SMARTFINANCIAL INC., 10-Q filed on 8/9/2018
Quarterly Report
v3.10.0.1
Document And Entity Information - shares
6 Months Ended
Jun. 30, 2018
Jul. 31, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Entity Registrant Name SMARTFINANCIAL INC.  
Entity Central Index Key 0001038773  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Trading Symbol SMBK  
Entity Common Stock, Shares Outstanding   12,704,581
v3.10.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
Jun. 30, 2018
Dec. 31, 2017
ASSETS    
Cash and due from banks $ 66,243,037 $ 64,097,287
Interest-bearing deposits at other financial institutions 101,992,073 41,965,597
Federal funds sold 2,000,000 6,964,000
Total cash and cash equivalents 170,235,110 113,026,884
Securities available-for-sale, at fair value 156,577,182 151,944,567
Restricted investments, at cost 8,272,600 6,430,700
Loans, net of allowance for loan losses of $7,073,937 at June 30, 2018 and $5,860,291 at December 31, 2017 1,568,360,556 1,317,397,909
Bank premises and equipment, net 52,202,992 43,000,249
Foreclosed assets 3,524,239 3,254,392
Goodwill and core deposit intangible, net 68,449,478 50,836,840
Cash surrender value of life insurance 21,944,300 21,646,894
Other assets 12,665,515 13,232,247
Total assets 2,062,231,972 1,720,770,682
Deposits:    
Noninterest-bearing demand deposits 301,317,854 220,520,287
Interest-bearing demand deposits 246,942,432 231,643,508
Money market and savings deposits 632,518,003 543,644,830
Time deposits 535,879,278 442,774,094
Total deposits 1,716,657,567 1,438,582,719
Securities sold under agreement to repurchase 18,635,215 24,054,730
Federal Home Loan Bank advances and other borrowings 72,040,028 43,600,000
Accrued expenses and other liabilities 7,412,585 8,681,393
Total liabilities 1,814,745,395 1,514,918,842
Shareholders' equity:    
Preferred stock - $1 par value; 2,000,000 shares authorized; None issued and outstanding as of June 30,2018 and December 31,2017 0 0
Common stock - $1 par value; 40,000,000 shares authorized; 12,704,581 and 11,152,561 shares issued and outstanding in 2018 and 2017, respectively 12,704,581 11,152,561
Additional paid-in capital 208,512,862 174,008,753
Retained earnings 29,234,901 21,888,575
Accumulated other comprehensive loss (2,965,767) (1,198,049)
Total shareholders' equity 247,486,577 205,851,840
Total liabilities and shareholders' equity $ 2,062,231,972 $ 1,720,770,682
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Allowance for loan losses (in dollars) $ 7,073,937 $ 5,860,291
Preferred stock, par value (in dollars per share) $ 1 $ 1
Preferred stock, shares authorized (in shares) 2,000,000 2,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 1 $ 1
Common stock, shares authorized (in shares) 40,000,000 40,000,000
Common stock, shares issued (in shares) 12,704,581 11,152,561
Common stock, shares outstanding (in shares) 12,704,581 11,152,561
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CONSOLIDATED STATEMENTS OF INCOME - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
INTEREST INCOME        
Loans, including fees $ 21,652,221 $ 10,747,217 $ 39,880,101 $ 20,962,823
Securities and interest-bearing deposits at other financial institutions 1,197,577 692,223 2,246,933 1,353,043
Federal funds sold and other earning assets 143,586 78,049 244,404 150,946
Total interest income 22,993,384 11,517,489 42,371,438 22,466,812
INTEREST EXPENSE        
Deposits 3,237,891 1,241,551 5,639,354 2,339,089
Securities sold under agreements to repurchase 10,913 15,588 23,408 31,539
Federal Home Loan Bank advances and other borrowings 206,558 11,682 359,334 27,156
Total interest expense 3,455,362 1,268,821 6,022,096 2,397,784
Net interest income before provision for loan losses 19,538,022 10,248,668 36,349,342 20,069,028
Provision for loan losses 616,602 298,033 1,305,397 310,482
Net interest income after provision for loan losses 18,921,420 9,950,635 35,043,945 19,758,546
NONINTEREST INCOME        
Customer service fees 556,891 290,626 1,134,894 555,299
Loss on sale of securities (1,200) 0 (1,200) 0
Gain on sale of loans and other assets 321,584 405,418 646,928 680,583
Interchange and debit card transaction fees 121,219 223,329 266,754 415,722
Other noninterest income 578,715 332,634 985,025 542,674
Total noninterest income 1,577,209 1,252,007 3,032,401 2,194,278
NONINTEREST EXPENSES        
Salaries and employee benefits 7,648,556 4,757,618 14,824,901 9,404,367
Net occupancy and equipment expense 1,521,687 962,593 3,055,100 1,941,052
Depository insurance 317,409 60,987 419,213 214,286
Sale of foreclosed assets and related expense 239,634 11,508 429,061 25,585
Advertising 214,632 129,398 399,107 293,659
Data processing 600,448 475,343 1,126,756 808,558
Professional services 918,135 473,351 1,816,495 1,043,192
Amortization of intangible assets 228,866 61,071 416,623 113,648
Service contracts 491,774 312,905 970,381 608,534
Merger expenses 1,122,976 419,992 1,620,716 419,992
Other operating expenses 1,968,249 1,163,896 3,416,505 2,116,265
Total noninterest expenses 15,272,366 8,828,662 28,494,858 16,989,138
Income before income tax expense 5,226,263 2,373,980 9,581,488 4,963,686
Income tax expense 1,294,707 725,694 2,235,162 1,671,548
Net income 3,931,556 1,648,286 7,346,326 3,292,138
Preferred stock dividends 0 0 0 195,000
Net income available to common shareholders $ 3,931,556 $ 1,648,286 $ 7,346,326 $ 3,097,138
EARNINGS PER COMMON SHARE        
Basic (in dollars per share) $ 0.32 $ 0.20 $ 0.63 $ 0.39
Diluted (in dollars per share) $ 0.32 $ 0.20 $ 0.62 $ 0.39
Weighted average common shares outstanding        
Basic (in shares) 12,201,185 8,216,567 11,708,746 7,872,609
Diluted (in shares) 12,320,498 8,325,538 11,822,497 7,977,282
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Statement of Comprehensive Income [Abstract]        
Net income available to common shareholders $ 3,931,556 $ 1,648,286 $ 7,346,326 $ 3,292,138
Other comprehensive (loss) income, net of tax:        
Unrealized holding gains (losses) on securities arising during the period, net of tax (benefit) expense of $(134,439), $(580,433), $468,293 and $270,461 in 2018 and 2017, respectively (397,244) 435,890 (1,768,638) 754,724
Reclassification adjustment for losses included in net income, net of tax (benefit) of $(280) and $0 in 2018 and 2017, respectively 920 0 920 0
Total other comprehensive (loss) income (396,324) 435,890 (1,767,718) 754,724
Comprehensive income $ 3,535,232 $ 2,084,176 $ 5,578,608 $ 4,046,862
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Statement of Comprehensive Income [Abstract]        
Unrealized holding gains arising during the period, tax expense (benefit) $ (134,439) $ 270,461 $ (580,433) $ 468,293
Reclassification adjustment for losses included in net income, tax expense $ (280) $ 0 $ (280) $ 0
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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED - USD ($)
Total
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
BALANCE at Dec. 31, 2016 $ 105,240,140 $ 12,000 $ 5,896,033 $ 83,463,051 $ 16,871,296 $ (1,002,240)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income available to common shareholders 3,292,138       3,292,138  
Other comprehensive loss 754,724         754,724
Issuance of common stock 32,934,676   1,840,000 31,094,676    
Issuance of stock grants 31,791   1,511 30,280    
Exercise of stock options 4,625,012   481,717 4,143,295    
Cash dividends on preferred stock (195,000)       (195,000)  
Redemption of preferred stock (12,000,000) (12,000)   (11,988,000)    
Stock option compensation expense 50,530     50,530    
BALANCE at Jun. 30, 2017 134,734,011 $ 0 8,219,261 106,793,832 19,968,434 (247,516)
BALANCE at Dec. 31, 2017 205,851,840   11,152,561 174,008,753 21,888,575 (1,198,049)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income available to common shareholders 7,346,326       7,346,326  
Other comprehensive loss (1,767,718)         (1,767,718)
Issuance of common stock 34,731,922   1,458,981 33,272,941    
Issuance of stock grants 9,062   394 8,668    
Exercise of stock options 1,070,917   92,645 978,272    
Stock option compensation expense 244,228     244,228    
BALANCE at Jun. 30, 2018 $ 247,486,577   $ 12,704,581 $ 208,512,862 $ 29,234,901 $ (2,965,767)
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income available to common shareholders $ 7,346,326 $ 3,292,138
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 1,907,969 1,165,930
Provision for loan losses 1,305,397 310,482
Stock option compensation expense 244,228 50,530
Loss from redemption of securities 1,200 0
Net gains from sale of loans and other assets (646,928) (680,583)
Net losses from sale of foreclosed assets 371,734 15,064
Changes in other assets and liabilities:    
Accrued interest receivable (250,228) 18,144
Accrued interest payable 48,400 13,117
Other assets and liabilities 1,869,609 1,457,176
Net cash provided by operating activities 12,197,707 5,641,998
CASH FLOWS FROM INVESTING ACTIVITIES, net of acquisitions    
Proceeds from sales, maturities, and paydowns of securities available-for-sale 34,524,629 10,062,386
Purchase of securities (17,239,649) (12,507,860)
Purchase of bank owned life insurance 0 (10,070,914)
Purchase of restricted investments (1,377,600) (452,750)
Net cash and cash equivalents received (paid) in business combination 5,653,304 (1,049,878)
Loan originations and principal collections, net (73,194,598) (27,248,001)
Purchase of bank premises and equipment (992,045) (1,226,898)
Proceeds from sale of foreclosed assets 2,126,213 41,636
Net cash used in investing activities (50,499,746) (42,452,279)
CASH FLOWS FROM FINANCING ACTIVITIES, net of acquisitions    
Net increase in deposits 75,409,773 47,682,310
Net decrease in securities sold under agreements to repurchase (5,419,515) (3,676,000)
Issuance of common stock 1,079,979 37,591,479
Redemption of preferred stock 0 (12,000,000)
Payment of dividends on preferred stock 0 (195,000)
Proceeds from Federal Home Loan Bank advances and other borrowings 127,040,028 79,268,072
Repayment of Federal Home Loan Bank advances and other borrowings (102,600,000) (97,773,462)
Net cash provided by financing activities 95,510,265 50,897,399
NET INCREASE IN CASH AND CASH EQUIVALENTS 57,208,226 14,087,118
CASH AND CASH EQUIVALENTS, beginning of year 113,026,884 68,748,308
CASH AND CASH EQUIVALENTS, end of period 170,235,110 82,835,426
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    
Cash paid during the period for interest 5,973,696 2,374,250
Cash paid during the period for income taxes 713,000 1,366,172
NONCASH INVESTING AND FINANCING ACTIVITIES    
Change in unrealized losses on securities available for sale 2,347,870 (1,223,017)
Acquisition of real estate through foreclosure 2,350,853 39,517
Financed sales of foreclosed assets 257,416 0
Change in goodwill due to acquisition $ 15,739,261 $ 0
v3.10.0.1
Presentation of Financial Information
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Presentation of Financial Information
Presentation of Financial Information
 
Nature of Business:
 
SmartFinancial, Inc. (the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly-owned subsidiary, SmartBank (the “Bank”). The Company provides a variety of financial services to individuals and corporate customers through its offices in eastern Tennessee, Alabama, Florida, and Georgia. The Company’s primary deposit products are interest-bearing demand deposits and time deposits. Its primary lending products are commercial, residential, and consumer loans. On May 22, 2017, the Company along with the Bank entered into an agreement and plan of merger with Capstone Bancshares, Inc., an Alabama corporation and Capstone Bank, an Alabama-chartered commercial bank and wholly owned subsidiary of Capstone Bancshares, Inc. which became effective on November 1, 2017. On December 12, 2017, the Company along with the Bank entered into an agreement and plan of merger with Tennessee Bancshares, Inc., a Tennessee corporation and Southern Community Bank, a Tennessee-chartered commercial bank and wholly owned subsidiary of Tennessee Bancshares which became effective on May 1, 2018.
 
Interim Financial Information (Unaudited):
 
The financial information in this report for June 30, 2018 and June 30, 2017 has not been audited. The information included herein should be read in conjunction with the Company’s annual consolidated financial statements and footnotes included in the Company's most recent Annual Report on Form 10-K. The consolidated financial statements presented herein conform to U.S. generally accepted accounting principles and to general industry practices. In the opinion of SmartFinancial’s management, the accompanying interim financial statements contain all material adjustments necessary to present fairly the financial condition, the results of operations, and cash flows for the interim period. Results for interim periods are not necessarily indicative of the results to be expected for a full year.
 
Basis of Presentation and Accounting Estimates:
 
All adjustments consisting of normal recurring accruals, that in the opinion of management, are necessary for a fair presentation of the financial position and the results of operations for the periods covered by the report have been included. The accompanying unaudited consolidated financial statements and related notes should be read in conjunction with those appearing in the most recent Annual Report previously filed on Form 10-K.
 
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
 
In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the U.S, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of foreclosed assets and deferred taxes, other-than-temporary impairments of securities, and the fair value of financial instruments.
 
The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.
 
The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions.
 
While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated. 
Note 1. Presentation of Financial Information, Continued

Accounting Changes:

We adopted ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)” and its related amendments as of January 1, 2018 utilizing the modified retrospective approach. The implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, the new guidance did not have a material impact on revenue most closely associated with financial instruments, including interest income and expense. The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including, deposit related fees, interchange fees, merchant income, and insurance and brokerage commissions. Based on this assessment, the Company concluded that ASU 2014-09 did not materially change the method in which the Company currently recognizes revenue for these revenue streams.

Under ASU 2014-09, we adopted new policies related to revenue recognition. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, we primarily use the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. We typically receive payment from customers and recognize revenue concurrent with the satisfaction of our performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time the performance obligations have been satisfied. In cases where we have not received payment despite satisfaction of our performance obligations, we accrue an estimate of the amount due in the period our performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. We generally act in a principal capacity, on our own behalf, in most of our contracts with customers. In such transactions, we recognize revenue and the related costs to provide our services on a gross basis in our financial statements. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions relate to our customers' use of various interchange and ATM/debit card networks.

Based on our underlying contracts, ASU 2014-09 requires us to report network costs associated with debit card and ATM transactions netted against the related fees from such transactions. Previously, such network costs were reported as a component of other noninterest expense. For the three and six months periods ended June 30, 2018, gross interchange and debit card transaction fees totaled $401 thousand and $733 thousand, respectively while related network costs totaled $280 thousand and $467 thousand, respectively. On a net basis, we reported $121 thousand and $267 thousand as interchange and debit card transaction fees in the accompanying Consolidated Statement of Income for the three and six months periods ended June  30, 2018.

For the three and six months periods ended June 30, 2017, we reported interchange and debit card transaction fees totaling $223 thousand and $416 thousand, respectively on a gross basis in the accompanying Consolidated Statement of Income while related network costs totaling $140 thousand and $227 thousand, respectively were reported in other operating expenses included as a component of other noninterest expense.

ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities, ("ASU 2016-01") makes targeted amendments to the guidance for recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 requires equity investments, other than equity method investments, to be measured at fair value with changes in fair value recognized in net income. The ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption to reclassify the cumulative change in fair value of equity securities previously recognized in Accumulated Other Comprehensive Income. ASU 2016-01 became effective for the Company on January 1, 2018 and there was no adjustment to retained earnings. ASU 2016-01 also emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans. Accordingly, we refined the calculation used to determine the disclosed fair value of our loans held for investment portfolio as part of adopting this standard. The refined calculation is disclosed Note 6 - Fair Value Disclosures.

Note 1. Presentation of Financial Information, Continued

Accounting Changes (continued):

In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220):  Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income; (“ASU 2018-02”).  ASU 2018-02 amends ASC Topic 220 and allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“Tax Reform Act”).  Consequently, this amendment eliminates the stranded tax effects resulting from the Tax Reform Act and will improve the usefulness of information reported to financial statement users.  However, because the amendments only related to the reclassification of the income tax effects of the Tax Reform Act, the underlying guidance that requires that the effects of the change in tax laws or rates be included in income from continuing operations is not affected.  The guidance is effective for public companies for annual periods beginning on or after December 15, 2018 and interim periods within those fiscal years.  Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance.  This amendment should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in U.S. federal corporate income tax rate in the Tax Reform Act is recognized.  The Company early adopted this amendment in the fourth quarter of 2017 and reclassified $197 thousand from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Reform Act. 

Recently Issued Accounting Pronouncements:
 
During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements for the year ended December 31, 2017 as filed with the Securities and Exchange Commission. The following is a summary of recent authoritative pronouncements not yet effective that could impact the accounting, reporting, and/or disclosure of financial information by the Company issued since December 31, 2017.

In February 2016, the FASB issued guidance that requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability in ASU 2016-2: Leases (Topic 842). For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 including interim periods within those fiscal years. The Company has several lease agreements, such as branch locations, which are currently considered operating leases, and therefore, not recognized on the Company’s consolidated statements of condition. The Company expects the new guidance will require these lease agreements to be recognized on the consolidated statements of condition as a right-of-use asset and a corresponding lease liability. Therefore, the Company’s preliminary evaluation indicates the provisions of ASU No. 2016-02 are expected to impact the Company’s consolidated statements of condition, along with our regulatory capital ratios. However, the Company continues to evaluate the extent of potential impact the new guidance will have on the Company’s consolidated financial statements. The Company is in the process of identifying a complete inventory of arrangements containing a lease and accumulating the lease data necessary to apply the amended guidance.
 
In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient Transition to Topic 842 , an amendment to ASU 2016-2: Leases. The amendments in this Update permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under Topic 840. Once an entity adopts Topic 842, it should apply that Topic prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. An entity should continue to apply its current accounting policy for accounting for land easements that existed before the entity’s adoption of Topic 842. For example, if an entity currently accounts for certain land easements as leases under Topic 840, it should continue to account for those land easements as leases before its adoption of Topic 842. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update 2016-02, for which the company is currently evaluating the impact.

