Financing Receivables [Text Block] | Note 6 Loans and the Allowance for Loan Losses Loans receivable at September 30, 2021 December 31, 2020 September 30, December 31, 2021 2020 (Dollars in thousands) Real estate loans: Construction and land $ 464,808 $ 403,065 Farmland 85,898 55,883 1-4 family residential 464,462 468,650 Multi-family residential 107,551 95,707 Nonfarm nonresidential 1,111,771 971,603 Commercial 723,077 886,325 Consumer and other 108,669 110,122 Total loans held for investment 3,066,236 2,991,355 Less: Allowance for loan losses (28,146 ) (22,024 ) Net loans $ 3,038,090 $ 2,969,331 Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans accounted for $9.7 million and $313.9 million of the commercial loan portfolio as of September 30, 2021 December 31, 2020, December 31, 2020. September 30, 2021, The performing 1 4 September 30, 2021 December 31, 2020. Net deferred loan origination fees were $6.2 million and $10.2 million at September 30, 2021 December 31, 2020, December 31, 2020, September 30, 2021 December 31, 2020, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not September 30, 2021 December 31, 2020, September 30, 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 September 30, 2021 September 30, 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 September 30, 2021 December 31, 2020, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable September 30, 2021 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Real Estate: Construction Real Estate: 1-4 Family Multi-family Nonfarm Consumer and Land Farmland Residential Residential Nonresidential Commercial and Other Total Allowance for credit losses: Beginning Balance $ 3,584 $ 600 $ 3,453 $ 818 $ 7,369 $ 5,018 $ 1,182 $ 22,024 Charge-offs - (1 ) (164 ) - (141 ) (680 ) (265 ) (1,251 ) Recoveries - 2 31 - 99 395 99 626 Provision 234 130 403 54 1,920 3,984 22 6,747 Ending Balance $ 3,818 $ 731 $ 3,723 $ 872 $ 9,247 $ 8,717 $ 1,038 $ 28,146 Ending Balance: Individually evaluated for impairment $ 25 $ - $ 116 $ - $ 88 $ 601 $ 3 $ 833 Collectively evaluated for impairment $ 3,793 $ 731 $ 3,607 $ 872 $ 9,159 $ 8,116 $ 1,035 $ 27,313 Purchased Credit Impaired $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 464,808 $ 85,898 $ 464,462 $ 107,551 $ 1,111,771 $ 723,077 $ 108,669 $ 3,066,236 Ending Balance: Individually evaluated for impairment $ 1,224 $ 85 $ 3,244 $ 287 $ 3,055 $ 5,773 $ 217 $ 13,885 Collectively evaluated for impairment $ 462,568 $ 85,812 $ 439,116 $ 107,264 $ 1,083,084 $ 711,785 $ 107,441 $ 2,997,070 Purchased Credit Impaired $ 1,016 $ 1 $ 22,102 $ - $ 25,632 $ 5,519 $ 1,011 $ 55,281 December 31, 2020 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Real Estate: Construction Real Estate: 1-4 Family Multi-family Nonfarm Consumer and Land Farmland Residential Residential Nonresidential Commercial and Other 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 $ - $ - $ - $ - $ - $ - $ - $ - 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 $ 1,007 $ 68 $ 27,453 $ - $ 28,656 $ 5,197 $ 1,879 $ 64,260 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 and other 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 September 30, 2021 December 31, 2020, Credit Quality Indicators September 30, 2021 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 461,427 $ 291 $ 1,883 $ 1,207 $ 464,808 Farmland 83,686 2,125 - 87 85,898 1-4 family residential 451,318 4,248 3,433 5,463 464,462 Multi-family residential 107,239 288 24 - 107,551 Nonfarm nonresidential 1,082,929 13,535 9,793 5,514 1,111,771 Commercial 704,053 7,521 4,193 7,310 723,077 Consumer and other 107,532 349 432 356 108,669 Total $ 2,998,184 $ 28,357 $ 19,758 $ 19,937 $ 3,066,236 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 and other 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 September 30, 2021 December 31, 2020, 90 September 30, 2021 December 31, 2020, 90 The following tables provide an analysis of the aging of loans and leases as of September 30, 2021 December 31, 2020. not 90 Aged Analysis of Past Due Loans Receivable September 30, 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 $ 473 $ 49 $ 840 $ 1,362 $ 463,446 $ 464,808 $ - Farmland 231 9 - 240 85,658 85,898 - 1-4 family residential 1,638 481 1,835 3,954 460,508 464,462 345 Multi-family residential - - - - 107,551 107,551 - Nonfarm nonresidential 762 684 1,889 3,335 1,108,436 1,111,771 336 Commercial 648 226 4,408 5,282 717,795 723,077 127 Consumer and other 204 45 350 599 108,070 108,669 222 Total $ 3,956 $ 1,494 $ 9,322 $ 14,772 $ 3,051,464 $ 3,066,236 $ 1,030 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 and other 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 September 30, 2021 December 31, 2020. nine September 30, 2021 December 31, 2020, September 30, 2021 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ 25 $ 27 $ 25 $ 23 Farmland - - - 16 1-4 family residential 310 359 116 331 Multi-family residential - - - - Nonfarm nonresidential 807 826 88 568 Other Loans: Commercial 808 927 601 1,388 Consumer and other 12 22 3 76 Total $ 1,962 $ 2,161 $ 833 $ 2,402 With no allowance recorded: Real Estate Loans: Construction and land $ 1,199 $ 1,265 $ - $ 990 Farmland 85 92 - 176 1-4 family residential 2,934 3,720 - 2,692 Multi-family residential 287 287 - 32 Nonfarm nonresidential 2,247 2,736 - 3,125 Other Loans: Commercial 4,966 5,361 - 3,554 Consumer and other 205 336 - 179 Total $ 11,923 $ 13,797 $ - $ 10,748 Total Impaired Loans: Real Estate Loans: Construction and land $ 1,224 $ 1,292 $ 25 $ 1,013 Farmland 85 92 - 192 1-4 family residential 3,244 4,079 116 3,023 Multi-family residential 287 287 - 32 Nonfarm nonresidential 3,054 3,562 88 3,693 Other Loans: Commercial 5,774 6,288 601 4,942 Consumer and other 217 358 3 255 Total $ 13,885 $ 15,958 $ 833 $ 13,150 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 and other 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 and other 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 and other 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 nine September 30, 2021: Balance at December 31, 2020 $ 15,853 Transfers from non-accretable difference to accretable yield 4,780 Accretion (910 ) Changes in expected cash flows not affecting non-accretable differences (2,186 ) Balance at September 30, 2021 $ 17,537 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, 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 Company had one nine September 30, 2021 one December 31, 2020. nine September 30, 2021, two December 31, 2020, seven Through September 30, 2021, 2020. September 30, 2021, 4013 2021, none 19 September 30, 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 $6.5 million and $8.4 million was outstanding as of September 30, 2021 December 31, 2020, 19 |