ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

Mar. 31, 2020

ALLOWANCE FOR CREDIT LOSSES

Loans by risk grades, loan class and vintage

The loans by risk grades, loan class and vintage at March 31, 2020 were as follows:

(Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans		Converted Revolving Loans		Total
Commercial and industrial:
Pass	$	16,734	$	120,547	$	67,560	$	19,418	$	12,466	$	9,688	$	270,877	$	11,585	$	528,875
Special mention		33		266		—		15		—		—		436		—		750
Substandard		1,000		786		464		39		354		2,406		4,012		3,964		13,025
Total commercial and industrial		17,767		121,599		68,024		19,472		12,820		12,094		275,325		15,549		542,650
Commercial real estate:
Pass		57,116		213,693		214,659		139,415		86,079		129,764		36,851		2,322		879,899
Special mention		—		—		—		—		1,587		—		—		11,000		12,587
Substandard		—		1,926		4,967		216		1,600		3,200		—		—		11,909
Total commercial real estate		57,116		215,619		219,626		139,631		89,266		132,964		36,851		13,322		904,395
Construction and development:
Pass		35,419		184,260		196,235		45,597		8,477		35,240		40,564		—		545,792
Substandard		—		519		1,500		10,532		—		—		—		—		12,551
Total construction and development		35,419		184,779		197,735		56,129		8,477		35,240		40,564		—		558,343
1-4 family residential:
Pass		7,110		35,961		66,602		49,164		27,973		70,808		11,094		1,277		269,989
Special mention		—		—		40		—		392		386		—		—		818
Substandard		—		547		—		249		20		3,034		—		1,485		5,335
Total 1-4 family residential		7,110		36,508		66,642		49,413		28,385		74,228		11,094		2,762		276,142
Multi-family residential:
Pass		7,770		8,527		23,743		50,750		4,361		172,001		—		—		267,152
Total multi-family residential		7,770		8,527		23,743		50,750		4,361		172,001		—		—		267,152
Consumer:
Pass		3,020		6,506		3,443		2,528		323		411		19,689		2,208		38,128
Substandard		—		—		—		—		—		5		—		—		5
Total consumer		3,020		6,506		3,443		2,528		323		416		19,689		2,208		38,133
Agriculture:
Pass		936		1,701		547		162		38		5		3,975		79		7,443
Substandard		—		—		—		—		—		27		50		—		77
Total agriculture		936		1,701		547		162		38		32		4,025		79		7,520
Other:
Pass		623		15,233		5,026		162		128		1,551		35,662		17,424		75,809
Substandard		—		—		1,381		—		1,241		—		5,645		—		8,267
Total other		623		15,233		6,407		162		1,369		1,551		41,307		17,424		84,076
Total	$	129,761	$	590,472	$	586,167	$	318,247	$	145,039	$	428,526	$	428,855	$	51,344	$	2,678,411

Loans by risk grades and loan class

			Special
(Dollars in thousands)	Pass		Mention		Substandard		Total Loans
December 31, 2019
Commercial and industrial	$	513,417	$	2,963	$	11,227	$	527,607
Real estate:
Commercial real estate		876,207		18,570		5,969		900,746
Construction and development		515,247		12,565		—		527,812
1-4 family residential		274,731		594		4,867		280,192
Multi-family residential		277,209		—		—		277,209
Consumer		36,566		—		216		36,782
Agriculture		9,733		50		29		9,812
Other		79,860		—		6,653		86,513
Total loans	$	2,582,970	$	34,742	$	28,961	$	2,646,673

Schedule of Charge-offs and recoveries by loan type and vintage

Charge-offs and recoveries by loan class and vintage for the three months ended March 31, 2020 were as follows:

(Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
Commercial and industrial:
Charge-off	$	—	$	—	$	—	$	(29)	$	—	$	—	$	(1)	$	(30)
Recovery		—		2		87		16		10		133		180		428
Total commercial and industrial		—		2		87		(13)		10		133		179		398
1-4 family residential:
Charge-off		—		—		—		—		—		—		—		—
Recovery		—		—		—		—		—		1		—		1
Total 1-4 family residential		—		—		—		—		—		1		—		1
Consumer:
Charge-off		—		—		(8)		(95)		—		—		—		(103)
Recovery		3		—		—		—		—		1		—		4
Total consumer		3		—		(8)		(95)		—		1		—		(99)
Other:
Charge-off		—		—		—		—		—		—		—		—
Recovery		—		—		—		1		—		—		—		1
Total other		—		—		—		1		—		—		—		1
Total	$	3	$	2	$	79	$	(107)	$	10	$	135	$	179	$	301

