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Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2020
Loans and Allowance for Loan Losses [Abstract]  
Summary of Loans
A summary of loans at June 30, 2020 and December 31, 2019, are as follows (dollars in thousands):

  
June 30,
2020
  
December 31,
2019
 
Construction & development
 
$
92,380
  
$
70,628
 
1 - 4 family real estate
  
29,675
   
34,160
 
Commercial real estate - other
  
285,609
   
273,278
 
Total commercial real estate
  
407,664
   
378,066
 
Commercial & industrial
  
372,554
   
260,762
 
Agricultural
  
49,274
   
57,945
 
Consumer
  
10,713
   
11,895
 
Gross loans
  
840,205
   
708,668
 
Less allowance for loan losses
  
(9,878
)
  
(7,846
)
Less deferred loan fees
  
(2,262
)
  
(1,364
)
Net loans
 
$
828,065
  
$
699,458
 
Activity in Allowance for Loan Losses by Portfolio Segment
The following table presents, by portfolio segment, the activity in the allowance for loan losses for the three months ended June 30, 2020 and 2019 (dollars in thousands):

  
Construction &
Development
  
1 - 4 Family
Commercial
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2020
                     
Balance, beginning of period
 
$
944
  
$
376
  
$
3,032
  
$
3,495
  
$
551
  
$
115
  
$
8,513
 
                             
Charge-offs
  
-
   
-
   
-
   
(39
)
  
-
   
-
   
(39
)
Recoveries
  
-
   
-
   
-
   
4
   
-
   
-
   
4
 
                             
Net recoveries
  
-
   
-
   
-
   
(35
)
  
-
   
-
   
(35
)
                             
Provision (credit) for loan losses
  
142
   
(27
)
  
326
   
920
   
28
   
11
   
1,400
 
Balance, end of period
 
$
1,086
  
$
349
  
$
3,358
  
$
4,380
  
$
579
  
$
126
  
$
9,878
 

  
Construction &
Development
  
1 - 4 Family
Commercial
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2019
                     
Balance, beginning of period
 
$
1,290
  
$
452
  
$
2,087
  
$
3,068
  
$
760
  
$
178
  
$
7,835
 
                             
Charge-offs
  
-
   
-
   
-
   
-
   
(10
)
  
-
   
(10
)
Recoveries
  
-
   
1
   
-
   
7
   
3
   
-
   
11
 
                             
Net recoveries
  
-
   
1
   
-
   
7
   
(7
)
  
-
   
1
 
                             
Provision (credit) for loan losses
  
(259
)
  
(5
)
  
242
   
96
   
(58
)
  
(16
)
  
-
 
Balance, end of period
 
$
1,031
  
$
448
  
$
2,329
  
$
3,171
  
$
695
  
$
162
  
$
7,836
 

The following table presents, by portfolio segment, the activity in the allowance for loan losses for the six months ended June 30, 2020 and 2019 (dollars in thousands):

  
Construction &
Development
  
1 - 4 Family
Real Estate
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2020
                     
Balance, beginning of period
 
$
782
  
$
378
  
$
3,025
  
$
2,887
  
$
642
  
$
132
  
$
7,846
 
                             
Charge-offs
  
-
   
-
   
-
   
(39
)
  
-
   
-
   
(39
)
Recoveries
  
-
   
2
   
-
   
9
   
10
   
-
   
21
 
                             
Net charge-offs
  
-
   
2
   
-
   
(30
)
  
10
   
-
   
(18
)
                             
Provision (credit) for loan losses
  
304
   
(31
)
  
333
   
1,523
   
(73
)
  
(6
)
  
2,050
 
Balance, end of period
 
$
1,086
  
$
349
  
$
3,358
  
$
4,380
  
$
579
  
$
126
  
$
9,878
 

  
Construction &
Development
  
1 - 4 Family
Real Estate
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2019
                     
Balance, beginning of period
 
$
1,136
  
$
433
  
$
2,035
  
$
3,231
  
$
818
  
$
179
  
$
7,832
 
                             
Charge-offs
  
-
   
-
   
-
   
(4
)
  
(10
)
  
-
   
(14
)
Recoveries
  
-
   
2
   
-
   
13
   
3
   
-
   
18
 
                             
Net recoveries
  
-
   
2
   
-
   
9
   
(7
)
  
-
   
4
 
                             
Provision (credit) for loan losses
  
(105
)
  
13
   
294
   
(69
)
  
(116
)
  
(17
)
  
-
 
Balance, end of period
 
$
1,031
  
$
448
  
$
2,329
  
$
3,171
  
$
695
  
$
162
  
$
7,836
 

The following table presents, by portfolio segment, the balance in allowance for loan losses and the gross loans based upon portfolio segment and impairment method as of June 30, 2020 and December 31, 2019 (dollars in thousands):

