Loans and Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2015 |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | 4. Loans and Allowance for Loan Losses |
Loans in the accompanying consolidated balance sheets are summarized as follows: |
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| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, | | December 31, | | | | | | | | | | | | | | | | |
| | 2015 | | 2014 | | | | | | | | | | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | 84,030 | | $ | 69,966 | | | | | | | | | | | | | | | | |
Farmland | | | 10,156 | | | 10,528 | | | | | | | | | | | | | | | | |
1 - 4 family residential | | | 113,392 | | | 105,788 | | | | | | | | | | | | | | | | |
Multi-family residential | | | 9,540 | | | 9,964 | | | | | | | | | | | | | | | | |
Nonfarm nonresidential | | | 190,967 | | | 195,839 | | | | | | | | | | | | | | | | |
Commercial | | | 204,061 | | | 207,101 | | | | | | | | | | | | | | | | |
Consumer | | | 3,349 | | | 4,124 | | | | | | | | | | | | | | | | |
| | | 615,495 | | | 603,310 | | | | | | | | | | | | | | | | |
Deferred loan fees | | | -50 | | | -51 | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | -6,006 | | | -5,981 | | | | | | | | | | | | | | | | |
| | $ | 609,439 | | $ | 597,278 | | | | | | | | | | | | | | | | |
Included in the net loan portfolio as of March 31, 2015 and December 31, 2014 is an accretable discount related to loans acquired within a business combination in the approximate amounts of $137 and $185, respectively. The discount is being accreted into income using the interest method over the life of the loans. |
The majority of the loan portfolio is comprised of loans to businesses and individuals in the Dallas metropolitan area. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses. Management believes the allowance for loan losses was adequate to cover estimated losses on loans as of March 31, 2015 and December 31, 2014. |
Non‑Accrual and Past Due Loans |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non‑accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non‑accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Non‑accrual loans, excluding purchased credit impaired loans, aggregated by class of loans are as follows: |
| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, | | December 31, | | | | | | | | | | | | | | | | |
| | 2015 | | 2014 | | | | | | | | | | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | | — | | $ | — | | | | | | | | | | | | | | | | |
Farmland | | | — | | | — | | | | | | | | | | | | | | | | |
1 - 4 family residential | | | — | | | — | | | | | | | | | | | | | | | | |
Multi-family residential | | | — | | | — | | | | | | | | | | | | | | | | |
Nonfarm nonresidential | | | — | | | 375 | | | | | | | | | | | | | | | | |
Commercial | | | 297 | | | 34 | | | | | | | | | | | | | | | | |
Consumer | | | 26 | | | 27 | | | | | | | | | | | | | | | | |
| | $ | 323 | | $ | 436 | | | | | | | | | | | | | | | | |
During the three months ended March 31, 2015 and 2014, interest income not recognized on non‑accrual loans was minimal. |
An age analysis of past due loans, aggregated by class of loans, as of March 31, 2015 and December 31, 2014 is as follows: |
| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2015 | |
| | | | | | | | | | | | | | | | | | | | Total 90 Days | |
| | | | | | | | | | | | | | | | | | | | Past Due | |
| | 30 to 59 | | 60 to 89 | | 90 Days | | Total | | Total | | Total | | and Still | |
| | Days | | Days | | or Greater | | Past Due | | Current | | Loans | | Accruing | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 84,030 | | $ | 84,030 | | $ | — | |
Farmland | | | — | | | — | | | — | | | — | | | 10,156 | | | 10,156 | | | — | |
1 - 4 family residential | | | 30 | | | — | | | — | | | 30 | | | 113,362 | | | 113,392 | | | — | |
Multi-family residential | | | — | | | — | | | — | | | — | | | 9,540 | | | 9,540 | | | — | |
Nonfarm nonresidential | | | — | | | — | | | — | | | — | | | 190,967 | | | 190,967 | | | — | |
