XML 88 R14.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Note 7: Loans and Allowance For Loan Losses | 6 Months Ended
--- | ---
Jun. 30, 2015
Notes |
Note 7: Loans and Allowance For Loan Losses | NOTE 7: LOANS AND ALLOWANCE FOR LOAN LOSSES
| June 30, |  | December 31,
| 2015 |  | 2014
(In Thousands) |  |  |
One- to four-family residential construction | $38,476 |  | $40,361
Subdivision construction | 34,253 |  | 28,593
Land development | 48,574 |  | 52,096
Commercial construction | 459,907 |  | 392,929
Owner occupied one- to four-family residential | 94,024 |  | 87,549
Non-owner occupied one- to four-family residential | 146,480 |  | 143,051
Commercial real estate | 1,015,454 |  | 945,876
Other residential | 385,901 |  | 392,414
Commercial business | 391,674 |  | 354,012
Industrial revenue bonds | 39,532 |  | 41,061
Consumer auto | 371,271 |  | 323,353
Consumer other | 76,581 |  | 78,029
Home equity lines of credit | 70,515 |  | 66,272
Acquired FDIC-covered loans, net of discounts | 266,371 |  | 286,608
Acquired loans no longer covered by FDIC loss sharing agreements, |  |  |
net of discounts | 38,482 |  | 49,945
Acquired non-covered loans, net of discounts | 110,865 |  | 121,982
| 3,588,360 |  | 3,404,131
Undisbursed portion of loans in process | (343,276) |  | (323,572)
Allowance for loan losses | (39,698) |  | (38,435)
Deferred loan fees and gains, net | (3,009) |  | (3,276)
| $3,202,377 |  | $3,038,848
Weighted average interest rate | 4.59% |  | 4.66%
Classes of loans by aging were as follows:
| June 30, 2015
|  |  |  |  |  |  | Total Loans
|  |  | Past Due |  |  |  | > 90 Days
| 30-59 Days | 60-89 Days | 90 Days | Total Past |  | Total Loans | Past Due and
| Past Due | Past Due | or More | Due | Current | Receivable | Still Accruing
(In Thousands) |  |  |  |  |  |  |
One- to four-family |  |  |  |  |  |  |
residential construction | $— | $— | $— | $— | $38,476 | $38,476 | $—
Subdivision construction | 306 | — | 56 | 362 | 33,891 | 34,253 | —
Land development | 34 | 106 | 11 | 151 | 48,423 | 48,574 | —
Commercial construction | — | — | — | — | 459,907 | 459,907 | —
Owner occupied one- to four- |  |  |  |  |  |  |
family residential | 68 | 120 | 760 | 948 | 93,076 | 94,024 | —
Non-owner occupied one- to |  |  |  |  |  |  |
four-family residential | — | 101 | 212 | 313 | 146,167 | 146,480 | —
Commercial real estate | 2,349 | 87 | 2,670 | 5,106 | 1,010,348 | 1,015,454 | —
Other residential | — | — | — | — | 385,901 | 385,901 | —
Commercial business | 190 | — | 215 | 405 | 391,269 | 391,674 | —
Industrial revenue bonds | — | — | — | — | 39,532 | 39,532 | —
Consumer auto | 1,773 | 397 | 476 | 2,646 | 368,625 | 371,271 | 4
Consumer other | 659 | 235 | 515 | 1,409 | 75,172 | 76,581 | 222
Home equity lines of credit | 128 | 105 | 194 | 427 | 70,088 | 70,515 | —
Acquired FDIC-covered |  |  |  |  |  |  |
loans, net of discounts | 1,173 | 1,661 | 14,753 | 17,587 | 248,784 | 266,371 | 747
Acquired loans no longer |  |  |  |  |  |  |
covered by loss sharing |  |  |  |  |  |  |
agreements, net of |  |  |  |  |  |  |
discounts | 16 | — | 91 | 107 | 38,375 | 38,482 | —
Acquired non-covered loans, |  |  |  |  |  |  |
net of discounts | 786 | 304 | 8,956 | 10,046 | 100,819 | 110,865 | —
| 7,482 | 3,116 | 28,909 | 39,507 | 3,548,853 | 3,588,360 | 973
Less FDIC-supported loans, |  |  |  |  |  |  |
and acquired non-covered |  |  |  |  |  |  |
loans, net of discounts | 1,975 | 1,965 | 23,800 | 27,740 | 387,978 | 415,718 | 747
Total | $5,507 | $1,151 | $5,109 | $11,767 | $3,160,875 | $3,172,642 | $226
| December 31, 2014
