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Credit Quality of Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Components of Loans Receivable
The loan portfolio consisted of the following (in thousands):
 
 
June 30, 2018
 
December 31, 2017
Commercial, financial and agricultural
 
$
354,944

 
$
435,207

Real estate – construction
 
98,108

 
90,287

Real estate – commercial
 
414,526

 
448,406

Real estate – residential
 
141,104

 
146,751

Installment loans to individuals
 
47,406

 
56,398

Lease financing receivable
 
632

 
732

Other
 
1,243

 
5,645

 
 
1,057,963

 
1,183,426

Less allowance for loan losses
 
(23,514
)
 
(26,888
)
 
 
$
1,034,449

 
$
1,156,538
Roll Forward of Activity in Allowance for Loan Losses
A rollforward of the activity within the allowance for loan losses by loan type and recorded investment in loans for the six months ended June 30, 2018 and 2017 is as follows (in thousands):
 
 
 
June 30, 2018
 
 
 
 
Real Estate
 
 
 
 
 
 
 
 
 
 
Coml, Fin,
and Agric
 
Construction
 
Commercial
 
Residential
 
Installment
loans to
individuals
 
Lease
financing
receivable
 
Other
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
20,577

 
$
596

 
$
3,893

 
$
837

 
$
957

 
$
3

 
$
25

 
$
26,888

Charge-offs
 
(3,647
)
 
(6
)
 
(216
)
 
(321
)
 
(448
)
 
—

 
—

 
(4,638
)
Recoveries
 
696

 
—

 
6

 
1

 
121

 
—

 
—

 
824

Provision
 
172

 
(201
)
 
(460
)
 
623

 
323

 
—

 
(17
)
 
440

Ending balance
 
$
17,798

 
$
389

 
$
3,223

 
$
1,140

 
$
953

 
$
3

 
$
8

 
$
23,514

Ending balance: individually evaluated for impairment
 
$
4,452

 
$
49

 
$
126

 
$
198

 
$
13

 
$
—

 
$
—

 
$
4,838

Ending balance: collectively evaluated for impairment
 
$
13,346

 
$
340

 
$
3,097

 
$
942

 
$
940

 
$
3

 
$
8

 
$
18,676

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
354,944

 
$
98,108

 
$
414,526

 
$
141,104

 
$
47,406

 
$
632

 
$
1,243

 
$
1,057,963

Ending balance: individually evaluated for impairment
 
$
40,228

 
$
717

 
$
29,917

 
$
3,623

 
$
65

 
$
—

 
$
—

 
$
74,550

Ending balance: collectively evaluated for impairment
 
$
314,716

 
$
97,391

 
$
384,609

 
$
137,481

 
$
47,341

 
$
632

 
$
1,243

 
$
983,413

 
 
June 30, 2017
 
 
 
 
Real Estate
 
 
 
 
 
 
 
 
 
 
Coml, Fin,
and Agric
 
Construction
 
Commercial
 
Residential
 
Installment
loans to
individuals
 
Lease
financing
receivable
 
Other
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
16,057

 
$
585

 
$
5,384

 
$
940

 
$
1,395

 
$
5

 
$
6

 
$
24,372

Charge-offs
 
(11,319
)
 
(1
)
 
(3,448
)
 
(198
)
 
(599
)
 
—

 
—

 
(15,565
)
Recoveries
 
290

 
—

 
33

 
96

 
148

 
—

 
—

 
567

Provision
 
13,272

 
623

 
1,845

 
(438
)
 
(1
)
 
(2
)
 
