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Loans and Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Schedule of Loans, by Major Class Within the Company's Loan Portfolio
Major classifications within the Company’s held for investment loan portfolio at June 30, 2023 and December 31, 2022 were as follows:
(in thousands)June 30, 2023December 31, 2022
Commercial, financial, and agricultural$233,029 $244,549 
Real estate construction − residential51,88432,095
Real estate construction − commercial127,761137,235
Real estate mortgage − residential383,439361,025
Real estate mortgage − commercial744,771722,729
Installment and other consumer22,32223,619
Total loans held for investment$1,563,206 $1,521,252 
Schedule of the Allowance for Loan Losses
Three Months Ended June 30, 2023
(in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$1,921 $631 $4,464 $5,262 $9,487 $222 $(8)$21,979 
Additions:
Provision for (release of ) credit losses (1)(227)117(1,042)20182835253165
Deductions:
Loans charged off14———2069—103
Less recoveries on loans(164)——(2)—(29)—(195)
Net loan charge-offs (recoveries)(150)——(2)2040—(92)
Balance at end of period$1,844 $748 $3,422 $5,465 $10,295 $217 $245 $22,236 
Liability for Unfunded Commitments
Balance at beginning of period$124 $389 $562 $110 $142 $1 $(26)$1,302 
Provision for credit losses on unfunded commitments(12)(34)(148)(2)(16)—47(165)
Balance at end of period$112 $355 $414 $108 $126 $1 $21 $1,137 
Allowance for credit losses on loans and liability for unfunded commitments$1,956 $1,103 $3,836 $5,573 $10,421 $218 $266 $23,373 
Three Months Ended June 30, 2022
(in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$2,830 $60 $664 $2,578 $7,692 $273 $182 $14,279 
Additions:
Provision for (release of ) loan losses (1)18469814982173(131)1,200
Deductions:
Loans charged off25———10459188
Less recoveries on loans(16)——(20)(1)(25)(62)
Net loan charge-offs (recoveries)9——(20)10334—126
Balance at end of period$3,005 $66 $762 $2,747 $8,410 $312 $51 $15,353 
Six Months Ended June 30, 2023
(in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$2,735 $157 $875 $3,329 $8,000 $326 $166 $15,588 
Adoption of ASU 2016-13(649)291 2,894 1,890 1,613 (80)(166)5,793 
Balance at January 1, 20232,086 448 3,769 5,219 9,613 246 — 21,381 
Additions:
Provision for (release of ) credit losses (1)(373)300(347)24270642245815
Deductions:
Loans charged off43———25128—196
Less recoveries on loans(174)——(4)(1)(57)—(236)
Net loan charge-offs (recoveries)(131)——(4)2471—(40)
Balance at end of period$1,844 $748 $3,422 $5,465 $10,295 $217 $245 $22,236 
Liability for Unfunded Commitments
Balance at beginning of period$— $— $— $— $— $— $— $— 
Adoption of ASU 2016-13104 341 569 107 150 1 — 1,272 
Balance at January 1, 2023104 341 569 107 150 1 — 1,272 
Provision for credit losses on unfunded commitments814(155)1(24)—21(135)
Balance at end of period$112 $355 $414 $108 $126 $1 $21 $1,137 
Allowance for credit losses on loans and liability for unfunded commitments$1,956 $1,103 $3,836 $5,573 $10,421 $218 $266 $23,373 
Six Months Ended June 30, 2022
(in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$2,717 $137 $588 $2,482 $10,662 $256 $61 $16,903 
Additions:
Provision for (release of ) loan losses (1)312(71)174242(2,077)130(10)(1,300)
Deductions:
Loans charged off60———178116—354
Less recoveries on loans(36)——(23)(3)(42)—(104)
Net loan charge-offs (recoveries)24——(23)17574—250
Balance at end of period$3,005 $66 $762 $2,747 $8,410 $312 $51 $15,353 
(1) Beginning January 1, 2023, calculation is based on CECL methodology. Prior to January 1, 2023, calculation was based on probable incurred loss methodology.
