Loans and Related Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2020

Loans and Related Allowance for Loan Losses [Abstract]

Summary of Loans

The Company’s loans, net of deferred fees and costs, at June 30, 2020 and December 31, 2019 were comprised of the following (dollars in thousands):

	June 30, 2020				December 31, 2019
	Amount		% of Loans		Amount		% of Loans
Mortgage loans on real estate:
Residential 1‑4 family	$	205,787	17.66	%	$	223,538	21.12	%
Commercial		443,923	38.09			396,858	37.50
Construction and land development		151,529	13.00			146,566	13.85
Second mortgages		6,136	0.53			6,639	0.63
Multifamily		76,587	6.57			72,978	6.90
Agriculture		7,122	0.61			8,346	0.79
Total real estate loans		891,084	76.46			854,925	80.79
Commercial loans		262,955	22.57			191,183	18.06
Consumer installment loans		10,257	0.88			11,163	1.05
All other loans		1,014	0.09			1,052	0.10
Total loans	$	1,165,310	100.00	%	$	1,058,323	100.00	%

Summary of Information Related to Impaired Loans

The following table summarizes information related to impaired loans as of and for the three and six months ended June 30, 2020 (dollars in thousands):

							Three months ended				Six months ended
	June 30, 2020						June 30, 2020				June 30, 2020
			Unpaid
	Recorded		Principal		Related		Average		Interest		Average		Interest
	Investment (1)		Balance (2)		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Mortgage loans on real estate:
Residential 1‑4 family	$	1,145	$	1,501	$	—	$	1,152	$	10	$	1,263	$	21
Commercial		3,534		4,247		—		3,114		34		3,151		68
Construction and land development		—		—		—		164		—		219		—
Multifamily		—		—		—		—		—		821		—
Total real estate loans		4,679		5,748		—		4,430		44		5,454		89
Commercial loans		350		964		—		175		—		117		—
Subtotal impaired loans with no valuation allowance		5,029		6,712		—		4,605		44		5,571		89
With an allowance recorded:
Mortgage loans on real estate:
Residential 1‑4 family		2,123		2,541		574		2,003		11		1,834		22
Commercial		86		555		23		92		2		187		4
Construction and land development		1,122		1,224		315		1,286		—		873		—
Agriculture		51		51		13		26		—		17		—
Total real estate loans		3,382		4,371		925		3,407		13		2,911		26
Commercial loans		700		700		184		1,164		3		928		7
Consumer installment loans		12		12		3		11		—		10		—
Subtotal impaired loans with a valuation allowance		4,094		5,083		1,112		4,582		16		3,849		33
Total:
Mortgage loans on real estate:
Residential 1‑4 family		3,268		4,042		574		3,155		21		3,097		43
Commercial		3,620		4,802		23		3,206		36		3,338		72
Construction and land development		1,122		1,224		315		1,450		—		1,092		—
Multifamily		—		—		—		—		—		821		—
Agriculture		51		51		13		26		—		17		—
Total real estate loans		8,061		10,119		925		7,837		57		8,365		115
Commercial loans		1,050		1,664		184		1,339		3		1,045		7
Consumer installment loans		12		12		3		11		—		10		—
Total impaired loans	$	9,123	$	11,795	$	1,112	$	9,187	$	60	$	9,420	$	122

(1) The amount of the investment in a loan, which is not net of a valuation allowance, but which does reflect any direct write-down of the investment.

(2) The contractual amount due, which reflects paydowns applied in accordance with loan documents, but which does not reflect any direct write-downs or valuation allowances.