Note 1. Presentation of Financial Information, Continued

Recently Issued Accounting Pronouncements (continued):

In June 2016, FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU changed the credit loss model on financial instruments measured at amortized cost, available for sale securities and certain purchased financial instruments. Credit losses on financial instruments measured at amortized cost will be determined using a current expected credit loss model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. Purchased financial assets with more-than-insignificant credit deterioration since origination ("PCD assets" which are currently named "PCI Loans") measured at amortized cost will have an allowance for credit losses established at acquisition as part of the purchase price. Subsequent increases or decreases to the allowance for credit losses on PCD assets will be recognized in the income statement. Interest income should be recognized on PCD assets based on the effective interest rate, determined excluding the discount attributed to credit losses at acquisition. Credit losses relating to available-for-sale debt securities will be recognized through an allowance for credit losses. The amount of the credit loss is limited to the amount by which fair value is below amortized cost of the available-for-sale debt security. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company and other SEC filers. Early adoption is permitted and if early adopted, all provisions must be adopted in the same period. The amendments should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the period adopted. A prospective approach is required for securities with other than temporary impairment recognized prior to adoption.

The Company is continuing its implementation efforts through its Company-wide implementation team. The implementation team meets periodically to discuss the latest developments and ensure progress is being made. The team also keeps current on evolving interpretations and industry practices related to ASU 2016-13 via webcasts, publications, conferences, and peer bank meetings. The team continues to evaluate and validate data resources and different loss methodologies. The Company’s preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to impact the Company’s consolidated financial statements, in particular an increase to the level of the reserve for credit losses. However, the Company continues to evaluate the extent of the potential impact.

In January 2017, FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. The Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In March 2017, FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium. The premium on individual callable debt securities shall be amortized to the earliest call date. This guidance does not apply to securities for which prepayments are estimated on a large number of similar loans where prepayments are probable and reasonably estimable. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. This update should be adopted on a modified retrospective basis with a cumulative-effect adjustment to retained earnings on the date of adoption. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (ASC) 815, Derivatives and Hedging. The goals of the ASU are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The amendments will be effective for the Company for interim and annual periods beginning after December 15, 2018. The Company does not expect these amendments to have a material effect on its consolidated financial statements.


Note 1. Presentation of Financial Information, Continued

As part of its Simplification Initiative, the FASB has issued (ASU) No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation (which previously only included payments to employees), to include share-based payment transactions for acquiring goods and services from non-employees. This required entities to apply the requirements of Topic 718 to non-employee awards, except for specific guidance on inputs to an option pricing model and the attribution of cost (i.e., the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). Additionally, the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in the grantor’s own operations by issuing share-based payment awards, and clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer, or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments are effective for fiscal years beginning after December 15, 2018, and for the interim periods within those years. The Company does not expect these amendments to have a material effect on its consolidated financial statements.
Reclassifications:

Certain captions and amounts in the 2017 consolidated financial statements were reclassified to conform to the 2018 presentation and these reclassifications had no impact on net income or equity as previously reported.

Earnings per common share:
 
Basic earnings per common share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance (excluding tax impact). Potential common shares that may be issued by the Company relate solely to outstanding stock options, determined using the treasury stock method, and restricted stock awards, determined by the fair value of the Company's stock on date of grant.
v3.10.0.1
Business Combination
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Business Combination
Business Combination

Acquisition of branch from Atlantic Capital Bank, N.A.

On December 8, 2016, the Bank entered into a purchase and assumption agreement with Atlantic Capital Bank, N.A. that provided for the acquisition and assumption by the Bank of certain assets and liabilities associated with Atlantic Capital Bank’s branch office located at 3200 Keith Street NW, Cleveland, Tennessee 37312. The purchase was completed on May 19, 2017 for total cash consideration of $1.2 million. The assets and liabilities as of the effective date of the transaction were recorded at their respective estimated fair values. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. In the periods following the acquisition, the financial statements will include the results attributable to the Cleveland branch purchase beginning on the date of purchase. For the three and six months period ended June 30, 2018, the revenues attributable to the Cleveland branch were $381 thousand and $754 thousand, respectively. For the three and six months period ended June 30, 2018, net income attributable to the Cleveland branch was a net income of $105 thousand and net income of $194 thousand, respectively. It is impracticable to determine the pro-forma impact to the 2017 revenues and net income if the acquisition had occurred on January 1, 2017 as the Company does not have access to those records for a single branch.
Note 2.    Business Combination, Continued

The following table details the financial impact of the transaction, including the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:

Allocation of Purchase Price (in thousands)
 
Total consideration in cash
$
1,183

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
133

Loans
24,073

Premises and equipment
2,839

Core deposit intangible
310

Prepaid and other assets
77

Deposits
(26,888
)
Payables and other liabilities
(21
)
Total fair value of net assets acquired
523

Goodwill
$
660



As of June 30, 2018 there have not been any changes to the initial fair values recorded as part of the business combination.

Acquisition of Capstone Bancshares, Inc.

On May 22, 2017, the shareholders of the Company approved a merger with Capstone Bancshares, Inc. ("Capstone"), the one bank holding company of Capstone Bank, which became effective November 1, 2017. Capstone shareholders received either: (a) 0.85 shares of common stock, (b) $18.50 in cash, or (c) a combination of 80% common stock and 20% cash. Elections were limited by the requirement that 80% of the total shares of Capstone common stock be exchanged for common stock and 20% be exchanged for cash. Therefore, the allocation of common stock and cash that a Capstone shareholder received depended on the elections of other Capstone shareholders, and were allocated in accordance with the procedures set forth in the merger agreement. Capstone shareholders also received cash instead of any fractional shares they would have otherwise received in the merger.

After the merger, shareholders of SmartFinancial owned approximately 74% of the outstanding common stock of the combined entity on a fully diluted basis, after taking into account the exchange ratio.
 
The merger is being accounted for using the acquisition method of accounting, in accordance with the provisions of FASB ASC 805-10 Business Combinations. Under this guidance, for accounting purposes, the Company is considered the acquirer in the merger, and as a result the historical financial statements of the combined entity are the historical consolidated financial statements of the Company.
 
The merger was effected by the issuance of shares of SmartFinancial stock along with cash consideration to shareholders of Capstone. The assets and liabilities of Capstone as of the effective date of the merger were recorded at their respective estimated fair values and combined with those of SmartFinancial. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. Goodwill from the transaction was $38.0 million, none of which is deductible for income tax purposes.
 
In periods following the merger, the financial statements of the combined entity will include the results attributable to Capstone beginning on the date the merger was completed. In the three and six month period ended June 30, 2018, the revenues attributable to Capstone were approximately $7.6 million and $14.5 million. In the three and six month period ended June 30, 2018, the net income attributable to Capstone was approximately $3.4 million and $6.0 million, respectively.

Note 2.    Business Combination, Continued

The pro-forma impact to 2017 revenues if the merger had occurred on December 31, 2016 would have been $6.2 million and $12.5 million for the three and six month period ending June 30, 2017, respectively. The pro-forma impact to 2017 net income if the merger had occurred on December 31, 2016 would have been $237 thousand and $473 thousand for the three and six month period ending June 30, 2017, respectively. While certain adjustments were made for the estimated impact of certain fair value adjustments, they are not indicative of what would have occurred had the merger taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of Capstone's provision for credit losses not have been necessary or any adjustments to estimate any additional income that would have been recorded as a result of fair value adjustments for the first six months of 2017 that may have occurred had the acquired loans been recorded at fair value as of the beginning of 2017. In addition there are no adjustments to reflect any expenses that potentially could have been reduced for the first six months of 2017 had the merger occurred on December 31, 2016. There were $4.6 million in nonrecurring pro forma adjustments to expense included in the reported proforma revenue and earnings.

The fair value estimates of Capstone’s assets and liabilities recorded are preliminary and subject to refinement as additional information becomes available. Under current accounting principles, the Company’s estimates of fair values may be adjusted for a period of up to one year from the acquisition date. As of June 30, 2018 there was a $11 thousand adjustment to reduce fair values initially recorded as part of the business combination.

The following table details the financial impact of the merger, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed, and goodwill recognized:

Calculation of Purchase Price
 
Shares of SMBK common stock issued to Capstone shareholders as of November 1, 2017
2,908,094

Market price of SMBK common stock on November 1, 2017
$
23.49

Estimated fair value of SMBK common stock issued (in thousands)
68,311

Estimated fair value of Capstone stock options (in thousands)
1,585

Cash consideration paid
15,826

Total consideration (in thousands)
$
85,722

 
Allocation of Purchase Price (in thousands)
 
Total consideration above
$
85,722

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
16,810

Investment securities available for sale
51,638

Restricted investments
1,049

Loans
413,023

Premises and equipment
8,668

Bank owned life insurance
10,031

Core deposit intangible
5,530

Other real estate owned
410

Prepaid and other assets
6,360

Deposits
(454,154
)
FHLB advances and other borrowings
(4,887
)
Payables and other liabilities
(6,803
)
Total fair value of net assets acquired
47,675

Goodwill
$
38,047



Note 2.    Business Combination, Continued

Acquisition of Tennessee Bancshares, Inc.

On May 1, 2018, the Company completed its merger with Tennessee Bancshares, Inc., a Tennessee corporation (“Tennessee Bancshares”), pursuant to an Agreement and Plan of Merger dated December 12, 2017 (the “Tennessee Bancshares merger agreement”), by and among SmartFinancial, Tennessee Bancshares, and Southern Community Bank, a Tennessee-chartered commercial bank and wholly owned subsidiary of Tennessee Bancshares. Tennessee Bancshares merged with and into SmartFinancial, with SmartFinancial continuing as the surviving corporation. Immediately following the merger, Southern Community Bank merged with and into the Bank continuing as the surviving banking corporation.

Pursuant to the Tennessee Bancshares merger agreement, each outstanding share of Tennessee Bancshares common stock was converted into and cancelled in exchange for 0.8065 shares of SmartFinancial common stock.. SmartFinancial issued approximately 1,458,981 shares of SmartFinancial common stock as consideration for the merger. SmartFinancial did not issue fractional shares of its common stock in connection with the merger, but instead paid cash in lieu of fractional shares based on the volume weighted average closing price of SmartFinancial common stock on the Nasdaq Capital Market for the 10 consecutive trading days ending on (and including) April 27, 2018 (calculated as $23.92).

After the merger, shareholders of SmartFinancial owned approximately 88.6% of the outstanding common stock of the combined entity on a fully diluted basis, after taking into account the exchange ratio.

The merger with Tennessee Bancshares is being accounted for using the acquisition method of accounting, in accordance with the provisions of FASB ASC 805-10 Business Combinations. Under this guidance, for accounting purposes, the Company is considered the acquirer in the merger, and as a result the historical financial statements of the combined entity are the historical consolidated financial statements of the Company.
 
The merger was effected by the issuance of shares of SmartFinancial stock along with cash consideration to the fractional shareholders of Tennessee Bancshares, Inc. The assets and liabilities of Tennessee Bancshares as of the effective date of the merger were recorded at their respective estimated fair values and combined with those of SmartFinancial. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. Goodwill from the transaction was $15.7 million, none of which is deductible for income tax purposes.

In periods following the Tennessee Bancshares merger, the financial statements of the combined entity will include the results attributable to Southern Community Bank beginning on the date the merger was completed. In the three and six months period ended June 30, 2018, the revenues and net income attributable to Southern Community Bank were approximately $2.4 million and $800 thousand, respectively.

The pro-forma impact to 2017 revenues if the merger had occurred on December 31, 2016 would have been $3.7 million and $7.3 million for the three and six month period ending June 30, 2017, respectively. The pro-forma impact to 2017 net income if the merger had occurred on December 31, 2016 would have been $909 thousand and $1.8 million for the three and six month period ending June 30, 2017, respectively.

While certain adjustments were made for the estimated impact of certain fair value adjustments, they are not indicative of what would have occurred had the merger taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of Southern Community Bank's provision for credit losses not have been necessary or any adjustments to estimate any additional income that would have been recorded as a result of fair value adjustments for the first six months of 2017 that may have occurred had the acquired loans been recorded at fair value as of the beginning of 2017. In addition there are no adjustments to reflect any expenses that potentially could have been reduced for the first six months of 2017 had the merger occurred on December 31, 2016. There were $1.3 million nonrecurring pro forma adjustments to expense included in the reported proforma earnings.

The fair value estimates of Tennessee Bancshares assets and liabilities recorded are preliminary and subject to refinement as additional information becomes available. Under current accounting principles, the Company’s estimates of fair values may be adjusted for a period of up to one year from the acquisition date. As of June 30, 2018 there were no adjustments to fair values initially recorded as part of the business combination.

Note 2.    Business Combination, Continued

The following table details the financial impact of the merger, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed, and goodwill recognized:

Calculation of Purchase Price
 
Shares of SMBK common stock issued to TN Bancshares shareholders as of May 1, 2018
1,458,981

Market price of SMBK common stock on May 1, 2018
$
23.85

Estimated fair value of SMBK common stock issued (in thousands)
34,797

Cash consideration paid
5

Total consideration (in thousands)
$
34,802

 
Allocation of Purchase Price (in thousands)
 
Total consideration above
$
34,802

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
5,723

Investment securities available for sale
24,563

Restricted investments
464

Loans
180,490

Premises and equipment
9,470

Core deposit intangible
2,290

Other real estate owned
674

Prepaid and other assets
2,258

Deposits
(202,272
)
FHLB advances and other borrowings
(4,000
)
Payables and other liabilities
(586
)
Total fair value of net assets acquired
19,074

Goodwill
$
15,728

v3.10.0.1
Earnings per share
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Earnings per share
Earnings per share
 
The following is a summary of the basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017.

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net income available to common shareholders
$
3,931,556

 
$
1,648,286

 
$
7,346,326

 
$
3,097,138

Weighted average common shares outstanding
12,201,185

 
8,216,567

 
11,708,746

 
7,872,609

Effect of dilutive stock options
119,313

 
108,971

 
113,751

 
104,673

Diluted shares
12,320,498

 
8,325,538

 
11,822,497

 
7,977,282

Basic earnings per common share
$
0.32

 
$
0.20

 
$
0.63

 
$
0.39

Diluted earnings per common share
$
0.32

 
$
0.20

 
$
0.62

 
$
0.39



For the three and six months ended June 30, 2018 and 2017, the effects of outstanding antidilutive stock options are excluded from the computation of diluted earnings per common share because the exercise price of such options is higher than the market price. There were no and 13,916 antidilutive stock options for the three and six months ended June 30, 2018 and 2017
v3.10.0.1
Securities
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities
 
The amortized cost and fair value of securities available-for-sale at June 30, 2018 and December 31, 2017 are summarized as follows (in thousands):
 
 
 
June 30, 2018
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. Government-sponsored enterprises (GSEs)
 
$
29,137

 
$

 
$
(1,009
)
 
$
28,128

Municipal securities
 
15,896

 
8

 
(320
)
 
15,584

Other debt securities
 
976

 

 
(65
)
 
911

Mortgage-backed securities (GSEs)
 
114,538

 
171

 
(2,755
)
 
111,954

 
 
$
160,547

 
$
179

 
$
(4,149
)
 
$
156,577


 
 
December 31, 2017
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. Government-sponsored enterprises (GSEs)
 
$
26,207

 
$
1

 
$
(432
)
 
$
25,776

Municipal securities
 
9,122

 
28

 
(147
)
 
9,003

Other debt securities
 
974

 

 
(24
)
 
950

Mortgage-backed securities (GSEs)
 
117,263

 
136

 
(1,184
)
 
116,215

 
 
$
153,566

 
$
165

 
$
(1,787
)
 
$
151,944


 
At June 30, 2018 and December 31, 2017, securities with a fair value totaling approximately $113.5 million and $97.2 million, respectively were pledged to secure public funds and securities sold under agreements to repurchase.

For the three and six months ended June 30, 2018 and June 30, 2017, there were no available-for-sale securities sold. For the three and six months ended June 30, 2018, a security was called for less than the amortized cost resulting in a realized loss of $1,200.

The amortized cost and estimated fair value of securities at June 30, 2018, by contractual maturity for non-mortgage backed securities, are shown below (in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 
 
Amortized
Cost
 
Fair
Value
Due in one year or less
 
$

 
$

Due from one year to five years
 
21,554

 
20,901

Due from five years to ten years
 
13,995

 
13,366

Due after ten years
 
10,460

 
10,356

 
 
46,009

 
44,623

Mortgage-backed securities
 
114,538

 
111,954

 
 
$
160,547

 
$
156,577


Note 4. Securities, Continued

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available-for-sale have been in a continuous unrealized loss position, as of June 30, 2018 and December 31, 2017 (in thousands): 
 
 
As of June 30, 2018
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
U.S. Government- sponsored enterprises (GSEs)
 
$
14,862

 
$
(425
)
 
$
13,266

 
$
(584
)
 
$
28,128

 
$
(1,009
)
Municipal securities
 
11,966

 
(182
)
 
2,072

 
(138
)
 
14,038

 
(320
)
Other debt securities
 

 

 
911

 
(65
)
 
911

 
(65
)
Mortgage-backed securities (GSEs)
 
58,377

 
(1,654
)
 
29,911

 
(1,101
)
 
88,288

 
(2,755
)
 
 
$
85,205

 
$
(2,261
)
 
$
46,160

 
$
(1,888
)
 
$
131,365

 
$
(4,149
)
 
 
As of December 31, 2017
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
U.S. Government- sponsored enterprises (GSEs)
 
$
1,358

 
$
(1
)
 
$
13,420

 
$
(431
)
 
$
14,778

 
$
(432
)
Municipal securities
 
3,418

 
(43
)
 
2,112

 
(104
)
 
5,530

 
(147
)
Other debt securities
 
950

 
(24
)
 

 

 
950

 
(24
)
Mortgage-backed securities (GSEs)
 
61,332

 
(407
)
 
35,048

 
(777
)
 
96,380

 
(1,184
)
 
 
$
67,058

 
$
(475
)
 
$
50,580

 
$
(1,312
)
 
$
117,638

 
$
(1,787
)


At June 30, 2018, the categories of temporarily impaired securities, and management’s evaluation of those securities, are as follows:

U.S. Government-sponsored enterprises: At June 30, 2018, 8 (or eight) investments in U.S. GSE securities had unrealized losses. These unrealized losses related principally to changes in market interest rates. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is more likely than not that the Bank will not be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider these investments to be other-than temporarily impaired at June 30, 2018.

Municipal securities: At June 30, 2018, 21 (or twenty one) investments in obligations of municipal securities had unrealized losses. The Bank believes the unrealized losses on those investments were caused by the interest rate environment and do not relate to the underlying credit quality of the issuers. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider these investments to be other-than temporarily impaired at June 30, 2018.

Other debt securities: At June 30, 2018, 1 (or one) investment in other debt securities had unrealized losses. The Bank believes the unrealized loss on this investment was caused by the interest rate environment and does not relate to the underlying credit quality of the issuer. Because the Bank does not intend to sell the investment and it is not more likely than not that the Bank will be required to sell the investment before recovery of its amortized cost bases, which may be maturity, the Bank does not consider this investment to be other-than temporarily impaired at June 30, 2018.

