Loans | NOTE 3—LOANS Loans at September 30, 2016 and December 31, 2015 were as follows: September 30, December 31, Loans that are not PCI loans Construction and land development $ 474,255 $ 372,767 Commercial real estate: Nonfarm, nonresidential 403,382 353,268 Other 26,866 10,955 Residential real estate: Closed-end 1-4 family 228,672 162,933 Other 142,374 112,001 Commercial and industrial 372,784 283,888 Consumer and other 3,458 6,577 Loans before net deferred loan fees 1,651,791 1,302,389 Deferred loan fees, net (820 ) (2,476 ) Total loans that are not PCI loans 1,650,971 1,299,913 PCI loans Construction and land development $ 81 $ 78 Commercial real estate: Nonfarm, nonresidential 576 1,460 Other — — Residential real estate: Closed-end 1-4 family 497 562 Other — 1 Commercial and industrial 1,933 1,812 Consumer and other — — Total PCI loans 3,087 3,913 Allowance for loan losses (15,590 ) (11,587 ) Total loans, net of allowance for loan losses $ 1,638,468 $ 1,292,239 The following table presents the activity in the allowance for loan losses by portfolio segment for the three month periods ended September 30, 2016 and 2015: Construction Commercial Residential Commercial Consumer Total Three Months Ended September 30, 2016 Allowance for loan losses: Beginning balance $ 3,624 $ 3,865 $ 2,060 $ 4,655 $ 49 $ 14,253 Provision for loan losses 427 43 451 455 16 1,392 Loans charged-off (11 ) — (40 ) — (19 ) (70 ) Recoveries — — 13 — 2 15 Total ending allowance balance $ 4,040 $ 3,908 $ 2,484 $ 5,110 $ 48 $ 15,590 Three Months Ended September 30, 2015 Allowance for loan losses: Beginning balance $ 2,567 $ 2,321 $ 1,739 $ 1,324 $ 65 $ 8,016 Provision for loan losses 461 135 (71 ) 1,253 (54 ) 1,724 Loans charged-off — — (15 ) (15 ) (33 ) (63 ) Recoveries — — 6 — 61 67 Total ending allowance balance $ 3,028 $ 2,456 $ 1,659 $ 2,562 $ 39 $ 9,744 The following table presents the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2016 and 2015: Construction Commercial Residential Commercial Consumer Total Nine Months Ended September 30, 2016 Allowance for loan losses: Beginning balance $ 3,186 $ 3,146 $ 1,861 $ 3,358 $ 36 $ 11,587 Provision for loan losses 865 762 609 1,817 42 4,095 Loans charged-off (11 ) — (39 ) (65 ) (35 ) (150 ) Recoveries — — 53 — 5 58 Total ending allowance balance $ 4,040 $ 3,908 $ 2,484 $ 5,110 $ 48 $ 15,590 Nine Months Ended September 30, 2015 Allowance for loan losses: Beginning balance $ 2,690 $ 1,494 $ 1,791 $ 650 $ 55 $ 6,680 Provision for loan losses $ 338 962 (114 ) 1,927 41 3,154 Loans charged-off — — (32 ) (15 ) (121 ) (168 ) Recoveries — — 14 — 64 78 Total ending allowance balance $ 3,028 $ 2,456 $ 1,659 $ 2,562 $ 39 $ 9,744 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 September 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 September 30, 2016 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 115 $ — $ 115 Collectively evaluated for impairment 4,040 3,908 2,484 4,995 48 15,475 Purchased credit-impaired loans — — — — — — Total ending allowance balance $ 4,040 $ 3,908 $ 2,484 $ 5,110 $ 48 $ 15,590 Loans: Individually evaluated for impairment $ — $ 835 $ 1,070 $ 509 $ — $ 2,414 Collectively evaluated for impairment 474,255 429,413 369,976 372,275 3,458 1,649,377 Purchased credit-impaired loans 81 576 497 1,933 — 3,087 Total ending loans balance $ 474,336 $ 430,824 $ 371,543 $ 374,717 $ 3,458 $ 1,654,878 December 31, 2015 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 113 $ — $ 113 Construction Commercial Residential Commercial Consumer Total 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 September 30, 2016 include certain acquired loans. At September 30, 2016, these non-PCI loans had a carrying value of $82,669, comprised of contractually unpaid principal totaling $84,848 and discounts totaling $2,179. Management evaluated these loans for credit deterioration since acquisition and determined that $32 in allowance for loan losses was necessary at September 30, 2016. The following table presents information related to impaired loans by class of loans as of September 30, 2016 and December 31, 2015: Unpaid * Recorded Allowance for September 30, 2016 With no allowance recorded: Commercial real estate: Nonfarm, nonresidential $ 2,421 $ 835 $ — Residential real estate: Closed-end 1-4 family 238 238 — Other 832 832 — Commercial and industrial 19 19 — Consumer and other — — — Subtotal 3,510 1,924 — With an allowance recorded: Commercial and industrial 490 490 115 Subtotal 490 490 115 Total $ 4,000 $ 2,414 $ 115 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 September 30, 2016 and 2015: Three Months Ended September 30, Nine Months Ended September 30, Average Recorded Investment 2016 2015 2016 2015 With no allowance recorded: Construction and land development $ — $ — $ 340 $ — Commercial real estate: Nonfarm, nonresidential 