Loans and Related Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2020

Loans and Related Allowance for Credit Losses [Abstract]

Loan Portfolio by Class

The following table presents the loan portfolio by class at June 30, 2020 and December 31, 2019.

(Dollars in thousands)
	June 30, 2020		December 31, 2019
Commercial, financial and agricultural	$	76,364	$	51,785
Real estate - commercial		123,581		126,613
Real estate - construction		54,000		46,459
Real estate - mortgage		143,136		150,538
Obligations of states and political subdivisions		16,390		16,377
Personal		7,125		8,818
Total	$	420,596	$	400,590

Allowance for Loan Losses and Recorded Investments in Loans Receivable

The following table summarizes the activity in the allowance for loan losses by loan class, for the three and six months ended June 30, 2020 and 2019.

(Dollars in thousands)							Obligations
	Commercial,						of states
	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
Three Months Ended
June 30, 2020
Balance, beginning of period	$	433	$	758	$	904	$	23	$	1,147	$	68	$	3,333
Provision for loan losses		(122)		120		203		(1)		4		(8)		196
Charge-offs		—		—		—		—		(4)		(3)		(7)
Recoveries		—		—		30		—		2		4		36
Balance, end of period	$	311	$	878	$	1,137	$	22	$	1,149	$	61	$	3,558
June 30, 2019
Balance, beginning of period	$	283	$	1,043	$	572	$	21	$	1,005	$	70	$	2,994
Provision for loan losses		(10)		(312)		(177)		1		16		23		(459)
Charge-offs		—		—		—		—		(2)		(26)		(28)
Recoveries		1		307		193		—		—		7		508
Balance, end of period	$	274	$	1,038	$	588	$	22	$	1,019	$	74	$	3,015
Six Months Ended
June 30, 2020
Balance, beginning of period	$	321	$	754	$	718	$	17	$	1,081	$	70	$	2,961
Provision for loan losses		(10)		124		357		5		69		7		552
Charge-offs		—		—		—		—		(4)		(24)		(28)
Recoveries		—		—		62		—		3		8		73
Balance, end of period	$	311	$	878	$	1,137	$	22	$	1,149	$	61	$	3,558
June 30, 2019
Balance, beginning of period	$	275	$	1,074	$	558	$	20	$	1,035	$	72	$	3,034
Provision for loan losses		(4)		(335)		(163)		2		28		28		(444)
Charge-offs		—		(15)		—		—		(49)		(37)		(101)
Recoveries		3		314		193		—		5		11		526
Balance, end of period	$	274	$	1,038	$	588	$	22	$	1,019	$	74	$	3,015

(Dollars in thousands)							Obligations
	Commercial,						of states
	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
June 30, 2020
Loans allocated by:
individually evaluated for impairment	$	549	$	3,160	$	—	$	—	$	911	$	—	$	4,620
acquired with credit deterioration		—		354		—		—		663		—		1,017
collectively evaluated for impairment		75,815		120,067		54,000		16,390		141,562		7,125		414,959
	$	76,364	$	123,581	$	54,000	$	16,390	$	143,136	$	7,125	$	420,596
Allowance for loan losses allocated by:
individually evaluated for impairment	$	—	$	—	$	—	$	—	$	2	$	—	$	2
acquired with credit deterioration		—		—		—		—		—		—		—
collectively evaluated for impairment		311		878		1,137		22		1,147		61		3,556
	$	311	$	878	$	1,137	$	22	$	1,149	$	61	$	3,558
December 31, 2019
Loans allocated by:
individually evaluated for impairment	$	—	$	1,206	$	—	$	—	$	1,296	$	14	$	2,516
acquired with credit deterioration		—		366		—		—		704		—		1,070
collectively evaluated for impairment		51,785		125,041		46,459		16,377		148,538		8,804		397,004
	$	51,785	$	126,613	$	46,459	$	16,377	$	150,538	$	8,818	$	400,590
Allowance for loan losses allocated by:
individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
acquired with credit deterioration		—		—		—		—		—		—		—
collectively evaluated for impairment		321		754		718		17		1,081		70		2,961
	$	275	$	1,074	$	558	$	20	$	1,035	$	72	$	2,961

Impaired Loans by Loan Portfolio Class

The following table summarizes information regarding impaired loans by portfolio class as of June 30, 2020 and December 31, 2019.

