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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Summary of Loan Portfolio by Type of Loan
The following table summarizes our loan portfolio by type of loan at December 31: 
 
2017
 
2016
Commercial and industrial
$
197,508

 
$
223,712

Real estate:
 
 
 
Construction and development
196,774

 
129,631

Commercial real estate
418,137

 
368,077

Farmland
59,023

 
62,366

1-4 family residential
374,371

 
361,665

Multi-family residential
36,574

 
26,079

Consumer
51,267

 
53,177

Agricultural
25,596

 
18,901

Overdrafts
294

 
317

Total loans
1,359,544

 
1,243,925

Net of:
 
 
 
Deferred loan fees
1,094

 
1,210

Allowance for loan losses
(12,859
)
 
(11,484
)
Total net loans
$
1,347,779

 
$
1,233,651
Schedule of Related Party Loans Receivable
Loans to principal officers, directors, and their affiliates during the year ended December 31, 2017, was as follows:
 
2017
Beginning balance
$
29,436

New loans
38,564

Repayments
(23,494
)
Ending balance
$
44,506
Schedule of Allowance for Loan Losses Activity
The following table presents the activity in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method for the years ended December 31, 2017, 2016 and 2015:
December 31, 2017
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Provision for loan losses
272

 
563

 
1,405

 
41

 
(418
)
 
348

 
253

 
276

 
110

 
2,850

Loans charged-off
(1,080
)
 
—

 
(84
)
 
—

 
(543
)
 
—

 
(344
)
 
(242
)
 
(165
)
 
(2,458
)
Recoveries
797

 
—

 
—

 
—

 
23

 
—

 
108

 
—

 
55

 
983

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
17

 
$
—

 
$
27

 
$
85

 
$
5

 
$
—

 
$
—

 
$
—

 
$
—

 
$
134

Collectively evaluated for impairment
1,564

 
1,724

 
4,558

 
438

 
3,017

 
629

 
602

 
187

 
6

 
12,725

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
463

 
$
—

 
$
4,258

 
$
163

 
$
842

 
$
217

 
$
—

 
$
397

 
$
—

 
$
6,340

Collectively evaluated for impairment
197,045

 
196,774

 
413,879

 
58,860

 
373,529

 
36,357

 
51,267

 
25,199

 
294

 
1,353,204

Ending balance
$
197,508

 
$
196,774

 
$
418,137

 
$
59,023

 
$
374,371

 
$
36,574

 
$
51,267

 
$
25,596

 
$
294

 
$
1,359,544

December 31, 2016
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,878

 
$
1,004

 
$
2,106

 
$
400

 
$
2,839

 
$
325

 
$
562

 
$
138

 
$
11

 
$
9,263

Provision for loan losses
910

 
162

 
1,158

 
82

 
1,117

 
(44
)
 
171

 
15

 
69

 
3,640

Loans charged-off
(1,213
)
 
(9
)
 
—

 
—

 
(71
)
 
—

 
(269
)
 
—

 
(200
)
 
(1,762
)
Recoveries
17

 
4

 
—

 
—

 
75

 
—

 
121

 
—

 
126

 
343

Ending balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
64

 
$
—

 
$
—

 
$
47

 
$
108

 
$
—

 
$
34

 
$
—

 
$
—

 
$
253

Collectively evaluated for impairment
1,528

 
1,161

 
3,264

 
435

 
3,852

 
281

 
551

 
153

 
6

 
11,231

Ending balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
231

 
$
1,825

 
$
1,196

 
$
258

 
$
2,588

 
$
5

 
$
200

 
$
15

 
$
—

 
$
6,318

Collectively evaluated for impairment
223,481

 
127,806

 
366,881

 
62,108

 
359,077

 
26,074

 
52,977

 
18,886

 
317

 
1,237,607

Ending balance
$
223,712

 
$
129,631

 
$
368,077

 
$
62,366

 
$
361,665

 
$
26,079

 
$
53,177

 
$
18,901

 
$
317

 
$
1,243,925

December 31, 2015
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,473

 
$
615

 
$
1,870

 
$
387

 
$
2,395

 
$
232

 
$
593

 
$
137

 
$
19

 
$
7,721

Provision for loan losses
577

 
395

 
289

 
(83
)
 
