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Credit Quality of Loans and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2017
Receivables [Abstract]  
Components of Loans Receivable
The loan portfolio consisted of the following (in thousands):
 
 
September 30, 2017
 
December 31, 2016
Commercial, financial and agricultural
 
$
447,482

 
$
459,574

Real estate – construction
 
90,088

 
100,959

Real estate – commercial
 
473,046

 
481,155

Real estate – residential
 
155,676

 
157,872

Installment loans to individuals
 
63,148

 
82,660

Lease financing receivable
 
760

 
1,095

Other
 
5,769

 
767

 
 
1,235,969

 
1,284,082

Less allowance for loan losses
 
(25,053
)
 
(24,372
)
 
 
$
1,210,916

 
$
1,259,710
Roll Forward of Activity in Allowance for Loan Losses
A rollforward of the activity within the allowance for loan losses by loan type and recorded investment in loans for the nine months ended September 30, 2017 and 2016 is as follows (in thousands):
 
 
 
September 30, 2017
 
 
 
 
Real Estate
 
 
 
 
 
 
 
 
 
 
Coml, Fin,
and Agric
 
Construction
 
Commercial
 
Residential
 
Installment
loans to
individuals
 
Lease
financing
receivable
 
Other
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
16,057

 
$
585

 
$
5,384

 
$
940

 
$
1,395

 
$
5

 
$
6

 
$
24,372

Charge-offs
 
(15,106
)
 
(70
)
 
(3,618
)
 
(293
)
 
(860
)
 
—

 
—

 
(19,947
)
Recoveries
 
537

 
—

 
158

 
97

 
235

 
—

 
—

 
1,027

Provision
 
17,413

 
28

 
2,024

 
(40
)
 
159

 
(1
)
 
18

 
19,601

Ending balance
 
$
18,901

 
$
543

 
$
3,948

 
$
704

 
$
929

 
$
4

 
$
24

 
$
25,053

Ending balance: individually evaluated for impairment
 
$
3,254

 
$
17

 
$
904

 
$
7

 
$
69

 
$
1

 
$
—

 
$
4,252

Ending balance: collectively evaluated for impairment
 
$
15,647

 
$
526

 
$
3,044

 
$
697

 
$
860

 
$
3

 
$
24

 
$
20,801

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
447,482

 
$
90,088

 
$
473,046

 
$
155,676

 
$
63,148

 
$
760

 
$
5,769

 
$
1,235,969

Ending balance: individually evaluated for impairment
 
$
30,892

 
$
2,416

 
$
18,132

 
$
1,031

 
$
338

 
$
34

 
$
—

 
$
52,843

Ending balance: collectively evaluated for impairment
 
$
416,590

 
$
87,672

 
$
454,488

 
$
154,582

 
$
62,810

 
$
726

 
$
5,769

 
$
1,182,637

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
426

 
$
63

 
$
—

 
$
—

 
$
—

 
$
489

 
 
September 30, 2016
 
 
 
 
Real Estate
 
 
 
 
 
 
 
 
 
 
Coml, Fin,
and Agric
 
Construction
 
Commercial
 
Residential
 
Installment
loans to
individuals
 
Lease
financing
receivable
 
Other
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
11,268

 
$
819

 
$
4,614

 
$
816

 
$
1,468

 
$
14

 
$
12

 
$
19,011

Charge-offs
 
(2,957
)
 
—

 
(208
)
 
(24
)
 
(991
)
 
—

 
—

 
(4,180
)
Recoveries
 
193

 
—

 
115

 
4

 
125

 
—

 
—

 
437

Provision
 
6,747

 
(478
)
 
1,042

 
(97
)
 
781

 
(5
)
 
