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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Summary of Loan Portfolio by Type of Loan
The following table summarizes our loan portfolio by type of loan at December 31: 
 
2018
 
2017
Commercial and industrial
$
261,779

 
$
197,508

Real estate:
 
 
 
Construction and development
237,503

 
196,774

Commercial real estate
582,519

 
418,137

Farmland
67,845

 
59,023

1-4 family residential
393,067

 
374,371

Multi-family residential
38,386

 
36,574

Consumer
54,777

 
51,267

Agricultural
23,277

 
25,596

Overdrafts
382

 
294

Total loans
1,659,535

 
1,359,544

Net of:
 
 
 
Net deferred loan fees and costs
560

 
1,094

Allowance for loan losses
(14,651
)
 
(12,859
)
Total net loans
$
1,645,444

 
$
1,347,779
Schedule of Related Party Loans Receivable
Loans to principal officers, directors, and their affiliates during the year ended December 31, 2018, was as follows:
 
2018
Beginning balance
$
44,506

New loans
29,285

Repayments
(17,592
)
Ending balance
$
56,199
Schedule of Allowance for Loan Losses Activity
The following table presents the activity in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method for the years ended December 31, 2018, 2017 and 2016:
December 31, 2018
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Provision for loan losses
426

 
196

 
1,472

 
120

 
(196
)
 
2

 
127

 
(12
)
 
115

 
2,250

Loans charged-off
(367
)
 
—

 
(33
)
 
—

 
(93
)
 
—

 
(254
)
 
(2
)
 
(169
)
 
(918
)
Recoveries
111

 
—

 
1

 
—

 
135

 
—

 
90

 
65

 
58

 
460

Ending balance
$
1,751

 
$
1,920

 
$
6,025

 
$
643

 
$
2,868

 
$
631

 
$
565

 
$
238

 
$
10

 
$
14,651

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
64

 
$
4

 
$
341

 
$
78

 
$
6

 
$
—

 
$
—

 
$
—

 
$
—

 
$
493

Collectively evaluated for impairment
1,687

 
1,916

 
5,684

 
565

 
2,862

 
631

 
565

 
238

 
10

 
14,158

Ending balance
$
1,751

 
$
1,920

 
$
6,025

 
$
643

 
$
2,868

 
$
631

 
$
565

 
$
238

 
$
10

 
$
14,651

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,022

 
$
1,250

 
$
7,153

 
$
140

 
$
1,383

 
$
—

 
$
—

 
$
408

 
$
—

 
$
11,356

Collectively evaluated for impairment
260,757

 
236,253

 
575,366

 
67,705

 
391,684

 
38,386

 
54,777

 
22,869

 
382

 
1,648,179

Ending balance
$
261,779

 
$
237,503

 
$
582,519

 
$
67,845

 
$
393,067

 
$
38,386

 
$
54,777

 
$
23,277

 
$
382

 
$
1,659,535

December 31, 2017
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Provision for loan losses
272

 
563

 
1,405

 
41

 
(418
)
 
348

 
253

 
276

 
110

 
2,850

Loans charged-off
(1,080
)
 
—

 
(84
)
 
—

 
(543
)
 
—

 
(344
)
 
(242
)
 
(165
)
 
(2,458
)
Recoveries
797

 
—

 
—

 
—

 
23

 
—

 
108

 
—

 
55

 
983

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
17

 
$
—

 
$
27

 
$
85

 
$
5

 
$
—

 
$
—

 
$
—

 
$
—

 
$
134

Collectively evaluated for impairment
1,564

 
1,724

 
4,558

 
438

 
3,017

 
629

 
602

 
187

 
6

 
12,725

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
463

 
$
—

 
$
4,258

 
$
163

 
$
842

 
$
217

 
$
—

 
$
397

 
$
—

 
$
6,340

Collectively evaluated for impairment
197,045

 
196,774

 
413,879

 
58,860

 
373,529

 
36,357

 
51,267

 
25,199

 
294

 
1,353,204

Ending balance
$
197,508

 
$
196,774

 
$
418,137

 
$
59,023

 
$
374,371

 
$
36,574

 
$
51,267

 
$
25,596

 
$
294

 
$
1,359,544

December 31, 2016
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,878

 
$
1,004

 
$
2,106

 
$
400

 
$
2,839

 
$
325

 
$
562

 
$
138

 
$
11

 
$
9,263

Provision for loan losses
910

 
162

 
1,158

 
82

 
1,117

 
(44
)
 
