7.	LOANS AND LEASE FINANCE RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES

The following table provides a summary of the Company’s total loans and lease finance receivables, excluding PCI loans, by type.


	March 31, 2018			December 31, 2017
	(Dollars in thousands)

Commercial and industrial	$	514,229		$	513,325
SBA		123,432			122,055
Real estate:
Commercial real estate		3,411,216			3,376,713
Construction		79,898			77,982
SFR mortgage		237,618			236,202
Dairy & livestock and agribusiness		276,379			347,289
Municipal lease finance receivables		67,892			70,243
Consumer and other loans		64,159			64,229

Gross loans, excluding PCI loans		4,774,823			4,808,038
Less: Deferred loan fees, net		(5,701	)		(6,289	)

Gross loans, excluding PCI loans, net of deferred loan fees		4,769,122			4,801,749
Less: Allowance for loan losses		(59,623	)		(59,218	)

Net loans, excluding PCI loans		4,709,499			4,742,531

PCI Loans		26,935			30,908
Discount on PCI loans		(1,074	)		(2,026	)
Less: Allowance for loan losses		(312	)		(367	)

PCI loans, net		25,549			28,515

Total loans and lease finance receivables	$	4,735,048		$	4,771,046

As of March 31, 2018, 78.09% of the Company’s total gross loan portfolio (excluding PCI loans) consisted of real estate loans, 71.44% of which consisted of commercial real estate loans. Substantially all of the Company’s real estate loans and construction loans are secured by real properties located in California. As of March 31, 2018, $203.4 million, or 5.96% of the total commercial real estate loans included loans secured by farmland, compared to $206.1 million, or 6.10%, at December 31, 2017. The loans secured by farmland included $117.1 million for loans secured by dairy & livestock land and $86.3 million for loans secured by agricultural land at March 31, 2018, compared to $118.2 million for loans secured by dairy & livestock land and $87.9 million for loans secured by agricultural land at December 31, 2017. As of March 31, 2018, dairy & livestock and agribusiness loans of $276.4 million were comprised of $245.3 million for dairy & livestock loans and $31.1 million for agribusiness loans, compared to $310.6 million for dairy & livestock loans and $36.7 million for agribusiness loans at December 31, 2017.

At March 31, 2018, the Company held approximately $2.18 billion of total fixed rate loans, including PCI loans.

At March 31, 2018 and December 31, 2017, loans totaling $3.62 billion and $3.68 billion, respectively, were pledged to secure the borrowings and available lines of credit from the FHLB and the Federal Reserve Bank.

There were no outstanding loans held-for-sale as of March 31, 2018 and December 31, 2017.

Credit Quality Indicators

An important element of our approach to credit risk management is our loan risk rating system. The originating officer assigns each loan an initial risk rating, which is reviewed and confirmed or changed, as appropriate, by credit management. Approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and credit management personnel. Credits are monitored by line and credit management personnel for deterioration or improvement in a borrower’s financial condition, which would impact the ability of the borrower to perform under the contract. Risk ratings are adjusted as necessary.

Loans are risk rated into the following categories (Credit Quality Indicators): Pass, Special Mention, Substandard, Doubtful and Loss. Each of these groups is assessed for the proper amount to be used in determining the adequacy of our allowance for losses. These categories can be described as follows:

Pass — These loans, including loans on the Bank’s internal watch list, range from minimal credit risk to lower than average, but still acceptable, credit risk. Watch list loans usually require more than normal management attention. Loans on the watch list may involve borrowers with adverse financial trends, higher debt/equity ratios, or weaker liquidity positions, but not to the degree of being considered a defined weakness or problem loan where risk of loss may be apparent.

Special Mention — Loans assigned to this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard — Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected.

Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or the liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loss — Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset with insignificant value even though partial recovery may be affected in the future.

The following table summarizes loans by type, excluding PCI loans, according to our internal risk ratings for the periods presented.