Activity in the total allowance for credit losses for loans

			Real Estate
	Commercial				Construction
	and		Commercial		and		1-4 family		Multi-family
(Dollars in thousands)	industrial		real estate		development		residential		residential		Consumer		Agriculture		Other		Total
March 31, 2020
Beginning balance	$	7,671	$	7,975	$	4,446	$	2,257	$	1,699	$	388	$	74	$	770	$	25,280
Impact of CECL adoption		852		(140)		100		(275)		294		(25)		64		4		874
Provision (recapture) for credit losses for loans		614		1,741		1,249		447		420		213		(9)		64		4,739
Charge-offs		(30)		—		—		—		—		(103)		—		—		(133)
Recoveries		428		—		—		1		—		4		—		1		434
Net (charge-offs) recoveries		398		—		—		1		—		(99)		—		1		301
Ending balance	$	9,535	$	9,576	$	5,795	$	2,430	$	2,413	$	477	$	129	$	839	$	31,194
Period-end amount allocated to:
Specific reserve	$	409	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	409
General reserve		9,126		9,576		5,795		2,430		2,413		477		129		839		30,785
Total	$	9,535	$	9,576	$	5,795	$	2,430	$	2,413	$	477	$	129	$	839	$	31,194

			Real Estate
	Commercial				Construction
	and		Commercial		and		1-4 family		Multi-family
(Dollars in thousands)	industrial		real estate		development		residential		residential		Consumer		Agriculture		Other		Total
March 31, 2019
Beginning balance	$	7,719	$	6,730	$	4,298	$	2,281	$	1,511	$	387	$	62	$	705	$	23,693
Provision (recapture) for credit losses for loans		903		52		402		(33)		(54)		(36)		(12)		(75)		1,147
Charge-offs		(280)		—		—		—		—		(4)		—		—		(284)
Recoveries		74		2		—		1		—		10		—		—		87
Net (charge-offs) recoveries		(206)		2		—		1		—		6		—		—		(197)
Ending balance	$	8,416	$	6,784	$	4,700	$	2,249	$	1,457	$	357	$	50	$	630	$	24,643
Period-end amount allocated to:
Specific reserve	$	582	$	33	$	—	$	77	$	—	$	—	$	—	$	96	$	788
General reserve		7,834		6,751		4,700		2,172		1,457		357		50		534		23,855
Total	$	8,416	$	6,784	$	4,700	$	2,249	$	1,457	$	357	$	50	$	630	$	24,643

Allowance for loan losses by loan category

	March 31, 2020				December 31, 2019
(Dollars in thousands)	Amount		Percent		Amount		Percent
Commercial and industrial	$	9,535	30.6	%	$	7,671	30.3	%
Real estate:
Commercial real estate		9,576	30.7	%		7,975	31.6	%
Construction and development		5,795	18.6	%		4,446	17.6	%
1-4 family residential		2,430	7.8	%		2,257	8.9	%
Multi-family residential		2,413	7.7	%		1,699	6.7	%
Consumer		477	1.5	%		388	1.5	%
Agriculture		129	0.4	%		74	0.3	%
Other		839	2.7	%		770	3.1	%
Total allowance for credit losses for loans	$	31,194	100.0	%	$	25,280	100.0	%

Loans evaluated individually and the related specific ACL

	March 31, 2020						December 31, 2019
(Dollars in thousands)	Recorded Investment		Specific ACL		Net		Recorded Investment		Specific ACL		Net
Loans evaluated individually
Commercial and industrial	$	1,528	$	409	$	1,119	$	999	$	416	$	583
Commercial real estate		5,818		—		5,818		1,404		—		1,404
Construction and development		519		—		519		—		—		—
1-4 family residential		3,703		—		3,703		3,651		15		3,636
Consumer		—		—		—		210		—		210
Other		8,267		—		8,267		6,653		6		6,647
Total	$	19,835	$	409	$	19,426	$	12,917	$	437	$	12,480

Schedule of allowance for credit losses for unfunded commitments

(Dollars in thousands)	March 31, 2020
Beginning balance	$	378
Impact of CECL adoption		2,981
Provision for credit losses for unfunded commitments		310
Ending balance	$	3,669