1,427 918 1,307 873 Residential real estate: Closed-end 1-4 family 451 33 533 188 Other 837 712 768 317 Commercial and industrial 46 23 110 77 Consumer and other — 25 10 8 Subtotal 2,761 1,711 3,068 1,463 With an allowance recorded: Commercial and industrial $ 490 $ 90 $ 247 $ 50 Residential real estate: Closed-end 1-4 family 70 — 23 — Consumer and other — 16 — 10 Subtotal 560 106 270 60 Total $ 3,321 $ 1,817 $ 3,338 $ 1,523 The impact on net interest income for these loans was not material to the Company’s results of operations for the three and nine months ended September 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 September 30, 2016 and December 31, 2015: Nonaccrual Loans Past Due September 30, 2016 Construction and land development $ — $ 149 Commercial real estate: Nonfarm, nonresidential 835 — Residential real estate: Other 123 — Commercial and industrial 490 — Total $ 1,448 $ 149 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 September 30, 2016 and December 31, 2015 by class of loans: 30-59 60-89 Greater Total Loans PCI Total September 30, 2016 Construction and land development $ 1,950 $ — $ 149 $ 2,099 $ 472,156 $ 81 $ 474,336 Commercial real estate: Nonfarm, nonresidential 79 — 835 914 402,468 576 403,958 Other — — — — 26,866 — 26,866 Residential real estate: Closed-end 1-4 family 11 — — 11 228,661 497 229,169 Other 714 — 123 837 141,537 — 142,374 Commercial and industrial 521 875 490 1,886 370,898 1,933 374,717 Consumer and other — — — — 3,458 — 3,458 $ 3,275 $ 875 $ 1,597 $ 5,747 $ 1,646,044 $ 3,087 $ 1,654,878 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 September 30, 2016 and December 31, 2015: Pass Special Substandard Total September 30, 2016 Construction and land development $ 472,980 $ — $ 1,356 $ 474,336 Commercial real estate: Nonfarm, nonresidential 395,852 1,791 6,315 403,958 Other 26,866 — — 26,866 Residential real estate: Closed-end 1-4 family 228,144 — 1,025 229,169 Other 141,305 — 1,069 142,374 Commercial and industrial 368,860 — 5,857 374,717 Consumer and other 3,458 — — 3,458 $ 1,637,465 $ 1,791 $ 15,622 $ 1,654,878 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 September 30, 2016 and December 31, 2015. Sept 30, 2016 Dec 31, 2015 Contractually required principal and interest $ 4,276 $ 5,618 Non-accretable difference (321 ) (352 ) Cash flows expected to be collected 3,955 5,266 Accretable yield (868 ) (1,353 ) Carrying value of acquired loans 3,087 3,913 Allowance for loan losses — (9 ) Carrying value less allowance for loan losses $ 3,087 $ 3,904 Management adjusted estimates of future expected losses, cash flows and renewal assumptions during the quarter ended September 30, 2016. These adjustments resulted in changes in expected cash flows, accretable yield, and the non-accretable difference for the three and nine months ended September 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 September 30, 2016 and 2015. Activity during the three month period ended September 30, 2016 Jun 30, 2016 Effect of Income All other Sep 30, 2016 Contractually required principal and interest $ 4,462 $ — $ — $ (186 ) $ 4,276 Non-accretable difference (319 ) — — (2 ) (321 ) Cash flows expected to be collected 4,143 — — (188 ) 3,955 Accretable yield (1,067 ) — 115 84 (868 ) Carrying value of acquired loans $ 3,076 $ — $ 115 $ (104 ) $ 3,087 Activity during the three month period ended September 30, 2015 Jun 30, 2015 Effect of Income All other Sep 30, 2015 Contractually required principal and interest $ 6,000 $ — $ — $ (128 ) $ 5,872 Non-accretable difference (973 ) — 839 (173 ) (307 ) Cash flows expected to be collected 5,027 — 839 (301 ) 5,565 Accretable yield (749 ) — 447 (1,350 ) (1,652 ) Carrying value of acquired loans $ 4,278 $ — $ 1,286 $ (1,651 ) $ 3,913 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 nine-month periods ended September 30, 2016 and 2015. Activity during the nine month period ended September 30, 2016 Dec 31, 2015 Effect of Income All other Sep 30, 2016 Contractually required principal and interest $ 5,618 $ — $ — $ (1,342 ) $ 4,276 Non-accretable difference (352 ) — — 31 (321 ) Cash flows expected to be collected 5,266 — — (1,311 ) 3,955 Accretable yield (1,353 ) — 444 41 (868 ) Carrying value of acquired loans $ 3,913 $ — $ 444 $ (1,270 ) $ 3,087 Activity during the nine month period ended September 30, 2015 Dec 31, 2014 Effect of Income All other Sep 30, 2015 Contractually required principal and interest $ 6,532 $ — $ — $ (660 ) $ 5,872 Non-accretable difference (1,270 ) — 839 124 (307 ) Cash flows expected to be collected 5,262 — 839 (536 ) 5,565 Accretable yield (947 ) — 637 (1,342 ) (1,652 ) Carrying value of acquired loans $ 4,315 $ — $ 1,476 $ (1,878 ) $ 3,913 Troubled Debt Restructurings The Company’s loan portfolio contains no loans that have been modified in a troubled debt restructuring. |