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LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2021

Summary of Loan Portfolio by Type of Loan

The following table summarizes the Company’s loan portfolio by type of loan as of:


	2021			2020
Commercial and industrial	$	280,569		$	358,958
Real estate:
Construction and development		307,797			270,407
Commercial real estate		622,842			594,216
Farmland		145,501			78,508
1-4 family residential		410,673			389,096
Multi-family residential		30,971			21,701
Consumer		50,965			51,044
Agricultural		14,639			15,734
Warehouse lending(1)		43,720			86,813
Overdrafts		363			342
Total loans(2)		1,908,040			1,866,819
Net of:
Deferred loan fees, net		(1,531	)		(1,463	)
Allowance for credit losses		(30,433	)		(33,619	)
Total net loans(2)	$	1,876,076		$	1,831,737

(1) Warehouse lending is presented as a component of commercial and industrial loans in remaining tables.
(2) Excludes accrued interest receivable on loans of $5.8 million and $7.0 million as of December 31, 2021 and 2020, respectively, which is presented separately on the consolidated balance sheets.

The Company has entered into transactions, at prevailing market rates and terms, with certain directors, executive officers, significant shareholders and their affiliates. Loans to such related parties at December 31, 2021 and 2020, totaled $44,052 and $52,559, respectively. Unfunded commitments to such related parties at December 31, 2021 totaled $40,244.

Loans to principal officers, directors, and their affiliates during the year ended December 31, 2021, was as follows:


	December 31, 2021
Beginning balance	$	52,559
New loans		91,192
Effect of changes in composition of related parties		(43	)
Repayments		(99,656	)
Ending balance	$	44,052

Schedule of Loans to Principal Officers, Directors and Affiliates

Loans to principal officers, directors, and their affiliates during the year ended December 31, 2021, was as follows:


	December 31, 2021
Beginning balance	$	52,559
New loans		91,192
Effect of changes in composition of related parties		(43	)
Repayments		(99,656	)
Ending balance	$	44,052

Schedule of Allowance for Credit Losses Activity

The Company’s estimate of the allowance for credit losses (“ACL”) reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring. The following tables present the activity in the ACL by class of loans for the years ended December 31, 2021, 2020 and 2019:


For the Year Ended December 31, 2021	Commercial and industrial			Construction and development			Commercial real estate			Farmland		1-4 family residential			Multi-family residential		Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	4,033		$	4,735		$	15,780		$	1,220	$	6,313		$	363	$	929		$	239		$	7		$	33,619
Provision for credit losses		(43	)		(515	)		(1,229	)		478		(495	)		33		(51	)		(78	)		200			(1,700	)
Loans charged-off		(411	)		—			(816	)		—		—			—		(151	)		—			(263	)		(1,641	)
Recoveries		21			1			30			—		—			—		35			8			60			155
Ending balance	$	3,600		$	4,221		$	13,765		$	1,698	$	5,818		$	396	$	762		$	169		$	4		$	30,433


For the Year Ended December 31, 2020	Commercial and industrial			Construction and development		Commercial real estate		Farmland		1-4 family residential			Multi-family residential			Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance, prior to adoption of ASC 326	$	2,056		$	2,378	$	6,853	$	570	$	3,125		$	409		$	602		$	197		$	12		$	16,202
Impact of adopting ASC 326		546			323		2,228		26		1,339			(50	)		72			73			(9	)		4,548
Provision for credit losses		1,398			2,034		6,698		624		1,915			4			373			(33	)		187			13,200
Loans charged-off		(68	)		—		—		—		(68	)		—			(155	)		(18	)		(234	)		(543	)
Recoveries		101			—		1		—		2			—			37			20			51			212
Ending balance	$	4,033		$	4,735	$	15,780	$	1,220	$	6,313		$	363		$	929		$	239		$	7		$	33,619


For the Year Ended December 31, 2019	Commercial and industrial			Construction and development		Commercial real estate		Farmland			1-4 family residential			Multi-family residential			Consumer			Agricultural			Overdrafts			Total
Allowance for credit losses:
Beginning balance	$	1,751		$	1,920	$	6,025	$	643		$	2,868		$	631		$	565		$	238		$	10		$	14,651
Provision for loan losses		(117	)		458		827		(73	)		268			(222	)		(2	)		(41	)		152			1,250
Loans charged-off		(86	)		—		—		—			(14	)		—			(72	)		(89	)		(192	)		(453	)
Recoveries		508			—		1		—			3			—			111			89			42			754
Ending balance	$	2,056		$	2,378	$	6,853	$	570		$	3,125		$	409		$	602		$	197		$	12		$	16,202

