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v3.19.3.a.u2

Allowance for Loans Losses | 9 Months Ended
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Sep. 30, 2019
Receivables [Abstract] |
Allowance for Loans Losses | Note 4 – Allowance for Loans Losses A summary of changes in the allowance for loans losses (in thousands) for September 30, 2019 and December 31, 2018 is as follows:
|  | September 30, 2019 |  |  | December 31, 2018 |
(Dollars in thousands) |  |  |  |  |  |  |  |
Allowance, beginning of period |  | $ | 3,580 |  |  | $ | 2,803 |
Charge-Offs |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 43 |  |  | $ | 6 |
Real estate, construction |  |  | — |  |  |  | — |
Real estate, mortgage |  |  | 3 |  |  |  | 13 |
Consumer and other loans |  |  | 733 |  |  |  | 545 |
Total charge-offs |  |  | 779 |  |  |  | 564 |
Recoveries |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  |  | — |
Real estate, construction |  |  | — |  |  |  | — |
Real estate, mortgage |  |  | (6 | ) |  |  | (12 | )
Consumer and other loans |  |  | (132 | ) |  |  | (104 | )
Total recoveries |  |  | (138 | ) |  |  | (116 | )
Net charge-offs (recoveries) |  |  | 641 |  |  |  | 448 |
Provision for loan losses |  |  | 1,465 |  |  |  | 1,225 |
Allowance, end of period |  | $ | 4,404 |  |  | $ | 3,580 |
|  | Individually Evaluated for Impairment |  |  | Collectively Evaluated for Impairment |  |  | Total |
September 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 291 |  |  | $ | 50,535 |  |  | $ | 50,826 |
Agricultural |  |  | — |  |  |  | 175 |  |  |  | 175 |
Real Estate – construction, commercial |  |  | — |  |  |  | 19,876 |  |  |  | 19,876 |
Real Estate – construction, residential |  |  | — |  |  |  | 16,364 |  |  |  | 16,364 |
Real Estate – mortgage, commercial |  |  | 735 |  |  |  | 166,488 |  |  |  | 167,223 |
Real Estate – mortgage, residential |  |  | 658 |  |  |  | 165,207 |  |  |  | 165,865 |
Real Estate – mortgage, farmland |  |  | — |  |  |  | 3,754 |  |  |  | 3,754 |
Consumer installment loans |  |  | — |  |  |  | 37,433 |  |  |  | 37,433 |
Gross loans |  |  | 1,684 |  |  |  | 459,832 |  |  |  | 461,516 |
Less: Unearned income |  |  | — |  |  |  | (638 | ) |  |  | (638 | )
Total |  | $ | 1,684 |  |  | $ | 459,194 |  |  | $ | 460,878 |
|  | Individually Evaluated for Impairment |  |  | Collectively Evaluated for Impairment |  |  | Total |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | — |  |  | $ | 49,076 |  |  | $ | 49,076 |
Agricultural |  |  | — |  |  |  | 216 |  |  |  | 216 |
Real Estate – construction, commercial |  |  | — |  |  |  | 14,666 |  |  |  | 14,666 |
Real Estate – construction, residential |  |  | — |  |  |  | 15,102 |  |  |  | 15,102 |
Real Estate – mortgage, commercial |  |  | 1,258 |  |  |  | 149,255 |  |  |  | 150,513 |
Real Estate – mortgage residential |  |  | 688 |  |  |  | 149,168 |  |  |  | 149,856 |
Real Estate – mortgage, farmland |  |  | — |  |  |  | 4,179 |  |  |  | 4,179 |
Consumer installment loans |  |  | — |  |  |  | 31,979 |  |  |  | 31,979 |
Gross loans |  |  | 1,946 |  |  |  | 413,641 |  |  |  | 415,587 |
Less: Unearned income |  |  | — |  |  |  | (719 | ) |  |  | (719 | )
Total |  | $ | 1,946 |  |  | $ | 412,922 |  |  | $ | 414,868 |
The following table presents information related to impaired loans, by portfolio segment, at the dates presented.
