Loans and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2020

A summary of loans at December 31, 2020 and 2019 follows (in thousands):

	2020		2019
Construction and land development	$	122,853	$	94,462
Agricultural real estate		254,662		240,481
1-4 Family residential properties		325,480		336,553
Multifamily residential properties		189,265		155,132
Commercial real estate		1,176,290		997,175
Loans secured by real estate		2,068,550		1,823,803
Agricultural loans		137,333		136,023
Commercial and industrial loans		741,819		528,987
Consumer loans		78,023		83,544
All other loans		118,196		126,807
Gross loans		3,143,921		2,699,164
Less: Loans held for sale		1,924		1,820
		3,141,997		2,697,344
Less:
Net deferred loan fees, premiums and discounts		5,502		3,817
Allowance for credit losses		41,910		26,911
Net loans	$	3,094,585	$	2,666,616

Allowance for Credit Losses Based on Portfolio Segment

The following tables present the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2020, 2019 and 2018 (in thousands):

	Construction & Land Development			Agricultural Real Estate			1-4 Family Residential Properties		Commercial Real Estate		Agricultural Loans			Commercial & Industrial		Consumer Loans		Total
Twelve months ended December 31, 2020
Beginning Balance (prior to adoption of ASC 326)	$	1,146		$	1,093		$	1,386	$	11,198	$	1,386		$	9,273	$	1,429	$	26,911
Impact of adopting ASC 326		(113	)		230			756		541		(363	)		155		466		1,672
Provision for credit loss expense		646			(239	)		274		8,581		503			5,869		469		16,103
Loans charged off		13			—			393		829		—			1,991		618		3,844
Recoveries collected		—			—			299		169		—			179		421		1,068
Ending balance	$	1,666		$	1,084		$	2,322	$	19,660	$	1,526		$	13,485	$	2,167	$	41,910

Twelve months ended December 31, 2019
Beginning Balance	$	561		$	1,246		$	1,504	$	11,102	$	951		$	9,893	$	932	$	26,189
Provision for credit loss expense		585			(153	)		1,268		1,827		459			1,053		1,394		6,433
Loans charged off		—			—			1,478		1,743		24			1,828		1,253		6,326
Recoveries collected		—			—			92		12		—			155		356		615
Ending balance	$	1,146		$	1,093		$	1,386	$	11,198	$	1,386		$	9,273	$	1,429	$	26,911

Twelve months ended December 31, 2018
Beginning Balance	$	1,202		$	1,001		$	886	$	7,918	$	743		$	7,425	$	802	$	19,977
Provision for credit loss expense		(631	)		245			1,628		3,353		301			3,155		616		8,667
Loans charged off		10			—			1,111		170		93			832		777		2,993
Recoveries collected		—			—			101		1		—			145		291		538
Ending balance	$	561		$	1,246		$	1,504	$	11,102	$	951		$	9,893	$	932	$	26,189

Amortized Cost Basis of Collateral-Dependent Loans by Class of Loans Individually Evaluated

The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of December 31, 2020 (in thousands):

	Collateral								Allowance
	Real Estate		Business Assets		Other		Total		for Credit Losses
Construction and land development	$	516	$	—	$	—	$	516	$	246
1-4 Family residential properties		2,393		—		—		2,393		158
Multifamily residential properties		1,914		—		—		1,914		—
Commercial real estate		11,527		—		—		11,527		863
Loans secured by real estate		16,350		—		—		16,350		1,267
Commercial and industrial loans		—		3,458		—		3,458		664
Consumer loans		—		—		8	8			—
Total loans	$	16,350	$	3,458	$	8	$	19,816	$	1,931

Credit Risk Profile of Loan Portfolio Based on Rating Category and Payment Activity

The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2020 (in thousands):