10

 
8,000

Ending balance
 
$
15,251

 
$
341

 
$
5,563

 
$
699

 
$
1,383

 
$
9

 
$
22

 
$
23,268

Ending balance: individually evaluated for impairment
 
$
1,105

 
$
—

 
$
2,270

 
$
194

 
$
268

 
$
—

 
$
—

 
$
3,837

Ending balance: collectively evaluated for impairment
 
$
14,146

 
$
341

 
$
3,293

 
$
505

 
$
1,115

 
$
9

 
$
22

 
$
19,431

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
463,031

 
$
96,365

 
$
464,853

 
$
155,653

 
$
88,537

 
$
1,449

 
$
2,912

 
$
1,272,800

Ending balance: individually evaluated for impairment
 
$
29,887

 
$
10

 
$
28,285

 
$
1,831

 
$
464

 
$
—

 
$
—

 
$
60,477

Ending balance: collectively evaluated for impairment
 
$
433,144

 
$
96,355

 
$
435,985

 
$
153,747

 
$
88,073

 
$
1,449

 
$
2,912

 
$
1,211,665

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
583

 
$
75

 
$
—

 
$
—

 
$
—

 
$
658
Age Analysis of Past Due Loans by Class of Loans
An age analysis of past due loans (including both accruing and non-accruing loans) is as follows (in thousands):
 
 
September 30, 2017
 
 
30-59
Days
Past Due
 
60-89
Days
Past
Due
 
Greater
than 90
Days
Past Due
 
Total
Past
Due
 
Current
 
Total Loans
 
Recorded
Investment
> 90 days
 and
Accruing
Commercial, financial, and agricultural
 
$
2,144

 
$
512

 
$
27,161

 
$
29,817

 
$
417,665

 
$
447,482

 
$
384

Real estate - construction
 
335

 
350

 
2,416

 
3,101

 
86,987

 
90,088

 
—

Real estate - commercial
 
1,804

 
—

 
9,749

 
11,553

 
461,493

 
473,046

 
—

Real estate - residential
 
2,467

 
28

 
898

 
3,393

 
152,283

 
155,676

 
—

Installment loans to individuals
 
408

 
173

 
215

 
796

 
62,352

 
63,148

 
18

Lease financing receivable
 
33

 
—

 
—

 
33

 
727

 
760

 
—

Other loans
 
79

 
12

 
—

 
91

 
5,678

 
5,769

 
—

 
 
$
7,270

 
$
1,075

 
$
40,439

 
$
48,784

 
$
1,187,185

 
$
1,235,969

 
$
402

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
30-59
Days
Past Due
 
60-89
Days
Past
Due
 
Greater
than 90
Days
Past Due
 
Total
Past
Due
 
Current
 
Total Loans
 
Recorded
Investment
> 90 days
and
Accruing
Commercial, financial, and agricultural
 
$
2,297

 
$
902

 
$
31,425

 
$
34,624

 
$
424,950

 
$
459,574

 
$
96

Real estate - construction
 
2,613

 
399

 
9

 
3,021

 
97,938

 
100,959

 
—

Real estate - commercial
 
5,159

 
1,931

 
25,408

 
32,498

 
448,657

 
481,155

 
140

Real estate - residential
 
1,956

 
207

 
1,553

 
3,716

 
154,156

 
157,872

 
16

Installment loans to individuals
 
756

 
36

 
538

 
1,330

 
81,330

 
82,660

 
16

Lease financing receivable
 
—

 
—

 
—

 
—

 
1,095

 
1,095

 
—

Other loans
 
89

 
5

 
—

 
94

 
673

 
767

 
—

 
 
$
12,870

 
$
3,480

 
$
58,933

 
$
75,283

 
$
1,208,799

 
$
1,284,082

 
$
268
Schedule of Loans on Nonaccrual Status
Non-accrual loans are as follows (in thousands):
 
 
 
September 30, 2017
 
December 31, 2016
Commercial, financial, and agricultural
 
$
29,337

 
$
31,461

Real estate - construction
 
2,416

 
9

Real estate - commercial
 
18,132

 
28,688

Real estate - residential
 
1,032

 
1,881

Installment loans to individuals
 
339

 
541

Lease financing receivable
 
33

 
—

Other
 
—

 
—

 
 
$
51,289

 
$
62,580
Schedule of Loans Evaluated for Impairment
The following table presents loans that are individually evaluated for impairment (in thousands). Interest income recognized represents interest on accruing loans modified in a TDR.
 