The following table summarizes information related to impaired loans as of December 31, 2019 and for the three and six months ended June 30, 2019 (dollars in thousands):

							Three months ended				Six months ended
	December 31, 2019						June 30, 2019				June 30, 2019
			Unpaid
	Recorded		Principal		Related		Average		Interest		Average		Interest
	Investment (1)		Balance (2)		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Mortgage loans on real estate:
Residential 1‑4 family	$	1,483	$	1,850	$	—	$	1,534	$	11	$	1,543	$	21
Commercial		3,226		3,966		—		3,349		35		3,400		69
Construction and land development		328		328		—		—		—		—		—
Multifamily		2,463		2,463		—		2,539		—		2,546		—
Total real estate loans		7,500		8,607		—		7,422		46		7,489		90
Subtotal impaired loans with no valuation allowance		7,500		8,607		—		7,422		46		7,489		90
With an allowance recorded:
Mortgage loans on real estate:
Residential 1‑4 family		1,498		1,808		380		2,133		12		2,133		24
Commercial		378		876		87		722		2		998		4
Construction and land development		48		147		11		4,096		—		4,254		—
Total real estate loans		1,924		2,831		478		6,951		14		7,385		28
Commercial loans		454		460		105		1,822		5		1,875		9
Consumer installment loans		7		7		1		6		—		4		—
Subtotal impaired loans with a valuation allowance		2,385		3,298		584		8,779		19		9,264		37
Total:
Mortgage loans on real estate:
Residential 1‑4 family		2,981		3,658		380		3,667		23		3,676		45
Commercial		3,604		4,842		87		4,071		37		4,398		73
Construction and land development		376		475		11		4,096		—		4,254		—
Multifamily		2,463		2,463		—		2,539		—		2,546		—
Total real estate loans		9,424		11,438		478		14,373		60		14,874		118
Commercial loans		454		460		105		1,822		5		1,875		9
Consumer installment loans		7		7		1		6		—		4		—
Total impaired loans	$	9,885	$	11,905	$	584	$	16,201	$	65	$	16,753	$	127

(1) The amount of the investment in a loan, which is not net of a valuation allowance, but which does reflect any direct write-down of the investment.

(2) The contractual amount due, which reflects paydowns applied in accordance with loan documents, but which does not reflect any direct write-downs or valuation allowances.

Reconciliation of Impaired Loans to Nonaccrual Loans

Troubled debt restructures still accruing interest are loans that management expects to ultimately collect all principal and interest due, but not under the terms of the original contract. A reconciliation of impaired loans to nonaccrual loans at June 30, 2020 and December 31, 2019, is set forth in the table below (dollars in thousands):

	June 30, 2020		December 31, 2019
Nonaccruals	$	4,225	$	5,292
Trouble debt restructure and still accruing		4,898		4,593
Total impaired	$	9,123	$	9,885

Age Analysis of Past Due Status of Loans, Excluding PCI Loans

The following tables present an age analysis of past due status of loans by category as of June 30, 2020 and December 31, 2019 (dollars in thousands):

	June 30, 2020
	30‑89 Days		90+ Days Past				Total Past				Total Loans
	Past Due		Due and Accruing		Nonaccrual		Due		Current		Receivable
Mortgage loans on real estate:
Residential 1‑4 family	$	1,999	$	—	$	1,697	$	3,696	$	202,091	$	205,787
Commercial		230		—		636		866		443,057		443,923
Construction and land development		—		—		1,122		1,122		150,407		151,529
Second mortgages		229		—		—		229		5,907		6,136
Multifamily		—		—		—		—		76,587		76,587
Agriculture		—		—		51		51		7,071		7,122
Total real estate loans		2,458		—		3,506		5,964		885,120		891,084
Commercial loans		362		—		707		1,069		261,886		262,955
Consumer installment loans		21		—		12		33		10,224		10,257
All other loans		—		—		—		—		1,014		1,014
Total loans	$	2,841	$	—	$	4,225	$	7,066	$	1,158,244	$	1,165,310