	Term Loans by Origination Year												Revolving
Risk Rating	2020		2019		2018		2017		2016		Prior		Loans		Total
December 31, 2020
Construction & Land Development Loans
Pass	$	41,842	$	40,989	$	31,500	$	2,760	$	871	$	3,822	$	—	$	121,784
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		128		—		517		—		50		—		695
Total	$	41,842	$	41,117	$	31,500	$	3,277	$	871	$	3,872	$	—	$	122,479
Agricultural Real Estate Loans
Pass	$	73,630	$	34,412	$	37,839	$	16,138	$	13,559	$	58,291	$	—	$	233,869
Special Mention		1,845		3,970		533		469		1,106		11,232		—		19,155
Substandard		—		—		800		208		64		245		—		1,317
Total	$	75,475	$	38,382	$	39,172	$	16,815	$	14,729	$	69,768	$	—	$	254,341
1-4 Family Residential Property Loans
Pass	$	81,366	$	29,695	$	38,163	$	23,086	$	26,676	$	62,942	$	40,363	$	302,291
Special Mention		192		2,142		523		2,720		247		1,578		293		7,695
Substandard		296		695		1,915		1,859		1,996		7,516		1,499		15,776
Total	$	81,854	$	32,532	$	40,601	$	27,665	$	28,919	$	72,036	$	42,155	$	325,762
Commercial Real Estate Loans
Pass	$	368,750	$	237,119	$	171,591	$	148,283	$	143,400	$	215,616	$	—	$	1,284,759
Special Mention		2,469		1,300		6,108		11,262		6,741		16,947		—		44,827
Substandard		1,863		40		7,081		2,022		4,905		18,435		—		34,346
Total	$	373,082	$	238,459	$	184,780	$	161,567	$	155,046	$	250,998	$	—	$	1,363,932
Agricultural Loans
Pass	$	83,377	$	15,680	$	5,978	$	1,838	$	635	$	2,856	$	—	$	110,364
Special Mention		21,070		4,483		694		224		148		38		—		26,657
Substandard		68		238		25		—		—		—		—		331
Total	$	104,515	$	20,401	$	6,697	$	2,062	$	783	$	2,894	$	—	$	137,352
Commercial & Industrial Loans
Pass	$	371,683	$	132,148	$	70,497	$	78,890	$	42,439	$	114,904	$	—	$	810,561
Special Mention		4,116		32,130		849		489		1,101		730		—		39,415
Substandard		889		2,360		532		1,689		136		969		—		6,575
Total	$	376,688	$	166,638	$	71,878	$	81,068	$	43,676	$	116,603	$	—	$	856,551
Consumer Loans
Pass	$	31,609	$	21,384	$	12,084	$	8,279	$	3,150	$	1,022	$	—	$	77,528
Special Mention		—		24		24		1		1		—		—		50
Substandard		15		16		111		95		67		120		—		424
Total	$	31,624	$	21,424	$	12,219	$	8,375	$	3,218	$	1,142	$	—	$	78,002
Total Loans
Pass	$	1,052,257	$	511,427	$	367,652	$	279,274	$	230,730	$	459,453	$	40,363	$	2,941,156
Special Mention		29,692		44,049		8,731		15,165		9,344		30,525		293		137,799
Substandard		3,131		3,477		10,464		6,390		7,168		27,335		1,499		59,464
Total	$	1,085,080	$	558,953	$	386,847	$	300,829	$	247,242	$	517,313	$	42,155	$	3,138,419

The following table presents the credit risk profile of the Company’s loan portfolio base on risk rating category as of December 31, 2019 (in thousands):

	Pass		Special Mention		Substandard		Total
Construction & land development	$	93,413	$	413	$	316	$	94,142
Agricultural real estate		231,227		6,902		2,112		240,241
1-4 Family residential property loans		314,999		5,743		15,685		336,427
Commercial real estate		1,103,543		14,156		31,951		1,149,650
Loans secured by real estate		1,743,182		27,214		50,064		1,820,460
Agricultural loans		129,811		3,862		2,451		136,124
Commercial & industrial loans		603,047		40,395		12,138		655,580
Consumer loans		82,117		140		926		83,183
Total loans	$	2,558,157	$	71,611	$	65,579	$	2,695,347

Loan Portfolio Aging Analysis

The following table presents the Company’s loan portfolio aging analysis at December 31, 2020 and 2019 (in thousands):