171

 
15

 
69

 
3,640

Loans charged-off
(1,213
)
 
(9
)
 
—

 
—

 
(71
)
 
—

 
(269
)
 
—

 
(200
)
 
(1,762
)
Recoveries
17

 
4

 
—

 
—

 
75

 
—

 
121

 
—

 
126

 
343

Ending balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
64

 
$
—

 
$
—

 
$
47

 
$
108

 
$
—

 
$
34

 
$
—

 
$
—

 
$
253

Collectively evaluated for impairment
1,528

 
1,161

 
3,264

 
435

 
3,852

 
281

 
551

 
153

 
6

 
11,231

Ending balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
231

 
$
1,825

 
$
1,196

 
$
258

 
$
2,588

 
$
5

 
$
200

 
$
15

 
$
—

 
$
6,318

Collectively evaluated for impairment
223,481

 
127,806

 
366,881

 
62,108

 
359,077

 
26,074

 
52,977

 
18,886

 
317

 
1,237,607

Ending balance
$
223,712

 
$
129,631

 
$
368,077

 
$
62,366

 
$
361,665

 
$
26,079

 
$
53,177

 
$
18,901

 
$
317

 
$
1,243,925
Summary of Credit Exposure by Internally Assigned Grade
The following is a discussion of the primary credit quality indicators most closely monitored for the respective portfolio segment classes:
 
 
 
Commercial and industrial:
  
In assessing risk associated with commercial loans, management considers the business’s cash flow and the value of the underlying collateral to be the primary credit quality indicators.
 
 
Construction and development:
  
In assessing the credit quality of construction loans, management considers the ability of the borrower to finance principal and interest payments in the event that he is unable to sell the completed structure to be a primary credit quality indicator. For real estate development loans, management also considers the likelihood of the successful sale of the constructed properties in the development.
 
 
Commercial real estate:
  
Management considers the strength of the borrower’s cash flows, changes in property values and occupancy status to be key credit quality indicators of commercial real estate loans.
 
 
Farmland:
  
In assessing risk associated with farmland loans, management considers the borrower’s cash flows and underlying property values to be key credit quality indicators.
 
 
Consumer:
  
Management considers the debt to income ratio of the borrower, the borrower’s credit history, the availability of other credit to the borrower, the borrower’s past-due history, and, if applicable, the value of the underlying collateral to be primary credit quality indicators.
 
 
1-4 family residential:
  
Management considers changes in the local economy, changes in property values, and changes in local unemployment rates to be key credit quality indicators of the loans in the 1-4 family residential loan segment.
 
 
Multi-family residential:
  
Management considers changes in the local economy, changes in property values, vacancy rates and changes in local unemployment rates to be key credit quality indicators of the loans in the multifamily loan segment.
 
 
Agricultural:
  
In assessing risk associated with agricultural loans, management considers the borrower’s cash flows, the value of the underlying collateral and sources of secondary repayment to be primary credit quality indicators.
The following tables summarize the credit exposure in the Company's consumer and commercial loan portfolios as of:
December 31, 2018
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4
family
residential
 
