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Loans | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loans | Loans The following table presents the composition of loans segregated by legacy and purchased loans and by class of loans, as of September 30, 2020 and December 31, 2019. Purchased loans are defined as loans that were acquired in bank acquisitions.
| September 30, 2020
(dollars in thousands) | Legacy Loans |  | Purchased Loans |  | Total
Construction, land and land development | $ | 110,162 |  |  | $ | 18,129 |  |  | $ | 128,291 |
Other commercial real estate | 464,100 |  |  | 45,892 |  |  | 509,992 |
Total commercial real estate | 574,262 |  |  | 64,021 |  |  | 638,283 |
Residential real estate | 168,139 |  |  | 16,979 |  |  | 185,118 |
Commercial, financial, & agricultural | 242,351 |  |  | 12,564 |  |  | 254,915 |
Consumer and other | 20,420 |  |  | 2,870 |  |  | 23,290 |
Total Loans | $ | 1,005,172 |  |  | $ | 96,434 |  |  | $ | 1,101,606 |
| December 31, 2019
(dollars in thousands) | Legacy Loans |  | Purchased Loans |  | Total
Construction, land and land development | $ | 83,036 |  |  | $ | 13,061 |  |  | $ | 96,097 |
Other commercial real estate | 481,943 |  |  | 58,296 |  |  | 540,239 |
Total commercial real estate | 564,979 |  |  | 71,357 |  |  | 636,336 |
Residential real estate | 171,341 |  |  | 23,455 |  |  | 194,796 |
Commercial, financial, & agricultural | 91,535 |  |  | 22,825 |  |  | 114,360 |
Consumer and other | 19,245 |  |  | 4,077 |  |  | 23,322 |
Total Loans | $ | 847,100 |  |  | $ | 121,714 |  |  | $ | 968,814 |
Commercial and industrial loans are extended to a diverse group of businesses within the Company’s market area. These loans are often underwritten based on the borrower’s ability to service the debt from income from the business. The change in commercial, financial & agricultural loans was primarily a result of commercial and industrial PPP loan originations during the second quarter of 2020, totaling $137.8 million at September 30, 2020. Real estate construction loans often require loan funds to be advanced prior to completion of the project. Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans. Consumer loans are originated at the Bank level. Credit Quality Indicators. As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (1) the risk grade assigned to commercial and consumer loans, (2) the level of classified commercial loans, (3) net charge-offs, (4) nonperforming loans, and (5) the general economic conditions in the Company’s geographic markets. The Company uses an eight category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades: •Grades 1 and 2 – Borrowers with these assigned grades range in risk from virtual absence of risk to minimal risk. Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds. Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans. Loans in this category fall into the “pass” classification. •Grades 3 and 4 – Loans assigned these “pass” risk grades are made to borrowers with acceptable credit quality and risk. The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average. •Grade 5 – This grade includes “special mention” loans on management’s watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term. •Grade 6 – This grade includes “substandard” loans in accordance with regulatory guidelines. This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms. Loans considered to be impaired are assigned this grade, and these loans often have assigned loss allocations as part of the allowance for loan and lease losses. Generally, loans on which interest accrual has been stopped would be included in this grade. •Grades 7 and 8 – These grades correspond to regulatory classification definitions of “doubtful” and “loss,” respectively. In practice, any loan with these grades would be for a very short period of time, of which the Company has no loans with these assigned grades at September 30, 2020. Management manages the Company’s problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 6. The following table presents the loan portfolio, excluding purchased loans, by credit quality indicator (risk grade) as of September 30, 2020 and December 31, 2019. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes.
