.64% in the second quarter of 2020, from 4.40% for the prior year period. This decrease was driven by lower rates on the loan and securities portfolios as well as higher average interest-earning deposits with banks. The Company’s operating net interest margin (tax equivalent)(1) decreased to 3.64% from 4.38% during the second quarter of 2019. The decrease was due to the items previously noted for the decrease in the net interest margin.
Comparison of current year-to-date to prior year period
The results for the first half of 2020 compared to the same period in 2019 were similar to the quarterly results. Net interest income for the six months ended June 30, 2020 was $244.3 million, relative to $246.1 million for the prior year period. The decrease in net interest income on loans was due to the lower rate environment partially offset by increases in interest income on loans and securities due to higher average balances. The decrease in interest income was also partially offset by favorable decreases in interest expense from interest-bearing deposits and FHLB advances primarily resulting from lower rates.
(1) Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the “Non-GAAP financial measures” section in this Management’s Discussion and Analysis.

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The Company’s net interest margin (tax equivalent) decreased to 3.82% for the first six months of 2020, from 4.36% for the prior year period. The decrease in the Company’s net interest margin (tax equivalent) was a result of lower rates on our loans and securities, partially offset by lower rates on the deposits and FHLB borrowings. The Company’s operating net interest margin (tax equivalent) for the six months ended June 30, 2020 was 3.82% compared to 4.36% for the six months ended June 30, 2019. The decrease was due to the items previously noted for the decrease in the net interest margin.
Provision for Credit Losses
Comparison of current quarter to prior year period
During the second quarter of 2020, the Company recorded a $33.5 million net provision for credit losses, under the CECL methodology, compared to a $218 thousand net provision, under the previous ALLL methodology, during the second quarter of 2019. The increase in provision expense for the second quarter of 2020 compared to one year ago was principally the result of the COVID-19 pandemic and the corresponding downturn in local, national and world economies as well as increased unemployment rates. As a result, we have increased our reserves for lifetime credit losses.
The net provision for credit losses recorded during the current quarter also included management’s ongoing assessment of the credit quality of the Company’s loan portfolio. Other factors affecting the provision include net charge-offs, credit quality migration, and size and composition of the loan portfolio and changes in the economic environment during the second quarter of 2020. The amount of provision was calculated in accordance with the Company’s methodology for determining the ACL, discussed in Note 5 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Comparison of current year-to-date to prior year period
The provision for credit losses for the six months ended June 30, 2020 was $75.0 million compared to $1.6 million during the same period in 2019. The increase in the provision for the first six months of 2020 was due to the same factors discussed above for the quarterly provision for credit losses. The amount of provision was calculated in accordance with the Company’s methodology for determining the ACL, discussed in Note 5 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Noninterest Income
The following table presents the significant components of noninterest income and the related dollar and percentage change from period to period:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
$ Change
 
% Change (1)
 
2020
 
2019
 
$ Change
 
% Change
 
 
(dollars in thousands)
Deposit account and treasury management fees
 
$
6,092

 
$
9,035

 
$
(2,943
)
 
(33
)%
 
$
13,880

 
$
18,015

 
$
(4,135
)
 
(23
)%
Card revenue
 
3,079

 
3,763

 
(684
)
 
(18
)%
 
6,597

 
7,425

 
(828
)
 
(11
)%
Financial services and trust revenue
 
3,163

 
3,425

 
(262
)
 
(8
)%
 
6,228

 
6,382

 
(154
)
 
(2
)%
Loan revenue
 
5,607

 
3,596

 
2,011

 
56
 %
 
10,197

 
5,985

 
4,212

 
70
 %
Bank owned life insurance
 
1,618

 
1,597

 
21

 
1
 %
 
3,214

 
3,116

 
98

 
3
 %
Investment securities gains, net
 
16,425

 
285

 
16,140

 
N/M

 
16,674

 
2,132

 
14,542

 
682
 %
Other
 
1,275

 
3,947

 
(2,672
)
 
(68
)%
 
1,676

 
4,289

 
(2,613
)
 
(61
)%
Total noninterest income
 
$
37,259

 
$
25,648

 
$
11,611

 
45
 %
 
$
58,466

 
$
47,344

 
$
11,122

 
23
 %
__________
1) Percentage changes greater than +/- 1000% are considered not meaningful and are presented as “N/M”.

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Comparison of current quarter to prior year period
Noninterest income was $37.3 million for the second quarter of 2020, compared to $25.6 million for the same period in 2019. The increase was principally due to the sale of 17,360 shares of Visa Class B restricted stock for a gain of $3.0 million which resulted in an observable market price. As a result, the Company wrote up its remaining 77,683 Visa Class B restricted shares to fair value resulting in a gain of $13.4 million, for a total gain of $16.4 million. Based on the transfer restrictions and uncertainty of Visa’s covered litigation, the Visa Class B restricted shares were previously carried at a zero-cost basis. Partially offsetting these gains were decreases of $1.2 million in overdraft fees, $1.1 million in treasury management fees and a $3.0 million BOLI benefit that was recognized during the second quarter of 2019. The decrease in overdraft fees was due to an overall decrease in the number of transactions during this period as a result of the COVID-19 pandemic as well as clients generally carrying higher balances in their deposit accounts.
Comparison of current year-to-date to prior year period
For the six months ended June 30, 2020, noninterest income was $58.5 million compared to $47.3 million for the same period in 2019, an increase of $11.1 million. The increase was primarily due to the previously noted $16.4 million gain from the sale and write-up of Visa Class B restricted shares to fair value during the second quarter of 2020. Loan revenue increased during the first half of 2020 due to increases in investor premiums earned due to a higher volume of mortgage loan originations through our held for sale program and interest rate swap income. These increases were partially offset by decreases in treasury management fees and overdraft fees which are included in the deposit account and treasury management fees line item in the table above.
Noninterest Expense
The following table presents the significant components of noninterest expense and the related dollar and percentage change from period to period:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
$ Change
 
% Change
 
2020
 
2019
 
$ Change
 
% Change
 
 
(dollars in thousands)
Compensation and employee benefits
 
$
46,043

 
$
52,015

 
$
(5,972
)
 
(11
)%
 
$
100,885

 
$
104,100

 
$
(3,215
)
 
(3
)%
Occupancy
 
8,812

 
8,712

 
100

 
1
 %
 
18,009

 
17,521

 
488

 
3
 %
Data processing
 
5,454

 
4,601

 
853

 
19
 %
 
10,294

 
9,270

 
1,024

 
11
 %
Legal and professional services
 
3,483

 
6,554

 
(3,071
)
 
(47
)%
 
5,585

 
11,127

 
(5,542
)
 
(50
)%
Amortization of intangibles
 
2,210

 
2,649

 
(439
)
 
(17
)%
 
4,520

 
5,397

 
(877
)
 
(16
)%
B&O taxes
 
1,244

 
1,411

 
(167
)
 
(12
)%
 
1,868

 
3,287

 
(1,419
)
 
(43
)%
Advertising and promotion
 
837

 
870

 
(33
)
 
(4
)%
 
2,142

 
1,844

 
298

 
16
 %
Regulatory premiums
 
1,034

 
956

 
78

 
8
 %
 
1,068

 
1,940

 
(872
)
 
(45
)%
Net benefit of operation of OREO
 
(200
)
 
(705
)
 
505

 
(72
)%
 
(188
)
 
(592
)
 
404

 
(68
)%
Other
 
11,916

 
9,665

 
2,251

 
23
 %
 
20,921

 
17,534

 
3,387

 
19
 %
Total noninterest expense
 
$
80,833

 
$
86,728

 
$
(5,895
)
 
(7
)%
 
$
165,104

 
$
171,428

 
$
(6,324
)
 
(4
)%
Comparison of current quarter to prior year period
Noninterest expense was $80.8 million for the second quarter of 2020, a decrease of $5.9 million from $86.7 million for the prior year period. This decrease was primarily driven by lower compensation and employee benefits and legal and professional expenses partially offset by higher other expenses. The decline in compensation and employee benefits was due to labor costs capitalized related to the origination of PPP loans during the second quarter of 2020 which reduced compensation and benefits expense. These labor costs are capitalized and amortized as a reduction in interest income over the life of the loan. Legal and professional fees also declined compared to the same period in 2019 primarily due to lower expenses tied to digital corporate initiatives. Partially offsetting these decreases was a $2.6 million increase in the provision for unfunded loan commitments which is included in other noninterest expense in the table above.

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Comparison of current year-to-date to prior year period
For the six months ended June 30, 2020, noninterest expense was $165.1 million, compared to $171.4 million for the same period in 2019, a decrease of $6.3 million. The decrease from the prior year period was driven by lower legal and professional fees, compensation and employee benefits and B&O tax expenses which were partially offset by higher other expenses. Legal and professional fees were down compared to the same period in 2019 primarily due to lower expenses tied to digital corporate initiatives. The decrease in compensation and benefits was similar to the quarterly results which related to the capitalization of labor costs on the origination of PPP loans while B&O taxes were down due to a refund received for taxes paid in prior periods. Partially offsetting these decreases was an increase in the provision for unfunded loan commitments which is included in other noninterest expense in the table above.
The provision for unfunded loan commitments for the periods indicated are as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Provision (recapture) for unfunded loan commitments
 
$
2,800

 
$
200

 
$
3,800

 
$
(350
)
Income Taxes
We recorded an income tax provision of $8.2 million for the second quarter of 2020, compared to a provision of $12.1 million for the same period in 2019, with effective tax rates of 18% and 19% for the second quarter of 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, we recorded income tax provisions of $11.4 million and $22.9 million, respectively, with effective tax rates of 18% for the current year and 19% for the prior year period. Our effective tax rate remains lower than the statutory tax rate due to tax-exempt income from municipal securities, BOLI and certain loan receivables. For additional information, please refer to the Company’s annual report on Form 10-K for the year ended December 31, 2019.
FINANCIAL CONDITION
Total assets were $15.92 billion at June 30, 2020, an increase of $1.84 billion from December 31, 2019. Cash and cash equivalents increased $850.0 million. Loans increased $1.03 billion during the first six months of 2020, which was primarily the result of new loan production, supplemented by PPP loans, partially offset by payments. Debt securities available for sale were $3.69 billion at June 30, 2020, a decrease of $52.4 million from December 31, 2019. Total liabilities were $13.64 billion as of June 30, 2020, an increase of $1.72 billion from December 31, 2019. The increase was primarily due to an increase in deposits driven by PPP loan funds being deposited into our clients’ deposit accounts, partially offset by a decrease in FHLB advances.
Investment Securities
At June 30, 2020, the Company’s investment portfolio primarily consisted of debt securities available for sale totaling $3.69 billion compared to $3.75 billion at December 31, 2019. The decrease in the debt securities portfolio from year-end is due to $458.9 million in maturities, repayments and sales and $12.1 million in premium amortization offset by $259.2 million in purchases and $159.4 million in net unrealized gain. The average duration of our debt securities investment portfolio was approximately 4 years and 6 months at June 30, 2020. This duration takes into account calls, where appropriate, and consensus prepayment speeds.
The investment securities are used by the Company as a component of its balance sheet management strategies. From time-to-time, securities may be sold to reposition the portfolio in response to strategies developed by the Company’s asset liability management committee. In accordance with our investment strategy, management monitors market conditions with a view to realize gains on its available for sale securities portfolio when prudent.
The Company performs a quarterly assessment of the debt securities available for sale in its investment portfolio that have an unrealized loss to determine whether the decline in the fair value of these securities below their amortized cost basis has resulted in a credit loss. A credit loss exists when it becomes probable that the Company will be unable to recover the entire amortized cost basis of its investment. The Company’s impairment assessment takes into consideration factors such as defaults or deferrals of scheduled interest or principal, external credit ratings and recent downgrades, internal assessment of credit quality, and whether the Company intends to sell the security and whether it is more likely than not it will be required to sell the security prior to recovery of its amortized cost basis. If a decline in fair value is determined to result in a credit loss, an allowance is recorded.

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When there are credit losses associated with a debt security and the Company does not have the intent to sell the security and it is more likely than not that it will not have to sell the security before recovery of its cost basis, the Company will separate the amount of the impairment into the amount that is credit-related and the amount related to non-credit factors. The credit-related impairment is recognized in earnings through an allowance and the non-credit-related impairment is recognized in accumulated other comprehensive income.
At June 30, 2020, the market value of debt securities available for sale had a net unrealized gain of $202.5 million compared to a net unrealized gain of $43.0 million at December 31, 2019. The change in valuation was the result of fluctuations in market interest rates during the six months ended June 30, 2020. At June 30, 2020, the Company had $124.0 million of debt securities available for sale with gross unrealized losses of $1.5 million; however, we did not consider these investment securities to have an indicated credit loss.
The following table sets forth our securities portfolio by type for the dates indicated:
 
 
June 30, 2020
 
December 31, 2019
 
 
(in thousands)
Debt securities available for sale:
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,865,030

 
$
2,892,950

Other asset-backed securities
 
224,276

 
196,050

State and municipal securities
 
468,615

 
488,802

U.S. government agency and government-sponsored enterprise securities
 
135,866

 
168,340

Total debt securities available for sale
 
$
3,693,787

 
$
3,746,142

Equity securities
 
13,425

 
—

Total investment securities
 
$
3,707,212

 
$
3,746,142

For further information on our investment portfolio and recent equity securities transactions, see Note 3 of the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Credit Risk Management
The extension of credit in the form of loans or other credit substitutes to individuals and businesses is one of our principal commerce activities. Our policies, as well as applicable laws, and regulations, require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies, and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry and type of borrower and by limiting the aggregation of debt to a single borrower.
In analyzing our existing portfolio, we review our consumer and residential loan portfolios by their performance as a pool of loans, since no single loan is individually significant or judged by its risk rating, size or potential risk of loss. In contrast, the monitoring process for the commercial business, real estate construction, and commercial real estate portfolios includes periodic reviews of individual loans with risk ratings assigned to each loan and performance judged on a loan-by-loan basis.
We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. In the event that full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an individually measured allowance is required for collateral dependent nonaccrual loans with balances equal to or greater than $500,000 and with respect to which foreclosure is probable. For the individually measured collateral dependent nonaccrual loan, the allowance for credit losses is equal to the difference between amortized cost of the loan and the determined value of the collateral. However, if the determined value of the collateral is greater than the amortized cost of the loan, no allowance for credit losses will be added for these loans.
For additional discussion on our methodology in managing credit risk within our loan portfolio, see the “Allowance for Credit Losses” section in this Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” of the Company’s 2019 Annual Report on Form 10-K.

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Loan policies, credit quality criteria, portfolio guidelines and other controls are established under the guidance of our Chief Credit Officer and approved, as appropriate, by the Board of Directors. Credit Administration, together with the management loan committee, has the responsibility for administering the credit approval process. As another part of its control process, we use an internal credit review and examination function to provide reasonable assurance that loans and commitments are made and maintained as prescribed by our credit policies. Examinations are performed to ensure continued performance and proper risk assessment.
Loan Portfolio Analysis
Our wholly owned banking subsidiary Columbia State Bank is a full service commercial bank, which originates a wide variety of loans, and focuses its lending efforts on originating commercial real estate and commercial business loans.
 
 
June 30, 2020
 
% of Total
 
December 31, 2019
 
% of Total
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,032,643

 
41.2
%
 
$
3,945,853

 
45.1
%
Commercial business
 
3,859,513

 
39.5
%
 
2,989,613

 
34.2
%
Agriculture
 
845,950

 
8.7
%
 
765,371

 
8.8
%
Construction
 
304,015

 
3.1
%
 
361,533

 
4.1
%
Consumer loans:
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
692,837

 
7.1
%
 
637,325

 
7.3
%
Other consumer
 
36,940

 
0.4
%
 
43,770

 
0.5
%
Total loans
 
$
9,771,898

 
100.0
%
 
$
8,743,465

 
100.0
%
Loans held for sale
 
$
28,803

 
 
 
$
17,718

 
 
Total loans increased $1.03 billion from year-end 2019. This increase was primarily the result of providing $941.6 million of PPP loans, net of $19.6 million in net deferred fees at June 30, 2020. The PPP loans were originated to provide financial support to small and medium-size businesses to cover payroll and certain other expenses during the COVID-19 pandemic. To further assist our borrowers, the Company also offered short-term loan modifications to support borrowers during the COVID-19 pandemic. At June 30, 2020, we had granted short-term payment deferrals on $1.58 billion of loans. The loan portfolio continues to be diversified, with the intent to mitigate risk by monitoring concentration in any one sector.
The following table provides additional detail related to the net discount of acquired and purchased loans by acquisition:
 
 
June 30, 2020
 
December 31, 2019
 
 
(in thousands)
Acquisition:
 
 
 
 
Pacific Continental
 
$
10,858

 
$
13,314

Intermountain
 
1,420

 
1,614

West Coast
 
2,126

 
2,675

Other
 
2,787

 
(1,378
)
Total net discount at period end
 
$
17,191

 
$
16,225

Commercial Real Estate Loans: Commercial real estate loans are secured by properties located within our primary market areas and typically, have loan-to-value ratios of 80% or lower at origination. Our underwriting standards for commercial and multifamily residential loans generally require that the loan-to-value ratio for these loans not exceed 75% of appraised value, cost, or discounted cash flow value, as appropriate, and that commercial properties maintain debt coverage ratios (net operating income divided by annual debt servicing) of 1.2 or better. However, underwriting standards can be influenced by competition and other factors. We endeavor to maintain the highest practical underwriting standards while balancing the need to remain competitive in our lending practices.
Commercial Business Loans: We are committed to providing competitive commercial lending in our primary market area. Management expects a continued focus within its commercial lending products and to emphasize, in particular, relationship banking with businesses and business owners.

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Table of Contents

Agriculture Loans: Agricultural lending includes agricultural real estate and production loans and lines of credit within our primary market area. We are committed to our Pacific Northwest communities offering seasonal and longer-term loans and operating lines of credit by lending officers with expertise in the agricultural communities we serve. Typical loan-to-value ratios on term loans can range from 55% to 80% depending upon the type of loan. Operating lines of credit require the borrower to provide a 20% to 25% equity investment. The debt coverage ratio is generally 1.25:1 or better on all term loans.
Construction Loans: We originate a variety of real estate construction loans. Underwriting guidelines for these loans vary by loan type but include loan-to-value limits, term limits and loan advance limits, as applicable. Our underwriting guidelines for commercial and multifamily residential real estate construction loans generally require that the loan-to-value ratio not exceed 75% and stabilized debt coverage ratios (net operating income divided by annual debt service) of 1.2 or better. As noted above, underwriting standards can be influenced by competition and other factors. However, we endeavor to maintain the highest practical underwriting standards while balancing the need to remain competitive in our lending practices.
One-to-four Family Residential Real Estate Loans: One-to-four family residential loans, including home equity loans and lines of credit, are secured by properties located within our primary market areas and, typically, have loan-to-value ratios of 80% or lower at origination.
Other Consumer Loans: Consumer loans include automobile loans, boat and recreational vehicle financing, and other miscellaneous personal loans.
Foreign Loans: The Company has no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon and Idaho.
For additional information on our loan portfolio, including amounts pledged as collateral on borrowings, see Note 4 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Nonperforming Assets
Nonperforming assets consist of: (i) nonaccrual loans, which generally are loans placed on a nonaccrual basis when the loan becomes past due 90 days or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan, (ii) OREO and (iii) OPPO, if applicable.

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The following table sets forth, at the dates indicated, information with respect to our nonaccrual loans and total nonperforming assets:
 
 
June 30, 2020
 
December 31, 2019
 
 
(dollars in thousands)
Nonperforming assets
 
 
 
 
Nonaccrual loans:
 
 
 
 
Commercial loans:
 
 
 
 
Commercial real estate
 
$
11,155

 
$
3,799

Commercial business
 
20,525

 
20,937

Agriculture
 
19,162

 
5,023

Construction
 
217

 
—

Consumer loans:
 
 
 
 
One-to-four family residential real estate
 
2,662

 
3,292

Other consumer
 
11

 
9

Total nonaccrual loans
 
53,732

 
33,060

OREO and OPPO
 
747

 
552

Total nonperforming assets
 
$
54,479

 
$
33,612

 
 
 
 
 
Loans, net of unearned income
 
$
9,771,898

 
$
8,743,465

Total assets
 
$
15,920,944

 
$
14,079,524

 
 
 
 
 
Nonperforming loans to period-end loans
 
0.55
%
 
0.38
%
Nonperforming assets to period-end assets
 
0.34
%
 
0.24
%
At June 30, 2020, nonperforming assets were $54.5 million, compared to $33.6 million at December 31, 2019. Nonperforming assets increased $20.9 million during the six months ended June 30, 2020, primarily due to a $14.1 million increase in nonaccrual agriculture loans and a $7.4 million increase in nonaccrual commercial real estate loans. For information on OREO, see Note 6 of the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Allowance for Credit Losses
The ACL is an accounting estimate of expected credit losses in our loan portfolio at the balance sheet date. The provision for credit losses is the expense recognized in the Consolidated Statements of Income to adjust the ACL to the levels deemed appropriate by management, as measured by the Company’s credit loss estimation methodologies. The allowance for unfunded commitments and letters of credit is maintained at a level believed by management to be sufficient to absorb estimated expected losses related to these unfunded credit facilities at the balance sheet date.
At June 30, 2020, our ACL was $151.5 million, or 1.55% of total loans (excluding loans held for sale). This compares with an ALLL of $84.0 million, or 0.96% of total loans (excluding loans held for sale) at December 31, 2019 and an ALLL of $80.5 million or 0.93% of total loans (excluding loans held for sale) at June 30, 2019. The increase was primarily the result of COVID-19 and the corresponding downturn in the local, national and world economies as well as increased unemployment rates. The ACL at June 30, 2020 does not include a reserve for the PPP loans as they are fully guaranteed by the SBA.

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The following table provides an analysis of the Company’s ACL at the dates and the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(dollars in thousands)
Beginning Balance
 
$
122,074

 
$
83,274

 
$
83,968

 
$
83,369

Impact of adopting ASC 326
 
—

 
—

 
1,632

 
—

Charge-offs:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
(564
)
 
(101
)
 
(1,242
)
Commercial business
 
(5,442
)
 
(4,316
)
 
(7,126
)
 
(5,822
)
Agriculture
 
—

 
(61
)
 
(4,726
)
 
(139
)
Construction
 
—

 
(20
)
 
—

 
(215
)
Consumer loans:
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
—

 
(321
)
 
(10
)
 
(802
)
Other consumer
 
(198
)
 
(5
)
 
(466
)
 
(55
)
Total charge-offs
 
(5,640
)
 
(5,287
)
 
(12,429
)
 
(8,275
)
Recoveries:
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
Commercial real estate
 
13

 
556

 
27

 
1,070

Commercial business
 
811

 
492

 
1,671

 
1,019

Agriculture
 
1

 
64

 
42

 
122

Construction
 
235

 
691

 
677

 
774

Consumer loans:
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
422

 
450

 
704

 
784

Other consumer
 
130

 
59

 
254

 
74

Total recoveries
 
1,612

 
2,312

 
3,375

 
3,843

Net (charge-offs) recoveries
 
(4,028
)
 
(2,975
)
 
(9,054
)
 
(4,432
)
Provision for credit losses
 
33,500

 
218

 
75,000

 
1,580

Ending balance
 
151,546

 
80,517

 
151,546

 
80,517

Total loans, net at end of period, excluding loans held for sale
 
$
9,771,898

 
$
8,646,990

 
$
9,771,898

 
$
8,646,990

ACL to period-end loans
 
1.55
%
 
0.93
%
 
1.55
%
 
0.93
%
Allowance for unfunded commitments and letters of credit
 
 
 
 
 
 
 
 
Beginning Balance
 
$
6,000

 
$
3,780

 
$
3,430

 
$
4,330

Impact of adopting ASC 326
 
—

 
—

 
1,570

 
—

Net changes in the allowance for unfunded commitments and letters of credit
 
2,800

 
200

 
3,800

 
(350
)
Ending balance
 
$
8,800

 
$
3,980

 
$
8,800

 
$
3,980



50

Table of Contents

Liquidity and Sources of Funds
Our primary sources of funds are customer deposits. Additionally, we utilize advances from the FHLB, borrowings from the FRB, sweep repurchase agreements, subordinated debentures assumed in acquisitions and a revolving line of credit to supplement our funding needs. These funds, together with loan repayments, loan sales, retained earnings, equity and other borrowed funds are used to make loans, to acquire securities, meet deposit withdrawals and maturing liabilities, to acquire other assets and to fund continuing operations.
In addition, we have a shelf registration statement on file with the SEC registering an unspecified amount of any combination of debt or equity securities, depositary shares, purchase contracts, units and warrants in one or more offerings. Specific information regarding the terms of and the securities being offered will be provided at the time of any offering. Proceeds from any future offerings are expected to be used for general corporate purposes, including, but not limited to, the repayment of debt, repurchasing or redeeming outstanding securities, working capital, funding future acquisitions or other purposes identified at the time of any offering.
Deposit Activities
Our deposit products include a wide variety of transaction accounts, savings accounts and time deposit accounts. We have established a branch system to serve our consumer and business depositors. Deposits increased $2.40 billion from December 31, 2019. The addition of PPP loans during the current quarter had a notable impact on our deposits, as our clients deposited these funds into their deposit accounts. In addition, management’s strategy for funding asset growth is to make use of public funds and brokered and other wholesale deposits on an as-needed basis. The Company participates in the CDARS® program. CDARS® is a network that allows participating banks to offer extended FDIC deposit insurance coverage on time deposits. The Company also participates in a similar program to offer extended FDIC deposit insurance coverage on money market accounts. These extended deposit insurance programs are generally available only to existing customers and are not used as a means of generating additional liquidity. At June 30, 2020, brokered deposits, reciprocal money market accounts and other wholesale deposits (excluding public funds) totaled $577.7 million, or 4.4% of total deposits, compared to $329.5 million or 3.1% at year-end 2019. These deposits have varied maturities.
The following table sets forth the Company’s deposit base by type of product for the dates indicated:
 
 
June 30, 2020
 
December 31, 2019
 
 
Balance
 
% of
Total
 
Balance
 
% of
Total
 
 
(dollars in thousands)
Demand and other noninterest-bearing
 
$
6,719,437

 
51.2
%
 
$
5,328,146

 
49.9
%
Money market
 
2,586,376

 
19.7
%
 
2,322,644

 
21.7
%
Interest-bearing demand
 
1,274,058

 
9.7
%
 
1,150,437

 
10.8
%
Savings
 
1,035,723

 
7.9
%
 
882,050

 
8.3
%
Interest-bearing public funds, other than certificates of deposit
 
623,496

 
4.7
%
 
301,203

 
2.8
%
Certificates of deposit, less than $250,000
 
210,357

 
1.6
%
 
218,764

 
2.0
%
Certificates of deposit, $250,000 or more
 
104,330

 
0.8
%
 
151,995

 
1.4
%
Certificates of deposit insured by CDARS®
 
17,078

 
0.1
%
 
17,065

 
0.2
%
Brokered certificates of deposit
 
8,427

 
0.1
%
 
12,259

 
0.1
%
Reciprocal money market accounts
 
552,195

 
4.2
%
 
300,158

 
2.8
%
Subtotal
 
13,131,477

 
100.0
%
 
10,684,721

 
100.0
%
Valuation adjustment resulting from acquisition accounting
 
—

 
 
 
(13
)
 
 
Total deposits
 
$
13,131,477

 
 
 
$
10,684,708

 
 


51

Table of Contents

Borrowings
We rely on FHLB advances and FRB borrowings as another source of both short and long-term funding. FHLB advances and FRB borrowings are secured by investment securities, and residential, commercial and commercial real estate loans. At June 30, 2020, we had FHLB advances of $157.4 million compared to $953.5 million at December 31, 2019.
We also utilize wholesale and retail repurchase agreements to supplement our funding sources. Our wholesale repurchase agreements are secured by mortgage-backed securities. At June 30, 2020 and December 31, 2019, we had deposit customer sweep-related repurchase agreements of $51.5 million and $64.4 million, respectively, which mature on a daily basis.
Subordinated debentures are another source of funding. The Company assumed $35.0 million in aggregate principal amount with its acquisition of Pacific Continental on November 1, 2017. These subordinated debentures, which are unsecured, are callable on June 30, 2021 and have a stated maturity date of June 30, 2026.
The Company has a $15.0 million short-term credit facility with an unaffiliated bank. This facility provides the Company additional liquidity, if needed, for various corporate activities including the repurchase of shares of Columbia Banking System, Inc. common stock. At both June 30, 2020 and December 31, 2019, there was no balance associated with this credit facility. The credit agreement requires the Company to comply with certain covenants including those related to asset quality and capital levels. The Company was in compliance with all covenants associated with this facility at June 30, 2020.
Management anticipates we will continue to rely on FHLB advances, FRB borrowings, the short-term credit facility and wholesale and retail repurchase agreements in the future. We will use those funds primarily to make loans and purchase securities.
Contractual Obligations, Commitments & Off-Balance Sheet Arrangements
We are party to many contractual financial obligations, including repayments of borrowings, operating and equipment lease payments, off-balance sheet commitments to extend credit and investments in affordable housing partnerships. At June 30, 2020, we had commitments to extend credit of $2.67 billion compared to $2.70 billion at December 31, 2019.
Capital Resources
Shareholders’ equity at June 30, 2020 was $2.28 billion, compared to $2.16 billion at December 31, 2019. Shareholders’ equity was 14% and 15% of total period-end assets at June 30, 2020 and December 31, 2019, respectively.
Regulatory Capital
In July 2013, the federal bank regulators approved the Capital Rules (as discussed in our 2019 Annual Report on Form 10-K, “Item 1. Business—Supervision and Regulation and —Regulatory Capital Requirements”), which implement the Basel III capital framework and various provisions of the Dodd-Frank Act, which were fully phased in as of January 1, 2019. As of June 30, 2020, we and the Bank met all capital adequacy requirements under the Capital Rules.
FDIC regulations set forth the qualifications necessary for a bank to be classified as “well-capitalized,” primarily for assignment of FDIC insurance premium rates. Failure to qualify as “well-capitalized” can negatively impact a bank’s ability to expand and to engage in certain activities. The Company and the Bank qualified as “well-capitalized” at June 30, 2020 and December 31, 2019.

