Allowance for Loans Losses | Note 4 – Allowance for Loans Losses A summary of changes in the allowance for loans losses (in thousands) for September 30, 2019 and December 31, 2018 is as follows: September 30, December 31, 2018 (Dollars in thousands) Allowance, beginning of period $ 3,580 $ 2,803 Charge-Offs Commercial and industrial $ 43 $ 6 Real estate, construction — — Real estate, mortgage 3 13 Consumer and other loans 733 545 Total charge-offs 779 564 Recoveries Commercial and industrial — — Real estate, construction — — Real estate, mortgage (6 ) (12 ) Consumer and other loans (132 ) (104 ) Total recoveries (138 ) (116 ) Net charge-offs (recoveries) 641 448 Provision for loan losses 1,465 1,225 Allowance, end of period $ 4,404 $ 3,580 Individually Collectively Evaluated for Impairment Total September 30, 2019 Commercial and industrial $ 291 $ 50,535 $ 50,826 Agricultural — 175 175 Real Estate – construction, commercial — 19,876 19,876 Real Estate – construction, residential — 16,364 16,364 Real Estate – mortgage, commercial 735 166,488 167,223 Real Estate – mortgage, residential 658 165,207 165,865 Real Estate – mortgage, farmland — 3,754 3,754 Consumer installment loans — 37,433 37,433 Gross loans 1,684 459,832 461,516 Less: Unearned income — (638 ) (638 ) Total $ 1,684 $ 459,194 $ 460,878 Individually Collectively Evaluated for Impairment Total December 31, 2018 Commercial and industrial $ — $ 49,076 $ 49,076 Agricultural — 216 216 Real Estate – construction, commercial — 14,666 14,666 Real Estate – construction, residential — 15,102 15,102 Real Estate – mortgage, commercial 1,258 149,255 150,513 Real Estate – mortgage residential 688 149,168 149,856 Real Estate – mortgage, farmland — 4,179 4,179 Consumer installment loans — 31,979 31,979 Gross loans 1,946 413,641 415,587 Less: Unearned income — (719 ) (719 ) Total $ 1,946 $ 412,922 $ 414,868 The following table presents information related to impaired loans, by portfolio segment, at the dates presented. September 30, 2019 (in thousands) Recorded Unpaid Related Average Interest With no specific allowance recorded: Real estate – mortgage, residential $ 658 $ 658 $ — $ 661 $ 7 With an allowance recorded: Commercial and industrial 291 291 151 146 2 Real estate – mortgage, commercial 735 735 100 735 5 $ 1,684 $ 1,684 $ 251 $ 1,542 $ 14 December 31, 2018 (in thousands) Recorded Unpaid Related Average Interest With no specific allowance recorded: Real estate – mortgage, residential $ 1,946 $ 1,946 $ — $ 2,067 $ 64 With an allowance recorded: Real estate – mortgage, commercial — — — — — $ 1,946 $ 1,946 $ — $ 2,067 $ 64 Purchased loans from the 2016 River Bancorp, Inc. acquisition had remaining balances (in thousands) of $25,091 and 34,672 as of September 30, 2019 and December 31, 2018, respectively. Of these balances three loan relationships were considered specifically impaired purchased credit-impaired loans. One of these relationships was resolved during 2018 and the Company recovered $200 of the balance previously written-off. written-off. September 30, December 31, Real Estate Construction loans and all land development and other land loans $ 1,415 $ 1,522 Secured by farmland 3 319 Revolving, open-end 1-4 properties and extended under lines of credit 2,814 3,376 Secured by first liens 7,803 10,448 Secured by junior liens 399 505 Secured by multifamily (5 or more) residential properties 95 250 Loans secured by owner-occupied, nonfarm nonresidential properties 4,146 7,344 Loans secured by other nonfarm nonresidential properties 5,395 6,239 Commercial and Industrial 2,906 4,457 Other Other revolving credit plans 37 89 Automobile loans 10 30 Other consumer loans 68 93 Total $ 25,091 $ 34,672 The following table presents the Company’s loan portfolio by internal loan grade (in thousands) as of September 30, 2019 and December 31, 2018: September 30, 2019 Grade Prime Grade 2 Desirable Grade 3 Good Grade 4 Acceptable Grade 5 Pass/Watch Grade 6 Special Grade 7 Total Commercial and industrial $ 406 $ 1,827 $ 21,936 $ 25,540 $ 579 $ — $ 538 $ 50,826 Agricultural — 103 66 6 — — — 175 Real Estate – construction, commercial — 659 10,210 7,923 104 — 980 19,876 Real Estate – construction, residential — — 4,295 8,011 4,058 — — 16,364 Real Estate – mortgage, commercial — 1,656 81,973 70,093 10,226 1,012 2,263 167,223 Real Estate – mortgage residential — 2,917 81,246 76,351 3,648 96 1,607 165,865 Real Estate – mortgage, farmland 1,565 100 1,418 218 453 — — 3,754 Consumer installment loans 297 32 23,863 12,447 106 — 688 37,433 Gross loans 2,268 7,294 225,007 200,589 19,174 1,108 6,076 461,516 Less: Unearned income (638 ) Total $ 460,878 December 31, 2018 Grade Prime Grade 2 Desirable Grade 3 Good Grade 4 Acceptable Grade 5 Pass/Watch Grade 6 Special Grade 7 Total Commercial and industrial $ 44 $ 2,660 $ 21,009 $ 24,254 $ 797 $ — $ 312 $ 49,076 Agricultural 9 99 105 3 — — — 216 Real Estate – construction, commercial — 485 7,118 5,937 106 — 1,020 14,666 Real Estate – construction, residential — — 4,305 5,059 5,738 — — 15,102 Real Estate – mortgage, commercial — 1,920 82,097 53,487 8,470 1,668 2,871 150,513 Real Estate – mortgage residential — 3,647 76,496 63,397 3,805 522 1,989 149,856 Real Estate – mortgage, farmland 1,700 100 1,340 730 — — 309 4,179 Consumer installment loans 213 29 16,174 15,081 123 — 359 31,979 Gross loans 1,966 8,940 208,644 167,948 19,039 2,190 6,860 415,587 Less: Unearned income (719 ) Total $ 414,868 The Company also utilizes the grades 8 (Doubtful) and 9 (Loss). There were no loans classified in these categories at September 30, 2019 and December 31, 2018. |