Loans | NOTE 4—LOANS Loans at June 30, 2015 and December 31, 2014 were as follows: June 30, December 31, Loans that are not PCI loans Construction and land development $ 293,629 $ 239,225 Commercial real estate: Nonfarm, nonresidential 273,221 240,975 Other 6,370 5,377 Residential real estate: Closed-end 1-4 family 137,815 130,631 Other 96,292 83,129 Commercial and industrial 144,735 76,570 Consumer and other 7,527 8,025 Loans before net deferred loan fees 959,589 783,932 Deferred loan fees, net (1,676 ) (1,059 ) Total loans that are not PCI loans 957,913 782,873 PCI loans Construction and land development $ 77 $ 77 Commercial real estate: Nonfarm, nonresidential 1,752 1,798 Other — — Residential real estate: Closed-end 1-4 family 703 706 Other 107 108 Commercial and industrial 1,639 1,624 Consumer and other — 2 Total PCI loans 4,278 4,315 Allowance for loan losses (8,016 ) (6,680 ) Total loans, net of allowance for loan losses $ 954,175 $ 780,508 The following table presents the activity in the allowance for loan losses by portfolio segment for the three month periods ending June 30, 2015 and 2014: Construction Commercial Residential Commercial Consumer Total Three Months Ending June 30, 2015 Allowance for loan losses: Beginning balance $ 2,549 $ 2,124 $ 1,727 $ 850 $ 58 $ 7,308 Provision for loan losses 18 197 24 474 92 805 Loans charged-off — — (17 ) — (88 ) (105 ) Recoveries — — 5 — 3 8 Total ending allowance balance $ 2,567 $ 2,321 $ 1,739 $ 1,324 $ 65 $ 8,016 Three Months Ending June 30, 2014 Allowance for loan losses: Beginning balance $ 1,546 $ 1,695 $ 1,536 $ 464 $ 63 $ 5,304 Provision for loan losses 250 159 (3 ) 44 (10 ) 440 Loans charged-off — — — — — — Recoveries — — 27 — — 27 Total ending allowance balance $ 1,796 $ 1,854 $ 1,560 $ 508 $ 53 $ 5,771 There was no allowance for loan losses for PCI loans for the three months ended June 30, 2015 or for the three months ended June 30, 2014. The following table presents the activity in the allowance for loan losses by portfolio segment for the six-month periods ending June 30, 2015 and 2014: Construction Commercial Residential Commercial Consumer Total Six Months Ending June 30, 2015 Allowance for loan losses: Beginning balance $ 2,690 $ 1,494 $ 1,791 $ 650 $ 55 $ 6,680 Provision for loan losses (123 ) 827 (43 ) 674 95 1,430 Loans charged-off — — (17 ) — (88 ) (105 ) Recoveries — — 8 — 3 11 Total ending allowance balance $ 2,567 $ 2,321 $ 1,739 $ 1,324 $ 65 $ 8,016 Six Months Ending June 30, 2014 Allowance for loan losses: Beginning balance $ 1,497 $ 1,566 $ 1,402 $ 337 $ 98 $ 4,900 Provision for loan losses 299 288 112 171 (45 ) 825 Loans charged-off — — — — — — Recoveries — — 46 — — 46 Total ending allowance balance $ 1,796 $ 1,854 $ 1,560 $ 508 $ 53 $ 5,771 There was no allowance for loan losses for PCI loans for the six months ended June 30, 2015 or for the six months ended June 30, 2014. The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2015 and December 31, 2014. For purposes of this disclosure, recorded investment in loans excludes accrued interest receivable and loan fees, net due to immateriality. Construction Commercial Residential Commercial Consumer Total June 30, 2015 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 96 $ 23 $ 119 Collectively evaluated for impairment 2,567 2,321 1,739 1,228 42 7,897 Purchased credit-impaired loans — — — — — — Total ending allowance balance $ 2,567 $ 2,321 $ 1,739 $ 1,324 $ 65 $ 8,016 Loans: Individually evaluated for impairment $ — $ 927 $ 807 $ 275 $ 23 $ 2,032 Collectively evaluated for impairment 293,629 278,664 233,300 144,460 7,504 957,557 Purchased credit-impaired loans 77 1,752 810 1,639 — 4,278 Total ending loans balance $ 293,706 $ 281,343 $ 234,917 $ 146,374 $ 7,527 $ 963,867 Construction Commercial Residential Commercial Consumer Total December 31, 2014 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 18 $ — $ 18 Collectively evaluated for impairment 2,690 1,494 1,791 632 55 6,662 Purchased credit-impaired loans — — — — — — Total ending