 
September 30, 2017
 
 
Recorded
Investment
 
Unpaid Principal Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
 
$
19,853

 
$
22,105

 
$
—

 
$
17,477

 
$
61

Real estate - construction
 
2,366

 
2,366

 
—

 
1,188

 
—

Real estate - commercial
 
15,371

 
17,820

 
—

 
14,040

 
—

Real estate - residential
 
587

 
587

 
—

 
745

 
—

Installment loans to individuals
 
91

 
91

 
—

 
82

 
—

Finance leases
 
—

 
—

 
—

 
—

 
—

Subtotal:
 
38,268

 
42,969

 
—

 
33,532

 
61

With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

Commercial, financial, and agricultural
 
11,039

 
12,071

 
3,254

 
13,706

 
1

Real estate - construction
 
50

 
120

 
17

 
25

 
—

Real estate - commercial
 
2,761

 
2,761

 
904

 
9,370

 
—

Real estate - residential
 
445

 
445

 
7

 
684

 
—

Installment loans to individuals
 
247

 
278

 
69

 
357

 
—

Finance leases
 
33

 
33

 
1

 
17

 
—

Subtotal:
 
14,575

 
15,708

 
4,252

 
24,159

 
1

Totals:
 
 

 
 

 
 

 
 

 
 

Commercial
 
49,057

 
54,790

 
4,159

 
54,610

 
62

Construction
 
2,416

 
2,486

 
17

 
1,213

 
—

Residential
 
1,032

 
1,032

 
7

 
1,429

 
—

Consumer
 
338

 
369

 
69

 
439

 
—

Grand total:
 
$
52,843

 
$
58,677

 
$
4,252

 
$
57,691

 
$
62

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
 
$
15,101

 
$
15,428

 
$
—

 
$
18,815

 
$
90

Real estate - construction
 
9

 
9

 
—

 
23

 
—

Real estate - commercial
 
12,710

 
12,710

 
—

 
9,297

 
14

Real estate - residential
 
903

 
903

 
—

 
1,134

 
—

Installment loans to individuals
 
73

 
87

 
—

 
54

 
—

Subtotal:
 
28,796

 
29,137

 
—

 
29,323

 
104

With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

Commercial, financial, and agricultural
 
16,372

 
16,470

 
4,369

 
10,781

 
1

Real estate - commercial
 
15,979

 
15,979

 
2,216

 
14,992

 
—

Real estate - residential
 
923

 
923

 
260

 
730

 
—

Installment loans to individuals
 
468

 
478

 
308

 
419

 
—

Subtotal:
 
33,742

 
33,850

 
7,153

 
26,922

 
1

Totals:
 
 

 
 

 
 

 
 

 
 

Commercial
 
60,162

 
60,587

 
6,585

 
53,885

 
105

Construction
 
9

 
9

 
—

 
23

 
—

Residential
 
1,826

 
1,826

 
260

 
1,864

 
—

Consumer
 
541

 
565

 
308

 
473

 
—

Grand total:
 
$
62,538

 
$
62,987

 
$
7,153

 
$
56,245

 
$
105
Credit Quality Indicators by Class of Loans
The following tables present the classes of loans by risk rating (in thousands):
 
 
 
  
 
September 30, 2017
Commercial Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial,
financial, and
agricultural
 
Real estate - commercial
 
Total
 
% of Total
Pass
 
 
 
 
 
$
345,629

 
$
421,071

 
$
766,700

 
83.29
%
Special mention
 
 
 
 
 
15,321

 
8,654

 
23,975

 
2.60
%
Substandard
 
 
 
 
 
86,523

 
43,321

 
129,844

 
14.11
%
Doubtful
 
 
 
 
 
9

 
—

 
9

 
—
%
 
 
 
 
 
 
$
447,482

 
$
473,046

 
$
920,528

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
 
% of Total
Pass
 
 
 
 
 
 
 
 
 
$
85,295

 
94.68
%
Special mention
 
 
 
 
 
 
 
 
 
1,834

 
2.04
%
Substandard
 
 
 
 
 
 
 
 
 
2,959

 
3.28
%
 
 
 
 
 
 
 
 
 
 
$
90,088

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile by
Creditworthiness Category
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 

