Financing Receivables [Text Block] | Note 6 Loans and the Allowance for Loan Losses Loans receivable at June 30, 2022 December 31, 2021 June 30, December 31, 2022 2021 (Dollars in thousands) Real estate loans: Construction and land $ 642,260 $ 548,528 Farmland 174,723 87,463 1-4 family residential 521,747 467,699 Multi-family residential 97,901 97,508 Nonfarm nonresidential 1,605,691 1,144,426 Commercial 949,631 721,385 Consumer and other 121,773 122,599 Total loans held for investment 4,113,726 3,189,608 Less: Allowance for loan losses (32,317 ) (29,112 ) Net loans $ 4,081,409 $ 3,160,496 As of June 30, 2022 December 31, 2021, The performing 1 4 June 30, 2022 December 31, 2021. Net deferred loan origination fees were $10.8 million and $7.7 million at June 30, 2022 December 31, 2021, June 30, 2022 December 31, 2021, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not June 30, 2022 December 31, 2021, June 30, 2022 December 31, 2021, 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, 2022 June 30, 2022 310 30, Loans and Debt Securities Acquired with Deteriorated Credit Quality 310 30” not 310 30 Total loans held for investment at December 31, 2021 December 31, 2021 310 30 not 310 30 The following tables set forth, as of June 30, 2022 December 31, 2021, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable June 30, 2022 (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 $ 4,498 $ 721 $ 3,791 $ 774 $ 9,794 $ 8,358 $ 1,176 $ 29,112 Charge-offs (6 ) - (3 ) - (30 ) (1,517 ) (211 ) (1,767 ) Recoveries 18 - 3 - 8 270 111 410 Provision 510 683 618 (51 ) 1,644 1,116 42 4,562 Ending Balance $ 5,020 $ 1,404 $ 4,409 $ 723 $ 11,416 $ 8,227 $ 1,118 $ 32,317 Ending Balance: Individually evaluated for impairment $ 25 $ - $ 89 $ - $ 89 $ 143 $ 7 $ 353 Collectively evaluated for impairment $ 4,995 $ 1,404 $ 4,320 $ 723 $ 11,327 $ 8,084 $ 1,111 $ 31,964 Purchased Credit Impaired $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 642,260 $ 174,723 $ 521,747 $ 97,901 $ 1,605,691 $ 949,631 $ 121,773 $ 4,113,726 Ending Balance: Individually evaluated for impairment $ 663 $ 88 $ 3,670 $ - $ 9,182 $ 6,926 $ 233 $ 20,762 Collectively evaluated for impairment $ 640,675 $ 174,631 $ 500,649 $ 97,901 $ 1,562,754 $ 937,492 $ 120,700 $ 4,034,802 Purchased Credit Impaired $ 922 $ 4 $ 17,428 $ - $ 33,755 $ 5,213 $ 840 $ 58,162 December 31, 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 (28 ) (1 ) (169 ) - (139 ) (830 ) (469 ) (1,636 ) Recoveries 1 2 39 - 99 417 119 677 Provision 941 120 468 (44 ) 2,465 3,753 344 8,047 Ending Balance $ 4,498 $ 721 $ 3,791 $ 774 $ 9,794 $ 8,358 $ 1,176 $ 29,112 Ending Balance: Individually evaluated for impairment $ 26 $ - $ 110 $ - $ 83 $ 438 $ 37 $ 694 Collectively evaluated for impairment $ 4,472 $ 721 $ 3,681 $ 774 $ 9,711 $ 7,920 $ 1,139 $ 28,418 Purchased Credit Impaired $ - $ - $ - $ - $ - $ - $ - $ - Loans receivable: Ending Balance $ 548,528 $ 87,463 $ 467,699 $ 97,508 $ 1,144,426 $ 721,385 $ 122,599 $ 3,189,608 Ending Balance: Individually evaluated for impairment $ 1,358 $ 74 $ 3,627 $ - $ 2,959 $ 5,514 $ 289 $ 13,821 Collectively evaluated for impairment $ 546,164 $ 87,387 $ 444,934 $ 97,508 $ 1,118,836 $ 708,346 $ 121,392 $ 3,124,567 Purchased Credit Impaired $ 1,006 $ 2 $ 19,138 $ - $ 22,631 $ 7,525 $ 918 $ 51,220 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 the Company’s market areas. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and change in market trends. The Company is 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 the Company’s 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. 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, 2022 December 31, 2021, Credit Quality Indicators June 30, 2022 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 638,578 $ 693 $ 2,325 $ 664 $ 642,260 Farmland 172,160 2,471 - 92 174,723 1-4 family residential 508,798 3,522 3,946 5,481 521,747 Multi-family residential 97,882 - 19 - 97,901 Nonfarm nonresidential 1,547,001 25,801 21,868 11,021 1,605,691 Commercial 931,664 8,567 5,786 3,614 949,631 Consumer and other 120,649 365 430 329 121,773 Total $ 4,016,732 $ 41,419 $ 34,374 $ 21,201 $ 4,113,726 December 31, 2021 Pass Special Mention Substandard Doubtful Total (Dollars in thousands) Real Estate Loans: Construction and land $ 545,071 $ 266 $ 1,850 $ 1,341 $ 548,528 Farmland 86,063 1,324 - 76 87,463 1-4 family residential 456,150 3,109 2,801 5,639 467,699 Multi-family residential 97,485 - 23 - 97,508 Nonfarm nonresidential 1,094,782 34,495 9,735 5,414 1,144,426 Commercial 704,755 7,886 3,137 5,607 721,385 Consumer and other 121,566 350 257 426 122,599 Total $ 3,105,872 $ 47,430 $ 17,803 $ 18,503 $ 3,189,608 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 June 30, 2022 December 31, 2021, 90 June 30, 2022 December 31, 2021, 90 The following