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Loans | 3 Months Ended
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Mar. 31, 2022
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 March 31, 2022 and December 31, 2021. Purchased loans are defined as loans that were acquired in bank acquisitions.
| March 31, 2022
(dollars in thousands) | Legacy Loans |  | Purchased Loans |  | Total
Construction, land and land development | $ | 147,306 |  |  | $ | 23,605 |  |  | $ | 170,911 |
Other commercial real estate | 653,831 |  |  | 149,164 |  |  | 802,995 |
Total commercial real estate | 801,137 |  |  | 172,769 |  |  | 973,906 |
Residential real estate | 149,215 |  |  | 58,471 |  |  | 207,686 |
Commercial, financial, & agricultural (*) | 126,373 |  |  | 27,865 |  |  | 154,238 |
Consumer and other | 16,788 |  |  | 1,414 |  |  | 18,202 |
Total Loans | $ | 1,093,513 |  |  | $ | 260,519 |  |  | $ | 1,354,032 |
| December 31, 2021
(dollars in thousands) | Legacy Loans |  | Purchased Loans |  | Total
Construction, land and land development | $ | 119,953 |  |  | $ | 45,493 |  |  | $ | 165,446 |
Other commercial real estate | 595,739 |  |  | 191,653 |  |  | 787,392 |
Total commercial real estate | 715,692 |  |  | 237,146 |  |  | 952,838 |
Residential real estate | 159,469 |  |  | 53,058 |  |  | 212,527 |
Commercial, financial, & agricultural (*) | 113,040 |  |  | 41,008 |  |  | 154,048 |
Consumer and other | 16,003 |  |  | 2,561 |  |  | 18,564 |
Total Loans | $ | 1,004,204 |  |  | $ | 333,773 |  |  | $ | 1,337,977 |
(*) Includes $387,000 and $9.0 million in PPP loans at March 31, 2022 and December 31, 2021, respectively. 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. 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 a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. A description of the general characteristics of the grades is as follows: •Grades 1, 2 and 3 - Borrowers with these assigned risk grades range 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 4 and 5 - 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. These loans are also included in into the “pass” classification. •Grade 6 - 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. •Grades 7 and 8 - These grades 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 grade 8, 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 9 and 10 - 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, and generally the Company has no loans with these assigned grades. 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 7 or 8. The following table presents the loan portfolio, excluding purchased loans, by credit quality indicator (risk grade) as of March 31, 2022 and December 31, 2021. Those loans with a risk grade of 1, 2, 3, 4 and 5 have been combined in the pass column for presentation purposes.
(dollars in thousands) | Pass |  | Special Mention |  | Substandard |  | Total Loans
March 31, 2022 |  |  |  |  |  |  |
Construction, land and land development | $ | 144,522 |  |  | $ | 2,529 |  |  | $ | 255 |  |  | $ | 147,306 |
Other commercial real estate | 622,237 |  |  | 23,734 |  |  | 7,860 |  |  | 653,831 |
Total commercial real estate | 766,759 |  |  | 26,263 |  |  | 8,115 |  |  | 801,137 |
Residential real estate | 138,027 |  |  | 5,803 |  |  | 5,385 |  |  | 149,215 |
Commercial, financial, & agricultural | 124,178 |  |  | 1,174 |  |  | 1,021 |  |  | 126,373 |
Consumer and other | 16,670 |  |  | 70 |  |  | 48 |  |  | 16,788 |
Total Loans | $ | 1,045,634 |  |  | $ | 33,310 |  |  | $ | 14,569 |  |  | $ | 1,093,513 |
(dollars in thousands) |  |  |  |  |  |  |
December 31, 2021 |  |  |  |  |  |  |
Construction, land and land development | $ | 117,044 |  |  | $ | 2,634 |  |  | $ | 275 |  |  | $ | 119,953 |
Other commercial real estate | 562,228 |  |  | 25,718 |  |  | 7,793 |  |  | 595,739 |
Total commercial real estate | 679,272 |  |  | 28,352 |  |  | 8,068 |  |  | 715,692 |
Residential real estate | 148,507 |  |  | 5,733 |  |  | 5,229 |  |  | 159,469 |
Commercial, financial, & agricultural | 110,267 |  |  | 1,488 |  |  | 1,285 |  |  | 113,040 |
Consumer and other | 15,787 |  |  | 78 |  |  | $ | 138 |  |  | 16,003 |
Total Loans | $ | 953,833 |  |  | $ | 35,651 |  |  | $ | 14,720 |  |  | $ | 1,004,204 |
The following table presents the purchased loan portfolio by credit quality indicator (risk grade) as of March 31, 2022 and December 31, 2021. Those loans with a risk grade of 1, 2, 3, 4 or 5 have been combined in the pass column for presentation purposes. For the period ending March 31, 2022, the Company did not have any loans classified as “doubtful” or a “loss”.
