ALLOWANCE FOR CREDIT LOSSES (Tables)

6 Months Ended

Jun. 30, 2020

ALLOWANCE FOR CREDIT LOSSES

Loans by risk grades, loan class and vintage

The loans by risk grades, loan class and year of origination, or vintage, at June 30, 2020 were as follows:

(Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans		Converted Revolving Loans		Total
Commercial and industrial:
Pass	$	358,270	$	123,340	$	59,931	$	16,374	$	11,020	$	7,459	$	233,552	$	9,178	$	819,124
Special mention		49		—		42		15		—		—		440		—		546
Substandard		1,000		1,240		4,362		32		309		2,366		3,554		5,134		17,997
Total commercial and industrial		359,319		124,580		64,335		16,421		11,329		9,825		237,546		14,312		837,667
Commercial real estate:
Pass		99,446		223,035		191,495		135,581		80,303		116,384		29,130		2,830		878,204
Special mention		—		331		—		—		1,559		—		—		—		1,890
Substandard		—		1,900		9,690		211		2,609		2,998		10,525		—		27,933
Total commercial real estate		99,446		225,266		201,185		135,792		84,471		119,382		39,655		2,830		908,027
Construction and development:
Pass		67,963		176,375		178,456		45,270		8,294		35,021		27,634		1,328		540,341
Substandard		—		506		1,500		10,532		—		—		—		—		12,538
Total construction and development		67,963		176,881		179,956		55,802		8,294		35,021		27,634		1,328		552,879
1-4 family residential:
Pass		13,806		38,376		62,172		46,787		27,580		66,678		9,719		1,036		266,154
Special mention		—		—		39		—		388		382		—		—		809
Substandard		—		545		—		323		18		2,897		—		1,507		5,290
Total 1-4 family residential		13,806		38,921		62,211		47,110		27,986		69,957		9,719		2,543		272,253
Multi-family residential:
Pass		6,351		8,951		28,421		46,161		4,325		160,987		77		—		255,273
Total multi-family residential		6,351		8,951		28,421		46,161		4,325		160,987		77		—		255,273
Consumer:
Pass		5,589		5,054		2,760		2,282		243		79		19,821		507		36,335
Substandard		—		—		—		—		—		3		—		—		3
Total consumer		5,589		5,054		2,760		2,282		243		82		19,821		507		36,338
Agriculture:
Pass		3,034		979		450		124		34		—		3,089		8		7,718
Substandard		—		—		—		—		—		27		50		—		77
Total agriculture		3,034		979		450		124		34		27		3,139		8		7,795
Other:
Pass		3,728		10,316		4,590		155		110		1,515		38,331		12,518		71,263
Substandard		—		—		1,326		—		1,241		—		3,705		—		6,272
Total other		3,728		10,316		5,916		155		1,351		1,515		42,036		12,518		77,535
Total	$	559,236	$	590,948	$	545,234	$	303,847	$	138,033	$	396,796	$	379,627	$	34,046	$	2,947,767

Loans by risk grades and loan class

(Dollars in thousands)	Pass		Special Mention		Substandard		Total Loans
June 30, 2020
Commercial and industrial	$	819,124	$	546	$	17,997	$	837,667
Real estate:
Commercial real estate		878,204		1,890		27,933		908,027
Construction and development		540,341		—		12,538		552,879
1-4 family residential		266,154		809		5,290		272,253
Multi-family residential		255,273		—		—		255,273
Consumer		36,335		—		3		36,338
Agriculture		7,718		—		77		7,795
Other		71,263		—		6,272		77,535
Total loans	$	2,874,412	$	3,245	$	70,110	$	2,947,767