|  |  |  |  |  |  | Total Loans
|  |  |  |  |  | Total | > 90 Days Past
| 30-59 Days | 60-89 Days | Over 90 | Total Past |  | Loans | Due and
| Past Due | Past Due | Days | Due | Current | Receivable | Still Accruing
(In Thousands) |  |  |  |  |  |  |
One- to four-family |  |  |  |  |  |  |
residential construction | $— | $— | $— | $— | $40,361 | $40,361 | $—
Subdivision construction | 109 | — | — | 109 | 28,484 | 28,593 | —
Land development | 110 | — | 255 | 365 | 51,731 | 52,096 | —
Commercial construction | — | — | — | — | 392,929 | 392,929 | —
Owner occupied one- to four- |  |  |  |  |  |  |
family residential | 2,037 | 441 | 1,029 | 3,507 | 84,042 | 87,549 | 170
Non-owner occupied one- to |  |  |  |  |  |  |
four-family residential | 583 | — | 296 | 879 | 142,172 | 143,051 | —
Commercial real estate | 6,887 | — | 4,699 | 11,586 | 934,290 | 945,876 | 187
Other residential | — | — | — | — | 392,414 | 392,414 | —
Commercial business | 59 | — | 411 | 470 | 353,542 | 354,012 | —
Industrial revenue bonds | — | — | — | — | 41,061 | 41,061 | —
Consumer auto | 1,801 | 244 | 316 | 2,361 | 320,992 | 323,353 | —
Consumer other | 1,301 | 260 | 801 | 2,362 | 75,667 | 78,029 | 397
Home equity lines of credit | 89 | — | 340 | 429 | 65,843 | 66,272 | 22
Acquired FDIC-covered loans, net of discounts | 6,236 | 1,062 | 16,419 | 23,717 | 262,891 | 286,608 | 194
Acquired loans no longer covered by FDIC loss sharing agreements, |  |  |  |  |  |  |
net of discounts | 754 | 46 | 243 | 1,043 | 48,902 | 49,945 | —
Acquired non-covered loans, net of discounts | 2,638 | 640 | 11,248 | 14,526 | 107,456 | 121,982 | —
| 22,604 | 2,693 | 36,057 | 61,354 | 3,342,777 | 3,404,131 | 970
Less FDIC-supported loans, |  |  |  |  |  |  |
and acquired non-covered loans, net of discounts | 9,628 | 1,748 | 27,910 | 39,286 | 419,249 | 458,535 | 194
Total | $12,976 | $945 | $8,147 | $22,068 | $2,923,528 | $2,945,596 | $776
Nonaccruing loans (excluding FDIC-supported loans, net of discount and acquired non-covered loans, net of discount) are summarized as follows:
| June 30, |  | December 31,
| 2015 |  | 2014
(In Thousands) |  |  |
One- to four-family residential construction | $— |  | $—
Subdivision construction | 56 |  | —
Land development | 11 |  | 255
Commercial construction | — |  | —
Owner occupied one- to four-family residential | 760 |  | 859
Non-owner occupied one- to four-family residential | 212 |  | 296
Commercial real estate | 2,670 |  | 4,512
Other residential | — |  | —
Commercial business | 215 |  | 411
Industrial revenue bonds | — |  | —
Consumer auto | 472 |  | 316
Consumer other | 293 |  | 404
Home equity lines of credit | 194 |  | 318
Total | $4,883 |  | $7,371
The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2015. Also presented is the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2015:
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for loan losses |  |  |  |  |  |  |
Balance April 1, 2015 | $3,985 | $2,809 | $20,216 | $3,356 | $3,945 | $4,760 | $39,071
Provision (benefit) charged to expense | (110) | 524 | (146) | (77) | 423 | 686 | 1,300
Losses charged off | (80) | — | (2) | — | (551) | (935) | (1,568)
Recoveries | 91 | 9 | 123 | 9 | 175 | 488 | 895
Balance June 30, 2015 | $3,886 | $3,342 | $20,191 | $3,288 | $3,992 | $4,999 | $39,698
Balance January 1, 2015 | $3,455 | $2,941 | $19,773 | $3,562 | $3,679 | $5,025 | $38,435
Provision (benefit) charged to expense | 446 | 384 | 239 | (190) | 890 | 831 | 2,600
Losses charged off | (220) | (2) | (4) | (197) | (775) | (2,082) | (3,280)
Recoveries | 205 | 19 | 183 | 113 | 198 | 1,225 | 1,943
