Financing Receivables [Text Block] | Note 7 – Loans and the Allowance for Loan Losses – Loans receivable at December 31, 2019 2018 December 31, 2019 2018 (Dollars in thousands) Real estate loans: Construction and land $ 244,181 $ 211,054 Farmland 48,681 45,989 1-4 family residential 293,142 270,583 Multi-family residential 36,454 39,273 Nonfarm nonresidential 612,608 518,660 Commercial 390,398 363,640 Consumer 84,801 79,270 Total loans held for investment 1,710,265 1,528,469 Less: Allowance for loan losses (12,124 ) (11,220 ) Net loans $ 1,698,141 $ 1,517,249 The performing one four December 31, 2019 2018. Net deferred loan origination fees were $3.0 $1.7 December 31, 2019 2018, December 31, 2019 2018, $276,000 $858,000, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not $129.7 $147.0 December 31, 2019 2018, The Bank grants loans and extensions of credit to individuals and a variety of businesses and corporations located in its general market areas throughout 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 December 31, 2019 $180.0 December 31, 2019 310 30 $5.0 not 310 30 $177.1 $2.0 Total loans held for investment at December 31, 2018 $334.8 December 31, 2018 310 30 $10.7 not 310 30 $327.3 $3.2 The following tables set forth, as of December 31, 2019 2018, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable December 31, 2019 (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 $ 1,590 $ 104 $ 1,538 $ 236 $ 2,715 $ 4,453 $ 584 $ 11,220 Charge-offs (2 ) (2 ) (162 ) - (51 ) (1,556 ) (52 ) (1,825 ) Recoveries - - 14 - 4 41 64 123 Provision 280 127 498 (10 ) 1,214 476 21 2,606 Ending Balance $ 1,868 $ 229 $ 1,888 $ 226 $ 3,882 $ 3,414 $ 617 $ 12,124 Ending Balance: Individually evaluated for impairment $ - $ 4 $ 30 $ - $ 52 $ 421 $ 49 $ 556 Collectively evaluated for impairment $ 1,868 $ 225 $ 1,858 $ 226 $ 3,830 $ 2,993 $ 568 $ 11,568 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 244,181 $ 48,681 $ 293,142 $ 36,454 $ 612,608 $ 390,398 $ 84,801 $ 1,710,265 Ending Balance: Individually evaluated for impairment $ 397 $ 222 $ 2,531 $ - $ 4,101 $ 4,175 $ 421 $ 11,847 Collectively evaluated for impairment $ 243,784 $ 48,324 $ 290,549 $ 36,454 $ 603,891 $ 386,027 $ 84,380 $ 1,693,409 Purchased Credit Impaired (1) $ - $ 135 $ 62 $ - $ 4,616 $ 196 $ - $ 5,009 ( 1 December 31, 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 ) - (294 ) - - - (88 ) (472 ) Recoveries 398 - 18 - 13 28 80 537 Provision (139 ) 28 530 92 379 1,278 222 2,390 Ending Balance $ 1,590 $ 104 $ 1,538 $ 236 $ 2,715 $ 4,453 $ 584 $ 11,220 Ending Balance: Individually evaluated for impairment $ - $ - $ 96 $ - $ 47 $ 1,112 $ 25 $ 1,280 Collectively evaluated for impairment $ 1,590 $ 104 $ 1,442 $ 236 $ 2,668 $ 3,341 $ 559 $ 9,940 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 211,054 $ 45,989 $ 270,583 $ 39,273 $ 518,660 $ 363,640 $ 79,270 $ 1,528,469 Ending Balance: Individually evaluated for impairment $ 32 $ 112 $ 2,728 $ - $ 4,155 $ 5,208 $ 125 $ 12,360 Collectively evaluated for impairment $ 211,022 $ 45,713 $ 267,761 $ 39,273 $ 507,506 $ 354,985 $ 79,145 $ 1,505,405 Purchased Credit Impaired (1) $ - $ 164 $ 94 $ - $ 6,999 $ 3,447 $ - $ 10,704 ( 1 Portfolio Segment Risk Factors Construction and land include loans to small-to-midsized businesses to construct owner-user properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in our market areas. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and change in market trends. We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may Farmland loans are often for investments related to agricultural businesses and may One to four first second one four Multifamily residential loans are generally originated to provide permanent financing for multifamily residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property. Nonfarm nonresidential loans are extensions of credit secured by owner occupied and non-owner occupied collateral. Repayment is generally relied upon from the successful operations of the property. General economic conditions may Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion and development loans, borrowing base loans, letters of credit and other loan products, primarily in our target markets that are underwritten on the basis of the borrower’s ability to service the debt from income. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not may not Consumer loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans. The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any. 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 December 31, 2019 2018, Credit Quality Indicators December 31, 2019 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 241,519 $ 1,141 $ 1,124 $ 397 $ 244,181 Farmland 46,591 1,737 14 339 48,681 1-4 family residential 284,381 3,175 3,237 2,349 293,142 Multi-family residential 36,422 - 32 - 36,454 Nonfarm nonresidential 594,046 11,077 3,830 3,655 612,608 Commercial 374,500 9,219 4,854 1,825 390,398 Consumer 82,726 1,538 125 412 84,801 Total $ 1,660,185 $ 27,887 $ 13,216 $ 8,977 $ 1,710,265 December 31, 2018 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 209,027 $ 718 $ 1,277 $ 32 $ 211,054 Farmland 45,563 153 161 112 45,989 1-4 family residential 260,325 4,601 2,929 2,728 270,583 Multi-family residential 39,237 - 36 - 39,273 Nonfarm nonresidential 494,698 14,421 3,510 6,031 518,660 Commercial 347,839 5,690 7,448 2,663 363,640 Consumer 77,731 1,180 234 125 79,270 Total $ 1,474,420 $ 26,763 $ 15,595 $ 11,691 $ 1,528,469 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. As of December 31, 2019 2018, 90 $72,000 $1.9 December 31, 2019 2018, $9.0 $11.7 90 The following tables reflect certain information with respect to the loan portfolio delinquencies by loan class and amount as of December 31, 2019 2018. 90 Aged Analysis of Past Due Loans Receivable December 31, 2019 (Dollars in thousands) Recorded Greater Investment Over 30-59 Days 60-89 Days Than 90 Days Total Total Loans 90 Days Past Due Past Due Past Due Past Due Past Due Current Receivable and Still Accruing Real Estate Loans: Construction and land $ 483 $ 17 $ 379 $ 879 $ 243,302 $ 244,181 $ - Farmland 18 16 143 177 48,504 48,681 - 1-4 family residential 1,245 975 1,000 3,220 289,922 293,142 29 Multi-family residential 32 - - 32 36,422 36,454 - Nonfarm nonresidential 181 610 1,529 2,320 610,288 612,608 - Commercial 126 142 1,311 1,579 388,819 390,398 - Consumer 143 34 405 582 84,219 84,801 43 Total $ 2,228 $ 1,794 $ 4,767 $ 8,789 $ 1,701,476 $ 1,710,265 $ 72 December 31, 2018 (Dollars in thousands) Recorded Greater Investment Over 30-59 Days 60-89 Days Than 90 Days Total Total Loans 90 Days Past Due Past Due Past Due Past Due Past Due Current Receivable and Still Accruing Real Estate Loans: Construction and land $ 325 $ 13 $ 89 $ 427 $ 210,627 $ 211,054 $ 60 Farmland - 96 - 96 45,893 45,989 - 1-4 family residential 1,596 588 1,400 3,584 266,999 270,583 270 Multi-family residential 36 - - 36 39,237 39,273 - Nonfarm nonresidential 2,437 - 3,967 6,404 512,256 518,660 450 Commercial 328 287 3,241 3,856 359,784 363,640 1,038 Consumer 237 89 106 432 78,838 79,270 58 Total $ 4,959 $ 1,073 $ 8,803 $ 14,835 $ 1,513,634 $ 1,528,469 $ 1,876 Loan Receivables on Nonaccrual Status December 31, 2019 2018 (Dollars in thousands) Real Estate Loans: Construction