Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

A summary of the loan portfolio as of March 31, 2019 and December 31, 2018 follows (in thousands):

	March 31, 2019			December 31, 2018
Commercial real estate	$	574,001		$	550,446
Consumer real estate		248,943			253,562
Construction and land development		162,237			174,670
Commercial and industrial		419,941			404,600
Consumer		26,241			25,615
Other		36,423			20,901
Total		1,467,786			1,429,794
Allowance for loan losses		(12,959	)		(12,113	)
	$	1,454,827		$	1,417,681

Summary of Loan Balance by Category as well as Risk Rating

The following tables present the loan balances by category as well as risk rating (in thousands):

	Non-impaired Loans
March 31, 2019	Pass		Special Mention		Substandard		Total Non-impaired		Total Impaired Loans		Total
Commercial real estate	$	571,234	$	173	$	1,223	$	572,630	$	1,371	$	574,001
Consumer real estate		244,890		1,753		1,347		247,990		953		248,943
Construction and land development		162,160		51		18		162,229		8		162,237
Commercial and industrial		402,650		8,537		7,298		418,485		1,456		419,941
Consumer		26,183		1		10		26,194		47		26,241
Other		36,423		—		—		36,423		—		36,423
Total	$	1,443,540	$	10,515	$	9,896	$	1,463,951	$	3,835	$	1,467,786
December 31, 2018
Commercial real estate	$	547,616	$	177	$	1,262	$	549,055	$	1,391	$	550,446
Consumer real estate		249,273		1,676		1,691		252,640		922		253,562
Construction and land development		174,591		52		19		174,662		8		174,670
Commercial and industrial		388,719		7,790		6,545		403,054		1,546		404,600
Consumer		25,556		1		27		25,584		31		25,615
Other		20,901		—		—		20,901		—		20,901
Total	$	1,406,656	$	9,696	$	9,544	$	1,425,896	$	3,898	$	1,429,794

Summary of Changes and Breakdown of Allowance for Loan Losses and Loan Portfolio by Loan Category

The following table details the changes in the ALL for the three months ended March 31, 2019 and 2018 (in thousands):

	Commercial real estate		Consumer real estate			Construction and land development			Commercial and industrial			Consumer			Other			Total
Three Months Ended March 31, 2019
Balance, beginning of year	$	3,309	$	1,005		$	2,431		$	5,036		$	105		$	227		$	12,113
Charged-off loans		—		—			—			—			(37	)		(45	)		(82	)
Recoveries		6		3			—			2			18			13			42
Provision for loan losses		199		9			(65	)		486			53			204			886
Balance, end of period	$	3,514	$	1,017		$	2,366		$	5,524		$	139		$	399		$	12,959

Three Months Ended March 31, 2018
Balance, beginning of year	$	3,324	$	1,063		$	1,628		$	7,209		$	91		$	406		$	13,721
Charged-off loans		—		—			—			(147	)		(13	)		—			(160	)
Recoveries		5		1			—			272			46			—			324
Provision for loan losses		183		(28	)		114			464			(2	)		(53	)		678
Balance, end of period	$	3,512	$	1,036		$	1,742		$	7,798		$	122		$	353		$	14,563

A breakdown of the ALL and the loan portfolio by loan category at March 31, 2019 and December 31, 2018 follows (in thousands):

	Commercial real estate		Consumer real estate		Construction and land development		Commercial and industrial		Consumer		Other		Total
March 31, 2019
Allowance for Loan Losses:
Collectively evaluated for impairment	$	3,514	$	1,017	$	2,366	$	5,333	$	139	$	399	$	12,768
Individually evaluated for impairment		—		—		—		191		—		—		191
Acquired with deteriorated credit quality		—		—		—		—		—		—		—
Balances, end of period	$	3,514	$	1,017	$	2,366	$	5,524	$	139	$	399	$	12,959
Loans:
Collectively evaluated for impairment	$	572,630	$	247,990	$	162,229	$	418,485	$	26,194	$	36,423	$	1,463,951
Individually evaluated for impairment		1,260		213		—		745		10		—		2,228
Acquired with deteriorated credit quality		111		740		8		711		37		—		1,607
Balances, end of period	$	574,001	$	248,943	$	162,237	$	419,941	$	26,241	$	36,423	$	1,467,786

December 31, 2018
Allowance for Loan Losses:
Collectively evaluated for impairment	$	3,309	$	1,005	$	2,431	$	5,036	$	105	$	227	$	12,113
Individually evaluated for impairment		—		—		—		—		—		—		—
Acquired with deteriorated credit quality		—		—		—		—		—		—		—
Balances, end of period	$	3,309	$	1,005	$	2,431	$	5,036	$	105	$	227	$	12,113
Loans:
Collectively evaluated for impairment	$	549,055	$	252,640	$	174,662	$	403,054	$	25,584	$	20,901	$	1,425,896
Individually evaluated for impairment		1,278		183		—		817		—		—		2,278
Acquired with deteriorated credit quality		113		739		8		729		31		—		1,620
Balances, end of period	$	550,446	$	253,562	$	174,670	$	404,600	$	25,615	$	20,901	$	1,429,794

Allocation of ALL with Corresponding Percentage of ALL in Each Category to Total Loans, Net of Deferred Fee

The following table presents the allocation of the ALL for each respective loan category with the corresponding percentage of the ALL in each category to total loans, net of deferred fees as of March 31, 2019 and December 31, 2018 (dollars in thousands):