(dollars in thousands) | Pass |  | Special Mention |  | Substandard |  | Total Loans
September 30, 2020 |  |  |  |  |  |  |
Construction, land and land development | $ | 99,109 |  |  | $ | 3,930 |  |  | $ | 7,123 |  |  | $ | 110,162 |
Other commercial real estate | 422,661 |  |  | 37,241 |  |  | 4,198 |  |  | 464,100 |
Total commercial real estate | 521,770 |  |  | 41,171 |  |  | 11,321 |  |  | 574,262 |
Residential real estate | 157,809 |  |  | 3,720 |  |  | 6,610 |  |  | 168,139 |
Commercial, financial, & agricultural | 238,613 |  |  | 2,320 |  |  | 1,418 |  |  | 242,351 |
Consumer and other | 20,115 |  |  | 123 |  |  | 182 |  |  | 20,420 |
Total Loans | $ | 938,307 |  |  | $ | 47,334 |  |  | $ | 19,531 |  |  | $ | 1,005,172 |
(dollars in thousands) |  |  |  |  |  |  |
December 31, 2019 |  |  |  |  |  |  |
Construction, land and land development | $ | 82,322 |  |  | $ | 445 |  |  | $ | 269 |  |  | $ | 83,036 |
Other commercial real estate | 459,064 |  |  | 13,438 |  |  | 9,441 |  |  | 481,943 |
Total commercial real estate | 541,386 |  |  | 13,883 |  |  | 9,710 |  |  | 564,979 |
Residential real estate | 159,194 |  |  | 4,632 |  |  | 7,515 |  |  | 171,341 |
Commercial, financial, & agricultural | 86,558 |  |  | 1,973 |  |  | 3,004 |  |  | 91,535 |
Consumer and other | 18,883 |  |  | 148 |  |  | 214 |  |  | 19,245 |
Total Loans | $ | 806,021 |  |  | $ | 20,636 |  |  | $ | 20,443 |  |  | $ | 847,100 |
The following table presents the purchased loan portfolio by credit quality indicator (risk grade) as of September 30, 2020 and December 31, 2019. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes. For the period ending September 30, 2020, the Company did not have any loans classified as “doubtful” or a “loss”.
(dollars in thousands) | Pass |  | Special Mention |  | Substandard |  | Total Loans
September 30, 2020 |  |  |  |  |  |  |
Construction, land and land development | $ | 16,430 |  |  | $ | 1,620 |  |  | $ | 79 |  |  | $ | 18,129 |
Other commercial real estate | 43,510 |  |  | 372 |  |  | 2,010 |  |  | 45,892 |
Total commercial real estate | 59,940 |  |  | 1,992 |  |  | 2,089 |  |  | 64,021 |
Residential real estate | 16,585 |  |  | 316 |  |  | 78 |  |  | 16,979 |
Commercial, financial, & agricultural | 10,637 |  |  | 1,889 |  |  | 38 |  |  | 12,564 |
Consumer and other | 2,768 |  |  | 19 |  |  | 83 |  |  | 2,870 |
Total Loans | $ | 89,930 |  |  | $ | 4,216 |  |  | $ | 2,288 |  |  | $ | 96,434 |
December 31, 2019 |  |  |  |  |  |  |
Construction, land and land development | $ | 12,996 |  |  | $ | — |  |  | $ | 65 |  |  | $ | 13,061 |
Other commercial real estate | 57,881 |  |  | 381 |  |  | 34 |  |  | 58,296 |
Total commercial real estate | 70,877 |  |  | 381 |  |  | 99 |  |  | 71,357 |
Residential real estate | 23,097 |  |  | 249 |  |  | 109 |  |  | 23,455 |
Commercial, financial, & agricultural | 19,443 |  |  | 2,949 |  |  | 433 |  |  | 22,825 |
Consumer and other | 4,077 |  |  | — |  |  | — |  |  | 4,077 |
Total Loans | $ | 117,494 |  |  | $ | 3,579 |  |  | $ | 641 |  |  | $ | 121,714 |