(dollars in thousands) | Pass |  | Special Mention |  | Substandard |  | Total Loans
March 31, 2022 |  |  |  |  |  |  |
Construction, land and land development | $ | 23,577 |  |  | $ | — |  |  | $ | 28 |  |  | $ | 23,605 |
Other commercial real estate | 147,899 |  |  | 184 |  |  | 1,081 |  |  | 149,164 |
Total commercial real estate | 171,476 |  |  | 184 |  |  | 1,109 |  |  | 172,769 |
Residential real estate | 55,412 |  |  | 686 |  |  | 2,373 |  |  | 58,471 |
Commercial, financial, & agricultural | 27,241 |  |  | 373 |  |  | 251 |  |  | 27,865 |
Consumer and other | 1,410 |  |  | — |  |  | 4 |  |  | 1,414 |
Total Loans | $ | 255,539 |  |  | $ | 1,243 |  |  | $ | 3,737 |  |  | $ | 260,519 |
December 31, 2021 |  |  |  |  |  |  |
Construction, land and land development | $ | 45,432 |  |  | $ | — |  |  | $ | 61 |  |  | $ | 45,493 |
Other commercial real estate | 186,905 |  |  | 3,518 |  |  | 1,230 |  |  | 191,653 |
Total commercial real estate | 232,337 |  |  | 3,518 |  |  | 1,291 |  |  | 237,146 |
Residential real estate | 49,875 |  |  | 563 |  |  | 2,620 |  |  | 53,058 |
Commercial, financial, & agricultural | 40,711 |  |  | — |  |  | 297 |  |  | 41,008 |
Consumer and other | 2,558 |  |  | 3 |  |  | — |  |  | 2,561 |
Total Loans | $ | 325,481 |  |  | $ | 4,084 |  |  | $ | 4,208 |  |  | $ | 333,773 |
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 March 31, 2022 and December 31, 2021:
(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
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 109 |  |  | $ | — |  |  | $ | 109 |  |  | $ | 67 |  |  | $ | 147,130 |  |  | $ | 147,306 |
Other commercial real estate | 759 |  |  | — |  |  | 759 |  |  | 1,336 |  |  | 651,736 |  |  | 653,831 |
Total commercial real estate | 868 |  |  | — |  |  | 868 |  |  | 1,403 |  |  | 798,866 |  |  | 801,137 |
Residential real estate | 278 |  |  | — |  |  | 278 |  |  | 2,978 |  |  | 145,959 |  |  | 149,215 |
Commercial, financial, & agricultural | 437 |  |  | — |  |  | 437 |  |  | 578 |  |  | 125,358 |  |  | 126,373 |
Consumer and other | 18 |  |  | — |  |  | 18 |  |  | 22 |  |  | 16,748 |  |  | 16,788 |
Total Loans | $ | 1,601 |  |  | $ | — |  |  | $ | 1,601 |  |  | $ | 4,981 |  |  | $ | 1,086,931 |  |  | $ | 1,093,513 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 6 |  |  | $ | — |  |  | $ | 6 |  |  | $ | — |  |  | $ | 119,947 |  |  | $ | 119,953 |
Other commercial real estate | 349 |  |  | — |  |  | 349 |  |  | 577 |  |  | 594,813 |  |  | 595,739 |
Total commercial real estate | 355 |  |  | — |  |  | 355 |  |  | 577 |  |  | 714,760 |  |  | 715,692 |
Residential real estate | 421 |  |  | — |  |  | 421 |  |  | 2,641 |  |  | 156,407 |  |  | 159,469 |
Commercial, financial, & agricultural | 69 |  |  | — |  |  | 69 |  |  | 708 |  |  | 112,263 |  |  | 113,040 |
Consumer and other | 93 |  |  | — |  |  | 93 |  |  | 26 |  |  | 15,884 |  |  | 16,003 |
Total Loans | $ | 938 |  |  | $ | — |  |  | $ | 938 |  |  | $ | 3,952 |  |  | $ | 999,314 |  |  | $ | 1,004,204 |
The following table presents the aging of the amortized cost basis in purchased loans by aging category and accrual status as of March 31, 2022 and December 31, 2021:
(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
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 23,605 |  |  | $ | 23,605 |