As part of its response to the impact of COVID-19, the U.S. federal regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100% of the day one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company elected to adopt the interim final rule. As a result, capital ratios and amounts as of June 30, 2020 exclude the impact of the increased allowance for credit losses related to the adoption of CECL.

52

Table of Contents

The following table presents the capital ratios and the capital conservation buffer, as applicable, for the Company and its banking subsidiary at June 30, 2020 and December 31, 2019:
 
 
Company
 
Columbia Bank
 
 
June 30, 2020
 
December 31, 2019
 
June 30, 2020
 
December 31, 2019
CET1 risk-based capital ratio
 
12.42
%
 
12.45
%
 
12.65
%
 
12.46
%
Tier 1 risk-based capital ratio
 
12.42
%
 
12.45
%
 
12.65
%
 
12.46
%
Total risk-based capital ratio
 
14.00
%
 
13.60
%
 
13.90
%
 
13.29
%
Leverage ratio
 
9.17
%
 
10.17
%
 
9.42
%
 
10.22
%
Capital conservation buffer
 
6.00
%
 
5.60
%
 
5.90
%
 
5.29
%
Stock Repurchase Program
As described in our Annual Report on Form 10-K for the year ended December 31, 2019, our board of directors approved a stock repurchase program to repurchase up to 2.9 million shares, up to a maximum aggregate purchase price of $100.0 million. The share repurchase authorization expired in May of 2020. There were no share repurchases during the three months ended June 30, 2020. The Company repurchased 731 thousand shares of common stock totaling $20.0 million during the six months ended June 30, 2020.
Non-GAAP Financial Measures
The Company considers operating net interest margin (tax equivalent) to be a useful measurement as it more closely reflects the ongoing operating performance of the Company. Additionally, presentation of the operating net interest margin allows readers to compare certain aspects of the Company’s net interest margin to other organizations that may not have had significant acquisitions. Despite the usefulness of the operating net interest margin (tax equivalent) to the Company, there is no standardized definition for it and, as a result, the Company’s calculations may not be comparable with other organizations. The Company encourages readers to consider its Consolidated Financial Statements in their entirety and not to rely on any single financial measure.
The following table reconciles the Company’s calculation of the operating net interest margin (tax equivalent) to the net interest margin (tax equivalent) for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(dollars in thousands)
Operating net interest margin non-GAAP reconciliation:
 
 
Net interest income (tax equivalent) (1)
 
$
123,692

 
$
127,236

 
$
248,025

 
$
250,346

Adjustments to arrive at operating net interest income (tax equivalent):
 
 
 
 
 
 
 
 
Incremental accretion income on acquired loans (2)
 
(1,675
)
 
(2,663
)
 
(3,166
)
 
(4,698
)
Premium amortization on acquired securities
 
975

 
1,651

 
2,102

 
3,430

Interest reversals on nonaccrual loans
 
673

 
662

 
1,461

 
1,288

Operating net interest income (tax equivalent) (1)
 
$
123,665

 
$
126,886

 
$
248,422

 
$
250,366

Average interest earning assets
 
$
13,657,719

 
$
11,606,727

 
$
13,072,635

 
$
11,584,301

Net interest margin (tax equivalent) (1)
 
3.64
%
 
4.40
%
 
3.82
%
 
4.36
%
Operating net interest margin (tax equivalent) (1)
 
3.64
%
 
4.38
%
 
3.82
%
 
4.36
%
__________
(1) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $1.8 million and $2.1 million for the three months ended June 30, 2020 and 2019, respectively, and an addition to net interest income of $3.8 million and $4.2 million for the six months ended June 30, 2020 and 2019, respectively.
(2) Beginning January 2020, incremental accretion income on PCI loans is no longer presented separate from incremental accretion income on other acquired loans. Prior period amounts have been reclassified to conform with current period presentation.


53

Table of Contents

Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Sensitivity
We are exposed to interest rate risk, which is the risk that changes in prevailing interest rates will adversely affect assets, liabilities, capital, income and expenses at different times or in different amounts. Generally, there are four sources of interest rate risk as described below:
Repricing risk—Repricing risk is the risk of adverse consequences from a change in interest rates that arises because of differences in the timing of when those interest rate changes affect an institution’s assets and liabilities.
Basis risk—Basis risk is the risk of adverse consequence resulting from unequal changes in the spread between two or more rates for different instruments with the same maturity.
Yield curve risk—Yield curve risk is the risk of adverse consequence resulting from unequal changes in the spread between two or more rates for different maturities for the same instrument.
Option risk—In banking, option risks are known as borrower options to prepay loans and depositor options to make deposits, withdrawals, and early redemptions. Option risk arises whenever a bank’s products give customers the right, but not the obligation, to alter the quantity or the timing of cash flows. We are also exposed to option risk in callable bonds as the counterparty may call the bonds during a low rate environment resulting in reinvestment of the proceeds at lower yields.
Since our earnings are primarily dependent on our ability to generate net interest income, we actively monitor and manage the effects of adverse changes in interest rates on our results of operations. Management of our interest rate risk is overseen by our board of directors, which is responsible for establishing policies and interest rate limits and approving these policies and interest rate limits annually. These policies include our asset/liability management policy, which provides guidelines for controlling our exposure to interest rate risk. These guidelines direct management to assess the impact of changes in interest rates upon both earnings and capital. These guidelines also establish limits for interest rate risk sensitivity.
We maintain an Asset/Liability Management Committee which is responsible for developing, monitoring and reviewing asset/liability processes, interest rate risk exposures, strategies and tactics. The Asset/Liability Management Committee reports on a regular basis to our board of directors. It is the responsibility of management to execute the approved policies, develop and implement risk management strategies and to report to the board of directors on a regular basis.
Interest Rate Risk Sensitivity
We use a number of measures to monitor and manage interest rate risk, including income simulations and interest sensitivity (gap) analysis. An income simulation model is the primary tool used to assess the direction and magnitude of changes in net interest income resulting from changes in interest rates. Basic assumptions in the model include prepayment speeds on mortgage-related assets, cash flows and maturities of other investment securities, loan and deposit volumes and pricing. These assumptions are inherently subjective and may not be realized and, as a result, actual results will differ from our projections. In addition, variances in the timing, magnitude and frequency of interest rate changes, overall market conditions including volumes and pricing, and changes in management strategies, among other factors, will also result in variances between the projected and actual results.
Based on the results of the simulation model as of June 30, 2020, we would expect decreases in net interest income of $2.8 million and $13.4 million in year one and year two, respectively, if interest rates gradually decrease from current rates by 100 basis points. We would expect an increase in net interest income of $7.0 million and $38.7 million in year one and year two, respectively, if interest rates gradually increase from current rates by 200 basis points.
The projections are based on the current interest rate environment and we assume our balance sheet remains constant during the next two years. Market interest rates are near historical lows. Loan interest rate indexes such as Prime and LIBOR are also near historical lows. Since we don’t assume negative interest rates, the downward repricing of Prime and LIBOR loans is more limited than during a higher interest rate environment. Our ability to reprice deposits downward is also limited given our low cost of funds.
The increase in low cost deposits during the quarter, particularly the increase in non-interest bearing deposits, also impacted our interest rate sensitivity. Increases in interest rates enhances net interest income since our assets tend to reprice more than our deposits. A shift in our deposit mix to interest-bearing deposits or borrowings would reduce this benefit.
On January 23, 2019, the Company entered into an interest rate collar derivative transaction with a $500.0 million notional value based on one month LIBOR. The Company has designated this as a cash flow hedge. This transaction was entered into to minimize the decrease in net interest income if interest rates decline prior to the maturity date of the collar in February 2024.

54

Table of Contents

Item 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Based on that evaluation, the CEO and CFO have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that the information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is (i) accumulated and communicated to our management (including the CEO and CFO) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There was no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

55

Table of Contents

PART II - OTHER INFORMATION
Item 1.
LEGAL PROCEEDINGS
The Company and its subsidiaries are party to routine litigation arising in the ordinary course of business. Management believes that, based on information currently known to it, any liabilities arising from such litigation will not have a material adverse impact on the Company’s financial conditions, results of operations or cash flows.
Item 1A. RISK FACTORS
Refer to Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and to Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 for a discussion of risk factors relating to the Company’s business. The Company believes that there has been no material change in its risk factors as previously disclosed in the Company’s Form 10-K for the year ended December 31, 2019 and Form 10-Q for the quarter ended March 31, 2020.
Item 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)
Not applicable
(b)
Not applicable
(c)
The following table provides information about repurchases of common stock by the Company during the quarter ended June 30, 2020:
Period
 
Total Number of Common Shares Purchased (1)
 
Average Price Paid per Common Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plan (2)
 
Maximum Number of Remaining Shares That May Yet Be Purchased Under the Plan (2)
4/1/2020 - 4/30/2020
 
46

 
$
24.96

 
—

 
716,647

5/1/2020 - 5/31/2020
 
—

 
—

 
—

 
—

6/1/2020 - 6/30/2020
 
257

 
22.49

 
—

 
—

 
 
303

 
$
22.86

 
—

 
 
__________
(1) Common shares repurchased by the Company during the quarter consisted of cancellation of 303 shares of common stock to pay the shareholders’ withholding taxes and no shares of common stock purchased under the Company’s stock repurchase program.
(2) As described in our Annual Report on Form 10-K for the year ended December 31, 2019, our board of directors approved a stock repurchase program to repurchase up to 2.9 million shares, up to a maximum aggregate purchase price of $100.0 million which expired May 2020.
Item 3.
DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.
MINE SAFETY DISCLOSURES
Not applicable.
Item 5.
OTHER INFORMATION
None.

56

Table of Contents

Item 6.
EXHIBITS
10.1**+
 
 
 
 
10.2**
 
 
 
 
31.1+
 
 
 
 
31.2+
 
 
 
 
32+
 
 
 
 
101.INS+
 
XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
 
 
 
101.SCH+
 
XBRL Taxonomy Extension Schema
 
 
 
101.CAL+
 
XBRL Taxonomy Extension Calculation Linkbase
 
 
 
101.LAB+
 
XBRL Taxonomy Extension Label Linkbase
 
 
 
101.PRE+
 
XBRL Taxonomy Extension Presentation Linkbase
 
 
 
101.DEF+
 
XBRL Taxonomy Extension Definition Linkbase
 
 
 
104+
 
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).

** Management contract or compensatory plan or arrangement
+ Filed herewith


57

Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
COLUMBIA BANKING SYSTEM, INC.
 
 
 
 
 
 
Date:
July 30, 2020
 
By
 
/s/ CLINT E. STEIN
 
 
 
 
 
Clint E. Stein
 
 
 
 
 
President and
Chief Executive Officer
(Principal Executive Officer)
 
 
 
 
 
 
Date:
July 30, 2020
 
By
 
/s/ AARON J. DEER
 
 
 
 
 
Aaron J. Deer
 
 
 
 
 
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
 
 
 
 
 
 
Date:
July 30, 2020
 
By
 
/s/ BROCK M. LAKELY
 
 
 
 
 
Brock M. Lakely
 
 
 
 
 
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)


58

 Exhibit



EXHIBIT 10.1

COLUMBIA STATE BANK
CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (“Agreement”) is made and entered into effective this 7th day of May 2020, by and between COLUMBIA STATE BANK, a Washington banking corporation (the “Bank”) and wholly owned subsidiary of Columbia Banking System, Inc. (“CBSI” and, together with the Bank, the “Company”) and Aaron Deer (“Employee”).

Recitals

A. The Bank currently receives the exclusive services of Employee as its employee, and Employee desires that this employment relationship continue.

B. The Bank desires to provide a severance benefit to Employee (i) to encourage Employee to continue employment with the Bank; (ii) to continue obtaining Employee’s services in the event of a potential Change in Control (as defined below) of CBSI that may be detrimental to Employee; and (iii) to allow CBSI to maximize the benefits obtainable by its shareholders from any Change in Control.

In consideration of the mutual promises, covenants, agreements and undertakings contained in this Agreement, the parties hereby contract and agree as follows:

Agreement

1.Term. The term of this Agreement (“Term”) shall commence as of the date first above written and shall end on the earlier of the termination of Employee’s employment in a manner that does not constitute a Termination Event or on the fifth anniversary of the date first above written, unless extended in writing by the parties.

2. Severance Benefit. In the case of a Termination Event, as defined in Section 4:

(a) the Bank shall pay to Employee all salary and benefits earned through the effective date of Employee’s termination and a severance benefit (“Severance Benefit”) in an amount equal to two times the amount of Employee’s then-current annual base salary;

(b) vesting of any stock options and lapse of all restrictions with respect to any restricted stock awards shall occur; and

(c) Bank shall pay or promptly reimburse Employee for the full amount of COBRA premiums incurred by Employee for coverage under the Bank’s group health plans for Employee and his or her eligible dependents (the “COBRA Amount”) during the period commencing on the effective date of termination and ending on the 18-month anniversary thereof, provided such reimbursement shall immediately cease in the event Employee becomes eligible to participate in the health insurance plan of a subsequent employer. If Employee’s termination of employment occurs prior to the effective date of a Change in Control, then, within 60 days following the




Termination Event, the Bank shall provide Employee the COBRA Amount for each month in which Employee and/or Employee’s eligible dependents elected to continue healthcare coverage prior to the date of the Change in Control.

Payment of the Severance Benefit shall begin, and vesting and lapse of restrictions described in paragraph 2(b) above shall occur, (i) in the case of a Termination Event described in paragraph 4.1, upon the effective date of termination, and (ii) in the case of a Termination Event described in paragraph 4.2, upon the effective date of the Change in Control which is then pending (or announced within sixty days of the date when the Employee’s employment terminated). The Severance Benefit shall be paid over a two year period in equal monthly payments without interest on the last day of each month, beginning with the month in which the Termination Event described in paragraphs 4.1 or 4.2, as the case may be, occurs.

3. Other Compensation and Terms of Employment. Except with respect to the Severance Benefit, this Agreement shall have no effect on the determination of any compensation payable by the Bank to the Employee, or upon any of the other terms of Employee’s employment with the Bank.

4. Termination Events. A Termination Event shall be deemed to occur upon, and only upon, one or more of the following:

4.1 Termination of Employee’s employment by the Bank without Cause (as defined below) or by Employee for Good Reason (as defined below) within 365 days following the effective date of a Change in Control; or

4.2 Termination of Employee’s employment by the Bank without Cause prior to a Change in Control if such termination occurs at any time from and after sixty days prior to the public announcement by the CBSI or any other party of a transaction which will result in a Change in Control; provided that the effective date of the Change in Control occurs within eighteen (18) months of Employee’s termination.

5. Restrictive Covenant.

5.1 Non-competition. Employee agrees that, during Employee’s employment with the Bank or any of its affiliates, and for a period of two years after commencement of the payment to Employee of the Severance Benefit, Employee will not directly or indirectly, be employed by, perform services for, or act directly or indirectly as an employee, agent, stockholder (other than passive holdings of less than two percent (2%) of the outstanding shares of a publicly-traded company), member, officer, director, co-partner, advisor, or in any other individual or representative capacity, on behalf of a Conflicting Organization in the Bank’s Market Area (each capitalized term as defined below); provided that Employee’s covenant not to compete as set forth herein shall terminate in the event Employee waives the right to payment of any balance of the Severance Benefit then payable. The provisions restricting competition by Employee may be waived by action of the Board. Employee acknowledges that the Company currently has operations in various counties within the states of Washington, Oregon, and Idaho, that the Company plans to continue to expand its operations and presence within these states and other states, and that as a member of the Company’s senior management, Employee’s

2


services are integral to these operations and expansion plans. Employee recognizes and agrees that any breach of this covenant by Employee will cause immediate and irreparable injury to the Company, and Employee hereby authorizes recourse by the Bank or CBSI to injunction and/or specific performance, as well as to other legal or equitable remedies to which either may be entitled.

5.2 Non-interference. During the non-competition period described in paragraph 5.1, Employee shall not (a) solicit or attempt to solicit any other employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee of the Company, (b) solicit or attempt to solicit any customer of the Company to cease doing business with the Company or to otherwise divert such customer’s business from the Company, or (c) solicit or attempt to solicit any supplier, licensee, or other business relations of the Company to cease doing business with the Company. Solicitation prohibited under this paragraph 5.2 includes solicitation by any means, including, without limitation, meetings, phone calls, letters or other mailings, and electronic and internet communications of any kind, or any other type of conduct intended or reasonably calculated to induce or urge a client, customer, or employee to discontinue, in whole or in part, its employment or business relationship with the Bank.

5.3 Confidentiality. Unless disclosure is otherwise required by legal or regulatory requirements, Employee shall keep all terms of this Agreement, including the existence of this Agreement and the amount of the Severance Benefit, strictly confidential. Employee shall keep this Agreement in a private location and shall use his or her best efforts to prevent this Agreement from being seen by others, including co-workers.

6. Section 280G of the Code.

6.1 Payments. In the event that any payments or benefits (whether under this Agreement or otherwise) payable to Employee (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code, then such payments and benefits will be either (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such payments and benefits may be taxable under Section 4999 of the Code. Any reduction in payments and/or benefits required by this provision will occur in the following order: (i) reduction of cash payments; (ii) reduction of vesting acceleration of equity awards; and (iii) reduction of other benefits paid or provided to Employee. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant for equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis.

6.2 Accounting Firm. All determinations required to be made under this Section 6, including the reduction payments hereunder and the assumptions to be utilized in

3


arriving at such determinations, will be made by a public accounting firm or other advisor that is retained by the Company in its reasonable discretion (the “Accounting Firm”) and whose determination will be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 6, the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Employee agree to furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accounting Firm may reasonably incur in connection with any calculations contemplated by this provision. Any determinations by the Accounting Firm with respect to whether any payments or benefits are subject to reduction under this Section 6 will be binding upon the Company and Employee.

7. Definitions.

7.1 Bank’s Market Area. “Bank’s Market Area” shall include the following locations, either during Employee’s employment or at the time of Employee’s termination from employment: (a) any counties in the States of Washington, Oregon and Idaho in which the Bank (or any Bank subsidiary, affiliate, related business entity, successor, or assign) maintains a branch or other office, and all counties bordering on any such county, or (b) any counties in other States in which the Bank (or any Bank subsidiary, affiliate, related business entity, successor, or assign) maintains a branch or other office, and all counties bordering on any such county, or (c) any other county in which the Bank or an affiliate or related business entity has bona fide documented plans to establish a branch or office, as demonstrated by minutes of board of director meetings, regulatory correspondence, or other written communications with third parties (including legal or financial advisers) with respect to such geographic expansion, and of which Employee is aware due to his employment with the Bank.

7.2 Cause. “Cause” shall mean only (a) willful misfeasance or gross negligence in the performance of Employee’s duties, (b) conduct demonstrably and significantly harmful to the Bank (which would include willful violation of any final cease and desist order applicable to the Bank), or (c) conviction of a felony.

7.3 Change in Control. “Change in Control” shall mean the occurrence of one or more of the following events:

7.3.1 A person, or more than one person acting as a group (as defined in IRC 409A), acquires ownership of stock in CBSI or the Bank that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of, respectively, CBSI or the Bank;

7.3.2 A person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock in CBSI or the Bank that comprises thirty percent (30%) or more of the total voting power of the stock of, respectively, CBSI or the Bank;


4


7.3.3 A majority of the members of the board of directors of either CBSI or the Bank is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the such board of directors before the date of the appointment or election; or

7.3.4 A person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from CBSI or the Bank that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of, respectively, CBSI or the Bank immediately before such acquisition or acquisitions. No Change in Control shall result if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring entity.

This definition of “Change in Control” is intended to comply with, and shall be interpreted in a manner consistent with, the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, as U.S. Treasury regulation issued thereunder.

7.4 Conflicting Organization. “Conflicting Organization” shall mean any person, entity, or organization engaged (or about to become engaged) in a business similar to, or that competes with, the business of the Bank in the Bank’s Market Area, including without limitation any bank or financial institution (including without limitation any trust company, finance company, or leasing company) in the Bank’s Market Area.

7.5 Good Reason. “Good Reason” shall mean (a) a material diminution in Employee’s base compensation, (b) a material diminution in Employee’s authority, duties or responsibilities, or (c) a relocation or transfer of Employee’s principal place of employment that would increase Employee’s commute on a regular basis by more than forty five (45) miles each way from his current residence to his current office location.

7.6 Termination of Employment. “Termination,” when used in reference to termination of employment, shall mean “separation from service,” as defined in Section 409A of the U.S. Internal Revenue Code of 1986, as amended, as U.S. Treasury regulation issued thereunder.

8. Specified Employee - Delay in Payments. If Employee is a “specified employee,” then amounts payable to him under this Agreement on account of a “separation from service” that could cause him to be subject to the gross income inclusion, interest and additional tax provisions of U.S. Internal Revenue Code § 409A(a)(1) shall not be paid until after the end of the sixth calendar month beginning after such separation from service (the “Suspension Period”). Within fourteen (14) calendar days after the end of the Suspension Period, the Company shall make a lump sum payment to Employee in cash in an amount equal to the sum of all payments delayed because of the preceding sentence. Thereafter, Employee shall receive any remaining payments under this Agreement as if the immediately preceding provisions of this paragraph 8 were not a part of the Agreement. For purposes of this Agreement, the terms “specified employee” and “separation from service” shall have the meanings given to those terms in U.S. Internal Revenue Code § 409A and the Treasury regulations issued thereunder.”


5


9. Miscellaneous.

9.1 Amendment. This Agreement may be modified or amended only upon amendment in writing signed by both parties. Employee and the Company understand, acknowledge, and agree that Employee and the Bank or CBSI have entered into other agreements which contain either change-in-control terms or restrictive covenants, including without limitation the Supplemental Executive Retirement Plan Agreement (and any amendments or restatements thereto). The parties understand, acknowledge, and agree that the terms of this Agreement are not intended by Employee, the Bank, or CBSI, and shall not be interpreted by any party, court or arbitrator, to supersede, modify, amend, change, negate, cancel or render null or void any other change-in-control terms or restrictive covenants between the parties contained in any other agreements, including without limitation, any change-in-control terms or restrictive covenants contained in the Supplemental Executive Retirement Plan Agreement (or any amendments or restatements thereof).

9.2 Binding Effect. This Agreement shall bind and inure to the benefit of the heirs, legal representatives, successors, and assign of the parties.

9.3 Enforceability. If an arbitrator or a court of competent jurisdiction shall find any provision of this Agreement illegal or unenforceable, the arbitrator or court may reform such provision to the extent necessary to render the otherwise unenforceable provision, and the rest of the Agreement, valid and enforceable, and so as to permit maximum restrictions that are legal and enforceable to be applied to the Employee’s ability to compete with the Bank. If an arbitrator or court declines to amend any such provision as provided herein, the invalidity or unenforceability of any such provision shall not affect the validity or enforceability of the remaining provisions, which shall be enforced as if the offending provision had not been included in this Agreement.

9.4 Governing Law; Venue. This Agreement is made with reference to and is intended to be construed in accordance with the laws of the State of Washington. Venue for any action arising out of or concerning this Agreement shall lie in Pierce County, Washington. In the event of a dispute under this Agreement, the disputes shall be arbitrated pursuant to the Superior Court Mandatory Arbitration Rules (“MAR”) adopted by the Washington State Supreme Court, irrespective of the amount in controversy. This Agreement shall be deemed as stipulation to that effect pursuant to MAR 1.2 and 8.1. The arbitrator, in his or her discretion, may award attorney’s fees to the prevailing party or parties.

9.5 Notices. Any notice required to be given under this Agreement to either party shall be given by personal service or by depositing a copy thereof in the United States registered or certified mail, postage prepaid, addressed to the following address or such other address as addressee shall designate in writing:
Company:
Columbia Bank  
1301 ‘A’ Street, Ste. 800  
Tacoma, WA 98402-4200  
Attn: Chief Human Resources Officer


6


Employee:
Aaron Deer
At the most recent address on file at the Company


IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date first above written.

BANK: COLUMBIA STATE BANK

By /s/ David Lawson _
David Lawson
Executive Vice President and Chief Human Resources Officer


EMPLOYEE:

By /s/ Aaron Deer
Aaron Deer
Executive Vice President and Chief Financial Officer




7

Exhibit


EXHIBIT 31.1
CERTIFICATION
I, Clint E. Stein, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Columbia Banking System, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 
/s/ CLINT E. STEIN
 
Clint E. Stein
President and
Chief Executive Officer
Date: July 30, 2020



Exhibit


EXHIBIT 31.2
CERTIFICATION
I, Aaron J. Deer, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Columbia Banking System, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 
/s/ AARON J. DEER
 
Aaron J. Deer
Executive Vice President and
Chief Financial Officer

Date: July 30, 2020



Exhibit


EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Columbia Banking System, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Clint E. Stein, President and Chief Executive Officer, and Aaron J. Deer, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
/s/ CLINT E. STEIN
 
Clint E. Stein
President and
Chief Executive Officer
Columbia Banking System, Inc.
 