Balance June 30, 2015 | $3,886 | $3,342 | $20,191 | $3,288 | $3,992 | $4,999 | $39,698
Ending balance: |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $663 | $— | $2,130 | $1,411 | $261 | $243 | $4,708
Collectively evaluated for |  |  |  |  |  |  |
impairment | $3,044 | $3,323 | $16,752 | $1,671 | $3,693 | $4,352 | $32,835
Loans acquired and |  |  |  |  |  |  |
accounted for under ASC |  |  |  |  |  |  |
310-30 | $179 | $19 | $1,309 | $206 | $38 | $404 | $2,155
Loans |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $9,992 | $9,729 | $25,891 | $7,334 | $1,567 | $1,558 | $56,071
Collectively evaluated for |  |  |  |  |  |  |
impairment | $303,241 | $376,172 | $989,563 | $501,147 | $429,639 | $516,809 | $3,116,571
Loans acquired and |  |  |  |  |  |  |
accounted for under ASC |  |  |  |  |  |  |
310-30 | $209,627 | $47,199 | $90,814 | $6,726 | $14,284 | $47,068 | $415,718
The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2014:
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for loan losses |  |  |  |  |  |  |
Balance April 1, 2014 | $4,638 | $1,998 | $18,443 | $7,071 | $2,341 | $3,784 | $38,275
Provision (benefit) charged to expense | 915 | (281) | (1,629) | 1,110 | 979 | 368 | 1,462
Losses charged off | (505) | (2) | (338) | (95) | (738) | (764) | (2,442)
Recoveries | 25 | 8 | — | 163 | — | 591 | 787
Balance June 30, 2014 | $5,073 | $1,723 | $16,476 | $8,249 | $2,582 | $3,979 | $38,082
Balance January 1, 2014 | $6,235 | $2,678 | $16,939 | $4,464 | $6,451 | $3,349 | $40,116
Provision (benefit) charged to expense | 367 | (968) | (134) | 3,693 | (1,182) | 1,378 | 3,154
Losses charged off | (1,697) | (2) | (719) | (130) | (2,687) | (1,784) | (7,019)
Recoveries | 168 | 15 | 390 | 222 | — | 1,036 | 1,831
Balance June 30, 2014 | $5,073 | $1,723 | $16,476 | $8,249 | $2,582 | $3,979 | $38,082
The following table presents the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2014:
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for loan losses |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $829 | $— | $1,751 | $1,507 | $823 | $232 | $5,142
Collectively evaluated for |  |  |  |  |  |  |
impairment | $2,532 | $2,923 | $16,671 | $1,905 | $2,805 | $4,321 | $31,157
Loans acquired and |  |  |  |  |  |  |
accounted for under ASC |  |  |  |  |  |  |
310-30 | $94 | $18 | $1,351 | $150 | $51 | $472 | $2,136
Loans |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $11,488 | $9,804 | $28,641 | $7,601 | $2,725 | $1,480 | $61,739
Collectively evaluated for |  |  |  |  |  |  |
impairment | $288,066 | $382,610 | $917,235 | $437,424 | $392,348 | $466,174 | $2,883,857
Loans acquired and |  |  |  |  |  |  |
accounted for under ASC |  |  |  |  |  |  |
310-30 | $234,158 | $48,470 | $107,278 | $1,937 | $17,789 | $48,903 | $458,535
The portfolio segments used in the preceding three tables correspond to the loan classes used in all other tables in Note 7 as follows: · The one-to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes · The other residential segment corresponds to the other residential class · The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes · The commercial construction segment includes the land development and commercial construction classes · The commercial business segment corresponds to the commercial business class · The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include not only nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. Impaired loans (excluding FDIC-supported loans, net of discount and acquired non-covered loans, net of discount), are summarized as follows:
| June 30, 2015