Commercial | | | 269 | | | — | | | — | | | 269 | | | 203,792 | | | 204,061 | | | — | |
Consumer | | | — | | | — | | | — | | | — | | | 3,349 | | | 3,349 | | | — | |
| | $ | 299 | | $ | — | | $ | — | | $ | 299 | | $ | 615,196 | | $ | 615,495 | | $ | — | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | |
| | | | | | | | | | | | | | | | | | | | Total 90 Days | |
| | | | | | | | | | | | | | | | | | | | Past Due | |
| | 30 to 59 | | 60 to 89 | | 90 Days | | Total | | Total | | Total | | and Still | |
| | Days | | Days | | or Greater | | Past Due | | Current | | Loans | | Accruing | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | 12 | | $ | — | | $ | 541 | | $ | 553 | | $ | 69,413 | | $ | 69,966 | | $ | — | |
Farmland | | | — | | | — | | | — | | | — | | | 10,528 | | | 10,528 | | | — | |
1 - 4 family residential | | | 512 | | | — | | | — | | | 512 | | | 105,276 | | | 105,788 | | | — | |
Multi-family residential | | | — | | | — | | | — | | | — | | | 9,964 | | | 9,964 | | | — | |
Nonfarm nonresidential | | | — | | | 375 | | | — | | | 375 | | | 195,464 | | | 195,839 | | | — | |
Commercial | | | 6 | | | 34 | | | — | | | 40 | | | 207,061 | | | 207,101 | | | — | |
Consumer | | | 26 | | | — | | | — | | | 26 | | | 4,098 | | | 4,124 | | | — | |
| | $ | 556 | | $ | 409 | | $ | 541 | | $ | 1,506 | | $ | 601,804 | | $ | 603,310 | | $ | — | |
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Impaired Loans |
Impaired loans are those loans where it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. All troubled debt restructurings (TDRs) are considered impaired loans. Impaired loans are measured based on either the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the collateral if the loan is collateral dependent. Substantially all of the Company’s impaired loans are measured at the fair value of the collateral. Impaired loans, or portions thereof, are charged off when deemed uncollectible. |
Impaired loans, including purchased credit impaired loans and troubled debt restructurings, at March 31, 2015 and December 31, 2014 are summarized in the following tables. |
| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2015 | | | | |
| | Unpaid | | Recorded | | Recorded | | | | | | | | Average | | | | |
| | Contractual | | Investment | | Investment | | Total | | | | | Recorded | | | | |
| | Principal | | with No | | With | | Recorded | | Related | | Investment | | | | |
| | Balance | | Allowance | | Allowance | | Investment | | Allowance | | During Year | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 42 | | | | |
Farmland | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
1 - 4 family residential | | | 168 | | | 168 | | | — | | | 168 | | | — | | | 168 | | | | |
Multi-family residential | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
Nonfarm nonresidential | | | 1,104 | | | 1,104 | | | — | | | 1,104 | | | — | | | 1,107 | | | | |
Commercial | | | 482 | | | 183 | | | 299 | | | 482 | | | 113 | | | 254 | | | | |
Consumer | | | 29 | | | 7 | | | 22 | | | 29 | | | 10 | | | 32 | | | | |
Total | | $ | 1,783 | | $ | 1,462 | | $ | 321 | | $ | 1,783 | | $ | 123 | | $ | 1,603 | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | | | |
| | Unpaid | | Recorded | | Recorded | | | | | | | | Average | | | | |
| | Contractual | | Investment | | Investment | | Total | | | | | Recorded | | | | |
| | Principal | | with No | | With | | Recorded | | Related | | Investment | | | | |
| | Balance | | Allowance | | Allowance | | Investment | | Allowance | | During Year | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | 819 | | $ | — | | $ | 541 | | $ | 541 | | $ | 44 | | $ | 611 | | | | |
Farmland | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
1 - 4 family residential | | | 168 | | | 168 | | | — | | | 168 | | | — | | | 205 | | | | |
Multi-family residential | | | — | | | — | | | — | | | — | | | — | | | — | | | | |
Nonfarm nonresidential | | | 1,086 | | | 1,086 | | | — | | | 1,086 | | | — | | | 980 | | | | |
Commercial | | | 223 | | | 183 | | | 40 | | | 223 | | | 30 | | | 361 | | | | |