Mortgage-backed securities: At June 30, 2018, 65 (or sixty five) investments in residential mortgage-backed securities had unrealized losses.  This impairment is believed to be caused by the current interest rate environment.  The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government.  Because the decline in market value is attributable to the current interest rate environment and not credit quality, and because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not deem these investments to be other-than-temporarily impaired at June 30, 2018.
v3.10.0.1
Loans and Allowance for Loan Losses
6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Loans and Allowance for Loan Losses
Loans and Allowance for Loan Losses
 
Portfolio Segmentation:
 
At June 30, 2018 and December 31, 2017, loans are summarized as follows (in thousands):
 
 
 
June 30, 2018
 
December 31, 2017
 
 
PCI Loans1
 
All Other
Loans
 
Total
 
PCI Loans1
 
All Other
Loans
 
Total
Commercial real estate
 
$
18,474

 
$
727,390

 
$
745,864

 
$
17,903

 
$
625,085

 
$
642,988

Consumer real estate
 
6,987

 
348,889

 
355,876

 
7,450

 
286,007

 
293,457

Construction and land development
 
5,690

 
173,741

 
179,431

 
5,120

 
130,289

 
135,409

Commercial and industrial
 
821

 
278,950

 
279,771

 
858

 
237,229

 
238,087

Consumer and other
 
686

 
13,807

 
14,493

 
1,463

 
11,854

 
13,317

Total loans
 
32,658

 
1,542,777

 
1,575,435

 
32,794

 
1,290,464

 
1,323,258

Less:  Allowance for loan losses
 
(19
)
 
(7,055
)
 
(7,074
)
 
(16
)
 
(5,844
)
 
(5,860
)
Loans, net
 
$
32,639

 
$
1,535,722

 
$
1,568,361

 
$
32,778

 
$
1,284,620

 
$
1,317,398


1 Purchased Credit Impaired loans (“PCI loans”) are loans with evidence of credit deterioration at purchase.

For purposes of the disclosures required pursuant to the adoption of ASC 310, the loan portfolio was disaggregated into segments. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are five loan portfolio segments that include commercial real estate, consumer real estate, construction and land development, commercial and industrial, and consumer and other.

The following describe risk characteristics relevant to each of the portfolio segments:

Commercial Real Estate: Commercial real estate loans include owner-occupied commercial real estate loans and loans secured by income-producing properties. Owner-occupied commercial real estate loans to operating businesses are long-term financing of land and buildings. These loans are repaid by cash flow generated from the business operation. Real estate loans for income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers are repaid from rent income derived from the properties. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.
 
Consumer Real Estate: Consumer real estate loans include real estate loans secured by first liens, second liens, or open end real estate loans, such as home equity lines. These are repaid by various means such as a borrower's income, sale of the property, or rental income derived from the property. One to four family first mortgage loans are repaid by various means such as a borrower's income, sale of the property, or rental income derived from the property. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.
 
Construction and Land Development: Loans for real estate construction and development are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio segment includes extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral. Loans within this portfolio segment are particularly sensitive to the valuation of real estate.
 
Commercial and Industrial: The commercial and industrial loan portfolio segment includes commercial, financial, agricultural, and municipal loans. These loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the customers' business operations.

Consumer and Other: The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans, educational loans, and other loans which do not fall into the categories above. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures.


Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management:
 
The Company employs a credit risk management process with defined policies, accountability and routine reporting to manage credit risk in the loan portfolio segments. Credit risk management is guided by credit policies that provide for a consistent and prudent approach to underwriting and approvals of credits. Within the Credit Policy, procedures exist that elevate the approval requirements as credits become larger and more complex. All loans are individually underwritten, risk-rated, approved, and monitored.
 
Responsibility and accountability for adherence to underwriting policies and accurate risk ratings lies in each portfolio segment. For the consumer real estate and consumer and other portfolio segments, the risk management process focuses on managing customers who become delinquent in their payments. For the other portfolio segments, the risk management process focuses on underwriting new business and, on an ongoing basis, monitoring the credit of the portfolios, including a third party review of the largest credits on an annual basis or more frequently as needed. To ensure problem credits are identified on a timely basis, several specific portfolio reviews occur periodically to assess the larger adversely rated credits for proper risk rating and accrual status.
 
Credit quality and trends in the loan portfolio segments are measured and monitored regularly. Detailed reports, by product, collateral, accrual status, etc., are reviewed by the Senior Credit Officer and the Directors Loan Committee.

The allowance for loan losses is a valuation reserve allowance established through provisions for loan losses charged against income. The allowance for loan losses, which is evaluated quarterly, is maintained at a level that management deems sufficient to absorb probable losses inherent in the loan portfolio. Loans deemed to be uncollectible are charged against the allowance for loan losses, while recoveries of previously charged-off amounts are credited to the allowance for loan losses. The allowance for loan losses is comprised of specific valuation allowances for loans evaluated individually for impairment and general allocations for pools of homogeneous loans with similar risk characteristics and trends.
 
The allowance for loan losses related to specific loans is based on management's estimate of potential losses on impaired loans as determined by (1) the present value of expected future cash flows; (2) the fair value of collateral if the loan is determined to be collateral dependent or (3) the loan's observable market price. The Company's homogeneous loan pools include commercial real estate loans, consumer real estate loans, construction and land development loans, commercial and industrial loans, and consumer and other loans. The general allocations to these loan pools are based on the historical loss rates for specific loan types and the internal risk grade, if applicable, adjusted for both internal and external qualitative risk factors.

The qualitative factors considered by management include, among other factors, (1) changes in local and national economic conditions; (2) changes in asset quality; (3) changes in loan portfolio volume; (4) the composition and concentrations of credit; (5) the impact of competition on loan structuring and pricing; (6) the impact of interest rate changes on portfolio risk and (7) effectiveness of the Company's loan policies, procedures and internal controls. The total allowance established for each homogeneous loan pool represents the product of the historical loss ratio adjusted for qualitative factors and the total dollar amount of the loans in the pool.

Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management (continued):

The composition of loans by loan classification for impaired and performing loan status at June 30, 2018 and December 31, 2017, is summarized in the tables below (in thousands):

 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Performing loans
 
$
726,356

 
$
347,893

 
$
173,194

 
$
278,431

 
$
13,698

 
$
1,539,572

Impaired loans
 
1,034

 
996

 
547

 
519

 
109

 
3,205

 
 
727,390

 
348,889

 
173,741

 
278,950

 
13,807

 
1,542,777

PCI loans
 
18,474

 
6,987

 
5,690

 
821

 
686

 
32,658

Total
 
$
745,864

 
$
355,876

 
$
179,431

 
$
279,771

 
$
14,493

 
$
1,575,435

 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Performing loans
 
$
624,638

 
$
284,585

 
$
129,742

 
$
237,016

 
$
11,842

 
$
1,287,823

Impaired loans
 
447

 
1,422

 
547

 
213

 
12

 
2,641

 
 
625,085

 
286,007

 
130,289

 
237,229

 
11,854

 
1,290,464

PCI loans
 
17,903

 
7,450

 
5,120

 
858

 
1,463

 
32,794

Total loans
 
$
642,988

 
$
293,457

 
$
135,409

 
$
238,087

 
$
13,317

 
$
1,323,258



The following tables show the allowance for loan losses allocation by loan classification for impaired, PCI, and performing loans as of June 30, 2018 and December 31, 2017 (in thousands):

 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and
Other
 
Total
Performing loans
 
$
3,116

 
$
1,491

 
$
744

 
$
1,145

 
$
224

 
$
6,720

PCI loans
 
19

 

 

 

 

 
19

Impaired loans
 

 
37

 

 
222

 
76

 
335

Total
 
$
3,135

 
$
1,528

 
$
744

 
$
1,367

 
$
300

 
$
7,074


 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and
Other
 
Total
Performing loans
 
$
2,444

 
$
1,340

 
$
521

 
$
890

 
$
204

 
$
5,399

PCI loans
 
16

 

 

 

 

 
16

Impaired loans
 
5

 
256

 

 
172

 
12

 
445

Total
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860


 

Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management (continued):

The following tables detail the changes in the allowance for loan losses for the six month period ending June 30, 2018 and year ending December 31, 2017, by loan classification (in thousands):
 
 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real
Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Beginning balance
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860

Loans charged off
 
(38
)
 
(25
)
 

 
(78
)
 
(101
)
 
(242
)
Recoveries of loans charged off
 

 
50

 
5

 
56

 
40

 
151

Provision (reallocation) charged to expense
 
708

 
(93
)
 
218

 
327

 
145

 
1,305

Ending balance
 
$
3,135

 
$
1,528

 
$
744

 
$
1,367

 
$
300

 
$
7,074


 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real
Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Beginning balance
 
$
2,369

 
$
1,382

 
$
717

 
$
520

 
$
117

 
$
5,105

Loans charged off
 

 
(111
)
 

 
(24
)
 
(141
)
 
(276
)
Recoveries of charge-offs
 
8

 
99

 
13

 
67

 
61

 
248

Provision (reallocation) charged to expense
 
88

 
226

 
(209
)
 
499

 
179

 
783

Ending balance
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860



A description of the general characteristics of the risk grades used by the Company is as follows:
 
Pass: Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk grade would possess sufficient mitigating factors, such as adequate collateral or strong guarantors possessing the capacity to repay the debt if required, for any weakness that may exist.
 
Special Mention: Loans in this risk grade are the equivalent of the regulatory definition of "Other Assets Especially Mentioned" classification. Loans in this category possess some credit deficiency or potential weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and /or reliance on the secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the asset or in the Company's credit position.

Substandard: Loans in this risk grade are inadequately protected by the borrower's current financial condition and payment capability or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the orderly repayment of debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, its classification as an estimated loss is deferred until its more exact status may be determined.

Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management (continued):

Uncollectible: Loans in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean the loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Charge-offs against the allowance for loan losses are taken in the period in which the loan becomes uncollectible. Consequently, the Company typically does not maintain a recorded investment in loans within this category.

The following tables outline the amount of each loan classification and the amount categorized into each risk rating as of June 30, 2018 and December 31, 2017 (in thousands):

 
 
June 30, 2018
Non PCI Loans
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Pass
 
$
724,763

 
$
343,407

 
$
172,972

 
$
277,384

 
$
13,184

 
$
1,531,710

Watch
 
1,604

 
3,168

 
62

 
1,035

 
123

 
5,992

Special mention
 

 
949

 
160

 
35

 
363

 
1,507

Substandard
 
1,023

 
1,365

 
547

 
483

 
111

 
3,529

Doubtful
 

 

 

 
13

 
26

 
39

Total
 
$
727,390

 
$
348,889

 
$
173,741

 
$
278,950

 
$
13,807

 
$
1,542,777

PCI Loans
 

 

 

 

 

 

Pass
 
$
14,494

 
$
4,558

 
$
3,973

 
$
210

 
$
565

 
$
23,800

Watch
 
1,513

 
898

 
653

 
2

 
18

 
3,084

Special mention
 
1,393

 
575

 
716

 
153

 
17

 
2,854

Substandard
 
1,074

 
956

 
348

 
456

 
86

 
2,920

Doubtful
 

 

 

 

 

 

Total
 
$
18,474

 
$
6,987

 
$
5,690

 
$
821

 
$
686

 
$
32,658

Total loans
 
$
745,864

 
$
355,876

 
$
179,431

 
$
279,771

 
$
14,493

 
$
1,575,435


Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management (continued):

 
 
December 31, 2017
Non PCI Loans
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Pass
 
$
616,028

 
$
279,464

 
$
129,359

 
$
233,942

 
$
11,624

 
$
1,270,417

Watch
 
7,673

 
2,543

 
383

 
3,007

 
62

 
13,668

Special mention
 
1,006

 
2,627

 

 
64

 
155

 
3,852

Substandard
 
378

 
1,159

 
547

 
157

 

 
2,241

Doubtful
 

 
214

 

 
59

 
13

 
286

Total
 
$
625,085

 
$
286,007

 
$
130,289

 
$
237,229

 
$
11,854

 
$
1,290,464

PCI Loans
 

 

 

 

 

 

Pass
 
$
14,386

 
$
4,151

 
$
4,134

 
$
68

 
$
819

 
$
23,558

Watch
 
261

 
1,345

 
649

 
120

 
262

 
2,637

Special mention
 

 
456

 

 
58

 
24

 
538

Substandard
 
3,084

 
1,192

 
337

 
588

 
107

 
5,308

Doubtful
 
172

 
306

 

 
24

 
251

 
753

Total
 
$
17,903

 
$
7,450

 
$
5,120

 
$
858

 
$
1,463

 
$
32,794

Total loans
 
$
642,988

 
$
293,457

 
$
135,409

 
$
238,087

 
$
13,317

 
$
1,323,258



Past Due Loans:
 
A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. Generally, management places a loan on nonaccrual when there is a clear indicator that the borrower’s cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due.
 
The following tables present the aging of the recorded investment in loans as of June 30, 2018 and December 31, 2017 (in thousands): 

 
 
June 30, 2018
 
 
30-89 Days
 Past Due and
Accruing
 
Past Due 90
 Days or More
and Accruing
 
Nonaccrual
 
Total
 Past Due
and NonAccrual
 
PCI Loans
 
Current
Loans
 
Total
Loans
Commercial real estate
 
$
2,628

 
$
82

 
$
6

 
$
2,716

 
$
18,474

 
$
724,674

 
$
745,864

Consumer real estate
 
701

 
76

 
463

 
1,240

 
6,987

 
347,649

 
355,876

Construction and land development
 
403

 
338

 
547

 
1,288

 
5,690

 
172,453

 
179,431

Commercial and industrial
 
647

 
113

 
430

 
1,190

 
821

 
277,760

 
279,771

Consumer and other
 
189

 
58

 
92

 
339

 
686

 
13,468

 
14,493

Total
 
$
4,568

 
$
667

 
$
1,538

 
$
6,773

 
$
32,658

 
$
1,536,004

 
$
1,575,435

Note 5. Loans and Allowance for Loan Losses, Continued

Past Due Loans (continued):

 
 
December 31, 2017
 
 
30-89 Days
Past Due and
Accruing
 
Past Due 90
Days or More
and Accruing
 
Nonaccrual
 
Total
Past Due
and NonAccrual
 
PCI
Loans
 
Current
Loans
 
Total
Loans
Commercial real estate
 
$
517

 
$
728

 
$
128

 
$
1,373

 
$
17,903

 
$
623,712

 
$
642,988

Consumer real estate
 
963

 
33

 
991

 
1,987

 
7,450

 
284,020

 
293,457

Construction and land development
 
65

 
326

 
547

 
938

 
5,120

 
129,351

 
135,409

Commercial and industrial
 
286

 
131

 
85

 
502

 
858

 
236,727

 
238,087

Consumer and other
 
165

 
291

 
13

 
469

 
1,463

 
11,385

 
13,317

Total
 
$
1,996

 
$
1,509

 
$
1,764

 
$
5,269

 
$
32,794

 
$
1,285,195

 
$
1,323,258



Impaired Loans:

The following is an analysis of the impaired loan portfolio, excluding PCI loans, detailing the related allowance recorded as of June 30, 2018 and December 31, 2017 (in thousands):  
 
 
 
 
 
 
 
 
For the six months ended
 
 
At June 30, 2018
 
June 30, 2018
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired loans without a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
1,034

 
$
1,043

 
$

 
$
670

 
$
15

Consumer real estate
 
793

 
823

 

 
699

 
12

Construction and land development
 
547

 
547

 

 
547

 

Commercial and industrial
 
81

 
83

 

 
58

 
3

Consumer and other
 
16

 
16

 

 
5

 

 
 
2,471

 
2,512

 

 
1,979

 
30

Impaired loans with a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 

 

 

 
8

 

Consumer real estate
 
203

 
216

 
37

 
642

 
11

Construction and land development
 

 

 

 

 

Commercial and industrial
 
438

 
440

 
222

 
257

 
5

Consumer and other
 
93

 
95

 
76

 
72

 
2

 
 
734

 
751

 
335

 
979

 
18

PCI loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
27

 
127

 
19

 
5

 
3

Total impaired loans
 
$
3,232

 
$
3,390

 
$
354

 
$
2,963

 
$
51



Note 5. Loans and Allowance for Loan Losses, Continued

Impaired Loans (continued):

 
 
 
 
 
 
 
 
For the year ended
 
 
At December 31, 2017
 
December 31, 2017
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired loans without a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
424

 
$
454

 
$

 
$
204

 
$
44

Consumer real estate
 
415

 
420

 

 
401

 
16

Construction and land development
 
547

 
547

 

 
628

 

Commercial and industrial
 
41

 
41

 

 
44

 
3

Consumer and other
 

 

 

 

 

 
 
1,427

 
1,462

 

 
1,277

 
63

Impaired loans with a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
23

 
23

 
5

 
5

 
1

Consumer real estate
 
1,007

 
1,033

 
256

 
601

 
38

Construction and land development
 

 

 

 

 

Commercial and industrial
 
172

 
172

 
172

 
117

 
10

Consumer and other
 
12

 
13

 
12

 
2

 
1

 
 
1,214

 
1,241

 
445

 
725

 
50

PCI loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
16

 
123

 
16

 
3

 
16

Total impaired loans
 
$
2,657

 
$
2,826

 
$
461

 
$
2,005

 
$
129


 
Troubled Debt Restructurings:
 
At June 30, 2018 and December 31, 2017, impaired loans included loans that were classified as Troubled Debt Restructurings ("TDRs"). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.
 
In assessing whether or not a borrower is experiencing financial difficulties, the Company considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the debtor is currently in payment default on any of its debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the debtor has declared or is in the process of declaring bankruptcy; and (iv) the debtor's projected cash flow is sufficient to satisfy contractual payments due under the original terms of the loan without a modification.
 
The Company considers all aspects of the modification to loan terms to determine whether or not a concession has been granted to the borrower. Key factors considered by the Company include the debtor's ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan.
 
Note 5. Loans and Allowance for Loan Losses, Continued

Troubled Debt Restructurings (continued):

The most common concessions granted by the Company generally include one or more modifications to the terms of the debt, such as (i) a reduction in the interest rate for the remaining life of the debt; (ii) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk; (iii) a temporary period of interest-only payments; and (iv) a reduction in the contractual payment amount for either a short period or remaining term of the loan. As of June 30, 2018 and December 31, 2017, management had approximately, $660 thousand and $41 thousand, respectively, in loans that met the criteria for restructured, none of which were on nonaccrual. A loan is placed back on accrual status when both principal and interest are current and it is probable that management will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement.

