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Loans and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Classification of loans in the consolidated balance sheets
Loans in the accompanying consolidated balance sheets are classified as follows (in thousands):    
September 30, 2020December 31, 2019
Real estate loans:  
Construction$610,394 $644,948 
1-4 family residential738,343 787,562 
Commercial1,327,233 1,250,208 
Commercial loans629,170 401,521 
Municipal loans387,286 383,960 
Loans to individuals97,549 100,005 
Total loans3,789,975 3,568,204 
Less: Allowance for loan losses55,110 24,797 
Net loans$3,734,865 $3,543,407 
Summary of loans by credit quality indicators
The following table sets forth the amortized cost basis by class of financing receivable and credit quality indicator for the periods presented (in thousands):
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized Cost BasisTotal
20202019201820172016Prior
Construction real estate:
Pass$87,515 $214,617 $108,910 $74,431 $3,553 $9,241 $110,858 $609,125 
Pass watch— — — — 23 — — 23 
Special mention— — — — — — — — 
Substandard— 995 — — — 63 — 1,058 
Doubtful— — — — — 188 — 188 
Total construction real estate$87,515 $215,612 $108,910 $74,431 $3,576 $9,492 $110,858 $610,394 
1-4 family residential real estate:
Pass$113,367 $124,089 $79,065 $62,838 $65,842 $282,651 $3,135 $730,987 
Pass watch— — — — — 14 — 14 
Special mention— — — — — 12 — 12 
Substandard— — 84 286 1,461 4,599 114 6,544 
Doubtful— — — 160 147 479 — 786 
Total 1-4 family residential real estate$113,367 $124,089 $79,149 $63,284 $67,450 $287,755 $3,249 $738,343 
Commercial real estate:
Pass$168,851 $347,128 $161,643 $210,171 $115,591 $226,048 $6,642 $1,236,074 
Pass watch— — 2,211 — — 2,587 — 4,798 
Special mention5,983 33,008 7,067 141 4,543 7,846 — 58,588 
Substandard9,230 2,599 2,246 112 632 12,898 — 27,717 
Doubtful— — — — — 56 — 56 
Total commercial real estate$184,064 $382,735 $173,167 $210,424 $120,766 $249,435 $6,642 $1,327,233 
Commercial loans:
Pass$366,405 $72,148 $27,755 $11,448 $4,989 $7,484 $127,918 $618,147 
Pass watch324 835 31 — — — 204 1,394 
Special mention— 693 450 208 325 606 391 2,673 
Substandard379 906 203 20 1 165 4,601 6,275 
Doubtful— 108 508 62 3 — — 681 
Total commercial loans$367,108 $74,690 $28,947 $11,738 $5,318 $8,255 $133,114 $629,170 
Municipal loans:
Pass$43,539 $69,964 $35,013 $62,626 $25,873 $150,271 $— $387,286 
Pass watch— — — — — — — — 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total municipal loans$43,539 $69,964 $35,013 $62,626 $25,873 $150,271 $— $387,286 
Loans to individuals:
Pass$40,522 $30,412 $12,870 $5,910 $2,370 $1,158 $3,897 $97,139 
Pass watch— — — — — — — — 
Special mention— — 53 — — — 4 57 
Substandard3 32 31 64 22 14 7 173 
Doubtful40 4 7 33 91 5 — 180 
Total loans to individuals$40,565 $30,448 $12,961 $6,007 $2,483 $1,177 $3,908 $97,549 
Total loans$836,158 $897,538 $438,147 $428,510 $225,466 $706,385 $257,771 $3,789,975 
Past due loans
The following tables present the aging of the amortized cost basis in past due loans by class of loans (in thousands):
 September 30, 2020
 
30-59 Days
Past Due
60-89 Days
Past Due
Greater than 90 Days Past Due
Total Past
Due
CurrentTotal
Real estate loans:      
Construction$1,077 $— $995 $2,072 $608,322 $610,394 
1-4 family residential1,028 913 1,831 3,772 734,571 738,343 
Commercial231 84 — 315 1,326,918 1,327,233 
Commercial loans1,315 282 3 1,600 627,570 629,170 
Municipal loans— — — — 387,286 387,286 
Loans to individuals509 81 37 627 96,922 97,549 
Total$4,160 $1,360 $2,866 $8,386 $3,781,589 $3,789,975 
December 31, 2019
30-59 Days Past Due60-89 Days Past Due
Greater than 89 Days
Past Due
Total Past
Due
Current (1)
Total
Real estate loans:
Construction$1,236 $229 $337 $1,802 $643,146 $644,948 
1-4 family residential8,788 1,077 1,607 11,472 776,090 787,562 
Commercial795 259 536 1,590 1,248,618 1,250,208 
Commercial loans1,917 722 651 3,290 398,231 401,521 
Municipal loans— — — — 383,960 383,960 
Loans to individuals660 261 128 1,049 98,956 100,005 
Total$13,396 $2,548 $3,259 $19,203 $3,549,001 $3,568,204 