Summary of Credit Exposure

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of December 31, 2021:


December 31, 2021	2021		2020		2019			2018			2017			Prior			Revolving Loans Amortized Cost			Total
Commercial and industrial:
Pass	$	176,972	$	31,337	$	16,207		$	6,449		$	3,493		$	14,657		$	74,364		$	323,479
Special mention		—		88		—			—			14			—			—			102
Substandard		—		272		55			192			40			1			—			560
Nonaccrual		14		101		—			22			—			11			—			148
Total commercial and industrial loans	$	176,986	$	31,798	$	16,262		$	6,663		$	3,547		$	14,669		$	74,364		$	324,289

Charge-offs	$	—	$	—	$	(168	)	$	(67	)	$	(115	)	$	—		$	(61	)	$	(411	)
Recoveries		—		—		—			—			—			—			21			21
Current period net	$	—	$	—	$	(168	)	$	(67	)	$	(115	)	$	—		$	(40	)	$	(390	)

Construction and development:
Pass	$	180,056	$	68,765	$	20,499		$	6,507		$	8,235		$	13,565		$	8,615		$	306,242
Special mention		—		—		—			—			944			—			—			944
Substandard		—		—		609			2			—			—			—			611
Nonaccrual		—		—		—			—			—			—			—			—
Total construction and development loans	$	180,056	$	68,765	$	21,108		$	6,509		$	9,179		$	13,565		$	8,615		$	307,797

Charge-offs	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—		—			—			—			1			—			1
Current period net	$	—	$	—	$	—		$	—		$	—		$	1		$	—		$	1

Commercial real estate:
Pass	$	134,617	$	93,806	$	80,733		$	59,380		$	43,457		$	145,477		$	16,065		$	573,535
Special mention		—		765		—			—			4,550			788			—			6,103
Substandard		—		6,987		—			10,041			12,981			12,553			—			42,562
Nonaccrual		—		—		124			69			32			337			80			642
Total commercial real estate loans	$	134,617	$	101,558	$	80,857		$	69,490		$	61,020		$	159,155		$	16,145		$	622,842

Charge-offs	$	—	$	—	$	(17	)	$	(56	)	$	(472	)	$	(271	)	$	—		$	(816	)
Recoveries		—		—		19			—			11			—			—			30
Current period net	$	—	$	—	$	2		$	(56	)	$	(461	)	$	(271	)	$	—		$	(786	)

Farmland:
Pass	$	94,491	$	11,868	$	8,664		$	7,456		$	5,191		$	11,145		$	6,290		$	145,105
Special mention		—		—		—			—			—			26			—			26
Substandard		—		—		—			—			—			72			—			72
Nonaccrual		—		195		—			—			—			103			—			298
Total farmland loans	$	94,491	$	12,063	$	8,664		$	7,456		$	5,191		$	11,346		$	6,290		$	145,501

Charge-offs	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—		—		—			—			—			—			—			—
Current period net	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—


December 31, 2021	2021			2020			2019			2018			2017			Prior			Revolving Loans Amortized Cost			Total
1-4 family residential:
Pass	$	132,448		$	64,590		$	43,016		$	36,501		$	26,987		$	91,864		$	13,714		$	409,120
Special mention		—			—			—			—			—			18			—			18
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		170			—			—			180			58			1,127			—			1,535
Total 1-4 family residential loans	$	132,618		$	64,590		$	43,016		$	36,681		$	27,045		$	93,009		$	13,714		$	410,673

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			—			—			—
Current period net	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Multi-family residential:
Pass	$	16,663		$	4,286		$	6,436		$	908		$	474		$	2,113		$	91		$	30,971
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		—			—			—			—			—			—			—			—
Total multi-family residential loans	$	16,663		$	4,286		$	6,436		$	908		$	474		$	2,113		$	91		$	30,971

