Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2018

Loans Evaluated for Impairment Individually and Collectively by Segment

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

September 30, 2018	Mortgage Loans on Real Estate		Commercial and Industrial		Consumer		Total
Allowance for loan losses applicable to:
Loans individually evaluated for impairment	$	922	$	—	$	131	$	1,053
Loans collectively evaluated for impairment		3,485		1,130		1,619		6,234
Purchased credit-impaired loans		—		—		—		—
Total allowance on loan losses	$	4,407	$	1,130	$	1,750	$	7,287
Loan balances applicable to:
Loans individually evaluated for impairment	$	7,463	$	—	$	131	$	7,594
Loans collectively evaluated for impairment		669,459		144,118		27,732		841,309
Purchased credit-impaired loans		5,399		—		57		5,456
Total loans	$	682,321	$	144,118	$	27,920	$	854,359
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 September 30, 2018
Beginning Balance	$	4,244		$	944		$	1,925		$	7,113
Charge-offs		(54	)		—			(418	)		(472	)
Recoveries		60			—			77			137
Provision		157			186			166			509
Ending Balance	$	4,407		$	1,130		$	1,750		$	7,287

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Three Months Ended September 30, 2017
Beginning Balance	$	3,686		$	456		$	99		$	4,241
Charge-offs		(75	)		—			(366	)		(441	)
Recoveries		10			1			34			45
Provision		216			56			803			1,075
Ending Balance	$	3,837		$	513		$	570		$	4,920

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Nine Months Ended September 30, 2018
Beginning Balance	$	3,864		$	878		$	3,028		$	7,770
Charge-offs		(168	)		(116	)		(1,095	)		(1,379	)
Recoveries		103			1			311			415
Provision (recovery)		608			367			(494	)		481
Ending Balance	$	4,407		$	1,130		$	1,750		$	7,287

	Mortgage Loans on Real Estate			Commercial and Industrial			Consumer			Total
For the Nine Months Ended September 30, 2017
Beginning Balance	$	3,318		$	493		$	52		$	3,863
Charge-offs		(348	)		—			(567	)		(915	)
Recoveries		98			2			39			139
Provision		769			18			1,046			1,833
Ending Balance	$	3,837		$	513		$	570		$	4,920

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 Nine Months Ended
	September 30, 2018
Balance as of December 31, 2017	$	1,087
Accretion of acquisition accounting adjustment		(261	)
Reclassifications from nonaccretable balance, net		(56	)
Other changes, net		343
Balance as of September 30, 2018	$	1,113

Internal Risk Rating Grades

The following tables show the risk rating of loans as of the dates stated.

September 30, 2018	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Residential First Mortgages		Residential Revolving and Junior Mortgages		Commercial and Industrial		Consumer		Total Loans
Grade:
Pass	$	86,066	$	748	$	166,537	$	75,984	$	281,677	$	37,298	$	137,964	$	9,605	$	795,879
Watch		6,504		—		4,307		4,712		7,809		1,159		4,873		18,105		47,469
Special mention		127		—		—		551		2,048		—		—		133		2,859
Substandard		2,053		—		1,152		1,144		1,732		713		1,281		72		8,147
Doubtful		—		—		—		—		—		—		—		5		5
Total loans	$	94,750	$	748	$	171,996	$	82,391	$	293,266	$	39,170	$	144,118	$	27,920	$	854,359

