Allowance for Loans Losses (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Summary of Allowance for Loans Losses

A summary of changes in the allowance for loans losses for the nine months ended September 30, 2020 and year ended December 31, 2019 is as follows:

	September 30, 2020			December 31, 2019
(in thousands)
Allowance, beginning of period	$	4,572		$	3,580
Charge-Offs
Commercial and industrial	$	—		$	(43	)
Real estate, mortgage		—			(4	)
Consumer and other loans		(787	)		(914	)
Total charge-offs		(787	)		(961	)
Recoveries
Commercial and industrial	$	34		$	—
Real estate, mortgage		—			6
Consumer and other loans		229			205
Total recoveries		263			211
Net charge-offs		(524	)		(750	)
Provision for loan losses		8,075			1,742
Allowance, end of period	$	12,123		$	4,572

Summary of Loan Portfolio Individually and Collectively Evaluated for Impairment

(in thousands)	Individually Evaluated for Impairment		Collectively Evaluated for Impairment			Total
September 30, 2020
Commercial and industrial	$	490	$	444,228		$	444,718
Real Estate – construction, commercial		—		49,884			49,884
Real Estate – construction, residential		—		19,001			19,001
Real Estate – mortgage, commercial		335		272,443			272,778
Real Estate – mortgage, residential		624		210,055			210,679
Real Estate – mortgage, farmland		—		4,176			4,176
Consumer installment loans		—		45,144			45,144
Gross loans		1,449		1,044,931			1,046,380
Less: Unearned income		—		(7,200	)		(7,200	)
Total	$	1,449	$	1,037,731		$	1,039,180
(in thousands)	Individually Evaluated for Impairment		Collectively Evaluated for Impairment			Total
December 31, 2019
Commercial and industrial	$	280	$	77,448		$	77,728
Real Estate – construction, commercial		—		38,039			38,039
Real Estate – construction, residential		—		26,778			26,778
Real Estate – mortgage, commercial		733		251,091			251,824
Real Estate – mortgage residential		395		208,099			208,494
Real Estate – mortgage, farmland		—		5,507			5,507
Consumer installment loans		—		39,202			39,202
Gross loans		1,408		646,164			647,572
Less: Unearned income		—		(738	)		(738	)
Total	$	1,408	$	645,426		$	646,834

Summary of Impaired Financing Receivables

The following table presents information related to impaired loans, by portfolio segment, at the dates presented.

	September 30, 2020
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Real estate – mortgage, residential	$	624	$	624	$	—	$	696	$	28
With an allowance recorded:
Commercial and industrial		490		490		70		375		1
Real estate – mortgage, commercial		335		335		97		337		7
	$	1,449	$	1,449	$	167	$	1,408	$	36

Note 5 – Allowance for Loans Losses, continued

	December 31, 2019
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Real estate – mortgage, residential	$	395	$	395	$	—	$	527	$	7
With an allowance recorded:
Commercial and industrial		280		280		143		286		2
Real estate – mortgage, commercial		733		733		98		734		5
	$	1,408	$	1,408	$	241	$	1,547	$	14

Summary of Purchased Loans

The following table presents the recorded investment in the segments of the River Bancorp, Inc. purchased loans as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Real Estate
Construction loans and all land development and other land    loans	$	900	$	1,397
Revolving, open-end loans secured by 1-4 family residential    properties and extended under lines of credit		2,584		2,709
Secured by first liens		5,743		6,971
Secured by junior liens		380		394
Secured by multifamily (five or more) residential properties		55		63
Loans secured by owner-occupied, nonfarm nonresidential    properties		3,406		4,459
Loans secured by other nonfarm nonresidential properties		—		2,322
Commercial and Industrial		644		1,272
Other
Other revolving credit plans		19		26
Automobile loans		7		10
Other consumer loans		49		63
Total	$	13,787	$	19,686

Summary of Accounts Notes Loans and Financing Receivable

The following table presents the Company’s loan portfolio by internal loan grade (in thousands) as of September 30, 2020 and December 31, 2019:

	September 30, 2020
	Grade 1 Prime		Grade 2 Desirable		Grade 3 Good		Grade 4 Acceptable		Grade 5 Pass/Watch		Grade 6 Special Mention		Grade 7 Substandard		Total
Commercial and industrial	$	362,661	$	1,317	$	27,454	$	44,134	$	7,394	$	993	$	765	$	444,718
Real Estate – construction, commercial		—		2,250		25,833		20,709		157		—		935		49,884
Real Estate – construction, residential		—		—		4,282		8,999		5,720		—		—		19,001
Real Estate – mortgage, commercial		—		3,273		128,673		126,106		7,355		4,918		2,453		272,778
Real Estate – mortgage residential		—		3,366		103,548		95,987		5,945		154		1,679		210,679
Real Estate – mortgage, farmland		589		105		1,302		2,180		—		—		—		4,176
Consumer installment loans		285		36		17,332		26,638		194		4		655		45,144
Gross loans		363,535		10,347		308,424		324,753		26,765		6,069		6,487		1,046,380
Less: Unearned income																(7,200	)
Total															$	1,039,180
	December 31, 2019
	Grade 1 Prime		Grade 2 Desirable		Grade 3 Good		Grade 4 Acceptable		Grade 5 Pass/Watch		Grade 6 Special Mention		Grade 7 Substandard		Total
Commercial and industrial	$	1,509	$	1,042	$	35,180	$	37,458	$	568	$	1,488	$	483	$	77,728
Real Estate – construction, commercial		—		1,454		24,667		10,850		102		—		966		38,039
Real Estate – construction, residential		—		139		9,355		14,331		2,953		—		—		26,778
Real Estate – mortgage, commercial		—		4,971		118,488		114,598		9,273		1,935		2,559		251,824
Real Estate – mortgage residential		—		4,611		100,665		98,116		3,470		130		1,502		208,494
Real Estate – mortgage, farmland		1,467		134		1,736		2,170		—		—		—		5,507
Consumer installment loans		293		72		17,872		20,067		116		—		782		39,202
Gross loans		3,269		12,423		307,963		297,590		16,482		3,553		6,292		647,572
Less: Unearned income																(738	)
Total															$	646,834