A loan’s risk grade is assigned at loan origination and is based on the financial strength of the borrower and the type of collateral. Loan risk grades are subject to review at various times throughout the year as part of the Company’s ongoing loan review process. Loans with an assigned risk grade of six or below and an outstanding balance of $250,000 or more are reassessed on a quarterly basis. During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired. In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas. The unemployment rates are reviewed on a quarterly basis as part of the allowance for loan loss determination. Loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory guidelines. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. The following table presents the aging of the amortized cost basis in legacy loans by aging category and accrual status as of September 30, 2020 and December 31, 2019:
(dollars in thousands) | 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Accruing Loans Past Due |  | Nonaccrual Loans |  | Current Loans |  | Total Loans
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 90 |  |  | $ | — |  |  | $ | 90 |  |  | $ | — |  |  | $ | 110,072 |  |  | $ | 110,162 |
Other commercial real estate | 206 |  |  | — |  |  | 206 |  |  | 2,586 |  |  | 461,308 |  |  | 464,100 |
Total commercial real estate | 296 |  |  | — |  |  | 296 |  |  | 2,586 |  |  | 571,380 |  |  | 574,262 |
Residential real estate | 1,390 |  |  | — |  |  | 1,390 |  |  | 3,532 |  |  | 163,217 |  |  | 168,139 |
Commercial, financial, & agricultural | 193 |  |  | — |  |  | 193 |  |  | 1,451 |  |  | 240,707 |  |  | 242,351 |
Consumer and other | 49 |  |  | — |  |  | 49 |  |  | 102 |  |  | 20,269 |  |  | 20,420 |
Total Loans | $ | 1,928 |  |  | $ | — |  |  | $ | 1,928 |  |  | $ | 7,671 |  |  | $ | 995,573 |  |  | $ | 1,005,172 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 50 |  |  | $ | — |  |  | $ | 50 |  |  | $ | 32 |  |  | $ | 82,954 |  |  | $ | 83,036 |
Other commercial real estate | 335 |  |  | — |  |  | 335 |  |  | 3,738 |  |  | 477,870 |  |  | 481,943 |
Total commercial real estate | 385 |  |  | — |  |  | 385 |  |  | 3,770 |  |  | 560,824 |  |  | 564,979 |
Residential real estate | 1,296 |  |  | — |  |  | 1,296 |  |  | 3,643 |  |  | 166,402 |  |  | 171,341 |
Commercial, financial, & agricultural | 212 |  |  | — |  |  | 212 |  |  | 1,628 |  |  | 89,695 |  |  | 91,535 |
Consumer and other | 21 |  |  | — |  |  | 21 |  |  | 138 |  |  | 19,086 |  |  | 19,245 |
Total Loans | $ | 1,914 |  |  | $ | — |  |  | $ | 1,914 |  |  | $ | 9,179 |  |  | $ | 836,007 |  |  | $ | 847,100 |
The following table presents the aging of the amortized cost basis in purchased loans by aging category and accrual status as of September 30, 2020 and December 31, 2019:
(dollars in thousands) | 30-89 Days Past Due |  | 90 Days or More Past Due |  | Total Accruing Loans Past Due |  | Nonaccrual Loans |  | Current Loans |  | Total Loans
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 136 |  |  | $ | — |  |  | $ | 136 |  |  | $ | 79 |  |  | $ | 17,914 |  |  | $ | 18,129 |
Other commercial real estate | — |  |  | — |  |  | — |  |  | 1,976 |  |  | 43,916 |  |  | 45,892 |
Total commercial real estate | 136 |  |  | — |  |  | 136 |  |  | 2,055 |  |  | 61,830 |  |  | 64,021 |