|  | Unpaid |  |
| Recorded | Principal | Specific |
| Balance | Balance | Allowance |
(In Thousands) |  |  |  |
One- to four-family residential construction | $467 | $467 | $— |
Subdivision construction | 4,361 | 4,418 | 223 |
Land development | 7,334 | 7,337 | 1,411 |
Commercial construction | — | — | — |
Owner occupied one- to four-family residential | 3,555 | 3,819 | 370 |
Non-owner occupied one- to four-family residential | 1,609 | 1,826 | 70 |
Commercial real estate | 25,891 | 27,250 | 2,130 |
Other residential | 9,729 | 9,729 | — |
Commercial business | 1,567 | 1,591 | 261 |
Industrial revenue bonds | — | — | — |
Consumer auto | 561 | 604 | 84 |
Consumer other | 604 | 756 | 91 |
Home equity lines of credit | 393 | 492 | 68 |
Total | $56,071 | $58,289 | $4,708 |
| Three Months Ended |  | Six Months Ended
| June 30, 2015 |  | June 30, 2015
| Average |  |  | Average |
| Investment | Interest |  | Investment | Interest
| in Impaired | Income |  | in Impaired | Income
| Loans | Recognized |  | Loans | Recognized
(In Thousands) |  |  |  |  |
One- to four-family residential construction | $660 | $12 |  | $815 | $28
Subdivision construction | 4,421 | 53 |  | 4,452 | 106
Land development | 7,339 | 66 |  | 7,424 | 132
Commercial construction | — | — |  | — | —
Owner occupied one- to four-family residential | 3,681 | 39 |  | 3,832 | 88
Non-owner occupied one- to four-family residential | 1,688 | 20 |  | 1,737 | 45
Commercial real estate | 26,275 | 326 |  | 26,456 | 630
Other residential | 9,742 | 93 |  | 9,761 | 180
Commercial business | 1,962 | 19 |  | 2,216 | 47
Industrial revenue bonds | — | — |  | — | —
Consumer auto | 456 | 14 |  | 440 | 21
Consumer other | 569 | 16 |  | 575 | 33
Home equity lines of credit | 404 | 4 |  | 405 | 13
Total | $57,197 | $662 |  | $58,113 | $1,323
| At or for the Year Ended December 31, 2014
|  |  |  | Average |
|  | Unpaid |  | Investment | Interest
| Recorded | Principal | Specific | in Impaired | Income
| Balance | Balance | Allowance | Loans | Recognized
(In Thousands) |  |  |  |  |
One- to four-family residential construction | $1,312 | $1,312 | $— | $173 | $76
Subdivision construction | 4,540 | 4,540 | 344 | 2,593 | 226
Land development | 7,601 | 8,044 | 1,507 | 9,691 | 292
Commercial construction | — | — | — | — | —
Owner occupied one- to four-family |  |  |  |  |
residential | 3,747 | 4,094 | 407 | 4,808 | 212
Non-owner occupied one- to four-family |  |  |  |  |
residential | 1,889 | 2,113 | 78 | 4,010 | 94
Commercial real estate | 28,641 | 30,781 | 1,751 | 29,808 | 1,253
Other residential | 9,804 | 9,804 | — | 10,469 | 407
Commercial business | 2,725 | 2,750 | 823 | 2,579 | 158
Industrial revenue bonds | — | — | — | 2,644 | —
Consumer auto | 420 | 507 | 63 | 219 | 37
Consumer other | 629 | 765 | 94 | 676 | 71
Home equity lines of credit | 431 | 476 | 75 | 461 | 25
Total | $61,739 | $65,186 | $5,142 | $68,131 | $2,851
| June 30, 2014
|  | Unpaid |
| Recorded | Principal | Specific
| Balance | Balance | Allowance
(In Thousands) |  |  |
One- to four-family residential construction | $170 | $170 | $—
Subdivision construction | 1,707 | 1,783 | 585
Land development | 7,600 | 8,024 | 1,531
Commercial construction | — | — | —
Owner occupied one- to four-family residential | 5,149 | 5,490 | 581
Non-owner occupied one- to four-family residential | 4,534 | 4,680 | 457
Commercial real estate | 30,744 | 33,200 | 1,507
Other residential | 10,586 | 10,586 | —
Commercial business | 2,183 | 2,203 | 606
Industrial revenue bonds | 3,651 | 4,585 | —
Consumer auto | 187 | 215 | 28
Consumer other | 738 | 856 | 111