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			—			—			—
Current period net	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Consumer and overdrafts:
Pass	$	24,715		$	11,589		$	4,557		$	4,647		$	558		$	543		$	4,478		$	51,087
Special mention		76			—			5			—			—			—			—			81
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		56			27			10			62			5			—			—			160
Total consumer loans and overdrafts	$	24,847		$	11,616		$	4,572		$	4,709		$	563		$	543		$	4,478		$	51,328

Charge-offs	$	(285	)	$	(36	)	$	(57	)	$	(32	)	$	(2	)	$	(2	)	$	—		$	(414	)
Recoveries		61			3			—			8			2			21			—			95
Current period net	$	(224	)	$	(33	)	$	(57	)	$	(24	)	$	—		$	19		$	—		$	(319	)

Agricultural:
Pass	$	3,557		$	1,866		$	927		$	917		$	221		$	526		$	6,492		$	14,506
Special mention		—			—			—			—			13			—			—			13
Substandard		—			14			4			15			39			—			—			72
Nonaccrual		—			—			—			8			—			40			—			48
Total agricultural loans	$	3,557		$	1,880		$	931		$	940		$	273		$	566		$	6,492		$	14,639

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			8			—			8
Current period net	$	—		$	—		$	—		$	—		$	—		$	8		$	—		$	8

Total loans:
Pass	$	763,519		$	288,107		$	181,039		$	122,765		$	88,616		$	279,890		$	130,109		$	1,854,045
Special mention		76			853			5			—			5,521			832			—			7,287
Substandard		—			7,273			668			10,250			13,060			12,626			—			43,877
Nonaccrual		240			323			134			341			95			1,618			80			2,831
Total loans	$	763,835		$	296,556		$	181,846		$	133,356		$	107,292		$	294,966		$	130,189		$	1,908,040

Charge-offs	$	(285	)	$	(36	)	$	(242	)	$	(155	)	$	(589	)	$	(273	)	$	(61	)	$	(1,641	)
Recoveries		61			3			19			8			13			30			21			155
Total current period net (charge-offs) recoveries	$	(224	)	$	(33	)	$	(223	)	$	(147	)	$	(576	)	$	(243	)	$	(40	)	$	(1,486	)

The following table summarizes the credit exposure in the Company’s loan portfolio, by year of origination, as of December 31, 2020:


December 31, 2020	2020		2019		2018			2017		2016		Prior		Revolving Loans Amortized Cost			Total
Commercial and industrial:
Pass	$	278,687	$	30,563	$	12,860		$	4,366	$	6,131	$	16,294	$	90,074		$	438,975
Special mention		124		119		222			4,040		1,324		—		—			5,829
Substandard		—		307		540			50		43		—		—			940
Nonaccrual		—		—		13			—		14		—		—			27
Total commercial and industrial loans	$	278,811	$	30,989	$	13,635		$	8,456	$	7,512	$	16,294	$	90,074		$	445,771

Charge-offs	$	—	$	—	$	(43	)	$	—	$	—	$	—	$	(25	)	$	(68	)
Recoveries		—		—		43			—		—		14		44			101
Current period net	$	—	$	—	$	—		$	—	$	—	$	14	$	19		$	33

Construction and development:
Pass	$	118,590	$	76,926	$	26,212		$	24,524	$	7,742	$	10,507	$	3,266		$	267,767
Special mention		356		—		—			990		—		—		—			1,346
Substandard		—		609		5			—		680		—		—			1,294
Nonaccrual		—		—		—			—		—		—		—			—
Total construction and development loans	$	118,946	$	77,535	$	26,217		$	25,514	$	8,422	$	10,507	$	3,266		$	270,407

Charge-offs	$	—	$	—	$	—		$	—	$	—	$	—	$	—		$	—
Recoveries		—		—		—			—		—		—		—			—
Current period net	$	—	$	—	$	—		$	—	$	—	$	—	$	—		$	—

Commercial real estate:
Pass	$	91,819	$	80,753	$	89,542		$	72,311	$	86,946	$	123,463	$	5,890		$	550,724
Special mention		—		2,716		3,542			849		5,724		449		—			13,280
Substandard		—		—		2,010			4,913		4,445		8,240		—			19,608
Nonaccrual		—		1,140		151			4,158		4,769		386		—			10,604
Total commercial real estate loans	$	91,819	$	84,609	$	95,245		$	82,231	$	101,884	$	132,538	$	5,890		$	594,216