There was one commercial real estate loan for approximately $622 thousand modified as troubled debt restructurings during the six month period ended June 30, 2018. There were no loans that were modified as troubled debt restructurings during the twelve month period ended December 31, 2017. There were no loans that were modified as troubled debt restructurings during the past three months and for which there was a subsequent payment default.

Foreclosure Proceedings and Balances:

As of June 30, 2018 the Company had $1.14 million in residential real estate included in foreclosed assets and there were no consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure.

Purchased Credit Impaired Loans:
 
The Company has acquired loans which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans as of is as follows (in thousands):
 
 
June 30, 2018
 
December 31, 2017
Commercial real estate
$
25,700

 
$
23,366

Consumer real estate
9,620

 
10,764

Construction and land development
6,793

 
6,285

Commercial and industrial
2,973

 
1,452

Consumer and other
1,014

 
1,710

Total loans
46,100

 
43,577

Less remaining purchase discount
(13,442
)
 
(10,783
)
Total loans, net of purchase discount
32,658

 
32,794

Less: Allowance for loan losses
(19
)
 
(16
)
Carrying amount, net of allowance
$
32,639

 
$
32,778



Activity related to the accretable yield on loans acquired with deteriorated credit quality is as follows for the three and six months period ended June 30, 2018 and 2017 (in thousands):

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Accretable yield, beginning of period
 
$
7,780

 
$
8,482

 
$
9,287

 
$
8,950

Additions
 
1,292

 

 
1,292

 

Accretion income
 
(1,928
)
 
(973
)
 
(3,029
)
 
(1,670
)
Reclassification to accretable
 
120

 
366

 
382

 
610

Other changes, net
 
(58
)
 
600

 
(726
)
 
585

Accretable yield
 
$
7,206

 
$
8,475

 
$
7,206

 
$
8,475


Note 5. Loans and Allowance for Loan Losses, Continued

Purchased Credit Impaired Loans (continued):

Purchased credit impaired loans acquired from Southern Community Bank during the three and six months period ended June 30, 2018 for which it was probable at acquisition that all contractually required payments would not be collected are as follows (in thousands):

 
 
Three and Six Months Ended June 30,
 
 
2018
Contractual principal and interest at acquisition
 
$
15,133

Nonaccretable difference
 
5,302

Expected cash flows at acquisition
 
9,831

Accretable yield
 
1,292

Fair value of purchased credit impaired loans
 
$
8,539

v3.10.0.1
Commitments and Contingent Liabilities
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities
 
Off Balance Sheet Arrangements:

In the normal course of business, the Bank has entered into off-balance sheet financial instruments which include commitments to extend credit (i.e., including unfunded lines of credit) and standby letters of credit. Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness. Typical borrowers are commercial concerns that use lines of credit to supplement their treasury management functions; thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing of their cash flows. Other typical lines of credit are related to home equity loans granted to consumers. Commitments to extend credit generally have fixed expiration dates or other termination clauses and may require payment of a fee.
 
Standby letters of credit are generally issued on behalf of an applicant (our client) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary. Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit. A typical arrangement involves the applicant routinely being indebted to the beneficiary for such items as inventory purchases, insurance, utilities, lease guarantees or other third party commercial transactions. The standby letter of credit would permit the beneficiary to obtain payment from the Bank under certain prescribed circumstances. Subsequently, the Bank would seek reimbursement from the applicant pursuant to the terms of the standby letter of credit.
    
The Bank follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments. Each client’s creditworthiness is evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management’s credit evaluation of the customer. Collateral held varies but may include cash, real estate and improvements, marketable securities, accounts receivable, inventory, equipment and personal property.
 
The contractual amounts of these commitments are not reflected in the consolidated financial statements and would only be reflected if drawn upon. Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements. However, should the commitments be drawn upon and should customers default on their resulting obligation to the Bank the maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those instruments.
 
A summary of the Bank’s total contractual amount for all off-balance sheet commitments at June 30, 2018 is as follows: 
Commitments to extend credit
$
299.6
 million
Standby letters of credit
$
3.7
 million

Various legal claims also arise from time to time in the normal course of business. In the opinion of management, the resolution of claims outstanding at June 30, 2018 will not have a material effect on the Company's consolidated financial statements.
v3.10.0.1
Fair Value Disclosures
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Disclosures
Fair Value Disclosures
 
Determination of Fair Value:
 
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the “Fair Value Measurements and Disclosures” ASC Topic 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
 
ASC Topic 820 provides a consistent definition of fair value, which focuses on exit price in an orderly transaction between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
 
Fair Value Hierarchy:
 
In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
 
Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
 
Level 2 - Valuation is based on inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
 
Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.
 
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:

Cash and Cash Equivalents: For cash and due from banks, interest-bearing deposits, and federal funds sold, the carrying amount is a reasonable estimate of fair value based on the short-term nature of the assets and are considered Level 1 inputs.

Securities Available-for-Sale: Where quoted prices are available in an active market, management classifies the securities within Level 1 of the valuation hierarchy. If quoted market prices are not available, management estimates fair values using pricing models that use observable inputs or quoted prices at securities with similar characteristics. Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, including GSE obligations, corporate bonds, and other securities. Mortgage-backed securities are included in Level 2 if observable inputs are available. In certain cases where there is limited activity or less transparency around inputs to the valuation, management classifies those securities in Level 3.

Restricted Investments: It is not practicable to determine the fair value of restricted investments due the restrictions placed on its transferability.

Note 7. Fair Value Disclosures, Continued

Fair Value Hierarchy (continued):

Loans: With the adoption of ASU 2016-01 on January 1, 2018, we refined our methodology to estimate the fair value of our loan portfolio to use the exit price notion as required by the ASU. The guidance was applied on a prospective approach resulting in prior-periods no longer being comparable. See “Note 1 – Presentation of Financial Information” for further information. For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair value for fixed rate loans are estimated using discounted cash flow analyses, using market interest rates for comparable loans. Fair values for nonperforming loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable. These methods are considered Level 3 inputs.

Deposits: The fair values disclosed for demand deposits (for example, interest and noninterest checking, savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts) and are considered Level 2 inputs. Fair values for fixed-rate time deposits are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits, and are considered Level 2 inputs.
 
Securities Sold Under Agreement to Repurchase: The carrying value of these liabilities approximates their fair value, and are considered Level 1 inputs.
 
Federal Home Loan Bank ("FHLB") Advances and Other Borrowings: The fair value of the FHLB fixed rate borrowings are estimated using discounted cash flows, based on the current incremental borrowing rates for similar types of borrowing arrangements, and are considered Level 2 inputs. The carrying value of FHLB floating rate borrowings and floating rate other borrowings approximates their fair value and are considered Level 1 inputs.

Commitments to Extend Credit and Standby Letters of Credit: Because commitments to extend credit and standby letters of credit are made using variable rates and have short maturities, the carrying value and the fair value are immaterial for disclosure.
 
Measurements of Fair Value:

Assets and liabilities recorded at fair value on a recurring basis are as follows (in thousands): 
 
 
Balance as of
June 30,
2018
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
Debt securities available-for-sale:
 
 

 
 

 
 

 
 

U.S. Government-sponsored enterprises (GSEs)
 
$
28,128

 
$

 
$
28,128

 
$

Mortgage-backed securities
 
111,954

 

 
111,954

 

Other debt securities
 
911

 

 
911

 

Municipal securities
 
15,584

 

 
15,584

 

Total securities available-for-sale
 
$
156,577

 
$

 
$
156,577

 
$


 
 
Balance as of
December 31,
2017
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
Debt securities available-for-sale:
 
 

 
 

 
 

 
 

U.S. Government-sponsored enterprises (GSEs)
 
$
25,776

 
$

 
$
25,776

 
$

Mortgage-backed securities
 
116,215

 

 
116,215

 

Other debt securities
 
950

 

 
950

 

Municipal securities
 
9,003

 

 
9,003

 

Total securities available-for-sale
 
$
151,944

 
$

 
$
151,944

 
$


Note 7. Fair Value Disclosures, Continued

Measurements of Fair Value (continued):
 
The Company has no assets or liabilities whose fair values are measured on a recurring basis using Level 3 inputs. Additionally, there were no transfers between Level 1 and Level 2 in the fair value hierarchy.

Assets Measured at Fair Value on a Nonrecurring Basis:
 
Under certain circumstances management makes adjustments to fair value for assets and liabilities although they are not measured at fair value on an ongoing basis. The following tables present the financial instruments carried on the consolidated balance sheets by caption and by level in the fair value hierarchy, for which a nonrecurring change in fair value has been recorded (in thousands):
 
 
 
Balance as of
June 30,
2018
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Other Unobservable Inputs (Level 3)
Impaired loans
 
$
407

 
$

 
$

 
$
407

Foreclosed assets
 
3,524

 

 

 
3,524


 
 
Balance as of
December 31,
2017
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Other Unobservable Inputs (Level 3)
Impaired loans
 
$
769

 
$

 
$

 
$
769

Foreclosed assets
 
3,254

 

 

 
3,254



For Level 3 assets measured at fair value on a non-recurring basis as of March 31, 2018 and December 31, 2017, , the significant unobservable inputs used in the fair value measurements are presented below (in thousands).

 
 
Balance as of
June 30,
2018
 
Valuation
Technique
 
Significant Other
Unobservable Input
 
Weighted
Average of Input
Impaired loans
 
$
407

 
Appraisal and Cashflow
 
Appraisal and Cashflow Discounts
 
47
%
Foreclosed assets
 
3,524

 
Appraisal
 
Appraisal Discounts
 
19
%

 
 
Balance as of
December 31,
2017
 
Valuation
Technique
 
Significant Other
Unobservable Input
 
Weighted
Average of Input
Impaired loans
 
$
769

 
Appraisal
 
Appraisal Discounts
 
36
%
Foreclosed assets
 
3,254

 
Appraisal
 
Appraisal Discounts
 
18
%

Impaired Loans: Loans considered impaired under ASC 310-10-35, Receivables, are loans for which, based on current information and events, it is probable that the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. Impaired loans can be measured based on the present value of expected payments using the loan’s original effective rate as the discount rate, the loan’s observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent. The fair value of impaired loans were measured based on the value of the collateral securing these loans or the discounted cash flows of the loans, as applicable. Impaired loans are classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets including equipment, inventory, and/or accounts receivable. The Company determines the value of the collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraised values are discounted for costs to sell and may be discounted further based on management’s historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts by management are subjective and are typically significant

Note 7. Fair Value Disclosures, Continued
 
Assets Measured at Fair Value on a Nonrecurring Basis (consintued):

unobservable inputs for determining fair value. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors discussed above.

Foreclosed assets: Foreclosed assets, consisting of properties obtained through foreclosure or in satisfaction of loans, are initially recorded at fair value less estimated costs to sell upon transfer of the loans to other real estate. Subsequently, other real estate is carried at the lower of carrying value or fair value less costs to sell. Fair values are generally based on third party appraisals of the property and are classified within Level 3 of the fair value hierarchy. The appraisals are sometimes further discounted based on management’s historical knowledge, and/or changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts are typically significant unobservable inputs for determining fair value. In cases where the carrying amount exceeds the fair value, less estimated costs to sell, a loss is recognized in noninterest expense.

Carrying value and estimated fair value:

The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2018 and December 31, 2017 are as follows (in thousands):

 
 
June 30, 2018
 
 
 
 
Fair Value Measurements Using
 
 
 
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
 
Estimated
Fair Value
Assets:
 
 

 
 
 
 
 
 
 
 

Cash and cash equivalents
 
$
170,235

 
170,235

 

 

 
$
170,235

Securities available-for-sale
 
156,577

 

 
156,577

 

 
156,577

Restricted investments
 
8,273

 
N/A

 
N/A

 
N/A

 
N/A

Loans, net
 
1,568,361

 

 

 
1,569,916

 
1,569,916

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 
 
 
 
 
 
 

Noninterest-bearing demand deposits
 
301,318

 

 
301,318

 

 
301,318

Interest-bearing demand deposits
 
246,942

 

 
246,942

 

 
246,942

Money Market and Savings deposits
 
632,518

 

 
632,518

 

 
632,518

Time deposits
 
535,879

 

 
537,006

 

 
537,006

Securities sold under agreements to repurchase
 
18,635

 

 
18,635

 

 
18,635

Federal Home Loan Bank advances and other borrowings
 
72,040

 

 
72,040

 

 
72,040


Note 7. Fair Value Disclosures, Continued

Carrying value and estimated fair value (continued):

 
 
December 31, 2017
 
 
 
 
Fair Value Measurements Using
 
 
 
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
 
Estimated
Fair Value
Assets:
 
 

 
 
 
 
 
 
 
 

Cash and cash equivalents
 
$
113,027

 
113,027

 

 

 
$
113,027

Securities available-for-sale
 
151,944

 

 
151,944

 

 
151,944

Restricted investments
 
6,431

 
N/A

 
N/A

 
N/A

 
N/A

Loans, net
 
1,317,398

 

 

 
1,292,303

 
1,292,303

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 
 
 
 
 
 
 

Noninterest-bearing demand deposits
 
220,520

 

 
220,520

 

 
250,520

Interest-bearing demand deposits
 
231,644

 

 
231,644

 

 
231,644

Money Market and Savings deposits
 
543,645

 

 
543,645

 

 
543,645

Time deposits
 
442,774

 

 
443,547

 

 
443,547

Securities sold under agreements to repurchase
 
24,055

 

 
24,055

 

 
24,055

Federal Home Loan Bank advances and other borrowings
 
43,600

 

 
43,600

 

 
43,600



Limitations
 
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition,
the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.
v3.10.0.1
Small Business Lending Fund
6 Months Ended
Jun. 30, 2018
Small Business Lending Fund [Abstract]  
Small Business Lending Fund
Small Business Lending Fund
 
In connection with the Company's merger with Legacy SmartFinancial, Inc. in 2015, the company assumed Legacy SmartFinancial's obligations under that certain stock purchase agreement with the U.S. Department of the Treasury and issued 12,000 shares of preferred stock at $1,000 per share under the Small Business Lending Fund Program (the "SBLF Program").The Company paid cash dividends at a one percent rate or $120,000 for the year ended December 31, 2015 on the preferred shares. On February 4, 2016 the dividend rate for the preferred shares increased to nine percent and as a result the company incurred preferred stock dividends of $1,022,000 for the year ended December 31, 2016 .

On January 30, 2017, the Company completed a public offering of 2,010,084 shares of its common stock with the net proceeds to the Company of approximately $33.2 million. On March 6, 2017 the Company used proceeds from the offering to redeem the $12 million of preferred stock and pay the $195 thousand accrued dividend.
v3.10.0.1
Related Party Transactions
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions

On March 1, 2018, two directors agreed to purchase from the Bank 21,250 shares of the Company's stock for the closing market price of $21.70 per share. The shares were held by the Bank as collateral on a past due loan with an unrelated borrower.. Steven B. Tucker purchased 6,250 shares and W. Miller Welborn purchased 15,000 shares for the benefit of a trust.
v3.10.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

On June 27, 2018, the Company entered into an agreement and plan of merger with Foothills Bancorp, Inc. ("Foothills Bancorp"), a Tennessee corporation and Foothills Bank and Trust, a Tennessee-chartered commercial bank and wholly owned subsidiary of Foothills Bancorp .
Under the terms of the merger agreement, at the effective time of the merger, each outstanding share of Foothills Bancorp common stock will be converted into the right to receive $1.75 in cash and 0.666 shares of SmartFinancial common stock, (the "Stock Consideration"). As of June 26, 2018, Foothills Bancorp had 1,776,925 shares of common stock outstanding.
The merger agreement contains customary representations, warranties, and covenants by all parties. Conditions to each party's obligation to consummate the Merger include the following, as well as other customary conditions: (1) approval of the merger Agreement by the holders of Foothills Bancorp common stock, (2) approval of the merger by regulatory authorities, (3) effectiveness of a registration statement for the shares issued as Stock Consideration, and (4) authorization to list the shares to be issued as Stock Consideration on the Nasdaq Capital Market. Conditions to SmartFinancial's obligation to consummate the merger include holders of not more than 10% of the outstanding shares of Foothills Bancorp common stock having perfected and not withdrawn or lost their rights to dissent from the Merger.
The merger agreement provides certain termination rights for both SmartFinancial and Foothills Bancorp and further provides that, upon termination of the merger agreement under certain circumstances, Foothills Bancorp will be obligated to pay SmartFinancial a termination fee of $1,450,000.
v3.10.0.1
Presentation of Financial Information (Policies)
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business
Nature of Business:
 
SmartFinancial, Inc. (the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly-owned subsidiary, SmartBank (the “Bank”). The Company provides a variety of financial services to individuals and corporate customers through its offices in eastern Tennessee, Alabama, Florida, and Georgia. The Company’s primary deposit products are interest-bearing demand deposits and time deposits. Its primary lending products are commercial, residential, and consumer loans.
Interim Financial Information (Unaudited)
Interim Financial Information (Unaudited):
 
The financial information in this report for June 30, 2018 and June 30, 2017 has not been audited. The information included herein should be read in conjunction with the Company’s annual consolidated financial statements and footnotes included in the Company's most recent Annual Report on Form 10-K. The consolidated financial statements presented herein conform to U.S. generally accepted accounting principles and to general industry practices. In the opinion of SmartFinancial’s management, the accompanying interim financial statements contain all material adjustments necessary to present fairly the financial condition, the results of operations, and cash flows for the interim period. Results for interim periods are not necessarily indicative of the results to be expected for a full year.
Basis of Presentation and Accounting Estimates
Basis of Presentation and Accounting Estimates:
 
All adjustments consisting of normal recurring accruals, that in the opinion of management, are necessary for a fair presentation of the financial position and the results of operations for the periods covered by the report have been included. The accompanying unaudited consolidated financial statements and related notes should be read in conjunction with those appearing in the most recent Annual Report previously filed on Form 10-K.
 
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
 
In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the U.S, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of foreclosed assets and deferred taxes, other-than-temporary impairments of securities, and the fair value of financial instruments.
 
The determination of the adequacy of the allowance for loan losses is based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans, management obtains independent appraisals for significant collateral.
 
The Company’s loans are generally secured by specific items of collateral including real property, consumer assets, and business assets. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on local economic conditions.
 
While management uses available information to recognize losses on loans, further reductions in the carrying amounts of loans may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the estimated losses on loans. Such agencies may require the Company to recognize additional losses based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the estimated losses on loans may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Accounting Changes and Recently Issued Accounting Pronouncements
Accounting Changes:

We adopted ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)” and its related amendments as of January 1, 2018 utilizing the modified retrospective approach. The implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, the new guidance did not have a material impact on revenue most closely associated with financial instruments, including interest income and expense. The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the ASU, including, deposit related fees, interchange fees, merchant income, and insurance and brokerage commissions. Based on this assessment, the Company concluded that ASU 2014-09 did not materially change the method in which the Company currently recognizes revenue for these revenue streams.