	December 31, 2019
	30‑89 Days		90+ Days Past				Total Past				Total Loans
	Past Due		Due and Accruing		Nonaccrual		Due		Current		Receivable
Mortgage loans on real estate:
Residential 1‑4 family	$	1,308	$	—	$	1,378	$	2,686	$	220,852	$	223,538
Commercial		552		—		1,006		1,558		395,300		396,858
Construction and land development		166		—		376		542		146,024		146,566
Second mortgages		229		—		—		229		6,410		6,639
Multifamily		—		—		2,463		2,463		70,515		72,978
Agriculture		—		—		—		—		8,346		8,346
Total real estate loans		2,255		—		5,223		7,478		847,447		854,925
Commercial loans		1,085		946		62		2,093		189,090		191,183
Consumer installment loans		41		—		7		48		11,115		11,163
All other loans		—		—		—		—		1,052		1,052
Total loans	$	3,381	$	946	$	5,292	$	9,619	$	1,048,704	$	1,058,323

Allowance for Loan Losses on Loans, Excluding PCI Loans, by Segment

Activity in the allowance for loan losses on loans by segment for the three and six months ended June 30, 2020 and 2019 is presented in the following tables (dollars in thousands):

	Three Months Ended June 30, 2020
			Provision
	March 31, 2020		Allocation		Charge-offs		Recoveries		June 30, 2020
Mortgage loans on real estate:
Residential 1‑4 family	$	2,935	$	547	$	—	$	13	$	3,495
Commercial		4,240		337		—		35		4,612
Construction and land development		1,354		(13)		—		1		1,342
Second mortgages		70		(26)		—		1		45
Multifamily		267		232		—		—		499
Agriculture		45		(1)		—		—		44
Total real estate loans		8,911		1,076		—		50		10,037
Commercial loans		2,546		37		(589)		64		2,058
Consumer installment loans		111		5		(29)		23		110
All other loans		8		—		—		—		8
Unallocated		243		(218)		—		—		25
Total loans	$	11,819	$	900	$	(618)	$	137	$	12,238

	Three Months Ended June 30, 2019
			Provision
	March 31, 2019		Allocation		Charge-offs		Recoveries		June 30, 2019
Mortgage loans on real estate:
Residential 1‑4 family	$	3,339	$	(426)	$	(34)	$	15	$	2,894
Commercial		1,508		461		—		57		2,026
Construction and land development		1,210		154		—		35		1,399
Second mortgages		62		18		—		1		81
Multifamily		361		(169)		—		—		192
Agriculture		23		(23)		—		—		—
Total real estate loans		6,503		15		(34)		108		6,592
Commercial loans		1,958		86		(28)		2		2,018
Consumer installment loans		188		12		(40)		25		185
All other loans		6		15		—		—		21
Unallocated		6		(3)		—		—		3
Total loans	$	8,661	$	125	$	(102)	$	135	$	8,819

	Six Months Ended June 30, 2020
			Provision
	December 31, 2019		Allocation		Charge-offs		Recoveries		June 30, 2020
Mortgage loans on real estate:
Residential 1‑4 family	$	2,685	$	781	$	—	$	29	$	3,495
Commercial		2,196		2,337		—		79		4,612
Construction and land development		1,044		214		—		84		1,342
Second mortgages		79		(36)		—		2		45
Multifamily		248		251		—		—		499
Agriculture		38		6		—		—		44
Total real estate loans		6,290		3,553		—		194		10,037
Commercial loans		1,980		619		(608)		67		2,058
Consumer installment loans		114		40		(104)		60		110
All other loans		7		1		—		—		8
Unallocated		38		(13)		—		—		25
Total loans	$	8,429	$	4,200	$	(712)	$	321	$	12,238

	Six Months Ended June 30, 2019
			Provision
	December 31, 2018		Allocation		Charge-offs		Recoveries		June 30, 2019
Mortgage loans on real estate:
Residential 1‑4 family	$	2,281	$	429	$	(34)	$	218	$	2,894
Commercial		1,810		429		(277)		64		2,026
Construction and land development		1,161		197		(12)		53		1,399
Second mortgages		20		58		—		3		81
Multifamily		371		(179)		—		—		192
Agriculture		17		(17)		—		—		—
Total real estate loans		5,660		917		(323)		338		6,592
Commercial loans		1,894		377		(257)		4		2,018
Consumer installment loans		152		84		(100)		49		185
All other loans		12		9		—		—		21
Unallocated		1,265		(1,262)		—		—		3
Total loans	$	8,983	$	125	$	(680)	$	391	$	8,819

