Loans | NOTE 3—LOANS Loans at March 31, 2016 and December 31, 2015 were as follows: March 31, December 31, Loans that are not PCI loans Construction and land development $ 413,279 $ 372,767 Commercial real estate: Nonfarm, nonresidential 388,807 353,268 Other 19,456 10,955 Residential real estate: Closed-end 1-4 family 163,216 162,933 Other 120,577 112,001 Commercial and industrial 308,622 283,888 Consumer and other 6,453 6,577 Loans before net deferred loan fees 1,420,410 1,302,389 Deferred loan fees, net (1,596 ) (2,476 ) Total loans that are not PCI loans 1,418,814 1,299,913 PCI loans Construction and land development $ 79 $ 78 Commercial real estate: Nonfarm, nonresidential 587 1,460 Other — — Residential real estate: Closed-end 1-4 family 567 562 Other 1 1 Commercial and industrial 1,895 1,812 Consumer and other — — Total PCI loans 3,129 3,913 Allowance for loan losses (12,676 ) (11,587 ) Total loans, net of allowance for loan losses $ 1,409,267 $ 1,292,239 The following table presents the activity in the allowance for loan losses by portfolio segment for the three month periods ending March 31, 2016 and 2015: Construction Commercial Residential Commercial Consumer Total Three Months Ending March 31, 2016 Allowance for loan losses: Beginning balance $ 3,186 $ 3,146 $ 1,861 $ 3,358 $ 36 $ 11,587 Provision for loan losses 192 418 (89 ) 582 33 1,136 Loans charged-off — — — (65 ) (11 ) (76 ) Recoveries — — 28 — 1 29 Total ending allowance balance $ 3,378 $ 3,564 $ 1,800 $ 3,875 $ 59 $ 12,676 Three Months Ending March 31, 2015 Allowance for loan losses: Beginning balance $ 2,690 $ 1,494 $ 1,791 $ 650 $ 55 $ 6,680 Provision for loan losses (141 ) 630 (67 ) 200 3 625 Loans charged-off — — — — — — Recoveries — — 3 — — 3 Total ending allowance balance $ 2,549 $ 2,124 $ 1,727 $ 850 $ 58 $ 7,308 As of March 31, 2016 and December 31, 2015, there was $0 and $9, respectively, in allowance for loan losses for PCI loans. 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 March 31, 2016 and December 31, 2015. 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 March 31, 2016 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 3,378 3,564 1,800 3,875 59 12,676 Purchased credit-impaired loans — — — — — — Total ending allowance balance $ 3,378 $ 3,564 $ 1,800 $ 3,875 $ 59 $ 12,676 Loans: Individually evaluated for impairment $ 412 $ 835 $ 1,185 $ 100 $ — $ 2,532 Collectively evaluated for impairment 412,867 407,428 282,608 308,522 6,453 1,417,878 Purchased credit-impaired loans 79 587 568 1,895 — 3,129 Total ending loans balance $ 413,358 $ 408,850 $ 284,361 $ 310,517 $ 6,453 $ 1,423,539 December 31, 2015 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 113 $ — $ 113 Collectively evaluated for impairment 3,186 3,137 1,861 3,245 36 11,465 Purchased credit-impaired loans — 9 — — — 9 Total ending allowance balance $ 3,186 $ 3,146 $ 1,861 $ 3,358 $ 36 $ 11,587 Loans: Individually evaluated for impairment $ 1,943 $ 908 $ 1,185 $ 134 $ — $ 4,170 Collectively evaluated for impairment 370,824 363,315 273,749 283,754 6,577 1,298,219 Purchased credit-impaired loans 78 1,460 563 1,812 — 3,913 Total ending loans balance $ 372,845 $ 365,683 $ 275,497 $ 285,700 $ 6,577 $ 1,306,302 Loans collectively evaluated for impairment reported at March 31, 2016 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 March 31, 2016, these non-PCI loans had a carrying value of $93,064, comprised of contractually unpaid principal totaling $95,471 and discounts totaling $2,407. Management evaluated these loans for credit deterioration since acquisition and determined that $28 in allowance for loan losses was necessary at March 31, 2016. The following table presents information related to impaired loans by class of loans as of March 31, 2016 and December 31, 2015: Unpaid Recorded Allowance for March 31, 2016 With no allowance recorded: Construction and land development $ 412 $ 412 $ — Commercial real estate: Nonfarm, nonresidential 2,422 835 — Residential real estate: Closed-end 1-4 family 476 476 — Other 709 709 — Commercial and industrial 100 100 — Subtotal 4,119 2,532 — With an allowance recorded: None — — — Subtotal — — — Total $ 4,119 $ 2,532 $ — December 31, 2015 With no allowance recorded: Construction and land development $ 1,943 $ 1,943 $ — Commercial real estate: Nonfarm, nonresidential 2,495 908 — Residential real estate: Closed-end 1-4 family 476 476 — Other 709 709 — Commercial and industrial 21 21 — Subtotal 5,644 4,057 — With an allowance recorded: Commercial and industrial 113 113 113 Subtotal 113 113 113 Total $ 5,757 $ 4,170 $ 113 The following table presents the average recorded investment of impaired loans by class of loans for the three months ended March 31, 2016 and 2015: Three Months Ended March 31, Average Recorded Investment 2016 2015 With no allowance recorded: Construction and land development $ 898 $ — Commercial real estate: Nonfarm, nonresidential $ 1,402 $ 835 Residential real estate: Closed-end 1-4 family 736 457 Other 712 — Commercial and industrial 21 83 Subtotal 3,769 1,375 With an allowance recorded: Commercial and industrial $ 86 $ 19 Subtotal 86 19 Total $ 3,855 $ 1,394 The impact on net interest income for these loans was not material to the Company’s results of operations for the three months ended March 31, 2016 and 2015. 