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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2021

Major categories of loans are summarized as follows (in thousands):


	March 31, 2021						December 31, 2020
	PCI		All Other				PCI		All Other
	Loans¹		Loans		Total		Loans¹		Loans		Total
Commercial real estate	$	13,877	$	1,056,764	$	1,070,641	$	16,123	$	996,853	$	1,012,976
Consumer real estate		9,597		422,889		432,486		10,258		433,672		443,930
Construction and land development		5,350		280,623		285,973		5,348		272,727		278,075
Commercial and industrial		303		685,707		686,010		308		634,138		634,446
Consumer and other		21		11,998		12,019		27		12,789		12,816
Total loans		29,148		2,457,981		2,487,129		32,064		2,350,179		2,382,243
Less: Allowance for loan losses		(376)		(17,994)		(18,370)		(309)		(18,037)		(18,346)

Loans, net	$	28,772	$	2,439,987	$	2,468,759	$	31,755	$	2,332,142	$	2,363,897

¹Purchased Credit Impaired loans (“PCI loans”) are loans with evidence of credit deterioration at purchase.

Schedule of Impaired and Performing Loans Receivable

The composition of loans by loan classification for impaired and performing loan status is summarized in the tables below (in thousands):


					Construction		Commercial
	Commercial		Consumer		and Land		and		Consumer
	Real Estate		Real Estate		Development		Industrial		and Other		Total
March 31, 2021:
Performing loans	$	1,053,610	$	420,419	$	280,623	$	685,598	$	11,998	$	2,452,248
Impaired loans		3,154		2,470		—		109		—		5,733
		1,056,764		422,889		280,623		685,707		11,998		2,457,981
PCI loans		13,877		9,597		5,350		303		21		29,148
Total loans	$	1,070,641	$	432,486	$	285,973	$	686,010	$	12,019	$	2,487,129

December 31, 2020:
Performing loans	$	992,982	$	432,356	$	272,727	$	633,992	$	12,789	$	2,344,846
Impaired loans		3,871		1,316		—		146		—		5,333
		996,853		433,672		272,727		634,138		12,789		2,350,179
PCI loans		16,123		10,258		5,348		308		27		32,064
Total loans	$	1,012,976	$	443,930	$	278,075	$	634,446	$	12,816	$	2,382,243

Schedule of Allowance for Loan Losses for Impaired and Performing Loans Receivable

The following tables show the allowance for loan losses allocation by loan classification for impaired, PCI, and performing loans (in thousands):


					Construction		Commercial		Consumer
	Commercial		Consumer		and Land		and		and
	Real Estate		Real Estate		Development		Industrial		Other		Total
March 31, 2021:
Performing loans	$	7,386	$	3,018	$	1,968	$	5,022	$	108	$	17,502
Impaired loans		251		132		—		109		—		492
		7,637		3,150		1,968		5,131		108		17,994
PCI loans		—		158		—		216		2		376
Total loans	$	7,637	$	3,308	$	1,968	$	5,347	$	110	$	18,370

December 31, 2020:
Performing loans	$	7,579	$	3,267	$	2,076	$	4,768	$	110	$	17,800
Impaired loans		—		116		—		121		—		237
		7,579		3,383		2,076		4,889		110		18,037
PCI loans		—		88		—		218		3		309
Total loans	$	7,579	$	3,471	$	2,076	$	5,107	$	113	$	18,346

Schedule of Allowance for Loan Losses

The following tables detail the changes in the allowance for loan losses by loan classification (in thousands):


	Three Months Ended March 31, 2021
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and		Consumer
	Real Estate		Estate		Development		Industrial		and Other		Total
Beginning balance	$	7,579	$	3,471	$	2,076	$	5,107	$	113	$	18,346
Charged-off loans		—		—		—		—		(120)		(120)
Recoveries of charge-offs		3		16		—		3		55		77
Provision charged to expense		55		(179)		(108)		237		62		67
Ending balance	$	7,637	$	3,308	$	1,968	$	5,347	$	110	$	18,370