Consumer | | | 38 | | | 8 | | | 30 | | | 38 | | | 13 | | | 44 | | | | |
Total | | $ | 2,334 | | $ | 1,445 | | $ | 611 | | $ | 2,056 | | $ | 87 | | $ | 2,201 | | | | |
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Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. |
During the three months ended March 31, 2015 and 2014, total interest income and cash‑based interest income recognized on impaired loans was minimal. |
Troubled Debt Restructuring |
Modifications of terms for the Company’s loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances. Loan modifications that are included as troubled debt restructurings may involve a reduction of the stated interest rate of the loan, an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk, or deferral of principal payments, regardless of the period of the modification. The recorded investment in troubled debt restructurings was $1,511 and $1,677 as of March 31, 2015 and December 31, 2014. |
During the three months ended March 31, 2015 and 2014, the terms of certain loans were modified as troubled debt restructurings as follows: |
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| | | | | | | During the three months ended March 31, 2015 | | | | | |
| | | | | | | Post-Modification Outstanding Recorded Investment | | | | | |
| | | | | | | | | | | | | | | | Extended | | | | | |
| | | | Pre- | | | | | | | | Extended | | Maturity, | | | | | |
| | | | Modification | | | | | | | | Maturity | | Restructured | | | | | |
| | | | Outstanding | | Adjusted | | | | | and | | Payments and | | | | | |
| | Number | | Recorded | | Interest | | Extended | | Restructured | | Adjusted | | | | | |
| | of Loans | | Investment | | Rate | | Maturity | | Payments | | Interest Rate | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | | | |
Farmland | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
1 - 4 family residential | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Multi-family residential | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Nonfarm nonresidential | | — | | | 399 | | | — | | | — | | | — | | | 397 | | | | | |
Commercial | | 1 | | | — | | | — | | | — | | | — | | | — | | | | | |
Consumer | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Total | | 1 | | $ | 399 | | $ | — | | $ | — | | $ | — | | $ | 397 | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | During the three months ended March 31, 2014 | | | | | |
| | | | | | | Post-Modification Outstanding Recorded Investment | | | | | |
| | | | | | | | | | | | | | | | Extended | | | | | |
| | | | Pre- | | | | | | | | Extended | | Maturity, | | | | | |
| | | | Modification | | | | | | | | Maturity | | Restructured | | | | | |
| | | | Outstanding | | Adjusted | | | | | and | | Payments and | | | | | |
| | Number | | Recorded | | Interest | | Extended | | Restructured | | Adjusted | | | | | |
| | of Loans | | Investment | | Rate | | Maturity | | Payments | | Interest Rate | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | | | | |
Farmland | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
1 - 4 family residential | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Multi-family residential | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Nonfarm nonresidential | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Commercial | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
Consumer | | 2 | | | 17 | | | — | | | 11 | | | 6 | | | — | | | | | |
Total | | 2 | | $ | 17 | | $ | — | | $ | 11 | | $ | 6 | | $ | — | | | | | |
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The one loan restructured during the three months ended March 31, 2015 was performing as agreed to the modified terms. Of the two loans restructured during the three months ended March 31, 2014, both were performing as agreed to the modified terms. No specific allowance for loan losses is recorded for loans that were modified as of March 31, 2015 and 2014. |