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 March 31, 2016 and December 31, 2015: Nonaccrual Loans Past Due March 31, 2016 Construction and land development $ — $ 412 Commercial real estate: Nonfarm, nonresidential 835 — Residential real estate: Closed-end 1-4 family 41 435 Commercial and industrial — 5 Total $ 876 $ 852 December 31, 2015 Construction and land development $ — $ 1,943 Commercial real estate: Nonfarm, nonresidential $ 835 $ — Residential real estate: Closed-end 1-4 family 41 435 Commercial and industrial 32 — Total $ 908 $ 2,378 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 March 31, 2016 and December 31, 2015 by class of loans: 30-59 60-89 Greater Total Loans PCI Total March 31, 2016 Construction and land development $ 417 $ — $ 412 $ 829 $ 412,450 $ 79 $ 413,358 Commercial real estate: Nonfarm, nonresidential — — 835 835 387,972 587 389,394 Other — — — — 19,456 — 19,456 Residential real estate: Closed-end 1-4 family 212 — 476 688 162,528 567 163,783 Other — — — — 120,577 1 120,578 Commercial and industrial 216 510 5 731 307,891 1,895 310,517 Consumer and other 1 — — 1 6,452 — 6,453 $ 846 $ 510 $ 1,728 $ 3,084 $ 1,417,326 $ 3,129 $ 1,423,539 30-59 60-89 Greater Total Loans PCI Total December 31, 2015 Construction and land development $ — $ 149 $ 1,943 $ 2,092 $ 370,675 $ 78 $ 372,845 Commercial real estate: Nonfarm, nonresidential 258 — 835 1,093 352,175 1,460 354,728 Other — — — — 10,955 — 10,955 Residential real estate: Closed-end 1-4 family 213 — 476 689 162,244 562 163,495 Other 30 — — 30 111,971 1 112,002 Commercial and industrial 86 32 — 118 283,770 1,812 285,700 Consumer and other 2 — — 2 6,575 — 6,577 $ 589 $ 181 $ 3,254 $ 4,024 $ 1,298,365 $ 3,913 $ 1,306,302 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 March 31, 2016 and December 31, 2015: Pass Special Substandard Total March 31, 2016 Construction and land development $ 412,867 $ — $ 491 $ 413,358 Commercial real estate: Nonfarm, nonresidential 387,633 — 1,761 389,394 Other 19,456 — — 19,456 Residential real estate: Closed-end 1-4 family 162,236 — 1,547 163,783 Other 119,869 — 709 120,578 Commercial and industrial 308,959 — 1,558 310,517 Consumer and other 6,453 — — 6,453 $ 1,417,473 $ — $ 6,066 $ 1,423,539 Pass Special Substandard Total December 31, 2015 Construction and land development $ 370,824 $ — $ 2,021 $ 372,845 Commercial real estate: Nonfarm, nonresidential 352,451 — 2,277 354,728 Other 10,955 — — 10,955 Residential real estate: 1-4 family 162,160 — 1,335 163,495 Other 111,292 — 710 112,002 Commercial and industrial 284,144 — 1,556 285,700 Consumer and other 6,577 — — 6,577 $ 1,298,403 $ — $ 7,899 $ 1,306,302 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 March 31, 2016 and December 31, 2015. Mar 31, 2016 Dec 31, 2015 Contractually required principal and interest $ 4,563 $ 5,618 Non-accretable difference (305 ) (352 ) Cash flows expected to be collected 4,258 5,266 Accretable yield (1,129 ) (1,353 ) Carrying value of acquired loans 3,129 3,913 Allowance for loan losses — (9 ) Carrying value less allowance for loan losses $ 3,129 $ 3,904 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 month periods ending March 31, 2016 and 2015. Activity during the three month period ending March 31, 2016 Dec 31, 2015 Effect of Income All other Mar 31, 2016 Contractually required principal and interest $ 5,618 $ — $ — $ (1,055 ) $ 4,563 Non-accretable difference (352 ) — — 47 (305 ) Cash flows expected to be collected 5,266 — — (1,008 ) 4,258 Accretable yield (1,353 ) — 194 30 (1,129 ) Carry value of acquired loans $ 3,913 $ — $ 194 $ (978 ) $ 3,129 Activity during the three month period ending March 31, 2015 Dec 31, 2014 Effect of Income All other Mar 31, 2015 Contractually required principal and interest $ 6,532 $ — $ — $ (397 ) $ 6,135 Non-accretable difference (1,270 ) — — 281 (989 ) Cash flows expected to be collected 5,262 — — (116 ) 5,146 Accretable yield (947 ) — 57 50 (840 ) Carry value of acquired loans $ 4,315 $ — $ 57 $ (66 ) $ 4,306 Troubled Debt Restructurings The Company’s loan portfolio contains no loans that have been modified in a troubled debt restructuring. |