651

 
93

 
138

 
1

 
114

 
2,175

Loans charged-off
(192
)
 
(6
)
 
(53
)
 
—

 
(215
)
 
—

 
(219
)
 
(1
)
 
(227
)
 
(913
)
Recoveries
20

 
—

 
—

 
96

 
8

 
—

 
50

 
1

 
105

 
280

Ending balance
$
1,878

 
$
1,004

 
$
2,106

 
$
400

 
$
2,839

 
$
325

 
$
562

 
$
138

 
$
11

 
$
9,263

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
316

 
$
—

 
$
—

 
$
47

 
$
63

 
$
—

 
$
101

 
$
—

 
$
—

 
$
527

Collectively evaluated for impairment
1,562

 
1,004

 
2,106

 
353

 
2,776

 
325

 
461

 
138

 
11

 
8,736

Ending balance
$
1,878

 
$
1,004

 
$
2,106

 
$
400

 
$
2,839

 
$
325

 
$
562

 
$
138

 
$
11

 
$
9,263

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
3,592

 
$
—

 
$
77

 
$
251

 
$
2,064

 
$
—

 
$
98

 
$
—

 
$
—

 
$
6,082

Collectively evaluated for impairment
178,124

 
122,904

 
301,833

 
47,417

 
310,242

 
30,395

 
50,543

 
19,524

 
313

 
1,061,295

Ending balance
$
181,716

 
$
122,904

 
$
301,910

 
$
47,668

 
$
312,306

 
$
30,395

 
$
50,641

 
$
19,524

 
$
313

 
$
1,067,377
Summary of Credit Exposure by Internally Assigned Grade
The following is a discussion of the primary credit quality indicators most closely monitored for the respective portfolio segment classes:
 
 
 
Commercial and industrial:
  
In assessing risk associated with commercial loans, management considers the business’s cash flow and the value of the underlying collateral to be the primary credit quality indicators.
 
 
Construction and development:
  
In assessing the credit quality of construction loans, management considers the ability of the borrower to finance principal and interest payments in the event that he is unable to sell the completed structure to be a primary credit quality indicator. For real estate development loans, management also considers the likelihood of the successful sale of the constructed properties in the development.
 
 
Commercial real estate:
  
Management considers the strength of the borrower’s cash flows, changes in property values and occupancy status to be key credit quality indicators of commercial real estate loans.
 
 
Farmland:
  
In assessing risk associated with farmland loans, management considers the borrower’s cash flows and underlying property values to be key credit quality indicators.
 
 
Consumer:
  
Management considers the debt to income ratio of the borrower, the borrower’s credit history, the availability of other credit to the borrower, the borrower’s past-due history, and, if applicable, the value of the underlying collateral to be primary credit quality indicators.
 
 
1-4 family residential:
  
Management considers changes in the local economy, changes in property values, and changes in local unemployment rates to be key credit quality indicators of the loans in the 1-4 family residential loan segment.
 
 
Multi-family residential:
  
Management considers changes in the local economy, changes in property values, vacancy rates and changes in local unemployment rates to be key credit quality indicators of the loans in the multifamily loan segment.
 
 
Agricultural:
  
In assessing risk associated with agricultural loans, management considers the borrower’s cash flows, the value of the underlying collateral and sources of secondary repayment to be primary credit quality indicators.
The following tables summarize the credit exposure in the Company's consumer and commercial loan portfolios as of:
December 31, 2017
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4
family
residential
 