1

 
15,300

Ending balance
 
$
18,300

 
$
1,207

 
$
3,814

 
$
400

 
$
943

 
$
3

 
$
7

 
$
24,674

Ending balance: individually evaluated for impairment
 
$
3,092

 
$
9

 
$
1,120

 
$
28

 
$
103

 
$
—

 
$
—

 
$
4,352

Ending balance: collectively evaluated for impairment
 
$
15,208

 
$
1,198

 
$
2,694

 
$
372

 
$
840

 
$
3

 
$
7

 
$
20,322

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance
 
$
451,767

 
$
98,695

 
$
461,064

 
$
156,394

 
$
70,031

 
$
866

 
$
1,436

 
$
1,240,253

Ending balance: individually evaluated for impairment
 
$
35,276

 
$
25

 
$
19,526

 
$
1,325

 
$
311

 
$
—

 
$
—

 
$
56,463

Ending balance: collectively evaluated for impairment
 
$
416,491

 
$
98,670

 
$
441,108

 
$
155,003

 
$
69,720

 
$
866

 
$
1,436

 
$
1,183,294

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
430

 
$
66

 
$
—

 
$
—

 
$
—

 
$
496
Age Analysis of Past Due Loans by Class of Loans
An age analysis of past due loans (including both accruing and non-accruing loans) is as follows (in thousands):
 
 
June 30, 2018
 
 
30-59
Days
Past Due
 
60-89
Days
Past
Due
 
Greater
than 90
Days
Past Due
 
Total
Past
Due
 
Current
 
Total Loans
 
Recorded
Investment
> 90 days
 and
Accruing
Commercial, financial, and agricultural
 
$
8,504

 
$
4,347

 
$
24,762

 
$
37,613

 
$
317,331

 
$
354,944

 
$
3

Real estate - construction
 
1,175

 
—

 
220

 
1,395

 
96,713

 
98,108

 
—

Real estate - commercial
 
1,655

 
9,523

 
18,102

 
29,280

 
385,246

 
414,526

 
—

Real estate - residential
 
1,077

 
99

 
1,692

 
2,868

 
138,236

 
141,104

 
—

Installment loans to individuals
 
215

 
27

 
61

 
303

 
47,103

 
47,406

 
—

Lease financing receivable
 
—

 
—

 
—

 
—

 
632

 
632

 
—

Other loans
 
51

 
10

 
—

 
61

 
1,182

 
1,243

 
—

 
 
$
12,677

 
$
14,006

 
$
44,837

 
$
71,520

 
$
986,443

 
$
1,057,963

 
$
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
30-59
Days
Past Due
 
60-89
Days
Past
Due
 
Greater
than 90
Days
Past Due
 
Total
Past
Due
 
Current
 
Total Loans
 
Recorded
Investment
> 90 days
and
Accruing
Commercial, financial, and agricultural
 
$
1,195

 
$
1,893

 
$
14,847

 
$
17,935

 
$
417,272

 
$
435,207

 
$
545

Real estate - construction
 
616

 
—

 
190

 
806

 
89,481

 
90,287

 
125

Real estate - commercial
 
5,889

 
6,402

 
4,163

 
16,454

 
431,952

 
448,406

 
58

Real estate - residential
 
1,065

 
235

 
559

 
1,859

 
144,892

 
146,751

 
—

Installment loans to individuals
 
276

 
32

 
34

 
342

 
56,056

 
56,398

 
—

Lease financing receivable
 
—

 
—

 
—

 
—

 
732

 
732

 
—

Other loans
 
—

 
—

 
—

 
—

 
5,645

 
5,645

 
—

 
 
$
9,041

 
$
8,562

 
$
19,793

 
$
37,396

 
$
1,146,030

 
$
1,183,426

 
$
728
Schedule of Loans on Nonaccrual Status
Non-accrual loans are as follows (in thousands):
 
 
 
June 30, 2018
 
December 31, 2017
Commercial, financial, and agricultural
 
$
39,218

 
$
37,418

Real estate - construction
 
1,531

 
66

Real estate - commercial
 
29,916

 
11,128

Real estate - residential
 
2,808

 
618

Installment loans to individuals
 
65

 
48

 
 
$
73,538

 
$
49,278
Schedule of Loans Evaluated for Impairment
The following table presents loans that are individually evaluated for impairment (in thousands). Interest income recognized represents interest on accruing loans modified in a troubled debt restructuring (TDR).
 