There were no loans modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default during the three months ended March 31, 2015. There was one loan modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default during the three months ended March, 31, 2014. The loan was secured by real estate and the collateral property was foreclosed upon subsequent to the default. No amounts were recorded against the allowance for loan losses related to the foreclosure. A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is 90 days past due or results in the foreclosure and repossession of the applicable collateral. |
Interest income recorded during the three months ended March 31, 2015 and 2014 on the restructured loans and interest income that would have been recorded had the terms of the loan not been modified was minimal. |
The Company has not committed to lend additional amounts to customers with outstanding loans that were classified as TDRs as of March 31, 2015 or 2014. |
Credit Quality Indicators |
From a credit risk standpoint, the Company classifies its loans in one of four categories: (i) pass, (ii) special mention, (iii) substandard or (iv) doubtful. Loans classified as loss are charged‑off. |
The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on criticized credits monthly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each monthly reporting period. All classified credits are evaluated for impairment. If impairment is determined to exist, a specific reserve is established. The Company’s methodology is structured so that specific reserves are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss). |
Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short‑term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly. |
Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. |
Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on non‑accrual. |
As of March 31, 2015 and December 31, 2014, the following summarizes the Company’s internal ratings of its loans, including purchased credit impaired loans: |
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| | March 31, 2015 | | | | | | | |
| | | | | Special | | | | | | | | | | | | | | | | |
| | Pass | | Mention | | Substandard | | Doubtful | | Total | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | 84,030 | | $ | — | | $ | — | | $ | — | | $ | 84,030 | | | | | | | |
Farmland | | | 10,156 | | | — | | | — | | | — | | | 10,156 | | | | | | | |
1 - 4 family residential | | | 113,055 | | | — | | | 337 | | | — | | | 113,392 | | | | | | | |
Multi-family residential | | | 9,540 | | | — | | | — | | | — | | | 9,540 | | | | | | | |
Nonfarm nonresidential | | | 190,570 | | | 397 | | | — | | | — | | | 190,967 | | | | | | | |
Commercial | | | 202,238 | | | 1,143 | | | 680 | | | — | | | 204,061 | | | | | | | |
Consumer | | | 3,320 | | | — | | | 29 | | | — | | | 3,349 | | | | | | | |
Total | | $ | 612,909 | | $ | 1,540 | | $ | 1,046 | | $ | — | | $ | 615,495 | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | | | | | | |
| | | | | Special | | | | | | | | | | | | | | | | |
| | Pass | | Mention | | Substandard | | Doubtful | | Total | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | | | | |
Construction and land | | $ | 69,425 | | $ | — | | $ | 541 | | $ | — | | $ | 69,966 | | | | | | | |
Farmland | | | 10,528 | | | — | | | — | | | — | | | 10,528 | | | | | | | |
1 - 4 family residential | | | 105,786 | | | — | | | 2 | | | — | | | 105,788 | | | | | | | |
Multi-family residential | | | 9,964 | | | — | | | — | | | — | | | 9,964 | | | | | | | |
Nonfarm nonresidential | | | 195,464 | | | — | | | 375 | | | — | | | 195,839 | | | | | | | |
Commercial | | | 205,681 | | | 672 | | | 748 | | | — | | | 207,101 | | | | | | | |
Consumer | | | 3,925 | | | — | | | 199 | | | — | | | 4,124 | | | | | | | |
Total | | $ | 600,773 | | $ | 672 | | $ | 1,865 | | $ | — | | $ | 603,310 | | | | | | | |
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An analysis of the allowance for loan losses for the three months ended March 31, 2015 and 2014 and year ended December 31, 2014 is as follows: |
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| | | | | | | | | | | | | | | | | | | | | | |