December 31, 2017	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Residential First Mortgages		Residential Revolving and Junior Mortgages		Commercial and Industrial		Consumer		Total Loans
Grade:
Pass	$	55,949	$	923	$	140,625	$	67,732	$	256,614	$	43,659	$	110,281	$	12,431	$	688,214
Watch		6,690		—		5,931		10,076		8,624		1,376		2,373		29,917		64,987
Special mention		172		—		—		—		205		—		1,347		—		1,724
Substandard		3,231		—		201		2,244		3,922		1,463		92		218		11,371
Doubtful		—		—		—		—		—		—		—		—		—
Total loans	$	66,042	$	923	$	146,757	$	80,052	$	269,365	$	46,498	$	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 table shows 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 September 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	$	92	$	163	$	—	$	900	$	1,378	$	—
Commercial mortgages (non-owner occupied)		—		—		—		—		—		—
Commercial mortgages (owner occupied)		1,026		1,026		—		1,721		1,971		—
Residential first mortgages		1,507		1,507		—		1,488		1,488		—
Residential revolving and junior mortgages		416		416		—		414		414		—
Commercial and industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total impaired loans with no related allowance		3,041		3,112		—		4,523		5,251		—
With an allowance recorded:
Construction, land and land development		523		523		290		550		621		137
Commercial mortgages (non-owner occupied)		443		443		18		—		—		—
Commercial mortgages (owner occupied)		931		931		156		547		586		195
Residential first mortgages		2,395		2,395		374		1,914		1,914		367
Residential revolving and junior mortgages		130		130		84		1,340		1,340		162
Commercial and industrial		—		—		—		92		92		92
Consumer		131		131		131		141		141		141
Total impaired loans with allowance recorded		4,553		4,553		1,053		4,584		4,694		1,094
Total impaired loans:
Construction, land and land development		615		686		290		1,450		1,999		137
Commercial mortgages (non-owner occupied)		443		443		18		—		—		—
Commercial mortgages (owner occupied)		1,957		1,957		156		2,268		2,557		195
Residential first mortgages		3,902		3,902		374		3,402		3,402		367
Residential revolving and junior mortgages		546		546		84		1,754		1,754		162
Commercial and industrial		—		—		—		92		92		92
Consumer		131		131		131		141		141		141
Total impaired loans	$	7,594	$	7,665	$	1,053	$	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 Nine Months Ended
	September 30, 2018				September 30, 2017				September 30, 2018				September 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	$	93	$	—	$	367	$	—	$	147	$	1	$	385	$	—
Commercial mortgages (non-owner occupied)		—		—		248		4		—		—		248		11
Commercial mortgages (owner occupied)		1,013		8		1,030		5		985		29		1,102		16
Residential first mortgages		1,472		21		1,425		4		1,282		62		1,439		15
Residential revolving and junior mortgages		416		1		482		5		415		4		485		7
Commercial and industrial		—		—		—		—		—		—		—		—
Consumer		—		3		—		—		—		—		—		—
Total impaired loans with no allowance		2,994		33		3,552		18		2,829		96		3,659		49
With an allowance recorded:
Construction, land and land development		524		8		1,315		15		512		24		1,323		44
Commercial mortgages (non-owner occupied)		445		11		—		—		223		11		—		—
Commercial mortgages (owner occupied)		935		13		1,372		4		945		39		1,381		19
Residential first mortgages		2,394		32		1,928		23		2,277		94		1,937		71
Residential revolving and junior mortgages		130		2		1,389		11		125		7		1,345		38
Commercial and industrial		—		—		92		—		—		—		92		—
Consumer		—		—		—		—		—		8		—		—
Total impaired loans with allowance recorded		4,428		66		6,096		53		4,082		183		6,078		172
Total impaired loans:
Construction, land and land development		617		8		1,682		15		659		25		1,708		44
Commercial mortgages (non-owner occupied)		445		11		248		4		223		11		248		11
Commercial mortgages (owner occupied)		1,948		21		2,402		9		1,930		68		2,483		35
Residential first mortgages		3,866		53		3,353		27		3,559		156		3,376		86
Residential revolving and junior mortgages		546		3		1,871		16		540		11		1,830		45
Commercial and industrial		—		—		92		—		—		—		92		—
Consumer		—		3		—		—		—		8		—		—
Total impaired loans	$	7,422	$	99	$	9,648	$	71	$	6,911	$	279	$	9,737	$	221

Reconciliation of Nonaccrual Loans to Impaired Loans

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

	September 30, 2018			December 31, 2017
Nonaccrual loans	$	4,204		$	6,496
Nonaccrual loans not individually evaluated for impairment		(2,196	)		(854	)
Nonaccrual impaired loans		2,008			5,642
TDRs on accrual		4,415			2,214
Other impaired loans on accrual		1,171			1,251
Total impaired loans	$	7,594		$	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
	September 30, 2018						September 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	$	1,272	$	1,303		—	$	—	$	—

(1)

Modifications were an extension of the loan terms.

	For the Nine Months Ended						For the Nine Months Ended
	September 30, 2018						September 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)		8	$	1,862	$	1,894		—	$	—	$	—

(1)

Modifications 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		(64	)		65			1
New TDR designation		1,192			702			1,894
Release TDR designation		—			—			—
Transfer		1,835			(1,835	)		—
Balance as of September 30, 2018	$	4,415		$	1,452		$	5,867