Home equity lines of credit | 436 | 460 | 92
Total | $67,685 | $72,252 | $5,498
| Three Months Ended |  | Six Months Ended
| June 30, 2014 |  | June 30, 2014
| Average |  |  | Average |
| Investment | Interest |  | Investment | Interest
| in Impaired | Income |  | in Impaired | Income
| Loans | Recognized |  | Loans | Recognized
(In Thousands) |  |  |  |  |
One- to four-family residential construction | $57 | $3 |  | $28 | $3
Subdivision construction | 2,310 | 8 |  | 2,720 | 30
Land development | 10,937 | 42 |  | 11,779 | 143
Commercial construction | — | — |  | — | —
Owner occupied one- to four-family residential | 5,101 | 60 |  | 5,318 | 112
Non-owner occupied one- to four-family residential | 4,140 | 69 |  | 3,930 | 110
Commercial real estate | 29,958 | 360 |  | 30,541 | 690
Other residential | 10,734 | 120 |  | 10,845 | 210
Commercial business | 1,847 | 47 |  | 2,904 | 68
Industrial revenue bonds | 2,933 | 303 |  | 2,815 | 303
Consumer auto | 160 | 5 |  | 166 | 7
Consumer other | 714 | 24 |  | 696 | 42
Home equity lines of credit | 441 | — |  | 484 | 14
Total | $69,332 | $1,041 |  | $72,226 | $1,732
At June 30, 2015, $19.6 million of impaired loans had specific valuation allowances totaling $4.7 million. At December 31, 2014, $20.0 million of impaired loans had specific valuation allowances totaling $5.1 million. Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. Troubled debt restructurings are loans that are modified by granting concessions to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The types of concessions made are factored into the estimation of the allowance for loan losses for troubled debt restructurings primarily using a discounted cash flows or collateral adequacy approach. The following tables present newly restructured loans during the three and six months ended June 30, 2015 by type of modification:
| Three Months Ended June 30, 2015
|  |  |  | Total
| Interest Only | Term | Combination | Modification
(In Thousands) |  |
Mortgage loans on real estate: |  |  |  |
One -to four- family residential | $— | $82 | $— | $82
Commercial real estate | — | 115 | — | 115
Consumer | — | 48 | — | 48
| $— | $245 | $— | $245
| Six Months Ended June 30, 2015
|  |  |  | Total
| Interest Only | Term | Combination | Modification
(In Thousands) |  |
Mortgage loans on real estate: |  |  |  |
One -to four- family residential | $— | $209 | $— | $209
Commercial real estate | — | 115 | — | 115
Consumer | — | 48 | — | 48
| $— | $372 | $— | $372
At June 30, 2015, the Company had $45.4 million of loans that were modified in troubled debt restructurings and impaired, as follows: $8.0 million of construction and land development loans, $13.4 million of single family and multi-family residential mortgage loans, $22.7 million of commercial real estate loans, $963,000 of commercial business loans and $294,000 of consumer loans. Of the total troubled debt restructurings at June 30, 2015, $43.3 million were accruing interest and $16.6 million were classified as substandard using the Company’s internal grading system, which is described below. The Company had no troubled debt restructurings which were modified in the previous 12 months and subsequently defaulted during the six months ended June 30, 2015. When loans modified as troubled debt restructuring have subsequent payment defaults, the defaults are factored into the determination of the allowance for loan losses to ensure specific valuation allowances reflect amounts considered uncollectible. At December 31, 2014, the Company had $47.6 million of loans that were modified