Schedule of Risk Categories by Class
The amortized cost of collateral-dependent loans by class as of June 30, 2023 was as follows:
Collateral Type
(in thousands)Real EstateOtherAllowance Allocated
June 30, 2023
Commercial, financial, and agricultural$— $50 $— 
Real estate mortgage − residential145 — 25 
Real estate mortgage − commercial2,660 — — 
Total$2,805 $50 $25 
The following table presents the recorded investment by risk categories at June 30, 2023:
Term Loans
Amortized Cost Basis by Origination Year and Risk Grades
(in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
June 30, 2023
Commercial, Financial, & Agricultural
Pass$31,555 $48,777 $36,532 $33,316 $5,385 $6,699 $56,184 $631 $219,079 
Watch— 2,673 78 633 118 339 3,736 — 7,577 
Substandard389 3,925 58 20 — — 1,819 — 6,211 
Non-accrual loans— 1 — — 16 95 50 — 162 
Total$31,944 $55,376 $36,668 $33,969 $5,519 $7,133 $61,789 $631 $233,029 
Real Estate Construction - Residential
Pass$26,216 $24,753 $642 $179 $— $— $— $— $51,790 
Watch— — — — — — — — — 
Substandard— — — — — — — — — 
Non-accrual loans94 — — — — — — — 94 
Total$26,310 $24,753 $642 $179 $— $— $— $— $51,884 
Real Estate Construction - Commercial
Pass$33,466 $55,813 $30,976 $1,214 $67 $869 $1,970 $— $124,375 
Watch1,924 333 241 — — 14 103 — 2,615 
Substandard693 — — — — — — — 693 
Non-accrual loans— — — — — 78 — — 78 
Total$36,083 $56,146 $31,217 $1,214 $67 $961 $2,073 $— $127,761 
Real Estate Mortgage - Residential
Pass$45,564 $136,199 $66,590 $50,586 $7,449 $27,804 $43,561 $257 $378,010 
Watch181 210 420 1,001 131 2,157 — — 4,100 
Substandard17 — — 136 — 452 — — 605 
Non-accrual loans— 53 — 236 — 283 152 — 724 
Total$45,762 $136,462 $67,010 $51,959 $7,580 $30,696 $43,713 $257 $383,439 
Real Estate Mortgage - Commercial
Pass$72,209 $222,715 $201,350 $92,218 $28,514 $46,381 $15,262 $498 $679,147 
Watch11,584 12,315 12,459 5,838 397 1,385 70 — 44,048 
Substandard2,348 223 15,571 — 132 298 100 124 18,796 
Non-accrual loans1,774 120 627 223 — 36 — — 2,780 
Total$87,915 $235,373 $230,007 $98,279 $29,043 $48,100 $15,432 $622 $744,771 
Installment and other Consumer
Pass$5,176 $8,056 $3,882 $1,844 $1,414 $49 $1,896 $— $22,317 
Watch— — — 3 — — — — 3 
Substandard— — — — — — — — — 
Non-accrual loans— — 2 — — — — — 2 
Total$5,176 $8,056 $3,884 $1,847 $1,414 $49 $1,896 $— $22,322 
Total Portfolio
Pass$214,186 $496,313 $339,972 $179,357 $42,829 $81,802 $118,873 $1,386 $1,474,718 
Watch13,689 15,531 13,198 7,475 646 3,895 3,909 — 58,343 
Substandard3,447 4,148 15,629 156 132 750 1,919 124 26,305 
Non-accrual loans1,868 174 629 459 16 492 202 — 3,840 
Total$233,190 $516,166 $369,428 $187,447 $43,623 $86,939 $124,903 $1,510 $1,563,206 
The following table presents the recorded investment by risk categories at December 31, 2022:
Term Loans
Amortized Cost Basis by Origination Year and Risk Grades
(in thousands)20222021202020192018PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to Term Loans Amortized Cost BasisTotal
December 31, 2022
Commercial, Financial, & Agricultural
Pass$73,654 $40,681 $37,994 $6,479 $4,050 $2,718 $63,869 $504 $229,949 
Watch1,228 296 756 150 48 251 3,155 1,527 7,411 