allowance balance $ 2,690 $ 1,494 $ 1,791 $ 650 $ 55 $ 6,680 Loans: Individually evaluated for impairment $ — $ 835 $ 93 $ 18 $ — $ 946 Collectively evaluated for impairment 239,225 245,517 213,667 76,552 8,025 782,986 Purchased credit-impaired loans 77 1,798 814 1,624 2 4,315 Total ending loans balance $ 239,302 $ 248,150 $ 214,574 $ 78,194 $ 8,027 $ 788,247 Loans collectively evaluated for impairment reported at June 30, 2015 include certain loans acquired from MidSouth on July 1, 2014. The acquired loans were recorded at estimated fair value at date of acquisition, which included an estimated credit discount. On July 1, 2014, acquired non-PCI loans were recorded at an estimated fair value of $178,818, comprised of contractually unpaid principal totaling $183,832 net of estimated discounts totaling $5,014 which included both credit and interest rate discount components. At June 30, 2015, acquired non-PCI loans were recorded at $111,284, comprised of contractually unpaid principal totaling $114,159 net of discounts totaling $2,875. Management evaluated these loans for credit deterioration since acquisition and determined that no allowance for loan losses was necessary at June 30, 2015. The following table presents information related to impaired loans by class of loans as of June 30, 2015 and December 31, 2014: Unpaid Recorded Allowance for June 30, 2015 With no allowance recorded: Commercial real estate: Nonfarm, nonresidential $ 2,514 $ 927 $ — Residential real estate: Closed-end 1-4 family 97 97 — Other 710 710 — Commercial and industrial 179 179 — Subtotal 3,500 1,913 — With an allowance recorded: Commercial and industrial 96 96 96 Consumer and other 23 23 23 Subtotal 119 119 119 Total $ 3,619 $ 2,032 $ 119 December 31, 2014 With no allowance recorded: Commercial real estate: Nonfarm, nonresidential $ 2,422 $ 835 $ — Residential real estate: Closed-end 1-4 family 93 93 — Subtotal 2,515 928 — With an allowance recorded: Commercial and industrial 18 18 18 Subtotal 18 18 18 Total $ 2,533 $ 946 $ 18 The following table presents the average recorded investment of impaired loans by class of loans for the three and six months ended June 30, 2015 and 2014: Three Months Ended Six Months Ended Average Recorded Investment 2015 2014 2015 2014 With no allowance recorded: Construction and land development $ — $ — $ — $ — Commercial real estate: Nonfarm, nonresidential 865 — 850 603 Residential real estate: Closed-end 1-4 family 313 — 265 — Other 238 — 119 — Commercial and industrial 110 — 104 — Subtotal 1,526 — 1,338 603 With an allowance recorded: Construction and land development $ — $ — $ — $ — Commercial real estate: Nonfarm, nonresidential — 1,375 — 1,375 Residential real estate: 1-4 family — 229 — 725 Commercial and industrial 43 66 30 66 Consumer and other 16 — 8 — Subtotal 59 1,670 38 2,166 Total $ 1,585 $ 1,670 $ 1,376 $ 2,769 The impact on net interest income for these loans was not material to the Company’s results of operations for the three and six months ended June 30, 2015 and 2014. The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2015 and December 31, 2014: Nonaccrual Loans Past Due June 30, 2015 Commercial real estate: Nonfarm, nonresidential $ 835 $ — Residential real estate: Closed-end1-4 family 96 — Commercial and industrial 16 — Total $ 947 $ — December 31, 2014 Commercial real estate: Nonfarm, nonresidential $ 835 $ — Residential real estate: Closed-end 1-4 family — 316 Total $ 835 $ 316 Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following table presents the aging of the recorded investment in past due loans as of June 30, 2015 and December 31, 2014 by class of loans: 30-59 60-89 Greater Total Loans PCI Total June 30, 2015 Construction and land development $ 1,328 $ 38 $ — $ 1,366 $ 292,263 $ 77 $ 293,706 Commercial real estate: Nonfarm, nonresidential — — 835 835 272,386 1,752 274,973 Other — — — — 6,370 — 6,370 Residential real estate: Closed-end 1-4 family 630 35 — 665 137,150 703 138,518 Other 710 40 — 750 95,542 107 96,399 Commercial and