  
Construction &
Development
  
1 - 4 Family
Real Estate
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2020
                     
Allowance Balance
                     
Ending balance Individually evaluated for impairment
 
$
-
  
$
130
  
$
26
  
$
-
  
$
169
  
$
-
  
$
325
 
Collectively evaluated for impairment
  
1,086
   
219
   
3,332
   
4,380
   
410
   
126
   
9,553
 
                             
Total
 
$
1,086
  
$
349
  
$
3,358
  
$
4,380
  
$
579
  
$
126
  
$
9,878
 
                             
Gross Loans
                            
Ending balance Individually evaluated for impairment
 
$
-
  
$
1,143
  
$
3,609
  
$
7,739
  
$
3,785
  
$
-
  
$
16,276
 
Collectively evaluated for impairment
  
92,380
   
28,532
   
282,000
   
364,815
   
45,489
   
10,713
   
823,929
 
                             
Total
 
$
92,380
  
$
29,675
  
$
285,609
  
$
372,554
  
$
49,274
  
$
10,713
  
$
840,205
 
                             
December 31, 2019
                            
Allowance Balance
                            
Ending balance Individually evaluated for impairment
 
$
-
  
$
-
  
$
26
  
$
-
  
$
-
  
$
-
  
$
26
 

                            
Collectively evaluated for impairment
  
782
   
378
   
2,999
   
2,887
   
642
   
132
   
7,820
 
                             
Total
 
$
782
  
$
378
  
$
3,025
  
$
2,887
  
$
642
  
$
132
  
$
7,846
 
                             
Gross Loans
                            
Ending balance Individually evaluated for impairment
 
$
-
  
$
-
  
$
5,841
  
$
2,750
  
$
2,527
  
$
-
  
$
11,118
 
Collectively evaluated for impairment
  
70,628
   
34,160
   
267,437
   
258,012
   
55,418
   
11,895
   
697,550
 
                             
Total
 
$
70,628
  
$
34,160
  
$
273,278
  
$
260,762
  
$
57,945
  
$
11,895
  
$
708,668
 
Loan Portfolio Based on Internal Rating Category
The following table presents the credit risk profile of the Company’s loan portfolio based on internal rating category as of June 30, 2020 and December 31, 2019 (dollars in thousands):

     
Construction &
Development
  
1 - 4 Family
Real Estate
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
June 30, 2020
                     
Grade
                     
1 (Pass)
 
$
92,380
  
$
27,745
  
$
269,191
  
$
335,070
  
$
45,489
  
$
10,713
  
$
780,588
 
2 (Watch)
  
-
   
787
   
9,811
   
14,654
   
-
   
-
   
25,252
 
3 (Special Mention)
  
-
   
-
   
2,998
   
15,091
   
-
   
-
   
18,089
 
4 (Substandard)
  
-
   
1,143
   
3,609
   
7,739
   
3,785
   
-
   
16,276
 
Total
 
$
92,380
  
$
29,675
  
$
285,609
  
$
372,554
  
$
49,274
  
$
10,713
  
$
840,205
 

   
Construction &
Development
  
1 - 4 Family
Real Estate
  
Commercial
Real Estate -
Other
  
Commercial
& Industrial
  
Agricultural
  
Consumer
  
Total
 
December 31, 2019
                     
Grade
                     
1 (Pass)
 
$
70,628
  
$
33,622
  
$
267,437
  
$
241,176
  
$
53,290
  
$
11,895
  
$
678,048
 
2 (Watch)
  
-
   
538
   
-
   
5,312
   
-
   
-
   
5,850
 
3 (Special Mention)
  
-
   
-
   
-
   
11,524
   
2,128
   
-
   
13,652
 
4 (Substandard)
  
-
   
-
   
5,841
   
2,750
   
2,527
   
-
   
11,118
 
Total
 
$
70,628
  
$
34,160
  
$
273,278
  
$
260,762
  
$
57,945
  
$
11,895
  
$
708,668
 
Loan Portfolio Aging Analysis of Recorded Investment in Loans
The following table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of June 30, 2020 and December 31, 2019 (dollars in thousands):

