Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2020

Allowance for Loan Losses

Schedule of changes in the allowance for loan losses

The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2020:

	Real Estate				Commercial,
	Residential		Real Estate		Financial &		Equity				Consumer
(Dollars in thousands)	Mortgage		Construction		Agricultural		Lines		Consumer		Finance		Total
Allowance for loan losses:
Balance at December 31, 2019	$	2,080	$	681	$	7,121	$	733	$	465	$	21,793	$	32,873
Provision charged to operations		285		302		1,724		56		33		3,850		6,250
Loans charged off		(4)		—		(18)		—		(133)		(5,422)		(5,577)
Recoveries of loans previously charged off		64		—		2		—		105		2,377		2,548
Balance at June 30, 2020	$	2,425	$	983	$	8,829	$	789	$	470	$	22,598	$	36,094

The following table presents the changes in the allowance for loan losses by major classification during the six months ended June 30, 2019:

	Real Estate				Commercial,
	Residential		Real Estate		Financial &		Equity				Consumer
(Dollars in thousands)	Mortgage		Construction		Agricultural		Lines		Consumer		Finance		Total
Allowance for loan losses:
Balance at December 31, 2018	$	2,246	$	727	$	6,688	$	1,106	$	257	$	22,999	$	34,023
Provision (credited) charged to operations		(68)		23		218		(225)		162		4,095		4,205
Loans charged off		(45)		—		(29)		—		(162)		(6,966)		(7,202)
Recoveries of loans previously charged off		9		—		3		—		115		2,248		2,375
Balance at June 30, 2019	$	2,142	$	750	$	6,880	$	881	$	372	$	22,376	$	33,401

Schedule of balance of the allowance for loan losses and the balance of loans by impairment methodology

The following table presents, as of June 30, 2020, the balance of the allowance for loan losses and the balance of loans by impairment methodology.

	Real Estate				Commercial,
	Residential		Real Estate		Financial &		Equity				Consumer
(Dollars in thousands)	Mortgage		Construction		Agricultural		Lines		Consumer		Finance		Total
Allowance balance attributable to loans:
Individually evaluated for impairment	$	69	$	—	$	72	$	—	$	107	$	—	$	248
Collectively evaluated for impairment		2,356		983		8,757		789		363		22,598		35,846
Acquired loans - PCI		—		—		—		—		—		—		—
Total allowance	$	2,425	$	983	$	8,829	$	789	$	470	$	22,598	$	36,094
Loans:
Individually evaluated for impairment	$	2,749	$	—	$	1,401	$	113	$	114	$	—	$	4,377
Collectively evaluated for impairment		200,448		72,094		675,964		52,508		15,119		300,649		1,316,782
Acquired loans - PCI		1,814		—		5,452		76		489		—		7,831
Total loans	$	205,011	$	72,094	$	682,817	$	52,697	$	15,722	$	300,649	$	1,328,990

The following table presents, as of December 31, 2019, the balance of the allowance for loan losses, the allowance by impairment methodology, total loans and loans by impairment methodology.

	Real Estate				Commercial,
	Residential		Real Estate		Financial &		Equity				Consumer
(Dollars in thousands)	Mortgage		Construction		Agricultural		Lines		Consumer		Finance		Total
Allowance balance attributable to loans:
Individually evaluated for impairment	$	72	$	—	$	77	$	—	$	118	$	—	$	267
Collectively evaluated for impairment		2,008		681		7,044		733		347		21,793		32,606
Acquired loans - PCI		—		—		—		—		—		—		—
Total allowance	$	2,080	$	681	$	7,121	$	733	$	465	$	21,793	$	32,873
Loans:
Individually evaluated for impairment	$	3,671	$	—	$	1,451	$	31	$	121	$	—	$	5,274
Collectively evaluated for impairment		177,517		54,246		498,798		52,017		13,635		312,999		1,109,212
Acquired loans - PCI		107		—		563		35		—		—		705
Total loans	$	181,295	$	54,246	$	500,812	$	52,083	$	13,756	$	312,999	$	1,115,191

Schedule of loans by credit quality indicators

Loans by credit quality indicators as of June 30, 2020 were as follows:

			Special				Substandard
(Dollars in thousands)	Pass		Mention		Substandard		Nonaccrual		Total1
Real estate – residential mortgage	$	201,678	$	1,511	$	842	$	980	$	205,011
Real estate – construction:
Construction lending		56,382		—		—		—		56,382
Consumer lot lending		15,712		—		—		—		15,712
Commercial, financial and agricultural:
Commercial real estate lending		393,105		26,125		2,453		—		421,683
Land acquisition and development lending		30,575		7,546		—		—		38,121
Builder line lending		22,172		—		—		—		22,172
Commercial business lending		196,755		4,086		—		—		200,841
Equity lines		52,340		105		8		244		52,697
Consumer		15,119		61		—		542		15,722
	$	983,838	$	39,434	$	3,303	$	1,766	$	1,028,341

1 At June 30, 2020, the Corporation did not have any loans classified as Doubtful or Loss.

Included in the table above are loans purchased in connection with the acquisition of Peoples of $93.84 million pass rated, $1.77 million special mention, $2.91 million substandard and $427,000 substandard nonaccrual.

			Non-
(Dollars in thousands)	Performing		Performing		Total
Consumer finance	$	300,280	$	369	$	300,649

Loans by credit quality indicators as of December 31, 2019 were as follows:

			Special				Substandard
(Dollars in thousands)	Pass		Mention		Substandard		Nonaccrual		Total1
Real estate – residential mortgage	$	177,049	$	1,839	$	881	$	1,526	$	181,295
Real estate – construction:
Construction lending		40,943		—		—		—		40,943
Consumer lot lending		13,303		—		—		—		13,303
Commercial, financial and agricultural:
Commercial real estate lending		323,218		3,266		70		—		326,554
Land acquisition and development lending		33,870		9,021		—		—		42,891
Builder line lending		25,995		378		—		—		26,373
Commercial business lending		104,291		692		—		11		104,994
Equity lines		51,662		181		11		229		52,083
Consumer		13,632		6		—		118		13,756
	$	783,963	$	15,383	$	962	$	1,884	$	802,192

1 At December 31, 2019, the Corporation did not have any loans classified as Doubtful or Loss.

			Non-
(Dollars in thousands)	Performing		Performing		Total
Consumer finance	$	312,388	$	611	$	312,999