(Dollars in thousands)	As of June 30, 2020						As of December 31, 2019
	Recorded		Unpaid Principal		Related		Recorded		Unpaid Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans
With no related allowance recorded:
Commercial, financial and agricultural	$	549	$	549	$	—	$	—	$	—	$	—
Real estate - commercial		3,160		3,304		—		1,206		1,304		—
Acquired with credit deterioration		354		390		—		366		395		—
Real estate – construction		—		1,029		—		—		1,054		—
Real estate - mortgage		790		1,523		—		1,296		2,006		—
Acquired with credit deterioration		663		825		—		704		840		—
Personal		—		—		—		14		14		—
With an allowance recorded:
Real estate - mortgage	$	121	$	120	$	2	$	—	$	—	$	—
Total:
Commercial, financial and agricultural	$	549	$	549	$	—	$	—	$	—	$	—
Real estate - commercial		3,160		3,304		—		1,206		1,304		—
Acquired with credit deterioration		354		390		—		366		395		—
Real estate - construction		—		1,029		—		—		1,054		—
Real estate – mortgage		911		1,643		2		1,296		2,006		—
Acquired with credit deterioration		663		825		—		704		840		—
Personal		—		—		—		14		14		—
	$	5,637	$	7,740	$	2	$	3,586	$	5,613	$	—

(Dollars in thousands)	Three Months Ended June 30, 2020						Three Months Ended June 30, 2019
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Income		Investment		Recognized		Income
Impaired loans
With no related allowance recorded:
Commercial, financial and agricultural	$	581	$	—	$	—	$	382	$	22	$	—
Real estate - commercial		3,412		5		8		1,228		32		—
Acquired with credit deterioration		354		—		—		458		—		—
Real estate - mortgage		877		4		11		1,291		4		11
Acquired with credit deterioration		668		—		—		860		—		—
Personal		—		—		—		14		—		—
With an allowance recorded:
Real estate - mortgage	$	121	$	—	$	—	$	—	$	—	$	—
Total:
Commercial, financial and agricultural	$	581	$	—	$	—	$	382	$	22	$	—
Real estate - commercial		3,412		5		8		1,228		32		—
Acquired with credit deterioration		354		—		—		458		—		—
Real estate - construction		—		—		—		—		—		—
Real estate - mortgage		998		4		11		1,291		4		11
Acquired with credit deterioration		668		—		—		860		—		—
Personal		—		—		—		14		—		—
	$	6,013	$	9	$	19	$	4,233	$	58	$	11

(Dollars in thousands)	Six Months Ended June 30, 2020						Six Months Ended June 30, 2019
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Income		Investment		Recognized		Income
Impaired Loans
With no related allowance recorded:
Commercial, financial and agricultural	$	384	$	—	$	—	$	382	$	22	$	—
Real estate - commercial		2,746		10		20		1,076		35		—
Acquired with credit deterioration		357		—		—		465		—		—
Real estate - construction		—		—		—		14		—		—
Real estate - mortgage		1,010		8		22		1,226		9		23
Acquired with credit deterioration		678		—		—		874		—		—
Personal		5		—		—		16		—		—
With an allowance recorded:
Real estate - mortgage	$	121	$	—	$	—	$	—	$	—	$	—
Total:
Commercial, financial and agricultural	$	384	$	—	$	—	$	382	$	22	$	—
Real estate - commercial		2,746		10		20		1,076		35		—
Acquired with credit deterioration		357		—		—		465		—		—
Real estate - construction		—		—		—		14		—		—
Real estate - mortgage		1,131		8		22		1,226		9		23
Acquired with credit deterioration		678		—		—		874		—		—
Personal		5		—		—		16		—		—
	$	5,301	$	18	$	42	$	4,053	$	66	$	23

Nonaccrual Loans by Classes of the Loan Portfolio

The following table presents nonaccrual loans by classes of the loan portfolio as of June 30, 2020 and December 31, 2019.

(Dollars in thousands)
	June 30, 2020		December 31, 2019
Non-accrual loans:
Commercial, financial and agricultural	$	549	$	—
Real estate - commercial		2,861		903
Real estate - mortgage		534		902
Personal		—		14
Total	$	3,944	$	1,819

Loan Portfolio Summarized by the Past Due Status

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. Past due status is determined by the contractual terms of the loan. The following tables present the classes of the loan portfolio summarized by the past due status as of June 30, 2020 and December 31, 2019.