Charge-offs	$	—	$	—	$	—		$	—	$	—	$	—	$	—		$	—
Recoveries		—		—		—			—		—		1		—			1
Current period net	$	—	$	—	$	—		$	—	$	—	$	1	$	—		$	1

Farmland:
Pass	$	17,444	$	12,668	$	10,327		$	6,620	$	9,904	$	15,402	$	5,864		$	78,229
Special mention		—		—		—			—		—		35		—			35
Substandard		—		—		—			—		—		129		—			129
Nonaccrual		—		—		—			—		—		115		—			115
Total farmland loans	$	17,444	$	12,668	$	10,327		$	6,620	$	9,904	$	15,681	$	5,864		$	78,508

Charge-offs	$	—	$	—	$	—		$	—	$	—	$	—	$	—		$	—
Recoveries		—		—		—			—		—		—		—			—
Current period net	$	—	$	—	$	—		$	—	$	—	$	—	$	—		$	—


December 31, 2020	2020			2019			2018			2017			2016			Prior			Revolving Loans Amortized Cost			Total
1-4 family residential:
Pass	$	87,578		$	62,937		$	52,087		$	37,224		$	43,858		$	93,486		$	10,091		$	387,261
Special mention		—			—			—			—			—			168			—			168
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		—			—			326			44			163			1,134			—			1,667
Total 1-4 family residential loans	$	87,578		$	62,937		$	52,413		$	37,268		$	44,021		$	94,788		$	10,091		$	389,096

Charge-offs	$	—		$	—		$	—		$	—		$	(9	)	$	(59	)	$	—		$	(68	)
Recoveries		—			—			—			—			—			2			—			2
Current period net	$	—		$	—		$	—		$	—		$	(9	)	$	(57	)	$	—		$	(66	)

Multi-family residential:
Pass	$	5,889		$	4,498		$	3,617		$	1,371		$	1,737		$	4,391		$	198		$	21,701
Special mention		—			—			—			—			—			—			—			—
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		—			—			—			—			—			—			—			—
Total multi-family residential loans	$	5,889		$	4,498		$	3,617		$	1,371		$	1,737		$	4,391		$	198		$	21,701

Charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Recoveries		—			—			—			—			—			—			—			—
Current period net	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Consumer and overdrafts:
Pass	$	24,740		$	11,176		$	9,369		$	1,701		$	735		$	513		$	2,825		$	51,059
Special mention		16			83			9			7			—			—			—			115
Substandard		—			—			—			—			—			—			—			—
Nonaccrual		24			36			131			20			1			—			—			212
Total consumer loans and overdrafts	$	24,780		$	11,295		$	9,509		$	1,728		$	736		$	513		$	2,825		$	51,386

Charge-offs	$	(243	)	$	(63	)	$	(31	)	$	(43	)	$	(3	)	$	(6	)	$	—		$	(389	)
Recoveries		49			2			12			8			4			13			—			88
Current period net	$	(194	)	$	(61	)	$	(19	)	$	(35	)	$	1		$	7		$	—		$	(301	)

Agricultural:
Pass	$	3,489		$	1,718		$	1,893		$	607		$	273		$	189		$	7,408		$	15,577
Special mention		—			—			—			36			—			—			—			36
Substandard		—			7			10			—			24			—			—			41
Nonaccrual		—			—			33			—			45			2			—			80
Total agricultural loans	$	3,489		$	1,725		$	1,936		$	643		$	342		$	191		$	7,408		$	15,734

Charge-offs	$	—		$	—		$	(18	)	$	—		$	—		$	—		$	—		$	(18	)
Recoveries		—			—			—			—			20			—			—			20
Current period net	$	—		$	—		$	(18	)	$	—		$	20		$	—		$	—		$	2

Total loans:
Pass	$	628,236		$	281,239		$	205,907		$	148,724		$	157,326		$	264,245		$	125,616		$	1,811,293
Special mention		496			2,918			3,773			5,922			7,048			652			—			20,809
Substandard		—			923			2,565			4,963			5,192			8,369			—			22,012
Nonaccrual		24			1,176			654			4,222			4,992			1,637			—			12,705
Total loans	$	628,756		$	286,256		$	212,899		$	163,831		$	174,558		$	274,903		$	125,616		$	1,866,819