(1)    Prior to the adoption of CECL, included PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales could be reasonably estimated.
Summary of nonperforming assets for the period
The following table sets forth the amortized cost basis of nonperforming assets for the periods presented (in thousands):
 September 30, 2020December 31, 2019
Nonaccrual loans:
Real estate loans:
Construction$1,246 $405 
1-4 family residential2,838 2,611 
Commercial884 704 
Commercial loans784 944 
Loans to individuals219 299 
Total nonaccrual loans (1)
5,971 4,963 
Accruing loans past due more than 90 days— — 
Troubled debt restructured loans(2)
10,307 12,014 
Other real estate owned536 472 
Repossessed assets8 — 
Total nonperforming assets$16,822 $17,449 

(1)    Prior to the adoption of CECL, excluded PCI loans measured at fair value at acquisition if the timing and amount of cash flows expected to be collected from those sales could be reasonably estimated. Includes $783,000 and $469,000 of restructured loans as of September 30, 2020 and December 31, 2019, respectively.
(2)    As of December 31, 2019, prior to the adoption of CECL, included $755,000 in PCI loans restructured.
Schedule of recorded investment in loans modified
The following tables set forth the recorded balance of loans considered to be TDRs that were restructured and the type of concession by class of loans during the periods presented (dollars in thousands):
 Nine Months Ended September 30, 2020
 
Extend Amortization
 Period
Interest Rate ReductionsCombinationTotal ModificationsNumber of Loans
Real estate loans:
Commercial$— $— $58 $58 1 
Commercial loans— — 117 117 3 
Total$— $— $175 $175 4 
Three Months Ended September 30, 2019
 
Extend Amortization
 Period
Interest Rate ReductionsCombination Total ModificationsNumber of Loans
Real estate loans:  
1-4 family residential$— $— $14 $14 1 
Commercial loans— — 181 181 3 
Total$— $— $195 $195 4 
 Nine Months Ended September 30, 2019
 
Extend Amortization
 Period
Interest Rate ReductionsCombinationTotal ModificationsNumber of Loans
Real estate loans:  
1-4 family residential$— $— $123 $123 2 
Commercial7,561 — 94 7,655 2 
Commercial loans54 — 659 713 8 
Loans to individuals— — 26 26 3 
Total$7,615 $— $902 $8,517 15 
Activity in the allowance for loan losses by portfolio segment
The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands):
 Three Months Ended September 30, 2020
 Real Estate    
 Construction
1-4 Family
Residential
Commercial
Commercial
Loans
Municipal
Loans
Loans to
Individuals
Total
Balance at beginning of period$8,500 $2,702 $43,785 $4,221 $47 $613 $59,868 
Loans charged-off(6)(18)(12)(279)— (403)(718)
Recoveries of loans charged-off— 9 13 61 — 278 361 
Net loans (charged-off) recovered(6)(9)1 (218)— (125)(357)
Provision for (reversal of) loan losses(1)
(2,868)(58)(2,001)489 (1)38 (4,401)
Balance at end of period$5,626 $2,635 $41,785 $4,492 $46 $526 $55,110 
 Nine Months Ended September 30, 2020
 Real Estate    
 Construction
1-4 Family
Residential
Commercial
Commercial
Loans
Municipal
Loans
Loans to
Individuals
Total
Balance at beginning of period$3,539 $3,833 $9,572 $6,351 $570 $932 $24,797 
Impact of CECL adoption - cumulative effect adjustment2,968 (1,447)7,730 (3,532)(522)(125)5,072 
Impact of CECL adoption - purchased loans with credit deterioration(15)(6)333 (22)— (59)231 
Loans charged-off(39)(74)(33)(800)— (1,313)(2,259)
Recoveries of loans charged-off11 29 94 191 — 923 1,248 
Net loans (charged-off) recovered(28)(45)61 (609)— (390)(1,011)
Provision for (reversal of) loan losses(1)
(838)300 24,089 2,304 (2)168 26,021 
Balance at end of period$5,626 $2,635 $41,785 $4,492 $46 $526 $55,110 
 Three Months Ended September 30, 2019
 Real Estate    
 Construction
1-4 Family
Residential
Commercial
Commercial
Loans
Municipal
Loans
Loans to
Individuals
Total
Balance at beginning of period$3,599 $3,522 $10,534 $5,546 $530 $974 $24,705 
Loans charged-off— (24)— (394)— (582)(1,000)
Recoveries of loans charged-off12 40 21 82 — 264 419 
Net loans (charged-off) recovered12 16 21 (312)— (318)(581)
Provision for (reversal of) loan losses (35)18 27 618 17 360 1,005 
Balance at end of period$3,576 $3,556 $10,582 $5,852 $547 $1,016 $25,129 
Nine Months Ended September 30, 2019
Real Estate
Construction
1-4 Family
Residential
Commercial
Commercial
Loans
Municipal
Loans
Loans to
Individuals
Total
Balance at beginning of period$3,597 $3,844 $13,968 $3,974 $525 $1,111 $27,019 
Loans charged-off— (42)(2,876)(975)— (1,789)(5,682)
Recoveries of loans charged-off12 46 59 235 — 847 1,199 
Net loans (charged-off) recovered12 4 (2,817)(740)— (942)(4,483)
Provision for (reversal of) loan losses(33)(292)(569)2,618 22 847 2,593 
Balance at end of period$3,576 $3,556 $10,582 $5,852 $547 $1,016 $25,129 

(1)    The increase in the provision for credit losses during 2020 was primarily due to the economic impact of COVID-19 on macroeconomic factors used in the CECL methodology.