Multi-family
residential
 
Consumer
and
Overdrafts
 
Agricultural
 
Total
Grade:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
$
260,863

 
$
236,253

 
$
569,648

 
$
67,541

 
$
391,956

 
$
38,386

 
$
55,055

 
$
22,713

 
$
1,642,415

Special mention
224

 
—

 
5,691

 
49

 
514

 
—

 
48

 
115

 
6,641

Substandard
692

 
1,250

 
7,180

 
255

 
597

 
—

 
56

 
449

 
10,479

Doubtful
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total
$
261,779

 
$
237,503

 
$
582,519

 
$
67,845

 
$
393,067

 
$
38,386

 
$
55,159

 
$
23,277

 
$
1,659,535

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real estate
 
Farmland
 
1-4
family
residential
 
Multi-family
residential
 
Consumer
and
Overdrafts
 
Agricultural
 
Total
Grade:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
$
196,890

 
$
196,515

 
$
412,488

 
$
58,623

 
$
373,154

 
$
16,073

 
$
51,409

 
$
24,650

 
$
1,329,802

Special mention
348

 
259

 
1,135

 
226

 
442

 
20,284

 
65

 
454

 
23,213

Substandard
270

 
—

 
4,514

 
174

 
775

 
217

 
87

 
492

 
6,529

Doubtful
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total
$
197,508

 
$
196,774

 
$
418,137

 
$
59,023

 
$
374,371

 
$
36,574

 
$
51,561

 
$
25,596

 
$
1,359,544
Summary of Payment Status of Loans
The following table summarizes the payment status of loans in the Company’s total loan portfolio, including an aging of delinquent loans, loans 90 days or more past due continuing to accrue interest and loans classified as nonperforming as of:
December 31, 2018
30 – 59
Days
Past Due
 
60 – 89
Days
Past Due
 
90 Days
and Greater
Past Due
 
Total
Past Due
 
Current
 
Total Loans
 
Recorded
Investment
> 90 Days
and Accruing
Commercial and industrial
$
209

 
$
493

 
$
266

 
$
968

 
$
260,811

 
$
261,779

 
$
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and development
735

 
2,816

 
—

 
3,551

 
233,952

 
237,503

 
—

Commercial real estate
1,803

 
3

 
3,227

 
5,033

 
577,486

 
582,519

 
—

Farmland
485

 
—

 
—

 
485

 
67,360

 
67,845

 
—

1-4 family residential
2,849

 
666

 
596

 
4,111

 
388,956

 
393,067

 
—

Multi-family residential
—

 
—

 
—

 
—

 
38,386

 
38,386

 
—

Consumer
526

 
51

 
56

 
633

 
54,144

 
54,777

 
—

Agricultural
105

 
59

 
41

 
205

 
23,072

 
23,277

 
—

Overdrafts
—

 
—

 
—

 
—

 
382

 
382

 
—

Total
$
6,712

 
$
4,088

 
$
4,186

 
$
14,986

 
$
1,644,549

 
$
1,659,535

 
$
—


December 31, 2017
30 – 59
Days
Past Due
 
60 – 89
Days
Past Due
 
90 Days
and Greater
Past Due
 
Total
Past Due
 
Current
 
Total
Loans
 
Recorded
Investment
> 90 Days
and Accruing
Commercial and industrial
$
1,273

 
$
93

 
$
17

 
$
1,383

 
$
196,125

 
$
197,508

 
$
—

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and development
117

 
—

 
—

 
117

 
196,657

 
196,774

 
—

Commercial real estate
192

 
265

 
1,067

 
1,524

 
416,613

 
418,137

 
—

Farmland
139

 
—

 
6

 
145

 
58,878

 
59,023

 
—

1-4 family residential
3,998

 
416

 
800

 
5,214

 
369,157

 
374,371

 
—

Multi-family residential
—

 
—

 
217

 
217

 
36,357

 
36,574

 
—

Consumer
381

 
69

 
87

 
537

 
50,730

 
51,267

 
—

Agricultural
204

 
2

 
—

 
206

 
25,390

 
25,596

 
—

Overdrafts
—

 
—

 
—

 
—

 
294

 
294

 
—

Total
$
6,304

 
$
845

 
$
2,194

 
$
9,343

 
$
1,350,201

 
$
1,359,544

 
$
—
Schedule of Nonaccrual Loans
The following table presents the nonaccrual loans by category as of December 31:
 
2018
 
2017
Commercial and industrial
$
366

 
$
77

Real estate:
 
 
 