industrial 79 — — 79 144,656 1,639 146,374 Consumer and other 23 — — 23 7,504 — 7,527 $ 2,770 $ 113 $ 835 $ 3,718 $ 955,871 $ 4,278 $ 963,867 30-59 60-89 Greater Total Loans PCI Total December 31, 2014 Construction and land development $ 354 $ — $ — $ 354 $ 238,871 $ 77 $ 239,302 Commercial real estate: Nonfarm, nonresidential — — 835 835 240,140 1,798 242,773 Other — — — — 5,377 — 5,377 Residential real estate: Closed-end 1-4 family 299 165 316 780 129,851 706 131,337 Other 52 — — 52 83,077 108 83,237 Commercial and industrial — 212 — 212 76,358 1,624 78,194 Consumer and other — — — — 8,025 2 8,027 $ 705 $ 377 $ 1,151 $ 2,233 $ 781,699 $ 4,315 $ 788,247 Credit Quality Indicators: Special Mention. Substandard. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. The following table includes PCI loans, which are included in the “Substandard” column. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of June 30, 2015 and December 31, 2014: Pass Special Substandard Total June 30, 2015 Construction and land development $ 293,629 $ — $ 77 $ 293,706 Commercial real estate: Nonfarm, nonresidential 271,384 — 3,589 274,973 Other 6,370 — — 6,370 Residential real estate: Closed-end 1-4 family 136,939 — 1,579 138,518 Other 95,582 — 817 96,399 Commercial and industrial 144,460 — 1,914 146,374 Consumer and other 7,504 — 23 7,527 $ 955,868 $ — $ 7,999 $ 963,867 Pass Special Substandard Total December 31, 2014 Construction and land development $ 239,225 $ — $ 77 $ 239,302 Commercial real estate: Nonfarm, nonresidential 239,584 — 3,189 242,773 Other 5,377 — — 5,377 Residential real estate: 1-4 family 128,869 — 2,468 131,337 Other 83,129 — 108 83,237 Commercial and industrial 76,552 — 1,642 78,194 Consumer and other 8,025 — 2 8,027 $ 780,761 $ — $ 7,486 $ 788,247 Purchased Credit-impaired (“PCI”) loans Income is recognized on PCI loans pursuant to ASC Topic 310-30. A portion of the fair value discount has been recognized as an accretable yield that is accreted into interest income over the estimated remaining life of the loans. The remaining non-accretable difference represents cash flows not expected to be collected. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the loans as of June 30, 2015 and December 31, 2014. Contractually required principal and interest payments have been adjusted for estimated prepayments. Jun 30, 2015 Dec 31, 2014 Contractually required principal and interest $ 6,000 $ 6,532 Non-accretable difference (973 ) (1,270 ) Cash flows expected to be collected 5,027 5,262 Accretable yield (749 ) (947 ) Carrying value of acquired loans 4,278 4,315 Allowance for loan losses — — Carrying value less allowance for loan losses $ 4,278 $ 4,315 Management adjusted estimates of future expected losses, cash flows and renewal assumptions during the current quarter. These adjustments resulted in a decrease in expected cash flows and accretable yield, and a decrease in the non-accretable difference. The table below summarizes the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the loans during the three- and six-month periods ending June 30, 2015. Activity during the three-month period ending June 30, 2015 Mar 31, 2015 Effect of Income All other Jun 30, 2015 Contractually required principal and interest $ 6,135 $ — $ — $ (135 ) $ 6,000 Non-accretable difference (989 ) — — 16 (973 ) Cash flows expected to be collected 5,146 — — (119 ) 5,027 Accretable yield (840 ) — 133 (42 ) (749 ) Carry value of acquired loans $ 4,306 $ — $ 133 $ (161 ) $ 4,278 Activity during the six-month period ending June 30, 2015 Dec 31, 2014 Effect of Income All other Jun 30, 2015 Contractually required principal and interest $ 6,532 $ — $ — $ (532 ) $ 6,000 Non-accretable difference (1,270 ) — — 297 (973 ) Cash flows expected to be collected 5,262 — — (235 ) 5,027 Accretable yield (947 ) — 190 8 (749 ) Carry value of acquired loans $ 4,315 $ — $ 190 $ (227 ) $ 4,278 Troubled Debt Restructurings The Company’s loan portfolio contains no loans that have been modified in a troubled debt restructuring. |