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Loans and Allowance for Loan Losses (Tables)
12 Months Ended
Dec. 31, 2014
Receivables [Abstract]  
Summary of Loans
Loans are stated at the principal amount outstanding net of unearned discounts, unearned income and allowance for loan losses.  Unearned income includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method.  Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at December 31, 2014 and 2013 follows (in thousands):
 
2014
 
2013
Construction and land development
$
21,627

 
$
25,321

Farm loans
110,158

 
109,376

1-4 Family residential properties
179,886

 
184,158

Multifamily residential properties
53,129

 
50,174

Commercial real estate
380,173

 
357,726

Loans secured by real estate
744,973

 
726,755

Agricultural loans
68,225

 
64,055

Commercial and industrial loans
223,633

 
168,227

Consumer loans
15,118

 
14,579

All other loans
8,736

 
9,094

Gross loans
1,060,685

 
982,710

Less:
 

 
 

Net deferred loan fees, premiums and discounts
237

 
420

Allowance for loan losses
13,682

 
13,249

Net loans
$
1,046,766

 
$
969,041


Allowance for Loan Losses and Recorded Investment in Loans
The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2014, 2013 and 2012 (in thousands):
 
 
Commercial/ Commercial Real Estate
 
Agricultural/ Agricultural Real Estate
 
Residential  Real Estate
 
Consumer
 
Unallocated
 
Total
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
10,646

 
$
533

 
$
771

 
$
377

 
$
922

 
$
13,249

Provision charged to expense
192

 
825

 
135

 
167

 
(690
)
 
629

Losses charged off
(86
)
 
—

 
(140
)
 
(311
)
 
—

 
(537
)
Recoveries
162

 
2

 
24

 
153

 
—

 
341

Balance, end of period
$
10,914

 
$
1,360

 
$
790

 
$
386

 
$
232

 
$
13,682

Ending balance:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
263

 
$
—

 
$
—

 
$
—

 
$
—

 
$
263

Collectively evaluated for impairment
$
10,651

 
$
1,360

 
$
790

 
$
386

 
$
232

 
$
13,419

Loans:
 
 
 
 
 
 
 
 
 
 
 
Ending balance
$
684,552

 
$
178,091

 
$
184,661

 
$
15,102

 
$
—

 
$
1,062,406

Ending balance:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
3,301

 
$
—

 
$
—

 
$
—

 
$
—

 
$
3,301

Collectively evaluated for impairment
$
681,251

 
$
178,091

 
$
184,661

 
$
15,102

 
$
—

 
$
1,059,105


 

 
Commercial/ Commercial Real Estate
 
Agricultural/ Agricultural Real Estate
 
Residential  Real Estate
 
Consumer
 
Unallocated
 
Total
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
9,301

 
$
558

 
$
726

 
$
403

 
$
788

 
$
11,776

Provision charged to expense
1,861

 
(30
)
 
171

 
57

 
134

 
2,193

Losses charged off
(764
)
 
—

 
(141
)
 
(223
)
 
—

 
(1,128
)
Recoveries
248

 
5

 
15

 
140

 
—

 
408

Balance, end of period
$
10,646

 
$
533

 
$
771

 
$
377

 
$
922

 
$
13,249

Ending balance:
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
604

 
$
—

 
$
—

 
$
—

 
$
—

 
$
604

Collectively evaluated for impairment
$
10,042

 
$
533

 
$
771

 
$
377

 
$
922

 
$
12,645

Loans:
 

 
 

 
 

 
 

 
 

 
 

Ending balance
$
607,062

 
$
172,979

 
$
187,796

 
$
14,967

 
$
—

 
$
982,804

Ending balance:
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
5,145

 
$
—

 
$
—

 
$
—

 
$
—

 
$
5,145

Collectively evaluated for impairment
$
601,917

 
$
172,979

 
$
187,796

 
$
14,967

 
$
—

 
$
977,659

December 31, 2012
 

 
 

 
 

 
 

 
 

 
 

Allowance for loan losses:
 

 
 

 
 

 
 

 
 

 
 

Balance, beginning of year
$
8,791

 
$
546

 
$
636

 
$
378

 
$
769

 
$
11,120

Provision charged to expense
1,979

 
(47
)
 
580

 
116

 
19

 
2,647

Losses charged off
(1,586
)
 
(12
)
 
(524
)
 
(249
)
 
—

 
(2,371
)
Recoveries
117

 
71

 
34

 
158

 
—

 
380

Balance, end of year
$
9,301

 
$
558

 
$
726

 
$
403

 
$
788

 
$
11,776

Ending balance:
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
457

 
$
54

 
$
—

 
$
—

 
$
—

 
$
511

Collectively evaluated for impairment
$
8,844

 
$
504

 
$
726

 
$
403

 
$
788

 
$
11,265

Loans:
 

 
 

 
 

 
 

 
 

 
 

Ending balance
$
569,717

 
$
145,695

 
$
179,309

 
$
16,066

 
$
278

 
$
911,065

Ending balance:
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
5,334

 
$
1,230

 
$
—

 
$
—

 
$
—

 
$
6,564

Collectively evaluated for impairment
$
564,383

 
$
144,465

 
$
179,309

 
$
16,066

 
$
278

 
$
904,501


Credit Risk Profile of the Company's Loan Portfolio
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2014 and 2013 (in thousands):

 
Construction &
Land Development
 
Farm Loans
 
1-4 Family Residential
Properties
 
Multifamily Residential
Properties
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Pass
$
20,842

 
$
23,839

 
$
107,976

 
$
108,262

 
$
177,764

 
$
182,593

 
$
52,793

 
$
50,174

Watch
—

 
—

 
1,036

 
231

 
1,187

 
637

 
—

 
—

Substandard
785

 
1,482

 
1,181

 
912

 
2,970

 
1,531

 
336

 
—

Doubtful
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total
$
21,627

 
$
25,321

 
$
110,193

 
$
109,405

 
$
181,921

 
$
184,761

 
$
53,129

 
$
50,174


 
Commercial Real Estate (Nonfarm/Nonresidential)
 
Agricultural Loans
 
Commercial & Industrial Loans
 
Consumer Loans
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Pass
$
357,873

 
$
335,284

 
$
67,619

 
$
62,439

 
$
218,193

 
$
158,107

 
$
15,105

 
$
14,558

Watch
18,817

 
17,998

 
—

 
193

 
4,647

 
3,515

 
9

 
—

Substandard
2,914

 
3,717

 
679

 
1,496

 
940

 
6,731

 
4

 
21

Doubtful
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total
$
379,604

 
$
356,999

 
$
68,298

 
$
64,128

 
$
223,780

 
$
168,353

 
$
15,118

 
$
14,579


 
All Other Loans
 
Total Loans
 
2014
 
2013
 
2014
 
2013
Pass
$
8,736

 
$
9,084

 
$
1,026,901

 
$
944,340

Watch
—

 
—

 
25,696

 
22,574

Substandard
—

 
—

 
9,809

 
15,890

Doubtful
—

 
—

 
—

 
—

Total
$
8,736

 
$
9,084

 
$
1,062,406

 
$
982,804


Loan Portfolio Aging Analysis
The following table presents the Company’s loan portfolio aging analysis at December 31, 2014 and 2013 (in thousands):
 
30-59 days Past Due
 
60-89 days Past Due
 
90 Days
or More Past Due
 
Total
Past Due
 
Current
 
Total Loans Receivable
 
Total Loans > 90 days & Accruing
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
$
297