Residential real estate | — |  |  | — |  |  | — |  |  | 78 |  |  | 16,901 |  |  | 16,979 |
Commercial, financial, & agricultural | 159 |  |  | — |  |  | 159 |  |  | 38 |  |  | 12,367 |  |  | 12,564 |
Consumer and other | — |  |  | — |  |  | — |  |  | 84 |  |  | 2,786 |  |  | 2,870 |
Total Loans | $ | 295 |  |  | $ | — |  |  | $ | 295 |  |  | $ | 2,255 |  |  | $ | 93,884 |  |  | $ | 96,434 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 13,061 |  |  | $ | 13,061 |
Other commercial real estate | 83 |  |  | — |  |  | 83 |  |  | — |  |  | 58,213 |  |  | 58,296 |
Total commercial real estate | 83 |  |  | — |  |  | 83 |  |  | — |  |  | 71,274 |  |  | 71,357 |
Residential real estate | 57 |  |  | — |  |  | 57 |  |  | — |  |  | 23,398 |  |  | 23,455 |
Commercial, financial, & agricultural | 553 |  |  | — |  |  | 553 |  |  | — |  |  | 22,272 |  |  | 22,825 |
Consumer and other | 8 |  |  | — |  |  | 8 |  |  | — |  |  | 4,069 |  |  | 4,077 |
Total Loans | $ | 701 |  |  | $ | — |  |  | $ | 701 |  |  | $ | — |  |  | $ | 121,013 |  |  | $ | 121,714 |
The following table details impaired loan data, including purchased credit impaired loans, as of September 30, 2020.
| September 30, 2020
(dollars in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment
With No Related Allowance Recorded |  |  |  |  |  |  |
Construction, land and land development | $ | 6,970 |  |  | $ | 7,023 |  |  | $ | — |  |  | $ | 1,806 |
Commercial real estate | 14,635 |  |  | 13,933 |  |  | — |  |  | 8,978 |
Residential real estate | 1,985 |  |  | 1,949 |  |  | — |  |  | 1,926 |
Commercial, financial & agriculture | 48 |  |  | 48 |  |  | — |  |  | 232 |
Consumer & other | — |  |  | — |  |  | — |  |  | — |
| 23,638 |  |  | 22,953 |  |  | — |  |  | 12,942 |
With An Allowance Recorded |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | — |
Commercial real estate | 2,390 |  |  | 2,395 |  |  | 728 |  |  | 9,334 |
Residential real estate | 480 |  |  | 480 |  |  | 74 |  |  | 1,059 |
Commercial, financial & agriculture | 567 |  |  | 567 |  |  | 567 |  |  | 1,332 |
Consumer & other | — |  |  | — |  |  | — |  |  | — |
| 3,437 |  |  | 3,442 |  |  | 1,369 |  |  | 11,725 |
Purchased Credit Impaired Loans |  |  |  |  |  |  |
Construction, land and land development | 118 |  |  | 118 |  |  | — |  |  | 96 |
Commercial real estate | 120 |  |  | 120 |  |  | — |  |  | 79 |
Residential real estate | 16 |  |  | 16 |  |  | 5 |  |  | 14 |
Commercial, financial & agriculture | 57 |  |  | 57 |  |  | — |  |  | 50 |
Consumer & other | 192 |  |  | 192 |  |  | 83 |  |  | 117 |
| 503 |  |  | 503 |  |  | 88 |  |  | 356 |
Total |  |  |  |  |  |  |
Construction, land and land development | 7,088 |  |  | 7,141 |  |  | — |  |  | 1,902 |
Commercial real estate | 17,145 |  |  | 16,448 |  |  | 728 |  |  | 18,391 |
Residential real estate | 2,481 |  |  | 2,445 |  |  | 79 |  |  | 2,999 |
Commercial, financial & agriculture | 672 |  |  | 672 |  |  | 567 |  |  | 1,614 |
Consumer & other | 192 |  |  | 192 |  |  | 83 |  |  | 117 |
| $ | 27,578 |  |  | $ | 26,898 |  |  | $ | 1,457 |  |  | $ | 25,023 |
The following table details impaired loan data as of December 31, 2019.