Construction and development
—

 
—

Commercial real estate
3,700

 
1,422

Farmland
140

 
163

1-4 family residential
1,567

 
1,937

Multi-family residential
—

 
217

Consumer
66

 
138

Agricultural
52

 
50

Total
$
5,891

 
$
4,004
Summary of Troubled Debt Restructuring
The outstanding balances of TDRs are shown below at December 31:
 
2018
 
2017
Nonaccrual TDRs
$
335

 
$
—

Performing TDRs
861

 
657

Total
$
1,196

 
$
657

Specific reserves on TDRs
$
—

 
$
17


The following tables present loans by class modified as TDRs that occurred during the years ended:
December 31, 2018
Number
of
Contracts
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
Troubled Debt Restructurings:
 
 
 
 
 
1-4 family residential
3

 
$
504

 
$
504

Agricultural
1

 
78

 
78

Total
4

 
$
582

 
$
582

There was one TDR that subsequently defaulted in 2018, therefore remains on nonaccrual status. The TDRs described above did not increase the allowance for loan losses and resulted in no charge-offs during the year ended December 31, 2018.
 
December 31, 2017
Number
of
Contracts
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
Troubled Debt Restructurings:
 
 
 
 
 
Commercial and industrial
2

 
$
381

 
$
364

1-4 family residential
1

 
11

 
11

Total
3

 
$
392

 
$
375
Summary of Impaired Loans
The following table presents information about the Company’s impaired loans as of:
December 31, 2018
Unpaid
Principal
Balance
 
Recorded
Investment
 
Related
Allowance
 
Average
Recorded
Investment
With no related allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
$
837

 
$
837

 
$
—

 
$
842

Real estate:
 
 
 
 
 
 
 
Construction and development
720

 
720

 
—

 
518

Commercial real estate
5,168

 
5,168

 
—

 
5,138

Farmland
—

 
—

 
—

 
62

1-4 family residential
1,223

 
1,223

 
—

 
1,132

Multi-family residential
—

 
—

 
—

 
54

Consumer
—

 
—

 
—

 
—

Agricultural
408

 
408

 
—

 
456

Subtotal
8,356

 
8,356

 
—

 
8,202

With allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
185

 
185

 
64

 
300

Real estate:
 
 
 
 
 
 
 
Construction and development
530

 
530

 
4

 
44

Commercial real estate
1,985

 
1,985

 
341

 
677

Farmland
140

 
140

 
78

 
147

1-4 family residential
160

 
160

 
6

 
128

Multi-family residential
—

 
—

 
—

 
—

Consumer
—

 
—

 
—

 
—

Agricultural
—

 
—

 
—

 
52

Subtotal
3,000

 
3,000

 
493

 
1,348

Total
$
11,356

 
$
11,356

 
$
493

 
$
9,550

 
The following table presents information about the Company’s impaired loans as of December 31, 2017:
December 31, 2017
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
With no related allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
$
437

 
$
437

 
$
—

 
$
434

Real estate:
 
 
 
 
 
 
 
Construction and development
—

 
—

 
—

 
311

Commercial real estate
3,979

 
3,979

 
—

 
4,230

Farmland
6

 
6

 
—

 
90

1-4 family residential
681

 
681

 
—

 
1,096

Multi-family residential
217

 
217

 
—

 
180

Consumer
—

 
—

 
—

 
61

Agricultural
397

 
397

 
—

 
384

Subtotal
5,717

 
5,717

 
—

 
6,786

With allowance recorded:
 
 
 
 
 
 
 
Commercial and industrial
26

 
26

 
17

 
315

Real estate:
 
 
 
 
 
 
 
Construction and development
—

 
—

 
—

 
7

Commercial real estate
279

 
279

 
27

 
505

Farmland
157

 
157

 
85

 
131

1-4 family residential
161

 
161

 
5

 
754

Multi-family residential
—

 
—

 
—

 
19

Consumer
—

 
—

 
—

 
42

Agricultural
—

 
—

 
—

 
180

Subtotal
623

 
623

 
134

 
1,953

Total
$
6,340

 
$
6,340

 
$
134

 
$
8,739