 
 
/s/ AARON J. DEER
 
Aaron J. Deer
Executive Vice President and
Chief Financial Officer
Columbia Banking System, Inc.
Dated: July 30, 2020



v3.20.2
Document - shares
 6 Months Ended
Jun. 30, 2020
Jul. 27, 2020
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 000-20288  
Entity Registrant Name COLUMBIA BANKING SYSTEM, INC.  
Entity Incorporation, State or Country Code WA  
Entity Tax Identification Number 91-1422237  
Entity Address, Address Line One 1301 A Street  
Entity Address, City or Town Tacoma  
Entity Address, State or Province WA  
Entity Address, Postal Zip Code 98402-2156  
City Area Code 253  
Local Phone Number 305-1900  
Title of 12(b) Security Common Stock, No Par Value  
Trading Symbol COLB  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   71,618,641
Entity Central Index Key 0000887343  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.20.2
Consolidated Balance Sheets - USD ($)
shares in Thousands, $ in Thousands
Jun. 30, 2020
Dec. 31, 2019
ASSETS    
Cash and due from banks $ 217,461 $ 223,541
Interest-earning deposits with banks 880,232 24,132
Total cash and cash equivalents 1,097,693 247,673
Debt securities available for sale at fair value 3,693,787 3,746,142
Equity Securities 13,425 0
FHLB stock at cost 16,280 48,120
Loans held for sale 28,803 17,718
Loans, net of unearned income 9,771,898 8,743,465
Less: Allowance for credit losses 151,546 83,968
Loans, net 9,620,352 8,659,497
Interest receivable 59,149 46,839
Premises and equipment, net 164,362 165,408
OREO 747 552
Goodwill 765,842 765,842
Other intangible assets, net 30,938 35,458
Other assets 429,566 346,275
Total assets 15,920,944 14,079,524
LIABILITIES AND SHAREHOLDERS' EQUITY    
Noninterest-bearing 6,719,437 5,328,146
Interest-bearing 6,412,040 5,356,562
Total deposits 13,131,477 10,684,708
FHLB advances and FRB borrowings 157,441 953,469
Securities sold under agreements to repurchase 51,479 64,437
Subordinated debentures 35,185 35,277
Other liabilities 268,607 181,671
Total liabilities 13,644,189 11,919,562
Commitments and contingent liabilities (Note 10)
Shareholders' equity:    
Preferred Stock, Authorized shares 2,000 2,000
Common Stock Authorized shares 115,000 115,000
Common Stock Shares Issued 73,770 73,577
Common Stock Issued value $ 1,654,129 $ 1,650,753
Common Stock, Shares, Outstanding 71,586 72,124
Retained earnings $ 512,383 $ 519,676
Accumulated other comprehensive income $ 181,077 $ 40,367
Treasury Stock, Shares 2,184 1,453
Treasury Stock, Value $ (70,834) $ (50,834)
Total shareholders’ equity 2,276,755 2,159,962
Total liabilities and shareholders’ equity $ 15,920,944 $ 14,079,524
v3.20.2
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale, Amortized Cost $ 3,491,307 $ 3,703,096
Common Stock, No Par Value $ 0 $ 0
Preferred Stock, No Par Value $ 0 $ 0
v3.20.2
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Interest Income        
Loans $ 105,496 $ 116,585 $ 212,862 $ 225,001
Taxable securities 18,343 15,918 39,431 33,333
Tax-exempt securities 2,257 2,712 4,559 5,681
Deposits in banks 136 207 277 295
Total interest income 126,232 135,422 257,129 264,310
Interest Expense        
Deposits 2,094 4,976 5,736 9,474
FHLB advances and FRB borrowings 1,796 4,708 6,025 7,393
Subordinated debentures 468 468 936 936
Other borrowings 23 154 159 369
Total interest expense 4,381 10,306 12,856 18,172
Net Interest Income 121,851 125,116 244,273 246,138
Provision for credit losses 33,500 218 75,000 1,580
Net interest income after provision for credit losses 88,351 124,898 169,273 244,558
Noninterest Income        
Deposit account and treasury management fees 6,092 9,035 13,880 18,015
Card revenue 3,079 3,763 6,597 7,425
Financial services and trust revenue 3,163 3,425 6,228 6,382
Loan revenue 5,607 3,596 10,197 5,985
Bank owned life insurance 1,618 1,597 3,214 3,116
Investment securities gains, net 16,425 285 16,674 2,132
Other 1,275 3,947 1,676 4,289
Total noninterest income 37,259 25,648 58,466 47,344
Noninterest Expense        
Compensation and employee benefits 46,043 52,015 100,885 104,100
Occupancy 8,812 8,712 18,009 17,521
Data processing 5,454 4,601 10,294 9,270
Legal and professional fees 3,483 6,554 5,585 11,127
Amortization of intangibles 2,210 2,649 4,520 5,397
B&O taxes 1,244 1,411 1,868 3,287
Advertising and promotion 837 870 2,142 1,844
Regulatory premiums 1,034 956 1,068 1,940
Net benefit of operation of OREO (200) (705) (188) (592)
Other 11,916 9,665 20,921 17,534
Total noninterest expense 80,833 86,728 165,104 171,428
Income before income taxes 44,777 63,818 62,635 120,474
Income tax provision 8,195 12,094 11,425 22,879
Net Income $ 36,582 $ 51,724 $ 51,210 $ 97,595
Earnings per common share        
Basic $ 0.52 $ 0.71 $ 0.72 $ 1.33
Diluted $ 0.52 $ 0.71 $ 0.72 $ 1.33
Weighted average number of common shares outstanding 70,679 72,451 70,942 72,486
Weighted average number of diluted common shares outstanding 70,711 72,451 70,981 72,487
v3.20.2
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Net income $ 36,582 $ 51,724 $ 51,210 $ 97,595
Unrealized gain from securities        
Net unrealized holding gain from available for sale debt securities arising during the period, net of tax 42,860 37,029 122,556 71,926
Reclassification adjustment of net gain from sale of available for sale debt securities included in income, net of tax 0 (219) (191) (1,636)
Net unrealized gain from securities, net of reclassification adjustment 42,860 36,810 122,365 70,290
Pension plan liability adjustment:        
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax 79 61 159 122
Pension plan liability adjustment, net 79 61 159 122
Unrealized gain from cash flow hedging instruments        
Net unrealized gain in cash flow hedging instruments arising during the period, net of tax 2,611 7,233 20,588 12,043
Reclassification adjustment for net gain in cash flow hedging instruments included in income, net of tax (1,680) 0 (2,402) 0
Net unrealized gain from cash flow hedging instruments, net of reclassification adjustment 931 7,233 18,186 12,043
Other Comprehensive Income [1] 43,870 44,104 140,710 82,455
Total comprehensive income $ 80,452 $ 95,828 $ 191,920 $ 180,050
[1] All amounts are net of tax. Amounts in parentheses indicate debits.
v3.20.2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Net unrealized holding gain (loss) from available for sale securities arising during the period, tax $ (12,984) $ (11,217) $ (37,126) $ (21,788)
Reclassification adjustment of net gain from sale of available for sale securities included in income, tax 0 66 58 496
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, tax (24) (19) (48) (37)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax (791) (2,191) (6,237) (3,648)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax $ 510 $ 0 $ 728 $ 0
v3.20.2
Consolidated Statements of Changes in Shareholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income [Member]
Treasury Stock [Member]
Shares, Outstanding   73,249      
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU | Accounting Standards Update 2016-02 [Member] $ 782   $ 782    
Common Stock, Dividends, Per Share, Cash Paid $ 0.84        
Balance, value at Dec. 31, 2018 $ 2,033,649 $ 1,642,246 426,708 $ (35,305)  
Net income 97,595   97,595    
Other comprehensive income (loss) 82,455     82,455  
Issuance of common stock - stock option and other plans, shares   27      
Issuance of common stock - stock option and other plans, value $ 893 $ 893      
Stock Adjustment Deferred Compensation - Shares 0        
Stock Adjustment Value Deferred Compensation $ 1        
Issuance of common stock - restricted stock awards, net of canceled awards, shares   345      
Issuance of common stock - restricted stock awards, net of canceled awards, value 4,528 $ 4,528      
Purchase and retirement of common stock, Shares   (73)      
Purchase and retirement of common stock, Value (2,746) $ (2,746)      
Cash dividends declared on common stock (61,656)   (61,656)    
Purchase of treasury stock, Shares   (624)      
Purchase of treasury stock, value (21,863)       $ (21,863)
Balance, value at Jun. 30, 2019 $ 2,133,638 $ 1,644,922 463,429 47,150 (21,863)
Shares, Outstanding   73,565      
Common Stock, Dividends, Per Share, Cash Paid $ 0.42        
Balance, value at Mar. 31, 2019 $ 2,088,620 $ 1,642,977 442,597 3,046  
Net income 51,724   51,724    
Other comprehensive income (loss) 44,104     44,104  
Issuance of common stock - stock option and other plans, shares   2      
Issuance of common stock - stock option and other plans, value $ 15 $ 15      
Stock Adjustment Deferred Compensation - Shares 0        
Stock Adjustment Value Deferred Compensation $ 1        
Issuance of common stock - restricted stock awards, net of canceled awards, shares   (10)      
Issuance of common stock - restricted stock awards, net of canceled awards, value 2,243 $ 2,243      
Purchase and retirement of common stock, Shares   (9)      
Purchase and retirement of common stock, Value (314) $ (314)      
Cash dividends declared on common stock (30,892)   (30,892)    
Purchase of treasury stock, Shares   (624)      
Purchase of treasury stock, value (21,863)       (21,863)
Balance, value at Jun. 30, 2019 2,133,638 $ 1,644,922 463,429 47,150 (21,863)
Shares, Outstanding   72,924      
Shares, Outstanding   72,124      
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU | Accounting Standards Update 2016-13 [Member] $ (2,500)   (2,457)    
Common Stock, Dividends, Per Share, Cash Paid $ 0.78        
Balance, value at Dec. 31, 2019 $ 2,159,962 $ 1,650,753 519,676 40,367 (50,834)
Net income 51,210   51,210    
Other comprehensive income (loss) 140,710     140,710  
Issuance of common stock - stock option and other plans, shares   26      
Issuance of common stock - stock option and other plans, value 945 $ 945      
Stock Adjustment Deferred Compensation - Shares   0      
Stock Adjustment Value Deferred Compensation 4 $ 4      
Issuance of common stock - restricted stock awards, net of canceled awards, shares   234      
Issuance of common stock - restricted stock awards, net of canceled awards, value 4,909 $ 4,909      
Purchase and retirement of common stock, Shares   (67)      
Purchase and retirement of common stock, Value (2,482) $ (2,482)      
Cash dividends declared on common stock $ (56,046)   (56,046)    
Purchase of treasury stock, Shares (731) (731)      
Purchase of treasury stock, value $ (20,000)       (20,000)
Balance, value at Jun. 30, 2020 $ 2,276,755 $ 1,654,129 512,383 181,077 (70,834)
Shares, Outstanding   71,575      
Common Stock, Dividends, Per Share, Cash Paid $ 0.28        
Balance, value at Mar. 31, 2020 $ 2,213,602 $ 1,651,399 495,830 137,207 (70,834)
Net income 36,582   36,582    
Other comprehensive income (loss) 43,870     43,870  
Issuance of common stock - stock option and other plans, shares   0      
Issuance of common stock - stock option and other plans, value 0 $ 0      
Stock Adjustment Deferred Compensation - Shares   0      
Stock Adjustment Value Deferred Compensation 1 $ 1      
Issuance of common stock - restricted stock awards, net of canceled awards, shares   12      
Issuance of common stock - restricted stock awards, net of canceled awards, value 2,737 $ 2,737      
Purchase and retirement of common stock, Shares   1      
Purchase and retirement of common stock, Value (8) $ (8)      
Cash dividends declared on common stock (20,029)   (20,029)    
Balance, value at Jun. 30, 2020 $ 2,276,755 $ 1,654,129 $ 512,383 $ 181,077 $ (70,834)
Shares, Outstanding   71,586      
v3.20.2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Common Stock, Dividends, Per Share, Cash Paid $ 0.28 $ 0.42 $ 0.78 $ 0.84
v3.20.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash Flows From Operating Activities    
Net income $ 51,210 $ 97,595
Adjustments to reconcile net income to net cash provided by operating activities    
Provision for credit losses 75,000 1,580
Stock-based compensation expense 4,909 4,528
Depreciation, amortization and accretion 10,382 17,298
Investment securities gain, net 16,674 2,132
Net realized gain on sale of premises and equipment and OPPO 705 666
Net realized loss (gain) on sale and valuation adjustments of OREO (18) 507
Gain on bank owned life insurance death benefit 0 2,975
Originations of loans held for sale 217,017 68,722
Proceeds from sales of loans held for sale 205,932 60,382
Net change in:    
Interest receivable (12,310) (1,555)
Interest payable (219) 1,608
Other assets (93,919) (16,484)
Other liabilities 76,500 8,560
Net cash provided by operating activities 83,107 98,510
Cash Flows From Investing Activities    
Loans originated, net of principal collected (1,026,250) (207,641)
Purchases of debt securities available for sale (259,236) (54,405)
Purchases of loans held for investment 0 49,039
Purchases of premises and equipment (4,490) (3,540)
Purchases of FHLB stock (53,240) (117,240)
Proceeds from sale of debt securities, available-for-sale 194,105 259,554
Proceeds from sale of equity securities 3,000 0
Proceeds from principal repayments and maturities of debt securities available for sale 265,072 182,125
Proceeds from sales of premises and equipment 932 24
Proceeds from redemption of Federal Home Loan Bank stock 85,080 113,400
Proceeds from sales of other real estate and other personal property owned 353 5,823
Proceeds from bank owned life insurance death benefit 1,050 0
Net cash provided by (used in) investing activities (793,624) 129,061
Cash Flows From Financing Activities    
Net increase (decrease) in deposits 2,446,782 (246,404)
Net decrease in sweep repurchase agreements (12,958) (10,868)
Proceeds from FHLB advances 1,331,000 2,931,000
Proceeds from FRB borrowings 222,010 36,000
Proceeds from other borrowings 9,222 100
Proceeds from exercise of stock options and employee stock purchase plan 945 893
Repayment of FHLB advances (2,127,000) (2,835,000)
Repayment of FRB borrowings 222,010 36,000
Repayments of other borrowings 9,222 100
Payments for common stock dividends (55,750) (61,511)
Purchase of treasury stock (20,000) (21,863)
Purchase and retirement of common stock 2,482 2,746
Net cash provided by (used in) financing activities 1,560,537 (246,499)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect 850,020 (18,928)
Cash and cash equivalents at beginning of period 247,673 277,587
Cash and cash equivalents at end of period 1,097,693 258,659
Supplemental Information:    
Cash paid for interest 13,075 16,564
Cash paid for income tax, net of refunds 21,501 20,940
Non-cash investing and financing activities    
Loans transferred to OREO 558 386
Premises and equipment expenditures incurred but not yet paid 9 56
Change in dividends payable on unvested shares included in other liabilities $ 296 $ 145
v3.20.2
Basis of Presentation and Significant Accounting Policies
 6 Months Ended
Jun. 30, 2020
Basis of Presentation And Significant Accounting Policies  
Basis of Presentation and Significant Accounting Policies
Basis of Presentation, Significant Accounting Policies and Reclassifications
Basis of Presentation
The interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The Consolidated Financial Statements include the accounts of Columbia Banking System, Inc. (“we”, “our”, “Columbia” or the “Company”) and its subsidiaries, including its wholly owned banking subsidiary Columbia State Bank (“Columbia Bank” or the “Bank”) and Columbia Trust Company (“Columbia Trust”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of results to be anticipated for the year ending December 31, 2020. The accompanying interim unaudited Consolidated Financial Statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2019 Annual Report on Form 10-K.
Significant Accounting Policies
The significant accounting policies used in preparation of our Consolidated Financial Statements are disclosed in our 2019 Annual Report on Form 10-K. In addition to the changes already disclosed in the Annual Report on Form 10-K regarding ASC 326, this ASC also made changes to the accounting for available for sale securities. One such change is to require credit losses to be presented as an allowance rather than a write-down on available for sale securities, which refers to securities management does not intend to sell or with respect to which management believes that it is more likely than not they will not be required to sell. With the exception of that change, there have not been any changes in our significant accounting policies compared to those contained in our 2019 Form 10-K disclosure for the year ended December 31, 2019.
Reclassifications
Certain amounts reported in prior periods have been reclassified in the Consolidated Financial Statements to conform to the current presentation. The reclassifications have no effect on net income or shareholders’ equity as previously reported.
v3.20.2
Accounting Pronouncements Recently Issued
 6 Months Ended
Jun. 30, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
New Accounting Pronouncements and Changes in Accounting Principles adopted
Accounting Standards Adopted in 2020
In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments in this ASU clarify certain aspects of accounting for credit losses, hedging activities, and financial instruments (addressed by ASUs 2016-01, 2016-13, and 2017-12). Many of the amendments reflect decisions reached at FASB meetings or meetings of the Board’s credit losses transition resource group. Topics covered in this ASU include: accrued interest, transfers between classifications or categories for loans and debt securities, recoveries, reinsurance recoverables, projections of interest rate environments for variable-rate financial instruments, costs to sell when foreclosure is probable, consideration of expected prepayments when determining the effective interest rate, vintage disclosures, extension and renewal options, etc. As the ASU focused on clarifying certain aspects of accounting, adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. The amendments included in this ASU require an entity to reflect its current estimate of all expected credit losses for assets held at an amortized cost basis. For available for sale debt securities, credit losses will be measured in a manner similar to current GAAP, however, this ASU requires that credit losses be presented as an allowance rather than as a write-down. In November 2019, the FASB subsequently issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. The amendments in the update require entities to include expected recoveries of the amortized cost basis previously written-off or expected to be written-off in the valuation account for purchased financial assets with credit deterioration. In addition, the amendments in this update clarify and improve various aspects of the guidance for ASU 2016-13.
Unlike the incurred loss models, the CECL model in ASU 2016-13 does not specify a threshold for the recognition of an impairment allowance. Rather, the Company recognizes an impairment allowance equal to its estimate of lifetime expected credit losses, adjusted for prepayments, for in-scope financial instruments. Accordingly, the impairment allowance measured under the CECL model is expected to change significantly from the impairment allowance measured under the Company’s incurred loss model. The Company engaged a third-party vendor to assist in the CECL calculation and has developed and implemented an internal governance framework. The amendments in ASU 2016-13 and the above ASUs related to credit losses are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption was permitted, including adoption in any interim period. The Company adopted the new standards, using a modified retrospective approach, effective January 1, 2020, which resulted in an increase of $1.6 million to its allowance for credit losses, an increase of $1.6 million to its allowance for unfunded commitments and letters of credit and a net-of-tax cumulative-effect adjustment of $2.5 million to decrease the beginning balance of retained earnings.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This ASU adds, eliminates and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. Entities are also allowed to elect early adoption of the eliminated or modified disclosure requirements and delay adoption of the added disclosure requirements until their effective date. The Company adopted the new standard effective January 1, 2020. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.
Accounting Pronouncements Recently Issued not yet adopted
Recently Issued Accounting Standards, Not Yet Adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In response to concerns about structural risks of the cessation of LIBOR, the amendments in this ASU provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this ASU are elective and are effective March 12, 2020 for all entities. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. The guidance issued in this ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities for outside basis differences. This ASU also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The ASU is effective for interim and annual reporting periods beginning after December 15, 2020; early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.
v3.20.2
Securities
 6 Months Ended
Jun. 30, 2020
Debt Securities, Available-for-sale [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Securities
The following table summarizes the amortized cost, gross unrealized gains and losses, the allowance for credit losses and the resulting fair value of debt securities available for sale:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Allowance for Credit
Losses
 
Fair Value
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,698,160

 
$
168,231

 
$
(1,361
)
 
$
—

 
$
2,865,030

Other asset-backed securities
 
215,620

 
8,729

 
(73
)
 
—

 
224,276

State and municipal securities
 
448,923

 
19,749

 
(57
)
 
—

 
468,615

U.S. government agency and government-sponsored enterprise securities
 
128,604

 
7,262

 
—

 
—

 
135,866

Total
 
$
3,491,307

 
$
203,971

 
$
(1,491
)
 
$
—

 
$
3,693,787

December 31, 2019
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,864,949

 
$
47,223

 
$
(19,222
)
 
$
—

 
$
2,892,950

Other asset-backed securities
 
194,563

 
2,476

 
(989
)
 
—

 
196,050

State and municipal securities
 
478,366

 
10,660

 
(224
)
 
—

 
488,802

U.S. government agency and government-sponsored enterprise securities
 
165,218

 
3,127

 
(5
)
 
—

 
168,340

Total
 
$
3,703,096

 
$
63,486

 
$
(20,440
)
 
$
—

 
$
3,746,142


A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. There were no amounts of accrued interest reversed against interest income for the three and six months ended June 30, 2020 and 2019.
Accrued interest receivable for securities available for sale is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2020 and December 31, 2019, accrued interest receivable for securities was $12.6 million and $13.9 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.
The following table provides the proceeds and both gross realized gains and losses on sales of debt securities available for sale as well as other securities gains and losses for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Proceeds from sales of debt securities available for sale
 
$
—

 
$
175,586

 
$
194,105

 
$
259,554

 
 
 
 
 
 
 
 
 
Gross realized gains from sales of debt securities available for sale
 
$
—

 
$
1,510

 
$
435

 
$
3,357

Gross realized losses from sales of debt securities available for sale
 
—

 
(1,225
)
 
(186
)
 
(1,225
)
Other securities gains (1)
 
16,425

 
—

 
16,425

 
—

Investment securities gains, net
 
$
16,425

 
$
285

 
$
16,674

 
$
2,132


__________
(1) Other securities gains includes gain from sale of Visa Class B restricted stock and subsequent write up to fair value of remaining Visa Class B shares. For additional information, please see Note 13 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
The following table provides the unrealized gains and losses on equity securities at the reporting date:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Gains recognized during the period on equity securities (1)
 
$
16,425

 
$
—

 
$
16,425

 
$
—

Less: Gains recognized during the period on equity securities sold during the period (1)
 
(3,000
)
 
—

 
(3,000
)
 
—

Unrealized gains recognized during the reporting period on equity securities still held at the reporting date (1)
 
$
13,425

 
$
—

 
$
13,425

 
$
—

__________
(1) Visa Class B restricted stock owned by the Company was previously carried at a zero-cost basis due to existing transfer restrictions and uncertainty of covered litigation. The sale of shares by the Company of Visa Class B restricted shares during the three months ended June 30, 2020 resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining shares of Visa Class B restricted shares upward to this observable market price.
The scheduled contractual maturities of debt securities available for sale at June 30, 2020 are presented as follows:
 
 
June 30, 2020
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
53,099

 
$
53,800

Due after one year through five years
 
389,269

 
409,099

Due after five years through ten years
 
1,894,385

 
2,038,033

Due after ten years
 
1,154,554

 
1,192,855

Total debt securities available for sale
 
$
3,491,307

 
$
3,693,787


The following table summarizes the carrying value of securities pledged as collateral to secure public funds, borrowings and other purposes as permitted or required by law:
 
 
June 30, 2020
 
 
(in thousands)
To secure public funds
 
$
449,497

To secure borrowings
 
111,873

Other securities pledged
 
150,587

Total securities pledged as collateral
 
$
711,957


The following table shows the gross unrealized losses and fair value of the Company’s debt securities available for sale for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2020 and December 31, 2019:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
49,116

 
$
(317
)
 
$
47,175

 
$
(1,044
)
 
$
96,291

 
$
(1,361
)
Other asset-backed securities
 
20,703

 
(73
)
 
95

 
—

 
20,798

 
(73
)
State and municipal securities
 
6,937

 
(57
)
 
—

 
—

 
6,937

 
(57
)
Total
 
$
76,756

 
$
(447
)
 
$
47,270

 
$
(1,044
)
 
$
124,026

 
$
(1,491
)
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
1,055,903

 
$
(12,424
)
 
$
491,539

 
$
(6,798
)
 
$
1,547,442

 
$
(19,222
)
Other asset-backed securities
 
89,508

 
(880
)
 
6,799

 
(109
)
 
96,307

 
(989
)
State and municipal securities
 
12,363

 
(142
)
 
12,587

 
(82
)
 
24,950

 
(224
)
U.S. government agency and government-sponsored enterprise securities
 
—

 
—

 
10,495

 
(5
)
 
10,495

 
(5
)
Total
 
$
1,157,774

 
$
(13,446
)
 
$
521,420

 
$
(6,994
)
 
$
1,679,194

 
$
(20,440
)

At June 30, 2020, there were 57 U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligation securities in an unrealized loss position. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
At June 30, 2020, there were two other asset-backed securities in an unrealized loss position. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
At June 30, 2020, there were five state and municipal government securities in an unrealized loss position. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of June 30, 2020, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company concluded an allowance for credit losses is unnecessary at June 30, 2020.
Equity Securities without Readily Determinable Fair Values
Visa Class B Restricted Shares

In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into publicly traded Visa Class A common shares. This conversion will not occur until the settlement of certain litigation which is indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account not be sufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Visa Class B conversion ratio to unrestricted Visa Class A shares.

