Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2018

Loans Evaluated for Impairment Individually and Collectively by Segment

The following tables show loans evaluated for impairment individually and collectively by segment as of the dates stated.

June 30, 2018	Mortgage Loans on Real Estate		Commercial and Industrial		Consumer and Other		Total
Allowance for loan losses applicable to:
Loans individually evaluated for impairment	$	1,125	$	—	$	131	$	1,256
Loans collectively evaluated for impairment		3,119		944		1,794		5,857
Purchased credit impaired loans		—		—		—		—
Total allowance on loan losses	$	4,244	$	944	$	1,925	$	7,113
Loan balances applicable to:
Loans individually evaluated for impairment	$	8,037	$	—	$	131	$	8,168
Loans collectively evaluated for impairment		630,587		124,563		32,576		787,726
Purchased credit impaired loans		5,578		—		60		5,638
Total loans	$	644,202	$	124,563	$	32,767	$	801,532
December 31, 2017
Allowance for loan losses applicable to:
Loans individually evaluated for impairment	$	861	$	92	$	141	$	1,094
Loans collectively evaluated for impairment		3,003		786		2,887		6,676
Purchased credit impaired loans		—		—		—		—
Total allowance on loan losses	$	3,864	$	878	$	3,028	$	7,770
Loan balances applicable to:
Loans individually evaluated for impairment	$	8,874	$	92	$	141	$	9,107
Loans collectively evaluated for impairment		595,007		114,001		42,356		751,364
Purchased credit impaired loans		5,756		—		69		5,825
Total loans	$	609,637	$	114,093	$	42,566	$	766,296

ALL by Portfolio Segment

The following tables show an analysis of the change in the ALL by segment for the periods presented.

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Three Months Ended June 30, 2018
Beginning Balance	$	4,190		$	1,043		$	2,690		$	7,923
(Charge-offs)		(83	)		(101	)		(335	)		(519	)
Recoveries		16			—			41			57
Provision (recovery)		121			2			(471	)		(348	)
Ending Balance	$	4,244		$	944		$	1,925		$	7,113

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Three Months Ended June 30, 2017
Beginning Balance	$	3,421		$	528		$	44		$	3,993
(Charge-offs)		(141	)		—			(193	)		(334	)
Recoveries		10			1			3			14
Provision (recovery)		396			(73	)		245			568
Ending Balance	$	3,686		$	456		$	99		$	4,241

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Six Months Ended June 30, 2018
Beginning Balance	$	3,864		$	878		$	3,028		$	7,770
(Charge-offs)		(114	)		(116	)		(677	)		(907	)
Recoveries		43			—			235			278
Provision (recovery)		451			182			(661	)		(28	)
Ending Balance	$	4,244		$	944		$	1,925		$	7,113

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Six Months Ended June 30, 2017
Beginning Balance	$	3,318		$	493		$	52		$	3,863
(Charge-offs)		(273	)		—			(201	)		(474	)
Recoveries		88			1			5			94
Provision (recovery)		553			(38	)		243			758
Ending Balance	$	3,686		$	456		$	99		$	4,241

Schedule of Changes in Accretable Yield for PCI Loans

The following table presents the changes in the accretable yield for PCI loans for the period presented.

	For the Six Months Ended
	June 30, 2018
Balance as of December 31, 2017	$	1,087
Accretion of acquisition accounting adjustment		(171	)
Reclassifications from nonaccretable balance, net		69
Other changes, net		175
Balance as of June 30, 2018	$	1,160

Internal Risk Rating Grades

The tables below show the risk ranking of loans as of the dates stated.

June 30, 2018	Construction, Land and Land Development		Farmland		Residential First Mortgages		Residential Revolving and Junior Mortgages		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Consumer		Total Loans
Grade:
Pass	$	72,229	$	770	$	273,382	$	37,869	$	151,342	$	73,781	$	121,571	$	11,225	$	742,169
Watch		6,673		—		7,779		1,165		4,946		4,798		1,691		21,264		48,316
Special mention		—		—		2,503		—		—		557		—		131		3,191
Substandard		2,157		—		1,813		713		603		1,122		1,301		142		7,851
Doubtful		—		—		—		—		—		—		—		5		5
Total loans	$	81,059	$	770	$	285,477	$	39,747	$	156,891	$	80,258	$	124,563	$	32,767	$	801,532

December 31, 2017	Construction, Land and Land Development		Farmland		Residential First Mortgages		Residential Revolving and Junior Mortgages		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Consumer		Total Loans
Grade:
Pass	$	55,949	$	923	$	256,614	$	43,659	$	140,625	$	67,732	$	110,281	$	12,431	$	688,214
Watch		6,690		—		8,624		1,376		5,931		10,076		2,373		29,917		64,987
Special mention		172		—		205		—		—		—		1,347		—		1,724
Substandard		3,231		—		3,922		1,463		201		2,244		92		218		11,371
Doubtful		—		—		—		—		—		—		—		—		—
Total loans	$	66,042	$	923	$	269,365	$	46,498	$	146,757	$	80,052	$	114,093	$	42,566	$	766,296

Company's Recorded Investment and Borrowers' Unpaid Principal Balances for Impaired Loans, Excluding PCI Loans, with Associated ALL Amount

The following tables show the Company’s recorded investment and the borrowers’ unpaid principal balances for impaired loans, excluding PCI loans, with the associated ALL amount, if applicable, as of the dates stated.