													Total
					90 Days								Loans > 90
	30-59 days		60-89 days		or More		Total				Total Loans		days &
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		Accruing
December 31, 2020
Construction and land development	$	—	$	—	$	128	$	128	$	122,351	$	122,479	$	—
Agricultural real estate		1,198		34		—		1,232		253,109		254,341		—
1-4 Family residential properties		1,121		1,105		2,033		4,259		321,503		325,762		—
Multifamily residential properties		—		—		—		—		189,632		189,632		—
Commercial real estate		2,618		341		794		3,753		1,170,547		1,174,300		—
Loans secured by real estate		4,937		1,480		2,955		9,372		2,057,142		2,066,514		—
Agricultural loans		43		—		236		279		137,073		137,352		—
Commercial and industrial loans		2,426		8		1,420		3,854		734,459		738,313		—
Consumer loans		145		50		149		344		77,658		78,002		—
All other loans		—		—		—		—		118,238		118,238		—
Total loans	$	7,551	$	1,538	$	4,760	$	13,849	$	3,124,570	$	3,138,419	$	—
December 31, 2019
Construction and land development	$	235	$	—	$	—	$	235	$	93,907	$	94,142	$	—
Agricultural real estate		1,595		—		47		1,642		238,599		240,241		—
1-4 Family residential properties		3,834		2,288		4,713		10,835		325,592		336,427		—
Multifamily residential properties		1,348		46		1,131		2,525		151,423		153,948		—
Commercial real estate		602		495		2,241		3,338		992,364		995,702		—
Loans secured by real estate		7,614		2,829		8,132		18,575		1,801,885		1,820,460		—
Agricultural loans		300		—		307		607		135,517		136,124		—
Commercial and industrial loans		767		855		5,989		7,611		521,362		528,973		—
Consumer loans		454		196		150		800		82,383		83,183		—
All other loans		—		—		—		—		126,607		126,607		—
Total loans	$	9,135	$	3,880	$	14,578	$	27,593	$	2,667,754	$	2,695,347	$	—

Impaired Loans

The following tables present impaired loans as of December 31, 2020 and 2019 (in thousands):

	2020						2019
			Unpaid						Unpaid
	Recorded		Principal		Specific		Recorded		Principal		Specific
	Balance		Balance		Allowance		Balance		Balance		Allowance
Loans with a specific allowance:
Construction and land development	$	516	$	516	$	246	$	256	$	256	$	—
Agricultural real estate		—		—		—		—		—		—
1-4 Family residential properties		4,005		4,157		158		5,154		5,351		182
Multifamily residential properties		1,914		1,914		—		4,254		4,254		19
Commercial real estate		11,528		11,794		863		5,904		6,408		587
Loans secured by real estate		17,963		18,381		1,267		15,568		16,269		788
Agricultural loans		—		228		—		85		669		8
Commercial and industrial loans		3,523		4,878		664		7,653		8,789		301
Consumer loans		112		114		—		134		134		1
Total loans	$	21,598	$	23,601	$	1,931	$	23,440	$	25,861	$	1,098
Loans without a specific allowance:
Construction and land development	$	162	$	175	$	—	$	41	$	41	$	—
Agricultural real estate		359		359		—		479		479		—
1-4 Family residential properties		4,262		4,715		—		3,719		4,263		—
Multifamily residential properties		267		267		—		—		—		—
Commercial real estate		552		581		—		1,721		1,724		—
Loans secured by real estate		5,602		6,097		—		5,960		6,507		—
Agricultural loans		659		431		—		724		140		—
Commercial and industrial loans		907		1,331		—		916		3,065		—
Consumer loans		218		313		—		391		713		—
Total loans	$	7,386	$	8,172	$	—	$	7,991	$	10,425	$	—
Total loans:
Construction and land development	$	678	$	691	$	246	$	297	$	297	$	—
Agricultural real estate		359		359		—		479		479		—
1-4 Family residential properties		8,267		8,872		158		8,873		9,614		182
Multifamily residential properties		2,181		2,181		—		4,254		4,254		19
Commercial real estate		12,080		12,375		863		7,625		8,132		587
Loans secured by real estate		23,565		24,478		1,267		21,528		22,776		788
Agricultural loans		659		659		—		809		809		8
Commercial and industrial loans		4,430		6,209		664		8,569		11,854		301
Consumer loans		330		427		—		525		847		1
Total loans	$	28,984	$	31,773	$	1,931	$	31,431	$	36,286	$	1,098