During the three months ended June 30, 2020, the Company sold 17,360 shares of Visa Class B restricted stock for a gain of $3.0 million, which resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining Visa Class B restricted shares upward to this observable market price. At June 30, 2020, the Company owned 77,683 Visa Class B shares, which had a carrying value of $13.4 million.
v3.20.2
Loans
 6 Months Ended
Jun. 30, 2020
Loans and Leases Receivable, Net Amount [Abstract]  
Loans
Loans
The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):
 
 
June 30, 2020
 
December 31, 2019
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,032,643

 
$
3,945,853

Commercial business
 
3,859,513

 
2,989,613

Agriculture
 
845,950

 
765,371

Construction
 
304,015

 
361,533

Consumer loans:
 
 
 
 
One-to-four family residential real estate
 
692,837

 
637,325

Other consumer
 
36,940

 
43,770

Total loans
 
9,771,898

 
8,743,465

Less: Allowance for credit losses
 
(151,546
)
 
(83,968
)
Total loans, net
 
$
9,620,352

 
$
8,659,497

Loans held for sale
 
$
28,803

 
$
17,718


At June 30, 2020 and December 31, 2019, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon and Idaho.
At June 30, 2020 and December 31, 2019, $3.43 billion and $3.24 billion of commercial and residential real estate loans were pledged as collateral on FHLB borrowings and additional borrowing capacity. The Company has also pledged $199.7 million and $151.3 million of commercial loans to the FRB for additional borrowing capacity at June 30, 2020 and December 31, 2019, respectively.
Accrued interest receivable for loans is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2020 and December 31, 2019, accrued interest receivable for loans was $46.5 million and $33.0 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.
The following is an aging of the recorded investment of the loan portfolio as of June 30, 2020 and December 31, 2019:
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,011,604

 
$
7,402

 
$
2,482

 
$
—

 
$
9,884

 
$
11,155

 
$
4,032,643

Commercial business
 
3,833,606

 
4,756

 
626

 
—

 
5,382

 
20,525

 
3,859,513

Agriculture
 
823,226

 
1,197

 
2,365

 
—

 
3,562

 
19,162

 
845,950

Construction
 
303,798

 
—

 
—

 
—

 
—

 
217

 
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
684,729

 
5,015

 
431

 
—

 
5,446

 
2,662

 
692,837

Other consumer
 
36,844

 
63

 
22

 
—

 
85

 
11

 
36,940

Total
 
$
9,693,807

 
$
18,433

 
$
5,926

 
$
—

 
$
24,359

 
$
53,732

 
$
9,771,898

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
3,935,633

 
$
6,421

 
$
—

 
—

 
$
6,421

 
$
3,799

 
$
3,945,853

Commercial business
 
2,959,826

 
6,081

 
2,769

 
—

 
8,850

 
20,937

 
2,989,613

Agriculture
 
755,719

 
2,283

 
2,346

 
—

 
4,629

 
5,023

 
765,371

Construction
 
360,582

 
951

 
—

 
—

 
951

 
—

 
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
631,109

 
2,516

 
408

 
—

 
2,924

 
3,292

 
637,325

Other consumer
 
43,654

 
80

 
27

 
—

 
107

 
9

 
43,770

Total
 
$
8,686,523

 
$
18,332

 
$
5,550

 
$
—

 
$
23,882

 
$
33,060

 
$
8,743,465


Loan payments are considered timely when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof is received on the due date of the scheduled payment. In addition, the risk rating on COVID-19 modified loans did not change. These loans are not considered past due until after the deferral period is over and scheduled payments resume. Accrued interest on these COVID-19 modified loans is due, in full, when the deferral period ends. The credit quality of these loans will be reevaluated after the deferral period ends.
Nonaccrual loans are generally loans placed on a nonaccrual basis when they become 90 days past due or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan. The Company’s policy is to write-off all accrued interest on loans when they are placed on nonaccrual status.
The following table summarizes written off interest on nonaccrual loans for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Commercial loans
 
$
665

 
$
623

 
$
1,448

 
$
1,168

Consumer loans
 
8

 
39

 
13

 
120

Total
 
$
673

 
$
662

 
$
1,461

 
$
1,288


The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
 
 
(in thousands)
Commercial loans:
 
 
 
 
Commercial real estate
 
$
9,609

 
$
1,715

Commercial business
 
5,932

 
15,762

Agriculture
 
14,387

 
1,798

Total
 
$
29,928

 
$
19,275


The following is an analysis of loans classified as TDR during the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30, 2020
 
Three Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
4

 
$
1,690

 
$
1,690

 
3

 
$
918

 
$
918

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
1

 
128

 
128

 
4

 
118

 
118

Total
 
5

 
$
1,818

 
$
1,818

 
7

 
$
1,036

 
$
1,036


 
 
Six Months Ended June 30, 2020
 
Six Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
6

 
$
1,962

 
$
1,962

 
5

 
$
1,534

 
$
1,534

Agriculture
 
1

 
895

 
895

 
—

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
2

 
196

 
196

 
5

 
335

 
335

Total
 
9

 
$
3,053

 
$
3,053

 
10

 
$
1,869

 
$
1,869


The Company’s loans classified as TDR are loans that have been modified or with respect to which the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. The concessions granted in the restructurings, summarized in the table above, largely consisted of maturity extensions, interest rate modifications or a combination of both. In limited circumstances, a reduction in the principal balance of the loan could also be made as a concession. Loans classified as TDR are included with the loans collectively measured for credit losses.
The Company had commitments to lend $625 thousand of additional funds on loans classified as TDR as of June 30, 2020. The Company had $1.1 million of such commitments at December 31, 2019. The Company did not have any loans modified as TDR that defaulted within 12 months of being modified as TDR during the three and six months ended June 30, 2020. During the three and six months ended June 30, 2019, the Company had one $26 thousand consumer loan that defaulted within 12 months of being modified as a TDR. The defaulted TDR loan was collateralized and included with the loans individually measured for credit loss.
Loan modifications and PPP loans in response to COVID-19
Financial institutions are required to maintain records of the volume of loans involved in modifications to which troubled debt restructuring relief is applicable. At June 30, 2020, the Company granted approximately 3,050 short–term deferments on loan balances of $1.58 billion, which represented 16% of total loan balances as of June 30, 2020. These short–term deferments are not classified as TDRs and will not be reported as past due provided that they are performing in accordance with the modified terms.
The Company offered PPP loans to provide financial support to small and medium-size businesses to cover payroll and certain other expenses during the COVID-19 pandemic. The PPP was established by the CARES Act and is implemented by the U.S. SBA with support from the U.S. Department of Treasury. The program, which was amended by the Paycheck Protection Flexibility Act of 2020, provides small businesses with funds to pay up to 24 weeks of payroll costs including benefits, as well as interest on mortgages, rent and utilities. Funds are provided to small businesses in the form of loans that will be fully forgiven when used for permitted purposes and when at least 60% of the funds are used for payroll costs in accordance with the requirements of the amended PPP. At June 30, 2020, we had $941.4 million of PPP loans outstanding, which are included in commercial business loans.
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit
 6 Months Ended
Jun. 30, 2020
Allowance For Credit Losses and Allowance for Unfunded Commitments and Letters Of Credit [Abstract]  
Allowance For Credit Losses And Allowance for Unfunded Loan Commitments And Letters Of Credit Text Block
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit
The ACL is determined through quarterly assessments of expected credit losses within the loan portfolio and is deducted from the loan’s amortized cost basis to present the net amount of loans expected to be collected. We estimate the ACL using relevant and reliable available information, which is derived from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Additions to and recaptures from the ACL are charged to current period earnings through the provision for credit losses. Loan amounts that are determined to be uncollectable are charged directly against the ACL and netted against amounts recovered on previously charged-off loans.
For the purpose of calculating portfolio level reserves, we have segmented our loan portfolio into two portfolio segments (Commercial and Consumer). The Commercial and Consumer portfolio segments are then further broken down into loan classes by risk characteristics. The risk characteristics include regulatory call codes, type of industry and collateral type.
The ACL is comprised of reserves measured on a collective (pool) basis using a quantitative DCF model for all loan classes with similar risk characteristics and then qualitatively adjusted for large loan concentrations, trends in problem loans, policy exemptions granted, and other factors. The quantitative DCF model utilizes anticipated period cash flows determined on a loan-level basis. The anticipated cash flows take into account contractual principal and interest payments, anticipated segment level prepayments, probability of defaults and historical loss given defaults. The majority of our loan classes utilize regression models to calculate probability of defaults, in which macroeconomic factors are correlated to historical quarterly defaults. The Commercial segment two-factor models utilize a mix of seven macroeconomic factors, including the four most commonly used factors: Real GDP, National Unemployment Rate, Home Price Index and Commercial Real Estate Index. The three additional factors are Nominal GDP, Producer Price Index and Core Consumer Price Index. The Consumer segment two-factor models utilize a mix of three macroeconomic factors: National Unemployment Rate, Home Price Index and Prime Rate. The Company utilizes an 18 month reasonable and supportable forecast for the macroeconomic factors, after which they revert to their historical mean using a straight-line basis constructed on their absolute historical quarterly change.
Loans are individually measured for credit losses if they do not share similar risk characteristics of other loans within their respective pools. Individually measured loans are primarily nonaccrual and collateral dependent with balances equal to or greater than $500,000 and for which foreclosure is probable. Commercial real estate loans are secured by commercial real estate, including owner occupied and non-owner occupied commercial real estate, as well as multifamily residential real estate. Commercial business loans are primarily secured by non-real estate collateral, including equipment and other non-real estate fixed assets, inventory, receivables, and cash. Agricultural loans are secured by farmland and other agricultural real estate, as well as equipment, inventory, such as crops and livestock, non-real estate fixed assets, and cash. Construction loans are secured by one-to-four family residential real estate and commercial real estate in varying stages of development. One-to-four family residential real estate loans are secured by one-to-four family residential properties. Other consumer loans are secured by personal property. For loans measured on an individual basis, the Company calculates the allowance as the difference between the amortized cost of the loan and the fair market value of the collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. If the fair value of the collateral is greater than the amortized cost of the loan, no reserve is recorded.
The Company also records an allowance for credit losses on unfunded loan commitments and letters of credit. We estimate expected credit losses on unfunded commitments in which we are exposed to credit risk, unless we have the option to unconditionally cancel the obligation. Expected credit losses are calculated based on the likelihood that funding will occur and an estimate of what will be funded by analyzing the most recent four-quarter utilization rates, current utilization, and our quantitative ACL rate. The allowance for unfunded commitments and letters of credit is included in “Other Liabilities” on the Consolidated Balance Sheets, with changes to the balance being charged to noninterest expense.
We do not measure an allowance for credit losses on accrued interest receivable balances because these balances are written-off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.
The following tables show a detailed analysis of the ACL for the three and six months ended June 30, 2020:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
37,122

 
$
—

 
$
13

 
$
13,098

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
45,570

 
(5,442
)
 
811

 
12,247

 
53,186

 
3,208

 
49,978

Agriculture
 
11,085

 
—

 
1

 
3,782

 
14,868

 
828

 
14,040

Construction
 
8,845

 
—

 
235

 
(1,127
)
 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
17,659

 
—

 
422

 
5,630

 
23,711

 
—

 
23,711

Other consumer
 
1,644

 
(198
)
 
130

 
19

 
1,595

 
—

 
1,595

Unallocated
 
149

 
—

 
—

 
(149
)
 
—

 
—

 
—

Total
 
$
122,074

 
$
(5,640
)
 
$
1,612

 
$
33,500

 
$
151,546

 
$
4,036

 
$
147,510

 
 
Prior Year
Ending Balance
 
Impact of Adopting ASC 326
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
20,340

 
$
7,533

 
$
27,873

 
$
(101
)
 
$
27

 
$
22,434

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
30,292

 
762

 
31,054

 
(7,126
)
 
1,671

 
27,587

 
53,186

 
3,208

 
49,978

Agriculture
 
15,835

 
(9,325
)
 
6,510

 
(4,726
)
 
42

 
13,042

 
14,868

 
828

 
14,040

Construction
 
8,571

 
(1,750
)
 
6,821

 
—

 
677

 
455

 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
7,435

 
4,237

 
11,672

 
(10
)
 
704

 
11,345

 
23,711

 
—

 
23,711

Other consumer
 
883

 
778

 
1,661

 
(466
)
 
254

 
146

 
1,595

 
—

 
1,595

Unallocated
 
612

 
(603
)
 
9

 
—

 
—

 
(9
)
 
—

 
—

 
—

Total
 
$
83,968

 
$
1,632

 
$
85,600

 
$
(12,429
)
 
$
3,375

 
$
75,000

 
$
151,546

 
$
4,036

 
$
147,510

The following tables show a detailed analysis of the ALLL for the three and six months ended June 30, 2019:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
16,359

 
$
(564
)
 
$
556

 
$
(703
)
 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,545

 
(4,316
)
 
492

 
(1,021
)
 
29,700

 
691

 
29,009

Agriculture
 
10,690

 
(61
)
 
64

 
1,978

 
12,671

 
712

 
11,959

Construction
 
11,965

 
(20
)
 
691

 
(179
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,311

 
(321
)
 
450

 
(821
)
 
7,619

 
27

 
7,592

Other consumer
 
823

 
(5
)
 
59

 
(162
)
 
715

 
1

 
714

Unallocated
 
581

 
—

 
—

 
1,126

 
1,707

 
—

 
1,707

Total
 
$
83,274

 
$
(5,287
)
 
$
2,312

 
$
218

 
$
80,517

 
$
1,475

 
$
79,042

 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
14,766

 
$
(1,242
)
 
$
1,070

 
$
1,054

 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,658

 
(5,822
)
 
1,019

 
(155
)
 
29,700

 
691

 
29,009

Agriculture
 
9,589

 
(139
)
 
122

 
3,099

 
12,671

 
712

 
11,959

Construction
 
14,395

 
(215
)
 
774

 
(2,497
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,024

 
(802
)
 
784

 
(387
)
 
7,619

 
27

 
7,592

Other consumer
 
787

 
(55
)
 
74

 
(91
)
 
715

 
1

 
714

Unallocated
 
1,150

 
—

 
—

 
557

 
1,707

 
—

 
1,707

Total
 
83,369

 
(8,275
)
 
3,843

 
1,580

 
80,517

 
1,475

 
79,042


The $67.6 million increase in the ACL at June 30, 2020 compared to the ALLL at December 31, 2019 was primarily the result of COVID-19 and the corresponding downturn in the national and world economies. The ACL at June 30, 2020 does not include a reserve for the PPP loans as these loans are fully guaranteed by the SBA.

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Beginning balance
 
$
6,000

 
$
3,780

 
$
3,430

 
$
4,330

Impact of adopting ASC 326
 
—

 
—

 
1,570

 
$
—

Net changes in the allowance for unfunded commitments and letters of credit
 
2,800

 
200

 
3,800

 
(350
)
Ending balance
 
$
8,800

 
$
3,980

 
$
8,800

 
$
3,980


Credit Quality Indicators
The extension of credit in the form of loans or other credit products to consumer and commercial clients is one of our principal business activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry and type of borrower and by limiting the aggregation of debt to a single borrower.
We evaluate the credit quality of our loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial condition, historical payment experience, credit documentation and current economic trends. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of the loss on the loan increases. All loans risk rated special mention or worse with amortized costs exceeding $100,000 are reviewed at least quarterly with more frequent review for specific loans.
Pass rated loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special Mention rated loans have potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Loans with a risk rating of Substandard or worse are reviewed to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating or accrual status may be adjusted accordingly. Loans risk rated as Substandard reflect loans where a loss is possible if loan weaknesses are not corrected. Doubtful rated loans have a high probability of loss; however, the amount of loss has not yet been determined. Loss rated loans are considered uncollectable and when identified, are charged-off.
The following is an analysis of the credit quality of our loan portfolio, as of June 30, 2020 and December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
 
Total (1)
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
332,517

 
$
650,893

 
$
521,112

 
$
569,062

 
$
483,908

 
$
1,121,467

 
$
48,813

 
$
2,424

 
$
3,730,196

Special mention
 
10,217

 
64,490

 
18,809

 
13,462

 
44,503

 
44,766

 
—

 
—

 
196,247

Substandard
 
—

 
2,050

 
23,736

 
6,535

 
39,711

 
33,096

 
—

 
1,072

 
106,200

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
342,734

 
$
717,433

 
$
563,657

 
$
589,059

 
$
568,122

 
$
1,199,329

 
$
48,813

 
$
3,496

 
$
4,032,643

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
1,075,991

 
$
440,684

 
$
355,598

 
$
259,075

 
$
256,579

 
$
284,232

 
$
920,762

 
$
5,951

 
$
3,598,872

Special mention
 
4,944

 
47,663

 
36,645

 
26,728

 
6,702

 
11,349

 
34,348

 
—

 
168,379

Substandard
 
923

 
4,340

 
21,141

 
6,358

 
8,679

 
7,581

 
40,155

 
3,085

 
92,262

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
1,081,858

 
$
492,687

 
$
413,384

 
$
292,161

 
$
271,960

 
$
303,162

 
$
995,265

 
$
9,036

 
$
3,859,513

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
118,361

 
$
103,163

 
$
44,586

 
$
60,678

 
$
60,533

 
$
69,132

 
$
274,960

 
$
17,136

 
$
748,549

Special mention
 
—

 
521

 
—

 
—

 
271

 
275

 
1,429

 
—

 
2,496

Substandard
 
1,977

 
12,736

 
5,684

 
5,662

 
7,985

 
6,209

 
51,994

 
2,658

 
94,905

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
120,338

 
$
116,420

 
$
50,270

 
$
66,340

 
$
68,789

 
$
75,616

 
$
328,383

 
$
19,794

 
$
845,950

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
58,564

 
$
140,987

 
$
32,706

 
$
9,610

 
$
1,025

 
$
1,999

 
$
32,630

 
$
—

 
$
277,521

Special mention
 
—

 
17,912

 
488

 
—

 
—

 
—

 
—

 
—

 
18,400

Substandard
 
—

 
2,472

 
5,526

 
—

 
—

 
58

 
38

 
—

 
8,094

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
58,564

 
$
161,371

 
$
38,720

 
$
9,610

 
$
1,025

 
$
2,057

 
$
32,668

 
$
—

 
$
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
75,255

 
$
90,453

 
$
82,106

 
$
35,033

 
$
25,963

 
$
97,256

 
$
278,444

 
$
790

 
$
685,300

Special mention
 
—

 
—

 
—

 
—

 
—

 
219

 
—

 
—

 
219

Substandard
 
442

 
739

 
227

 
1,215

 
397

 
2,532

 
1,011

 
755

 
7,318

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
75,697

 
$
91,192

 
$
82,333

 
$
36,248

 
$
26,360

 
$
100,007

 
$
279,455

 
$
1,545

 
$
692,837

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
3,500

 
$
4,237

 
$
4,734

 
$
1,409

 
$
420

 
$
1,536

 
$
20,611

 
$
439

 
$
36,886

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
11

 
—

 
—

 
4

 
7

 
32

 
—

 
54

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
3,500

 
$
4,248

 
$
4,734

 
$
1,409

 
$
424

 
$
1,543

 
$
20,643

 
$
439

 
$
36,940

Total
 
$
1,682,691

 
$
1,583,351

 
$
1,153,098

 
$
994,827

 
$
936,680

 
$
1,681,714

 
$
1,705,227

 
$
34,310

 
$
9,771,898

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
151,546

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,620,352

__________
(1) Loans that are on short-term deferments are treated as Pass loans and will not be reported as past due provided that they are performing in accordance with the modified terms.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2019
 
2018
 
2017
 
2016
 
2015
 
Prior
 
 
Total
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
699,336

 
$
562,992

 
$
621,113

 
$
565,928

 
$
441,220

 
$
873,687

 
$
52,276

 
$
19,986

 
$
3,836,538

Special mention
 
1,824

 
305

 
7,019

 
3,360

 
—

 
3,426

 
—

 
—

 
15,934

Substandard
 
47

 
10,698

 
9,320

 
36,229

 
20,278

 
11,738

 
—

 
5,071

 
93,381

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
701,207

 
$
573,995

 
$
637,452

 
$
605,517

 
$
461,498

 
$
888,851

 
$
52,276

 
$
25,057

 
$
3,945,853

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
479,481

 
$
442,222

 
$
330,934

 
$
301,337

 
$
157,436

 
$
199,089

 
$
963,663

 
$
25,577

 
$
2,899,739

Special mention
 
2,241

 
6,673

 
56

 
2,006

 
52

 
585

 
12,710

 
—

 
24,323

Substandard
 
85

 
17,240

 
3,458

 
9,534

 
3,227

 
3,972

 
26,639

 
1,396

 
65,551

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
481,807

 
$
466,135

 
$
334,448

 
$
312,877

 
$
160,715

 
$
203,646

 
$
1,003,012

 
$
26,973

 
$
2,989,613

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
107,152

 
$
54,950

 
$
70,337

 
$
71,874

 
$
33,597

 
$
56,342

 
$
280,984

 
$
10,036

 
$
685,272

Special mention
 
557

 
2,535

 
1,381

 
—

 
64

 
576

 
5,336

 
—

 
10,449

Substandard
 
7,291

 
6,047

 
6,173

 
5,907

 
1,477

 
5,698

 
30,669

 
6,388

 
69,650

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
115,000

 
$
63,532

 
$
77,891

 
$
77,781

 
$
35,138

 
$
62,616

 
$
316,989

 
$
16,424

 
$
765,371

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
183,525

 
$
91,342

 
$
40,514

 
$
1,067

 
$
939

 
$
1,601

 
$
33,388

 
$
7,793

 
$
360,169

Special mention
 
—

 
1,264

 
—

 
—

 
—

 
—

 
41

 
—

 
1,305

Substandard
 
—

 
—

 
—

 
—

 
—

 
59

 
—

 
—

 
59

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
183,525

 
$
92,606

 
$
40,514

 
$
1,067

 
$
939

 
$
1,660

 
$
33,429

 
$
7,793

 
$
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
103,315

 
$
77,877

 
$
32,440

 
$
25,052

 
$
27,294

 
$
80,370

 
$
283,830

 
$
554

 
$
630,732

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
228

 
800

 
400

 
623

 
3,156

 
905

 
481

 
6,593

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
103,315

 
$
78,105

 
$
33,240

 
$
25,452

 
$
27,917

 
$
83,526

 
$
284,735

 
$
1,035

 
$
637,325

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
9,276

 
$
5,713

 
$
1,974

 
$
758

 
$
848

 
$
1,306

 
$
23,351

 
$
508

 
$
43,734

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
—

 
1

 
—

 
—

 
8

 
27

 
—

 
36

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
9,276

 
$
5,713

 
$
1,975

 
$
758

 
$
848

 
$
1,314

 
$
23,378

 
$
508

 
$
43,770

Total
 
$
1,594,130

 
$
1,280,086

 
$
1,125,520

 
$
1,023,452

 
$
687,055

 
$
1,241,613

 
$
1,713,819

 
$
77,790

 
$
8,743,465

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,968

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
8,659,497
v3.20.2
Other Real Estate Owned
 6 Months Ended
Jun. 30, 2020
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract]  
Other Real Estate Owned
Other Real Estate Owned
The following tables set forth activity in OREO for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Balance, beginning of period
 
$
510

 
$
6,075

 
$
552

 
$
6,019

Transfers in
 
558

 
—

 
558

 
386

Valuation adjustments
 
—

 
—

 
—

 
(195
)
Proceeds from sale of OREO property
 
(303
)
 
(5,673
)
 
(345
)
 
(5,794
)
Gain (loss) on sale of OREO, net
 
(18
)
 
716

 
(18
)
 
702

Balance, end of period
 
$
747

 
$
1,118

 
$
747

 
$
1,118


At June 30, 2020, there were $60 thousand in foreclosed residential real estate properties held as OREO. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $451 thousand.
v3.20.2
Goodwill and Intangible Assets
 6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Other Intangible Assets
In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. The Company performed an annual impairment assessment as of July 31, 2019 and concluded that there was no impairment. As of June 30, 2020, we evaluated potential triggering events that might be indicators that our goodwill was impaired. The events include the economic disruption and uncertainty surrounding the COVID-19 pandemic and the recent volatility in stock prices. Based on our evaluation, we concluded that our goodwill was not more than likely impaired.
The CDI is evaluated for impairment if events and circumstances indicate a possible impairment. The CDI is amortized on an accelerated basis over an estimated life of 10 years.
The following table sets forth activity for goodwill and other intangible assets for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Goodwill
 
 
 
 
 
 
 
 
Total goodwill
 
$
765,842

 
$
765,842

 
$
765,842

 
$
765,842

Other intangible assets, net
 
 
 
 
 
 
 
 
CDI:
 
 
 
 
 
 
 
 
Gross CDI balance at beginning of period
 
105,473

 
105,473

 
105,473

 
105,473

Accumulated amortization at beginning of period
 
(73,244
)
 
(63,203
)
 
(70,934
)
 
(60,455
)
CDI, net at beginning of period
 
32,229

 
42,270

 
34,539

 
45,018

CDI current period amortization
 
(2,210
)
 
(2,649
)
 
(4,520
)
 
(5,397
)
Total CDI, net at end of period
 
30,019

 
39,621

 
30,019

 
39,621

Intangible assets not subject to amortization
 
919

 
919

 
919

 
919

Other intangible assets, net at end of period
 
30,938

 
40,540

 
30,938

 
40,540

Total goodwill and other intangible assets at end of period
 
$
796,780

 
$
806,382

 
$
796,780

 
$
806,382


The following table provides the estimated future amortization expense of our CDI for the remaining six months ending December 31, 2020 and the succeeding four years:
 
 
Year ending December 31,
 
 
(in thousands)
2020
 
$
4,204

2021
 
7,264

2022
 
5,880

2023
 
4,552

2024
 
3,432
v3.20.2
Revolving Line of Credit
 6 Months Ended
Jun. 30, 2020
Line of Credit [Member]  
Line of Credit Facility [Line Items]  
Short-term Debt [Text Block] Revolving Line of Credit
The Company has a $15.0 million short-term credit facility with an unaffiliated bank that expires May 27, 2021. This facility has a variable interest rate and provides the Company additional liquidity, if needed, for various corporate activities including the repurchase of shares of Columbia Banking System, Inc. common stock. There was no outstanding balance at both June 30, 2020 and December 31, 2019. The credit agreement requires the Company to comply with certain covenants including those related to asset quality and capital levels. The Company was in compliance with all covenants associated with this facility at June 30, 2020.
v3.20.2
Derivatives and Balance Sheet Offsetting
 6 Months Ended
Jun. 30, 2020
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Derivatives and Hedging Activities
Derivatives, Hedging Activities and Balance Sheet Offsetting
The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio.
The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate collars as part of its interest rate risk management strategy. Interest rate collars designated as cash flow hedges involve the payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and receipts of variable-rate amounts if interest rates fall below the floor strike rate on the contract. These derivative contracts are used to hedge the variable cash flows associated with existing variable-rate assets.
With respect to derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate assets. During the next 12 months, the Company estimates that there will be $10.6 million reclassified as an increase to interest income.
In addition, the Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third-party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at June 30, 2020 and December 31, 2019 was $533.8 million and $428.6 million, respectively. During both the three and six month periods ended June 30, 2020, there was mark-to-market loss of $473 thousand recorded to “Other” noninterest expense. During both the three and six months ended June 30, 2019, there was mark-to-market loss of $2 thousand recorded to “Other” noninterest expense.
The following table presents the fair value of derivatives, as well as their classification on the Consolidated Balance Sheet at June 30, 2020 and December 31, 2019:
 
Asset Derivatives
 
Liability Derivatives
 
June 30, 2020
 
December 31, 2019
 
June 30, 2020
 
December 31, 2019
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
(in thousands)
Derivatives designated as hedging instruments:
Interest rate collar
Other assets
 
$
38,421

 
Other assets
 
$
14,727

 
Other liabilities
 
$
—

 
Other liabilities
 
$
—

Derivatives not designated as hedging instruments:
Interest rate swap contracts
Other assets
 
$
54,424

 
Other assets
 
$
19,144

 
Other liabilities
 
$
54,898

 
Other liabilities
 
$
19,145


The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss) at June 30, 2020 and 2019:
 
Amount of Gain or (Loss) Recognized in Accumulated Other Comprehensive Income on Derivative
 
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Three Months Ended June 30,
 
 
 
Three Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
(in thousands)
Interest rate collar
$
3,402

 
$
9,423

 
 Interest income
 
$
2,190

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
Interest rate collar
$
26,825

 
$
15,691

 
 Interest income
 
$
3,130

 
$
—



The notional amount of the interest rate collar was $500.0 million at June 30, 2020. The cash flow hedge was determined to be effective during the periods presented and, as a result, qualifies for hedge accounting treatment.

The Company is party to interest rate swap contracts, interest rate collar and repurchase agreements that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.
The following tables show the gross interest rate swap contracts, collar agreements and repurchase agreements in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of overcollateralization are not shown.
 