	March 31, 2018
	Pass		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial and industrial	$	486,079	$	17,312	$	10,838	$	-	$	514,229
SBA		114,632		5,294		3,506		-		123,432
Real estate:
Commercial real estate
Owner occupied		1,017,210		73,607		4,913		-		1,095,730
Non-owner occupied		2,291,202		18,337		5,947		-		2,315,486
Construction
Speculative		63,544		-		-		-		63,544
Non-speculative		16,354		-		-		-		16,354
SFR mortgage		230,517		3,100		4,001		-		237,618
Dairy & livestock and agribusiness		253,498		12,706		10,175		-		276,379
Municipal lease finance receivables		67,324		568		-		-		67,892
Consumer and other loans		62,225		1,113		821		-		64,159

Total gross loans, excluding PCI loans	$	4,602,585	$	132,037	$	40,201	$	-	$	4,774,823


	December 31, 2017
	Pass		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial and industrial	$	483,641	$	19,566	$	10,118	$	-	$	513,325
SBA		112,835		5,358		3,862		-		122,055
Real estate:
Commercial real estate
Owner occupied		1,009,199		76,111		10,970		-		1,096,280
Non-owner occupied		2,257,130		16,434		6,869		-		2,280,433
Construction
Speculative		60,042		-		-		-		60,042
Non-speculative		17,940		-		-		-		17,940
SFR mortgage		229,032		3,124		4,046		-		236,202
Dairy & livestock and agribusiness		321,413		9,047		16,829		-		347,289
Municipal lease finance receivables		69,644		599		-		-		70,243
Consumer and other loans		61,715		1,255		1,259		-		64,229

Total gross loans, excluding PCI loans	$	4,622,591	$	131,494	$	53,953	$	-	$	4,808,038

Allowance for Loan Losses (“ALLL”)

The Bank’s Audit and Director Loan Committees provide Board oversight of the ALLL process and approves the ALLL on a quarterly basis.

Our methodology for assessing the appropriateness of the allowance is conducted on a regular basis and considers the Bank’s overall loan portfolio. Refer to Note 3 – Summary of Significant Accounting Policies of the 2017 Annual Report on Form 10-K for the year ended December 31, 2017 for a more detailed discussion concerning the allowance for loan losses.

Management believes that the ALLL was appropriate at March 31, 2018 and December 31, 2017. No assurance can be given that economic conditions which adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for loan losses in the future.

The following tables present the balance and activity related to the allowance for loan losses for held-for-investment loans by type for the periods presented.


	For the Three Months Ended March 31, 2018
	Ending Balance December 31, 2017		Charge-offs			Recoveries		(Recapture of) Provision for Loan Losses			Ending Balance March 31, 2018
	(Dollars in thousands)
Commercial and industrial	$	7,280	$	-		$	10	$	209		$	7,499
SBA		869		-			5		10			884
Real estate:
Commercial real estate		41,722		-			-		141			41,863
Construction		984		-			1,334		(1,331	)		987
SFR mortgage		2,112		-			-		90			2,202
Dairy & livestock and agribusiness		4,647		-			-		19			4,666
Municipal lease finance receivables		851		-			-		(17	)		834
Consumer and other loans		753			(7)		8		(66	)		688
PCI loans		367		-			-		(55	)		312

Total allowance for loan losses	$	59,585	$		(7)	$	1,357	$	(1,000	)	$	59,935


	For the Three Months Ended March 31, 2017
	Ending Balance December 31, 2016		Charge-offs			Recoveries		(Recapture of) Provision for Loan Losses			Ending Balance March 31, 2017
	(Dollars in thousands)
Commercial and industrial	$	8,154	$	-		$	52	$	(250	)	$	7,956
SBA		871		-			4		(4	)		871
Real estate:
Commercial real estate		37,443		-			-		1,543			38,986
Construction		1,096		-			2,025		(2,301	)		820
SFR mortgage		2,287		-			64		(165	)		2,186
Dairy & livestock and agribusiness		8,541		-			-		(2,699	)		5,842
Municipal lease finance receivables		941		-			-		(52	)		889
Consumer and other loans		988		(2	)		29		(78	)		937
PCI loans		1,219		-			-		(494	)		725