Substandard5,014 58 24 — 152 — 1,820 — 7,068 
Non-accrual loans— — — 26 95 — — — 121 
Total$79,896 $41,035 $38,774 $6,655 $4,345 $2,969 $68,844 $2,031 $244,549 
Real Estate Construction - Residential
Pass$29,289 $1,248 $769 $449 $— $— $340 $— $32,095 
Watch— — — — — — — — — 
Substandard— — — — — — — — — 
Non-accrual loans— — — — — — — — — 
Total$29,289 $1,248 $769 $449 $— $— $340 $— $32,095 
Real Estate Construction - Commercial
Pass$60,318 $67,977 $2,249 $78 $676 $656 $1,831 $— $133,785 
Watch2,239 321 — — — 14 103 — 2,677 
Substandard686 — — — — — — — 686 
Non-accrual loans— — — — — 87 — — 87 
Total$63,243 $68,298 $2,249 $78 $676 $757 $1,934 $— $137,235 
Real Estate Mortgage - Residential
Pass$147,130 $68,380 $53,322 $8,013 $4,981 $25,590 $45,182 $523 $353,121 
Watch1,226 429 1,511 145 215 2,015 — — 5,541 
Substandard— 136 820 — 10 712 — — 1,678 
Non-accrual loans59 — 144 — — 386 96 — 685 
Total$148,415 $68,945 $55,797 $8,158 $5,206 $28,703 $45,278 $523 $361,025 
Real Estate Mortgage - Commercial
Pass$248,529 $203,033 $99,989 $31,341 $21,354 $38,317 $10,868 $121 $653,552 
Watch14,049 14,029 16,863 842 897 811 149 401 48,041 
Substandard260 2,673 — 48 — 306 — 48 3,335 
Non-accrual loans4,621 13,180 — — — — — — 17,801 
Total$267,459 $232,915 $116,852 $32,231 $22,251 $39,434 $11,017 $570 $722,729 
Installment and other Consumer
Pass$11,170 $5,183 $2,891 $2,016 $459 $88 $1,806 $— $23,613 
Watch— — — — — — — — — 
Substandard— — — — — — — — — 
Non-accrual loans2 3 — 1 — — — — 6 
Total$11,172 $5,186 $2,891 $2,017 $459 $88 $1,806 $— $23,619 
Total Portfolio
Pass$570,090 $386,502 $197,214 $48,376 $31,520 $67,369 $123,896 $1,148 $1,426,115 
Watch18,742 15,075 19,130 1,137 1,160 3,091 3,407 1,928 63,670 
Substandard5,960 2,867 844 48 162 1,018 1,820 48 12,767 
Non-accrual loans4,682 13,183 144 27 95 473 96 — 18,700 
Total$599,474 $417,627 $217,332 $49,588 $32,937 $71,951 $129,219 $3,124 $1,521,252 
Schedule of Allowance for Loan Losses and Recorded Investment by Portfolio Segment
The following table illustrates the allowance for loan losses and recorded investment by portfolio segment based on the impairment method:
(in thousands)Commercial, Financial, and AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
December 31, 2022
Allowance for loan losses:
Individually evaluated for impairment$36 $— $11 $148 $62 $1 $— $258 
Collectively evaluated for impairment2,6991578643,1817,93832516615,330
Total$2,735 $157 $875 $3,329 $8,000 $326 $166 $15,588 
Loans outstanding:
Individually evaluated for impairment$295 $— $87 $1,863 $18,110 $6 $— $20,361 
Collectively evaluated for impairment244,25432,095137,148359,162704,61923,613—1,500,891
Total$244,549 $32,095 $137,235 $361,025 $722,729 $23,619 $— $1,521,252 
Schedule of Impaired Loans
The categories of impaired loans at December 31, 2022 were as follows:
(in thousands)December 31, 2022
Non-accrual loans$18,700 
Performing TDRs1,661
Total impaired loans$20,361 
The following table presents loans individually evaluated for impairment at December 31, 2022, segregated between loans for which an allowance was provided and loans for which no allowance was provided.