Loans Evaluated for Impairment

The following tables present information on the loans evaluated for impairment in the allowance for loan losses as of June 30, 2020 and December 31, 2019 (dollars in thousands):

	June 30, 2020
	Allowance for Loan Losses						Recorded Investment in Loans
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Mortgage loans on real estate:
Residential 1‑4 family	$	574	$	2,921	$	3,495	$	3,268	$	202,519	$	205,787
Commercial		23		4,589		4,612		3,620		440,303		443,923
Construction and land development		315		1,027		1,342		1,122		150,407		151,529
Second mortgages		—		45		45		—		6,136		6,136
Multifamily		—		499		499		—		76,587		76,587
Agriculture		13		31		44		51		7,071		7,122
Total real estate loans		925		9,112		10,037		8,061		883,023		891,084
Commercial loans		184		1,874		2,058		1,050		261,905		262,955
Consumer installment loans		3		107		110		12		10,245		10,257
All other loans		—		8		8		—		1,014		1,014
Unallocated		—		25		25		—		—		—
Total loans	$	1,112	$	11,126	$	12,238	$	9,123	$	1,156,187	$	1,165,310

	December 31, 2019
	Allowance for Loan Losses						Recorded Investment in Loans
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Mortgage loans on real estate:
Residential 1‑4 family	$	380	$	2,305	$	2,685	$	2,981	$	220,557	$	223,538
Commercial		87		2,109		2,196		3,604		393,254		396,858
Construction and land development		11		1,033		1,044		376		146,190		146,566
Second mortgages		—		79		79		—		6,639		6,639
Multifamily		—		248		248		2,463		70,515		72,978
Agriculture		—		38		38		—		8,346		8,346
Total real estate loans		478		5,812		6,290		9,424		845,501		854,925
Commercial loans		105		1,875		1,980		454		190,729		191,183
Consumer installment loans		1		113		114		7		11,156		11,163
All other loans		—		7		7		—		1,052		1,052
Unallocated		—		38		38		—		—		—
Total loans	$	584	$	7,845	$	8,429	$	9,885	$	1,048,438	$	1,058,323

Loans, Excluding PCI Loans, by Credit Quality Indicator

The following tables present the composition of loans by credit quality indicator at June 30, 2020 and December 31, 2019 (dollars in thousands):

	June 30, 2020
			Special
	Pass		Mention		Substandard		Doubtful		Total
Mortgage loans on real estate:
Residential 1‑4 family	$	191,802	$	12,544	$	1,441	$	—	$	205,787
Commercial		318,456		123,432		2,035		—		443,923
Construction and land development		148,857		1,550		1,122		—		151,529
Second mortgages		5,156		980		—		—		6,136
Multifamily		69,930		6,657		—		—		76,587
Agriculture		6,653		418		51		—		7,122
Total real estate loans		740,854		145,581		4,649		—		891,084
Commercial loans		216,060		41,394		5,501		—		262,955
Consumer installment loans		10,198		47		12		—		10,257
All other loans		998		16		—		—		1,014
Total loans	$	968,110	$	187,038	$	10,162	$	—	$	1,165,310

	December 31, 2019
			Special
	Pass		Mention		Substandard		Doubtful		Total
Mortgage loans on real estate:
Residential 1‑4 family	$	219,210	$	2,964	$	1,364	$	—	$	223,538
Commercial		391,251		3,188		2,419		—		396,858
Construction and land development		145,782		408		376		—		146,566
Second mortgages		6,096		543		—		—		6,639
Multifamily		70,515		—		2,463		—		72,978
Agriculture		8,098		248		—		—		8,346
Total real estate loans		840,952		7,351		6,622		—		854,925
Commercial loans		185,123		2,770		3,290		—		191,183
Consumer installment loans		11,140		16		7		—		11,163
All other loans		1,052		—		—		—		1,052
Total loans	$	1,038,267	$	10,137	$	9,919	$	—	$	1,058,323