|  | September 30, 2019 |
(in thousands) |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no specific allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – mortgage, residential |  | $ | 658 |  |  | $ | 658 |  |  | $ | — |  |  | $ | 661 |  |  | $ | 7 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 291 |  |  |  | 291 |  |  |  | 151 |  |  |  | 146 |  |  |  | 2 |
Real estate – mortgage, commercial |  |  | 735 |  |  |  | 735 |  |  |  | 100 |  |  |  | 735 |  |  |  | 5 |
|  | $ | 1,684 |  |  | $ | 1,684 |  |  | $ | 251 |  |  | $ | 1,542 |  |  | $ | 14 |
|  | December 31, 2018 |
(in thousands) |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no specific allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – mortgage, residential |  | $ | 1,946 |  |  | $ | 1,946 |  |  | $ | — |  |  | $ | 2,067 |  |  | $ | 64 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – mortgage, commercial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 1,946 |  |  | $ | 1,946 |  |  | $ | — |  |  | $ | 2,067 |  |  | $ | 64 |
Purchased loans from the 2016 River Bancorp, Inc. acquisition had remaining balances (in thousands) of $25,091 and 34,672 as of September 30, 2019 and December 31, 2018, respectively. Of these balances three loan relationships were considered specifically impaired purchased credit-impaired loans. One of these relationships was resolved during 2018 and the Company recovered $200 of the balance previously written-off. During the first quarter of 2019, another loan relationship was resolved and the Company recovered $200 of the balance previously written-off. At September 30, 2019, the remaining specifically impaired PCI loans totaled $2,318 with a specific impairment of $190. The following table presents the recorded investment in the segments of the River Bancorp, Inc. purchased loans as of September 30, 2019 and December 31, 2018 (in thousands):
|  | September 30, 2019 |  |  | December 31, 2018 |
Real Estate |  |  |  |  |  |  |  |
Construction loans and all land development and other land loans |  | $ | 1,415 |  |  | $ | 1,522 |
Secured by farmland |  |  | 3 |  |  |  | 319 |
Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit |  |  | 2,814 |  |  |  | 3,376 |
Secured by first liens |  |  | 7,803 |  |  |  | 10,448 |
Secured by junior liens |  |  | 399 |  |  |  | 505 |
Secured by multifamily (5 or more) residential properties |  |  | 95 |  |  |  | 250 |
Loans secured by owner-occupied, nonfarm nonresidential properties |  |  | 4,146 |  |  |  | 7,344 |
Loans secured by other nonfarm nonresidential properties |  |  | 5,395 |  |  |  | 6,239 |
Commercial and Industrial |  |  | 2,906 |  |  |  | 4,457 |
Other |  |  |  |  |  |  |  |
Other revolving credit plans |  |  | 37 |  |  |  | 89 |
Automobile loans |  |  | 10 |  |  |  | 30 |
Other consumer loans |  |  | 68 |  |  |  | 93 |
Total |  | $ | 25,091 |  |  | $ | 34,672 |
The following table presents the Company’s loan portfolio by internal loan grade (in thousands) as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019 |
|  | Grade 1 Prime |  |  | Grade 2 Desirable |  |  | Grade 3 Good |  |  | Grade 4 Acceptable |  |  | Grade 5 Pass/Watch |  |  | Grade 6 Special Mention |  |  | Grade 7 Substandard |  |  | Total |
Commercial and industrial |  | $ | 406 |  |  | $ | 1,827 |  |  | $ | 21,936 |  |  | $ | 25,540 |  |  | $ | 579 |  |  | $ | — |  |  | $ | 538 |  |  | $ | 50,826 |
Agricultural |  |  | — |  |  |  | 103 |  |  |  | 66 |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 175 |