(in thousands)Recorded InvestmentUnpaid Principal BalanceSpecific ReservesAverage Recorded Investment
December 31, 2022   
With no related allowance recorded:   
Real estate mortgage − residential$— $— $— $1 
Real estate mortgage − commercial17,66418,975—16,230
Total$17,664 $18,975 $— $16,231 
With an allowance recorded:
Commercial, financial and agricultural$295 $330 $36 $319 
Real estate construction − commercial871271193
Real estate mortgage − residential1,8632,0801482,189
Real estate mortgage − commercial44653562428
Installment and other consumer66190
Total$2,697 $3,078 $258 3,119 
Total impaired loans$20,361 $22,053 $258 $19,350 
Schedule of Financing Receivable, Nonaccrual
The following tables present the recorded investment in non-accrual loans and loans past due over 90 days still on accrual by class of loans as of June 30, 2023 and December 31, 2022:
(in thousands)Non-accrual with no AllowanceNon-accrual with AllowanceTotal Non-accrual (1)90 Days Past Due And Still AccruingTotal Non-performing Loans
June 30, 2023
Commercial, Financial, and Agricultural$49 $113 $162 $— $162 
Real estate construction − residential— 94 94 — 94 
Real estate construction − commercial— 78 78 — 78 
Real estate mortgage − residential96 628 724 — 724 
Real estate mortgage − commercial2,660 120 2,780 — 2,780 
Installment and Other Consumer— 2 2 7 9 
Total$2,805 $1,035 $3,840 $7 $3,847 
December 31, 2022
Commercial, Financial, and Agricultural$— $121 $121 $— $121 
Real estate construction − commercial— 87 87 —87 
Real estate mortgage − residential— 685 685 —685 
Real estate mortgage − commercial17,664 137 17,801 —17,801 
Installment and Other Consumer— 6 6 1 7 
Total$17,664 $1,036 $18,700 $1 $18,701 
(1) Includes $0.3 million of restructured loans as of both June 30, 2023 and December 31, 2022.
Schedule of Aging Information for the Company's Past Due and Non-Accrual Loans
The following table provides aging information for the Company’s past due and non-accrual loans at June 30, 2023 and December 31, 2022.
(in thousands)Current or Less Than 30 Days Past Due30 - 89 Days Past Due90 Days Past Due And Still AccruingNon-AccrualTotal
June 30, 2023
Commercial, Financial, and Agricultural$232,864 $3 $— $162 $233,029 
Real estate construction − residential51,790 — — 94 51,884 
Real estate construction − commercial127,683 — — 78 127,761 
Real estate mortgage − residential381,782 933 — 724 383,439 
Real estate mortgage − commercial741,402 589 — 2,780 744,771 
Installment and Other Consumer22,173 140 7 2 22,322 
Total$1,557,694 $1,665 $7 $3,840 $1,563,206 
December 31, 2022
Commercial, Financial, and Agricultural$244,392 $36 $— $121 $244,549 
Real estate construction − residential32,095 — — — 32,095 
Real estate construction − commercial137,148 — — 87 137,235 
Real estate mortgage − residential359,672 668 — 685 361,025 
Real estate mortgage − commercial704,925 3 — 17,801 722,729 
Installment and Other Consumer23,506 106 1 6 23,619 
Total$1,501,738 $813 $1 $18,700 $1,521,252 
Schedule of Summary of Loans that were Modified as TDRs The following table presents information regarding modifications to borrowers experiencing financial difficulty as of June 30, 2023:
June 30, 2023
(Dollars in thousands)Number of contractsRecorded Investment% to Total Loans
Commercial, financial and agricultural2$1670.01%
Real estate mortgage − residential91,2660.08%
Real estate mortgage − commercial33250.02%
Total14 $1,758 0.11 %