| December 31, 2019 |  |  |  |
(dollars in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment |  |  |  |
With No Related Allowance Recorded |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 67 |  |  | $ | 67 |  |  | $ | — |  |  | $ | 168 |  |  |  |  |
Commercial real estate | 12,455 |  |  | 11,639 |  |  | — |  |  | 13,924 |  |  |  |  |
Residential real estate | 2,706 |  |  | 2,711 |  |  | — |  |  | 3,693 |  |  |  |  |
Commercial, financial & agriculture | 257 |  |  | 257 |  |  | — |  |  | 910 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | 123 |  |  |  |  |
| 15,485 |  |  | 14,674 |  |  | — |  |  | 18,818 |  |  |  |  |
With An Allowance Recorded |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 80 |  |  |  |  |
Commercial real estate | 6,379 |  |  | 6,385 |  |  | 1,939 |  |  | 3,898 |  |  |  |  |
Residential real estate | 757 |  |  | 760 |  |  | 137 |  |  | 367 |  |  |  |  |
Commercial, financial & agriculture | 2,189 |  |  | 1,989 |  |  | 1,073 |  |  | 722 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
| 9,325 |  |  | 9,134 |  |  | 3,149 |  |  | 5,067 |  |  |  |  |
Purchased Credit Impaired Loans |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | 65 |  |  | 65 |  |  | — |  |  | 80 |  |  |  |  |
Commercial real estate | 34 |  |  | 34 |  |  | — |  |  | 35 |  |  |  |  |
Residential real estate | 11 |  |  | 11 |  |  | 6 |  |  | 24 |  |  |  |  |
Commercial, financial & agriculture | 37 |  |  | 37 |  |  | — |  |  | 47 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
| 147 |  |  | 147 |  |  | 6 |  |  | 186 |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | 132 |  |  | 132 |  |  | — |  |  | 328 |  |  |  |  |
Commercial real estate | 18,868 |  |  | 18,058 |  |  | 1,939 |  |  | 17,857 |  |  |  |  |
Residential real estate | 3,474 |  |  | 3,482 |  |  | 143 |  |  | 4,084 |  |  |  |  |
Commercial, financial & agriculture | 2,483 |  |  | 2,283 |  |  | 1,073 |  |  | 1,679 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | 123 |  |  |  |  |
| $ | 24,957 |  |  | $ | 23,955 |  |  | $ | 3,155 |  |  | $ | 24,071 |  |  |  |  |
Interest income recorded on impaired loans during the three months ended September 30, 2020 and 2019 were $104,000 and $274,000, respectively and during the nine months ended September 30, 2020 and 2019 were $154,000 and $477,000, respectively. Troubled Debt Restructurings The restructuring of a loan is considered a troubled debt restructuring ("TDRs") if both the borrower is experiencing financial difficulties and the Company has granted a concession to the terms of the loan. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. As discussed in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2019, which are included in the Company’s 2019 Form 10-K, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of September 30, 2020. The Company had three loan contracts restructured during the three and nine month periods ended September 30, 2020, all three modifications were payment deferral modifications. Two of the loans were commercial real estate totaling $131,000 and there was one commercial loan totaling $97,000. Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis. The Company had no loans that subsequently defaulted during the three or nine months ended September 30, 2020 and 2019. Modifications in Response to COVID-19 Certain borrowers are currently unable to meet their contractual payment obligations because of the adverse effects of the COVID-19 pandemic. To help mitigate these effects, loan customers may apply for a deferral of payments, or portions thereof, for up to three months. In the absence of other intervening factors, such short-term modifications made on a good faith basis are not categorized as troubled debt restructurings, nor are loans granted payment deferrals related to the COVID-19 pandemic reported as past due or placed on nonaccrual status (provided the loans were not past due or on nonaccrual status prior to the deferral). As of September 30, 2020, the Company had approximately $12.6 million in loans still under their modified terms. The Company’s modification program included payment deferrals, interest only, and other forms of modifications. See Note 1 - Summary of Significant Accounting Policies for more information.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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