 
$
25

 
$
—

 
$
322

 
$
21,305

 
$
21,627

 
$
—

Farm loans
—

 
—

 
—

 
—

 
110,193

 
110,193

 
—

1-4 Family residential properties
201

 
224

 
385

 
810

 
181,111

 
181,921

 
—

Multifamily residential properties
—

 
—

 
—

 
—

 
53,129

 
53,129

 
—

Commercial real estate
60

 
32

 
945

 
1,037

 
378,567

 
379,604

 
—

Loans secured by real estate
558

 
281

 
1,330

 
2,169

 
744,305

 
746,474

 
—

Agricultural loans
16

 
20

 
—

 
36

 
68,262

 
68,298

 
—

Commercial and industrial loans
228

 
10

 
98

 
336

 
223,444

 
223,780

 
—

Consumer loans
331

 
10

 
5

 
346

 
14,772

 
15,118

 
—

All other loans
—

 
—

 
—

 
—

 
8,736

 
8,736

 
—

Total loans
$
1,133

 
$
321

 
$
1,433

 
$
2,887

 
$
1,059,519

 
$
1,062,406

 
$
—

December 31, 2013
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
$
—

 
$
—

 
$
—

 
$
—

 
$
25,321

 
$
25,321

 
$
—

Farm loans
299

 
—

 
—

 
299

 
109,106

 
109,405

 
—

1-4 Family residential properties
326

 
146

 
371

 
843

 
183,918

 
184,761

 
—

Multifamily residential properties
—

 
—

 
—

 
—

 
50,174

 
50,174

 
—

Commercial real estate
568

 
1,030

 
145

 
1,743

 
355,256

 
356,999

 
—

Loans secured by real estate
1,193

 
1,176

 
516

 
2,885

 
723,775

 
726,660

 
—

Agricultural loans
122

 
49

 
—

 
171

 
63,957

 
64,128

 
—

Commercial and industrial loans
113

 
88

 
62

 
263

 
168,090

 
168,353

 
—

Consumer loans
83

 
25

 
4

 
112

 
14,467

 
14,579

 
—

All other loans
—

 
—

 
—

 
—

 
9,084

 
9,084

 
—

Total loans
$
1,511

 
$
1,338

 
$
582

 
$
3,431

 
$
979,373

 
$
982,804

 
$
—


Impaired Loans
The following tables present impaired loans as of December 31, 2014 and 2013 (in thousands):

 
2014
 
2013
 
Recorded
Balance
 
Unpaid Principal Balance
 
Specific Allowance
 
Recorded
Balance
 
Unpaid Principal Balance
 
Specific Allowance
Loans with a specific allowance:
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
$
785

 
$
2,960

 
$
43

 
$
614

 
$
614

 
$
76

Farm loans
—

 
—

 
—

 
—

 
—

 
—

1-4 Family residential properties
67

 
134

 
—

 
—

 
—

 
—

Multifamily residential properties
—

 
—

 
—

 
—

 
—

 
—

Commercial real estate
472

 
986

 
136

 
1,096

 
1,096

 
301

Loans secured by real estate
1,324

 
4,080

 
179

 
1,710

 
1,710

 
377

Agricultural loans
—

 
—

 
—

 
—

 
—

 
—

Commercial and industrial loans
83

 
181

 
84

 
275

 
275

 
227

Consumer loans
—

 
—

 
—

 
—

 
—

 
—

All other loans
—

 
—

 
—

 
—

 
—

 
—

Total loans
$
1,407

 
$
4,261

 
$
263

 
$
1,985

 
$
1,985

 
$
604

Loans without a specific allowance:
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
$
—

