Financing Receivables [Text Block] | Note 6 Loans and the Allowance for Loan Losses Loans receivable at March 31, 2021 December 31, 2020 March 31, December 31, 2021 2020 (Dollars in thousands) Real estate loans: Construction and land $ 418,234 $ 403,065 Farmland 52,861 55,883 1-4 family residential 460,907 468,650 Multi-family residential 77,390 95,707 Nonfarm nonresidential 966,416 971,603 Commercial 962,099 886,325 Consumer 104,071 110,122 Total loans held for investment 3,041,978 2,991,355 Less: Allowance for loan losses (25,251 ) (22,024 ) Net loans $ 3,016,727 $ 2,969,331 Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans accounted for $385.8 million and $313.9 million of the commercial loan portfolio as of March 31, 2021 December 31, 2020, March 31, 2021 December 31, 2020, The performing 1 4 March 31, 2021 December 31, 2020. Net deferred loan origination fees were $14.9 million and $10.2 million at March 31, 2021 December 31, 2020, March 31, 2021 December 31, 2020, March 31, 2021 December 31, 2020, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not March 31, 2021 December 31, 2020, March 31, 2021 December 31, 2020, 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 March 31, 2021 March 31, 2021 310 30, Loans and Debt Securities Acquired with Deteriorated Credit Quality 310 30” not 310 30 Total loans held for investment at December 31, 2020 December 31, 2020 310 30 not 310 30 The following tables set forth, as of March 31, 2021 December 31, 2020, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable March 31, 2021 (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 $ 3,584 $ 600 $ 3,453 $ 818 $ 7,369 $ 5,018 $ 1,182 $ 22,024 Charge-offs - - (134 ) - (20 ) (87 ) (68 ) (309 ) Recoveries - 2 23 - 98 24 30 177 Provision 343 (119 ) 465 (162 ) 395 2,524 (87 ) 3,359 Ending Balance $ 3,927 $ 483 $ 3,807 $ 656 $ 7,842 $ 7,479 $ 1,057 $ 25,251 Ending Balance: Individually evaluated for impairment $ 26 $ 3 $ 117 $ - $ 129 $ 553 $ 103 $ 931 Collectively evaluated for impairment $ 3,901 $ 480 $ 3,690 $ 656 $ 7,713 $ 6,926 $ 954 $ 24,320 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 418,234 $ 52,861 $ 460,907 $ 77,390 $ 966,416 $ 962,099 $ 104,071 $ 3,041,978 Ending Balance: Individually evaluated for impairment $ 958 $ 236 $ 3,186 $ - $ 3,905 $ 6,392 $ 312 $ 14,989 Collectively evaluated for impairment $ 416,249 $ 52,558 $ 431,898 $ 77,390 $ 934,545 $ 950,942 $ 102,175 $ 2,965,757 Purchased Credit Impaired (1) $ 1,027 $ 67 $ 25,823 $ - $ 27,966 $ 4,765 $ 1,584 $ 61,232 ( 1 December 31, 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 (26 ) (2 ) (387 ) - (232 ) (849 ) (467 ) (1,963 ) Recoveries 10 - 53 - 12 203 150 428 Provision 1,732 373 1,899 592 3,707 2,250 882 11,435 Ending Balance $ 3,584 $ 600 $ 3,453 $ 818 $ 7,369 $ 5,018 $ 1,182 $ 22,024 Ending Balance: Individually evaluated for impairment $ 27 $ 93 $ 62 $ - $ 119 $ 609 $ 104 $ 1,014 Collectively evaluated for impairment $ 3,557 $ 507 $ 3,391 $ 818 $ 7,250 $ 4,409 $ 1,078 $ 21,010 Purchased Credit Impaired (1) $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 403,065 $ 55,883 $ 468,650 $ 95,707 $ 971,603 $ 886,325 $ 110,122 $ 2,991,355 Ending Balance: Individually evaluated for impairment $ 924 $ 299 $ 2,957 $ - $ 3,525 $ 5,517 $ 335 $ 13,557 Collectively evaluated for impairment $ 401,134 $ 55,516 $ 438,240 $ 95,707 $ 939,422 $ 875,611 $ 107,908 $ 2,913,538 Purchased Credit Impaired (1) $ 1,007 $ 68 $ 27,453 $ - $ 28,656 $ 5,197 $ 1,879 $ 64,260 ( 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 1 4 Multi-family residential loans are generally originated to provide permanent financing for multi-family 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 March 31, 2021 December 31, 2020, Credit Quality Indicators March 31, 2021 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 414,941 $ 809 $ 1,526 $ 958 $ 418,234 Farmland 50,933 1,625 - 303 52,861 1-4 family residential 440,800 10,074 5,343 4,690 460,907 Multi-family residential 77,055 308 27 - 77,390 Nonfarm nonresidential 944,976 11,940 3,287 6,213 966,416 Commercial 933,997 17,311 5,975 4,816 962,099 Consumer 101,881 1,255 460 475 104,071 Total $ 2,964,583 $ 43,322 $ 16,618 $ 17,455 $ 3,041,978 December 31, 2020 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 400,027 $ 912 $ 1,202 $ 924 $ 403,065 Farmland 53,874 1,642 - 367 55,883 1-4 family residential 450,702 9,290 4,913 3,745 468,650 Multi-family residential 95,359 320 28 - 95,707 Nonfarm nonresidential 949,245 12,810 3,473 6,075 971,603 Commercial 859,851 16,832 7,325 2,317 886,325 Consumer 107,449 1,970 229 474 110,122 Total $ 2,916,507 $ 43,776 $ 17,170 $ 13,902 $ 2,991,355 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 March 31, 2021 December 31, 2020, 90 March 31, 2021 December 31, 2020, 90 The