Gross Amounts of Recognized Assets/Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
 
Collateral Pledged/Received
 
Net Amount
June 30, 2020
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,424

 
$
—

 
$
54,424

 
$
—

 
$
54,424

Interest rate collar
$
38,421

 
$
—

 
$
38,421

 
$
(38,421
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,898

 
$
—

 
$
54,898

 
$
(53,320
)
 
$
1,578

Repurchase agreements
$
51,479

 
$
—

 
$
51,479

 
$
(51,479
)
 
$
—

 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,144

 
$
—

 
$
19,144

 
$
—

 
$
19,144

Interest rate collar
$
14,727

 
$
—

 
$
14,727

 
$
(14,727
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,145

 
$
—

 
$
19,145

 
$
(19,145
)
 
$
—

Repurchase agreements
$
64,437

 
$
—

 
$
64,437

 
$
(64,437
)
 
$
—


The Company’s agreements with each of its derivative counterparties provide that if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
The following table presents the class of collateral pledged for repurchase agreements as well as the remaining contractual maturity of the repurchase agreements:
 
 
Remaining contractual maturity of the agreements
 
 
Overnight and continuous
 
Up to 30 days
 
30 - 90 days
 
Greater than 90 days
 
Total
June 30, 2020
 
(in thousands)
Class of collateral pledged for repurchase agreements
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
51,479

 
$
—

 
$
—

 
$
—

 
$
51,479

Gross amount of recognized liabilities for repurchase agreements
 
 
 
 
 
 
 
 
 
51,479

Amounts related to agreements not included in offsetting disclosure
 
 
 
 
 
 
 
 
 
$
—


The collateral utilized for the Company’s repurchase agreements is subject to market fluctuations as well as prepayments of principal. The Company monitors the risk of the fair value of its pledged collateral falling below acceptable amounts based on the type of the underlying repurchase agreement. The pledged collateral related to the Company’s $51.5 million sweep repurchase agreements, which mature on an overnight basis, is monitored on a daily basis as the underlying sweep accounts can have frequent transaction activity and the amount of pledged collateral is adjusted as necessary.
v3.20.2
Commitments and contingent liabilities
 6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingent Liabilities
Lease Commitments: The Company’s lease commitments consist primarily of leased locations under various non-cancellable operating leases that expire between 2020 and 2043. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule.
Financial Instruments with Off-Balance Sheet Risk: In the normal course of business, the Company makes loan commitments (typically unfunded loans and unused lines of credit) and issues standby letters of credit to accommodate the financial needs of its customers. At June 30, 2020 and December 31, 2019, the Company’s loan commitments amounted to $2.65 billion and $2.67 billion, respectively.
Standby letters of credit commit the Company to make payments on behalf of customers under specified conditions. Historically, no significant losses have been incurred by the Company under standby letters of credit. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including collateral requirements, where appropriate. Standby letters of credit were $24.1 million and $25.7 million at June 30, 2020 and December 31, 2019, respectively. In addition, there were no commitments under commercial letters of credit used to facilitate customers’ trade transactions and other off-balance sheet liabilities at both June 30, 2020 and December 31, 2019.
Legal Proceedings: The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from their regular business activities. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the financial statements of the Company.
v3.20.2
Shareholders' Equity
 6 Months Ended
Jun. 30, 2020
Stockholders' Equity Note [Abstract]  
Shareholders' Equity
Shareholders’ Equity
Dividends:
The following table summarizes year-to-date dividend activity as of June 30, 2020:
Declared
 
Regular Cash Dividends Per Common Share
 
Special Cash Dividends Per Common Share
 
Record Date
 
Paid Date
January 23, 2020
 
$
0.28

 
$
0.22

 
February 5, 2020
 
February 19, 2020
April 30, 2020
 
$
0.28

 
$
—

 
May 14, 2020
 
May 28, 2020

Subsequent to quarter end, on July 23, 2020, the Company declared a regular quarterly cash dividend of $0.28 per common share payable on August 19, 2020 to shareholders of record at the close of business on August 5, 2020.
The payment of cash dividends is subject to federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both federal and state regulatory requirements.
Share Repurchase Program:
For the three months ended June 30, 2020, the Company did not purchase any common shares under the share repurchase program. For the six months ended June 30, 2020, the Company repurchased 731 thousand shares of common stock at an average price of $27.36 per share. The Company’s share repurchase authorization expired in May of 2020.
v3.20.2
Accumulated Other Comprehensive Income
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Abstract]  
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
The following table shows changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2020 and 2019:
 
 
Unrealized Gains and Losses on Available for Sale Securities (1)
 
Unrealized Gains and Losses on Pension Plan Liability (1)
 
Unrealized Gains and Losses on Hedging Instruments (1)
 
Total (1)
Three Months Ended June 30, 2020
 
(in thousands)
Beginning balance
 
$
112,543

 
$
(3,894
)
 
$
28,558

 
$
137,207

Other comprehensive income before reclassifications
 
42,860

 
—

 
2,611

 
45,471

Amounts reclassified from accumulated other comprehensive income (2)
 
—

 
79

 
(1,680
)
 
(1,601
)
Net current-period other comprehensive income
 
42,860

 
79

 
931

 
43,870

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
352

 
$
(2,116
)
 
$
4,810

 
$
3,046

Other comprehensive income before reclassifications
 
37,029

 
—

 
7,233

 
44,262

Amounts reclassified from accumulated other comprehensive income (2)
 
(219
)
 
61

 
—

 
(158
)
Net current-period other comprehensive income
 
36,810

 
61

 
7,233

 
44,104

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

Six Months Ended June 30, 2020
 
 
 
 
 
 
 
 
Beginning balance
 
$
33,038

 
$
(3,974
)
 
$
11,303

 
$
40,367

Other comprehensive income before reclassifications
 
122,556

 
—

 
20,588

 
143,144

Amounts reclassified from accumulated other comprehensive income (2)
 
(191
)
 
159

 
(2,402
)
 
(2,434
)
Net current-period other comprehensive income
 
122,365

 
159

 
18,186

 
140,710

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
(33,128
)
 
$
(2,177
)
 
$
—

 
$
(35,305
)
Other comprehensive income before reclassifications
 
71,926

 
—

 
12,043

 
83,969

Amounts reclassified from accumulated other comprehensive loss (2)
 
(1,636
)
 
122

 
—

 
(1,514
)
Net current-period other comprehensive income
 
70,290

 
122

 
12,043

 
82,455

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

__________
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See following table for details about these reclassifications.

The following table shows details regarding the reclassifications from accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019:
 
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Affected line Item in the Consolidated
 
 
2020
 
2019
 
2020
 
2019
 
Statement of Income
 
 
(in thousands)
 
 
Unrealized gains on available for sale debt securities
 
$
—

 
$
285

 
$
249

 
$
2,132

 
Investment securities gains, net
 
 
—

 
285

 
249

 
2,132

 
Total before tax
 
 
—

 
(66
)
 
(58
)
 
(496
)
 
Income tax provision
 
 
$
—

 
$
219

 
$
191

 
$
1,636

 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Amortization of pension plan liability actuarial losses
 
$
(103
)
 
$
(80
)
 
$
(207
)
 
$
(159
)
 
Compensation and employee benefits
 
 
(103
)
 
(80
)
 
(207
)
 
(159
)
 
Total before tax
 
 
24

 
19

 
48

 
37

 
Income tax provision
 
 
$
(79
)
 
$
(61
)
 
$
(159
)
 
$
(122
)
 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains from hedging instruments
 
$
2,190

 
$
—

 
$
3,130

 
$
—

 
Loans
 
 
2,190

 
—

 
3,130

 
—

 
Total before tax
 
 
(510
)
 
—

 
(728
)
 
—

 
Income tax provision
 
 
$
1,680

 
$
—

 
$
2,402

 
$
—

 
Net of tax
v3.20.2
Fair Value Accounting and Measurement
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Accounting and Measurement
Fair Value Accounting and Measurement
The Fair Value Measurements and Disclosures topic of the FASB ASC defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value. We hold fixed and variable rate interest-bearing securities, investments in marketable equity securities and certain other financial instruments, which are carried at fair value. Fair value is determined based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available.
The valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy:
Level 1 – Quoted prices for identical instruments in active markets that are accessible at the measurement date.
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
Fair values are determined as follows:
Debt securities available for sale at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors. These fair value calculations are considered a Level 2 input method under the provisions of the Fair Value Measurements and Disclosures topic of the FASB ASC for all debt securities available for sale.
Interest rate contracts and the interest rate collar are valued in models, which use as their basis, readily observable market parameters and are classified within Level 2 of the valuation hierarchy.
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2020 and December 31, 2019 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
June 30, 2020
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,865,030

 
$
—

 
$
2,865,030

 
$
—

Other asset-backed securities
 
224,276

 
—

 
224,276

 
—

State and municipal securities
 
468,615

 
—

 
468,615

 
—

U.S. government agency and government-sponsored enterprise securities
 
135,866

 
—

 
135,866

 
—

Total debt securities available for sale
 
$
3,693,787

 
$
—

 
$
3,693,787

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,424

 
$
—

 
$
54,424

 
$
—

Interest rate collar
 
$
38,421

 
$
—

 
$
38,421

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,898

 
$
—

 
$
54,898

 
$
—

 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
December 31, 2019
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,892,950

 
$
—

 
$
2,892,950

 
$
—

Other asset-backed securities
 
196,050

 
—

 
196,050

 
—

State and municipal securities
 
488,802

 
—

 
488,802

 
—

U.S. government agency and government-sponsored enterprise securities
 
168,340

 
—

 
168,340

 
—

Total debt securities available for sale
 
$
3,746,142

 
$
—

 
$
3,746,142

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,144

 
$
—

 
$
19,144

 
$
—

Interest rate collar
 
$
14,727

 
$
—

 
$
14,727

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,145

 
$
—

 
$
19,145

 
$
—


Nonrecurring Measurements
Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as collateral dependent loans. The following valuation techniques and inputs were used to estimate the fair value of collateral dependent loans.
Collateral dependent loans - A collateral dependent loan is a loan in which repayment is expected to be provided solely by the underlying collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. The collateral dependent loan valuations are performed in conjunction with the allowance for credit losses process on a quarterly basis.
Equity securities without readily determinable fair value - The Company measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with such changes recognized in earnings. Our equity securities without readily determinable fair value consist of 77,683 Visa Class B shares. These shares are currently subject to certain transfer restrictions and will be convertible into Visa Class A shares upon final resolution of certain litigation matters involving Visa. For additional information, please see Note 3 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
The following table presents the carrying value of equity securities, without readily determinable fair values, still held as of June 30, 2020, that are measured under the measurement alternative and related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
Equity securities without readily determinable fair values
 
(in thousands)
Carrying value, beginning of period
 
$
—

 
$
—

 
$
—

 
$
—

Upward carrying value changes
 
13,425

 
—

 
13,425

 
—

Carrying value, end of period
 
$
13,425

 
$
—

 
$
13,425

 
$
—


The following tables set forth information related to the Company’s assets that were measured using fair value estimates on a nonrecurring basis during the current and prior year quarterly periods:
 
 
Fair Value at June 30, 2020
 
Fair Value Measurements at Reporting Date Using
 
Gains(Losses) During the Three Months Ended June 30, 2020
 
Gains(Losses) During the Six Months Ended June 30, 2020
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
7,976

 
$
—

 
$
—

 
$
7,976

 
$
(6,946
)
 
$
(7,745
)
Equity securities
 
$
13,425

 
$
—

 
$
—

 
$
13,425

 
$
13,425

 
$
13,425

 
 
Fair Value at June 30, 2019
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Three Months Ended June 30, 2019
 
Losses During the Six Months Ended June 30, 2019
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
4,837

 
$
—

 
$
—

 
$
4,837

 
$
(2,124
)
 
$
(2,525
)

The losses on collateral dependent loans disclosed above represent the amount of the allowance for credit losses and/or charge-offs during the period applicable to loans held at period-end. The amount of the allowance is included in the ACL.
Quantitative information about Level 3 fair value measurements
The range and weighted average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:
 
 
Fair Value at June 30, 2020
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
7,976

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (56.22%)

__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of accounts receivable, fixed assets, inventory and real estate.
 
 
Fair Value at June 30, 2019
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
4,837

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (35.67%)
__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of cash, accounts receivable, fixed assets, inventory and real estate.
The following tables summarize carrying amounts and estimated fair values of selected financial instruments by level within the fair value hierarchy at June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
217,461

 
$
217,461

 
$
217,461

 
$
—

 
$
—

Interest-earning deposits with banks
 
880,232

 
880,232

 
880,232

 
—

 
—

Debt securities available for sale
 
3,693,787

 
3,693,787

 
—

 
3,693,787

 
—

Equity securities without readily determinable fair values
 
13,425

 
13,425

 
—

 
—

 
13,425

FHLB stock
 
16,280

 
16,280

 
—

 
16,280

 
—

Loans held for sale
 
28,803

 
28,803

 
—

 
28,803

 
—

Loans
 
9,620,352

 
10,061,835

 
—

 
—

 
10,061,835

Interest rate contracts
 
54,424

 
54,424

 
—

 
54,424

 
—

Interest rate collar
 
38,421

 
38,421

 
—

 
38,421

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
340,192

 
$
340,419

 
$
—

 
$
340,419

 
$
—

FHLB advances and FRB borrowings
 
157,441

 
159,400

 
—

 
159,400

 
—

Repurchase agreements
 
51,479

 
51,479

 
—

 
51,479

 
—

Subordinated debentures
 
35,185

 
35,227

 
—

 
35,227

 
—

Interest rate contracts
 
54,898

 
54,898

 
—

 
54,898

 
—


 
 
December 31, 2019
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
223,541

 
$
223,541

 
$
223,541

 
$
—

 
$
—

Interest-earning deposits with banks
 
24,132

 
24,132

 
24,132

 
—

 
—

Debt securities available for sale
 
3,746,142

 
3,746,142

 
—

 
3,746,142

 
—

FHLB stock
 
48,120

 
48,120

 
—

 
48,120

 
—

Loans held for sale
 
17,718

 
17,718

 
—

 
17,718

 
—

Loans
 
8,659,497

 
8,883,865

 
—

 
—

 
8,883,865

Interest rate contracts
 
19,144

 
19,144

 
—

 
19,144

 
—

Interest rate collar
 
14,727

 
14,727

 
—

 
14,727

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
400,070

 
$
397,736

 
$
—

 
$
397,736

 
$
—

FHLB advances
 
953,469

 
952,762

 
—

 
952,762

 
—

Repurchase agreements
 
64,437

 
64,437

 
—

 
64,437

 
—

Subordinated debentures
 
35,277

 
35,491

 
—

 
35,491

 
—

Interest rate contracts
 
19,145

 
19,145

 
—

 
19,145

 
—
v3.20.2
Earnings per Common Share
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Earnings Per Common Share
Earnings Per Common Share
The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company issues restricted shares under share-based compensation plans which qualify as participating securities.
The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands except per share amounts)
Basic EPS:
 
 
 
 
 
 
 
 
Net income
 
$
36,582

 
$
51,724

 
$
51,210

 
$
97,595

Less: Earnings allocated to participating securities:
 
 
 
 
 
 
 
 
Nonvested restricted shares
 
139

 
378

 
325

 
838

Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Basic earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Diluted EPS:
 
 
 
 
 
 
 
 
Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Dilutive effect of equity awards
 
32

 
—

 
39

 
1

Weighted average diluted common shares outstanding
 
70,711

 
72,451

 
70,981

 
72,487

Diluted earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive
 
571

 
—

 
450

 
—
v3.20.2
Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
Revenue from Contracts with Customers
Revenue in the scope of Topic 606, Revenue from Contracts with Customers is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. The vast majority of the Company’s revenue is specifically outside the scope of Topic 606. For in-scope revenue, the following is a description of principal activities, separated by the timing of revenue recognition from which the Company generates its revenue from contracts with customers.
a.
Revenue earned at a point in time - Examples of revenue earned at a point in time are ATM transaction fees, wire transfer fees, overdraft fees, interchange fees and foreign exchange transaction fees. Revenue is primarily based on the number and type of transactions and is generally derived from transactional information accumulated by our systems and is recognized immediately as the transactions occur or upon providing the service to complete the customer’s transaction. The Company is the principal in each of these contracts, with the exception of interchange fees, in which case we are acting as the agent and record revenue net of expenses paid to the principal.
b.
Revenue earned over time - The Company earns revenue from contracts with customers in a variety of ways where the revenue is earned over a period of time - generally monthly. Examples of this type of revenue are deposit account maintenance fees, investment advisory fees, merchant revenue and safe deposit box fees. Revenue is generally derived from transactional information accumulated by our systems or those of third-parties and is recognized as the related transactions occur or services are rendered to the customer.
The Company recognizes revenue from contracts with customers when it satisfies its performance obligations. The Company’s performance obligations are typically satisfied as services are rendered and our contracts generally do not include multiple performance obligations. As a result, there are no contract balances as payments and services are rendered simultaneously. Payment is generally collected at the time services are rendered, monthly or quarterly. Unsatisfied performance obligations at the report date are not material to our Consolidated Financial Statements.
In certain cases, other parties are involved with providing products and services to our customers. If the Company is principal in the transaction (providing goods or services itself), revenues are reported based on the gross consideration received from the customer and any related expenses are reported gross in noninterest expense. If the Company is an agent in the transaction (arranging for another party to provide goods or services), the Company reports its net fee or commission retained as revenue.
Rebates, waivers and reversals are recorded as a reduction of the transaction price either when the revenue is recognized by the Company or at the time the rebate, waiver or reversal is earned by the customer.
Practical expedients
The Company applies the practical expedient in paragraph 606-10-32-18 and does not adjust the consideration from customers for the effects of a significant financing component if at contract inception the period between when the entity transfers the goods or services and when the customer pays for that good or service will be one year or less.
The Company pays sales commissions to its employees in accordance with certain incentive plans and in connection with obtaining certain contracts with customers. The Company applies the practical expedient in paragraph 340-40-25-4 and expenses such sales commissions when incurred if the amortization period of the asset the Company otherwise would have recognized is one year or less. Sales commissions are included in compensation and employee benefits expense.
For the Company’s contracts that have an original expected duration of one year or less, the Company uses the practical expedient in paragraph 606-10-50-14 and has not disclosed the amount of the transaction price allocated to unsatisfied performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue.
Disaggregation of revenue
The following table shows the disaggregation of revenue from contracts with customers for the three and six month periods ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Noninterest income:
 
 
 
 
 
 
 
 
Revenue from contracts with customers:
 
 
 
 
 
 
 
 
Deposit account and treasury management fees
 
$
6,092

 
$
9,035

 
$
13,880

 
$
18,015

Card revenue
 
3,079

 
3,763

 
6,597

 
7,425

Financial services and trust revenue
 
3,163

 
3,425

 
6,228

 
6,382

Total revenue from contracts with customers
 
12,334

 
16,223

 
26,705

 
31,822

Other sources of noninterest income
 
24,925

 
9,425

 
31,761

 
15,522

Total noninterest income
 
$
37,259

 
$
25,648

 
$
58,466

 
$
47,344
v3.20.2
Securities (Tables)
 6 Months Ended
Jun. 30, 2020
Debt Securities, Available-for-sale [Abstract]  
Securities Available for Sale
The following table summarizes the amortized cost, gross unrealized gains and losses, the allowance for credit losses and the resulting fair value of debt securities available for sale:
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Allowance for Credit
Losses
 
Fair Value
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,698,160

 
$
168,231

 
$
(1,361
)
 
$
—

 
$
2,865,030

Other asset-backed securities
 
215,620

 
8,729

 
(73
)
 
—

 
224,276

State and municipal securities
 
448,923

 
19,749

 
(57
)
 
—

 
468,615

U.S. government agency and government-sponsored enterprise securities
 
128,604

 
7,262

 
—

 
—

 
135,866

Total
 
$
3,491,307

 
$
203,971

 
$
(1,491
)
 
$
—

 
$
3,693,787

December 31, 2019
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
2,864,949

 
$
47,223

 
$
(19,222
)
 
$
—

 
$
2,892,950

Other asset-backed securities
 
194,563

 
2,476

 
(989
)
 
—

 
196,050

State and municipal securities
 
478,366

 
10,660

 
(224
)
 
—

 
488,802

U.S. government agency and government-sponsored enterprise securities
 
165,218

 
3,127

 
(5
)
 
—

 
168,340

Total
 
$
3,703,096

 
$
63,486

 
$
(20,440
)
 
$
—

 
$
3,746,142
Schedule of gross realized gains and losses on sales and calls of securities available for sale
The following table provides the proceeds and both gross realized gains and losses on sales of debt securities available for sale as well as other securities gains and losses for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Proceeds from sales of debt securities available for sale
 
$
—

 
$
175,586

 
$
194,105

 
$
259,554

 
 
 
 
 
 
 
 
 
Gross realized gains from sales of debt securities available for sale
 
$
—

 
$
1,510

 
$
435

 
$
3,357

Gross realized losses from sales of debt securities available for sale
 
—

 
(1,225
)
 
(186
)
 
(1,225
)
Other securities gains (1)
 
16,425

 
—

 
16,425

 
—

Investment securities gains, net
 
$
16,425

 
$
285

 
$
16,674

 
$
2,132


__________
(1) Other securities gains includes gain from sale of Visa Class B restricted stock and subsequent write up to fair value of remaining Visa Class B shares. For additional information, please see Note 13 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.
Unrealized gains and losses on equity securities [Table Text Block]
The following table provides the unrealized gains and losses on equity securities at the reporting date:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Gains recognized during the period on equity securities (1)
 
$
16,425

 
$
—

 
$
16,425

 
$
—

Less: Gains recognized during the period on equity securities sold during the period (1)
 
(3,000
)
 
—

 
(3,000
)
 
—

Unrealized gains recognized during the reporting period on equity securities still held at the reporting date (1)
 
$
13,425

 
$
—

 
$
13,425

 
$
—

__________
(1) Visa Class B restricted stock owned by the Company was previously carried at a zero-cost basis due to existing transfer restrictions and uncertainty of covered litigation. The sale of shares by the Company of Visa Class B restricted shares during the three months ended June 30, 2020 resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining shares of Visa Class B restricted shares upward to this observable market price.
Schedule of Contractual Maturities of Investment Securities Available for Sale
The scheduled contractual maturities of debt securities available for sale at June 30, 2020 are presented as follows:
 
 
June 30, 2020
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
53,099

 
$
53,800

Due after one year through five years
 
389,269

 
409,099

Due after five years through ten years
 
1,894,385

 
2,038,033

Due after ten years
 
1,154,554

 
1,192,855

Total debt securities available for sale
 
$
3,491,307

 
$
3,693,787
Carrying Value of Securities Pledged As Collateral
The following table summarizes the carrying value of securities pledged as collateral to secure public funds, borrowings and other purposes as permitted or required by law:
 
 
June 30, 2020
 
 
(in thousands)
To secure public funds
 
$
449,497

To secure borrowings
 
111,873

Other securities pledged
 
150,587

Total securities pledged as collateral
 
$
711,957
Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses
The following table shows the gross unrealized losses and fair value of the Company’s debt securities available for sale for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2020 and December 31, 2019:
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
June 30, 2020
 
(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
49,116

 
$
(317
)
 
$
47,175

 
$
(1,044
)
 
$
96,291

 
$
(1,361
)
Other asset-backed securities
 
20,703

 
(73
)
 
95

 
—

 
20,798

 
(73
)
State and municipal securities
 
6,937

 
(57
)
 
—

 
—

 
6,937

 
(57
)
Total
 
$
76,756

 
$
(447
)
 
$
47,270

 
$
(1,044
)
 
$
124,026

 
$
(1,491
)
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
1,055,903

 
$
(12,424
)
 
$
491,539

 
$
(6,798
)
 
$
1,547,442

 
$
(19,222
)
Other asset-backed securities
 
89,508

 
(880
)
 
6,799

 
(109
)
 
96,307

 
(989
)
State and municipal securities
 
12,363

 
(142
)
 
12,587

 
(82
)
 
24,950

 
(224
)
U.S. government agency and government-sponsored enterprise securities
 
—

 
—

 
10,495

 
(5
)
 
10,495

 
(5
)
Total
 
$
1,157,774

 
$
(13,446
)
 
$
521,420

 
$
(6,994
)
 
$
1,679,194

 
$
(20,440
)
v3.20.2
Loans (Tables)
 6 Months Ended
Jun. 30, 2020
Financing Receivable, Credit Quality Indicator [Line Items]  
Analysis of Loan Portfolio by Major Types of Loans
The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):
 
 
June 30, 2020
 
December 31, 2019
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,032,643

 
$
3,945,853

Commercial business
 
3,859,513

 
2,989,613

Agriculture
 
845,950

 
765,371

Construction
 
304,015

 
361,533

Consumer loans:
 
 
 
 
One-to-four family residential real estate
 
692,837

 
637,325

Other consumer
 
36,940

 
43,770

Total loans
 
9,771,898

 
8,743,465

Less: Allowance for credit losses
 
(151,546
)
 
(83,968
)
Total loans, net
 
$
9,620,352

 
$
8,659,497

Loans held for sale
 
$
28,803

 
$
17,718
Analysis of the Aged Loan Portfolio
The following is an aging of the recorded investment of the loan portfolio as of June 30, 2020 and December 31, 2019:
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,011,604

 
$
7,402

 
$
2,482

 
$
—

 
$
9,884

 
$
11,155

 
$
4,032,643

Commercial business
 
3,833,606

 
4,756

 
626

 
—

 
5,382

 
20,525

 
3,859,513

Agriculture
 
823,226

 
1,197

 
2,365

 
—

 
3,562

 
19,162

 
845,950

Construction
 
303,798

 
—

 
—

 
—

 
—

 
217

 
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
684,729

 
5,015

 
431

 
—

 
5,446

 
2,662

 
692,837

Other consumer
 
36,844

 
63

 
22

 
—

 
85

 
11

 
36,940

Total
 
$
9,693,807

 
$
18,433

 
$
5,926

 
$
—

 
$
24,359

 
$
53,732

 
$
9,771,898

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
Loans
 
30 - 59
Days
Past Due
 
60 - 89
Days
Past Due
 
Greater
than 90
Days Past
Due
 
Total
Past Due
 
Nonaccrual
Loans
 
Total Loans
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
3,935,633

 
$
6,421

 
$
—

 
—

 
$
6,421

 
$
3,799

 
$
3,945,853

Commercial business
 
2,959,826

 
6,081

 
2,769

 
—

 
8,850

 
20,937

 
2,989,613

Agriculture
 
755,719

 
2,283

 
2,346

 
—

 
4,629

 
5,023

 
765,371

Construction
 
360,582

 
951

 
—

 
—

 
951

 
—

 
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
631,109

 
2,516

 
408

 
—

 
2,924

 
3,292

 
637,325

Other consumer
 
43,654

 
80

 
27

 
—

 
107

 
9

 
43,770

Total
 
$
8,686,523

 
$
18,332

 
$
5,550

 
$
—

 
$
23,882

 
$
33,060

 
$
8,743,465
Interest written off on nonaccrual loans
The following table summarizes written off interest on nonaccrual loans for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Commercial loans
 
$
665

 
$
623

 
$
1,448

 
$
1,168

Consumer loans
 
8

 
39

 
13

 
120

Total
 
$
673

 
$
662

 
$
1,461

 
$
1,288
Analysis of Nonaccrual Loans
The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL as of June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
December 31, 2019
 
 
(in thousands)
Commercial loans:
 
 
 
 
Commercial real estate
 
$
9,609

 
$
1,715

Commercial business
 
5,932

 
15,762

Agriculture
 
14,387

 
1,798

Total
 
$
29,928

 
$
19,275
Analysis of loans classified as Troubled Debt Restructurings (“TDR”)
The following is an analysis of loans classified as TDR during the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30, 2020
 
Three Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
4

 
$
1,690

 
$
1,690

 
3

 
$
918

 
$
918

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
1

 
128

 
128

 
4

 
118

 
118

Total
 
5

 
$
1,818

 
$
1,818

 
7

 
$
1,036

 
$
1,036


 
 
Six Months Ended June 30, 2020
 
Six Months Ended June 30, 2019
 
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
Number of TDR Modifications
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
6

 
$
1,962

 
$
1,962

 
5

 
$
1,534

 
$
1,534

Agriculture
 
1

 
895

 
895

 
—

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
2

 
196

 
196

 
5

 
335

 
335

Total
 
9

 
$
3,053

 
$
3,053

 
10

 
$
1,869

 
$
1,869
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Tables)
 6 Months Ended
Jun. 30, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]  
Allowance for Credit Losses on Financing Receivables
The following tables show a detailed analysis of the ACL for the three and six months ended June 30, 2020:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
37,122

 
$
—

 
$
13

 
$
13,098

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
45,570

 
(5,442
)
 
811

 
12,247

 
53,186

 
3,208

 
49,978

Agriculture
 
11,085

 
—

 
1

 
3,782

 
14,868

 
828

 
14,040

Construction
 
8,845

 
—

 
235

 
(1,127
)
 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
17,659

 
—

 
422

 
5,630

 
23,711

 
—

 
23,711

Other consumer
 
1,644

 
(198
)
 
130

 
19

 
1,595

 
—

 
1,595

Unallocated
 
149

 
—

 
—

 
(149
)
 
—

 
—

 
—

Total
 
$
122,074

 
$
(5,640
)
 
$
1,612

 
$
33,500

 
$
151,546

 
$
4,036

 
$
147,510

 
 
Prior Year
Ending Balance
 
Impact of Adopting ASC 326
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
20,340

 
$
7,533

 
$
27,873

 
$
(101
)
 
$
27

 
$
22,434

 
$
50,233

 
$
—

 
$
50,233

Commercial business
 
30,292

 
762

 
31,054

 
(7,126
)
 
1,671

 
27,587

 
53,186

 
3,208

 
49,978

Agriculture
 
15,835

 
(9,325
)
 
6,510

 
(4,726
)
 
42

 
13,042

 
14,868

 
828

 
14,040

Construction
 
8,571

 
(1,750
)
 