Total allowance for loan losses	$	61,540	$	(2	)	$	2,174	$	(4,500	)	$	59,212

The following tables present the recorded investment in loans held-for-investment and the related allowance for loan losses by loan type, based on the Company’s methodology for determining the allowance for loan losses for the periods presented. Acquired loans are also supported by a credit discount established through the determination of fair value for the acquired loan portfolio.


	March 31, 2018
	Recorded Investment in Loans						Allowance for Loan Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Acquired with Deterioriated Credit Quality		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Acquired with Deterioriated Credit Quality
					(Dollars in thousands)
Commercial and industrial	$	432	$	513,797	$	-	$	-	$	7,499	$	-
SBA		1,201		122,231		-		-		884		-
Real estate:
Commercial real estate		7,992		3,403,224		-		-		41,863		-
Construction		-		79,898		-		-		987		-
SFR mortgage		3,576		234,042		-		-		2,202		-
Dairy & livestock and agribusiness		818		275,561		-		-		4,666		-
Municipal lease finance receivables		-		67,892		-		-		834		-
Consumer and other loans		438		63,721		-		-		688		-
PCI loans		-		-		25,861		-		-		312

Total	$	14,457	$	4,760,366	$	25,861	$	-	$	59,623	$	312


	March 31, 2017
	Recorded Investment in Loans						Allowance for Loan Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Acquired with Deterioriated Credit Quality		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Acquired with Deterioriated Credit Quality
					(Dollars in thousands)
Commercial and industrial	$	1,150	$	527,795	$	-	$	88	$	7,868	$	-
SBA		1,926		110,764		-		9		862		-
Real estate:
Commercial real estate		20,216		3,199,083		-		-		38,986		-
Construction		384		72,398		-		-		820		-
SFR mortgage		4,248		241,114		-		-		2,186		-
Dairy & livestock and agribusiness		1,324		242,940		-		-		5,842		-
Municipal lease finance receivables		-		62,416		-		-		889		-
Consumer and other loans		801		79,362		-		-		937		-
PCI loans		-		-		56,527		-		-		725

Total	$	30,049	$	4,535,872	$	56,527	$	97	$	58,390	$	725

Past Due and Nonperforming Loans

We seek to manage asset quality and control credit risk through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Management Division is in charge of monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of nonperforming, past due loans and larger credits, designed to identify potential charges to the allowance for loan losses, and to determine the adequacy of the allowance, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers and any guarantors, the value of the applicable collateral, loan loss experience, estimated loan losses, growth in the loan portfolio, prevailing economic conditions and other factors. Refer to Note 3 – Summary of Significant Accounting Policies, included in our Annual Report on Form 10-K for the year ended December 31, 2017, for additional discussion concerning the Bank’s policy for past due and nonperforming loans.

A loan is reported as a Troubled Debt Restructuring (“TDR”) when the Bank grants a concession(s) to a borrower experiencing financial difficulties that the Bank would not otherwise consider. Examples of such concessions include a reduction in the interest rate, deferral of principal or accrued interest, extending the payment due dates or loan maturity date(s), or providing a lower interest rate than would be normally available for new debt of similar risk. As a result of one or more of these concessions, restructured loans are classified as impaired. Impairment reserves on non-collateral dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the loan’s carrying value. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan losses.

Generally, when loans are identified as impaired they are moved to our Special Assets Department. When we identify a loan as impaired, we measure the loan for potential impairment using discounted cash flows, unless the loan is determined to be collateral dependent. In these cases, we use the current fair value of collateral, less selling costs. Generally, the determination of fair value is established through obtaining external appraisals of the collateral.