| | For the | | For the | | For the | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended | | Three Months Ended | | | | | | | | | | | | | |
| | 2015 | | 2014 | | 2014 | | | | | | | | | | | | | |
Balance at beginning of year | | $ | 5,981 | | $ | 5,018 | | $ | 5,018 | | | | | | | | | | | | | |
Provision charged to earnings | | | 110 | | | 1,423 | | | 252 | | | | | | | | | | | | | |
Charge-offs | | | -102 | | | -510 | | | -60 | | | | | | | | | | | | | |
Recoveries | | | 17 | | | 50 | | | 5 | | | | | | | | | | | | | |
Net charge-offs | | | -85 | | | -460 | | | -55 | | | | | | | | | | | | | |
Balance at end of year | | $ | 6,006 | | $ | 5,981 | | $ | 5,215 | | | | | | | | | | | | | |
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The allowance for loan losses as a percentage of total loans is 0.98%, 0.99%, and 1.04% as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively. |
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The following tables summarize the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2015 and 2014 and the year ended December 31, 2014: |
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| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2015 | | | | |
| | Real Estate | | | | | | | | | | | | | |
| | Construction | | | | | Nonfarm | | | | | | | | | | | | | |
| | Land and | | | | | Non- | | | | | | | | | | | | | |
| | Farmland | | Residential | | Residential | | Commercial | | Consumer | | Total | | | | |
Balance at beginning of year | | $ | 769 | | $ | 1,166 | | $ | 1,890 | | $ | 2,092 | | $ | 64 | | $ | 5,981 | | | | |
Provision (recapture) charged to earnings | | | 137 | | | 74 | | | -54 | | | -40 | | | -7 | | | 110 | | | | |
Charge-offs | | | -48 | | | — | | | — | | | -50 | | | -4 | | | -102 | | | | |
Recoveries | | | — | | | — | | | 5 | | | 12 | | | — | | | 17 | | | | |
Net charge-offs (recoveries) | | | -48 | | | — | | | 5 | | | -38 | | | -4 | | | -85 | | | | |
Balance at end of year | | $ | 858 | | $ | 1,240 | | $ | 1,841 | | $ | 2,014 | | $ | 53 | | $ | 6,006 | | | | |
Period-end amount allocated to: | | | | | | | | | | | | | | | | | | | | | | |
Specific reserves: | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | $ | — | | $ | — | | $ | — | | $ | 113 | | $ | 10 | | $ | 123 | | | | |
Total specific reserves | | | — | | | — | | | — | | | 113 | | | 10 | | | 123 | | | | |
General reserves | | | 858 | | | 1,240 | | | 1,841 | | | 1,901 | | | 43 | | | 5,883 | | | | |
Total | | $ | 858 | | $ | 1,240 | | $ | 1,841 | | $ | 2,014 | | $ | 53 | | $ | 6,006 | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | | | |
| | Real Estate | | | | | | | | | | | | | |
| | Construction | | | | | Nonfarm | | | | | | | | | | | | | |
| | Land and | | | | | Non- | | | | | | | | | | | | | |
| | Farmland | | Residential | | Residential | | Commercial | | Consumer | | Total | | | | |
Balance at beginning of year | | $ | 660 | | $ | 970 | | $ | 1,726 | | $ | 1,585 | | $ | 77 | | $ | 5,018 | | | | |
Provision (recapture) charged to earnings | | | 137 | | | 226 | | | 162 | | | 909 | | | -11 | | | 1,423 | | | | |
Charge-offs | | | -28 | | | -30 | | | — | | | -448 | | | -4 | | | -510 | | | | |
Recoveries | | | — | | | — | | | 2 | | | 46 | | | 2 | | | 50 | | | | |
Net charge-offs (recoveries) | | | -28 | | | -30 | | | 2 | | | -402 | | | -2 | | | -460 | | | | |
Balance at end of year | | $ | 769 | | $ | 1,166 | | $ | 1,890 | | $ | 2,092 | | $ | 64 | | $ | 5,981 | | | | |
Period-end amount allocated to: | | | | | | | | | | | | | | | | | | | | | | |
Specific reserves: | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | $ | 44 | | $ | — | | $ | — | | $ | 30 | | $ | 13 | | $ | 87 | | | | |
Total specific reserves | | | 44 | | | — | | | — | | | 30 | | | 13 | | | 87 | | | | |
General reserves | | | 725 | | | 1,166 | | | 1,890 | | | 2,062 | | | 51 | | | 5,894 | | | | |
Total | | $ | 769 | | $ | 1,166 | | $ | 1,890 | | $ | 2,092 | | $ | 64 | | $ | 5,981 | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2014 | | | | |
| | Real Estate | | | | | | | | | | | | | |