tables provide an analysis of the aging of loans and leases as of June 30, 2022 December 31, 2021. not 90 Aged Analysis of Past Due Loans Receivable June 30, 2022 (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 $ 156 $ 112 $ 520 $ 788 $ 641,472 $ 642,260 $ 126 Farmland 94 - - 94 174,629 174,723 - 1-4 family residential 1,071 744 1,774 3,589 518,158 521,747 30 Multi-family residential - - - - 97,901 97,901 - Nonfarm nonresidential 282 99 8,306 8,687 1,597,004 1,605,691 83 Commercial 549 500 1,872 2,921 946,710 949,631 - Consumer and other 235 80 291 606 121,167 121,773 85 Total $ 2,387 $ 1,535 $ 12,763 $ 16,685 $ 4,097,041 $ 4,113,726 $ 324 December 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 $ 632 $ 16 $ 488 $ 1,136 $ 547,392 $ 548,528 $ - Farmland 83 - - 83 87,380 87,463 - 1-4 family residential 917 534 1,496 2,947 464,752 467,699 107 Multi-family residential - - - - 97,508 97,508 - Nonfarm nonresidential 222 627 1,767 2,616 1,141,810 1,144,426 - Commercial 106 55 4,257 4,418 716,967 721,385 97 Consumer and other 392 144 271 807 121,792 122,599 18 Total $ 2,352 $ 1,376 $ 8,279 $ 12,007 $ 3,177,601 $ 3,189,608 $ 222 The following is a summary of information pertaining to impaired loans as of June 30, 2022 December 31, 2021. six June 30, 2022 December 31, 2021, June 30, 2022 (Dollars in thousands) Unpaid Average Recorded Principal Related Recorded Investment Balance Allowance Investment With an allowance recorded: Real Estate Loans: Construction and land $ 66 $ 70 $ 25 $ 218 Farmland - - - - 1-4 family residential 293 360 89 301 Multi-family residential - - - - Nonfarm nonresidential 757 789 89 670 Other Loans: Commercial 342 480 143 416 Consumer and other 125 125 7 94 Total $ 1,583 $ 1,824 $ 353 $ 1,699 With no allowance recorded: Real Estate Loans: Construction and land $ 597 $ 632 $ - $ 893 Farmland 88 101 - 112 1-4 family residential 3,377 4,301 - 3,300 Multi-family residential - - - - Nonfarm nonresidential 8,425 8,977 - 5,473 Other Loans: Commercial 6,584 8,309 - 4,939 Consumer and other 108 233 - 162 Total $ 19,179 $ 22,553 $ - $ 14,879 Total Impaired Loans: Real Estate Loans: Construction and land $ 663 $ 702 $ 25 $ 1,111 Farmland 88 101 - 112 1-4 family residential 3,670 4,661 89 3,601 Multi-family residential - - - - Nonfarm nonresidential 9,182 9,766 89 6,143 Other Loans: Commercial 6,926 8,789 143 5,355 Consumer and other 233 358 7 256 Total $ 20,762 $ 24,377 $ 353 $ 16,578 December 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 $ 68 $ 70 $ 26 $ 27 Farmland - - - 12 1-4 family residential 314 371 110 325 Multi-family residential - - - - Nonfarm nonresidential 784 801 83 623 Other Loans: Commercial 695 836 438 1,217 Consumer and other 91 92 37 80 Total $ 1,952 $ 2,170 $ 694 $ 2,284 With no allowance recorded: Real Estate Loans: Construction and land $ 1,290 $ 1,356 $ - $ 1,050 Farmland 74 82 - 150 1-4 family residential 3,313 4,171 - 2,835 Multi-family residential - - - 48 Nonfarm nonresidential 2,175 2,691 - 2,889 Other Loans: Commercial 4,819 5,211 - 3,882 Consumer and other 198 467 - 184 Total $ 11,869 $ 13,978 $ - $ 11,038 Total Impaired Loans: Real Estate Loans: Construction and land $ 1,358 $ 1,426 $ 26 $ 1,077 Farmland 74 82 - 162 1-4 family residential 3,627 4,542 110 3,160 Multi-family residential - - - 48 Nonfarm nonresidential 2,959 3,492 83 3,512 Other Loans: Commercial 5,514 6,047 438 5,099 Consumer and other 289 559 37 264 Total $ 13,821 $ 16,148 $ 694 $ 13,322 As discussed in Note 3, March 1, 2022. $337.9 no 310 10 310 20. March 1, 2022. 310 30. The following table presents the balances acquired on March 1, 2022 310 30. Purchased Impaired Credits (Dollars in thousands) Contractually required payments $ 52,899 Non-accretable difference (expected losses) (26,803 ) Cash flows expected to be collected at acquisition 26,096 Accretable yield (4,622 ) Basis in acquired loans at acquisition $ 21,474 The following is a summary of changes in the accretable difference for loans accounted for under ASC 310 30 six June 30, 2022: Balance at December 31, 2021 $ 20,659 Additions 4,622 Transfers from non-accretable difference to accretable yield 2,745 Accretion (2,958 ) Changes in expected cash flows not affecting non-accretable differences (7,775 ) Balance at June 30, 2022 $ 17,293 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, 2022 December 31, 2021, 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 no troubled debt restructurings that had subsequently defaulted during the six June 30, 2022 December 31, 2021. six June 30, 2022, December 31, 2021, not As of June 30, 2022 December 31, 2021, 19 June 30, 2022 December 31, 2021, 4013 2021, none 19 June 30, 2022 December 31, 2021. Accrued interest receivable of $6.4 million and $6.0 million was outstanding as of June 30, 2022 December 31, 2021, |