Other commercial real estate | — |  |  | — |  |  | — |  |  | 125 |  |  | 149,039 |  |  | 149,164 |
Total commercial real estate | — |  |  | — |  |  | — |  |  | 125 |  |  | 172,644 |  |  | 172,769 |
Residential real estate | 598 |  |  | — |  |  | 598 |  |  | 1,061 |  |  | 56,812 |  |  | 58,471 |
Commercial, financial, & agricultural | 226 |  |  | — |  |  | 226 |  |  | — |  |  | 27,639 |  |  | 27,865 |
Consumer and other | 3 |  |  | — |  |  | 3 |  |  | 4 |  |  | 1,407 |  |  | 1,414 |
Total Loans | $ | 827 |  |  | $ | — |  |  | $ | 827 |  |  | $ | 1,190 |  |  | $ | 258,502 |  |  | $ | 260,519 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 2,680 |  |  | $ | — |  |  | $ | 2,680 |  |  | $ | 31 |  |  | $ | 42,782 |  |  | $ | 45,493 |
Other commercial real estate | — |  |  | — |  |  | — |  |  | 260 |  |  | 191,393 |  |  | 191,653 |
Total commercial real estate | 2,680 |  |  | — |  |  | 2,680 |  |  | 291 |  |  | 234,175 |  |  | 237,146 |
Residential real estate | 560 |  |  | — |  |  | 560 |  |  | 1,198 |  |  | 51,300 |  |  | 53,058 |
Commercial, financial, & agricultural | 389 |  |  | — |  |  | 389 |  |  | — |  |  | 40,619 |  |  | 41,008 |
Consumer and other | — |  |  | — |  |  | — |  |  | 8 |  |  | 2,553 |  |  | 2,561 |
Total Loans | $ | 3,629 |  |  | $ | — |  |  | $ | 3,629 |  |  | $ | 1,497 |  |  | $ | 328,647 |  |  | $ | 333,773 |
The following table details impaired loan data, including purchased credit impaired loans, as of March 31, 2022.
| March 31, 2022
(dollars in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment
With No Related Allowance Recorded |  |  |  |  |  |  |
Construction, land and land development | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,773 |
Commercial real estate | 5,982 |  |  | 5,281 |  |  | — |  |  | 6,155 |
Residential real estate | 1,022 |  |  | 1,058 |  |  | — |  |  | 1,071 |
Commercial, financial & agriculture | 99 |  |  | 99 |  |  | — |  |  | 85 |
Consumer & other | 2 |  |  | 2 |  |  | — |  |  | 1 |
| 7,105 |  |  | 6,440 |  |  | — |  |  | 9,085 |
With An Allowance Recorded |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | — |
Commercial real estate | 1,168 |  |  | 1,183 |  |  | 141 |  |  | 2,938 |
Residential real estate | 1,297 |  |  | 1,406 |  |  | 123 |  |  | 1,022 |
Commercial, financial & agriculture | 180 |  |  | 198 |  |  | 163 |  |  | 50 |
Consumer & other | — |  |  | — |  |  | — |  |  | — |
| 2,645 |  |  | 2,787 |  |  | 427 |  |  | 4,010 |
Purchased Credit Impaired Loans |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 30 |
Commercial real estate | — |  |  | — |  |  | — |  |  | 1,239 |
Residential real estate | 3 |  |  | — |  |  | 1 |  |  | 6 |
Commercial, financial & agriculture | — |  |  | — |  |  | — |  |  | 31 |
Consumer & other | 192 |  |  | — |  |  | 96 |  |  | 144 |
| 195 |  |  | — |  |  | 97 |  |  | 1,450 |
Total |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 1,803 |
Commercial real estate | 7,150 |  |  | 6,464 |  |  | 141 |  |  | 10,332 |
Residential real estate | 2,322 |  |  | 2,464 |  |  | 124 |  |  | 2,099 |
Commercial, financial & agriculture | 279 |  |  | 297 |  |  | 163 |  |  | 166 |
Consumer & other | 194 |  |  | 2 |  |  | 96 |  |  | 145 |
| $ | 9,945 |  |  | $ | 9,227 |  |  | $ | 524 |  |  | $ | 14,545 |
The following table details impaired loan data as of December 31, 2021.