The following tables present the recorded investment in, and the aging of, past due and nonaccrual loans, excluding PCI loans, by type of loans for the periods presented.


	March 31, 2018
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial and industrial	$	-	$	-	$	-	$	272	$	513,957	$	514,229
SBA		-		-		-		589		122,843		123,432
Real estate:
Commercial real estate
Owner occupied		-		-		-		4,332		1,091,398		1,095,730
Non-owner occupied		-		-		-		2,414		2,313,072		2,315,486
Construction
Speculative (2)		-		-		-		-		63,544		63,544
Non-speculative		-		-		-		-		16,354		16,354
SFR mortgage		680		-		680		1,309		235,629		237,618
Dairy & livestock and agribusiness		-		-		-		818		275,561		276,379
Municipal lease finance receivables		-		-		-		-		67,892		67,892
Consumer and other loans		63		-		63		438		63,658		64,159

Total gross loans, excluding PCI loans	$	743	$	-	$	743	$	10,172	$	4,763,908	$	4,774,823

(1)

As of March 31, 2018, $3.6 million of nonaccruing loans were current, $431,000 were 30-59 days past due, and $6.2 million were 90+ days past due.

(2)

Speculative construction loans are generally for properties where there is no identified buyer or renter.


	December 31, 2017
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial and industrial	$	768	$	-	$	768	$	250	$	512,307	$	513,325
SBA		403		-		403		906		120,746		122,055
Real estate:
Commercial real estate
Owner occupied		-		-		-		4,365		1,091,915		1,096,280
Non-owner occupied		-		-		-		2,477		2,277,956		2,280,433
Construction
Speculative (2)		-		-		-		-		60,042		60,042
Non-speculative		-		-		-		-		17,940		17,940
SFR mortgage		-		-		-		1,337		234,865		236,202
Dairy & livestock and agribusiness		-		-		-		829		346,460		347,289
Municipal lease finance receivables		-		-		-		-		70,243		70,243
Consumer and other loans		1		-		1		552		63,676		64,229

Total gross loans, excluding PCI loans	$	1,172	$	-	$	1,172	$	10,716	$	4,796,150	$	4,808,038

(1)

As of December 31, 2017, $3.6 million of nonaccruing loans were current, $376,000 were 60-89 days past due and $6.8 million were 90+ days past due.

(2)

Speculative construction loans are generally for properties where there is no identified buyer or renter.

Impaired Loans

At March 31, 2018, the Company had impaired loans, excluding PCI loans, of $14.5 million. Impaired loans included $6.7 million of nonaccrual commercial real estate loans, $1.3 million of nonaccrual single-family residential (“SFR”) mortgage loans, $818,000 of nonaccrual dairy & livestock and agribusiness loans, $589,000 of nonaccrual Small Business Administration (“SBA”) loans, $438,000 of nonaccrual consumer and other loans, and $272,000 of nonaccrual commercial and industrial loans. These impaired loans included $8.2 million of loans whose terms were modified in a troubled debt restructuring, of which $3.9 million were classified as nonaccrual. The remaining balance of $4.3 million consisted of 15 loans performing according to the restructured terms. The impaired loans had a specific allowance of zero at March 31, 2018. At December 31, 2017, the Company had classified as impaired, loans, excluding PCI loans, with a balance of $15.5 million with a related allowance of $75,000.

The following tables present information for held-for-investment loans, excluding PCI loans, individually evaluated for impairment by type of loans, as and for the periods presented.