| | Construction | | | | | Nonfarm | | | | | | | | | | | | | |
| | Land and | | | | | Non- | | | | | | | | | | | | | |
| | Farmland | | Residential | | Residential | | Commercial | | Consumer | | Total | | | | |
Balance at beginning of year | | $ | 660 | | $ | 970 | | $ | 1,726 | | $ | 1,585 | | $ | 77 | | $ | 5,018 | | | | |
Provision (recapture) charged to earnings | | | -6 | | | 150 | | | -372 | | | 493 | | | -13 | | | 252 | | | | |
Charge-offs | | | — | | | — | | | — | | | -60 | | | — | | | -60 | | | | |
Recoveries | | | — | | | — | | | — | | | 3 | | | 2 | | | 5 | | | | |
Net charge-offs (recoveries) | | | — | | | — | | | — | | | -57 | | | 2 | | | -55 | | | | |
Balance at end of year | | $ | 654 | | $ | 1,120 | | $ | 1,354 | | $ | 2,021 | | $ | 66 | | $ | 5,215 | | | | |
Period-end amount allocated to: | | | | | | | | | | | | | | | | | | | | | | |
Specific reserves: | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | | $ | — | | $ | 26 | | $ | — | | $ | — | | $ | — | | $ | 26 | | | | |
Total specific reserves | | | — | | | 26 | | | — | | | — | | | — | | | 26 | | | | |
General reserves | | | 654 | | | 1,094 | | | 1,354 | | | 2,021 | | | 66 | | | 5,189 | | | | |
Total | | $ | 654 | | $ | 1,120 | | $ | 1,354 | | $ | 2,021 | | $ | 66 | | $ | 5,215 | | | | |
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The Company’s recorded investment in loans as of March 31, 2015 and December 31, 2014 related to the balance in the allowance for loan losses on the basis of the Company’s impairment methodology is as follows: |
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| | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2015 | | | | |
| | Real Estate | | | | | | | | | | | | | |
| | Construction | | | | | Nonfarm | | | | | | | | | | | | | |
| | Land and | | | | | Non- | | | | | | | | | | | | | |
| | Farmland | | Residential | | Residential | | Commercial | | Consumer | | Total | | | | |
Loans individually evaluated for impairment | | $ | — | | $ | 168 | | $ | 1,104 | | $ | 482 | | $ | 29 | | $ | 1,783 | | | | |
Loans collectively evaluated for impairment | | | 94,186 | | | 122,764 | | | 189,863 | | | 203,579 | | | 3,320 | | | 613,712 | | | | |
Total | | $ | 94,186 | | $ | 122,932 | | $ | 190,967 | | $ | 204,061 | | $ | 3,349 | | $ | 615,495 | | | | |
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| | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 | | | | |
| | Real Estate | | | | | | | | | | | | | |
| | Construction | | | | | Nonfarm | | | | | | | | | | | | | |
| | Land and | | | | | Non- | | | | | | | | | | | | | |
| | Farmland | | Residential | | Residential | | Commercial | | Consumer | | Total | | | | |
Loans individually evaluated for impairment | | $ | 541 | | $ | 168 | | $ | 1,086 | | $ | 223 | | $ | 38 | | $ | 2,056 | | | | |
Loans collectively evaluated for impairment | | | 79,953 | | | 115,584 | | | 194,753 | | | 206,878 | | | 4,086 | | | 601,254 | | | | |
Total | | $ | 80,494 | | $ | 115,752 | | $ | 195,839 | | $ | 207,101 | | $ | 4,124 | | $ | 603,310 | | | | |
The Company has acquired certain loans which experienced credit deterioration since origination (purchased credit impaired loans). Accretion on purchased credit impaired loans is based on estimated future cash flows, regardless of contractual maturity. The related carrying amounts of those loans as of December 31, 2014 was $541. There are no purchase credit impaired loans as of March 31, 2015. |
There were no loans purchased during the three months ended March 31, 2015 and 2014. |
Income is not recognized on certain purchased credit impaired loans if the Company cannot reasonably estimate cash flows expected to be collected. Income on these loans is recognized using the asset recovery method. As of March 31, 2015, there were no remaining purchase credit impaired loans. As of December 31, 2014, there was only one purchased credit impaired loan remaining with a carrying amount of $541, which was accounted for using the cost recovery method. |
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