following tables provide an analysis of the aging of loans and leases as of March 31, 2021 December 31, 2020. not 90 Aged Analysis of Past Due Loans Receivable March 31, 2021 (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 $ 530 $ 526 $ 1,008 $ 2,064 $ 416,170 $ 418,234 $ 73 Farmland - - 142 142 52,719 52,861 - 1-4 family residential 2,929 621 2,268 5,818 455,089 460,907 756 Multi-family residential - - - - 77,390 77,390 - Nonfarm nonresidential 846 36 2,544 3,426 962,990 966,416 418 Commercial 769 473 3,977 5,219 956,880 962,099 228 Consumer 140 60 240 440 103,631 104,071 4 Total $ 5,214 $ 1,716 $ 10,179 $ 17,109 $ 3,024,869 $ 3,041,978 $ 1,479 December 31, 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 $ 874 $ 75 $ 972 $ 1,921 $ 401,144 $ 403,065 $ 72 Farmland - 11 289 300 55,583 55,883 - 1-4 family residential 3,162 1,160 1,927 6,249 462,401 468,650 603 Multi-family residential - - - - 95,707 95,707 - Nonfarm nonresidential 2,651 1,049 2,514 6,214 965,389 971,603 315 Commercial 2,618 549 1,925 5,092 881,233 886,325 511 Consumer 389 33 283 705 109,417 110,122 22 Total $ 9,694 $ 2,877 $ 7,910 $ 20,481 $ 2,970,874 $ 2,991,355 $ 1,523 The following is a summary of information pertaining to impaired loans as of March 31, 2021 December 31, 2020. three March 31, 2021 December 31, 2020, March 31, 2021 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ 26 $ 27 $ 26 $ 18 Farmland 19 21 3 49 1-4 family residential 518 545 117 365 Multi-family residential - - - - Nonfarm nonresidential 445 446 129 777 Other Loans: - Commercial 1,337 1,449 553 1,998 Consumer 131 153 103 124 Total $ 2,476 $ 2,641 $ 931 $ 3,331 With no allowance recorded: Real Estate Loans: Construction and land $ 932 $ 975 $ - $ 926 Farmland 217 220 - 226 1-4 family residential 2,668 3,405 - 2,813 Multi-family residential - - - - Nonfarm nonresidential 3,460 3,948 - 3,405 Other Loans: Commercial 5,055 5,091 - 4,499 Consumer 181 217 - 192 Total $ 12,513 $ 13,856 $ - $ 12,061 Total Impaired Loans: Real Estate Loans: Construction and land $ 958 $ 1,002 $ 26 $ 944 Farmland 236 241 3 275 1-4 family residential 3,186 3,950 117 3,178 Multi-family residential - - - - Nonfarm nonresidential 3,905 4,394 129 4,182 Other Loans: Commercial 6,392 6,540 553 6,497 Consumer 312 370 103 316 Total $ 14,989 $ 16,497 $ 931 $ 15,392 December 31, 2020 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ 27 $ 27 $ 27 $ 2 Farmland 109 112 93 27 1-4 family residential 337 361 62 361 Multi-family residential - - - - Nonfarm nonresidential 457 457 119 652 Other Loans: Commercial 2,530 2,636 609 1,655 Consumer 133 145 104 158 Total $ 3,593 $ 3,738 $ 1,014 $ 2,855 With no allowance recorded: Real Estate Loans: Construction and land $ 897 $ 939 $ - $ 520 Farmland 190 197 - 208 1-4 family residential 2,620 3,388 - 3,091 Multi-family residential - - - - Nonfarm nonresidential 3,068 3,534 - 3,325 Other Loans: Commercial 2,987 3,017 - 3,569 Consumer 202 239 - 324 Total $ 9,964 $ 11,314 $ - $ 11,037 Total Impaired Loans: Real Estate Loans: Construction and land $ 924 $ 966 $ 27 $ 522 Farmland 299 309 93 235 1-4 family residential 2,957 3,749 62 3,452 Multi-family residential - - - - Nonfarm nonresidential 3,525 3,991 119 3,977 Other Loans: Commercial 5,517 5,653 609 5,224 Consumer 335 384 104 482 Total $ 13,557 $ 15,052 $ 1,014 $ 13,892 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 three March 31, 2021: Balance at December 31, 2020 $ 15,853 Transfers from non-accretable difference to accretable yield 2,333 Accretion (330 ) Changes in expected cash flows not affecting non-accretable differences (1,421 ) Balance at March 31, 2021 $ 16,435 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 March 31, 2021 December 31, 2020, 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 March 31, 2021 December 31, 2020. Modifications as of March 31, 2021: 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 $ 214 Nonfarm nonresidential 5 4,627 3,377 Other Loans: Commercial 7 5,150 2,644 Consumer 3 18 6 Total 19 $ 10,063 $ 6,241 Modifications as of December 31, 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 $ 215 Nonfarm nonresidential 5 4,627 4,204 Other Loans: Commercial 7 5,150 4,094 Consumer 3 18 8 Total 19 $ 10,063 $ 8,521 The Company had no troubled debt restructurings that had subsequently defaulted during the three March 31, 2021 one December 31, 2020. no three March 31, 2021, December 31, 2020, seven Through March 31, 2021, 2020. March 31, 2021, 4013 2021, none 19 March 31, 2021. Payment deferrals with an outstanding principal balance of $829.1 million had been granted as of December 31, 2020, 19 December 31, 2020, 4013 none 19 December 31, 2020. Accrued interest receivable of $8.0 million and $8.4 million was outstanding as of March 31, 2021 December 31, 2020, 19 |