LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

12 Months Ended

Dec. 31, 2020

Loans in the accompanying consolidated balance sheets are classified as follows (in thousands):


	December 31, 2020		December 31, 2019
Real estate loans:
Construction	$	581,941	$	644,948
1-4 family residential	719,952		787,562
Commercial	1,295,746		1,250,208
Commercial loans	557,122		401,521
Municipal loans	409,028		383,960
Loans to individuals	93,990		100,005
Total loans	3,657,779		3,568,204
Less: Allowance for loan losses	49,006		24,797
Net loans	$	3,608,773	$	3,543,407

Summary of loans by credit quality indicators and origination year

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 Year												Revolving Loans Amortized Cost Basis		Total
	2020		2019		2018		2017		2016		Prior
Construction real estate:
Pass	$	155,693	$	180,536	$	76,090	$	55,636	$	3,191	$	8,297	$	101,793	$	581,236
Pass watch	—		—		—		—		23		—		—		23
Special mention	—		—		—		—		—		—		—		—
Substandard	—		382		62		—		—		58		—		502
Doubtful	—		—		—		—		—		180		—		180
Total construction real estate	$	155,693	$	180,918	$	76,152	$	55,636	$	3,214	$	8,535	$	101,793	$	581,941

1-4 family residential real estate:
Pass	$	154,003	$	114,063	$	70,621	$	55,557	$	57,680	$	255,003	$	2,833	$	709,760
Pass watch	—		—		—		—		267		564		—		831
Special mention	—		—		—		—		—		10		—		10
Substandard	1,473		—		135		427		1,588		5,134		96		8,853
Doubtful	—		—		—		36		103		359		—		498
Total 1-4 family residential real estate	$	155,476	$	114,063	$	70,756	$	56,020	$	59,638	$	261,070	$	2,929	$	719,952

Commercial real estate:
Pass	$	270,087	$	307,161	$	143,177	$	162,180	$	98,828	$	179,919	$	6,957	$	1,168,309
Pass watch	—		—		3,153		40,125		1,696		2,582		—		47,556
Special mention	4,555		33,020		7,041		140		4,531		7,850		—		57,137
Substandard	7,542		—		2,097		65		704		12,282		—		22,690
Doubtful	—		—		—		—		—		54		—		54
Total commercial real estate	$	282,184	$	340,181	$	155,468	$	202,510	$	105,759	$	202,687	$	6,957	$	1,295,746

Commercial loans:
Pass	$	313,688	$	47,446	$	20,386	$	7,505	$	3,392	$	6,142	$	140,018	$	538,577
Pass watch	2,599		1,318		2,410		1,981		—		—		370		8,678
Special mention	304		809		433		39		286		265		455		2,591
Substandard	405		1,081		473		7		—		—		4,417		6,383
Doubtful	310		53		475		54		1		—		—		893
Total commercial loans	$	317,306	$	50,707	$	24,177	$	9,586	$	3,679	$	6,407	$	145,260	$	557,122

Municipal loans:
Pass	$	72,542	$	68,132	$	33,735	$	61,170	$	25,387	$	148,062	$	—	$	409,028
Pass watch	—		—		—		—		—		—		—		—
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total municipal loans	$	72,542	$	68,132	$	33,735	$	61,170	$	25,387	$	148,062	$	—	$	409,028

Loans to individuals:
Pass	$	46,722	$	25,302	$	10,132	$	4,716	$	1,867	$	917	$	3,900	$	93,556
Pass watch	—		—		—		—		—		—		—		—
Special mention	—		—		51		—		—		—		4		55
Substandard	6		35		28		30		9		11		1		120
Doubtful	73		20		6		55		81		24		—		259
Total loans to individuals	$	46,801	$	25,357	$	10,217	$	4,801	$	1,957	$	952	$	3,905	$	93,990
Total loans	$	1,030,002	$	779,358	$	370,505	$	389,723	$	199,634	$	627,713	$	260,844	$	3,657,779

Aging of past due loans by class of loan

The following tables present the aging of the amortized cost basis in past due loans by class of loans (in thousands):


	December 31, 2020
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Total
Real estate loans:
Construction	$	95	$	14	$	444	$	553	$	581,388	$	581,941
1-4 family residential	7,872		2,469		2,830		13,171		706,781		719,952
Commercial	467		315		86		868		1,294,878		1,295,746
Commercial loans	1,423		4,516		323		6,262		550,860		557,122
Municipal loans	64		—		—		64		408,964		409,028
Loans to individuals	519		123		27		669		93,321		93,990
Total	$	10,440	$	7,437	$	3,710	$	21,587	$	3,636,192	$	3,657,779


	December 31, 2019
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 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 residential	8,788		1,077		1,607		11,472		776,090		787,562
Commercial	795		259		536		1,590		1,248,618		1,250,208
Commercial loans	1,917		722		651		3,290		398,231		401,521
Municipal loans	—		—		—		—		383,960		383,960
Loans to individuals	660		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, PCI loans were 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.

