Loans | NOTE 3—LOANS Loans at June 30, 2019 and December 31, 2018 were as follows: June 30, 2019 December 31, 2018 Loans Construction and land development $ 584,599 $ 584,440 Commercial real estate: Nonfarm, nonresidential 894,910 754,243 Other 37,845 48,017 Residential real estate: Closed-end 1-4 family 496,597 493,065 Other 197,549 189,817 Commercial and industrial 668,065 592,793 Consumer and other 4,945 5,568 Loans before net deferred loan fees 2,884,510 2,667,943 Deferred loan fees, net (4,077 ) (2,544 ) Total loans 2,880,433 2,665,399 Allowance for loan losses (27,443 ) (23,451 ) Total loans, net of allowance for loan losses $ 2,852,990 $ 2,641,948 The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month periods ended June 30, 2019 and 2018: Construction and Land Development Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer and Other Total Three Months Ended June 30, 2019 Allowance for loan losses: Beginning balance $ 4,742 $ 7,027 $ 4,810 $ 11,229 $ 49 $ 27,857 Provision for loan losses 42 614 18 6,382 (25 ) 7,031 Loans charged-off — — — (7,563 ) (29 ) (7,592 ) Recoveries — — 16 70 61 147 Total ending allowance balance $ 4,784 $ 7,641 $ 4,844 $ 10,118 $ 56 $ 27,443 Three Months Ended June 30, 2018 Allowance for loan losses: Beginning balance $ 4,345 $ 5,875 $ 3,605 $ 7,866 $ 47 $ 21,738 Provision for loan losses 267 288 909 (900 ) 6 570 Loans charged-off — — — — (5 ) (5 ) Recoveries 1 — 19 10 8 38 Total ending allowance balance $ 4,613 $ 6,163 $ 4,533 $ 6,976 $ 56 $ 22,341 The following table presents the activity in the allowance for loan losses by portfolio segment for the six-month periods ended June 30, 2019 and 2018. Construction and Land Development Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer and Other Total Six Months Ended June 30, 2019 Allowance for loan losses: Beginning balance $ 4,743 $ 6,725 $ 4,743 $ 7,166 $ 74 $ 23,451 Provision for loan losses 41 916 101 11,012 16 12,086 Loans charged-off — — (15 ) (8,131 ) (99 ) (8,245 ) Recoveries — — 15 71 65 151 Total ending allowance balance $ 4,784 $ 7,641 $ 4,844 $ 10,118 $ 56 $ 27,443 Six Months Ended June 30, 2018 Allowance for loan losses: Beginning balance $ 3,802 $ 5,981 $ 3,834 $ 7,587 $ 43 $ 21,247 Provision for loan losses 848 182 668 (572 ) 17 1,143 Loans charged-off (38 ) — (7 ) (49 ) (17 ) (111 ) Recoveries 1 — 38 10 13 62 Total ending allowance balance $ 4,613 $ 6,163 $ 4,533 $ 6,976 $ 56 $ 22,341 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, 2019 and December 31, 2018. For purposes of this disclosure, recorded investment in loans excludes accrued interest receivable and net deferred loan fees due to immateriality. Construction and Land Development Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer and Other Total June 30, 2019 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 2,193 $ — $ 2,193 Collectively evaluated for impairment 4,784 7,641 4,844 7,925 56 25,250 Total ending allowance balance $ 4,784 $ 7,641 $ 4,844 $ 10,118 $ 56 $ 27,443 Loans: Individually evaluated for impairment $ — $ — $ 1,837 $ 2,193 $ — $ 4,030 Collectively evaluated for impairment 584,599 932,755 692,309 665,872 4,945 2,880,480 Total ending loans balance $ 584,599 $ 932,755 $ 694,146 $ 668,065 $ 4,945 $ 2,884,510 December 31, 2018 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ 17 $ — $ 17 Collectively evaluated for impairment 4,743 6,725 4,743 7,149 74 23,434 Total ending allowance balance $ 4,743 $ 6,725 $ 4,743 $ 7,166 $ 74 $ 23,451 Loans: Individually evaluated for impairment $ 2,298 $ — $ 3,189 $ 167 $ — $ 5,654 Collectively evaluated for impairment 582,142 802,260 679,693 592,626 5,568 2,662,289 Total ending loans balance $ 584,440 $ 802,260 $ 682,882 $ 592,793 $ 5,568 $ 2,667,943 Loans collectively evaluated for impairment reported at June 30, 2019 include certain acquired loans. At June 30, 2019, these non-PCI loans had a carrying value of $72,774, comprised of contractually unpaid principal totaling $73,717 and discounts totaling $943. Management evaluated these loans for credit deterioration since acquisition and determined that an allowance for loan losses of $115 was necessary at June 30, 2019. The following table presents information related to impaired loans by class of loans as of June 30, 2019 and December 31, 2018: Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated June 30, 2019 With no allowance recorded: Residential real estate: Closed-end 1-4 family $ 491 484 $ — Other 1,353 1,353 — Commercial and