	As of and For the Three Months Ended
	March 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	432	$	986	$	-	$	461	$	2
SBA		1,201		1,327		-		1,220		12
Real estate:
Commercial real estate
Owner occupied		4,332		4,755		-		4,348		-
Non-owner occupied		3,660		5,033		-		3,715		22
Construction
Speculative		-		-		-		-		-
Non-speculative		-		-		-		-		-
SFR mortgage		3,576		4,236		-		3,599		25
Dairy & livestock and agribusiness		818		1,091		-		826		-
Municipal lease finance receivables		-		-		-		-		-
Consumer and other loans		438		640		-		519		-

Total		14,457		18,068		-		14,688		61

With a related allowance recorded:
Commercial and industrial		-		-		-		-		-
SBA		-		-		-		-		-
Real estate:
Commercial real estate
Owner occupied		-		-		-		-		-
Non-owner occupied		-		-		-		-		-
Construction
Speculative		-		-		-		-		-
Non-speculative		-		-		-		-		-
SFR mortgage		-		-		-		-		-
Dairy & livestock and agribusiness		-		-		-		-		-
Municipal lease finance receivables		-		-		-		-		-
Consumer and other loans		-		-		-		-		-

Total		-		-		-		-		-

Total impaired loans	$	14,457	$	18,068	$	-	$	14,688	$	61

	As of and For the Three Months Ended
	March 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	1,015	$	1,985	$	-	$	1,045	$	6
SBA		1,917		2,272		-		1,960		16
Real estate:
Commercial real estate
Owner occupied		6,669		7,081		-		6,434		32
Non-owner occupied		13,547		16,198		-		13,479		401
Construction
Speculative		384		402		-		384		-
Non-speculative		-		-		-		-		-
SFR mortgage		4,248		5,024		-		4,259		34
Dairy & livestock and agribusiness		1,324		1,610		-		1,839		1
Municipal lease finance receivables		-		-		-		-		-
Consumer and other loans		801		1,379		-		809		5

Total		29,905		35,951		-		30,209		495

With a related allowance recorded:
Commercial and industrial		135		136		88		152		2
SBA		9		25		9		10		-
Real estate:
Commercial real estate
Owner occupied		-		-		-		-		-
Non-owner occupied		-		-		-		-		-
Construction
Speculative		-		-		-		-		-
Non-speculative		-		-		-		-		-
SFR mortgage		-		-		-		-		-
Dairy & livestock and agribusiness		-		-		-		-		-
Municipal lease finance receivables		-		-		-		-		-
Consumer and other loans		-		-		-		-		-

Total		144		161		97		162		2

Total impaired loans	$	30,049	$	36,112	$	97	$	30,371	$	497


	As of December 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	440	$	980	$	-
SBA		1,530		1,699		-
Real estate:
Commercial real estate
Owner occupied		4,365		4,763		-
Non-owner occupied		3,768		5,107		-
Construction
Speculative		-		-		-
Non-speculative		-		-		-
SFR mortgage		4,040		4,692		-
Dairy & livestock and agribusiness		829		1,091		-
Municipal lease finance receivables		-		-		-
Consumer and other loans		174		370		-

Total		15,146		18,702		-

With a related allowance recorded:
Commercial and industrial		-		-		-
SBA		1		18		1
Real estate:
Commercial real estate
Owner occupied		-		-		-
Non-owner occupied		-		-		-
Construction
Speculative		-		-		-
Non-speculative		-		-		-
SFR mortgage		-		-		-
Dairy & livestock and agribusiness		-		-		-
Municipal lease finance receivables		-		-		-
Consumer and other loans		378		391		74

Total		379		409		75

Total impaired loans	$	15,525	$	19,111	$	75

The Company recognizes the charge-off of the impairment allowance on impaired loans in the period in which a loss is identified for collateral dependent loans. Therefore, the majority of the nonaccrual loans as of March 31, 2018, December 31, 2017 and March 31, 2017 have already been written down to the estimated net realizable value. An allowance is recorded on impaired loans for the following: nonaccrual loans where a charge-off is not yet processed, nonaccrual SFR mortgage loans where there is a potential modification in process, or on smaller balance non-collateral dependent loans.