Under ASU 2014-09, we adopted new policies related to revenue recognition. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete, or over time. For performance obligations satisfied over time, we primarily use the output method, directly measuring the value of the products/services transferred to the customer, to determine when performance obligations have been satisfied. We typically receive payment from customers and recognize revenue concurrent with the satisfaction of our performance obligations. In most cases, this occurs within a single financial reporting period. For payments received in advance of the satisfaction of performance obligations, revenue recognition is deferred until such time the performance obligations have been satisfied. In cases where we have not received payment despite satisfaction of our performance obligations, we accrue an estimate of the amount due in the period our performance obligations have been satisfied. For contracts with variable components, only amounts for which collection is probable are accrued. We generally act in a principal capacity, on our own behalf, in most of our contracts with customers. In such transactions, we recognize revenue and the related costs to provide our services on a gross basis in our financial statements. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions relate to our customers' use of various interchange and ATM/debit card networks.

Based on our underlying contracts, ASU 2014-09 requires us to report network costs associated with debit card and ATM transactions netted against the related fees from such transactions. Previously, such network costs were reported as a component of other noninterest expense. For the three and six months periods ended June 30, 2018, gross interchange and debit card transaction fees totaled $401 thousand and $733 thousand, respectively while related network costs totaled $280 thousand and $467 thousand, respectively. On a net basis, we reported $121 thousand and $267 thousand as interchange and debit card transaction fees in the accompanying Consolidated Statement of Income for the three and six months periods ended June  30, 2018.

For the three and six months periods ended June 30, 2017, we reported interchange and debit card transaction fees totaling $223 thousand and $416 thousand, respectively on a gross basis in the accompanying Consolidated Statement of Income while related network costs totaling $140 thousand and $227 thousand, respectively were reported in other operating expenses included as a component of other noninterest expense.

ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities, ("ASU 2016-01") makes targeted amendments to the guidance for recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 requires equity investments, other than equity method investments, to be measured at fair value with changes in fair value recognized in net income. The ASU requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption to reclassify the cumulative change in fair value of equity securities previously recognized in Accumulated Other Comprehensive Income. ASU 2016-01 became effective for the Company on January 1, 2018 and there was no adjustment to retained earnings. ASU 2016-01 also emphasizes the existing requirement to use exit prices to measure fair value for disclosure purposes and clarifies that entities should not make use of a practicability exception in determining the fair value of loans. Accordingly, we refined the calculation used to determine the disclosed fair value of our loans held for investment portfolio as part of adopting this standard. The refined calculation is disclosed Note 6 - Fair Value Disclosures.

Note 1. Presentation of Financial Information, Continued

Accounting Changes (continued):

In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220):  Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income; (“ASU 2018-02”).  ASU 2018-02 amends ASC Topic 220 and allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“Tax Reform Act”).  Consequently, this amendment eliminates the stranded tax effects resulting from the Tax Reform Act and will improve the usefulness of information reported to financial statement users.  However, because the amendments only related to the reclassification of the income tax effects of the Tax Reform Act, the underlying guidance that requires that the effects of the change in tax laws or rates be included in income from continuing operations is not affected.  The guidance is effective for public companies for annual periods beginning on or after December 15, 2018 and interim periods within those fiscal years.  Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance.  This amendment should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in U.S. federal corporate income tax rate in the Tax Reform Act is recognized.  The Company early adopted this amendment in the fourth quarter of 2017 and reclassified $197 thousand from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Reform Act.
Recently Issued Accounting Pronouncements:
 
During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements for the year ended December 31, 2017 as filed with the Securities and Exchange Commission. The following is a summary of recent authoritative pronouncements not yet effective that could impact the accounting, reporting, and/or disclosure of financial information by the Company issued since December 31, 2017.

In February 2016, the FASB issued guidance that requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability in ASU 2016-2: Leases (Topic 842). For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 including interim periods within those fiscal years. The Company has several lease agreements, such as branch locations, which are currently considered operating leases, and therefore, not recognized on the Company’s consolidated statements of condition. The Company expects the new guidance will require these lease agreements to be recognized on the consolidated statements of condition as a right-of-use asset and a corresponding lease liability. Therefore, the Company’s preliminary evaluation indicates the provisions of ASU No. 2016-02 are expected to impact the Company’s consolidated statements of condition, along with our regulatory capital ratios. However, the Company continues to evaluate the extent of potential impact the new guidance will have on the Company’s consolidated financial statements. The Company is in the process of identifying a complete inventory of arrangements containing a lease and accumulating the lease data necessary to apply the amended guidance.
 
In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient Transition to Topic 842 , an amendment to ASU 2016-2: Leases. The amendments in this Update permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under Topic 840. Once an entity adopts Topic 842, it should apply that Topic prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. An entity should continue to apply its current accounting policy for accounting for land easements that existed before the entity’s adoption of Topic 842. For example, if an entity currently accounts for certain land easements as leases under Topic 840, it should continue to account for those land easements as leases before its adoption of Topic 842. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update 2016-02, for which the company is currently evaluating the impact.

Note 1. Presentation of Financial Information, Continued

Recently Issued Accounting Pronouncements (continued):

In June 2016, FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU changed the credit loss model on financial instruments measured at amortized cost, available for sale securities and certain purchased financial instruments. Credit losses on financial instruments measured at amortized cost will be determined using a current expected credit loss model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. Purchased financial assets with more-than-insignificant credit deterioration since origination ("PCD assets" which are currently named "PCI Loans") measured at amortized cost will have an allowance for credit losses established at acquisition as part of the purchase price. Subsequent increases or decreases to the allowance for credit losses on PCD assets will be recognized in the income statement. Interest income should be recognized on PCD assets based on the effective interest rate, determined excluding the discount attributed to credit losses at acquisition. Credit losses relating to available-for-sale debt securities will be recognized through an allowance for credit losses. The amount of the credit loss is limited to the amount by which fair value is below amortized cost of the available-for-sale debt security. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years for the Company and other SEC filers. Early adoption is permitted and if early adopted, all provisions must be adopted in the same period. The amendments should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the period adopted. A prospective approach is required for securities with other than temporary impairment recognized prior to adoption.

The Company is continuing its implementation efforts through its Company-wide implementation team. The implementation team meets periodically to discuss the latest developments and ensure progress is being made. The team also keeps current on evolving interpretations and industry practices related to ASU 2016-13 via webcasts, publications, conferences, and peer bank meetings. The team continues to evaluate and validate data resources and different loss methodologies. The Company’s preliminary evaluation indicates the provisions of ASU No. 2016-13 are expected to impact the Company’s consolidated financial statements, in particular an increase to the level of the reserve for credit losses. However, the Company continues to evaluate the extent of the potential impact.

In January 2017, FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. The Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In March 2017, FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Topic 310-20): Premium Amortization on Purchased Callable Debt Securities. The ASU shortens the amortization period for certain callable debt securities held at a premium. The premium on individual callable debt securities shall be amortized to the earliest call date. This guidance does not apply to securities for which prepayments are estimated on a large number of similar loans where prepayments are probable and reasonably estimable. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. This update should be adopted on a modified retrospective basis with a cumulative-effect adjustment to retained earnings on the date of adoption. The Company does not expect these amendments to have a material effect on its consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification (ASC) 815, Derivatives and Hedging. The goals of the ASU are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. The amendments will be effective for the Company for interim and annual periods beginning after December 15, 2018. The Company does not expect these amendments to have a material effect on its consolidated financial statements.


Note 1. Presentation of Financial Information, Continued

As part of its Simplification Initiative, the FASB has issued (ASU) No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation (which previously only included payments to employees), to include share-based payment transactions for acquiring goods and services from non-employees. This required entities to apply the requirements of Topic 718 to non-employee awards, except for specific guidance on inputs to an option pricing model and the attribution of cost (i.e., the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). Additionally, the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in the grantor’s own operations by issuing share-based payment awards, and clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer, or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments are effective for fiscal years beginning after December 15, 2018, and for the interim periods within those years. The Company does not expect these amendments to have a material effect on its consolidated financial statements.
Reclassifications
Reclassifications:

Certain captions and amounts in the 2017 consolidated financial statements were reclassified to conform to the 2018 presentation and these reclassifications had no impact on net income or equity as previously reported.
Earnings Per Common Share
Earnings per common share:
 
Basic earnings per common share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance (excluding tax impact). Potential common shares that may be issued by the Company relate solely to outstanding stock options, determined using the treasury stock method, and restricted stock awards, determined by the fair value of the Company's stock on date of grant.
v3.10.0.1
Business Combination (Tables)
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Schedule of Allocation of Purchase Price to Fair Value of Net Assets Acquired
The following table details the financial impact of the merger, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed, and goodwill recognized:

Calculation of Purchase Price
 
Shares of SMBK common stock issued to Capstone shareholders as of November 1, 2017
2,908,094

Market price of SMBK common stock on November 1, 2017
$
23.49

Estimated fair value of SMBK common stock issued (in thousands)
68,311

Estimated fair value of Capstone stock options (in thousands)
1,585

Cash consideration paid
15,826

Total consideration (in thousands)
$
85,722

 
Allocation of Purchase Price (in thousands)
 
Total consideration above
$
85,722

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
16,810

Investment securities available for sale
51,638

Restricted investments
1,049

Loans
413,023

Premises and equipment
8,668

Bank owned life insurance
10,031

Core deposit intangible
5,530

Other real estate owned
410

Prepaid and other assets
6,360

Deposits
(454,154
)
FHLB advances and other borrowings
(4,887
)
Payables and other liabilities
(6,803
)
Total fair value of net assets acquired
47,675

Goodwill
$
38,047

The following table details the financial impact of the merger, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed, and goodwill recognized:

Calculation of Purchase Price
 
Shares of SMBK common stock issued to TN Bancshares shareholders as of May 1, 2018
1,458,981

Market price of SMBK common stock on May 1, 2018
$
23.85

Estimated fair value of SMBK common stock issued (in thousands)
34,797

Cash consideration paid
5

Total consideration (in thousands)
$
34,802

 
Allocation of Purchase Price (in thousands)
 
Total consideration above
$
34,802

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
5,723

Investment securities available for sale
24,563

Restricted investments
464

Loans
180,490

Premises and equipment
9,470

Core deposit intangible
2,290

Other real estate owned
674

Prepaid and other assets
2,258

Deposits
(202,272
)
FHLB advances and other borrowings
(4,000
)
Payables and other liabilities
(586
)
Total fair value of net assets acquired
19,074

Goodwill
$
15,728

The following table details the financial impact of the transaction, including the allocation of the purchase price to the fair values of net assets assumed and goodwill recognized:

Allocation of Purchase Price (in thousands)
 
Total consideration in cash
$
1,183

Fair value of assets acquired and liabilities assumed:
 

Cash and cash equivalents
133

Loans
24,073

Premises and equipment
2,839

Core deposit intangible
310

Prepaid and other assets
77

Deposits
(26,888
)
Payables and other liabilities
(21
)
Total fair value of net assets acquired
523

Goodwill
$
660

v3.10.0.1
Earnings per share (Tables)
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following is a summary of the basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017.

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net income available to common shareholders
$
3,931,556

 
$
1,648,286

 
$
7,346,326

 
$
3,097,138

Weighted average common shares outstanding
12,201,185

 
8,216,567

 
11,708,746

 
7,872,609

Effect of dilutive stock options
119,313

 
108,971

 
113,751

 
104,673

Diluted shares
12,320,498

 
8,325,538

 
11,822,497

 
7,977,282

Basic earnings per common share
$
0.32

 
$
0.20

 
$
0.63

 
$
0.39

Diluted earnings per common share
$
0.32

 
$
0.20

 
$
0.62

 
$
0.39

v3.10.0.1
Securities (Tables)
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Schedule of Available-For-Sale Securities Reconciliation
The amortized cost and fair value of securities available-for-sale at June 30, 2018 and December 31, 2017 are summarized as follows (in thousands):
 
 
 
June 30, 2018
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. Government-sponsored enterprises (GSEs)
 
$
29,137

 
$

 
$
(1,009
)
 
$
28,128

Municipal securities
 
15,896

 
8

 
(320
)
 
15,584

Other debt securities
 
976

 

 
(65
)
 
911

Mortgage-backed securities (GSEs)
 
114,538

 
171

 
(2,755
)
 
111,954

 
 
$
160,547

 
$
179

 
$
(4,149
)
 
$
156,577


 
 
December 31, 2017
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
U.S. Government-sponsored enterprises (GSEs)
 
$
26,207

 
$
1

 
$
(432
)
 
$
25,776

Municipal securities
 
9,122

 
28

 
(147
)
 
9,003

Other debt securities
 
974

 

 
(24
)
 
950

Mortgage-backed securities (GSEs)
 
117,263

 
136

 
(1,184
)
 
116,215

 
 
$
153,566

 
$
165

 
$
(1,787
)
 
$
151,944

Investments Classified by Contractual Maturity Date
The amortized cost and estimated fair value of securities at June 30, 2018, by contractual maturity for non-mortgage backed securities, are shown below (in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 
 
Amortized
Cost
 
Fair
Value
Due in one year or less
 
$

 
$

Due from one year to five years
 
21,554

 
20,901

Due from five years to ten years
 
13,995

 
13,366

Due after ten years
 
10,460

 
10,356

 
 
46,009

 
44,623

Mortgage-backed securities
 
114,538

 
111,954

 
 
$
160,547

 
$
156,577

Schedule of Unrealized Loss on Investments
The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available-for-sale have been in a continuous unrealized loss position, as of June 30, 2018 and December 31, 2017 (in thousands): 
 
 
As of June 30, 2018
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
U.S. Government- sponsored enterprises (GSEs)
 
$
14,862

 
$
(425
)
 
$
13,266

 
$
(584
)
 
$
28,128

 
$
(1,009
)
Municipal securities
 
11,966

 
(182
)
 
2,072

 
(138
)
 
14,038

 
(320
)
Other debt securities
 

 

 
911

 
(65
)
 
911

 
(65
)
Mortgage-backed securities (GSEs)
 
58,377

 
(1,654
)
 
29,911

 
(1,101
)
 
88,288

 
(2,755
)
 
 
$
85,205

 
$
(2,261
)
 
$
46,160

 
$
(1,888
)
 
$
131,365

 
$
(4,149
)
 
 
As of December 31, 2017
 
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
U.S. Government- sponsored enterprises (GSEs)
 
$
1,358

 
$
(1
)
 
$
13,420

 
$
(431
)
 
$
14,778

 
$
(432
)
Municipal securities
 
3,418

 
(43
)
 
2,112

 
(104
)
 
5,530

 
(147
)
Other debt securities
 
950

 
(24
)
 

 

 
950

 
(24
)
Mortgage-backed securities (GSEs)
 
61,332

 
(407
)
 
35,048

 
(777
)
 
96,380

 
(1,184
)
 
 
$
67,058

 
$
(475
)
 
$
50,580

 
$
(1,312
)
 
$
117,638

 
$
(1,787
)
v3.10.0.1
Loans and Allowance for Loan Losses (Tables)
6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
At June 30, 2018 and December 31, 2017, loans are summarized as follows (in thousands):
 
 
 
June 30, 2018
 
December 31, 2017
 
 
PCI Loans1
 
All Other
Loans
 
Total
 
PCI Loans1
 
All Other
Loans
 
Total
Commercial real estate
 
$
18,474

 
$
727,390

 
$
745,864

 
$
17,903

 
$
625,085

 
$
642,988

Consumer real estate
 
6,987

 
348,889

 
355,876

 
7,450

 
286,007

 
293,457

Construction and land development
 
5,690

 
173,741

 
179,431

 
5,120

 
130,289

 
135,409

Commercial and industrial
 
821

 
278,950

 
279,771

 
858

 
237,229

 
238,087

Consumer and other
 
686

 
13,807

 
14,493

 
1,463

 
11,854

 
13,317

Total loans
 
32,658

 
1,542,777

 
1,575,435

 
32,794

 
1,290,464

 
1,323,258

Less:  Allowance for loan losses
 
(19
)
 
(7,055
)
 
(7,074
)
 
(16
)
 
(5,844
)
 
(5,860
)
Loans, net
 
$
32,639

 
$
1,535,722

 
$
1,568,361

 
$
32,778

 
$
1,284,620

 
$
1,317,398


1 Purchased Credit Impaired loans (“PCI loans”) are loans with evidence of credit deterioration at purchase.
Schedule of Impaired and Performing Loans Receivable
The composition of loans by loan classification for impaired and performing loan status at June 30, 2018 and December 31, 2017, is summarized in the tables below (in thousands):

 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Performing loans
 
$
726,356

 
$
347,893

 
$
173,194

 
$
278,431

 
$
13,698

 
$
1,539,572

Impaired loans
 
1,034

 
996

 
547

 
519

 
109

 
3,205

 
 
727,390

 
348,889

 
173,741

 
278,950

 
13,807

 
1,542,777

PCI loans
 
18,474

 
6,987

 
5,690

 
821

 
686

 
32,658

Total
 
$
745,864

 
$
355,876

 
$
179,431

 
$
279,771

 
$
14,493

 
$
1,575,435

 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Performing loans
 
$
624,638

 
$
284,585

 
$
129,742

 
$
237,016

 
$
11,842

 
$
1,287,823

Impaired loans
 
447

 
1,422

 
547

 
213

 
12

 
2,641

 
 
625,085

 
286,007

 
130,289

 
237,229

 
11,854

 
1,290,464

PCI loans
 
17,903

 
7,450

 
5,120

 
858

 
1,463

 
32,794

Total loans
 
$
642,988

 
$
293,457

 
$
135,409

 
$
238,087

 
$
13,317

 
$
1,323,258

Schedule of Allowance for Loan Losses for Impaired and Performing Loans Receivable
The following tables show the allowance for loan losses allocation by loan classification for impaired, PCI, and performing loans as of June 30, 2018 and December 31, 2017 (in thousands):

 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and
Other
 
Total
Performing loans
 
$
3,116

 
$
1,491

 
$
744

 
$
1,145

 
$
224

 
$
6,720

PCI loans
 
19

 

 

 

 

 
19

Impaired loans
 

 
37

 

 
222

 
76

 
335

Total
 
$
3,135

 
$
1,528

 
$
744

 
$
1,367

 
$
300

 
$
7,074


 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and
Other
 
Total
Performing loans
 
$
2,444

 
$
1,340

 
$
521

 
$
890

 
$
204

 
$
5,399

PCI loans
 
16

 