| December 31, 2021 |  |  |  |
(dollars in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment |  |  |  |
With No Related Allowance Recorded |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | $ | 62 |  |  | $ | 62 |  |  | $ | — |  |  | $ | 4,311 |  |  |  |  |
Commercial real estate | 7,203 |  |  | 6,369 |  |  | — |  |  | 8,113 |  |  |  |  |
Residential real estate | 958 |  |  | 997 |  |  | — |  |  | 1,083 |  |  |  |  |
Commercial, financial & agriculture | 75 |  |  | 75 |  |  | — |  |  | 56 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
| 8,298 |  |  | 7,503 |  |  | — |  |  | 13,563 |  |  |  |  |
With An Allowance Recorded |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | — |  |  |  |  |
Commercial real estate | 430 |  |  | 483 |  |  | 148 |  |  | 4,429 |  |  |  |  |
Residential real estate | 685 |  |  | 773 |  |  | 108 |  |  | 1,029 |  |  |  |  |
Commercial, financial & agriculture | — |  |  | — |  |  | — |  |  | 79 |  |  |  |  |
Consumer & other | — |  |  | — |  |  | — |  |  | 1 |  |  |  |  |
| 1,115 |  |  | 1,256 |  |  | 256 |  |  | 5,538 |  |  |  |  |
Purchased Credit Impaired Loans |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | — |  |  | — |  |  | — |  |  | 51 |  |  |  |  |
Commercial real estate | 2,003 |  |  | 1,916 |  |  | 18 |  |  | 802 |  |  |  |  |
Residential real estate | 4 |  |  | — |  |  | 6 |  |  | 7 |  |  |  |  |
Commercial, financial & agriculture | — |  |  | — |  |  | — |  |  | 35 |  |  |  |  |
Consumer & other | 192 |  |  | 73 |  |  | 96 |  |  | 72 |  |  |  |  |
| 2,199 |  |  | 1,989 |  |  | 120 |  |  | 967 |  |  |  |  |
Total |  |  |  |  |  |  |  |  |  |  |
Construction, land and land development | 62 |  |  | 62 |  |  | — |  |  | 4,362 |  |  |  |  |
Commercial real estate | 9,636 |  |  | 8,768 |  |  | 166 |  |  | 13,344 |  |  |  |  |
Residential real estate | 1,647 |  |  | 1,770 |  |  | 114 |  |  | 2,119 |  |  |  |  |
Commercial, financial & agriculture | 75 |  |  | 75 |  |  | — |  |  | 170 |  |  |  |  |
Consumer & other | 192 |  |  | 73 |  |  | 96 |  |  | 73 |  |  |  |  |
| $ | 11,612 |  |  | $ | 10,748 |  |  | $ | 376 |  |  | $ | 20,068 |  |  |  |  |
Interest income recorded on impaired loans during the three months ended March 31, 2022 and 2021 was $215,000 and $238,000, respectively. Troubled Debt Restructurings The restructuring of a loan is considered a troubled debt restructuring ("TDR") 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, 2021, which are included in the Company’s 2021 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 March 31, 2022. The Company had no loans restructured during the three month period ended March 31, 2022. Loans modified in a TDR 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 months ended March 31, 2022 and 2021.

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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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