Real Estate – construction, commercial |  |  | — |  |  |  | 659 |  |  |  | 10,210 |  |  |  | 7,923 |  |  |  | 104 |  |  |  | — |  |  |  | 980 |  |  |  | 19,876 |
Real Estate – construction, residential |  |  | — |  |  |  | — |  |  |  | 4,295 |  |  |  | 8,011 |  |  |  | 4,058 |  |  |  | — |  |  |  | — |  |  |  | 16,364 |
Real Estate – mortgage, commercial |  |  | — |  |  |  | 1,656 |  |  |  | 81,973 |  |  |  | 70,093 |  |  |  | 10,226 |  |  |  | 1,012 |  |  |  | 2,263 |  |  |  | 167,223 |
Real Estate – mortgage residential |  |  | — |  |  |  | 2,917 |  |  |  | 81,246 |  |  |  | 76,351 |  |  |  | 3,648 |  |  |  | 96 |  |  |  | 1,607 |  |  |  | 165,865 |
Real Estate – mortgage, farmland |  |  | 1,565 |  |  |  | 100 |  |  |  | 1,418 |  |  |  | 218 |  |  |  | 453 |  |  |  | — |  |  |  | — |  |  |  | 3,754 |
Consumer installment loans |  |  | 297 |  |  |  | 32 |  |  |  | 23,863 |  |  |  | 12,447 |  |  |  | 106 |  |  |  | — |  |  |  | 688 |  |  |  | 37,433 |
Gross loans |  |  | 2,268 |  |  |  | 7,294 |  |  |  | 225,007 |  |  |  | 200,589 |  |  |  | 19,174 |  |  |  | 1,108 |  |  |  | 6,076 |  |  |  | 461,516 |
Less: Unearned income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (638 | )
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 460,878 |
|  | December 31, 2018 |
|  | Grade 1 Prime |  |  | Grade 2 Desirable |  |  | Grade 3 Good |  |  | Grade 4 Acceptable |  |  | Grade 5 Pass/Watch |  |  | Grade 6 Special Mention |  |  | Grade 7 Substandard |  |  | Total |
Commercial and industrial |  | $ | 44 |  |  | $ | 2,660 |  |  | $ | 21,009 |  |  | $ | 24,254 |  |  | $ | 797 |  |  | $ | — |  |  | $ | 312 |  |  | $ | 49,076 |
Agricultural |  |  | 9 |  |  |  | 99 |  |  |  | 105 |  |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 216 |
Real Estate – construction, commercial |  |  | — |  |  |  | 485 |  |  |  | 7,118 |  |  |  | 5,937 |  |  |  | 106 |  |  |  | — |  |  |  | 1,020 |  |  |  | 14,666 |
Real Estate – construction, residential |  |  | — |  |  |  | — |  |  |  | 4,305 |  |  |  | 5,059 |  |  |  | 5,738 |  |  |  | — |  |  |  | — |  |  |  | 15,102 |
Real Estate – mortgage, commercial |  |  | — |  |  |  | 1,920 |  |  |  | 82,097 |  |  |  | 53,487 |  |  |  | 8,470 |  |  |  | 1,668 |  |  |  | 2,871 |  |  |  | 150,513 |
Real Estate – mortgage residential |  |  | — |  |  |  | 3,647 |  |  |  | 76,496 |  |  |  | 63,397 |  |  |  | 3,805 |  |  |  | 522 |  |  |  | 1,989 |  |  |  | 149,856 |
Real Estate – mortgage, farmland |  |  | 1,700 |  |  |  | 100 |  |  |  | 1,340 |  |  |  | 730 |  |  |  | — |  |  |  | — |  |  |  | 309 |  |  |  | 4,179 |
Consumer installment loans |  |  | 213 |  |  |  | 29 |  |  |  | 16,174 |  |  |  | 15,081 |  |  |  | 123 |  |  |  | — |  |  |  | 359 |  |  |  | 31,979 |
Gross loans |  |  | 1,966 |  |  |  | 8,940 |  |  |  | 208,644 |  |  |  | 167,948 |  |  |  | 19,039 |  |  |  | 2,190 |  |  |  | 6,860 |  |  |  | 415,587 |
Less: Unearned income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (719 | )
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 414,868 |
The Company also utilizes the grades 8 (Doubtful) and 9 (Loss). There were no loans classified in these categories at September 30, 2019 and December 31, 2018.

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- Definition The entire disclosure for allowance for credit losses. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI http://asc.fasb.org/topic&trid=2196771 + Details
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