6,821

 
—

 
677

 
455

 
7,953

 
—

 
7,953

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
7,435

 
4,237

 
11,672

 
(10
)
 
704

 
11,345

 
23,711

 
—

 
23,711

Other consumer
 
883

 
778

 
1,661

 
(466
)
 
254

 
146

 
1,595

 
—

 
1,595

Unallocated
 
612

 
(603
)
 
9

 
—

 
—

 
(9
)
 
—

 
—

 
—

Total
 
$
83,968

 
$
1,632

 
$
85,600

 
$
(12,429
)
 
$
3,375

 
$
75,000

 
$
151,546

 
$
4,036

 
$
147,510

The following tables show a detailed analysis of the ALLL for the three and six months ended June 30, 2019:
 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Three Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
16,359

 
$
(564
)
 
$
556

 
$
(703
)
 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,545

 
(4,316
)
 
492

 
(1,021
)
 
29,700

 
691

 
29,009

Agriculture
 
10,690

 
(61
)
 
64

 
1,978

 
12,671

 
712

 
11,959

Construction
 
11,965

 
(20
)
 
691

 
(179
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,311

 
(321
)
 
450

 
(821
)
 
7,619

 
27

 
7,592

Other consumer
 
823

 
(5
)
 
59

 
(162
)
 
715

 
1

 
714

Unallocated
 
581

 
—

 
—

 
1,126

 
1,707

 
—

 
1,707

Total
 
$
83,274

 
$
(5,287
)
 
$
2,312

 
$
218

 
$
80,517

 
$
1,475

 
$
79,042

 
 
Beginning Balance
 
Charge-offs
 
Recoveries
 
Provision
(Recapture)
 
Ending Balance
 
Allowance on Individually Measured Loans
 
Allowance on Collectively Measured Loans
Six Months Ended June 30, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
14,766

 
$
(1,242
)
 
$
1,070

 
$
1,054

 
$
15,648

 
$
44

 
$
15,604

Commercial business
 
34,658

 
(5,822
)
 
1,019

 
(155
)
 
29,700

 
691

 
29,009

Agriculture
 
9,589

 
(139
)
 
122

 
3,099

 
12,671

 
712

 
11,959

Construction
 
14,395

 
(215
)
 
774

 
(2,497
)
 
12,457

 
—

 
12,457

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
8,024

 
(802
)
 
784

 
(387
)
 
7,619

 
27

 
7,592

Other consumer
 
787

 
(55
)
 
74

 
(91
)
 
715

 
1

 
714

Unallocated
 
1,150

 
—

 
—

 
557

 
1,707

 
—

 
1,707

Total
 
83,369

 
(8,275
)
 
3,843

 
1,580

 
80,517

 
1,475

 
79,042
Changes in the Allowance for Unfunded Commitments and Letters of Credit
Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Beginning balance
 
$
6,000

 
$
3,780

 
$
3,430

 
$
4,330

Impact of adopting ASC 326
 
—

 
—

 
1,570

 
$
—

Net changes in the allowance for unfunded commitments and letters of credit
 
2,800

 
200

 
3,800

 
(350
)
Ending balance
 
$
8,800

 
$
3,980

 
$
8,800

 
$
3,980
Financing Receivable Credit Quality Indicators
The following is an analysis of the credit quality of our loan portfolio, as of June 30, 2020 and December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2020
 
2019
 
2018
 
2017
 
2016
 
Prior
 
 
Total (1)
June 30, 2020
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
332,517

 
$
650,893

 
$
521,112

 
$
569,062

 
$
483,908

 
$
1,121,467

 
$
48,813

 
$
2,424

 
$
3,730,196

Special mention
 
10,217

 
64,490

 
18,809

 
13,462

 
44,503

 
44,766

 
—

 
—

 
196,247

Substandard
 
—

 
2,050

 
23,736

 
6,535

 
39,711

 
33,096

 
—

 
1,072

 
106,200

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
342,734

 
$
717,433

 
$
563,657

 
$
589,059

 
$
568,122

 
$
1,199,329

 
$
48,813

 
$
3,496

 
$
4,032,643

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
1,075,991

 
$
440,684

 
$
355,598

 
$
259,075

 
$
256,579

 
$
284,232

 
$
920,762

 
$
5,951

 
$
3,598,872

Special mention
 
4,944

 
47,663

 
36,645

 
26,728

 
6,702

 
11,349

 
34,348

 
—

 
168,379

Substandard
 
923

 
4,340

 
21,141

 
6,358

 
8,679

 
7,581

 
40,155

 
3,085

 
92,262

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
1,081,858

 
$
492,687

 
$
413,384

 
$
292,161

 
$
271,960

 
$
303,162

 
$
995,265

 
$
9,036

 
$
3,859,513

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
118,361

 
$
103,163

 
$
44,586

 
$
60,678

 
$
60,533

 
$
69,132

 
$
274,960

 
$
17,136

 
$
748,549

Special mention
 
—

 
521

 
—

 
—

 
271

 
275

 
1,429

 
—

 
2,496

Substandard
 
1,977

 
12,736

 
5,684

 
5,662

 
7,985

 
6,209

 
51,994

 
2,658

 
94,905

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
120,338

 
$
116,420

 
$
50,270

 
$
66,340

 
$
68,789

 
$
75,616

 
$
328,383

 
$
19,794

 
$
845,950

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
58,564

 
$
140,987

 
$
32,706

 
$
9,610

 
$
1,025

 
$
1,999

 
$
32,630

 
$
—

 
$
277,521

Special mention
 
—

 
17,912

 
488

 
—

 
—

 
—

 
—

 
—

 
18,400

Substandard
 
—

 
2,472

 
5,526

 
—

 
—

 
58

 
38

 
—

 
8,094

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
58,564

 
$
161,371

 
$
38,720

 
$
9,610

 
$
1,025

 
$
2,057

 
$
32,668

 
$
—

 
$
304,015

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
75,255

 
$
90,453

 
$
82,106

 
$
35,033

 
$
25,963

 
$
97,256

 
$
278,444

 
$
790

 
$
685,300

Special mention
 
—

 
—

 
—

 
—

 
—

 
219

 
—

 
—

 
219

Substandard
 
442

 
739

 
227

 
1,215

 
397

 
2,532

 
1,011

 
755

 
7,318

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
75,697

 
$
91,192

 
$
82,333

 
$
36,248

 
$
26,360

 
$
100,007

 
$
279,455

 
$
1,545

 
$
692,837

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
3,500

 
$
4,237

 
$
4,734

 
$
1,409

 
$
420

 
$
1,536

 
$
20,611

 
$
439

 
$
36,886

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
11

 
—

 
—

 
4

 
7

 
32

 
—

 
54

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
3,500

 
$
4,248

 
$
4,734

 
$
1,409

 
$
424

 
$
1,543

 
$
20,643

 
$
439

 
$
36,940

Total
 
$
1,682,691

 
$
1,583,351

 
$
1,153,098

 
$
994,827

 
$
936,680

 
$
1,681,714

 
$
1,705,227

 
$
34,310

 
$
9,771,898

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
151,546

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
9,620,352

__________
(1) Loans that are on short-term deferments are treated as Pass loans and will not be reported as past due provided that they are performing in accordance with the modified terms.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Loans Amortized Cost Basis
 
Revolving Loans Converted to Term Loans Amortized Cost Basis
 
 
 
 
Term Loans
 
 
 
 
 
 
 
Amortized Cost Basis by Origination Year
 
 
 
 
 
 
 
2019
 
2018
 
2017
 
2016
 
2015
 
Prior
 
 
Total
December 31, 2019
 
(in thousands)
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
699,336

 
$
562,992

 
$
621,113

 
$
565,928

 
$
441,220

 
$
873,687

 
$
52,276

 
$
19,986

 
$
3,836,538

Special mention
 
1,824

 
305

 
7,019

 
3,360

 
—

 
3,426

 
—

 
—

 
15,934

Substandard
 
47

 
10,698

 
9,320

 
36,229

 
20,278

 
11,738

 
—

 
5,071

 
93,381

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial real estate
 
$
701,207

 
$
573,995

 
$
637,452

 
$
605,517

 
$
461,498

 
$
888,851

 
$
52,276

 
$
25,057

 
$
3,945,853

Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
479,481

 
$
442,222

 
$
330,934

 
$
301,337

 
$
157,436

 
$
199,089

 
$
963,663

 
$
25,577

 
$
2,899,739

Special mention
 
2,241

 
6,673

 
56

 
2,006

 
52

 
585

 
12,710

 
—

 
24,323

Substandard
 
85

 
17,240

 
3,458

 
9,534

 
3,227

 
3,972

 
26,639

 
1,396

 
65,551

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total commercial business
 
$
481,807

 
$
466,135

 
$
334,448

 
$
312,877

 
$
160,715

 
$
203,646

 
$
1,003,012

 
$
26,973

 
$
2,989,613

Agriculture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
107,152

 
$
54,950

 
$
70,337

 
$
71,874

 
$
33,597

 
$
56,342

 
$
280,984

 
$
10,036

 
$
685,272

Special mention
 
557

 
2,535

 
1,381

 
—

 
64

 
576

 
5,336

 
—

 
10,449

Substandard
 
7,291

 
6,047

 
6,173

 
5,907

 
1,477

 
5,698

 
30,669

 
6,388

 
69,650

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total agriculture
 
$
115,000

 
$
63,532

 
$
77,891

 
$
77,781

 
$
35,138

 
$
62,616

 
$
316,989

 
$
16,424

 
$
765,371

Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
183,525

 
$
91,342

 
$
40,514

 
$
1,067

 
$
939

 
$
1,601

 
$
33,388

 
$
7,793

 
$
360,169

Special mention
 
—

 
1,264

 
—

 
—

 
—

 
—

 
41

 
—

 
1,305

Substandard
 
—

 
—

 
—

 
—

 
—

 
59

 
—

 
—

 
59

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total construction
 
$
183,525

 
$
92,606

 
$
40,514

 
$
1,067

 
$
939

 
$
1,660

 
$
33,429

 
$
7,793

 
$
361,533

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
103,315

 
$
77,877

 
$
32,440

 
$
25,052

 
$
27,294

 
$
80,370

 
$
283,830

 
$
554

 
$
630,732

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
228

 
800

 
400

 
623

 
3,156

 
905

 
481

 
6,593

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total one-to-four family real estate
 
$
103,315

 
$
78,105

 
$
33,240

 
$
25,452

 
$
27,917

 
$
83,526

 
$
284,735

 
$
1,035

 
$
637,325

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
$
9,276

 
$
5,713

 
$
1,974

 
$
758

 
$
848

 
$
1,306

 
$
23,351

 
$
508

 
$
43,734

Special mention
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Substandard
 
—

 
—

 
1

 
—

 
—

 
8

 
27

 
—

 
36

Doubtful
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total consumer
 
$
9,276

 
$
5,713

 
$
1,975

 
$
758

 
$
848

 
$
1,314

 
$
23,378

 
$
508

 
$
43,770

Total
 
$
1,594,130

 
$
1,280,086

 
$
1,125,520

 
$
1,023,452

 
$
687,055

 
$
1,241,613

 
$
1,713,819

 
$
77,790

 
$
8,743,465

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,968

Loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
8,659,497
v3.20.2
Other Real Estate Owned (Tables)
 6 Months Ended
Jun. 30, 2020
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract]  
Summary of Other Real Estate Owned
The following tables set forth activity in OREO for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Balance, beginning of period
 
$
510

 
$
6,075

 
$
552

 
$
6,019

Transfers in
 
558

 
—

 
558

 
386

Valuation adjustments
 
—

 
—

 
—

 
(195
)
Proceeds from sale of OREO property
 
(303
)
 
(5,673
)
 
(345
)
 
(5,794
)
Gain (loss) on sale of OREO, net
 
(18
)
 
716

 
(18
)
 
702

Balance, end of period
 
$
747

 
$
1,118

 
$
747

 
$
1,118
v3.20.2
Goodwill and Intangible Assets (Tables)
 6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill and Intangible Assets
The following table sets forth activity for goodwill and other intangible assets for the periods indicated:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Goodwill
 
 
 
 
 
 
 
 
Total goodwill
 
$
765,842

 
$
765,842

 
$
765,842

 
$
765,842

Other intangible assets, net
 
 
 
 
 
 
 
 
CDI:
 
 
 
 
 
 
 
 
Gross CDI balance at beginning of period
 
105,473

 
105,473

 
105,473

 
105,473

Accumulated amortization at beginning of period
 
(73,244
)
 
(63,203
)
 
(70,934
)
 
(60,455
)
CDI, net at beginning of period
 
32,229

 
42,270

 
34,539

 
45,018

CDI current period amortization
 
(2,210
)
 
(2,649
)
 
(4,520
)
 
(5,397
)
Total CDI, net at end of period
 
30,019

 
39,621

 
30,019

 
39,621

Intangible assets not subject to amortization
 
919

 
919

 
919

 
919

Other intangible assets, net at end of period
 
30,938

 
40,540

 
30,938

 
40,540

Total goodwill and other intangible assets at end of period
 
$
796,780

 
$
806,382

 
$
796,780

 
$
806,382
Estimated Future Amortization Expense of Core Deposit Intangibles
The following table provides the estimated future amortization expense of our CDI for the remaining six months ending December 31, 2020 and the succeeding four years:
 
 
Year ending December 31,
 
 
(in thousands)
2020
 
$
4,204

2021
 
7,264

2022
 
5,880

2023
 
4,552

2024
 
3,432
v3.20.2
Derivatives and Balance Sheet Offsetting (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative [Line Items]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table presents the fair value of derivatives, as well as their classification on the Consolidated Balance Sheet at June 30, 2020 and December 31, 2019:
 
Asset Derivatives
 
Liability Derivatives
 
June 30, 2020
 
December 31, 2019
 
June 30, 2020
 
December 31, 2019
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
 
(in thousands)
Derivatives designated as hedging instruments:
Interest rate collar
Other assets
 
$
38,421

 
Other assets
 
$
14,727

 
Other liabilities
 
$
—

 
Other liabilities
 
$
—

Derivatives not designated as hedging instruments:
Interest rate swap contracts
Other assets
 
$
54,424

 
Other assets
 
$
19,144

 
Other liabilities
 
$
54,898

 
Other liabilities
 
$
19,145
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss) at June 30, 2020 and 2019:
 
Amount of Gain or (Loss) Recognized in Accumulated Other Comprehensive Income on Derivative
 
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
 
Three Months Ended June 30,
 
 
 
Three Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
(in thousands)
Interest rate collar
$
3,402

 
$
9,423

 
 Interest income
 
$
2,190

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
 
Six Months Ended June 30,
 
2020
 
2019
 
 
 
2020
 
2019
 
 
 
 
 
 
 
 
 
 
Interest rate collar
$
26,825

 
$
15,691

 
 Interest income
 
$
3,130

 
$
—
Balance Sheet Offsetting [Table Text Block]
The following tables show the gross interest rate swap contracts, collar agreements and repurchase agreements in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of overcollateralization are not shown.
 
Gross Amounts of Recognized Assets/Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
 
Collateral Pledged/Received
 
Net Amount
June 30, 2020
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,424

 
$
—

 
$
54,424

 
$
—

 
$
54,424

Interest rate collar
$
38,421

 
$
—

 
$
38,421

 
$
(38,421
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
54,898

 
$
—

 
$
54,898

 
$
(53,320
)
 
$
1,578

Repurchase agreements
$
51,479

 
$
—

 
$
51,479

 
$
(51,479
)
 
$
—

 
 
 
 
 
 
 
 
 
 
December 31, 2019
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,144

 
$
—

 
$
19,144

 
$
—

 
$
19,144

Interest rate collar
$
14,727

 
$
—

 
$
14,727

 
$
(14,727
)
 
—

Liabilities
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
$
19,145

 
$
—

 
$
19,145

 
$
(19,145
)
 
$
—

Repurchase agreements
$
64,437

 
$
—

 
$
64,437

 
$
(64,437
)
 
$
—
Carrying Value of Securities Pledged As Collateral
The following table summarizes the carrying value of securities pledged as collateral to secure public funds, borrowings and other purposes as permitted or required by law:
 
 
June 30, 2020
 
 
(in thousands)
To secure public funds
 
$
449,497

To secure borrowings
 
111,873

Other securities pledged
 
150,587

Total securities pledged as collateral
 
$
711,957
Available-for-sale Securities [Member]  
Derivative [Line Items]  
Carrying Value of Securities Pledged As Collateral
The following table presents the class of collateral pledged for repurchase agreements as well as the remaining contractual maturity of the repurchase agreements:
 
 
Remaining contractual maturity of the agreements
 
 
Overnight and continuous
 
Up to 30 days
 
30 - 90 days
 
Greater than 90 days
 
Total
June 30, 2020
 
(in thousands)
Class of collateral pledged for repurchase agreements
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
51,479

 
$
—

 
$
—

 
$
—

 
$
51,479

Gross amount of recognized liabilities for repurchase agreements
 
 
 
 
 
 
 
 
 
51,479

Amounts related to agreements not included in offsetting disclosure
 
 
 
 
 
 
 
 
 
$
—
v3.20.2
Shareholders' Equity Dividends Declared (Tables)
 6 Months Ended
Jun. 30, 2020
Shareholders' Equity [Abstract]  
Dividends Declared [Table Text Block]
The following table summarizes year-to-date dividend activity as of June 30, 2020:
Declared
 
Regular Cash Dividends Per Common Share
 
Special Cash Dividends Per Common Share
 
Record Date
 
Paid Date
January 23, 2020
 
$
0.28

 
$
0.22

 
February 5, 2020
 
February 19, 2020
April 30, 2020
 
$
0.28

 
$
—

 
May 14, 2020
 
May 28, 2020
v3.20.2
Accumulated Other Comprehensive Income (Tables)
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The following table shows changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2020 and 2019:
 
 
Unrealized Gains and Losses on Available for Sale Securities (1)
 
Unrealized Gains and Losses on Pension Plan Liability (1)
 
Unrealized Gains and Losses on Hedging Instruments (1)
 
Total (1)
Three Months Ended June 30, 2020
 
(in thousands)
Beginning balance
 
$
112,543

 
$
(3,894
)
 
$
28,558

 
$
137,207

Other comprehensive income before reclassifications
 
42,860

 
—

 
2,611

 
45,471

Amounts reclassified from accumulated other comprehensive income (2)
 
—

 
79

 
(1,680
)
 
(1,601
)
Net current-period other comprehensive income
 
42,860

 
79

 
931

 
43,870

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
352

 
$
(2,116
)
 
$
4,810

 
$
3,046

Other comprehensive income before reclassifications
 
37,029

 
—

 
7,233

 
44,262

Amounts reclassified from accumulated other comprehensive income (2)
 
(219
)
 
61

 
—

 
(158
)
Net current-period other comprehensive income
 
36,810

 
61

 
7,233

 
44,104

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

Six Months Ended June 30, 2020
 
 
 
 
 
 
 
 
Beginning balance
 
$
33,038

 
$
(3,974
)
 
$
11,303

 
$
40,367

Other comprehensive income before reclassifications
 
122,556

 
—

 
20,588

 
143,144

Amounts reclassified from accumulated other comprehensive income (2)
 
(191
)
 
159

 
(2,402
)
 
(2,434
)
Net current-period other comprehensive income
 
122,365

 
159

 
18,186

 
140,710

Ending balance
 
$
155,403

 
$
(3,815
)
 
$
29,489

 
$
181,077

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
Beginning balance
 
$
(33,128
)
 
$
(2,177
)
 
$
—

 
$
(35,305
)
Other comprehensive income before reclassifications
 
71,926

 
—

 
12,043

 
83,969

Amounts reclassified from accumulated other comprehensive loss (2)
 
(1,636
)
 
122

 
—

 
(1,514
)
Net current-period other comprehensive income
 
70,290

 
122

 
12,043

 
82,455

Ending balance
 
$
37,162

 
$
(2,055
)
 
$
12,043

 
$
47,150

__________
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See following table for details about these reclassifications.
Schedule of reclassifications from accumulated other comprehensive income [Table Text Block]
The following table shows details regarding the reclassifications from accumulated other comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019:
 
 
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Affected line Item in the Consolidated
 
 
2020
 
2019
 
2020
 
2019
 
Statement of Income
 
 
(in thousands)
 
 
Unrealized gains on available for sale debt securities
 
$
—

 
$
285

 
$
249

 
$
2,132

 
Investment securities gains, net
 
 
—

 
285

 
249

 
2,132

 
Total before tax
 
 
—

 
(66
)
 
(58
)
 
(496
)
 
Income tax provision
 
 
$
—

 
$
219

 
$
191

 
$
1,636

 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Amortization of pension plan liability actuarial losses
 
$
(103
)
 
$
(80
)
 
$
(207
)
 
$
(159
)
 
Compensation and employee benefits
 
 
(103
)
 
(80
)
 
(207
)
 
(159
)
 
Total before tax
 
 
24

 
19

 
48

 
37

 
Income tax provision
 
 
$
(79
)
 
$
(61
)
 
$
(159
)
 
$
(122
)
 
Net of tax
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains from hedging instruments
 
$
2,190

 
$
—

 
$
3,130

 
$
—

 
Loans
 
 
2,190

 
—

 
3,130

 
—

 
Total before tax
 
 
(510
)
 
—

 
(728
)
 
—

 
Income tax provision
 
 
$
1,680

 
$
—

 
$
2,402

 
$
—

 
Net of tax
v3.20.2
Fair Value Accounting and Measurement (Tables)
 6 Months Ended
Jun. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2020 and December 31, 2019 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
June 30, 2020
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,865,030

 
$
—

 
$
2,865,030

 
$
—

Other asset-backed securities
 
224,276

 
—

 
224,276

 
—

State and municipal securities
 
468,615

 
—

 
468,615

 
—

U.S. government agency and government-sponsored enterprise securities
 
135,866

 
—

 
135,866

 
—

Total debt securities available for sale
 
$
3,693,787

 
$
—

 
$
3,693,787

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,424

 
$
—

 
$
54,424

 
$
—

Interest rate collar
 
$
38,421

 
$
—

 
$
38,421

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
54,898

 
$
—

 
$
54,898

 
$
—

 
 
Fair Value
 
Fair Value Measurements at Reporting Date Using
 
 
Level 1
 
Level 2
 
Level 3
December 31, 2019
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
Debt securities available for sale:
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations
 
$
2,892,950

 
$
—

 
$
2,892,950

 
$
—

Other asset-backed securities
 
196,050

 
—

 
196,050

 
—

State and municipal securities
 
488,802

 
—

 
488,802

 
—

U.S. government agency and government-sponsored enterprise securities
 
168,340

 
—

 
168,340

 
—

Total debt securities available for sale
 
$
3,746,142

 
$
—

 
$
3,746,142

 
$
—

Other assets:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,144

 
$
—

 
$
19,144

 
$
—

Interest rate collar
 
$
14,727

 
$
—

 
$
14,727

 
$
—

Liabilities
 
 
 
 
 
 
 
 
Other liabilities:
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
19,145

 
$
—

 
$
19,145

 
$
—
Equity Securities without Readily Determinable Fair Value [Table Text Block]
The following table presents the carrying value of equity securities, without readily determinable fair values, still held as of June 30, 2020, that are measured under the measurement alternative and related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
Equity securities without readily determinable fair values
 
(in thousands)
Carrying value, beginning of period
 
$
—

 
$
—

 
$
—

 
$
—

Upward carrying value changes
 
13,425

 
—

 
13,425

 
—

Carrying value, end of period
 
$
13,425

 
$
—

 
$
13,425

 
$
—
Financial Assets Accounted For Fair Value On Nonrecurring Basis
The following tables set forth information related to the Company’s assets that were measured using fair value estimates on a nonrecurring basis during the current and prior year quarterly periods:
 
 
Fair Value at June 30, 2020
 
Fair Value Measurements at Reporting Date Using
 
Gains(Losses) During the Three Months Ended June 30, 2020
 
Gains(Losses) During the Six Months Ended June 30, 2020
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
7,976

 
$
—

 
$
—

 
$
7,976

 
$
(6,946
)
 
$
(7,745
)
Equity securities
 
$
13,425

 
$
—

 
$
—

 
$
13,425

 
$
13,425

 
$
13,425

 
 
Fair Value at June 30, 2019
 
Fair Value Measurements at Reporting Date Using
 
Losses During the Three Months Ended June 30, 2019
 
Losses During the Six Months Ended June 30, 2019
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in thousands)
Collateral dependent loans
 
$
4,837

 
$
—

 
$
—

 
$
4,837

 
$
(2,124
)
 
$
(2,525
)
Fair Value, by Balance Sheet Grouping
The following tables summarize carrying amounts and estimated fair values of selected financial instruments by level within the fair value hierarchy at June 30, 2020 and December 31, 2019:
 
 
June 30, 2020
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
217,461

 
$
217,461

 
$
217,461

 
$
—

 
$
—

Interest-earning deposits with banks
 
880,232

 
880,232

 
880,232

 
—

 
—

Debt securities available for sale
 
3,693,787

 
3,693,787

 
—

 
3,693,787

 
—

Equity securities without readily determinable fair values
 
13,425

 
13,425

 
—

 
—

 
13,425

FHLB stock
 
16,280

 
16,280

 
—

 
16,280

 
—

Loans held for sale
 
28,803

 
28,803

 
—

 
28,803

 
—

Loans
 
9,620,352

 
10,061,835

 
—

 
—

 
10,061,835

Interest rate contracts
 
54,424

 
54,424

 
—

 
54,424

 
—

Interest rate collar
 
38,421

 
38,421

 
—

 
38,421

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
340,192

 
$
340,419

 
$
—

 
$
340,419

 
$
—

FHLB advances and FRB borrowings
 
157,441

 
159,400

 
—

 
159,400

 
—

Repurchase agreements
 
51,479

 
51,479

 
—

 
51,479

 
—

Subordinated debentures
 
35,185

 
35,227

 
—

 
35,227

 
—

Interest rate contracts
 
54,898

 
54,898

 
—

 
54,898

 
—


 
 
December 31, 2019
 
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
(in thousands)
Assets
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
223,541

 
$
223,541

 
$
223,541

 
$
—

 
$
—

Interest-earning deposits with banks
 
24,132

 
24,132

 
24,132

 
—

 
—

Debt securities available for sale
 
3,746,142

 
3,746,142

 
—

 
3,746,142

 
—

FHLB stock
 
48,120

 
48,120

 
—

 
48,120

 
—

Loans held for sale
 
17,718

 
17,718

 
—

 
17,718

 
—

Loans
 
8,659,497

 
8,883,865

 
—

 
—

 
8,883,865

Interest rate contracts
 
19,144

 
19,144

 
—

 
19,144

 
—

Interest rate collar
 
14,727

 
14,727

 
—

 
14,727

 
—

Liabilities
 
 
 
 
 
 
 
 
 
 
Time deposits
 
$
400,070

 
$
397,736

 
$
—

 
$
397,736

 
$
—

FHLB advances
 
953,469

 
952,762

 
—

 
952,762

 
—

Repurchase agreements
 
64,437

 
64,437

 
—

 
64,437

 
—

Subordinated debentures
 
35,277

 
35,491

 
—

 
35,491

 
—

Interest rate contracts
 
19,145

 
19,145

 
—

 
19,145

 
—
Fair Value, Inputs, Level 3 [Member] | Fair Value, Nonrecurring [Member]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Fair Value Inputs, Assets, Quantitative Information
The range and weighted average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:
 
 
Fair Value at June 30, 2020
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
7,976

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (56.22%)

__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of accounts receivable, fixed assets, inventory and real estate.
 
 
Fair Value at June 30, 2019
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Average) (1)
 
 
(dollars in thousands)
Collateral dependent loans (2)
 
$
4,837

 
Fair Market Value of Collateral
 
Adjustment to Stated Value
 
0.00% - 100.00% (35.67%)
__________
(1) Discount applied to appraised value or stated value (in the case of accounts receivable, fixed assets and inventory).
(2) Collateral consists of cash, accounts receivable, fixed assets, inventory and real estate.
v3.20.2
Earnings per Common Share (Tables)
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Earnings Per Share
The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands except per share amounts)
Basic EPS:
 