 
June 30, 2018
 
 
Recorded
Investment
 
Unpaid Principal Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
 
$
28,188

 
$
32,776

 
$
—

 
$
26,424

 
$
32

Real estate - construction
 
1,164

 
1,164

 
—

 
582

 
—

Real estate - commercial
 
29,020

 
30,242

 
—

 
19,745

 
—

Real estate - residential
 
1,599

 
1,599

 
—

 
950

 
—

Installment loans to individuals
 
24

 
24

 
—

 
12

 
—

Finance leases
 
—

 
—

 
—

 
—

 
—

Subtotal:
 
59,995

 
65,805

 
—

 
47,713

 
32

With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

Commercial, financial, and agricultural
 
12,040

 
13,959

 
4,452

 
13,079

 
—

Real estate - construction
 
367

 
367

 
49

 
216

 
—

Real estate - commercial
 
897

 
1,028

 
126

 
777

 
—

Real estate - residential
 
1,210

 
1,897

 
198

 
763

 
—

Installment loans to individuals
 
41

 
41

 
13

 
45

 
—

Finance leases
 
—

 
—

 
—

 
—

 
—

Subtotal:
 
14,555

 
17,292

 
4,838

 
14,880

 
—

Totals:
 
 

 
 

 
 

 
 

 
 

Commercial
 
70,145

 
78,005

 
4,578

 
60,025

 
32

Construction
 
1,531

 
1,531

 
49

 
798

 
—

Residential
 
2,809

 
3,496

 
198

 
1,713

 
—

Consumer
 
65

 
65

 
13

 
57

 
—

Grand total:
 
$
74,550

 
$
83,097

 
$
4,838

 
$
62,593

 
$
32

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
 
$
24,659

 
$
30,630

 
$
—

 
$
19,880

 
$
90

Real estate - construction
 
—

 
—

 
—

 
5

 
—

Real estate - commercial
 
10,471

 
11,965

 
—

 
11,590

 
—

Real estate - residential
 
302

 
302

 
—

 
602

 
—

Installment loans to individuals
 
—

 
—

 
—

 
37

 
—

Subtotal:
 
35,432

 
42,897

 
—

 
32,114

 
90

With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

Commercial, financial, and agricultural
 
14,119

 
14,150

 
7,197

 
15,245

 
1

Real estate - construction
 
66

 
136

 
23

 
33

 
—

Real estate - commercial
 
657

 
657

 
131

 
8,318

 
—

Real estate - residential
 
316

 
316

 
5

 
620

 
—

Installment loans to individuals
 
48

 
50

 
14

 
258

 
—

Subtotal:
 
15,206

 
15,309

 
7,370

 
24,474

 
1

Totals:
 
 

 
 

 
 

 
 

 
 

Commercial
 
49,906

 
57,402

 
7,328

 
55,033

 
91

Construction
 
66

 
136

 
23

 
38

 
—

Residential
 
618

 
618

 
5

 
1,222

 
—

Consumer
 
48

 
50

 
14

 
295

 
—

Grand total:
 
$
50,638

 
$
58,206

 
$
7,370

 
$
56,588

 
$
91
Credit Quality Indicators by Class of Loans
The following tables present the classes of loans by risk rating (in thousands):
 
 
 
  
 
June 30, 2018
Commercial Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial,
financial, and
agricultural
 
Real estate - commercial
 
Total
 
% of Total
Pass
 
 
 
 
 
$
275,744

 
$
361,281

 
$
637,025

 
82.79
%
Special mention
 
 
 
 
 
21,320

 
9,985

 
31,305

 
4.07
%
Substandard
 
 
 
 
 
57,880

 
43,260

 
101,140

 
13.14
%
 
 
 
 
 