Charge-offs	$	(243	)	$	(63	)	$	(92	)	$	(43	)	$	(12	)	$	(65	)	$	(25	)	$	(543	)
Recoveries		49			2			55			8			24			30			44			212
Total current period net (charge-offs) recoveries	$	(194	)	$	(61	)	$	(37	)	$	(35	)	$	12		$	(35	)	$	19		$	(331	)

Summary of Amortized Cost Basis of Collateral-dependent Loans

The following table presents the amortized cost basis of individually evaluated collateral-dependent loans by class of loans, and their impact on the ACL, as of December 31, 2021:


	Real Estate		Non-RE		Total		Allowance for Credit Losses Allocation
Commercial and industrial	$	116	$	—	$	116	$	40
Real estate:
Construction and development		609		—		609		207
Commercial real estate		4,319		—		4,319		553
Total	$	5,044	$	—	$	5,044	$	800

The following table presents the amortized cost basis of individually evaluated collateral-dependent loans by class of loans, and their impact on the ACL, as of December 31, 2020:


	Real Estate		Non-RE		Total		Allowance for Credit Losses Allocation
Commercial and industrial	$	129	$	—	$	129	$	44
Real estate:
Construction and development		609		—		609		208
Commercial real estate		9,989		—		9,989		2,048
Total	$	10,727	$	—	$	10,727	$	2,300

Summary of Payment Status of Loans

The following tables summarize the payment status of loans in the Company’s total loan portfolio, including an aging of delinquent loans and loans 90 days or more past due continuing to accrue interest as of:


December 31, 2021	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	969	$	38	$	134	$	1,141	$	323,148	$	324,289	$	—
Real estate:
Construction and development		885		132		—		1,017		306,780		307,797		—
Commercial real estate		—		360		350		710		622,132		622,842		—
Farmland		114		87		195		396		145,105		145,501		—
1-4 family residential		1,650		123		410		2,183		408,490		410,673		—
Multi-family residential		—		—		—		—		30,971		30,971		—
Consumer		189		113		68		370		50,595		50,965		—
Agricultural		41		8		—		49		14,590		14,639		—
Overdrafts		—		—		—		—		363		363		—
Total	$	3,848	$	861	$	1,157	$	5,866	$	1,902,174	$	1,908,040	$	—


December 31, 2020	30 to 59 Days Past Due		60 to 89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial and industrial	$	385	$	25	$	22	$	432	$	445,339	$	445,771	$	—
Real estate:
Construction and development		256		—		—		256		270,151		270,407		—
Commercial real estate		1,094		—		10,105		11,199		583,017		594,216		—
Farmland		117		3		—		120		78,388		78,508		—
1-4 family residential		2,097		556		127		2,780		386,316		389,096		—
Multi-family residential		—		—		—		—		21,701		21,701		—
Consumer		383		124		97		604		50,440		51,044		—
Agricultural		50		46		45		141		15,593		15,734		—
Overdrafts		—		—		—		—		342		342		—
Total	$	4,382	$	754	$	10,396	$	15,532	$	1,851,287	$	1,866,819	$	—

Schedule of Nonaccrual Loans

The following table presents information regarding nonaccrual loans as of:


	2021		2020
Commercial and industrial	$	148	$	27
Real estate:
Commercial real estate		642		10,604
Farmland		298		115
1-4 family residential		1,535		1,667
Consumer and overdrafts		160		212
Agricultural		48		80
Total	$	2,831	$	12,705

Summary of Troubled Debt Restructuring

There was one loan modified as a TDR during the year ended December 31, 2021. No TDRs subsequently defaulted during 2021 or 2020, and the TDRs described above did not increase the allowance for credit losses and did not result in any charge-offs during years ended December 31, 2021 and 2020.

The following tables present loans, by class, modified as a TDR during the years ended December 31, 2021, 2020 and 2019:


December 31, 2021	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial and industrial		1	$	17	$	14
Total		1	$	17	$	14


December 31, 2020	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Construction and development		2	$	1,289	$	1,081
Commercial and industrial		1		129		85
Commercial real estate		1		1,017		670
Total		4	$	2,435	$	1,836


December 31, 2019	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial real estate		4	$	1,017	$	670
Total		4	$	1,017	$	670