 
 
 
 
 
Real estate - residential
 
% of Total
Pass
 
 
 
 

 


 
 
 
$
149,548

 
96.06
%
Special mention
 
 
 
 

 


 
 
 
1,839

 
1.18
%
Substandard
 
 
 
 

 
 
 
 
 
4,289

 
2.76
%
 
 
 
 
 

 


 
 
 
$
155,676

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and Other Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile Based on
Payment Activity
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Installment loans to individuals
 
Lease
financing
receivable
 
Other
 
Total
 
% of Total
Performing
 
 
 
$
62,791

 
$
727

 
$
5,769

 
$
69,287

 
99.44
%
Nonperforming
 

 
357

 
33

 
—

 
390

 
0.56
%
 
 

 
$
63,148

 
$
760

 
$
5,769

 
$
69,677

 
100.00
%
 
 
December 31, 2016
Commercial Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial,
financial, and
agricultural
 
Real estate - commercial
 
Total
 
%
of Total
Pass
 
 
 
 
 
$
346,246

 
$
420,970

 
$
767,216

 
81.56
%
Special mention
 
 
 
 
 
22,611

 
23,085

 
45,696

 
4.86
%
Substandard
 
 
 
 
 
90,300

 
37,100

 
127,400

 
13.54
%
Doubtful
 
 
 
 
 
417

 
—

 
417

 
0.04
%
 
 
 
 
 
 
$
459,574

 
$
481,155

 
$
940,729

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
 
%
of Total
Pass
 
 
 
 
 
 
 
 
 
$
100,775

 
99.82
%
Special mention
 
 
 
 
 
 
 
 
 
—

 
—
%
Substandard
 
 
 
 
 
 
 
 
 
184

 
0.18
%
 
 
 
 
 
 
 
 
 
 
$
100,959

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile by
Creditworthiness Category
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 

 
 
 
 
 
Real estate - residential
 
%
of Total
Pass
 
 
 
 

 
 
 


 
$
153,403

 
97.17
%
Special mention
 
 
 
 

 
 
 


 
1,181

 
0.75
%
Substandard
 
 
 
 

 
 
 


 
3,288

 
2.08
%
 
 
 
 
 

 
 
 


 
$
157,872

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and Other Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile Based on
Payment Activity
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Installment loans to individuals
 
Lease
financing
receivable
 
Other
 
Total
 
%
of Total
Performing
 

 
$
82,103

 
$
1,095

 
$
767

 
$
83,965

 
99.34
%
Nonperforming
 

 
557

 
—

 
—

 
557

 
0.66
%
 
 

 
$
82,660

 
$
1,095

 
$
767

 
$
84,522

 
100.00
%
Schedule of Modified Troubled Debt Restructurings During the Period
The following tables present information about TDRs that were modified during the periods presented by portfolio segment:

 
 
Three months ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Number of loans
 
Pre-modification recorded investment
 
Number of loans
 
Pre-modification recorded investment
Commercial, financial and agricultural
 
1

 
$
18

 
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Nine months ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Number of loans
 
Pre-modification recorded investment
 
Number of loans
 
Pre-modification recorded investment
Commercial, financial and agricultural
 
6

 
$
2,002

 
2

 
$
3,943

Real estate – commercial
 
—

 
—

 
2

 
1,572

 
 
6

 
$
2,002

 
4

 
$
5,515
Schedule of Defaults on Troubled Debt Restructurings
The following table presents TDRs that had a payment default during the three and nine-month periods ending September 30, 2017 and 2016, and that were modified within the previous 12 months. The Company defines a payment default as any loan that is greater than 30 days past due or was past due greater than 30 days at any point during the reporting period, or since the date of modification, whichever is shorter.

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2017
 
2016
 
2017
 
2016
 
 
Recorded Investment
 
Recorded Investment
 
Recorded Investment
 
Recorded Investment
Commercial, financial and agricultural
 
$
18

 
$
—

 
$
18

 
$
3,943

Real estate – commercial
 
—

 
—

 
—

 
1,572

 
 
$
18

 
$
—

 
$
18

 
$
5,515