	Three Months Ended March 31, 2020
			Consumer		Construction		Commercial
	Commercial		Real		and Land		and		Consumer
	Real Estate		Estate		Development		Industrial		and Other		Total
Beginning balance	$	4,508	$	2,576	$	1,127	$	1,957	$	75	$	10,243
Charged-off loans		—		(2)		—		(8)		(76)		(86)
Recoveries of charge-offs		2		6		2		42		22		74
Provision charged to expense		1,453		721		355		566		105		3,200
Ending balance	$	5,963	$	3,301	$	1,484	$	2,557	$	126	$	13,431

Loan Credit Quality Indicators

The following tables outline the amount of each loan classification and the amount categorized into each risk rating (in thousands):


	March 31, 2021
					Construction		Commercial
	Commercial		Consumer		and Land		and		Consumer
Non PCI Loans:	Real Estate		Real Estate		Development		Industrial		and Other		Total
Pass	$	1,011,291	$	418,604	$	280,299	$	680,635	$	11,908	$	2,402,737
Watch		38,170		1,234		245		4,489		52		44,190
Special mention		3,922		44		—		297		—		4,263
Substandard		3,381		3,007		79		238		38		6,743
Doubtful		—		—		—		48		—		48
Total		1,056,764		422,889		280,623		685,707		11,998		2,457,981

PCI Loans:
Pass		11,088		8,173		1,430		257		20		20,968
Watch		1,592		206		3,405		—		1		5,204
Special mention		17		58		—		—		—		75
Substandard		1,180		1,160		515		46		—		2,901
Doubtful		—		—		—		—		—		—
Total		13,877		9,597		5,350		303		21		29,148
Total loans	$	1,070,641	$	432,486	$	285,973	$	686,010	$	12,019	$	2,487,129


	December 31, 2020
					Construction		Commercial
	Commercial		Consumer		and Land		and		Consumer
Non PCI Loans:	Real Estate		Real Estate		Development		Industrial		and Other		Total
Pass	$	922,153	$	417,302	$	269,350	$	625,836	$	12,622	$	2,247,263
Watch		66,287		14,218		3,296		7,673		137		91,611
Special mention		4,446		46		—		320		—		4,812
Substandard		3,967		2,020		81		261		30		6,359
Doubtful		—		86		—		48		—		134
Total		996,853		433,672		272,727		634,138		12,789		2,350,179

PCI Loans:
Pass		11,072		8,382		1,008		262		25		20,749
Watch		3,381		224		3,820		—		2		7,427
Special mention		19		57		—		—		—		76
Substandard		1,651		1,595		520		46		—		3,812
Doubtful		—		—		—		—		—		—
Total		16,123		10,258		5,348		308		27		32,064
Total loans	$	1,012,976	$	443,930	$	278,075	$	634,446	$	12,816	$	2,382,243

Past Due Loans and Leases

The following tables present an aging analysis of our loan portfolio (in thousands):


	March 31, 2021
	30-60 Days		61-89 Days		Past Due 90				Total
	Past Due and		Past Due and		Days or More				Past Due and		PCI		Current		Total
	Accruing		Accruing		and Accruing		Nonaccrual		Nonaccrual		Loans		Loans		Loans
Commercial real estate	$	565	$	—	$	1,495	$	3,155	$	5,215	$	13,877	$	1,051,549	$	1,070,641
Consumer real estate		968		1,336		—		1,481		3,785		9,597		419,104		432,486
Construction and land development		643		—		—		11		654		5,350		279,969		285,973
Commercial and industrial		666		12		—		60		738		303		684,969		686,010
Consumer and other		3		—		—		32		35		21		11,963		12,019
Total	$	2,845	$	1,348	$	1,495	$	4,739	$	10,427	$	29,148	$	2,447,554	$	2,487,129