 
 
 
 
 
 
 
Net income
 
$
36,582

 
$
51,724

 
$
51,210

 
$
97,595

Less: Earnings allocated to participating securities:
 
 
 
 
 
 
 
 
Nonvested restricted shares
 
139

 
378

 
325

 
838

Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Basic earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Diluted EPS:
 
 
 
 
 
 
 
 
Earnings allocated to common shareholders
 
$
36,443

 
$
51,346

 
$
50,885

 
$
96,757

Weighted average common shares outstanding
 
70,679

 
72,451

 
70,942

 
72,486

Dilutive effect of equity awards
 
32

 
—

 
39

 
1

Weighted average diluted common shares outstanding
 
70,711

 
72,451

 
70,981

 
72,487

Diluted earnings per common share
 
$
0.52

 
$
0.71

 
$
0.72

 
$
1.33

Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive
 
571

 
—

 
450

 
—
v3.20.2
Revenue from Contracts with Customers (Tables)
 6 Months Ended
Jun. 30, 2020
Disaggregation of Revenue [Line Items]  
Disaggregation of Revenue [Table Text Block]
Disaggregation of revenue
The following table shows the disaggregation of revenue from contracts with customers for the three and six month periods ended June 30, 2020 and 2019:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2020
 
2019
 
2020
 
2019
 
 
(in thousands)
Noninterest income:
 
 
 
 
 
 
 
 
Revenue from contracts with customers:
 
 
 
 
 
 
 