	As of June 30, 2018						As of December 31, 2017
	Recorded Investment		Borrowers’ Unpaid Principal Balance		Related Allowance		Recorded Investment		Borrowers’ Unpaid Principal Balance		Related Allowance
With no related allowance:
Construction, Land and Land Development	$	93	$	164	$	—	$	900	$	1,378	$	—
Residential First Mortgages		1,598		1,852		—		1,488		1,488		—
Residential Revolving and Junior Mortgages		416		416		—		414		414		—
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,404		1,404		—		1,721		1,971		—
Commercial and Industrial		—		—		—		—		—		—
Consumer-Other		—		—		—		—		—		—
Total impaired loans with no related allowance		3,511		3,836		—		4,523		5,251		—
With an allowance recorded:
Construction, Land and Land Development		571		571		257		550		621		137
Residential First Mortgages		2,842		2,842		594		1,914		1,914		367
Residential Revolving and Junior Mortgages		130		527		67		1,340		1,340		162
Commercial Mortgages (Non-owner occupied)		448		448		46		—		—		—
Commercial Mortgages (Owner occupied)		535		535		161		547		586		195
Commercial and Industrial		—		—		—		92		92		92
Consumer-Other		131		131		131		141		141		141
Total impaired loans with allowance recorded		4,657		5,054		1,256		4,584		4,694		1,094
Total Impaired Loans:
Construction, Land and Land Development		664		735		257		1,450		1,999		137
Residential First Mortgages		4,440		4,694		594		3,402		3,402		367
Residential Revolving and Junior Mortgages		546		943		67		1,754		1,754		162
Commercial Mortgages (Non-owner occupied)		448		448		46		—		—		—
Commercial Mortgages (Owner occupied)		1,939		1,939		161		2,268		2,557		195
Commercial and Industrial		—		—		—		92		92		92
Consumer-Other		131		131		131		141		141		141
Total Impaired Loans	$	8,168	$	8,890	$	1,256	$	9,107	$	9,945	$	1,094

The following table shows the average recorded investment and interest income recognized for impaired loans, excluding PCI loans, for the periods presented.

	For the Three Months Ended								For the Six Months Ended
	June 30, 2018				June 30, 2017				June 30, 2018				June 30, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Construction, land and land development	$	84	$	—	$	1,453	$	14	$	165	$	1	$	1,479	$	27
Residential First Mortgages		1,513		24		1,769		2		1,471		41		1,774		7
Residential Revolving and Junior Mortgages		415		1		162		—		415		3		162		1
Commercial Mortgages (Non-owner occupied)		—		—		247		5		—		—		248		8
Commercial Mortgages (Owner occupied)		1,385		20		1,689		4		1,380		32		1,777		11
Commercial and Industrial		—		—		—		—		—		—		—		—
Consumer - Other		—		3		—		—		—		—		—		—
Total impaired loans with no allowance		3,397		48		5,320		25		3,431		77		5,440		54
With an allowance recorded:
Construction, land and land development		571		8		236		1		553		17		238		2
Residential First Mortgages		2,623		36		1,938		23		2,386		67		1,942		47
Residential Revolving and Junior Mortgages		131		2		1,300		5		123		4		1,301		18
Commercial Mortgages (Non-owner occupied)		224		—		—		—		149		—		—		—
Commercial Mortgages (Owner occupied)		538		8		737		—		541		15		739		—
Commercial and Industrial		—		—		92		—		—		—		92		—
Consumer - Other		—		—		—		—		—		5		—		—
Total impaired loans with allowance recorded		4,087		54		4,303		29		3,752		108		4,312		67
Total Impaired Loans:
Construction, land and land development		655		8		1,689		15		718		18		1,717		29
Residential First Mortgages		4,136		60		3,707		25		3,857		108		3,716		54
Residential Revolving and Junior Mortgages		546		3		1,462		5		538		7		1,463		19
Commercial Mortgages (Non-owner occupied)		224		—		247		5		149		—		248		8
Commercial Mortgages (Owner occupied)		1,923		28		2,426		4		1,921		47		2,516		11
Commercial and Industrial		—		—		92		—		—		—		92		—
Consumer - Other		—		3		—		—		—		5		—		—
Total impaired loans	$	7,484	$	102	$	9,623	$	54	$	7,183	$	185	$	9,752	$	121

Reconciliation of Nonaccrual Loans to Impaired Loans

The following table presents a reconciliation of nonaccrual loans to impaired loans as of the dates stated.

	June 30, 2018			December 31, 2017
Nonaccrual loans	$	3,474		$	6,496
Nonaccrual loans not individually evaluated for impairment		(1,279	)		(854	)
Nonaccrual impaired loans		2,195			5,642
TDRs on accrual		3,803			2,214
Other impaired loans on accrual		2,170			1,251
Total impaired loans	$	8,168		$	9,107

Summary of Troubled Debt Restructurings

Loans modified as TDRs are considered impaired and are individually evaluated for impairment for the ALL. The following table presents, by segment, information related to loans modified as TDRs for the periods presented.

	For the Three Months Ended						For the Three Months Ended
	June 30, 2018						June 30, 2017
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Residential first mortgages (1)		1	$	30	$	30		—	$	—	$	—

(1)

Modifications were an extension of the loan terms.

	For the Six Months Ended						For the Six Months Ended
	June 30, 2018						June 30, 2017
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Residential first mortgages (1)		4	$	590	$	594		—	$	—	$	—

(1)

Modification were an extension of the loan terms.

Summary of Roll Forward of Accruing and Nonaccruing TDRs

The following table presents a roll forward of accruing and nonaccruing TDRs for the period presented.

	Accruing			Nonaccruing			Total
Balance as of December 31, 2017	$	1,452		$	2,612		$	4,064
Charge-offs		—			(92	)		(92	)
Payments and other adjustments		(41	)		7			(34	)
New TDR designation		557			30			587
Release TDR designation		—			—			—
Transfer		1,835			(1,729	)		106
Balance as of June 30, 2018	$	3,803		$	828		$	4,631