and land $ 397 $ 32 Farmland 339 112 1-4 family residential 2,349 2,728 Multi-family residential - - Nonfarm nonresidential 3,655 6,031 Commercial 1,825 2,663 Consumer 412 125 Total $ 8,977 $ 11,691 The following is a summary of information pertaining to impaired loans as of December 31, 2019 2018. $292,000 $254,000 December 31, 2019 2018, December 31, 2019 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ - $ - $ - $ 1 Farmland 20 21 4 21 1-4 family residential 136 167 30 163 Multi-family residential - - - - Nonfarm nonresidential 721 738 52 601 Other Loans: Commercial 851 926 421 1,053 Consumer 120 123 49 116 Total $ 1,848 $ 1,975 $ 556 $ 1,955 With no allowance recorded: Real Estate Loans: Construction and land $ 397 $ 420 $ - $ 184 Farmland 202 207 - 177 1-4 family residential 2,395 3,041 - 2,531 Multi-family residential - - - - Nonfarm nonresidential 3,381 3,693 - 3,644 Other Loans: Commercial 3,323 4,173 - 4,157 Consumer 301 358 - 192 Total $ 9,999 $ 11,892 $ - $ 10,885 Total Impaired Loans: Real Estate Loans: Construction and land $ 397 $ 420 $ - $ 185 Farmland 222 228 4 198 1-4 family residential 2,531 3,208 30 2,694 Multi-family residential - - - - Nonfarm nonresidential 4,102 4,431 52 4,245 Other Loans: Commercial 4,174 5,099 421 5,210 Consumer 421 481 49 308 Total $ 11,847 $ 13,867 $ 556 $ 12,840 December 31, 2018 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ - $ - $ - $ 22 Farmland - - - - 1-4 family residential 363 451 96 303 Multi-family residential - - - - Nonfarm nonresidential 447 501 47 367 Other Loans: Commercial 1,883 2,935 1,112 547 Consumer 25 25 25 2 Total $ 2,718 $ 3,912 $ 1,280 $ 1,241 With no allowance recorded: Real Estate Loans: Construction and land $ 32 $ 56 $ - $ 15 Farmland 112 193 - 9 1-4 family residential 2,365 3,975 - 2,708 Multi-family residential - - - - Nonfarm nonresidential 3,708 3,833 - 5,240 Other Loans: Commercial 3,325 4,198 - 5,350 Consumer 100 144 - 261 Total $ 9,642 $ 12,399 $ - $ 13,583 Total Impaired Loans: Real Estate Loans: Construction and land $ 32 $ 56 $ - $ 37 Farmland 112 193 - 9 1-4 family residential 2,728 4,426 96 3,011 Multi-family residential - - - - Nonfarm nonresidential 4,155 4,334 47 5,607 Other Loans: Commercial 5,208 7,133 1,112 5,897 Consumer 125 169 25 263 Total $ 12,360 $ 16,311 $ 1,280 $ 14,824 The Company elected to account for certain loans acquired in business combinations as acquired impaired loans under ASC 310 30 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, 2017 $ 696 Carrying amount of purchased impaired credits acquired in MBI acquisition 5,798 Carrying amount of purchased impaired credits acquired in RSBI acquisition 4,533 Payments received, net of discounts realized (507 ) Purchased impaired credit participation interest sales proceeds, net of discount realized 210 Charge-offs (26 ) Carrying amount - December 31, 2018 10,704 Payments received, net of discounts realized (5,695 ) Carrying amount - December 31, 2019 $ 5,009 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 December 31, 2019 2018, 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 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 December 31, 2019 2018. Modifications as of December 31, 2019: 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 3 $ 235 $ 219 Nonfarm nonresidential 3 2,411 2,044 Other Loans: Commercial 6 5,914 2,755 Consumer 1 11 9 Total 13 $ 8,571 $ 5,027 Modifications as of December 31, 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 $ - $ - Nonfarm nonresidential 3 2,412 2,308 Other Loans: Commercial 6 5,914 3,512 Total 10 $ 8,326 $ 5,820 The Bank had $79,000 December 31, 2018 none December 31, 2019. |