Financing Receivables [Text Block] | Note 6 – Loans and the Allowance for Loan Losses – Loans receivable at June 30, 2020 December 31, 2019 June 30, December 31, 2020 2019 (Dollars in thousands) Real estate loans: Construction and land $ 333,675 $ 244,181 Farmland 57,498 48,681 1-4 family residential 495,827 293,142 Multi-family residential 59,213 36,454 Nonfarm nonresidential 914,601 612,608 Commercial 1,026,596 390,398 Consumer 107,402 84,801 Total loans held for investment 2,994,812 1,710,265 Less: Allowance for loan losses (18,715 ) (12,124 ) Net loans $ 2,976,097 $ 1,698,141 Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans accounted for $389.9 million and $5.5 million of the commercial and consumer portfolios, respectively, as of June 30, 2020. The performing 1 4 June 30, 2020 December 31, 2019. Net deferred loan origination fees were $14.3 million and $3.0 million at June 30, 2020 December 31, 2019, June 30, 2020 June 30, 2020 December 31, 2019, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not June 30, 2020 December 31, 2019, 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 Total loans held for investment at June 30, 2020 June 30, 2020 310 30, Loans and Debt Securities Acquired with Deteriorated Credit Quality 310 30” not 310 30 Total loans held for investment at December 31, 2019 December 31, 2019 310 30 not 310 30 The following tables set forth, as of June 30, 2020 December 31, 2019, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable June 30, 2020 (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 $ 1,868 $ 229 $ 1,888 $ 226 $ 3,882 $ 3,414 $ 617 $ 12,124 Charge-offs (9 ) (2 ) (26 ) - - (187 ) (68 ) (292 ) Recoveries 9 - 3 - 1 31 29 73 Provision 611 300 1,396 275 2,384 1,392 452 6,810 Ending Balance $ 2,479 $ 527 $ 3,261 $ 501 $ 6,267 $ 4,650 $ 1,030 $ 18,715 Ending Balance: Individually evaluated for impairment $ - $ 3 $ 183 $ - $ 50 $ 427 $ 170 $ 833 Collectively evaluated for impairment $ 2,479 $ 524 $ 3,078 $ 501 $ 6,217 $ 4,223 $ 860 $ 17,882 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 333,675 $ 57,498 $ 495,827 $ 59,213 $ 914,601 $ 1,026,596 $ 107,402 $ 2,994,812 Ending Balance: Individually evaluated for impairment $ 424 $ 236 $ 4,732 $ - $ 5,171 $ 15,321 $ 717 $ 26,601 Collectively evaluated for impairment $ 332,279 $ 57,125 $ 456,468 $ 59,213 $ 882,774 $ 998,233 $ 104,002 $ 2,890,094 Purchased Credit Impaired (1) $ 972 $ 137 $ 34,627 $ - $ 26,656 $ 13,042 $ 2,683 $ 78,117 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 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. Within the commercial and consumer loans are 100% 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 June 30, 2020 December 31, 2019, Credit Quality Indicators June 30, 2020 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 325,167 $ 6,434 $ 1,650 $ 424 $ 333,675 Farmland 55,251 1,897 13 337 57,498 1-4 family residential 477,560 9,757 4,009 4,501 495,827 Multi-family residential 58,839 343 31 - 59,213 Nonfarm nonresidential 892,551 13,635 3,672 4,743 914,601 Commercial 999,861 10,898 4,994 10,843 1,026,596 Consumer 105,223 1,289 192 698 107,402 Total $ 2,914,452 $ 44,253 $ 14,561 $ 21,546 $ 2,994,812 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 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 provide an analysis of the aging of loans and leases as of June 30, 2020 December 31, 2019. not 90 Aged Analysis of Past Due Loans Receivable June 30, 2020 (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 $ 1,071 $ 156 $ 399 $ 1,626 $ 332,049 $ 333,675 $ 4 Farmland 65 - 337 402 57,096 57,498 - 1-4 family residential 1,958 150 2,414 4,522 491,305 495,827 277 Multi-family residential - - - - 59,213 59,213 - Nonfarm nonresidential 521 32 1,954 2,507 912,094 914,601 - Commercial 997 164 3,047 4,208 1,022,388 1,026,596 24 Consumer 165 69 456 690 106,712 107,402 12 Total $ 4,777 $ 571 $ 8,607 $ 13,955 $ 2,980,857 $ 2,994,812 $ 317 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 The following is a summary of information pertaining to impaired loans as of June 30, 2020 December 31, 2019. six June 30, 2020 December 31, 2019, June 30, 2020 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ - $ - $ - $ - Farmland 19 21 3 19 1-4 family residential 750 779 183 308 Multi-family residential - - - - Nonfarm nonresidential 1,139 1,140 50 658 Other Loans: Commercial 2,529 2,616 427 1,450 Consumer 251 254 170 176 Total $ 4,688 $ 4,810 $ 833 $ 2,611 With no allowance recorded: Real Estate Loans: Construction and land $ 424 $ 454 $ - $ 557 Farmland 217 223 - 217 1-4 family residential 3,981 4,766 - 3,401 Multi-family residential - - - - Nonfarm nonresidential 4,033 4,583 - 3,841 Other Loans: Commercial 12,792 12,946 - 6,380 Consumer 466 528 - 350 Total $ 21,913 $ 23,500 $ - $ 14,746 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 As discussed in Note 3, May 1, 2020. $893.3 no 310 10 310 20. May 1, 2020. 310 30. The following table presents the balances acquired on May 1, 2020 310 30. Purchased Impaired Credits (Dollars in thousands) Contractually required payments $ 133,621 Non-accretable difference (expected losses) (49,828 ) Cash flows expected to be collected at acquisition 83,793 Accretable yield (9,202 ) Basis in acquired loans at acquisition $ 74,591 The following is a summary of changes in the accretable difference for loans accounted for under ASC 310 30 six June 30, 2020: Balance at December 31, 2019 $ 1,489 Accretable difference relating to purchased impaired credits acquired in Pedestal acquisition 9,202 Accretion (958 ) Changes in expected cash flows not affecting non-accretable differences 116 Balance at June 30, 2020 $ 9,849 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 June 30, 2020 December 31, 2019, 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 June 30, 2020 December 31, 2019. no six June 30, 2020 December 31, 2019, Modifications as of June 30, 2020: 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 4 $ 268 $ 251 Nonfarm nonresidential 3 2,411 1,993 Other Loans: Commercial 7 5,150 4,287 Consumer 1 11 6 Total 15 $ 7,840 $ 6,537 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 For the six June 30, 2020, 19 not |