Multi-family
residential
 
Consumer
and
Overdrafts
 
Agricultural
 
Total
Grade:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
$
196,890

 
$
196,515

 
$
412,488

 
$
58,623

 
$
373,154

 
$
16,073

 
$
51,409

 
$
24,650

 
$
1,329,802

Special mention
348

 
259

 
1,135

 
226

 
442

 
20,284

 
65

 
454

 
23,213

Substandard
270

 
—

 
4,514

 
174

 
775

 
217

 
87

 
492

 
6,529

Doubtful
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total
$
197,508

 
$
196,774

 
$
418,137

 
$
59,023

 
$
374,371

 
$
36,574

 
$
51,561

 
$
25,596

 
$
1,359,544

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4
family
residential
 
Multi-family
residential
 
Consumer
and
Overdrafts
 
Agricultural
 
Total
Grade:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
$
218,690

 
$
127,802

 
$
360,591

 
$
61,717

 
$
352,196

 
$
25,871

 
$
52,320

 
$
17,965

 
$
1,217,152

Special mention
4,299

 
4

 
2,021

 
248

 
4,311

 
—

 
524

 
478

 
11,885

Substandard
706

 
1,825

 
5,465

 
401

 
5,121

 
208

 
568

 
458

 
14,752

Doubtful
17

 
—

 
—

 
—

 
37

 
—

 
82

 
—

 
136

Total
$
223,712

 
$
129,631

 
$
368,077

 
$
62,366

 
$
361,665

 
$
26,079

 
$
53,494

 
$
18,901

 
$
1,243,925
Summary of Payment Status of Loans
The following table summarizes the payment status of loans in the Company’s total loan portfolio, including an aging of delinquent loans, loans 90 days or more past due continuing to accrue interest and loans classified as nonperforming as of:
December 31, 2017
30 – 59
Days
Past Due
 
60 – 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
$
1,273

 
$
93

 
$
17

 
$
1,383

 
$
196,125

 
$
197,508

 
$
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and development
117

 
—

 
—

 
117

 
196,657

 
196,774

 
—

Commercial real estate
192

 
265

 
1,067

 
1,524

 
416,613

 
418,137

 
—

Farmland
139

 
—

 
6

 
145

 
58,878

 
59,023

 
—

1-4 family residential
3,998

 
416

 
800

 
5,214

 
369,157

 
374,371

 
—

Multi-family residential
—

 
—

 
217

 
217

 
36,357

 
36,574

 
—

Consumer
381

 
69

 
87

 
537

 
50,730

 
51,267

 
—

Agricultural
204

 
2

 
—

 
206

 
25,390

 
25,596

 
—

Overdrafts
—

 
—

 
—

 
—

 
294

 
294

 
—

Total
$
6,304

 
$
845

 
$
2,194

 
$
9,343

 
$
1,350,201

 
$
1,359,544

 
$
—


December 31, 2016
30 – 59
Days
Past Due
 
60 – 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
$
941

 
$
105

 
$
25

 
$
1,071

 
$
222,641

 
$
223,712

 
$
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and development
73

 
—

 
1,825

 
1,898

 
127,733

 
129,631

 
—

Commercial real estate
1,629

 
32

 
134

 
1,795

 
366,282

 
368,077

 
—

Farmland
100

 
26

 
7

 
133

 
62,233

 
62,366

 
—

1-4 family residential
3,724

 
803

 
1,041

 
5,568

 
356,097

 
361,665

 
—

Multi-family residential
207

 
49

 
—

 
256

 
25,823

 
26,079

 
—

Consumer
613

 
205

 
87

 
905

 
52,272

 
53,177

 
—

Agricultural
59

 
—

 
15

 
74

 
18,827

 
18,901

 
—

Overdrafts
—

 
—

 
—

 
—

 
317

 
317

 
—

Total
$
7,346

 
$
1,220

 
$
3,134

 
$
11,700

 
$
1,232,225

 
$
1,243,925

 
$
—
Schedule of Nonaccrual Loans
The following table presents the nonaccrual loans by category as of December 31:
 
2017
 
2016
Commercial and industrial
$
77

 
$
82

Real estate:
 
 
 
Construction and development
—

 
1,825

Commercial real estate
1,422

 
415

Farmland
163

 
176

1-4 family residential
1,937

 
1,699

Multi-family residential
217

 
5

Consumer
138

 
192

Agricultural
50

 
15

Total
$
4,004

 
$
4,409
Summary of Troubled Debt Restructuring
The outstanding balances of TDRs are shown below at December 31:
 