	December 31, 2020
	30-60 Days		61-89 Days		Past Due 90				Total
	Past Due and		Past Due and		Days or More				Past Due and		PCI		Current		Total
	Accruing		Accruing		and Accruing		Nonaccrual		Nonaccrual		Loans		Loans		Loans
Commercial real estate	$	134	$	—	$	67	$	3,740	$	3,941	$	16,123	$	992,912	$	1,012,976
Consumer real estate		1,916		51		82		1,823		3,872		10,258		429,800		443,930
Construction and land development		245		—		—		12		257		5,348		272,470		278,075
Commercial and industrial		12		76		—		36		124		308		634,014		634,446
Consumer and other		14		5		—		22		41		27		12,748		12,816
Total	$	2,321	$	132	$	149	$	5,633	$	8,235	$	32,064	$	2,341,944	$	2,382,243

Impaired Loans

The following is an analysis of the impaired loan portfolio, including PCI loans, detailing the related allowance recorded (in thousands):


	March 31, 2021						December 31, 2020
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans without a valuation allowance:
Commercial real estate	$	130	$	130	$	—	$	3,871	$	3,872	$	—
Consumer real estate		1,880		1,882		—		888		888		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Consumer and other		—		—		—		—		—		—
		2,010		2,012		—		4,759		4,760		—

Impaired loans with a valuation allowance:
Commercial real estate		3,155		3,155		251		—		—		—
Consumer real estate		459		462		132		428		428		116
Construction and land development		—		—		—		—		—		—
Commercial and industrial		109		109		109		146		146		121
Consumer and other		—		—		—		—		—		—
		3,723		3,726		492		574		574		237
PCI loans:
Commercial real estate		—		—		—		—		—		—
Consumer real estate		1,210		1,347		158		1,827		2,086		88
Construction and land development		—		—		—		—		—		—
Commercial and industrial		266		233		216		270		234		218
Consumer and other		17		16		2		21		20		3
		1,493		1,596		376		2,118		2,340		309
Total impaired loans	$	7,226	$	7,334	$	868	$	7,451	$	7,674	$	546


	Three Months Ended March 31,
	2021				2020
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans without a valuation allowance:
Commercial real estate	$	2,001	$	1	$	196	$	3
Consumer real estate		1,384		12		550		4
Construction and land development		—		—		577		—
Commercial and industrial		—		—		—		—
Consumer and other		—		—		—		—
		3,385		13		1,323		7
Impaired loans with a valuation allowance:
Commercial real estate		1,577		102		198		2
Consumer real estate		444		5		984		9
Construction and land development		—		—		—		—
Commercial and industrial		128		2		159		2
Consumer and other		—		—		—		—
		2,149		109		1,341		13
PCI loans:
Commercial real estate		—		—		964		1
Consumer real estate		1,215		22		456		1
Construction and land development		—		—		231		—
Commercial and industrial		268		1		355		—
Consumer real estate		19		—		11		—
		1,502		23		2,017		2

Total impaired loans	$	7,036	$	145	$	4,681	$	22

Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Acquired During Period Carrying Amount Of Loans

The Company has acquired loans where there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans are as follows (in thousands):


	March 31,		December 31,
	2021		2020
Commercial real estate	$	21,221	$	23,787
Consumer real estate		12,011		12,692
Construction and land development		968		1,812
Commercial and industrial		6,463		6,521
Consumer and other		122		161
Total loans		40,785		44,973
Less: Remaining purchase discount		(11,637)		(12,909)
Total loans, net of purchase discount		29,148		32,064
Less: Allowance for loan losses		(376)		(309)
Carrying amount, net of allowance	$	28,772	$	31,755

Schedule of Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement

Activity related to the accretable yield on loans acquired with deteriorated credit quality is as follows (in thousands):


	Three Months Ended
	March 31,
	2021		2020
Accretable yield, beginning of period	$	16,889	$	8,454
Additions		—		2,515
Accretion income		(1,931)		(2,077)
Reclassification		337		1,916
Other changes, net		(590)		171
Accretable yield, end of period	$	14,705	$	10,979