Average Recorded Investment and Interest Income Recognized on Impaired Loans

The following tables present average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2020, 2019 and 2018 (in thousands):

	2020				2019				2018
	Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Construction and land development	$	694	$	7	$	622	$	32	$	2,558	$	37
Farm loans		827		—		1,218		—		415		—
1-4 Family residential properties		8,557		17		9,659		80		6,297		144
Multifamily residential properties		2,325		—		6,490		89		9,666		137
Commercial real estate		12,387		41		12,189		234		9,818		271
Loans secured by real estate		24,790		65		30,178		435		28,754		589
Agricultural loans		815		—		808		3		727		23
Commercial and industrial loans		4,941		1		10,065		9		9,003		6
Consumer loans		392		—		649		1		131		1
All other loans		—		—		—		—		3		—
Total loans	$	30,938	$	66	$	41,700	$	448	$	38,618	$	619

Recorded Balance of Nonaccrual Loans

The following table presents the Company’s recorded balance of nonaccrual loans at December 31, 2020 and December 31, 2019 (in thousands). This table excludes performing purchased credit deteriorated loans and performing troubled debt restructurings.

	Nonaccrual with no Allowance for		2020		2019
	Credit Loss		Nonaccrual		Nonaccrual
Construction and land development	$	162	$	162	$	41
Agricultural real estate		359		359		479
1-4 Family residential properties		6,747		6,930		7,379
Multifamily residential properties		2,181		2,181		3,137
Commercial real estate		7,345		8,760		4,351
Loans secured by real estate		16,794		18,392		15,387
Agricultural loans		659		659		769
Commercial and industrial loans		3,677		4,372		8,441
Consumer loans		327		327		521
Total loans	$	21,457	$	23,750	$	25,118

Acquired Loans with Credit Deterioration

The amount of these loans at December 31, 2019 was as follows (in thousands):

	December 31, 2019
Construction and land development	$	256
Agricultural real estate		—
1-4 Family residential properties		371
Multifamily residential properties		2,077
Commercial real estate		2,247
Loans secured by real estate		4,951
Agricultural loans		—
Commercial and industrial loans		—
Consumer loans		—
Carrying amount		4,951
Allowance for credit losses		(365	)
Carrying amount, net of allowance	$	4,586

Recorded Balance of Troubled Debt Restructurings

The following table presents the Company’s recorded balance of troubled debt restructurings at December 31, 2020 and 2019 (in thousands).

Troubled debt restructurings:	2020		2019
1-4 Family residential properties	$	1,603	$	1,905
Commercial real estate		5,170		1,746
Loans secured by real estate		6,773		3,651
Agricultural loans		228		669
Commercial and industrial loans		2,389		1,349
Consumer loans		112		134
Total	$	9,502	$	5,803
Performing troubled debt restructurings:
1-4 Family residential properties	$	1,268	$	1,382
Commercial real estate		3,045		1,146
Loans secured by real estate		4,313		2,528
Agricultural Loans		-		40
Commercial and industrial loans		58		128
Consumer loans		2		5
Total	$	4,373	$	2,701

Loans Modified as Troubled Debt Restructurings During Period

The following table presents loans modified as TDRs during the years ended December 31, 2020 and 2019 as a result of various modified loan factors (in thousands). The change in the recorded investment from pre-modification to post-modification was not material.

	December 31, 2020					December 31, 2019
	Number of		Recorded		Type of	Number of		Recorded		Type of
	Modifications		Investment		Modifications	Modifications		Investment		Modifications
1-4 Family residential properties		2	$	87			3	$	131	(a)(b)(c)
Commercial real estate		4		3,622	(b)		3		1,507	(b)(d)
Loans secured by real estate		6		3,709			6		1,638
Agricultural loans		0		-	(b)(c)		1		40	(b)
Commercial and industrial loans		4		2,314	(b)		5		127	(b)(c)
Consumer Loans		1		8	(b)		1		11	(c)
Total		11	$	6,031			13	$	1,816

Type of modifications:

(a)Reduction of stated interest rate of loan

(b)Change in payment terms

(c)Extension of maturity date

(d)Permanent reduction of the recorded investment