industrial — — — Subtotal 1,844 1,837 — With an allowance recorded: Commercial and industrial 5,722 2,193 2,193 Subtotal 5,722 2,193 2,193 Total $ 7,566 $ 4,030 $ 2,193 December 31, 2018 With no allowance recorded: Construction and land development $ 2,298 $ 2,298 $ — Residential real estate: Closed-end 1-4 family 1,280 1,272 — Other 1,917 1,917 — Subtotal 5,495 5,487 — With an allowance recorded: Commercial and industrial 167 167 17 Subtotal 167 167 17 Total $ 5,662 $ 5,654 $ 17 The following table presents the average recorded investment of impaired loans by class of loans for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, Average Recorded Investment 2019 2018 2019 2018 With no allowance recorded: Construction and land development $ — $ — $ 384 $ 100 Commercial real estate: Nonfarm, nonresidential — — 25 — Residential real estate: Closed-end 1-4 family 681 496 744 432 Other 1,086 112 1,174 192 Commercial and industrial 2,638 883 1,319 867 Subtotal 4,405 1,491 3,646 1,591 With an allowance recorded: Construction and land development $ — $ — $ 91 $ — Commercial and industrial 4,404 1,638 3,787 1,785 Subtotal 4,404 1,638 3,878 1,785 Total average recorded investment $ 8,809 $ 3,129 $ 7,524 $ 3,376 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, 2019 and 2018. The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans as of June 30, 2019 and December 31, 2018: Nonaccrual Loans Past Due Over 90 Days And Still Accruing Interest June 30, 2019 Residential real estate: Closed-end 1-4 family $ 484 $ — Other 1,353 250 Commercial and industrial 2,193 426 Total $ 4,030 $ 676 December 31, 2018 Construction and land development $ 2,298 $ — Residential real estate: Closed-end 1-4 family 1,273 — Other 1,917 — Commercial and industrial — 208 Total $ 5,488 $ 208 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, 2019 and December 31, 2018 by class of loans: 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due Total Past Due Loans Not Past Due Total June 30, 2019 Construction and land development $ — $ 380 $ — $ 380 $ 584,219 $ 584,599 Commercial real estate: Nonfarm, nonresidential — — — — 894,910 894,910 Other — — — — 37,845 37,845 Residential real estate: Closed-end 1-4 family 350 — 159 509 496,088 496,597 Other 218 404 609 1,231 196,318 197,549 Commercial and industrial 601 289 2,619 3,509 664,556 668,065 Consumer and other 33 — — 33 4,912 4,945 $ 1,202 $ 1,073 $ 3,387 $ 5,662 $ 2,878,848 $ 2,884,510 December 31, 2018 Construction and land development $ 294 $ 1,986 $ 548 $ 2,828 $ 581,612 $ 584,440 Commercial real estate: Nonfarm, nonresidential 515 — — 515 753,728 754,243 Other — — — — 48,017 48,017 Residential real estate: Closed-end 1-4 family 2,390 404 228 3,022 490,043 493,065 Other 142 — 1,810 1,952 187,865 189,817 Commercial and industrial 241 252 208 701 592,092 592,793 Consumer and other — — — — 5,568 5,568 $ 3,582 $ 2,642 $ 2,794 $ 9,018 $ 2,658,925 $ 2,667,943 Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans as well as non-homogeneous residential real estate loans. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. 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 excludes deferred loan fees and 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, 2019 and December 31, 2018: Pass Special Mention Substandard Total June 30, 2019 Construction and land development $ 584,251 113 235 $ 584,599 Commercial real estate: Nonfarm, nonresidential 894,430 480 — 894,910 Other 37,229 616 — 37,845 Residential real estate: Closed-end 1-4 family 494,306 — 2,291 496,597 Other 195,207 — 2,342 197,549 Commercial and industrial 642,120 2,662 23,283 668,065 Consumer and other 4,945 — — 4,945 $ 2,852,488 $ 3,871 $ 28,151 $ 2,884,510 Pass Special Mention Substandard Total December 31, 2018 Construction and land development $ 580,468 $ 1,416 $ 2,556 $ 584,440 Commercial real estate: Nonfarm, nonresidential 739,469 14,774 — 754,243 Other 48,017 — — 48,017 Residential real estate: Closed-end 1-4 family 489,781 948 2,336 493,065 Other 186,485 404 2,928 189,817 Commercial and industrial 553,589 8,313 30,891 592,793 Consumer and other 5,567 1 — 5,568 $ 2,603,376 $ 25,856 $ 38,711 $ 2,667,943 Troubled Debt Restructurings As of June 30, 2019, the Company’s loan portfolio contains one loan that has been modified in a troubled debt restructuring with a balance of $316. As of December 31, 2018, the Company’s loan portfolio contained one loan that had been modified in a troubled debt restructuring with a balance of $167. |