 

 

 

 
16

Impaired loans
 
5

 
256

 

 
172

 
12

 
445

Total
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860

Schedule of Financing Receivable Allowance for Credit Losses
The following tables detail the changes in the allowance for loan losses for the six month period ending June 30, 2018 and year ending December 31, 2017, by loan classification (in thousands):
 
 
 
June 30, 2018
 
 
Commercial
Real Estate
 
Consumer
Real
Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Beginning balance
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860

Loans charged off
 
(38
)
 
(25
)
 

 
(78
)
 
(101
)
 
(242
)
Recoveries of loans charged off
 

 
50

 
5

 
56

 
40

 
151

Provision (reallocation) charged to expense
 
708

 
(93
)
 
218

 
327

 
145

 
1,305

Ending balance
 
$
3,135

 
$
1,528

 
$
744

 
$
1,367

 
$
300

 
$
7,074


 
 
December 31, 2017
 
 
Commercial
Real Estate
 
Consumer
Real
Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Beginning balance
 
$
2,369

 
$
1,382

 
$
717

 
$
520

 
$
117

 
$
5,105

Loans charged off
 

 
(111
)
 

 
(24
)
 
(141
)
 
(276
)
Recoveries of charge-offs
 
8

 
99

 
13

 
67

 
61

 
248

Provision (reallocation) charged to expense
 
88

 
226

 
(209
)
 
499

 
179

 
783

Ending balance
 
$
2,465

 
$
1,596

 
$
521

 
$
1,062

 
$
216

 
$
5,860

Financing Receivable Credit Quality Indicators
The following tables outline the amount of each loan classification and the amount categorized into each risk rating as of June 30, 2018 and December 31, 2017 (in thousands):

 
 
June 30, 2018
Non PCI Loans
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Pass
 
$
724,763

 
$
343,407

 
$
172,972

 
$
277,384

 
$
13,184

 
$
1,531,710

Watch
 
1,604

 
3,168

 
62

 
1,035

 
123

 
5,992

Special mention
 

 
949

 
160

 
35

 
363

 
1,507

Substandard
 
1,023

 
1,365

 
547

 
483

 
111

 
3,529

Doubtful
 

 

 

 
13

 
26

 
39

Total
 
$
727,390

 
$
348,889

 
$
173,741

 
$
278,950

 
$
13,807

 
$
1,542,777

PCI Loans
 

 

 

 

 

 

Pass
 
$
14,494

 
$
4,558

 
$
3,973

 
$
210

 
$
565

 
$
23,800

Watch
 
1,513

 
898

 
653

 
2

 
18

 
3,084

Special mention
 
1,393

 
575

 
716

 
153

 
17

 
2,854

Substandard
 
1,074

 
956

 
348

 
456

 
86

 
2,920

Doubtful
 

 

 

 

 

 

Total
 
$
18,474

 
$
6,987

 
$
5,690

 
$
821

 
$
686

 
$
32,658

Total loans
 
$
745,864

 
$
355,876

 
$
179,431

 
$
279,771

 
$
14,493

 
$
1,575,435


Note 5. Loans and Allowance for Loan Losses, Continued

Credit Risk Management (continued):

 
 
December 31, 2017
Non PCI Loans
 
Commercial
Real Estate
 
Consumer
Real Estate
 
Construction
and Land
Development
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
Pass
 
$
616,028

 
$
279,464

 
$
129,359

 
$
233,942

 
$
11,624

 
$
1,270,417

Watch
 
7,673

 
2,543

 
383

 
3,007

 
62

 
13,668

Special mention
 
1,006

 
2,627

 

 
64

 
155

 
3,852

Substandard
 
378

 
1,159

 
547

 
157

 

 
2,241

Doubtful
 

 
214

 

 
59

 
13

 
286

Total
 
$
625,085

 
$
286,007

 
$
130,289

 
$
237,229

 
$
11,854

 
$
1,290,464

PCI Loans
 

 

 

 

 

 

Pass
 
$
14,386

 
$
4,151

 
$
4,134

 
$
68

 
$
819

 
$
23,558

Watch
 
261

 
1,345

 
649

 
120

 
262

 
2,637

Special mention
 

 
456

 

 
58

 
24

 
538

Substandard
 
3,084

 
1,192

 
337

 
588

 
107

 
5,308

Doubtful
 
172

 
306

 

 
24

 
251

 
753

Total
 
$
17,903

 
$
7,450

 
$
5,120

 
$
858

 
$
1,463

 
$
32,794

Total loans
 
$
642,988

 
$
293,457

 
$
135,409

 
$
238,087

 
$
13,317

 
$
1,323,258

Past Due Financing Receivables
The following tables present the aging of the recorded investment in loans as of June 30, 2018 and December 31, 2017 (in thousands): 

 
 
June 30, 2018
 
 
30-89 Days
 Past Due and
Accruing
 
Past Due 90
 Days or More
and Accruing
 
Nonaccrual
 
Total
 Past Due
and NonAccrual
 
PCI Loans
 
Current
Loans
 
Total
Loans
Commercial real estate
 
$
2,628

 
$
82

 
$
6

 
$
2,716

 
$
18,474

 
$
724,674

 
$
745,864

Consumer real estate
 
701

 
76

 
463

 
1,240

 
6,987

 
347,649

 
355,876

Construction and land development
 
403

 
338

 
547

 
1,288

 
5,690

 
172,453

 
179,431

Commercial and industrial
 
647

 
113

 
430

 
1,190

 
821

 
277,760

 
279,771

Consumer and other
 
189

 
58

 
92

 
339

 
686

 
13,468

 
14,493

Total
 
$
4,568

 
$
667

 
$
1,538

 
$
6,773

 
$
32,658

 
$
1,536,004

 
$
1,575,435

Note 5. Loans and Allowance for Loan Losses, Continued

Past Due Loans (continued):

 
 
December 31, 2017
 
 
30-89 Days
Past Due and
Accruing
 
Past Due 90
Days or More
and Accruing
 
Nonaccrual
 
Total
Past Due
and NonAccrual
 
PCI
Loans
 
Current
Loans
 
Total
Loans
Commercial real estate
 
$
517

 
$
728

 
$
128

 
$
1,373

 
$
17,903

 
$
623,712

 
$
642,988

Consumer real estate
 
963

 
33

 
991

 
1,987

 
7,450

 
284,020

 
293,457

Construction and land development
 
65

 
326

 
547

 
938

 
5,120

 
129,351

 
135,409

Commercial and industrial
 
286

 
131

 
85

 
502

 
858

 
236,727

 
238,087

Consumer and other
 
165

 
291

 
13

 
469

 
1,463

 
11,385

 
13,317

Total
 
$
1,996

 
$
1,509

 
$
1,764

 
$
5,269

 
$
32,794

 
$
1,285,195

 
$
1,323,258

Impaired Financing Receivables
The following is an analysis of the impaired loan portfolio, excluding PCI loans, detailing the related allowance recorded as of June 30, 2018 and December 31, 2017 (in thousands):  
 
 
 
 
 
 
 
 
For the six months ended
 
 
At June 30, 2018
 
June 30, 2018
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired loans without a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
1,034

 
$
1,043

 
$

 
$
670

 
$
15

Consumer real estate
 
793

 
823

 

 
699

 
12

Construction and land development
 
547

 
547

 

 
547

 

Commercial and industrial
 
81

 
83

 

 
58

 
3

Consumer and other
 
16

 
16

 

 
5

 

 
 
2,471

 
2,512

 

 
1,979

 
30

Impaired loans with a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 

 

 

 
8

 

Consumer real estate
 
203

 
216

 
37

 
642

 
11

Construction and land development
 

 

 

 

 

Commercial and industrial
 
438

 
440

 
222

 
257

 
5

Consumer and other
 
93

 
95

 
76

 
72

 
2

 
 
734

 
751

 
335

 
979

 
18

PCI loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
27

 
127

 
19

 
5

 
3

Total impaired loans
 
$
3,232

 
$
3,390

 
$
354

 
$
2,963

 
$
51



Note 5. Loans and Allowance for Loan Losses, Continued

Impaired Loans (continued):

 
 
 
 
 
 
 
 
For the year ended
 
 
At December 31, 2017
 
December 31, 2017
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired loans without a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
424

 
$
454

 
$

 
$
204

 
$
44

Consumer real estate
 
415

 
420

 

 
401

 
16

Construction and land development
 
547

 
547

 

 
628

 

Commercial and industrial
 
41

 
41

 

 
44

 
3

Consumer and other
 

 

 

 

 

 
 
1,427

 
1,462

 

 
1,277

 
63

Impaired loans with a valuation allowance:
 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
23

 
23

 
5

 
5

 
1

Consumer real estate
 
1,007

 
1,033

 
256

 
601

 
38

Construction and land development
 

 

 

 

 

Commercial and industrial
 
172

 
172

 
172

 
117

 
10

Consumer and other
 
12

 
13

 
12

 
2

 
1

 
 
1,214

 
1,241

 
445

 
725

 
50

PCI loans:
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
16

 
123

 
16

 
3

 
16

Total impaired loans
 
$
2,657

 
$
2,826

 
$
461

 
$
2,005

 
$
129

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period, Carrying Amount of Loans
The Company has acquired loans which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans as of is as follows (in thousands):
 
 
June 30, 2018
 
December 31, 2017
Commercial real estate
$
25,700

 
$
23,366

Consumer real estate
9,620

 
10,764

Construction and land development
6,793

 
6,285

Commercial and industrial
2,973

 
1,452

Consumer and other
1,014

 
1,710

Total loans
46,100

 
43,577

Less remaining purchase discount
(13,442
)
 
(10,783
)
Total loans, net of purchase discount
32,658

 
32,794

Less: Allowance for loan losses
(19
)
 
(16
)
Carrying amount, net of allowance
$
32,639

 
$
32,778

Schedule of Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement
Activity related to the accretable yield on loans acquired with deteriorated credit quality is as follows for the three and six months period ended June 30, 2018 and 2017 (in thousands):

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Accretable yield, beginning of period
 
$
7,780

 
$
8,482

 
$
9,287

 
$
8,950

Additions
 
1,292

 

 
1,292

 

Accretion income
 
(1,928
)
 
(973
)
 
(3,029
)
 
(1,670
)
Reclassification to accretable
 
120

 
366

 
382

 
610

Other changes, net
 
(58
)
 
600

 
(726
)
 
585

Accretable yield
 
$
7,206

 
$
8,475

 
$
7,206

 
$
8,475

Schedule of Certain Loans Acquired Accounted For As Debt Securities Acquired During Period
Purchased credit impaired loans acquired from Southern Community Bank during the three and six months period ended June 30, 2018 for which it was probable at acquisition that all contractually required payments would not be collected are as follows (in thousands):

 
 
Three and Six Months Ended June 30,
 
 
2018
Contractual principal and interest at acquisition
 
$
15,133

Nonaccretable difference
 
5,302

Expected cash flows at acquisition
 
9,831

Accretable yield
 
1,292

Fair value of purchased credit impaired loans
 
$
8,539

v3.10.0.1
Commitments and Contingent Liabilities (Tables)
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Other Commitments
A summary of the Bank’s total contractual amount for all off-balance sheet commitments at June 30, 2018 is as follows: 
Commitments to extend credit
$
299.6
 million
Standby letters of credit
$
3.7
 million
v3.10.0.1
Fair Value Disclosures (Tables)
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Assets and liabilities recorded at fair value on a recurring basis are as follows (in thousands): 
 
 
Balance as of
June 30,
2018
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
Debt securities available-for-sale:
 
 

 
 

 
 

 
 

U.S. Government-sponsored enterprises (GSEs)
 
$
28,128

 
$

 
$
28,128

 
$

Mortgage-backed securities
 
111,954

 

 
111,954

 

Other debt securities
 
911

 

 
911

 

Municipal securities
 
15,584

 

 
15,584

 

Total securities available-for-sale
 
$
156,577

 
$

 
$
156,577

 
$


 
 
Balance as of
December 31,
2017
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Other
Unobservable
Inputs
(Level 3)
Debt securities available-for-sale:
 
 

 
 

 
 

 
 

U.S. Government-sponsored enterprises (GSEs)
 
$
25,776

 
$

 
$
25,776

 
$

Mortgage-backed securities
 
116,215

 

 
116,215

 

Other debt securities
 
950

 

 
950

 

Municipal securities
 
9,003

 

 
9,003

 

Total securities available-for-sale
 
$
151,944

 
$

 
$
151,944

 
$

Fair Value, Assets and Liabilities Measured on Non-Recurring Basis
For Level 3 assets measured at fair value on a non-recurring basis as of March 31, 2018 and December 31, 2017, , the significant unobservable inputs used in the fair value measurements are presented below (in thousands).

 
 
Balance as of
June 30,
2018
 
Valuation
Technique
 
Significant Other
Unobservable Input
 
Weighted
Average of Input
Impaired loans
 
$
407

 
Appraisal and Cashflow
 
Appraisal and Cashflow Discounts
 
47
%
Foreclosed assets
 
3,524

 
Appraisal
 
Appraisal Discounts
 
19
%

 
 
Balance as of
December 31,
2017
 
Valuation
Technique
 
Significant Other
Unobservable Input
 
Weighted
Average of Input
Impaired loans
 
$
769

 
Appraisal
 
Appraisal Discounts
 
36
%
Foreclosed assets
 
3,254

 
Appraisal
 
Appraisal Discounts
 
18
%

The following tables present the financial instruments carried on the consolidated balance sheets by caption and by level in the fair value hierarchy, for which a nonrecurring change in fair value has been recorded (in thousands):
 
 
 
Balance as of
June 30,
2018
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Other Unobservable Inputs (Level 3)
Impaired loans
 
$
407

 
$

 
$

 
$
407

Foreclosed assets
 
3,524

 

 

 
3,524


 
 
Balance as of
December 31,
2017
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Other Unobservable Inputs (Level 3)
Impaired loans
 
$
769

 
$

 
$

 
$
769

Foreclosed assets
 
3,254

 

 

 
3,254

Fair Value, by Balance Sheet Grouping
The carrying amount and estimated fair value of the Company’s financial instruments at June 30, 2018 and December 31, 2017 are as follows (in thousands):

 
 
June 30, 2018
 
 
 
 
Fair Value Measurements Using
 
 
 
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
 
Estimated
Fair Value
Assets:
 
 

 
 
 
 
 
 
 
 

Cash and cash equivalents
 
$
170,235

 
170,235

 

 

 
$
170,235

Securities available-for-sale
 
156,577

 

 
156,577

 

 
156,577

Restricted investments
 
8,273

 
N/A

 
N/A

 
N/A

 
N/A

Loans, net
 
1,568,361

 

 

 
1,569,916

 
1,569,916

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 
 
 
 
 
 
 

Noninterest-bearing demand deposits
 
301,318

 

 
301,318

 

 
301,318

Interest-bearing demand deposits
 
246,942

 

 
246,942

 

 
246,942

Money Market and Savings deposits
 
632,518

 

 
632,518

 

 
632,518

Time deposits
 
535,879

 

 
537,006

 

 
537,006

Securities sold under agreements to repurchase
 
18,635

 

 
18,635

 

 
18,635

Federal Home Loan Bank advances and other borrowings
 
72,040

 

 
72,040

 

 
72,040


Note 7. Fair Value Disclosures, Continued

Carrying value and estimated fair value (continued):

 
 
December 31, 2017
 
 
 
 
Fair Value Measurements Using
 
 
 
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
 
Estimated
Fair Value
Assets:
 
 

 
 
 
 
 
 
 
 

Cash and cash equivalents
 
$
113,027

 
113,027

 

 

 
$
113,027

Securities available-for-sale
 
151,944

 

 
151,944

 

 
151,944

Restricted investments
 
6,431

 
N/A

 
N/A

 
N/A

 
N/A

Loans, net
 
1,317,398

 

 

 
1,292,303

 
1,292,303

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 
 
 
 
 
 
 

Noninterest-bearing demand deposits
 
220,520

 

 
220,520

 

 
250,520

Interest-bearing demand deposits
 
231,644

 

 
231,644

 

 
231,644

Money Market and Savings deposits
 
543,645

 

 
543,645

 

 
543,645

Time deposits
 
442,774

 

 
443,547

 

 
443,547

Securities sold under agreements to repurchase
 
24,055

 

 
24,055

 

 
24,055

Federal Home Loan Bank advances and other borrowings
 
43,600

 

 
43,600

 