Reserve for Unfunded Loan Commitments

The allowance for off-balance sheet credit exposure relates to commitments to extend credit, letters of credit and undisbursed funds on lines of credit. The Company evaluates credit risk associated with the off-balance sheet loan commitments at the same time it evaluates credit risk associated with the loan and lease portfolio. There was no provision or recapture of provision for unfunded loan commitments for the three months ended March 31, 2018, and 2017. As of March 31, 2018 and December 31, 2017, the balance in this reserve was $6.3 million and was included in other liabilities.

Troubled Debt Restructurings (“TDRs”)

Loans that are reported as TDRs are considered impaired and charge-off amounts are taken on an individual loan basis, as deemed appropriate. The majority of restructured loans are loans for which the terms of repayment have been renegotiated, resulting in a reduction in interest rate or deferral of principal. Refer to Note 3 – Summary of Significant Accounting Policies, included in our Annual Report on Form 10-K for the year ended December 31, 2017 for a more detailed discussion regarding TDRs.

As of March 31, 2018, there were $8.2 million of loans classified as a TDR, of which $3.9 million were nonperforming and $4.3 million were performing. TDRs on accrual status are comprised of loans that were accruing interest at the time of restructuring or have demonstrated repayment performance in compliance with the restructured terms for a sustained period and for which the Company anticipates full repayment of both principal and interest. At March 31, 2018, performing TDRs were comprised of nine SFR mortgage loans of $2.3 million, two commercial real estate loans of $1.2 million, one SBA loan of $612,000, and three commercial and industrial loans of $160,000.

The majority of TDRs have no specific allowance allocated as any impairment amount is normally charged off at the time a probable loss is determined. We have allocated zero and $1,000 of specific allowance to TDRs as of March 31, 2018 and December 31, 2017, respectively.

The following table provides a summary of the activity related to TDRs for the periods presented.


	For the Three Months Ended
	March 31,
	2018			2017
	(Dollars in thousands)
Performing TDRs:
Beginning balance	$	4,809		$	19,233
New modifications		-			3,143
Payoffs/payments, net and other		(524	)		(3,003	)
TDRs returned to accrual status		-			329
TDRs placed on nonaccrual status		-			-

Ending balance	$	4,285		$	19,702

Nonperforming TDRs:
Beginning balance	$	4,200		$	1,626
New modifications		-			2,066
Charge-offs		-			-
Payoffs/payments, net and other		(291	)		(1,956	)
TDRs returned to accrual status		-			(329	)
TDRs placed on nonaccrual status		-			-

Ending balance	$	3,909		$	1,407

Total TDRs	$	8,194		$	21,109

There were no loans that were modified as TDRs during the three months ended March 31, 2018.

The following table summarizes loans modified as troubled debt restructurings for the period presented.


Modifications (1)

	For the Three Months Ended March 31, 2017
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at March 31, 2017		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial and industrial:
Interest rate reduction		-	$	-	$	-	$	-	$	-
Change in amortization period or maturity		-		-		-		-		-
SBA:
Interest rate reduction		-		-		-		-		-
Change in amortization period or maturity		-		-		-		-		-
Real estate:
Commercial real estate:
Owner occupied
Interest rate reduction		-		-		-		-		-
Change in amortization period or maturity		1		3,143		3,143		3,143		-
Non-owner occupied
Interest rate reduction		-		-		-		-		-
Change in amortization period or maturity		-		-		-		-		-
Dairy & livestock and agribusiness:
Interest rate reduction		-		-		-		-		-
Change in amortization period or maturity		1		1,984		1,984		78		-
Consumer:
Interest rate reduction		-		-		-		-		-
Change in amortization period or maturity		1		82		82		80		-

Total loans		3	$	5,209	$	5,209	$	3,301	$	-

(1)

The tables above exclude modified loans that were paid off prior to the end of the period.

(2)

Financial effects resulting from modifications represent charge-offs and specific allowance recorded at modification date.

As of March 31, 2018 and 2017, there were no loans that were previously modified as a TDR within the previous 12 months that subsequently defaulted during the three months ended March 31, 2018 and 2017, respectively.