Loans | NOTE 3—LOANS Loans at June 30, 2016 and December 31, 2015 were as follows: June 30, December 31, Loans that are not PCI loans Construction and land development $ 438,850 $ 372,767 Commercial real estate: Nonfarm, nonresidential 415,790 353,268 Other 24,987 10,955 Residential real estate: Closed-end 1-4 family 184,823 162,933 Other 132,948 112,001 Commercial and industrial 345,556 283,888 Consumer and other 5,718 6,577 Loans before net deferred loan fees 1,548,672 1,302,389 Deferred loan fees, net (1,019 ) (2,476 ) Total loans that are not PCI loans 1,547,653 1,299,913 PCI loans Construction and land development $ 80 $ 78 Commercial real estate: Nonfarm, nonresidential 582 1,460 Other — — Residential real estate: Closed-end 1-4 family 564 562 Other 7 1 Commercial and industrial 1,843 1,812 Consumer and other — — Total PCI loans 3,076 3,913 Allowance for loan losses (14,253 ) (11,587 ) Total loans, net of allowance for loan losses $ 1,536,476 $ 1,292,239 The following table presents the activity in the allowance for loan losses by portfolio segment for the three month periods ended June 30, 2016 and 2015: Construction Commercial Residential Commercial Consumer Total Three Months Ended June 30, 2016 Allowance for loan losses: Beginning balance $ 3,378 $ 3,564 $ 1,800 $ 3,875 $ 59 $ 12,676 Provision for loan losses 246 301 248 780 (8 ) 1,567 Loans charged-off — — — — (4 ) (4 ) Recoveries — — 12 — 2 14 Total ending allowance balance $ 3,624 $ 3,865 $ 2,060 $ 4,655 $ 49 $ 14,253 Three Months Ended 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 The following table presents the activity in the allowance for loan losses by portfolio segment for the six-month periods ended June 30, 2016 and 2015: Construction Commercial Residential Commercial Consumer Total Six Months Ended June 30, 2016 Allowance for loan losses: Beginning balance $ 3,186 $ 3,146 $ 1,861 $ 3,358 $ 36 $ 11,587 Provision for loan losses 438 719 159 1,362 25 2,703 Loans charged-off — — — (65 ) (15 ) (80 ) Recoveries — — 40 — 3 43 Total ending allowance balance $ 3,624 $ 3,865 $ 2,060 $ 4,655 $ 49 $ 14,253 Six Months Ended 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 As of June 30, 2016 and December 31, 2015, there was $0 and $9 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 June 30, 2016 and December 31, 2015. For purposes of this disclosure, recorded investment in loans excludes accrued interest receivable and deferred loan fees, net due to immateriality. Construction Commercial Residential Commercial Consumer Total June 30, 2016 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 95 $ — $ 95 Collectively evaluated for impairment 3,624 3,865 2,060 4,560 49 14,158 Purchased credit-impaired loans — — — — — — Total ending allowance balance $ 3,624 $ 3,865 $ 2,060 $ 4,655 $ 49 $ 14,253 Loans: Individually evaluated for impairment $ 119 $ 1,073 $ 955 $ 510 $ 10 $ 2,667 Collectively evaluated for impairment 438,731 439,704 316,816 345,046 5,708 1,546,005 Purchased credit-impaired loans 80 582 571 1,843 — 3,076 Total ending loans balance $ 438,930 $ 441,359 $ 318,342 $ 347,399 $ 5,718 $ 1,551,748 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 June 30, 2016 include certain acquired loans. At June 30, 2016, these non-PCI loans had a carrying value of $88,793, comprised of contractually unpaid principal totaling $86,976 and discounts totaling $1,817. Management evaluated these loans for credit deterioration since acquisition and determined that $30 in allowance for loan losses was necessary at June 30, 2016. The following table presents information related to impaired loans by class of loans as of June 30, 2016 and December 31, 2015: Unpaid Recorded Allowance for June 30, 2016 With no allowance recorded: Construction and land development $ 119 $ 119 $ — Commercial real estate: Nonfarm, nonresidential 2,754 1,073 — Residential real estate: Closed-end 1-4 family 121 120 — Other 835 835 — Commercial and industrial 19 20 — Consumer and other 10 10 — Subtotal 3,858 2,177 — With an allowance recorded: Commercial and industrial 490 490 95 Subtotal 490 490 95 Total $ 4,348 $ 2,667 $ 95 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 