 
$
354,944

 
$
414,526

 
$
769,470

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
 
% of Total
Pass
 
 
 
 
 
 
 
 
 
$
96,225

 
98.08
%
Special mention
 
 
 
 
 
 
 
 
 
85

 
0.09
%
Substandard
 
 
 
 
 
 
 
 
 
1,798

 
1.83
%
 
 
 
 
 
 
 
 
 
 
$
98,108

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile by
Creditworthiness Category
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 

 
 
 
 
 
Real estate - residential
 
% of Total
Pass
 
 
 
 

 


 
 
 
$
134,952

 
95.64
%
Special mention
 
 
 
 

 


 
 
 
602

 
0.43
%
Substandard
 
 
 
 

 
 
 
 
 
5,550

 
3.93
%
 
 
 
 
 

 


 
 
 
$
141,104

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and Other Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile Based on
Payment Activity
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Installment loans to individuals
 
Lease
financing
receivable
 
Other
 
Total
 
% of Total
Performing
 
 
 
$
47,355

 
$
632

 
$
1,243

 
$
49,230

 
99.90
%
Nonperforming
 

 
51

 
—

 
—

 
51

 
0.10
%
 
 

 
$
47,406

 
$
632

 
$
1,243

 
$
49,281

 
100.00
%
 
 
December 31, 2017
Commercial Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial,
financial, and
agricultural
 
Real estate - commercial
 
Total
 
%
of Total
Pass
 
 
 
 
 
$
358,373

 
$
411,280

 
$
769,653

 
87.10
%
Special mention
 
 
 
 
 
9,687

 
3,823

 
13,510

 
1.53
%
Substandard
 
 
 
 
 
67,147

 
33,303

 
100,450

 
11.37
%
 
 
 
 
 
 
$
435,207

 
$
448,406

 
$
883,613

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction Credit Exposure
 
 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by
Creditworthiness Category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
 
%
of Total
Pass
 
 
 
 
 
 
 
 
 
$
89,323

 
98.93
%
Special mention
 
 
 
 
 
 
 
 
 
600

 
0.67
%
Substandard
 
 
 
 
 
 
 
 
 
364

 
0.40
%
 
 
 
 
 
 
 
 
 
 
$
90,287

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile by
Creditworthiness Category
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
 

 
 
 
 
 
Real estate - residential
 
%
of Total
Pass
 
 
 
 

 
 
 


 
$
144,250

 
98.30
%
Special mention
 
 
 
 

 
 
 


 
1,233

 
0.84
%
Substandard
 
 
 
 

 
 
 


 
1,268

 
0.86
%
 
 
 
 
 

 
 
 


 
$
146,751

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and Other Credit Exposure
 
 
 
 

 
 

 
 

 
 

 
 

Credit Risk Profile Based on
Payment Activity
 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Installment loans to individuals
 
Lease
financing
receivable
 
Other
 
Total
 
%
of Total
Performing
 

 
$
56,041

 
$
699

 
$
5,645

 
$
62,385

 
99.38
%
Nonperforming
 

 
357

 
33

 
—

 
390

 
0.62
%
 
 

 
$
56,398

 
$
732

 
$
5,645

 
$
62,775

 
100.00
%
Schedule of Modified Troubled Debt Restructurings During the Period
The following tables present information about TDRs that were modified during the periods presented by portfolio segment (in thousands):
 
 
Three months ended
 
 
June 30, 2018
 
June 30, 2017
 
 
Number of loans
 
Pre-modification recorded investment
 
Number of loans
 
Pre-modification recorded investment
Commercial, financial and agricultural
 
—

 
$
—

 
—

 
$
—



 
 
Six months ended
 
 
June 30, 2018
 
June 30, 2017
 
 
Number of loans
 
Pre-modification recorded investment
 
Number of loans
 
Pre-modification recorded investment
Commercial, financial and agricultural
 
—

 
$
—

 
1

 
$
1,984