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

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
June 30, 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 for credit losses for loans		3,169		4,613		2,504		1,256		887		258		(16)		605		13,276
Charge-offs		(79)		(24)		—		(66)		—		(103)		—		—		(272)
Recoveries		495		—		—		1		—		11		12		1		520
Net (charge-offs) recoveries		416		(24)		—		(65)		—		(92)		12		1		248
Ending balance	$	12,108	$	12,424	$	7,050	$	3,173	$	2,880	$	529	$	134	$	1,380	$	39,678
Period-end amount allocated to:
Specific reserve	$	2,403	$	—	$	—	$	—	$	—	$	—	$	—	$	468	$	2,871
General reserve		9,705		12,424		7,050		3,173		2,880		529		134		912		36,807
Total	$	12,108	$	12,424	$	7,050	$	3,173	$	2,880	$	529	$	134	$	1,380	$	39,678

			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
June 30, 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		257		637		281		(35)		667		143		11		(7)		1,954
Charge-offs		(425)		—		—		(12)		—		(87)		—		(43)		(567)
Recoveries		241		4		—		2		—		15		—		—		262
Net (charge-offs) recoveries		(184)		4		—		(10)		—		(72)		—		(43)		(305)
Ending balance	$	7,792	$	7,371	$	4,579	$	2,236	$	2,178	$	458	$	73	$	655	$	25,342
Period-end amount allocated to:
Specific reserve	$	699	$	29	$	—	$	46	$	—	$	22	$	—	$	—	$	796
General reserve		7,093		7,342		4,579		2,190		2,178		436		73		655		24,546
Total	$	7,792	$	7,371	$	4,579	$	2,236	$	2,178	$	458	$	73	$	655	$	25,342

Allowance for loan losses by loan category

	June 30, 2020				December 31, 2019
(Dollars in thousands)	Amount		Percent		Amount		Percent
Commercial and industrial	$	12,108	30.5	%	$	7,671	30.3	%
Real estate:
Commercial real estate		12,424	31.3	%		7,975	31.6	%
Construction and development		7,050	17.8	%		4,446	17.6	%
1-4 family residential		3,173	8.0	%		2,257	8.9	%
Multi-family residential		2,880	7.3	%		1,699	6.7	%
Consumer		529	1.3	%		388	1.5	%
Agriculture		134	0.3	%		74	0.3	%
Other		1,380	3.5	%		770	3.1	%
Total allowance for credit losses for loans	$	39,678	100.0	%	$	25,280	100.0	%

Loans individually evaluated and collectively evaluated

	June 30, 2020						December 31, 2019
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Total		Evaluated		Evaluated		Total
(Dollars in thousands)	Loans		Loans		Loans		Loans		Loans		Loans
Commercial and industrial	$	9,414	$	828,253	$	837,667	$	999	$	526,608	$	527,607
Real estate:
Commercial real estate		15,442		892,585		908,027		1,404		899,342		900,746
Construction and development		12,538		540,341		552,879		—		527,812		527,812
1-4 family residential		3,741		268,512		272,253		3,651		276,541		280,192
Multi-family residential		—		255,273		255,273		—		277,209		277,209
Consumer		—		36,338		36,338		210		36,572		36,782
Agriculture		—		7,795		7,795		—		9,812		9,812
Other		6,272		71,263		77,535		6,653		79,860		86,513
Total	$	47,407	$	2,900,360	$	2,947,767	$	12,917	$	2,633,756	$	2,646,673

Recorded investment in impaired loans in accordance with ASC 310

	Unpaid		Recorded								Average
	Contractual		Investment		Recorded		Total				Recorded
	Principal		with No		Investment		Recorded		Related		Investment
(Dollars in thousands)	Balance		Allowance		with Allowance		Investment		Allowance		Year-to-Date
December 31, 2019
Commercial and industrial	$	1,111	$	300	$	699	$	999	$	416	$	2,452
Real estate:
Commercial real estate		1,407		1,404		—		1,404		—		2,165
1-4 family residential		3,761		2,166		1,485		3,651		15		4,020
Consumer		210		210				210		—		128
Other		6,653		5,411		1,242		6,653		6		6,825
Total loans	$	13,142	$	9,491	$	3,426	$	12,917	$	437	$	15,590

Schedule of allowance for credit losses for unfunded commitments

(Dollars in thousands)	June 30, 2020
Beginning balance	$	378
Impact of CECL adoption		2,981
Provision for credit losses for unfunded commitments		1,643
Ending balance	$	5,002