Nonperforming assets by asset class

The following table sets forth the amortized cost basis of nonperforming assets for the periods presented (in thousands):


	December 31, 2020		December 31, 2019
Nonaccrual loans:
Real estate loans:
Construction	$	640	$	405
1-4 family residential	3,922		2,611
Commercial	1,269		704
Commercial loans	1,592		944

Loans to individuals	291		299
Total nonaccrual loans (1)	7,714		4,963

Accruing loans past due more than 90 days	—		—
TDR loans(2)	9,646		12,014
OREO	106		472
Repossessed assets	14		—
Total nonperforming assets	$	17,480	$	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 $976,000 and $469,000 of restructured loans as of December 31, 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.

Troubled debt restructurings

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):


	December 31, 2020
	Extend Amortization Period		Interest Rate Reductions		Combination		Total Modifications		Number of Loans
Real estate loans:


Commercial	$	—	$	—	$	58	$	58	1
Commercial loans	51		—		390		441		6
Loans to individuals	—		—		22		22		1
Total	$	51	$	—	$	470	$	521	8


	December 31, 2019
	Extend Amortization Period		Interest Rate Reductions		Combination		Total Modifications		Number of Loans
Real estate loans:

1-4 family residential	$	—	$	—	$	121	$	121	2
Commercial	7,518		—		93		7,611		2
Commercial loans	52		—		1,143		1,195		9
Loans to individuals	4		—		24		28		5
Total	$	7,574	$	—	$	1,381	$	8,955	18


	December 31, 2018
	Extend Amortization Period		Interest Rate Reductions		Combination		Total Modifications		Number of Loans
Real estate loans:

1-4 family residential	$	—	$	79	$	—	$	79	1
Commercial	10,398		—		274		10,672		3
Commercial loans	211		—		215		426		13
Loans to individuals	8		33		51		92		5
Total	$	10,617	$	112	$	540	$	11,269	22

Allowance for loan losses activity by portfolio segment

The following tables detail activity in the allowance for loan losses by portfolio segment for the periods presented (in thousands):



	Year Ended December 31, 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 adjustment	2,968		(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	(40)		(152)		(33)		(823)		—		(1,806)		(2,854)
Recoveries of loans charged-off	28		32		102		310		—		1,178		1,650
Net loans (charged-off) recovered	(12)		(120)		69		(513)		—		(628)		(1,204)
Provision for (reversal of) loan losses(1)	10		10		18,005		1,823		(2)		264		20,110
Balance at end of period	$	6,490	$	2,270	$	35,709	$	4,107	$	46	$	384	$	49,006


	Year Ended December 31, 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	—		(126)		(5,247)		(1,162)		—		(2,398)		(8,933)
Recoveries of loans charged-off	12		68		113		250		—		1,167		1,610
Net loans (charged-off) recovered	12		(58)		(5,134)		(912)		—		(1,231)		(7,323)
Provision for (reversal of) loan losses	(70)		47		738		3,289		45		1,052		5,101
Balance at end of period	$	3,539	$	3,833	$	9,572	$	6,351	$	570	$	932	$	24,797


	Year Ended December 31, 2018
	Real Estate
	Construction		1-4 Family Residential		Commercial		Commercial Loans		Municipal Loans		Loans to Individuals		Total
Balance at beginning of period	$	3,676	$	2,445	$	10,821	$	2,094	$	860	$	885	$	20,781
Loans charged-off	(14)		(91)		(783)		(756)		—		(2,602)		(4,246)
Recoveries of loans charged-off	7		356		36		244		—		1,404		2,047
Net loans (charged-off) recovered	(7)		265		(747)		(512)		—		(1,198)		(2,199)
Provision for (reversal of) loan losses	(72)		1,134		3,894		2,392		(335)		1,424		8,437
Balance at end of period	$	3,597	$	3,844	$	13,968	$	3,974	$	525	$	1,111	$	27,019

(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.