	March 31, 2019					December 31, 2018
	Amount		Percent of total loans, net of deferred fees			Amount		Percent of total loans, net of deferred fees
Commercial real estate	$	3,514		0.24	%	$	3,309		0.23	%
Consumer real estate		1,017		0.07			1,005		0.07
Construction and land development		2,366		0.16			2,431		0.17
Commercial and industrial		5,524		0.38			5,036		0.35
Consumer		139		0.01			105		0.01
Other		399		0.03			227		0.02
Total allowance for loan and lease losses	$	12,959		0.88	%	$	12,113		0.85	%

Summary of Impaired Loans

The following table presents the Company’s impaired loans that were evaluated for specific loss allowance as of March 31, 2019 and December 31, 2018 (in thousands):


	March 31, 2019						December 31, 2018
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
With no related allowance recorded:
Commercial real estate	$	1,371	$	1,751	$	—	$	1,391	$	1,775	$	—
Consumer real estate		953		1,466		—		922		1,204		—
Construction and land development		8		25		—		8		18		—
Commercial and industrial		714		1,489		—		1,546		6,350		—
Consumer		47		77		—		31		56		—
Other		—		—		—		—		—		—
Subtotal		3,093		4,808		—		3,898		9,403		—
With an allowance recorded:
Commercial real estate		—		—		—		—		—		—
Consumer real estate		—		—		—		—		—		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		742		5,419		191		—		—		—
Consumer		—		—		—		—		—		—
Other		—		—		—		—		—		—
Subtotal		742		5,419		191		—		—		—
Total	$	3,835	$	10,227	$	191	$	3,898	$	9,403	$	—

The following presents information related to the average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2019 and 2018 (in thousands):

	Three Months Ended				Three Months Ended
	March 31, 2019				March 31, 2018
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial real estate	$	1,381	$	16	$	1,197	$	10
Consumer real estate		938		—		—		—
Construction and land development		8		—		—		—
Commercial and industrial		724		—		1,470		—
Consumer		39		—		—		—
Other		—		—		—		—
Subtotal		3,090		16		2,667		10
With an allowance recorded:
Commercial real estate		—		—		—		—
Consumer real estate		—		—		—		—
Construction and land development		—		—		—		—
Commercial and industrial		777		—		—		—
Consumer		—		—		—		—
Other		—		—		—		—
Subtotal		777		—		—		—
Total	$	3,867	$	16	$	2,667	$	10

Schedule of Aging of Recorded Investment in Past-due Loans, by Class of Loans

The following table presents the aging of the recorded investment in past-due loans as of March 31, 2019 and December 31, 2018 by class of loans (in thousands):

	30 - 59		60 - 89		Greater Than
	Days		Days		89 Days		Total		Loans Not
March 31, 2019	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Commercial real estate	$	—	$	5,709	$	—	$	5,709	$	568,292	$	574,001
Consumer real estate		367		38		417		822		248,121		248,943
Construction and land development		—		—		—		—		162,237		162,237
Commercial and industrial		291		753		—		1,044		418,897		419,941
Consumer		17		6		36		59		26,182		26,241
Other		—		—		—		—		36,423		36,423
Total	$	675	$	6,506	$	453	$	7,634	$	1,460,152	$	1,467,786
December 31, 2018
Commercial real estate	$	300	$	227	$	—	$	527	$	549,919	$	550,446
Consumer real estate		69		75		775		919		252,643		253,562
Construction and land development		—		—		—		—		174,670		174,670
Commercial and industrial		54		—		—		54		404,546		404,600
Consumer		52		—		43		95		25,520		25,615
Other		—		—		—		—		20,901		20,901
Total	$	475	$	302	$	818	$	1,595	$	1,428,199	$	1,429,794

Schedule of Recorded In Non Accrual Loans, Past Due Loans over 90 Days and Accruing and Troubled Debt Restructurings

The following table presents the recorded investment in non-accrual loans, past due loans over 89 days and accruing and troubled debt restructurings (“TDR”) by class of loans as of March 31, 2019 and December 31, 2018 (in thousands):

			Past Due Over 89		Troubled Debt
	Non-Accrual		Days and Accruing		Restructurings
March 31, 2019
Commercial real estate	$	—	$	—	$	1,255
Consumer real estate		912		—		—
Construction and land development		8		—		—
Commercial and industrial		744		—		—
Consumer		48		—		—
Other		—		—		—
Total	$	1,712	$	—	$	1,255

December 31, 2018
Commercial real estate	$	—	$	—	$	1,391
Consumer real estate		1,187		214		—
Construction and land development		19		—		—
Commercial and industrial		817		—		—
Consumer		55		—		—
Other		—		—		—
Total	$	2,078	$	214	$	1,391

Schedule of activity in purchased credit impaired loans

The following table presents changes in the carrying value of purchased credit impaired (“PCI”) loans (in thousands):

	Three Months Ended
	March 31, 2019
Balance at beginning of period	$	1,620
Change due to payments received and accretion		(13	)
Change due to loan charge-offs		—
Other		—
Balance at end of period	$	1,607

The following table presents changes in the accretable yield for PCI loans (in thousands):

	Three Months Ended
	March 31, 2019
Balance at beginning of period	$	440
Accretion		(13	)
Reclassification from (to) nonaccretable difference		—
Other, net		11
Balance at end of period	$	438