in troubled debt restructurings and impaired, as follows: $8.3 million of construction and land development loans, $13.8 million of single family and multi-family residential mortgage loans, $23.3 million of commercial real estate loans, $1.9 million of commercial business loans and $324,000 of consumer loans. Of the total troubled debt restructurings at December 31, 2014, $39.2 million were accruing interest and $18.3 million were classified as substandard using the Company’s internal grading system. During the three months ended June 30, 2015, loans designated as troubled debt restructurings totaling $1,000 met the criteria for placement back on accrual status. During the six months ended June 30, 2015, loans designated as troubled debt restructurings totaling $768,000 met the criteria for placement back on accrual status. The $768,000 consisted of $711,000 of residential mortgage loans, $29,000 of commercial business loans, $22,000 of consumer loans and $6,000 of construction and land development loans. The criteria is generally a minimum of six months of payment performance under original or modified terms. The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected. Doubtful loans are those having all the weaknesses inherent to those classified Substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Special mention loans possess potential weaknesses that deserve management’s close attention but do not expose the Bank to a degree of risk that warrants substandard classification. Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. Loans not meeting any of the criteria previously described are considered satisfactory. The FDIC-covered loans are evaluated using this internal grading system. These loans are accounted for in pools and are currently substantially covered through loss sharing agreements with the FDIC. Minimal adverse classification in the loan pools was identified as of June 30, 2015 and December 31, 2014, respectively. The acquired non-covered loans are also evaluated using this internal grading system. These loans are accounted for in pools and minimal adverse classification in the loan pools was identified as of June 30, 2015 and December 31, 2014, respectively. See Note 8 for further discussion of the acquired loan pools and loss sharing agreements. The Company evaluates the loan risk internal grading system definitions and allowance for loan loss methodology on an ongoing basis. In the fourth quarter of 2014, the Company began using a three-year average of historical losses for the general component of the allowance for loan loss calculation. The Company had previously used a five-year average. For interim periods, the Company uses three full years plus the interim period’s annualized average losses for the general component of the allowance for loan loss calculation. The Company believes that the three-year average provides a better representation of the current risks in the loan portfolio. This change was made after consultation with our regulators and other third-party consultants, as well as a review of the practices used by the Company’s peers. This change did not materially affect the level of the allowance for loan losses. The general component of the allowance for loan losses is affected by several factors, including, but not limited to, average historical losses, the average life of the loan, the current composition of the loan portfolio, current and expected economic conditions, collateral values and internal risk ratings. Management considers all these factors in determining the adequacy of its allowance for loan losses. No other significant changes were made to the loan risk grading system definitions and allowance for loan loss methodology during the past year. The loan grading system is presented by loan class below:
|  | June 30, 2015
|  |  | Special |  |  |
| Satisfactory | Watch | Mention | Substandard | Doubtful | Total
(In Thousands) |  |  |  |  |  |
One- to four-family residential |  |  |  |  |  |
construction | $38,009 | $— | $— | $467 | $— | $38,476
Subdivision construction | 30,153 | 269 | — | 3,831 | — | 34,253
Land development | 37,603 | 5,432 | — | 5,539 | — | 48,574
Commercial construction | 459,907 | — | — | — | — | 459,907
Owner occupied one- to four- |  |  |  |  |  |
family residential | 91,783 | 596 | — | 1,645 | — | 94,024
Non-owner occupied one- to four- |  |  |  |  |  |
family residential | 144,892 | 531 | — | 1,057 | — | 146,480
Commercial real estate | 977,324 | 28,349 | — | 9,781 | — | 1,015,454
Other residential | 374,377 | 9,569 | — | 1,955 | — | 385,901
Commercial business | 389,655 | 1,322 | — | 697 | — | 391,674
Industrial revenue bonds | 39,532 | — | — | — | — | 39,532
Consumer auto | 370,770 | — | — | 501 | — | 371,271
Consumer other | 76,122 | — | — | 459 | — | 76,581
Home equity lines of credit | 70,122 | — | — | 393 | — | 70,515
Acquired FDIC-covered loans, |  |  |  |  |  |
net of discounts | 265,833 | — | — | 538 | — | 266,371
Acquired loans no longer covered |  |  |  |  |  |
by FDIC loss sharing |  |  |  |  |  |
agreements, net of discounts | 38,343 | — | — | 139 | — | 38,482
Acquired non-covered loans, |  |  |  |  |  |
net of discounts | 110,798 | — | — | 67 | — | 110,865
Total | $3,515,223 | $46,068 | $— | $27,069 | $— | $3,588,360
| December 31, 2014
|  |  | Special |  |  |
| Satisfactory | Watch | Mention | Substandard | Doubtful | Total
(In Thousands) |  |  |  |  |  |
One- to four-family residential |  |  |  |  |  |
construction | $39,049 | $— | $— | $1,312 | $— | $40,361
Subdivision construction | 24,269 | 21 | — | 4,303 | — | 28,593
Land development | 41,035 | 5,000 | — | 6,061 | — | 52,096
Commercial construction | 392,929 | — | — | — | — | 392,929
Owner occupied one- to-four- |  |  |  |  |  |
family residential | 85,041 | 745 | — | 1,763 | — | 87,549
Non-owner occupied one- to- |  |  |  |  |  |
four-family residential | 141,198 | 580 | — | 1,273 | — | 143,051
Commercial real estate | 901,167 | 32,155 | — | 12,554 | — | 945,876
Other residential | 380,811 | 9,647 | — | 1,956 | — | 392,414
Commercial business | 351,744 | 423 | — | 1,845 | — | 354,012
Industrial revenue bonds | 40,037 | 1,024 | — | — | — | 41,061
Consumer auto | 323,002 | — | — | 351 | — | 323,353
Consumer other | 77,507 | 3 | — | 519 | — | 78,029
Home equity lines of credit | 65,841 | — | — | 431 | — | 66,272
Acquired FDIC-covered loans, |  |  |  |  |  |
net of discounts | 286,049 | — | — | 559 | — | 286,608
Acquired loans no longer covered |  |  |  |  |  |
by FDIC loss sharing |  |  |  |  |  |
agreements, net of discounts | 48,592 | — | — | 1,353 | — | 49,945
Acquired non-covered loans, |  |  |  |  |  |
net of discounts | 121,982 | — | — | — | — | 121,982
Total | $3,320,253 | $49,598 | $— | $34,280 | $— | $3,404,131

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5066-111524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.3,4) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5162-111524 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e5074-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 7 -Article 9 + Details
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration