Financing Receivables [Text Block] | Note 6 – Loans and the Allowance for Loan Losses – Loans receivable at September 30, 2018 December 31, 2017 September 30, December 31, 2018 2017 (Dollars in thousands) Real estate loans: Construction and land $ 196,404 $ 143,535 Farmland 26,882 10,480 1-4 family residential 234,690 157,505 Multi-family residential 22,109 20,717 Nonfarm nonresidential 432,306 337,699 Commercial 317,889 254,427 Consumer 67,679 50,921 Total loans held for investment 1,297,959 975,284 Less: Allowance for loan losses (10,273 ) (8,765 ) Net loans $ 1,287,686 $ 966,519 The performing 1 4 September 30, 2018 December 31, 2017. Net deferred loan origination fees were $1.4 $1.3 September 30, 2018 December 31, 2017, September 30, 2018 December 31, 2017, $159,000 $129,000, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which are not $129.2 $82.4 September 30, 2018 December 31, 2017, The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations in markets across Louisiana and Texas. Management segregates the loan portfolio into portfolio segments which is defined as the level at which the Bank develops and documents a systematic method for determining its allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans and, therefore, no not Loans acquired in business combinations were recorded at estimated fair value at the acquisition date with no Total loans held for investment at September 30, 2018 $163.3 September 30, 2018 310 30, Loans and Debt Securities Acquired with Deteriorated Credit Quality 310 30” $5.4 not 310 30 $160.6 $2.7 Total loans held for investment at December 31, 2017 $46.1 December 31, 2017 $696,000 $47.2 $1.8 The following tables set forth, as of September 30, 2018 December 31, 2017, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable September 30, 2018 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Real Estate: Construction Real Estate: 1-4 Family Multi-family Nonfarm and Land Farmland Residential Residential Nonresidential Commercial Consumer Total Allowance for credit losses: Beginning Balance $ 1,421 $ 76 $ 1,284 $ 144 $ 2,323 $ 3,147 $ 370 $ 8,765 Charge-offs (90 ) - (290 ) - - - (73 ) (453 ) Recoveries 398 - 11 - 13 25 63 510 Provision (95 ) 26 528 1 236 668 87 1,451 Ending Balance $ 1,634 $ 102 $ 1,533 $ 145 $ 2,572 $ 3,840 $ 447 $ 10,273 Ending Balance: Individually evaluated for impairment $ - $ - $ 105 $ - $ 54 $ 214 $ - $ 373 Collectively evaluated for impairment $ 1,634 $ 102 $ 1,428 $ 145 $ 2,518 $ 3,626 $ 447 $ 9,900 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 196,404 $ 26,882 $ 234,690 $ 22,109 $ 432,306 $ 317,889 $ 67,679 $ 1,297,959 Ending Balance: Individually evaluated for impairment $ 7 $ - $ 2,895 $ - $ 4,123 $ 5,377 $ 103 $ 12,505 Collectively evaluated for impairment $ 196,397 $ 26,882 $ 231,628 $ 22,109 $ 422,980 $ 312,512 $ 67,576 $ 1,280,084 Purchased Credit Impaired (1) $ - $ - $ 167 $ - $ 5,203 $ - $ - $ 5,370 ( 1 December 31, 2017 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Real Estate: Construction Real Estate: 1-4 Family Multi-family Nonfarm and Land Farmland Residential Residential Nonresidential Commercial Consumer Total Allowance for credit losses: Beginning balance $ 933 $ 75 $ 1,228 $ 172 $ 2,314 $ 3,039 $ 401 $ 8,162 Charge-offs (2 ) - (184 ) - (617 ) (2,945 ) (36 ) (3,784 ) Recoveries 1 - 48 - 23 40 38 150 Provision 489 1 192 (28 ) 603 3,013 (33 ) 4,237 Ending Balance $ 1,421 $ 76 $ 1,284 $ 144 $ 2,323 $ 3,147 $ 370 $ 8,765 Ending Balance: Individually evaluated for impairment $ 36 $ - $ 125 $ - $ 46 $ 329 $ - $ 536 Collectively evaluated for impairment $ 1,385 $ 76 $ 1,125 $ 144 $ 2,277 $ 2,818 $ 370 $ 8,195 Purchased Credit Impaired (1) $ - $ - $ 34 $ - $ - $ - $ - $ 34 Loans receivable: Ending Balance $ 143,535 $ 10,480 $ 157,505 $ 20,717 $ 337,699 $ 254,427 $ 50,921 $ 975,284 Ending Balance: Individually evaluated for impairment $ 92 $ - $ 2,817 $ - $ 5,831 $ 4,268 $ 441 $ 13,449 Collectively evaluated for impairment $ 143,443 $ 10,480 $ 154,480 $ 20,717 $ 331,380 $ 250,159 $ 50,480 $ 961,139 Purchased Credit Impaired (1) $ - $ - $ 208 $ - $ 488 $ - $ - $ 696 ( 1 Management further disaggregates the loan portfolio segments into classes of loans, which are based on the initial measurement of the loan, risk characteristics of the loan and the method for monitoring and assessing the credit risk of the loan. As of September 30, 2018 December 31, 2017, Credit Quality Indicators September 30, 2018 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 193,894 $ 1,208 $ 1,295 $ 7 $ 196,404 Farmland 26,880 2 - - 26,882 1-4 family residential 225,196 4,616 2,384 2,494 234,690 Multi-family residential 22,072 - 37 - 22,109 Nonfarm nonresidential 414,530 5,786 5,926 6,064 432,306 Commercial 303,204 3,960 8,052 2,673 317,889 Consumer 66,639 852 85 103 67,679 Total $ 1,252,415 $ 16,424 $ 17,779 $ 11,341 $ 1,297,959 December 31, 2017 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 141,128 $ 1,953 $ 362 $ 92 $ 143,535 Farmland 10,480 - - - 10,480 1-4 family residential 148,845 4,657 1,574 2,429 157,505 Multi-family residential 20,677 - 40 - 20,717 Nonfarm nonresidential 325,216 4,861 1,687 5,935 337,699 Commercial 228,157 20,681 1,951 3,638 254,427 Consumer 49,787 672 21 441 50,921 Total $ 924,290 $ 32,824 $ 5,635 $ 12,535 $ 975,284 The above classifications follow regulatory guidelines and can generally be described as follows: ● Pass loans are of satisfactory quality. ● Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values. ● Substandard loans have an existing specific and well defined weakness that may may ● Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable. The following tables reflect certain information with respect to the loan portfolio delinquencies by loan class and amount as of September 30, 2018 December 31, 2017. 90 Aged Analysis of Past Due Loans Receivable September 30, 2018 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Loans Receivable Recorded Investment Over 90 Days Past Due and Still Accruing Real Estate Loans: Construction and land $ 42 $ 20 $ 29 $ 91 $ 196,313 $ 196,404 $ 27 Farmland - - - - 26,882 26,882 - 1-4 family residential 1,251 356 1,175 2,782 231,908 234,690 122 Multi-family residential - - - - 22,109 22,109 - Nonfarm nonresidential 251 - 3,514 3,765 428,541 432,306 - Commercial 507 297 2,290 3,094 314,795 317,889 78 Consumer 119 71 107 297 67,382 67,679 29 Total $ 2,170 $ 744 $ 7,115 $ 10,029 $ 1,287,930 $ 1,297,959 $ 256 December 31, 2017 (Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Loans Receivable Recorded Investment Over 90 Days Past Due and Still Accruing Real Estate Loans: Construction and land $ - $ - $ 91 $ 91 $ 143,444 $ 143,535 $ - Farmland - - - - 10,480 10,480 - 1-4 family residential 470 319 939 1,728 155,777 157,505 73 Multi-family residential - - - - 20,717 20,717 - Nonfarm nonresidential 2,344 103 3,329 5,776 331,923 337,699 - Commercial - - 3,274 3,274 251,153 254,427 59 Consumer 6 - 367 373 50,548 50,921 - Total $ 2,820 $ 422 $ 8,000 $ 11,242 $ 964,042 $ 975,284 $ 132 The following is a summary of information pertaining to impaired loans as of September 30, 2018 December 31, 2017. $186,000 $257,000 nine September 30, 2018 2017, September 30, 2018 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ - $ - $ - $ 30 Farmland - - - - 1-4 family residential 372 452 105 289 Multi-family residential - - - - Nonfarm nonresidential 463 509 54 339 Other Loans: Commercial 378 427 214 428 Consumer - - - - Total $ 1,213 $ 1,388 $ 373 $ 1,086 With no allowance recorded: Real Estate Loans: Construction and land $ 7 $ 35 $ - $ 12 Farmland - - - - 1-4 family residential 2,523 3,018 - 2,728 Multi-family residential - - - - Nonfarm nonresidential 3,660 3,728 - 5,764 Other Loans: Commercial 4,999 6,857 - 5,689 Consumer 103 145 - 312 Total $ 11,292 $ 13,783 $ - $ 14,505 Total Impaired Loans: Real Estate Loans: Construction and land $ 7 $ 35 $ - $ 42 Farmland - - - - 1-4 family residential 2,895 3,470 105 3,017 Multi-family residential - - - - Nonfarm nonresidential 4,123 4,237 54 6,103 Other Loans: Commercial 5,377 7,284 214 6,117 Consumer 103 145 - 312 Total $ 12,505 $ 15,171 $ 373 $ 15,591 December 31, 2017 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ 90 $ 90 $ 36 $ 74 Farmland - - - - 1-4 family residential 491 540 125 787 Multi-family residential - - - - Nonfarm nonresidential 316 341 46 462 Other Loans: Commercial 539 572 329 502 Consumer - - - 5 Total $ 1,436 $ 1,543 $ 536 $ 1,830 With no allowance recorded: Real Estate Loans: Construction and land $ 3 $ 9 $ - $ 44 Farmland - - - - 1-4 family residential 2,325 2,744 - 2,188 Multi-family residential - - - - Nonfarm nonresidential 5,515 5,653 - 3,402 Other Loans: Commercial 3,729 5,581 - 5,898 Consumer 441 472 - 243 Total $ 12,013 $ 14,459 $ - $ 11,775 Total Impaired Loans: Real Estate Loans: Construction and land $ 93 $ 99 $ 36 $ 118 Farmland - - - - 1-4 family residential 2,816 3,284 125 2,975 Multi-family residential - - - - Nonfarm nonresidential 5,831 5,994 46 3,864 Other Loans: Commercial 4,268 6,153 329 6,400 Consumer 441 472 - 248 Total $ 13,449 $ 16,002 $ 536 $ 13,605 The Company elected to account for certain loans acquired in business combinations as acquired impaired loans under ASC 310 30 no The following table presents the changes in the carrying amount of the purchased impaired credits accounted for under ASC 310 30 Purchased Impaired Credits (Dollars in thousands) Carrying amount - December 31, 2016 $ 1,776 Payments received, net of discounts realized (924 ) Purchased impaired credit participation interest sales proceeds, net of discount realized 511 Charge-offs (667 ) Carrying amount - December 31, 2017 696 Carrying amount of purchased impaired credits acquired in MBI acquisition 4,814 Payments received, net of discounts realized (140 ) Carrying amount - September 30, 2018 $ 5,370 The Bank seeks to assist customers that are experiencing financial difficulty by renegotiating loans within lending regulations and guidelines. The Bank makes loan modifications, primarily utilizing internal renegotiation programs via direct customer contact, that manage customers’ debt exposures held only by the Bank. Additionally, the Bank makes loan modifications with customers who have elected to work with external renegotiation agencies and these modifications provide solutions to customers’ entire unsecured debt structures. During the periods ended September 30, 2018 December 31, 2017, Once modified in a troubled debt restructuring, a loan is generally considered impaired until its contractual maturity. At the time of the restructuring, the loan is evaluated for an asset-specific allowance for credit losses. The Bank continues to specifically reevaluate the loan in subsequent periods, regardless of the borrower’s performance under the modified terms. If a borrower subsequently defaults on the loan after it is restructured, the Bank provides an allowance for credit losses for the amount of the loan that exceeds the value of the related collateral. The following tables present informative data regarding troubled debt restructurings as of September 30, 2018 December 31, 2017. $3.3 December 31, 2017 $79,000 nine September 30, 2018. Modifications as of September 30, 2018: Pre-Modification Post-Modification Number Outstanding Outstanding of Recorded Recorded Contracts Investment Investment (Dollars in thousands) Troubled Debt Restructuring Real Estate Loans: 1-4 family residential 1 $ 524 $ 401 Nonfarm nonresidential 3 2,412 2,370 Other Loans: Commercial 7 5,924 3,602 Total 11 $ 8,860 $ 6,373 Modifications as of December 31, 2017: Pre-Modification Post-Modification Number Outstanding Outstanding of Recorded Recorded Contracts Investment Investment (Dollars in thousands) Troubled Debt Restructuring Real Estate Loans: 1-4 family residential 2 $ 703 $ 455 Other Loans: Commercial 4 4,498 2,605 Total 6 $ 5,201 $ 3,060 |