 
$
—

 
$
—

 
$
869

 
$
1,727

 
$
—

Farm loans
73

 
235

 
—

 
105

 
113

 
—

1-4 Family residential properties
1,156

 
2,866

 
—

 
1,110

 
1,558

 
—

Multifamily residential properties
—

 
—

 
—

 
—

 
—

 
—

Commercial real estate
1,640

 
3,808

 
—

 
1,750

 
1,778

 
—

Loans secured by real estate
2,869

 
6,909

 
—

 
3,834

 
5,176

 
—

Agricultural loans
—

 
—

 
—

 
—

 
—

 
—

Commercial and industrial loans
249

 
933

 
—

 
613

 
946

 
—

Consumer loans
15

 
60

 
—

 
37

 
51

 
—

All other loans
—

 
—

 
—

 
—

 
—

 
—

Total loans
$
3,133

 
$
7,902

 
$
—

 
$
4,484

 
$
6,173

 
$
—

Total loans:
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
$
785

 
$
2,960

 
$
43

 
$
1,483

 
$
2,341

 
$
76

Farm loans
73

 
235

 
—

 
105

 
113

 
—

1-4 Family residential properties
1,223

 
3,000

 
—

 
1,110

 
1,558

 
—

Multifamily residential properties
—

 
—

 
—

 
—

 
—

 
—

Commercial real estate
2,112

 
4,794

 
136

 
2,846

 
2,874

 
301

Loans secured by real estate
4,193

 
10,989

 
179

 
5,544

 
6,886

 
377

Agricultural loans
—

 
—

 
—

 
—

 
—

 
—

Commercial and industrial loans
332

 
1,114

 
84

 
888

 
1,221

 
227

Consumer loans
15

 
60

 
—

 
37

 
51

 
—

All other loans
—

 
—

 
—

 
—

 
—

 
—

Total loans
$
4,540

 
$
12,163

 
$
263

 
$
6,469

 
$
8,158

 
$
604


Impaired loans by portfolio class
The following tables present average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2014, 2013 and 2012 (in thousands):
 
2014
 
2013
 
2012
 
Average Investment
in Impaired Loans
 
Interest Income Recognized
 
Average Investment
in Impaired Loans
 
Interest Income Recognized
 
Average Investment
in Impaired Loans
 
Interest Income Recognized
Construction and land development
$
933

 
$
—

 
$
1,565

 
$
—

 
$
1,520

 
$
—

Farm loans
78

 
2

 
107

 
—

 
421

 
—

1-4 Family residential properties
1,276

 
12

 
1,248

 
5

 
1,948

 
7

Multifamily residential properties
—

 
—

 
—

 
—

 
—

 
—

Commercial real estate
2,205

 
2

 
2,895

 
3

 
2,100

 
—

Loans secured by real estate
4,492

 
16

 
5,815

 
8

 
5,989

 
7

Agricultural loans
—

 
—

 
16

 
1

 
1,071

 
—

Commercial and industrial loans
429

 
—

 
1,240

 
10

 
755

 
—

Consumer loans
25

 
1

 
47

 
12

 
56

 
15

All other loans
—

 
—

 
—

 
—

 
—

 
—

Total loans
$
4,946

 
$
17

 
$
7,118

 
$
31

 
$
7,871

 
$
22



The amount of interest income recognized by the Company within the periods stated above was due to loans modified in a troubled debt restructuring that remained on accrual status.  The balance of loans modified in a troubled debt restructuring included in the impaired loans stated above that were still accruing was $345,000 of 1-4 Family residential properties, $44,000 of Farm Loans, $37,000 of commercial real estate, and $9,000 of consumer loans at December 31, 2014 and $101,000 of 1-4 Family residential properties, $39,000 of commercial real estate loans, $182,000 of commercial and industrial loans and $26,000 of consumer loans at December 31, 2013. For the years ended December 31, 2014, 2013 and 2012, the amount of interest income recognized using a cash-basis method of accounting during the period that the loans were impaired was not material.
Nonaccrual Loans
The following table presents the Company’s recorded balance of nonaccrual loans at December 31, 2014 and December 31, 2013 (in thousands). This table excludes purchased impaired loans and performing troubled debt restructurings.
 
2014
 
2013
Construction and land development
$
785

 
$
1,483

Farm loans
29

 
105

1-4 Family residential properties
878

 
1,009

Multifamily residential properties
—

 
—

Commercial real estate
2,074

 
2,807

Loans secured by real estate
3,766

 
5,404

Agricultural loans
—

 
—

Commercial and industrial loans
332

 
706

Consumer loans
7

 
11

All other loans
—

 
—

Total loans
$
4,105

 
$
6,121


Recorded Balance of Troubled Debt Restructurings
The following table presents the Company’s recorded balance of troubled debt restructurings at December 31, 2014 and 2013 (in thousands).
Troubled debt restructurings:
2014
 
2013
Construction and land development
$
785

 
$
1,482

Farm Loans
44

 
—

1-4 Family residential properties
503

 
306

Commercial real estate
1,283

 
899

Loans secured by real estate
2,615

 
2,687

Commercial and industrial loans
236

 
487

 Consumer Loans
9

 
26

Total
$
2,860

 
$
3,200

Performing troubled debt restructurings:
 

 
 

1-4 Family residential properties
$
345

 
$
101

Farm Loans
44

 
—

Commercial real estate
37

 
39

Loans secured by real estate
426

 
140

Commercial and industrial loans
—

 
182

 Consumer Loans
9

 
26

Total
$
435

 
$
348