 
43,600

v3.10.0.1
Presentation of Financial Information - Additional Details (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]          
Gross interchange and debit card transaction fees $ 401,000     $ 733,000  
Network costs 280,000   $ 140,000 467,000 $ 227,000
Interchange and debit card transaction fees $ 121,219   $ 223,329 $ 266,754 $ 415,722
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect   $ 197,000      
v3.10.0.1
Business Combination - Narrative (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
May 01, 2018
Apr. 27, 2018
Nov. 01, 2017
May 19, 2017
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Business Acquisition [Line Items]                
Fair value adjustment         $ 11      
Atlantic Capital Bank, N.A. [Member]                
Business Acquisition [Line Items]                
Cash consideration paid       $ 1,183        
Pro-forma revenue         381   $ 754  
Pro-forma net income         105   194  
Goodwill       $ 660        
Capstone Bancshares Inc. [Member]                
Business Acquisition [Line Items]                
Cash consideration paid     $ 15,826          
Pro-forma revenue         7,600   14,500  
Pro-forma net income         $ 3,400   6,000  
Exchange of shares     0.85          
Cash payment per share (in dollars per share)     $ 18.50          
Percentage of common stock consideration transferred     80.00%          
Percentage of cash consideration transferred     20.00%          
Voting interests acquired     74.00%          
Goodwill     $ 38,047          
Pro forma revenue, acquisition           $ 6,200   $ 12,500
Pro forma net income (loss)           237   473
Estimated common stock issued (in shares)     2,908,094          
Market price of SMBK common stock (in dollars per share)     $ 23.49          
Tennessee Bancshares [Member]                
Business Acquisition [Line Items]                
Cash consideration paid $ 5              
Pro-forma revenue             2,400  
Pro-forma net income             800  
Voting interests acquired 88.60%              
Goodwill $ 15,728              
Pro forma revenue, acquisition           3,700   7,300
Pro forma net income (loss)           $ 909   $ 1,800
Common shares converted (in shares) 0.8065              
Estimated common stock issued (in shares) 1,458,981              
Consecutive trading days   10 days            
Market price of SMBK common stock (in dollars per share) $ 23.85              
Weighted Average [Member] | Tennessee Bancshares [Member]                
Business Acquisition [Line Items]                
Market price of SMBK common stock (in dollars per share)   $ 23.92            
Pro Forma [Member] | Capstone Bancshares Inc. [Member]                
Business Acquisition [Line Items]                
Expenses             4,600  
Pro Forma [Member] | Tennessee Bancshares [Member]                
Business Acquisition [Line Items]                
Expenses             $ 1,300  
v3.10.0.1
Business Combination - Atlantic Capital Bank, N.A. Allocation of Purchase Price (Details) - Atlantic Capital Bank, N.A. [Member]
$ in Thousands
May 19, 2017
USD ($)
Business Acquisition [Line Items]  
Cash consideration paid $ 1,183
Fair value of assets acquired and liabilities assumed:  
Cash and cash equivalents 133
Loans 24,073
Premises and equipment 2,839
Core deposit intangible 310
Prepaid and other assets 77
Deposits (26,888)
Payables and other liabilities (21)
Total fair value of net assets acquired 523
Goodwill $ 660
v3.10.0.1
Business Combination - Capstone Merger (Details) - Capstone Bancshares Inc. [Member]
$ / shares in Units, $ in Thousands
Nov. 01, 2017
USD ($)
$ / shares
shares
Business Acquisition [Line Items]  
Estimated common stock issued (in shares) | shares 2,908,094
Market price of SMBK common stock (in dollars per share) | $ / shares $ 23.49
Estimated fair value of SMBK common stock issued (in shares) $ 68,311
Estimated fair value of Capstone stock options 1,585
Cash consideration paid 15,826
Total consideration 85,722
Fair value of assets acquired and liabilities assumed:  
Cash and cash equivalents 16,810
Investment securities available for sale 51,638
Restricted investments 1,049
Loans 413,023
Premises and equipment 8,668
Bank owned life insurance 10,031
Core deposit intangible 5,530
Other real estate owned 410
Prepaid and other assets 6,360
Deposits (454,154)
FHLB advances and other borrowings (4,887)
Payables and other liabilities (6,803)
Total fair value of net assets acquired 47,675
Goodwill $ 38,047
v3.10.0.1
Business Combination - Tennessee Bancshares Merger (Details) - Tennessee Bancshares [Member]
$ / shares in Units, $ in Thousands
May 01, 2018
USD ($)
$ / shares
shares
Business Acquisition [Line Items]  
Shares of SMBK common stock issued to TN Bancshares shareholders as of May 1, 2018 (in shares) | shares 1,458,981
Market price of SMBK common stock on May 1, 2018 (in dollars per share) | $ / shares $ 23.85
Estimated fair value of SMBK common stock issued (in shares) $ 34,797
Cash consideration paid 5
Total consideration 34,802
Fair value of assets acquired and liabilities assumed:  
Cash and cash equivalents 5,723
Investment securities available for sale 24,563
Restricted investments 464
Loans 180,490
Premises and equipment 9,470
Core deposit intangible 2,290
Other real estate owned 674
Prepaid and other assets 2,258
Deposits (202,272)
FHLB advances and other borrowings (4,000)
Payables and other liabilities (586)
Total fair value of net assets acquired 19,074
Goodwill $ 15,728
v3.10.0.1
Earnings per share - Basic and Diluted (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Earnings Per Share [Abstract]        
Net income available to common shareholders $ 3,931,556 $ 1,648,286 $ 7,346,326 $ 3,097,138
Weighted average common shares outstanding (in shares) 12,201,185 8,216,567 11,708,746 7,872,609
Effect of dilutive stock options (in shares) 119,313 108,971 113,751 104,673
Diluted shares (in shares) 12,320,498 8,325,538 11,822,497 7,977,282
Basic earnings per common share (in dollars per share) $ 0.32 $ 0.20 $ 0.63 $ 0.39
Diluted earnings per common share (in dollars per share) $ 0.32 $ 0.20 $ 0.62 $ 0.39
v3.10.0.1
Earnings per share - Narrative (Details) - shares
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Earnings Per Share [Abstract]        
Antidilutive securities excluded from computation of earnings per share (in shares) 0 13,916 0 13,916
v3.10.0.1
Securities - Amortized Cost and Fair Value of Available-for-sale Securities (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 160,547,000 $ 153,566,000
Gross Unrealized Gains 179,000 165,000
Gross Unrealized Losses (4,149,000) (1,787,000)
Fair Value 156,577,182 151,944,567
U.S. Government-sponsored enterprises (GSEs) [Member]    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 29,137,000 26,207,000
Gross Unrealized Gains 0 1,000
Gross Unrealized Losses (1,009,000) (432,000)
Fair Value 28,128,000 25,776,000
Municipal securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 15,896,000 9,122,000
Gross Unrealized Gains 8,000 28,000
Gross Unrealized Losses (320,000) (147,000)
Fair Value 15,584,000 9,003,000
Other debt securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 976,000 974,000
Gross Unrealized Gains 0 0
Gross Unrealized Losses (65,000) (24,000)
Fair Value 911,000 950,000
Mortgage-backed securities (GSEs) [Member]    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 114,538,000 117,263,000
Gross Unrealized Gains 171,000 136,000
Gross Unrealized Losses (2,755,000) (1,184,000)
Fair Value $ 111,954,000 $ 116,215,000
v3.10.0.1
Securities - Narrative (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2018
USD ($)
investment
Jun. 30, 2017
USD ($)
Jun. 30, 2018
USD ($)
investment
Jun. 30, 2017
USD ($)
Dec. 31, 2017
USD ($)
Loans and Leases Receivable Disclosure [Line Items]          
Proceeds from sale of available-for-sale securities | $ $ 0 $ 0 $ 0 $ 0  
Loss from redemption of securities | $ 1,200   1,200 $ 0  
Collateral Pledged [Member]          
Loans and Leases Receivable Disclosure [Line Items]          
Restricted securities | $ $ 113,500,000   $ 113,500,000   $ 97,200,000
Mortgage-backed securities [Member]          
Loans and Leases Receivable Disclosure [Line Items]          
Number of positions 65   65    
US Government-sponsored Enterprises Debt Securities [Member]          
Loans and Leases Receivable Disclosure [Line Items]          
Number of positions 8   8    
Municipal securities [Member]          
Loans and Leases Receivable Disclosure [Line Items]          
Number of positions 21   21    
Other debt securities [Member]          
Loans and Leases Receivable Disclosure [Line Items]          
Number of positions 1   1    
v3.10.0.1
Securities - Available-for-sale Securities by Contractual Maturity (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]    
Securities Available for Sale, Due in one year or less, Amortized Cost $ 0  
Securities Available for Sale, Due from one year to five years, Amortized Cost 21,554,000  
Securities Available for Sale, Due from five years to ten years, Amortized Cost 13,995,000  
Securities Available for Sale, Due after ten years, Amortized Cost 10,460,000  
Securities Available for Sale, Debt Securities, Amortized Cost 46,009,000  
Amortized Cost 160,547,000 $ 153,566,000
Securities Available for Sale, Due in one year or less, Fair Value 0  
Securities Available for Sale, Due from one year to five years, Fair Value 20,901,000  
Securities Available for Sale, Due from five years to ten years, Fair Value 13,366,000  
Securities Available for Sale, Due after ten years, Fair Value 10,356,000  
Securities Available for Sale, Debt Securities, Fair Value 44,623,000  
Securities available for sale 156,577,182 $ 151,944,567
Mortgage-backed securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Securities Available for Sale, Mortgage-backed securities, Amortized Cost 114,538,000  
Securities Available for Sale, Mortgage-backed securities, Fair Value $ 111,954,000  
v3.10.0.1
Securities - Available-for-sale Securities in Continuous Loss Position (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale, fair value, less than 12 months $ 85,205 $ 67,058
Available-for-sale, gross unrealized losses, less than 12 months (2,261) (475)
Available-for-sale, fair value, 12 months or greater 46,160 50,580
Available-for-sale, gross unrealized losses, 12 months or greater (1,888) (1,312)
Securities available for sale 131,365 117,638
Available-for-sale, gross unrealized losses, total (4,149) (1,787)
U.S. Government-sponsored enterprises (GSEs) [Member]    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale, fair value, less than 12 months 14,862 1,358
Available-for-sale, gross unrealized losses, less than 12 months (425) (1)
Available-for-sale, fair value, 12 months or greater 13,266 13,420
Available-for-sale, gross unrealized losses, 12 months or greater (584) (431)
Securities available for sale 28,128 14,778
Available-for-sale, gross unrealized losses, total (1,009) (432)
Municipal securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale, fair value, less than 12 months 11,966 3,418
Available-for-sale, gross unrealized losses, less than 12 months (182) (43)
Available-for-sale, fair value, 12 months or greater 2,072 2,112
Available-for-sale, gross unrealized losses, 12 months or greater (138) (104)
Securities available for sale 14,038 5,530
Available-for-sale, gross unrealized losses, total (320) (147)
Other debt securities [Member]    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale, fair value, less than 12 months 0 950
Available-for-sale, gross unrealized losses, less than 12 months 0 (24)
Available-for-sale, fair value, 12 months or greater 911 0
Available-for-sale, gross unrealized losses, 12 months or greater (65) 0
Securities available for sale 911 950
Available-for-sale, gross unrealized losses, total (65) (24)
Mortgage-backed securities (GSEs) [Member]    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale, fair value, less than 12 months 58,377 61,332
Available-for-sale, gross unrealized losses, less than 12 months (1,654) (407)
Available-for-sale, fair value, 12 months or greater 29,911 35,048
Available-for-sale, gross unrealized losses, 12 months or greater (1,101) (777)
Securities available for sale 88,288 96,380
Available-for-sale, gross unrealized losses, total $ (2,755) $ (1,184)
v3.10.0.1
Loans and Allowance for Loan Losses - Loan Summary (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans $ 1,575,435,000 $ 1,323,258,000  
Less: Allowance for loan losses (7,073,937) (5,860,291) $ (5,105,000)
Loans, net 1,568,360,556 1,317,397,909  
Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 32,658,000 32,794,000  
Less: Allowance for loan losses (19,000) (16,000)  
Loans, net 32,639,000 32,778,000  
All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 1,542,777,000 1,290,464,000  
Less: Allowance for loan losses (7,055,000) (5,844,000)  
Loans, net 1,535,722,000 1,284,620,000  
Commercial Real Estate [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 745,864,000 642,988,000  
Less: Allowance for loan losses (3,135,000) (2,465,000) (2,369,000)
Commercial Real Estate [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 18,474,000 17,903,000  
Less: Allowance for loan losses (19,000) (16,000)  
Commercial Real Estate [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 727,390,000 625,085,000  
Consumer Real Estate [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 355,876,000 293,457,000  
Less: Allowance for loan losses (1,528,000) (1,596,000) (1,382,000)
Consumer Real Estate [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 6,987,000 7,450,000  
Less: Allowance for loan losses 0 0  
Consumer Real Estate [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 348,889,000 286,007,000  
Construction and Land Development [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 179,431,000 135,409,000  
Less: Allowance for loan losses (744,000) (521,000) (717,000)
Construction and Land Development [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 5,690,000 5,120,000  
Less: Allowance for loan losses 0 0  
Construction and Land Development [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 173,741,000 130,289,000  
Commercial and Industrial [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 279,771,000 238,087,000  
Less: Allowance for loan losses (1,367,000) (1,062,000) (520,000)
Commercial and Industrial [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 821,000 858,000  
Less: Allowance for loan losses 0 0  
Commercial and Industrial [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 278,950,000 237,229,000  
Consumer and Other [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 14,493,000 13,317,000  
Less: Allowance for loan losses (300,000) (216,000) $ (117,000)
Consumer and Other [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans 686,000 1,463,000  
Less: Allowance for loan losses 0 0  
Consumer and Other [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Total loans $ 13,807,000 $ 11,854,000  
v3.10.0.1
Loans and Allowance for Loan Losses - Narrative (Details)
6 Months Ended 12 Months Ended
Jun. 30, 2018
USD ($)
loan
segment
Dec. 31, 2017
USD ($)
contract
Dec. 31, 2016
USD ($)
Financing Receivable, Modifications [Line Items]      
Loan portfolio segments | segment 5    
Allowance for loan losses $ 7,073,937 $ 5,860,291 $ 5,105,000
Number of contracts | contract   0  
Foreclosed assets 3,524,239 $ 3,254,392  
Trouble Debt Restructuring [Member]      
Financing Receivable, Modifications [Line Items]      
Loans that met criteria for restructured $ 660,000 $ 41,000  
Number of contracts, nonaccrual | loan 0    
Residential Real Estate [Member]      
Financing Receivable, Modifications [Line Items]      
Foreclosed assets $ 1,140,000    
Commercial Real Estate [Member]      
Financing Receivable, Modifications [Line Items]      
Loans that met criteria for restructured $ 622,000    
Number of contracts | loan 1    
v3.10.0.1
Loans and Allowance for Loan Losses - Performing and Impaired Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans $ 1,575,435 $ 1,323,258
All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 1,542,777 1,290,464
Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 32,658 32,794
Commercial Real Estate [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 745,864 642,988
Commercial Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 727,390 625,085
Commercial Real Estate [Member] | Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 18,474 17,903
Consumer Real Estate [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 355,876 293,457
Consumer Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 348,889 286,007
Consumer Real Estate [Member] | Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 6,987 7,450
Construction and Land Development [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 179,431 135,409
Construction and Land Development [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 173,741 130,289
Construction and Land Development [Member] | Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 5,690 5,120
Commercial and Industrial [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 279,771 238,087
Commercial and Industrial [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 278,950 237,229
Commercial and Industrial [Member] | Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 821 858
Consumer and Other [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 14,493 13,317
Consumer and Other [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 13,807 11,854
Consumer and Other [Member] | Purchased Credit Impaired Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 686 1,463
Performing [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 1,539,572 1,287,823
Performing [Member] | Commercial Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 726,356 624,638
Performing [Member] | Consumer Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 347,893 284,585
Performing [Member] | Construction and Land Development [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 173,194 129,742
Performing [Member] | Commercial and Industrial [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 278,431 237,016
Performing [Member] | Consumer and Other [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 13,698 11,842
Impaired Loans [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 3,205 2,641
Impaired Loans [Member] | Commercial Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 1,034 447
Impaired Loans [Member] | Consumer Real Estate [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 996 1,422
Impaired Loans [Member] | Construction and Land Development [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 547 547
Impaired Loans [Member] | Commercial and Industrial [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans 519 213
Impaired Loans [Member] | Consumer and Other [Member] | All Other Loans [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total loans $ 109 $ 12
v3.10.0.1
Loans and Allowance for Loan Losses - ALL by Loan Classification (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses $ 7,073,937 $ 5,860,291 $ 5,105,000
All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 7,055,000 5,844,000  
Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 19,000 16,000  
Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 6,720,000 5,399,000  
Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 335,000 445,000  
Commercial Real Estate [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 3,135,000 2,465,000 2,369,000
Commercial Real Estate [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 19,000 16,000  
Commercial Real Estate [Member] | Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 3,116,000 2,444,000  
Commercial Real Estate [Member] | Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 5,000  
Consumer Real Estate [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 1,528,000 1,596,000 1,382,000
Consumer Real Estate [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 0  
Consumer Real Estate [Member] | Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 1,491,000 1,340,000  
Consumer Real Estate [Member] | Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 37,000 256,000  
Construction and Land Development [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 744,000 521,000 717,000
Construction and Land Development [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 0  
Construction and Land Development [Member] | Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 744,000 521,000  
Construction and Land Development [Member] | Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 0  
Commercial and Industrial [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 1,367,000 1,062,000 520,000
Commercial and Industrial [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 0  
Commercial and Industrial [Member] | Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 1,145,000 890,000  
Commercial and Industrial [Member] | Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 222,000 172,000  
Consumer and Other [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 300,000 216,000 $ 117,000
Consumer and Other [Member] | Purchased Credit Impaired Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 0 0  
Consumer and Other [Member] | Performing [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses 224,000 204,000  
Consumer and Other [Member] | Impaired Loans [Member] | All Other Loans [Member]      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Allowance for loan losses $ 76,000 $ 12,000  
v3.10.0.1
Loans and Allowance for Loan Losses - ALL Roll Forward (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance $ 5,860,291 $ 5,105,000 $ 5,105,000
Loans charged off (242,000)   (276,000)
Recoveries of loans charged off 151,000   248,000
Provision (reallocation) charged to expense 1,305,397 310,482 783,000
Ending balance 7,073,937   5,860,291
Commercial Real Estate [Member]      
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance 2,465,000 2,369,000 2,369,000
Loans charged off (38,000)   0
Recoveries of loans charged off 0   8,000
Provision (reallocation) charged to expense 708,000   88,000
Ending balance 3,135,000   2,465,000
Consumer Real Estate [Member]      
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance 1,596,000 1,382,000 1,382,000
Loans charged off (25,000)   (111,000)
Recoveries of loans charged off 50,000   99,000
Provision (reallocation) charged to expense (93,000)   226,000
Ending balance 1,528,000   1,596,000
Construction and Land Development [Member]      
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance 521,000 717,000 717,000
Loans charged off 0   0
Recoveries of loans charged off 5,000   13,000
Provision (reallocation) charged to expense 218,000   (209,000)
Ending balance 744,000   521,000
Commercial and Industrial [Member]      
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance 1,062,000 520,000 520,000
Loans charged off (78,000)   (24,000)
Recoveries of loans charged off 56,000   67,000
Provision (reallocation) charged to expense 327,000   499,000
Ending balance 1,367,000   1,062,000
Consumer and Other [Member]      
Allowance for Loan and Lease Losses [Roll Forward]      
Beginning balance 216,000 $ 117,000 117,000
Loans charged off (101,000)   (141,000)
Recoveries of loans charged off 40,000   61,000
Provision (reallocation) charged to expense 145,000   179,000
Ending balance $ 300,000   $ 216,000
v3.10.0.1
Loans and Allowance for Loan Losses - Loan Risk Rating (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Financing Receivable, Recorded Investment [Line Items]    
Total loans $ 1,575,435 $ 1,323,258
Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 745,864 642,988
Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 355,876 293,457
Construction and Land Development [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 179,431 135,409
Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 279,771 238,087
Consumer and Other [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 14,493 13,317
Non PCI Loans [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,542,777 1,290,464
Non PCI Loans [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,531,710 1,270,417
Non PCI Loans [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 5,992 13,668
Non PCI Loans [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,507 3,852
Non PCI Loans [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 3,529 2,241
Non PCI Loans [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 39 286
Non PCI Loans [Member] | Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 727,390 625,085
Non PCI Loans [Member] | Commercial Real Estate [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 724,763 616,028
Non PCI Loans [Member] | Commercial Real Estate [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,604 7,673
Non PCI Loans [Member] | Commercial Real Estate [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 1,006
Non PCI Loans [Member] | Commercial Real Estate [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,023 378
Non PCI Loans [Member] | Commercial Real Estate [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 0
Non PCI Loans [Member] | Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 348,889 286,007
Non PCI Loans [Member] | Consumer Real Estate [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 343,407 279,464
Non PCI Loans [Member] | Consumer Real Estate [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 3,168 2,543
Non PCI Loans [Member] | Consumer Real Estate [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 949 2,627
Non PCI Loans [Member] | Consumer Real Estate [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,365 1,159
Non PCI Loans [Member] | Consumer Real Estate [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 214
Non PCI Loans [Member] | Construction and Land Development [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 173,741 130,289
Non PCI Loans [Member] | Construction and Land Development [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 172,972 129,359
Non PCI Loans [Member] | Construction and Land Development [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 62 383
Non PCI Loans [Member] | Construction and Land Development [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 160 0
Non PCI Loans [Member] | Construction and Land Development [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 547 547
Non PCI Loans [Member] | Construction and Land Development [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 0
Non PCI Loans [Member] | Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 278,950 237,229
Non PCI Loans [Member] | Commercial and Industrial [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 277,384 233,942
Non PCI Loans [Member] | Commercial and Industrial [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,035 3,007
Non PCI Loans [Member] | Commercial and Industrial [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 35 64
Non PCI Loans [Member] | Commercial and Industrial [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 483 157
Non PCI Loans [Member] | Commercial and Industrial [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 13 59
Non PCI Loans [Member] | Consumer and Other [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 13,807 11,854
Non PCI Loans [Member] | Consumer and Other [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 13,184 11,624
Non PCI Loans [Member] | Consumer and Other [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 123 62
Non PCI Loans [Member] | Consumer and Other [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 363 155
Non PCI Loans [Member] | Consumer and Other [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 111 0
Non PCI Loans [Member] | Consumer and Other [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 26 13
Purchased Credit Impaired Loans [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 32,658 32,794
Purchased Credit Impaired Loans [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 23,800 23,558
Purchased Credit Impaired Loans [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 3,084 2,637
Purchased Credit Impaired Loans [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 2,854 538
Purchased Credit Impaired Loans [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 2,920 5,308
Purchased Credit Impaired Loans [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 753
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 18,474 17,903
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 14,494 14,386
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,513 261
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,393 0
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 1,074 3,084
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 172
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 6,987 7,450
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 4,558 4,151
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 898 1,345
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 575 456
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 956 1,192
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 306
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 5,690 5,120
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 3,973 4,134
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 653 649
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 716 0
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 348 337
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 0
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 821 858
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 210 68
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 2 120
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 153 58
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 456 588
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 0 24
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 686 1,463
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member] | Pass [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 565 819
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member] | Watch [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 18 262
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member] | Special Mention [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 17 24
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member] | Substandard [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans 86 107
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member] | Doubtful [Member]    
Financing Receivable, Recorded Investment [Line Items]    
Total loans $ 0 $ 251
v3.10.0.1
Loans and Allowance for Loan Losses - Past Due Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual $ 1,538 $ 1,764
Total Past Due and NonAccrual 6,773 5,269
Current Loans 1,536,004 1,285,195
Total loans 1,575,435 1,323,258
Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual 6 128
Total Past Due and NonAccrual 2,716 1,373
Current Loans 724,674 623,712
Total loans 745,864 642,988
Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual 463 991
Total Past Due and NonAccrual 1,240 1,987
Current Loans 347,649 284,020
Total loans 355,876 293,457
Construction and Land Development [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual 547 547
Total Past Due and NonAccrual 1,288 938
Current Loans 172,453 129,351
Total loans 179,431 135,409
Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual 430 85
Total Past Due and NonAccrual 1,190 502
Current Loans 277,760 236,727
Total loans 279,771 238,087
Consumer and Other [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Nonaccrual 92 13
Total Past Due and NonAccrual 339 469
Current Loans 13,468 11,385
Total loans 14,493 13,317
Purchased Credit Impaired Loans [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 32,658 32,794
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 18,474 17,903
Purchased Credit Impaired Loans [Member] | Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 6,987 7,450
Purchased Credit Impaired Loans [Member] | Construction and Land Development [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 5,690 5,120
Purchased Credit Impaired Loans [Member] | Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 821 858
Purchased Credit Impaired Loans [Member] | Consumer and Other [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Total loans 686 1,463
30-89 Days Past Due and Accruing [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 4,568 1,996
30-89 Days Past Due and Accruing [Member] | Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 2,628 517
30-89 Days Past Due and Accruing [Member] | Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 701 963
30-89 Days Past Due and Accruing [Member] | Construction and Land Development [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 403 65
30-89 Days Past Due and Accruing [Member] | Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 647 286
30-89 Days Past Due and Accruing [Member] | Consumer and Other [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 189 165
Past Due 90 Days or More and Accruing [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 667 1,509
Past Due 90 Days or More and Accruing [Member] | Commercial Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 82 728
Past Due 90 Days or More and Accruing [Member] | Consumer Real Estate [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 76 33
Past Due 90 Days or More and Accruing [Member] | Construction and Land Development [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 338 326
Past Due 90 Days or More and Accruing [Member] | Commercial and Industrial [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due 113 131
Past Due 90 Days or More and Accruing [Member] | Consumer and Other [Member]    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Recorded investment, past due $ 58 $ 291
v3.10.0.1
Loans and Allowance for Loan Losses - Impaired Loan Portfolio (Details) - USD ($)
$ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Financing Receivable, Impaired [Line Items]    
Impaired loans with a valuation allowance, Related Allowance $ 354 $ 461
Total impaired loans, Recorded Investment 3,232 2,657
Total impaired loans, Unpaid Principal Balance 3,390 2,826
Total impaired loans, Average Recorded Investment 2,963 2,005
Total impaired loans, Interest Income Recognized 51 129
Non PCI Loans [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 2,471 1,427
Impaired loans without a valuation allowance, Unpaid Principal Balance 2,512 1,462
Impaired loans without a valuation allowance, Average Recorded Investment 1,979 1,277
Impaired loans without a valuation allowance, Interest Income Recognized 30 63
Impaired loans with a valuation allowance, Recorded Investment 734 1,214
Impaired loans with a valuation allowance, Unpaid Principal Balance 751 1,241
Impaired loans with a valuation allowance, Related Allowance 335 445
Impaired loans with a valuation allowance, Average Recorded Investment 979 725
Impaired loans with a valuation allowance, Interest Income Recognized 18 50
Non PCI Loans [Member] | Commercial Real Estate [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 1,034 424
Impaired loans without a valuation allowance, Unpaid Principal Balance 1,043 454
Impaired loans without a valuation allowance, Average Recorded Investment 670 204
Impaired loans without a valuation allowance, Interest Income Recognized 15 44
Impaired loans with a valuation allowance, Recorded Investment 0 23
Impaired loans with a valuation allowance, Unpaid Principal Balance 0 23
Impaired loans with a valuation allowance, Related Allowance 0 5
Impaired loans with a valuation allowance, Average Recorded Investment 8 5
Impaired loans with a valuation allowance, Interest Income Recognized 0 1
Non PCI Loans [Member] | Consumer Real Estate [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 793 415
Impaired loans without a valuation allowance, Unpaid Principal Balance 823 420
Impaired loans without a valuation allowance, Average Recorded Investment 699 401
Impaired loans without a valuation allowance, Interest Income Recognized 12 16
Impaired loans with a valuation allowance, Recorded Investment 203 1,007
Impaired loans with a valuation allowance, Unpaid Principal Balance 216 1,033
Impaired loans with a valuation allowance, Related Allowance 37 256
Impaired loans with a valuation allowance, Average Recorded Investment 642 601
Impaired loans with a valuation allowance, Interest Income Recognized 11 38
Non PCI Loans [Member] | Construction and Land Development [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 547 547
Impaired loans without a valuation allowance, Unpaid Principal Balance 547 547
Impaired loans without a valuation allowance, Average Recorded Investment 547 628
Impaired loans without a valuation allowance, Interest Income Recognized 0 0
Impaired loans with a valuation allowance, Recorded Investment 0 0
Impaired loans with a valuation allowance, Unpaid Principal Balance 0 0
Impaired loans with a valuation allowance, Related Allowance 0 0
Impaired loans with a valuation allowance, Average Recorded Investment 0 0
Impaired loans with a valuation allowance, Interest Income Recognized 0 0
Non PCI Loans [Member] | Commercial and Industrial [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 81 41
Impaired loans without a valuation allowance, Unpaid Principal Balance 83 41
Impaired loans without a valuation allowance, Average Recorded Investment 58 44
Impaired loans without a valuation allowance, Interest Income Recognized 3 3
Impaired loans with a valuation allowance, Recorded Investment 438 172
Impaired loans with a valuation allowance, Unpaid Principal Balance 440 172
Impaired loans with a valuation allowance, Related Allowance 222 172
Impaired loans with a valuation allowance, Average Recorded Investment 257 117
Impaired loans with a valuation allowance, Interest Income Recognized 5 10
Non PCI Loans [Member] | Consumer and Other [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans without a valuation allowance, Recorded Investment 16 0
Impaired loans without a valuation allowance, Unpaid Principal Balance 16 0
Impaired loans without a valuation allowance, Average Recorded Investment 5 0
Impaired loans without a valuation allowance, Interest Income Recognized 0 0
Impaired loans with a valuation allowance, Recorded Investment 93 12
Impaired loans with a valuation allowance, Unpaid Principal Balance 95 13
Impaired loans with a valuation allowance, Related Allowance 76 12
Impaired loans with a valuation allowance, Average Recorded Investment 72 2
Impaired loans with a valuation allowance, Interest Income Recognized 2 1
Purchased Credit Impaired Loans [Member] | Commercial Real Estate [Member]    
Financing Receivable, Impaired [Line Items]    
Impaired loans with a valuation allowance, Recorded Investment 27 16
Impaired loans with a valuation allowance, Unpaid Principal Balance 127 123
Impaired loans with a valuation allowance, Related Allowance 19 16
Impaired loans with a valuation allowance, Average Recorded Investment 5 3
Impaired loans with a valuation allowance, Interest Income Recognized $ 3 $ 16
v3.10.0.1
Loans and Allowance for Loan Losses - Purchased Credit Impaired Loans (Details) - Purchased Credit Impaired Loans [Member] - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans $ 46,100 $ 43,577
Less remaining purchase discount (13,442) (10,783)
Total loans, net of purchase discount 32,658 32,794
Less: Allowance for loan losses (19) (16)
Carrying amount, net of allowance 32,639 32,778
Commercial Real Estate [Member]    
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans 25,700 23,366
Consumer Real Estate [Member]    
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans 9,620 10,764
Construction and Land Development [Member]    
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans 6,793 6,285
Commercial and Industrial [Member]    
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans 2,973 1,452
Consumer and Other [Member]    
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]    
Total loans $ 1,014 $ 1,710
v3.10.0.1
Loans and Allowance for Loan Losses - Accretable Yield Roll Forward (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]        
Accretable yield $ 1,292   $ 1,292  
Purchased Credit Impaired Loans [Member]        
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]        
Accretable yield, beginning of period 7,780 $ 8,482 9,287 $ 8,950
Additions 1,292 0 1,292 0
Accretion income (1,928) (973) (3,029) (1,670)
Reclassification to accretable 120 366 382 610
Other changes, net (58) 600 (726) 585
Accretable yield $ 7,206 $ 8,475 $ 7,206 $ 8,475
v3.10.0.1
Loans and Allowance for Loan Losses - Southern Community Bank Purchased Credit Impaired Loans (Details)
$ in Thousands
Jun. 30, 2018
USD ($)
Receivables [Abstract]  
Contractual principal and interest at acquisition $ 15,133
Nonaccretable difference 5,302
Expected cash flows at acquisition 9,831
Accretable yield 1,292
Fair value of purchased credit impaired loans $ 8,539
v3.10.0.1
Commitments and Contingent Liabilities (Details)
$ in Millions
6 Months Ended
Jun. 30, 2018
USD ($)
Line of Credit Facility [Line Items]  
Commitments to extend credit $ 299.6
Standby letters of credit $ 3.7
Standby Letters of Credit [Member]  
Line of Credit Facility [Line Items]  
Standby letter of credit term, or less 2 years
v3.10.0.1
Fair Value Disclosures - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value $ 156,577,182 $ 151,944,567
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 156,577,000 151,944,000
Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
U.S. Government-sponsored enterprises (GSEs) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 28,128,000 25,776,000
U.S. Government-sponsored enterprises (GSEs) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
U.S. Government-sponsored enterprises (GSEs) [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 28,128,000 25,776,000
U.S. Government-sponsored enterprises (GSEs) [Member] | Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Mortgage-backed securities [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 111,954,000 116,215,000
Mortgage-backed securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Mortgage-backed securities [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 111,954,000 116,215,000
Mortgage-backed securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Other debt securities [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 911,000 950,000
Other debt securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Other debt securities [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 911,000 950,000
Other debt securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Municipal securities [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 15,584,000 9,003,000
Municipal securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 0 0
Municipal securities [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value 15,584,000 9,003,000
Municipal securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Securities available-for-sale, at fair value $ 0 $ 0
v3.10.0.1
Fair Value Disclosures - Assets and Liabilities Measured on Nonrecurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Impaired loans $ 407 $ 769
Foreclosed assets 3,524 3,254
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Impaired loans 0 0
Foreclosed assets 0 0
Significant Other Observable Inputs (Level 2) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Impaired loans 0 0
Foreclosed assets 0 0
Significant Other Unobservable Inputs (Level 3) [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Impaired loans 407 769
Foreclosed assets $ 3,524 $ 3,254
v3.10.0.1
Fair Value Disclosures Fair Value Disclosures - Unobservable Inputs (Details)
Jun. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Impaired loans $ 407,000 $ 769,000
Foreclosed assets 3,524,239 3,254,392
Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Impaired loans $ 407,000 $ 769,000
Weighted Average [Member] | Level 3 [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Impaired loans, measurement input 0.47 0.36
Foreclosed assets, measurement input 0.19 0.18
v3.10.0.1
Fair Value Disclosures - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Assets:    
Securities available-for-sale, at fair value $ 156,577,182 $ 151,944,567
Restricted investments 8,272,600 6,430,700
Liabilities:    
Noninterest-bearing demand deposits 301,317,854 220,520,287
Interest-bearing demand deposits 246,942,432 231,643,508
Time deposits 535,879,278 442,774,094
Level 1 [Member]    
Assets:    
Cash and cash equivalents 170,235,000 113,027,000
Securities available-for-sale, at fair value 0 0
Level 2 [Member]    
Assets:    
Securities available-for-sale, at fair value 156,577,000 151,944,000
Liabilities:    
Noninterest-bearing demand deposits 301,318,000 220,520,000
Interest-bearing demand deposits 246,942,000 231,644,000
Money Market and Savings deposits 632,518,000 543,645,000
Time deposits 537,006,000 443,547,000
Securities sold under agreements to repurchase 18,635,000 24,055,000
Federal Home Loan Bank advances and other borrowings 72,040,000 43,600,000
Level 3 [Member]    
Assets:    
Securities available-for-sale, at fair value 0 0
Loans, net 1,569,916,000 1,292,303,000
Carrying Amount [Member]    
Assets:    
Cash and cash equivalents 170,235,000 113,027,000
Securities available-for-sale, at fair value 156,577,000 151,944,000
Restricted investments 8,273,000 6,431,000
Loans, net 1,568,361,000 1,317,398,000
Liabilities:    
Noninterest-bearing demand deposits 301,318,000 220,520,000
Interest-bearing demand deposits 246,942,000 231,644,000
Money Market and Savings deposits 632,518,000 543,645,000
Time deposits 535,879,000 442,774,000
Securities sold under agreements to repurchase 18,635,000 24,055,000
Federal Home Loan Bank advances and other borrowings 72,040,000 43,600,000
Estimated Fair Value [Member]    
Assets:    
Cash and cash equivalents 170,235,000 113,027,000
Securities available-for-sale, at fair value 156,577,000 151,944,000
Loans, net 1,569,916,000 1,292,303,000
Liabilities:    
Noninterest-bearing demand deposits 301,318,000 250,520,000
Interest-bearing demand deposits 246,942,000 231,644,000
Money Market and Savings deposits 632,518,000 543,645,000
Time deposits 537,006,000 443,547,000
Securities sold under agreements to repurchase 18,635,000 24,055,000
Federal Home Loan Bank advances and other borrowings $ 72,040,000 $ 43,600,000
v3.10.0.1
Small Business Lending Fund - Narrative (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Mar. 06, 2017
Jan. 30, 2017
Feb. 04, 2016
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Class of Stock [Line Items]                    
Preferred stock, shares issued (in shares)       0   0       0
Preferred stock, dividend rate (as a percent)     9.00%           1.00%  
Preferred stock dividends       $ 0 $ 0 $ 0 $ 195,000 $ 1,022,000 $ 120,000  
Proceeds from issuance of common stock           1,079,979 37,591,479      
Payments for redemption of preferred stock $ 12,000,000                  
Payment of dividends on preferred stock $ 195,000         $ 0 $ 195,000      
SBLF Program [Member]                    
Class of Stock [Line Items]                    
Preferred stock, shares issued (in shares)                 12,000  
Share price (in dollars per share)                 $ 1,000  
Common Stock [Member]                    
Class of Stock [Line Items]                    
Issuance of common stock in public offering (in shares)   2,010,084                
Proceeds from issuance of common stock   $ 33,200,000                
v3.10.0.1
Related Party Transactions (Details) - Director [Member]
Mar. 01, 2018
director
$ / shares
shares
Related Party Transaction [Line Items]  
Number of shares sold (in shares) 21,250
Number of directors | director 2
Price per share (in dollars per share) | $ / shares $ 21.70
Steven B. Tucker [Member]  
Related Party Transaction [Line Items]  
Stock purchased (in shares) 6,250
W. Miller Welborn [Member]  
Related Party Transaction [Line Items]  
Stock purchased (in shares) 15,000
v3.10.0.1
Subsequent Events - Narrative (Details) - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 27, 2018
Jun. 26, 2018
May 01, 2018
Dec. 31, 2017
Subsequent Event [Line Items]          
Common Stock, Shares, Outstanding 12,704,581       11,152,561
Foothills Bancorp [Member]          
Subsequent Event [Line Items]          
Cash paid upon conversion (in dollars per share)   $ 1.75      
Common shares converted (in shares)   0.666      
Common Stock, Shares, Outstanding     1,776,925    
Termination fee $ 1,450,000        
Tennessee Bancshares [Member]          
Subsequent Event [Line Items]          
Common shares converted (in shares)       0.8065