2017
 
2016
Nonaccrual TDRs
$
—

 
$
43

Performing TDRs
657

 
462

Total
$
657

 
$
505

Specific reserves on TDRs
$
17

 
$
4


The following tables present loans by class modified as TDRs that occurred during the years ended:
December 31, 2017
Number
of
Contracts
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
Troubled Debt Restructurings:
 
 
 
 
 
Commercial and industrial
2

 
$
381

 
$
364

Commercial real estate


 
—

 
—

Consumer
—

 
—

 
—

1-4 family residential
1

 
11

 
11

Farmland
—

 
—

 
—

Multi-family residential
—

 
—

 
—

Agricultural
—

 
—

 
—

Total
3

 
$
392

 
$
375

There were no TDRs that subsequently defaulted in 2017. The TDRs described above did not increase the allowance for loan losses and resulted in no charge-offs during the year ended December 31, 2017.
 
December 31, 2016
Number
of
Contracts
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
Troubled Debt Restructurings:
 
 
 
 
 
Commercial and industrial
1

 
$
90

 
$
90

1-4 family residential
3

 
248

 
244

Total
4

 
$
338

 
$
334
Summary of Impaired Loans
The following table presents information about the Company’s impaired loans as of December 31, 2017:
December 31, 2017
Unpaid
Principal
Balance
 
Recorded
Investment
 
Related
Allowance
 
Average
Recorded
Investment
With no related allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
$
437

 
$
437

 
$
—

 
$
434

Real estate:
 
 
 
 
 
 
 
Construction and development
—

 
—

 
—

 
311

Commercial real estate
3,979

 
3,979

 
—

 
4,230

Farmland
6

 
6

 
—

 
90

1-4 family residential
681

 
681

 
—

 
1,096

Multi-family residential
217

 
217

 
—

 
180

Consumer
—

 
—

 
—

 
61

Agricultural
397

 
397

 
—

 
384

Subtotal
5,717

 
5,717

 
—

 
6,786

With allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
26

 
26

 
17

 
315

Real estate:
 
 
 
 
 
 
 
Construction and development
—

 
—

 
—

 
7

Commercial real estate
279

 
279

 
27

 
505

Farmland
157

 
157

 
85

 
131

1-4 family residential
161

 
161

 
5

 
754

Multi-family residential
—

 
—

 
—

 
19

Consumer
—

 
—

 
—

 
42

Agricultural
—

 
—

 
—

 
180

Subtotal
623

 
623

 
134

 
1,953

Total
$
6,340

 
$
6,340

 
$
134

 
$
8,739

 
The following table presents information about the Company’s impaired loans as of December 31, 2016:
December 31, 2016
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
With no related allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
$
28

 
$
28

 
$
—

 
$
809

Real estate:
 
 
 
 
 
 
 
Construction and development
1,825

 
1,825

 
—

 
172

Commercial real estate
1,196

 
1,196

 
—

 
871

Farmland
89

 
89

 
—

 
109

1-4 family residential
1,799

 
1,799

 
—

 
1,575

Multi-family residential
5

 
5

 
—

 
2

Consumer
105

 
105

 
—

 
89

Agricultural
15

 
15

 
—

 
68

Subtotal
5,062

 
5,062

 
—

 
3,695

With allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
203

 
203

 
64

 
3,153

Real estate:
 
 
 
 
 
 
 
Construction and development
—

 
—

 
—

 
—

Commercial real estate
—

 
—

 
—

 
—

Farmland
169

 
169

 
47

 
169

1-4 family residential
789

 
789

 
108

 
639

Multi-family residential
—

 
—

 
—

 
—

Consumer
95

 
95

 
34

 
155

Agricultural
—

 
—

 
—

 
2

Subtotal
1,256

 
1,256

 
253

 
4,118

Total
$
6,318

 
$
6,318

 
$
253

 
$
7,813