June 30, 2016 and 2015: Three Months Ended June 30, Six Months Ended June 30, Average Recorded Investment 2016 2015 2016 2015 With no allowance recorded: Construction and land development $ 121 $ — $ 510 $ — Commercial real estate: Nonfarm, nonresidential 1,094 865 1,248 850 Residential real estate: Closed-end 1-4 family 413 313 574 265 Other 754 238 733 119 Commercial and industrial 263 110 142 104 Consumer and other 30 — 15 — Subtotal 2,675 1,526 3,222 1,338 With an allowance recorded: Commercial and industrial $ 163 $ 43 $ 125 $ 30 Consumer and other — 16 — 8 Subtotal 163 59 125 38 Total $ 2,838 $ 1,585 $ 3,347 $ 1,376 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, 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 June 30, 2016 and December 31, 2015: Nonaccrual Loans Past Due June 30, 2016 Construction and land development $ — $ 119 Commercial real estate: Nonfarm, nonresidential 835 — Residential real estate: Closed-end 1-4 family 41 — Other 126 — Commercial and industrial 491 — Total $ 1,493 $ 119 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 June 30, 2016 and December 31, 2015 by class of loans: 30-59 60-89 Greater Total Loans PCI Total June 30, 2016 Construction and land development $ 1,039 $ — $ 119 $ 1,158 $ 437,692 $ 80 $ 438,930 Commercial real estate: Nonfarm, nonresidential 115 — 835 950 414,840 582 416,372 Other — — — — 24,987 — 24,987 Residential real estate: Closed-end 1-4 family 78 — 41 119 184,704 564 185,387 Other 68 — 126 194 132,754 7 132,955 Commercial and industrial 73 11 491 575 344,981 1,843 347,399 Consumer and other — 10 — 10 5,708 — 5,718 $ 1,373 $ 21 $ 1,612 $ 3,006 $ 1,545,666 $ 3,076 $ 1,551,748 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 June 30, 2016 and December 31, 2015: Pass Special Substandard Total June 30, 2016 Construction and land development $ 438,731 $ — $ 199 $ 438,930 Commercial real estate: Nonfarm, nonresidential 414,769 — 1,603 416,372 Other 24,987 — — 24,987 Residential real estate: Closed-end 1-4 family 184,409 — 978 185,387 Other 132,955 — — 132,955 Commercial and industrial 345,397 — 2,002 347,399 Consumer and other 5,708 — 10 5,718 $ 1,546,956 $ — $ 4,792 $ 1,551,748 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 is 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, 2016 and December 31, 2015. Jun 30, 2016 Dec 31, 2015 Contractually required principal and interest $ 4,462 $ 5,618 Non-accretable difference (319 ) (352 ) Cash flows expected to be collected 4,143 5,266 Accretable yield (1,067 ) (1,353 ) Carrying value of acquired loans 3,076 3,913 Allowance for loan losses — (9 ) Carrying value less allowance for loan losses $ 3,076 $ 3,904 Management adjusted estimates of future expected losses, cash flows and renewal assumptions during the quarter ended June 30, 2016. These adjustments resulted in changes in expected cash flows, accretable yield, and the non-accretable difference for the three and six months ended June 30, 2016. 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 ended June 30, 2016 and 2015. Activity during the three month period ended June 30, 2016 Mar 31, 2016 Effect of Income All other Jun 30, 2016 Contractually required principal and interest $ 4,563 $ — $ — $ (101 ) $ 4,462 Non-accretable difference (305 ) — — (14 ) (319 ) Cash flows expected to be collected 4,258 — — (115 ) 4,143 Accretable yield (1,129 ) — 115 (53 ) (1,067 ) Carry value of acquired loans $ 3,129 $ — $ 115 $ (168 ) $ 3,076 Activity during the three month period ended 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 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 six-month periods ended June 30, 2016 and 2015. Activity during the six month period ended June 30, 2016 Dec 31, 2015 Effect of Income All other Jun 30, 2016 Contractually required principal and interest $ 5,618 $ — $ — $ (1,156 ) $ 4,462 Non-accretable difference (352 ) — — 33 (319 ) Cash flows expected to be collected 5,266 — — (1,123 ) 4,143 Accretable yield (1,353 ) — 309 (23 ) (1,067 ) Carry value of acquired loans $ 3,913 $ — $ 309 $ (1,146 ) $ 3,076 Activity during the six month period ended 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. |