 
Past Due
        
Total Loans
 
   
30–59
Days
   
60–89
Days
  
Greater than
90 Days
  
Total
  
Current
  
Total
Loans
  
> 90 Days &
Accruing
 
June 30, 2020
                     
Construction & development
 
$
-
  
$
-
  
$
-
  
$
-
  
$
92,380
  
$
92,380
  
$
-
 
1 - 4 Family Real Estate
  
-
   
-
   
-
   
-
   
29,675
   
29,675
   
-
 
Commercial Real Estate - other
  
-
   
-
   
-
   
-
   
285,609
   
285,609
   
-
 
Commercial & industrial
  
329
   
6
   
-
   
335
   
372,219
   
372,554
   
-
 
Agricultural
  
57
   
-
   
-
   
57
   
49,217
   
49,274
   
-
 
Consumer
  
89
   
-
   
-
   
89
   
10,624
   
10,713
   
-
 
Total
 
$
475
  
$
6
  
$
-
  
$
481
  
$
839,724
  
$
840,205
  
$
-
 
December 31, 2019
                            
Construction & development
 
$
-
  
$
-
  
$
-
  
$
-
  
$
70,628
  
$
70,628
  
$
-
 
1 - 4 Family Real Estate
  
-
   
-
   
-
   
-
   
34,160
   
34,160
   
-
 
Commercial Real Estate - other
  
-
   
-
   
-
   
-
   
273,278
   
273,278
   
-
 
Commercial & industrial
  
-
   
-
   
14
   
14
   
260,748
   
260,762
   
14
 
Agricultural
  
-
   
-
   
598
   
598
   
57,347
   
57,945
   
598
 
Consumer
  
90
   
-
   
-
   
90
   
11,805
   
11,895
   
-
 
Total
 
$
90
  
$
-
  
$
612
  
$
702
  
$
707,966
  
$
708,668
  
$
612
 
Impaired Loans
The following table presents impaired loans as of June 30, 2020 and December 31, 2019 (dollars in thousands):

         
Unpaid
Principal
Balance
        
Recorded
Investment
with No
Allowance
        
Recorded
Investment
with an
Allowance
         
Total
Recorded
Investment
          
Related
Allowance
         
Average
Recorded
Investment
         
Interest
Income
Recognized
         
Average
Recorded
Investment
         
Interest
Income
Recognized
    
                 
Three Months Ended June 30,
  
Six Months Ended June 30,
 
                 
2020
  
2020
 
June 30, 2020
                           
Construction & development
 
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
 
1 - 4 Family Real Estate
  
1,143
   
-
   
1,143
   
1,143
   
130
   
1,148
   
32
   
574
   
32
 
Commercial Real Estate - other
  
3,609
   
1,902
   
1,707
   
3,609
   
26
   
3,664
   
59
   
3,795
   
129
 
Commercial & industrial
  
7,739
   
7,739
   
-
   
7,739
   
-
   
8,170
   
139
   
6,131
   
321
 
Agricultural
  
3,002
   
873
   
2,129
   
3,002
   
169
   
2,635
   
3
   
2,741
   
41
 
Consumer
  
-
   
-
   
-
   
-
   
-
   
-
   
-
   
-
   
-
 
Total
 
$
15,493
  
$
10,514
  
$
4,979
  
$
15,493
  
$
325
  
$
15,617
  
$
233
  
$
13,241
  
$
523
 
 
                 
Three Months Ended June 30,
  
Six Months Ended June 30,
 
December 31, 2019
                
2019
  
2019
 
Construction & development
 
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
 
1 - 4 Family Real Estate
  
-
   
-
   
-
   
-
   
-
   
713
   
-
   
414
   
-
 
Commercial Real Estate - other
  
5,841
   
4,032
   
1,809
   
5,841
   
26
   
1,335
   
33
   
1,147
   
66
 
Commercial & industrial
  
2,750
   
2,750
   
-
   
2,750
   
-
   
5,290
   
55
   
5,940
   
178
 
Agricultural
  
2,527
   
1,744
   
-
   
1,744
   
-
   
2,548
   
48
   
2,190
   
105
 
Consumer
  
-
   
-
   
-
   
-
   
-
   
193
   
-
   
193
   
-
 
Total
 
$
11,118
  
$
8,526
  
$
1,809
  
$
10,335
  
$
26
  
$
10,079
  
$
136
  
$
9,884
  
$
349
 
Information Regarding Nonperforming Assets
The following table represents information regarding nonperforming assets at June 30, 2020 and December 31, 2019 (dollars in thousands):

   As of
 
      
June 30,
2020
      
  December 31,
2019
   
Nonaccrual loans
 
$
7,127
  
$
1,809
 
Troubled-debt restructurings (1)
  
786
   
912
 
Accruing loans 90 or more days past due
  
-
   
612
 
Total nonperforming loans
 
$
7,913
  
$
3,333
 

(1) $1.71 million and $1.81 million of TDRs as of June 30, 2020 and December 31, 2019, respectively, are included in the nonaccrual loans balance in the line above.