 
Deposit account and treasury management fees
 
$
6,092

 
$
9,035

 
$
13,880

 
$
18,015

Card revenue
 
3,079

 
3,763

 
6,597

 
7,425

Financial services and trust revenue
 
3,163

 
3,425

 
6,228

 
6,382

Total revenue from contracts with customers
 
12,334

 
16,223

 
26,705

 
31,822

Other sources of noninterest income
 
24,925

 
9,425

 
31,761

 
15,522

Total noninterest income
 
$
37,259

 
$
25,648

 
$
58,466

 
$
47,344
v3.20.2
Accounting Pronouncements Recently Issued Narrative - Impact of implementation of new accounting standards (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Accounting Standards Update 2016-02 [Member]          
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU         $ 782
Accounting Standards Update 2016-13 [Member]          
Change in allowance for credit losses due to adoption of new ASU   $ 1,632      
Change in allowance for unfunded commitments and letters of credit due to adoption of new ASU $ 0 $ 1,570   $ 0 0
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU     $ (2,500)    
Retained Earnings [Member] | Accounting Standards Update 2016-02 [Member]          
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU         $ 782
Retained Earnings [Member] | Accounting Standards Update 2016-13 [Member]          
Adjustment to opening retained earnings, net of tax, pursuant to adoption of ASU     $ (2,457)    
v3.20.2
Securities (Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months Fair Value $ 76,756 $ 1,157,774
Less than 12 Months Unrealized Losses (447) (13,446)
12 Months or More Fair Value 47,270 521,420
12 Months or More Unrealized Losses (1,044) (6,994)
Total Fair Value 124,026 1,679,194
Total Unrealized Losses (1,491) (20,440)
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months Fair Value 49,116 1,055,903
Less than 12 Months Unrealized Losses (317) (12,424)
12 Months or More Fair Value 47,175 491,539
12 Months or More Unrealized Losses (1,044) (6,798)
Total Fair Value 96,291 1,547,442
Total Unrealized Losses (1,361) (19,222)
Asset-backed Securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months Fair Value 20,703 89,508
Less than 12 Months Unrealized Losses (73) (880)
12 Months or More Fair Value 95 6,799
12 Months or More Unrealized Losses 0 (109)
Total Fair Value 20,798 96,307
Total Unrealized Losses (73) (989)
State and Municipal Securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months Fair Value 6,937 12,363
Less than 12 Months Unrealized Losses (57) (142)
12 Months or More Fair Value 0 12,587
12 Months or More Unrealized Losses 0 (82)
Total Fair Value 6,937 24,950
Total Unrealized Losses $ (57) (224)
U.S. Government and Government-Sponsored Enterprise Securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 Months Fair Value   0
Less than 12 Months Unrealized Losses   0
12 Months or More Fair Value   10,495
12 Months or More Unrealized Losses   (5)
Total Fair Value   10,495
Total Unrealized Losses   $ (5)
v3.20.2
Securities Securities (Summary of Gross Realized Gains and Gross Realized Losses (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]        
Proceeds from Sale of Debt Securities, Available-for-sale $ 0 $ 175,586 $ 194,105 $ 259,554
Gross Realized Gains from sales of debt securities available for sale 0 1,510 435 3,357
Gross Realized Losses from sales of debt securities available for sale 0 (1,225) (186) (1,225)
Other securities gains 16,425 [1],[2] 0 16,425 [1],[2] 0
Investment securities gain (loss), net $ 16,425 $ 285 $ 16,674 $ 2,132
[1] Other securities gains includes gain from sale of Visa Class B restricted stock and subsequent write up to fair value of remaining Visa Class B shares.
[2] Visa Class B restricted stock owned by the Company was previously carried at a zero-cost basis due to existing transfer restrictions and uncertainty of covered litigation. The sale of shares by the Company of Visa Class B restricted shares during the three months ended June 30, 2020 resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining shares of Visa Class B restricted shares upward to this observable market price.
v3.20.2
Securities Equity Securities (Details) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]                
Gains recognized during the period on equity securities $ 16,425 [1],[2] $ 0 $ 16,425 [1],[2] $ 0        
Less: Gains recognized during the period on equity securities sold during the period (3,000) [2] 0 (3,000) [2] 0        
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date $ 13,425 [2] 0 $ 13,425 [2] 0        
Visa Class B shares, shares sold 17,360              
Visa Class B shares, gain on sale $ 3,000              
Visa Class B shares, remaining shares 77,683   77,683          
Equity Securities $ 13,425 $ 0 $ 13,425 $ 0 $ 0 $ 0 $ 0 $ 0
[1] Other securities gains includes gain from sale of Visa Class B restricted stock and subsequent write up to fair value of remaining Visa Class B shares.
[2] Visa Class B restricted stock owned by the Company was previously carried at a zero-cost basis due to existing transfer restrictions and uncertainty of covered litigation. The sale of shares by the Company of Visa Class B restricted shares during the three months ended June 30, 2020 resulted in an observable market price. As a result, the Company adjusted the carrying value of its remaining shares of Visa Class B restricted shares upward to this observable market price.
v3.20.2
Securities (Securities Available for Sale) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]          
Proceeds from Sale of Debt Securities, Available-for-sale $ 0 $ 175,586 $ 194,105 $ 259,554  
Debt securities available-for-sale, amortized cost 3,491,307   3,491,307   $ 3,703,096
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax 203,971   203,971   63,486
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax (1,491)   (1,491)   (20,440)
Debt Securities, Available-for-sale, Allowance for Credit Loss 0   0   0
Debt securities available for sale at fair value 3,693,787   3,693,787   3,746,142
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]          
Debt Securities, Available-for-sale [Line Items]          
Debt securities available-for-sale, amortized cost 2,698,160   2,698,160   2,864,949
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax 168,231   168,231   47,223
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax (1,361)   (1,361)   (19,222)
Debt Securities, Available-for-sale, Allowance for Credit Loss 0   0   0
Debt securities available for sale at fair value 2,865,030   2,865,030   2,892,950
Asset-backed Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Debt securities available-for-sale, amortized cost 215,620   215,620   194,563
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax 8,729   8,729   2,476
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax (73)   (73)   (989)
Debt Securities, Available-for-sale, Allowance for Credit Loss 0   0   0
Debt securities available for sale at fair value 224,276   224,276   196,050
State and Municipal Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Debt securities available-for-sale, amortized cost 448,923   448,923   478,366
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax 19,749   19,749   10,660
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax (57)   (57)   (224)
Debt Securities, Available-for-sale, Allowance for Credit Loss 0   0   0
Debt securities available for sale at fair value 468,615   468,615   488,802
U.S. Government and Government-Sponsored Enterprise Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Debt securities available-for-sale, amortized cost 128,604   128,604   165,218
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax 7,262   7,262   3,127
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax 0   0   (5)
Debt Securities, Available-for-sale, Allowance for Credit Loss 0   0   0
Debt securities available for sale at fair value $ 135,866   $ 135,866   $ 168,340
v3.20.2
Securities (Schedule of Contractual Maturities of Investment Securities Available for Sale) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Abstract]    
Due within one year, Amortized Cost $ 53,099  
Due after one year through five years, Amortized Cost 389,269  
Due after five years through ten years, Amortized Cost 1,894,385  
Due after ten years, Amortized Cost 1,154,554  
Debt securities available-for-sale, amortized cost 3,491,307 $ 3,703,096
Due within one year, Fair Value 53,800  
Due after one year through five years, Fair Value 409,099  
Due after five years through ten years, Fair Value 2,038,033  
Due after ten years, Fair Value 1,192,855  
Debt securities available for sale at fair value $ 3,693,787 $ 3,746,142
v3.20.2
Securities (Carrying Value of Securities Pledged as Collateral) (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Restricted $ 711,957
To secure public funds  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Restricted 449,497
To secure borrowings  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Restricted 111,873
Other securities pledged  
Debt Securities, Available-for-sale [Line Items]  
Debt Securities, Available-for-sale, Restricted $ 150,587
v3.20.2
Securities (Narrative) (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
security
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
security
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Debt Securities, Available-for-sale [Line Items]          
Interest receivable | $ $ 59,149   $ 59,149   $ 46,839
Proceeds from Sale of Debt Securities, Available-for-sale | $ $ 0 $ 175,586 $ 194,105 $ 259,554  
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]          
Debt Securities, Available-for-sale [Line Items]          
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security 57   57    
Asset-backed Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security 2   2    
State and Municipal Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security 5   5    
Available-for-sale Securities [Member]          
Debt Securities, Available-for-sale [Line Items]          
Interest receivable | $ $ 12,600   $ 12,600   $ 13,900
v3.20.2
Loans (Narrative) (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
contract
Jun. 30, 2019
USD ($)
contract
Jun. 30, 2020
USD ($)
contract
Jun. 30, 2019
USD ($)
contract
Dec. 31, 2019
USD ($)
Financing Receivable, Credit Quality Indicator [Line Items]          
Interest Receivable, loans $ 59,149   $ 59,149   $ 46,839
Financing Receivable Accrued Interest Reversed Through Interest Income $ 673 $ 662 $ 1,461 $ 1,288  
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | contract 0 1 0 1  
Short-term loan modifications, payment deferral, COVID-19 response $ 1,580,000        
Paycheck Protection Program (PPP) loans, net of unearned income 941,400   $ 941,400    
Loans Receivable [Member]          
Financing Receivable, Credit Quality Indicator [Line Items]          
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged 3,430,000   3,430,000   3,240,000
Commercial Loan [Member]          
Financing Receivable, Credit Quality Indicator [Line Items]          
Loans pledged to collateralize Federal Reserve Bank Borrowings 199,700   199,700   151,300
Loans [Member]          
Financing Receivable, Credit Quality Indicator [Line Items]          
Interest Receivable, loans 46,500   46,500   $ 33,000
Commercial Portfolio Segment [Member]          
Financing Receivable, Credit Quality Indicator [Line Items]          
Financing Receivable Accrued Interest Reversed Through Interest Income 665 $ 623 1,448 $ 1,168  
Consumer Portfolio Segment [Member]          
Financing Receivable, Credit Quality Indicator [Line Items]          
Financing Receivable Accrued Interest Reversed Through Interest Income $ 8 $ 39 $ 13 $ 120  
v3.20.2
Loans (Analysis of Loan Portfolio by Major Types of Loans) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income $ 9,771,898     $ 8,743,465      
Financing Receivable, Allowance for Credit Loss (151,546) $ (122,074) $ (85,600) (83,968) $ (80,517) $ (83,274) $ (83,369)
Loans and Leases Receivable, Net Amount 9,620,352     8,659,497      
Loans held for sale 28,803     17,718      
Commercial Real Estate [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 4,032,643     3,945,853      
Financing Receivable, Allowance for Credit Loss (50,233) (37,122) (27,873) (20,340) (15,648) (16,359) (14,766)
Commercial Business [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 3,859,513     2,989,613      
Financing Receivable, Allowance for Credit Loss (53,186) (45,570) (31,054) (30,292) (29,700) (34,545) (34,658)
Agriculture [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 845,950     765,371      
Financing Receivable, Allowance for Credit Loss (14,868) (11,085) (6,510) (15,835) (12,671) (10,690) (9,589)
Construction [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 304,015     361,533      
Financing Receivable, Allowance for Credit Loss (7,953) (8,845) (6,821) (8,571) (12,457) (11,965) (14,395)
One-to-Four Family Residential [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 692,837     637,325      
Financing Receivable, Allowance for Credit Loss (23,711) (17,659) (11,672) (7,435) (7,619) (8,311) (8,024)
Consumer Loan [Member]              
Financing Receivable, Credit Quality Indicator [Line Items]              
Loans and Leases Receivable, Net of Deferred Income 36,940     43,770      
Financing Receivable, Allowance for Credit Loss $ (1,595) $ (1,644) $ (1,661) $ (883) $ (715) $ (823) $ (787)
v3.20.2
Loans (Analysis of the Aged Loan Portfolio) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Past Due [Line Items]    
Current Loans $ 9,693,807 $ 8,686,523
Past Due Loans 24,359 23,882
Nonaccrual Loans 53,732 33,060
Total Loans 9,771,898 8,743,465
Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 4,011,604 3,935,633
Past Due Loans 9,884 6,421
Nonaccrual Loans 11,155 3,799
Total Loans 4,032,643 3,945,853
Commercial Business [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 3,833,606 2,959,826
Past Due Loans 5,382 8,850
Nonaccrual Loans 20,525 20,937
Total Loans 3,859,513 2,989,613
Agriculture [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 823,226 755,719
Past Due Loans 3,562 4,629
Nonaccrual Loans 19,162 5,023
Total Loans 845,950 765,371
Construction [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 303,798 360,582
Past Due Loans 0 951
Nonaccrual Loans 217 0
Total Loans 304,015 361,533
One-to-Four Family Residential [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 684,729 631,109
Past Due Loans 5,446 2,924
Nonaccrual Loans 2,662 3,292
Total Loans 692,837 637,325
Consumer Loan [Member]    
Financing Receivable, Past Due [Line Items]    
Current Loans 36,844 43,654
Past Due Loans 85 107
Nonaccrual Loans 11 9
Total Loans 36,940 43,770
Financial Asset, 30 to 59 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 18,433 18,332
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 7,402 6,421
Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Business [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 4,756 6,081
Financial Asset, 30 to 59 Days Past Due [Member] | Agriculture [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 1,197 2,283
Financial Asset, 30 to 59 Days Past Due [Member] | Construction [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 951
Financial Asset, 30 to 59 Days Past Due [Member] | One-to-Four Family Residential [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 5,015 2,516
Financial Asset, 30 to 59 Days Past Due [Member] | Consumer Loan [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 63 80
Financial Asset, 60 to 89 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 5,926 5,550
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 2,482 0
Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Business [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 626 2,769
Financial Asset, 60 to 89 Days Past Due [Member] | Agriculture [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 2,365 2,346
Financial Asset, 60 to 89 Days Past Due [Member] | Construction [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, 60 to 89 Days Past Due [Member] | One-to-Four Family Residential [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 431 408
Financial Asset, 60 to 89 Days Past Due [Member] | Consumer Loan [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 22 27
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Real Estate [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Business [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Agriculture [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Construction [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | One-to-Four Family Residential [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans 0 0
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer Loan [Member]    
Financing Receivable, Past Due [Line Items]    
Past Due Loans $ 0 $ 0
v3.20.2
Loans (Analysis of Nonaccrual Loans) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Nonaccrual [Line Items]    
Financing Receivable, Nonaccrual, No Allowance $ 29,928 $ 19,275
Commercial Real Estate [Member]    
Financing Receivable, Nonaccrual [Line Items]    
Financing Receivable, Nonaccrual, No Allowance 9,609 1,715
Commercial Business [Member]    
Financing Receivable, Nonaccrual [Line Items]    
Financing Receivable, Nonaccrual, No Allowance 5,932 15,762
Agriculture [Member]    
Financing Receivable, Nonaccrual [Line Items]    
Financing Receivable, Nonaccrual, No Allowance $ 14,387 $ 1,798
v3.20.2
Loans Loans (Analysis of Troubled Debt Restructurings) (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
Modifications
contract
Jun. 30, 2019
USD ($)
Modifications
contract
Jun. 30, 2020
USD ($)
Modifications
contract
Jun. 30, 2019
USD ($)
Modifications
contract
Dec. 31, 2019
USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]          
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | contract 0 1 0 1  
Financing Receivable Modifications Additional Commitment To Lend $ 625   $ 625   $ 1,100
Financing Receivable, Modifications, Number of Contracts | Modifications 5 7 9 10  
Financing Receivable, Troubled Debt Restructuring, Premodification $ 1,818 $ 1,036 $ 3,053 $ 1,869  
Financing Receivable, Troubled Debt Restructuring, Postmodification 1,818 1,036 3,053 1,869  
Financing Receivable, Troubled Debt Restructuring, Subsequent Default $ 0 $ 26 $ 0 $ 26  
Commercial Business [Member]          
Financing Receivable, Troubled Debt Restructuring [Line Items]          
Financing Receivable, Modifications, Number of Contracts | Modifications 4 3 6 5  
Financing Receivable, Troubled Debt Restructuring, Premodification $ 1,690 $ 918 $ 1,962 $ 1,534  
Financing Receivable, Troubled Debt Restructuring, Postmodification $ 1,690 $ 918 $ 1,962 $ 1,534  
Agriculture [Member]          
Financing Receivable, Troubled Debt Restructuring [Line Items]          
Financing Receivable, Modifications, Number of Contracts | Modifications     1 0  
Financing Receivable, Troubled Debt Restructuring, Premodification     $ 895 $ 0  
Financing Receivable, Troubled Debt Restructuring, Postmodification     $ 895 $ 0  
One-to-Four Family Residential [Member]          
Financing Receivable, Troubled Debt Restructuring [Line Items]          
Financing Receivable, Modifications, Number of Contracts | Modifications 1 4 2 5  
Financing Receivable, Troubled Debt Restructuring, Premodification $ 128 $ 118 $ 196 $ 335  
Financing Receivable, Troubled Debt Restructuring, Postmodification $ 128 $ 118 $ 196 $ 335  
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Narrative) (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Financing Receivable, Allowance for Credit Loss, Period Increase (Decrease) $ 67,600,000      
Minimum loan balance of nonaccrual, collateral dependent loans considered for ACL 500,000   $ 500,000  
Provision for credit losses $ 33,500,000 $ 218,000 $ 75,000,000 $ 1,580,000
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Allowance for Credit Losses) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss $ 151,546 $ 80,517 $ 151,546 $ 80,517 $ 122,074 $ 85,600 $ 83,968 $ 83,274 $ 83,369
Financing Receivable, Allowance for Credit Loss, Writeoff (5,640) (5,287) (12,429) (8,275)          
Financing Receivable, Allowance for Credit Loss, Recovery 1,612 2,312 3,375 3,843          
Provision for credit losses 33,500 218 75,000 1,580          
Allowance on Individually Measured Loans 4,036 1,475 4,036 1,475          
Allowance on Collectively Measured Loans 147,510 79,042 147,510 79,042          
Commercial Real Estate [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 50,233 15,648 50,233 15,648 37,122 27,873 20,340 16,359 14,766
Financing Receivable, Allowance for Credit Loss, Writeoff 0 (564) (101) (1,242)          
Financing Receivable, Allowance for Credit Loss, Recovery 13 556 27 1,070          
Provision for credit losses 13,098 (703) 22,434 1,054          
Allowance on Individually Measured Loans 0 44 0 44          
Allowance on Collectively Measured Loans 50,233 15,604 50,233 15,604          
Commercial Business [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 53,186 29,700 53,186 29,700 45,570 31,054 30,292 34,545 34,658
Financing Receivable, Allowance for Credit Loss, Writeoff (5,442) (4,316) (7,126) (5,822)          
Financing Receivable, Allowance for Credit Loss, Recovery 811 492 1,671 1,019          
Provision for credit losses 12,247 (1,021) 27,587 (155)          
Allowance on Individually Measured Loans 3,208 691 3,208 691          
Allowance on Collectively Measured Loans 49,978 29,009 49,978 29,009          
Agriculture [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 14,868 12,671 14,868 12,671 11,085 6,510 15,835 10,690 9,589
Financing Receivable, Allowance for Credit Loss, Writeoff 0 (61) (4,726) (139)          
Financing Receivable, Allowance for Credit Loss, Recovery 1 64 42 122          
Provision for credit losses 3,782 1,978 13,042 3,099          
Allowance on Individually Measured Loans 828 712 828 712          
Allowance on Collectively Measured Loans 14,040 11,959 14,040 11,959          
Construction [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 7,953 12,457 7,953 12,457 8,845 6,821 8,571 11,965 14,395
Financing Receivable, Allowance for Credit Loss, Writeoff 0 (20) 0 (215)          
Financing Receivable, Allowance for Credit Loss, Recovery 235 691 677 774          
Provision for credit losses (1,127) (179) 455 (2,497)          
Allowance on Individually Measured Loans 0 0 0 0          
Allowance on Collectively Measured Loans 7,953 12,457 7,953 12,457          
One-to-Four Family Residential [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 23,711 7,619 23,711 7,619 17,659 11,672 7,435 8,311 8,024
Financing Receivable, Allowance for Credit Loss, Writeoff 0 (321) (10) (802)          
Financing Receivable, Allowance for Credit Loss, Recovery 422 450 704 784          
Provision for credit losses 5,630 (821) 11,345 (387)          
Allowance on Individually Measured Loans 0 27 0 27          
Allowance on Collectively Measured Loans 23,711 7,592 23,711 7,592          
Consumer Loan [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 1,595 715 1,595 715 1,644 1,661 883 823 787
Financing Receivable, Allowance for Credit Loss, Writeoff (198) (5) (466) (55)          
Financing Receivable, Allowance for Credit Loss, Recovery 130 59 254 74          
Provision for credit losses 19 (162) 146 (91)          
Allowance on Individually Measured Loans 0 1 0 1          
Allowance on Collectively Measured Loans 1,595 714 1,595 714          
Unallocated Financing Receivables [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Financing Receivable, Allowance for Credit Loss 0 1,707 0 1,707 $ 149 9 $ 612 $ 581 $ 1,150
Financing Receivable, Allowance for Credit Loss, Writeoff 0 0 0 0          
Financing Receivable, Allowance for Credit Loss, Recovery 0 0 0 0          
Provision for credit losses (149) 1,126 (9) 557          
Allowance on Individually Measured Loans 0 0 0 0          
Allowance on Collectively Measured Loans $ 0 $ 1,707 $ 0 $ 1,707          
Accounting Standards Update 2016-13 [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           1,632      
Accounting Standards Update 2016-13 [Member] | Commercial Real Estate [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           7,533      
Accounting Standards Update 2016-13 [Member] | Commercial Business [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           762      
Accounting Standards Update 2016-13 [Member] | Agriculture [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           (9,325)      
Accounting Standards Update 2016-13 [Member] | Construction [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           (1,750)      
Accounting Standards Update 2016-13 [Member] | One-to-Four Family Residential [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           4,237      
Accounting Standards Update 2016-13 [Member] | Consumer Loan [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           778      
Accounting Standards Update 2016-13 [Member] | Unallocated Financing Receivables [Member]                  
Financing Receivable, Allowance for Credit Loss [Roll Forward]                  
Change in allowance for credit losses due to adoption of new ASU           $ (603)      
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Changes in the Allowance for Unfunded Commitments and Letters of Credit) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Schedule of Allowance for Unfunded Commitments and Letters of Credit [Line Items]                  
Allowance For Unfunded Loan Commitments And Letters Of Credit $ 8,800 $ 3,980 $ 8,800 $ 3,980 $ 6,000   $ 3,430 $ 3,780 $ 4,330
Allowance for Loan and Lease Losses, Net Changes In Unfunded Commitments and Letters Of Credit Allowance $ 2,800 $ 200 $ 3,800 $ (350)          
Accounting Standards Update 2016-13 [Member]                  
Schedule of Allowance for Unfunded Commitments and Letters of Credit [Line Items]                  
Change in allowance for unfunded commitments and letters of credit due to adoption of new ASU         $ 0 $ 1,570   $ 0 $ 0
v3.20.2
Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit (Analysis of Credit Quality of the Loan Portfolio) (Details) - USD ($)
Jun. 30, 2020
Mar. 31, 2020
Jan. 01, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year $ 1,682,691,000     $ 1,594,130,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 1,583,351,000     1,280,086,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 1,153,098,000     1,125,520,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 994,827,000     1,023,452,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 936,680,000     687,055,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,681,714,000     1,241,613,000      
Financing Receivable, Revolving 1,705,227,000     1,713,819,000      
Financing Receivable, Revolving Converted to Term Loans 34,310,000     77,790,000      
Loans and Leases Receivable, Net of Deferred Income 9,771,898,000     8,743,465,000      
Financing Receivable, Allowance for Credit Loss 151,546,000 $ 122,074,000 $ 85,600,000 83,968,000 $ 80,517,000 $ 83,274,000 $ 83,369,000
Loans, net 9,620,352,000     8,659,497,000      
Commercial Real Estate [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 342,734,000     701,207,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 717,433,000     573,995,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 563,657,000     637,452,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 589,059,000     605,517,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 568,122,000     461,498,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,199,329,000     888,851,000      
Financing Receivable, Revolving 48,813,000     52,276,000      
Financing Receivable, Revolving Converted to Term Loans 3,496,000     25,057,000      
Loans and Leases Receivable, Net of Deferred Income 4,032,643,000     3,945,853,000      
Financing Receivable, Allowance for Credit Loss 50,233,000 37,122,000 27,873,000 20,340,000 15,648,000 16,359,000 14,766,000
Commercial Real Estate [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 332,517,000     699,336,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 650,893,000     562,992,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 521,112,000     621,113,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 569,062,000     565,928,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 483,908,000     441,220,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,121,467,000     873,687,000      
Financing Receivable, Revolving 48,813,000     52,276,000      
Financing Receivable, Revolving Converted to Term Loans 2,424,000     19,986,000      
Loans and Leases Receivable, Net of Deferred Income 3,730,196,000     3,836,538,000      
Commercial Real Estate [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 10,217,000     1,824,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 64,490,000     305,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 18,809,000     7,019,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 13,462,000     3,360,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 44,503,000     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 44,766,000     3,426,000      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 196,247,000     15,934,000      
Commercial Real Estate [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     47,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 2,050,000     10,698,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 23,736,000     9,320,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 6,535,000     36,229,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 39,711,000     20,278,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 33,096,000     11,738,000      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 1,072,000     5,071,000      
Loans and Leases Receivable, Net of Deferred Income 106,200,000     93,381,000      
Commercial Real Estate [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
Commercial Business [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 1,081,858,000     481,807,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 492,687,000     466,135,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 413,384,000     334,448,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 292,161,000     312,877,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 271,960,000     160,715,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 303,162,000     203,646,000      
Financing Receivable, Revolving 995,265,000     1,003,012,000      
Financing Receivable, Revolving Converted to Term Loans 9,036,000     26,973,000      
Loans and Leases Receivable, Net of Deferred Income 3,859,513,000     2,989,613,000      
Financing Receivable, Allowance for Credit Loss 53,186,000 45,570,000 31,054,000 30,292,000 29,700,000 34,545,000 34,658,000
Commercial Business [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 1,075,991,000     479,481,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 440,684,000     442,222,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 355,598,000     330,934,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 259,075,000     301,337,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 256,579,000     157,436,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 284,232,000     199,089,000      
Financing Receivable, Revolving 920,762,000     963,663,000      
Financing Receivable, Revolving Converted to Term Loans 5,951,000     25,577,000      
Loans and Leases Receivable, Net of Deferred Income 3,598,872,000     2,899,739,000      
Commercial Business [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 4,944,000     2,241,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 47,663,000     6,673,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 36,645,000     56,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 26,728,000     2,006,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 6,702,000     52,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 11,349,000     585,000      
Financing Receivable, Revolving 34,348,000     12,710,000      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 168,379,000     24,323,000      
Commercial Business [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 923,000     85,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 4,340,000     17,240,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 21,141,000     3,458,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 6,358,000     9,534,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 8,679,000     3,227,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 7,581,000     3,972,000      
Financing Receivable, Revolving 40,155,000     26,639,000      
Financing Receivable, Revolving Converted to Term Loans 3,085,000     1,396,000      
Loans and Leases Receivable, Net of Deferred Income 92,262,000     65,551,000      
Commercial Business [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
Agriculture [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 120,338,000     115,000,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 116,420,000     63,532,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 50,270,000     77,891,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 66,340,000     77,781,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 68,789,000     35,138,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 75,616,000     62,616,000      
Financing Receivable, Revolving 328,383,000     316,989,000      
Financing Receivable, Revolving Converted to Term Loans 19,794,000     16,424,000      
Loans and Leases Receivable, Net of Deferred Income 845,950,000     765,371,000      
Financing Receivable, Allowance for Credit Loss 14,868,000 11,085,000 6,510,000 15,835,000 12,671,000 10,690,000 9,589,000
Agriculture [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 118,361,000     107,152,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 103,163,000     54,950,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 44,586,000     70,337,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 60,678,000     71,874,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 60,533,000     33,597,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 69,132,000     56,342,000      
Financing Receivable, Revolving 274,960,000     280,984,000      
Financing Receivable, Revolving Converted to Term Loans 17,136,000     10,036,000      
Loans and Leases Receivable, Net of Deferred Income 748,549,000     685,272,000      
Agriculture [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     557,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 521,000     2,535,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     1,381,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 271,000     64,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 275,000     576,000      
Financing Receivable, Revolving 1,429,000     5,336,000      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 2,496,000     10,449,000      
Agriculture [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 1,977,000     7,291,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 12,736,000     6,047,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 5,684,000     6,173,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 5,662,000     5,907,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 7,985,000     1,477,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 6,209,000     5,698,000      
Financing Receivable, Revolving 51,994,000     30,669,000      
Financing Receivable, Revolving Converted to Term Loans 2,658,000     6,388,000      
Loans and Leases Receivable, Net of Deferred Income 94,905,000     69,650,000      
Agriculture [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
Construction [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 58,564,000     183,525,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 161,371,000     92,606,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 38,720,000     40,514,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 9,610,000     1,067,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 1,025,000     939,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 2,057,000     1,660,000      
Financing Receivable, Revolving 32,668,000     33,429,000      
Financing Receivable, Revolving Converted to Term Loans 0     7,793,000      
Loans and Leases Receivable, Net of Deferred Income 304,015,000     361,533,000      
Financing Receivable, Allowance for Credit Loss 7,953,000 8,845,000 6,821,000 8,571,000 12,457,000 11,965,000 14,395,000
Construction [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 58,564,000     183,525,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 140,987,000     91,342,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 32,706,000     40,514,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 9,610,000     1,067,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 1,025,000     939,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,999,000     1,601,000      
Financing Receivable, Revolving 32,630,000     33,388,000      
Financing Receivable, Revolving Converted to Term Loans 0     7,793,000      
Loans and Leases Receivable, Net of Deferred Income 277,521,000     360,169,000      
Construction [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 17,912,000     1,264,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 488,000     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     41,000      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 18,400,000     1,305,000      
Construction [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 2,472,000     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 5,526,000     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 58,000     59,000      
Financing Receivable, Revolving 38,000     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 8,094,000     59,000      
Construction [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
One-to-Four Family Residential [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 75,697,000     103,315,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 91,192,000     78,105,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 82,333,000     33,240,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 36,248,000     25,452,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 26,360,000     27,917,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 100,007,000     83,526,000      
Financing Receivable, Revolving 279,455,000     284,735,000      
Financing Receivable, Revolving Converted to Term Loans 1,545,000     1,035,000      
Loans and Leases Receivable, Net of Deferred Income 692,837,000     637,325,000      
Financing Receivable, Allowance for Credit Loss 23,711,000 17,659,000 11,672,000 7,435,000 7,619,000 8,311,000 8,024,000
One-to-Four Family Residential [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 75,255,000     103,315,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 90,453,000     77,877,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 82,106,000     32,440,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 35,033,000     25,052,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 25,963,000     27,294,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 97,256,000     80,370,000      
Financing Receivable, Revolving 278,444,000     283,830,000      
Financing Receivable, Revolving Converted to Term Loans 790,000     554,000      
Loans and Leases Receivable, Net of Deferred Income 685,300,000     630,732,000      
One-to-Four Family Residential [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 219,000     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 219,000     0      
One-to-Four Family Residential [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 442,000     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 739,000     228,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 227,000     800,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 1,215,000     400,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 397,000     623,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 2,532,000     3,156,000      
Financing Receivable, Revolving 1,011,000     905,000      
Financing Receivable, Revolving Converted to Term Loans 755,000     481,000      
Loans and Leases Receivable, Net of Deferred Income 7,318,000     6,593,000      
One-to-Four Family Residential [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
Consumer Loan [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 3,500,000     9,276,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 4,248,000     5,713,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 4,734,000     1,975,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 1,409,000     758,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 424,000     848,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,543,000     1,314,000      
Financing Receivable, Revolving 20,643,000     23,378,000      
Financing Receivable, Revolving Converted to Term Loans 439,000     508,000      
Loans and Leases Receivable, Net of Deferred Income 36,940,000     43,770,000      
Financing Receivable, Allowance for Credit Loss 1,595,000 $ 1,644,000 $ 1,661,000 883,000 $ 715,000 $ 823,000 $ 787,000
Consumer Loan [Member] | Pass [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 3,500,000     9,276,000      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 4,237,000     5,713,000      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 4,734,000     1,974,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 1,409,000     758,000      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 420,000     848,000      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 1,536,000     1,306,000      
Financing Receivable, Revolving 20,611,000     23,351,000      
Financing Receivable, Revolving Converted to Term Loans 439,000     508,000      
Loans and Leases Receivable, Net of Deferred Income 36,886,000     43,734,000      
Consumer Loan [Member] | Special Mention [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 0     0      
Consumer Loan [Member] | Substandard [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 11,000     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     1,000      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 4,000     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 7,000     8,000      
Financing Receivable, Revolving 32,000     27,000      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income 54,000     36,000      
Consumer Loan [Member] | Doubtful [Member]              
Accounts, Notes, Loans and Financing Receivable [Line Items]              
Financing Receivable, Year One, Originated, Current Fiscal Year 0     0      
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year 0     0      
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year 0     0      
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year 0     0      
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year 0     0      
Financing Receivable, Originated, More than Five Years before Current Fiscal Year 0     0      
Financing Receivable, Revolving 0     0      
Financing Receivable, Revolving Converted to Term Loans 0     0      
Loans and Leases Receivable, Net of Deferred Income $ 0     $ 0      
v3.20.2
Other Real Estate Owned (Summary of Other Real Estate Owned) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Other Real Estate Owned [Line Items]        
Balance, beginning of period $ 510 $ 6,075 $ 552 $ 6,019
Transfers in 558 0 558 386
Valuation adjustments 0 0 0 (195)
Proceeds from Sale of OREO Property 303 5,673 345 5,794
Loss on sale of OREO, net (18) 716 (18) 702
Total OREO, end of period 747 $ 1,118 747 $ 1,118
Mortgage Loans in Process of Foreclosure, Amount 451   451  
One-to-Four Family Residential [Member]        
Other Real Estate Owned [Line Items]        
Total OREO, end of period $ 60   $ 60  
v3.20.2
Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Goodwill and Intangible Assets [Roll Forward]                
Total goodwill, beginning of period     $ 765,842          
Total goodwill, end of period $ 765,842 $ 765,842 765,842 $ 765,842        
CDI current period amortization (2,210) (2,649) (4,520) (5,397)        
Indefinite-lived Intangible Assets (Excluding Goodwill) 919 919 919 919        
Other intangible assets, net 30,938 40,540 30,938 40,540   $ 35,458    
Total goodwill and intangible assets, end of period 796,780 806,382 $ 796,780 806,382        
Core Deposits [Member]                
Goodwill and Intangible Assets [Line Items]                
Estimated life of CDI, in years     10 years          
Goodwill and Intangible Assets [Roll Forward]                
Gross core deposit intangible balance, beginning of period         $ 105,473 105,473 $ 105,473 $ 105,473
Accumulated amortization at beginning of period         $ (73,244) $ (70,934) $ (63,203) $ (60,455)
Core deposit intangible, net, beginning of period 32,229 42,270 $ 34,539 45,018        
CDI current period amortization (2,210) (2,649) (4,520) (5,397)        
Total core deposit intangible, end of period $ 30,019 $ 39,621 $ 30,019 $ 39,621        
v3.20.2
Goodwill and Intangible Assets (Estimated Future Amortization Expense of Core Deposit Intangibles) (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Future Amortization Expense For Core Deposit Intangibles  
2020 $ 4,204
2021 7,264
2022 5,880
2023 4,552
2024 $ 3,432
v3.20.2
Revolving Line of Credit (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Line of Credit Facility [Line Items]    
Line of Credit Facility, Maximum Borrowing Capacity $ 15,000  
Line of Credit [Member]    
Line of Credit Facility [Line Items]    
Short-term Debt $ 0 $ 0
v3.20.2
Derivatives and Balance Sheet Offsetting (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement $ 51,479 $ 51,479    
Secured Borrowings, Gross, Difference, Amount 0 0    
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]        
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 51,479 51,479    
Maturity Overnight [Member] | U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]        
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 51,479 51,479    
Maturity Less than 30 Days [Member] | U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]        
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 0 0    
Maturity 30 to 90 Days [Member] | U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]        
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 0 0    
Maturity Greater than 90 Days [Member] | U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]        
Derivative [Line Items]        
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 0 0    
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member]        
Derivative [Line Items]        
Derivative, Notional Amount 533,800 533,800   $ 428,600
Gain (Loss) on Derivative Instruments, Net, Pretax (473) (473) $ (2)  
Not Designated as Hedging Instrument [Member] | Other Assets [Member] | Interest Rate Contracts [Member]        
Derivative [Line Items]        
Fair value of asset derivative instruments 54,424 54,424   19,144
Not Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest Rate Contracts [Member]        
Derivative [Line Items]        
Fair value of liability derivative instruments 54,898 54,898   19,145
Designated as Hedging Instrument [Member] | Interest rate collar [Domain]        
Derivative [Line Items]        
Derivative, Notional Amount 500,000 500,000    
Designated as Hedging Instrument [Member] | Other Assets [Member] | Interest rate collar [Domain]        
Derivative [Line Items]        
Fair value of asset derivative instruments 38,421 38,421   14,727
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest rate collar [Domain]        
Derivative [Line Items]        
Fair value of liability derivative instruments $ 0 $ 0   $ 0
v3.20.2
Derivatives and Balance Sheet Offsetting Balance Sheet Offsetting (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Balance Sheet Offsetting [Line Items]          
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net $ 10,600   $ 10,600    
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss) 3,402 $ 9,423 26,825 $ 15,691  
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax 2,190 $ 0 3,130 0  
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 51,479   51,479    
Repurchase agreements, amounts offset in balance sheet 0   0   $ 0
Repurchase agreements, net amount presented in statement of financial position 51,479   51,479   64,437
Securities Sold under Agreements to Repurchase, Collateral, Right to Reclaim Securities (51,479)   (51,479)   (64,437)
Securities sold under agreements to repurchase, amount not offset 0   0   0
Interest Rate Contracts [Member]          
Balance Sheet Offsetting [Line Items]          
Derivative Assets, Gross Amounts Offset in the Balance Sheets 0   0   0
Derivative Asset 54,424   54,424   19,144
Derivative, Collateral, Obligation to Return Cash 0   0   0
Derivative Asset, Fair Value, Amount Not Offset Against Collateral 54,424   54,424   19,144
Derivative Liability, Gross Amounts Offset in Balance Sheets 0   0   0
Derivative Liability 54,898   54,898   19,145
Derivative, Collateral, Right to Reclaim Cash 53,320   53,320   19,145
Derivative Liability, Fair Value, Amount Not Offset Against Collateral 1,578   1,578   0
Interest rate collar [Domain]          
Balance Sheet Offsetting [Line Items]          
Derivative Assets, Gross Amounts Offset in the Balance Sheets 0   0   0
Derivative Asset 38,421   38,421   14,727
Derivative, Collateral, Obligation to Return Cash (38,421)   (38,421)   (14,727)
Derivative Asset, Fair Value, Amount Not Offset Against Collateral 0   0   0
Available-for-sale Securities [Member]          
Balance Sheet Offsetting [Line Items]          
Securities Sold under Agreements to Repurchase, Gross 51,479   51,479   64,437
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member]          
Balance Sheet Offsetting [Line Items]          
Gain (Loss) on Derivative Instruments, Net, Pretax (473)   (473) $ (2)  
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member] | Other Assets [Member]          
Balance Sheet Offsetting [Line Items]          
Fair value of asset derivative instruments 54,424   54,424   19,144
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member] | Other Liabilities [Member]          
Balance Sheet Offsetting [Line Items]          
Fair value of liability derivative instruments 54,898   54,898   19,145
Designated as Hedging Instrument [Member] | Interest rate collar [Domain] | Other Assets [Member]          
Balance Sheet Offsetting [Line Items]          
Fair value of asset derivative instruments 38,421   38,421   14,727
Designated as Hedging Instrument [Member] | Interest rate collar [Domain] | Other Liabilities [Member]          
Balance Sheet Offsetting [Line Items]          
Fair value of liability derivative instruments 0   0   $ 0
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]          
Balance Sheet Offsetting [Line Items]          
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement 51,479   51,479    
Maturity Overnight [Member] | U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]          
Balance Sheet Offsetting [Line Items]          
Secured Borrowings, Gross Including Not Subject to Master Netting Arrangement $ 51,479   $ 51,479    
v3.20.2
Commitments and contingent liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Commitments to Extend Credit [Member]    
Other Commitments [Line Items]    
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability $ 2,650,000 $ 2,670,000
Standby Letters of Credit [Member]    
Other Commitments [Line Items]    
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability 24,100 25,700
Commercial Letter of Credit and other off-balance sheet liabilities [Member]    
Other Commitments [Line Items]    
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability $ 0 $ 0
v3.20.2
Shareholders' Equity (Details) - $ / shares
Jul. 23, 2020
Apr. 30, 2020
Jan. 23, 2020
Subsequent Event [Line Items]      
Common Stock, Special Cash Dividends, Per Share, Declared   $ 0 $ 0.22
Declared quarterly cash dividend   $ 0.28 $ 0.28
Subsequent Event [Member]      
Subsequent Event [Line Items]      
Declared quarterly cash dividend $ 0.28    
v3.20.2
Shareholders' Equity Share repurchase (Details) - $ / shares
shares in Thousands
 3 Months Ended 6 Months Ended
Jul. 23, 2020
Apr. 30, 2020
Jan. 23, 2020
Jun. 30, 2020
Jun. 30, 2020
Class of Stock [Line Items]          
Common Stock, Dividends, Per Share, Declared   $ 0.28 $ 0.28    
Treasury Stock, Shares, Acquired         731
Treasury Stock Acquired, Average Cost Per Share       $ 27.36  
Subsequent Event [Member]          
Class of Stock [Line Items]          
Common Stock, Dividends, Per Share, Declared $ 0.28        
v3.20.2
Accumulated Other Comprehensive Income (Changes in AOCI by Component) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance $ 137,207 $ 3,046 $ 40,367 $ (35,305)
Other comprehensive income before reclassifications [1] 45,471 44,262 143,144 83,969
Amounts reclassified from accumulated other comprehensive income (2) [1] (1,601) (158) (2,434) (1,514)
Net current-period other comprehensive income [1] 43,870 44,104 140,710 82,455
Ending balance 181,077 47,150 181,077 47,150
Unrealized Gains and Losses on Available-for-Sale Debt Securities [Member]        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance 112,543 352 33,038 (33,128)
Other comprehensive income before reclassifications [1] 42,860 37,029 122,556 71,926
Amounts reclassified from accumulated other comprehensive income (2) 0 [2] (219) [1] (191) [1] (1,636) [1]
Net current-period other comprehensive income [1] 42,860 36,810 122,365 70,290
Ending balance 155,403 37,162 155,403 37,162
Unrealized Gains and Losses on Pension Plan Liability [Member]        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance (3,894) (2,116) (3,974) (2,177)
Other comprehensive income before reclassifications [1] 0 0 0 0
Amounts reclassified from accumulated other comprehensive income (2) [1] 79 61 159 122
Net current-period other comprehensive income [1] 79 61 159 122
Ending balance (3,815) (2,055) (3,815) (2,055)
Unrealized gains and losses on cash flow hedge        
Accumulated Other Comprehensive Income (Loss) [Roll Forward]        
Beginning balance 28,558 4,810 11,303 0
Other comprehensive income before reclassifications 2,611 [1] 7,233 [1] 20,588 [2] 12,043 [1]
Amounts reclassified from accumulated other comprehensive income (2) [2] (1,680) 0 (2,402) 0
Net current-period other comprehensive income [1] 931 7,233 18,186 12,043
Ending balance $ 29,489 $ 12,043 $ 29,489 $ 12,043
[1] All amounts are net of tax. Amounts in parentheses indicate debits.
[2] See following table for details about these reclassifications.
v3.20.2
Accumulated Other Comprehensive Income (Reclassification out of AOCI) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Investment securities gains, net     $ 16,674 $ 2,132
Total before tax $ 44,777 $ 63,818 62,635 120,474
Income tax provision (8,195) (12,094) (11,425) (22,879)
Compensation and employee benefits 46,043 52,015 100,885 104,100
Net income 36,582 51,724 51,210 97,595
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Debt Securities [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Investment securities gains, net 0 285 249 2,132
Total before tax 0 285 249 2,132
Income tax provision 0 (66) (58) (496)
Net income 0 219 191 1,636
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Pension Plan Liability [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total before tax (103) (80) (207) (159)
Income tax provision 24 19 48 37
Compensation and employee benefits (103) (80) (207) (159)
Net income (79) (61) (159) (122)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized gains and losses from hedging instruments        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Total before tax 2,190 0 3,130 0
Income tax provision (510) 0 (728) 0
Net income 1,680 0 2,402 0
Interest income, Loans $ 2,190 $ 0 $ 3,130 $ 0
v3.20.2
Fair Value Accounting and Measurement (Financial Assets And Liabilities Accounted for Fair Value On Recurring Basis) (Details) - Fair Value, Recurring [Member] - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale $ 3,693,787 $ 3,746,142
Other assets (Interest rate contracts) 54,424 19,144
Interest Rate Cash Flow Hedge Asset at Fair Value 38,421 14,727
Other liabilities (Interest rate contracts) 54,898 19,145
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
Other assets (Interest rate contracts) 0 0
Interest Rate Cash Flow Hedge Asset at Fair Value 0 0
Other liabilities (Interest rate contracts) 0 0
Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 3,693,787 3,746,142
Other assets (Interest rate contracts) 54,424 19,144
Interest Rate Cash Flow Hedge Asset at Fair Value 38,421 14,727
Other liabilities (Interest rate contracts) 54,898 19,145
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
Other assets (Interest rate contracts) 0 0
Interest Rate Cash Flow Hedge Asset at Fair Value 0 0
Other liabilities (Interest rate contracts) 0 0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 2,865,030 2,892,950
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 2,865,030 2,892,950
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
Asset-backed Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 224,276 196,050
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 224,276 196,050
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
State and Municipal Securities [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 468,615 488,802
State and Municipal Securities [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
State and Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 468,615 488,802
State and Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
U.S. Government Agency [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 135,866 168,340
U.S. Government Agency [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 0 0
U.S. Government Agency [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale 135,866 168,340
U.S. Government Agency [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt securities available for sale $ 0 $ 0
v3.20.2
Fair Value Accounting and Measurement (Financial Assets Accounted For Fair Value On Nonrecurring Basis) (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Equity Securities $ 13,425 $ 0 $ 13,425 $ 0 $ 0 $ 0 $ 0 $ 0
Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Collateral dependent loans, Fair Value 7,976 4,837 7,976 4,837        
Equity Securities 13,425   13,425          
Fair Value, Inputs, Level 1 [Member] | Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Collateral dependent loans, Fair Value 0 0 0 0        
Equity Securities 0   0          
Fair Value, Inputs, Level 2 [Member] | Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Collateral dependent loans, Fair Value 0 0 0 0        
Equity Securities 0   0          
Fair Value, Inputs, Level 3 [Member] | Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Collateral dependent loans, Fair Value 7,976 4,837 7,976 4,837        
Equity Securities 13,425   13,425          
Collateral dependent loans [Domain] | Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair Value, Option, Changes in Fair Value, Gain (Loss) (6,946) $ (2,124) (7,745) $ (2,525)        
Equity Securities [Member] | Fair Value, Nonrecurring [Member]                
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]                
Fair Value, Option, Changes in Fair Value, Gain (Loss) $ 13,425   $ 13,425          
v3.20.2
Fair Value Accounting and Measurement (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Fair Value, Nonrecurring [Member]
$ in Thousands
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)    
Collateral dependent loans, Fair Value $ 7,976 $ 4,837
Fair Value, Inputs, Level 3 [Member]    
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)    
Collateral dependent loans, Fair Value $ 7,976 $ 4,837
Valuation, Market Approach [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)    
Collateral dependent loans, Measurement Input 0.0000 0.0000
Valuation, Market Approach [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)    
Collateral dependent loans, Measurement Input 1.0000 1.0000
Valuation, Market Approach [Member] | Weighted Average [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)    
Collateral dependent loans, Measurement Input 0.5622 0.3567
v3.20.2
Fair Value Accounting and Measurement (Carrying Amounts and Estimated Fair Values of Selected Financial Instruments) (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Assets            
Interest-earning deposits with banks $ 880,232   $ 24,132      
Debt securities available for sale at fair value 3,693,787   3,746,142      
Equity Securities 13,425 $ 0 0 $ 0 $ 0 $ 0
Estimate of Fair Value Measurement [Member]            
Assets            
Cash and due from banks 217,461   223,541      
Interest-earning deposits with banks 880,232   24,132      
Debt securities available for sale at fair value 3,693,787   3,746,142      
Equity Securities 13,425          
FHLB stock 16,280   48,120      
Loans held for sale 28,803   17,718      
Loans 10,061,835   8,883,865      
Interest rate contracts 54,424   19,144      
Interest Rate Cash Flow Hedge Asset at Fair Value 38,421   14,727      
Liabilities            
Deposits 340,419   397,736      
FHLB advances and FRB borrowings 159,400          
FHLB advances     952,762      
Repurchase agreements 51,479   64,437      
Subordinated Debt Obligations, Fair Value Disclosure 35,227   35,491      
Interest rate contracts 54,898   19,145      
Reported Value Measurement [Member]            
Assets            
Cash and due from banks 217,461   223,541      
Interest-earning deposits with banks 880,232   24,132      
Debt securities available for sale at fair value 3,693,787   3,746,142      
Equity Securities 13,425          
FHLB stock 16,280   48,120      
Loans held for sale 28,803   17,718      
Loans 9,620,352   8,659,497      
Interest rate contracts 54,424   19,144      
Interest Rate Cash Flow Hedge Asset at Fair Value 38,421   14,727      
Liabilities            
Deposits 340,192   400,070      
FHLB advances and FRB borrowings 157,441          
FHLB advances     953,469      
Repurchase agreements 51,479   64,437      
Subordinated Debt Obligations, Fair Value Disclosure 35,185   35,277      
Interest rate contracts 54,898   19,145      
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]            
Assets            
Cash and due from banks 217,461   223,541      
Interest-earning deposits with banks 880,232   24,132      
Debt securities available for sale at fair value 0   0      
Equity Securities 0          
FHLB stock 0   0      
Loans held for sale 0   0      
Loans 0   0      
Interest rate contracts 0   0      
Interest Rate Cash Flow Hedge Asset at Fair Value 0   0      
Liabilities            
Deposits 0   0      
FHLB advances and FRB borrowings 0          
FHLB advances     0      
Repurchase agreements 0   0      
Subordinated Debt Obligations, Fair Value Disclosure 0   0      
Interest rate contracts 0   0      
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]            
Assets            
Cash and due from banks 0   0      
Interest-earning deposits with banks 0   0      
Debt securities available for sale at fair value 3,693,787   3,746,142      
Equity Securities 0          
FHLB stock 16,280   48,120      
Loans held for sale 28,803   17,718      
Loans 0   0      
Interest rate contracts 54,424   19,144      
Interest Rate Cash Flow Hedge Asset at Fair Value 38,421   14,727      
Liabilities            
Deposits 340,419   397,736      
FHLB advances and FRB borrowings 159,400          
FHLB advances     952,762      
Repurchase agreements 51,479   64,437      
Subordinated Debt Obligations, Fair Value Disclosure 35,227   35,491      
Interest rate contracts 54,898   19,145      
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]            
Assets            
Cash and due from banks 0   0      
Interest-earning deposits with banks 0   0      
Debt securities available for sale at fair value 0   0      
Equity Securities 13,425          
FHLB stock 0   0      
Loans held for sale 0   0      
Loans 10,061,835   8,883,865      
Interest rate contracts 0   0      
Interest Rate Cash Flow Hedge Asset at Fair Value 0   0      
Liabilities            
Deposits 0   0      
FHLB advances and FRB borrowings 0          
FHLB advances     0      
Repurchase agreements 0   0      
Subordinated Debt Obligations, Fair Value Disclosure 0   0      
Interest rate contracts $ 0   $ 0      
v3.20.2
Fair Value Accounting and Measurement Equity securities without readily determinable values (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Fair Value Disclosures [Abstract]                
Visa Class B shares, remaining shares 77,683   77,683          
Equity Securities $ 13,425 $ 0 $ 13,425 $ 0 $ 0 $ 0 $ 0 $ 0
Equity Securities without Readily Determinable Fair Value, Upward Price Adjustment, Annual Amount $ 13,425 $ 0 $ 13,425 $ 0        
v3.20.2
Earnings per Common Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]        
Net Income $ 36,582 $ 51,724 $ 51,210 $ 97,595
Earnings allocated to participating securities - nonvested restricted shares 139 378 325 838
Earnings allocated to common shareholders, Basic $ 36,443 $ 51,346 $ 50,885 $ 96,757
Weighted average common shares outstanding 70,679 72,451 70,942 72,486
Basic earnings per common share $ 0.52 $ 0.71 $ 0.72 $ 1.33
Earnings allocated to common shareholders, Diluted $ 36,443 $ 51,346 $ 50,885 $ 96,757
Dilutive effect of equity awards and warrants 32 0 39 1
Weighted average diluted common shares outstanding 70,711 72,451 70,981 72,487
Diluted earnings per common share $ 0.52 $ 0.71 $ 0.72 $ 1.33
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive. 571 0 450 0
v3.20.2
Revenue from Contracts with Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]        
Deposit account and treasury management fees $ 6,092 $ 9,035 $ 13,880 $ 18,015
Card revenue 3,079 3,763 6,597 7,425
Financial services and trust revenue 3,163 3,425 6,228 6,382
Revenue from contracts with customers 12,334 16,223 26,705 31,822
Noninterest income, excluding revenue from contracts with customers 24,925 9,425 31,761 15,522
Noninterest Income $ 37,259 $ 25,648 $ 58,466 $ 47,344