													Loans
													Past Due
													Greater
(Dollars in thousands)							Greater						than 89
			30‑59 Days		60‑89 Days		than 89		Total Past				Days and
	Current		Past Due(2)		Past Due		Days		Due		Total Loans		Accruing(1)
As of June 30, 2020
Commercial, financial and agricultural	$	76,355	$	—	$	—	$	9	$	9	$	76,364	$	—
Real estate - commercial		123,127		54		1		45		100		123,227		—
Real estate - construction		54,000		—		—		—		—		54,000		—
Real estate - mortgage		141,689		149		190		445		784		142,473		133
Obligations of states and political subdivisions		16,390		—		—		—		—		16,390		—
Personal		7,121		—		4		—		4		7,125		—
Subtotal		418,682		203		195		499		897		419,579		133
Loans acquired with credit deterioration
Real estate - commercial		354		—		—		—		—		354		—
Real estate - mortgage		570		—		—		93		93		663		93
Subtotal		924		—		—		93		93		1,017		93
	$	419,606	$	203	$	195	$	592	$	990	$	420,596	$	226

													Loans
													Past Due
													Greater
(Dollars in thousands)							Greater						than 89
			30‑59 Days		60‑89 Days		than 89		Total Past				Days and
	Current		Past Due(2)		Past Due		Days		Due		Total Loans		Accruing(1)
As of December 31, 2019
Commercial, financial and agricultural	$	51,725	$	60	$	—	$	—	$	60	$	51,785	$	—
Real estate - commercial		126,180		19		—		48		67		126,247		—
Real estate - construction		46,172		287		—		—		287		46,459		—
Real estate - mortgage		148,366		348		149		971		1,468		149,834		359
Obligations of states and political subdivisions		16,377		—		—		—		—		16,377		—
Personal		8,725		55		—		38		93		8,818		24
Subtotal		397,545		769		149		1,057		1,975		399,520		383
Loans acquired with credit deterioration
Real estate - commercial		366		—		—		—		—		366		—
Real estate - mortgage		330		371		—		3		374		704		3
Subtotal		696		371		—		3		374		1,070		3
	$	398,241	$	1,140	$	149	$	1,060	$	2,349	$	400,590	$	386

(1) These loans are guaranteed, or well-secured, and there is an effective means of collection in process.

(2) Loans are considered past due when the borrower is in arrears on two or more monthly payments.

Troubled Debt Restructurings on Financing Receivables

The following tables summarize information regarding troubled debt restructurings by loan portfolio class at June 30, 2020 and December 31, 2019.

(Dollars in thousands)
	Number of
	Contracts	Recorded Investment
As of June 30, 2020
Accruing troubled debt restructurings:
Real estate - commercial	1	$	302
Real estate - mortgage	7		377
	8	$	679

(Dollars in thousands)
	Number of
	Contracts	Recorded Investment
As of December 31, 2019
Accruing troubled debt restructurings:
Real estate - commercial	1	$	306
Real estate - mortgage	7		397
	8	$	703

Summary of Loans Whose Terms Have Been Modified

There were no loan terms modified resulting in troubled debt restructuring during the three and six months ended June 30, 2020, nor during the three months ended June 30, 2019. The following table lists the loan whose terms were modified resulting in a troubled debt restructuring during the six months ended June 30, 2019.

(Dollars in thousands)		Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding
	Contracts	Recorded Investment		Recorded Investment		Recorded Investment
Six months ended June 30, 2019
Accruing troubled debt restructurings:
Real estate - commercial	1	$	306	$	326	$	324
	1	$	306	$	326	$	324

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of June 30, 2020 and December 31, 2019. The increase in the special mention category at June 30, 2020 compared to December 31, 2019 was predominantly the result of downgrading two participated relationships totaling $10,495,000 from pass to special mention during the second quarter.

(Dollars in thousands)			Special
As of June 30, 2020	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	71,595	$	3,770	$	459	$	540	$	76,364
Real estate - commercial		108,947		8,775		3,843		2,016		123,581
Real estate - construction		44,420		7,625		1,955		—		54,000
Real estate - mortgage		141,251		311		1,515		59		143,136
Obligations of states and political subdivisions		16,390		—		—		—		16,390
Personal		7,125		—		—		—		7,125
Total	$	389,728	$	20,481	$	7,772	$	2,615	$	420,596

(Dollars in thousands)			Special
As of December 31, 2019	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	46,725	$	4,080	$	980	$	—	$	51,785
Real estate - commercial		113,851		5,668		7,046		48		126,613
Real estate - construction		44,954		287		1,218		—		46,459
Real estate - mortgage		148,164		327		1,951		96		150,538
Obligations of states and political subdivisions		16,377		—		—		—		16,377
Personal		8,804		—		14		—		8,818
Total	$	378,875	$	10,362	$	11,209	$	144	$	400,590