Financing Receivables [Text Block] | Note 6 Loans and the Allowance for Loan Losses Loans receivable at September 30, 2023 December 31, 2022 September 30, December 31, 2023 2022 (Dollars in thousands) Real Estate Loans: Commercial $ 2,128,855 $ 2,020,406 Construction 708,835 722,074 Residential 686,921 656,378 Total Real Estate Loans 3,524,611 3,398,858 Commercial 1,332,384 1,153,873 Consumer and Other 63,278 53,445 Total Loans Held for Investment 4,920,273 4,606,176 Less: Allowance for Loan Losses (41,129 ) (38,178 ) Net Loans $ 4,879,144 $ 4,567,998 The performing 1 4 September 30, 2023 December 31, 2022. September 30, 2023. Net deferred loan origination fees were $12.8 million and $13.1 million at September 30, 2023 December 31, 2022, September 30, 2023 December 31, 2022, The Bank is the lead lender on participations sold, without recourse, to other financial institutions which amounts are not September 30, 2023 December 31, 2022, September 30, 2023, December 31, 2022, 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 credit 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. Portfolio Segments and Risk Factors The loan portfolio is disaggregated into portfolio segments and then further disaggregated into classes for certain disclosures. GAAP defines a portfolio segment as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. A class is generally a disaggregation of a portfolio segment. The Company's loan portfolio segments are Real Estate, Commercial, and Consumer and Other. The classes and risk characteristics of each segment are discussed in more detail below. The segmentation and disaggregation of the portfolio is part of the ongoing credit monitoring process. Real Estate Portfolio Segment Real Estate: Commercial may Real Estate: Construction may Real Estate: Residential first second 1 4 Commercial Portfolio Segment Commercial may not may not Consumer and Other Portfolio Segment Consumer and other The following table sets forth, as of September 30, 2023, not not Allowance for Credit Losses and Recorded Investment in Loans Receivable September 30, 2023 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Consumer Commercial Construction Residential Commercial and Other Total Allowance for Loan Losses: Beginning Balance $ 14,702 $ 5,768 $ 5,354 $ 11,721 $ 633 $ 38,178 Adoption of ASU 2016-13 4,823 933 (365 ) (2,483 ) (248 ) 2,660 Beginning Balance After Adoption 19,525 6,701 4,989 9,238 385 40,838 Charge-offs (1,827 ) (1 ) (42 ) (2,407 ) (1,113 ) (5,390 ) Recoveries 21 1 9 655 206 892 Provision 770 1,474 441 1,170 934 4,789 Ending Balance $ 18,489 $ 8,175 $ 5,397 $ 8,656 $ 412 $ 41,129 Reserve for Unfunded Loan Commitments: Beginning Balance $ 220 $ 137 $ 13 $ 229 $ 6 $ 605 Adoption of ASU 2016-13 116 2,113 190 657 121 3,197 Beginning Balance After Adoption 336 2,250 203 886 127 3,802 Provision 7 (556 ) 32 195 (103 ) (425 ) Ending Balance $ 343 $ 1,694 $ 235 $ 1,081 $ 24 $ 3,377 Total Allowance for Credit Losses $ 18,832 $ 9,869 $ 5,632 $ 9,737 $ 436 $ 44,506 Included within the above allowance are loans which management has individually evaluated to determine an allowance for credit losses. The following table summarizes, by segment, the loan balance and specific allowance allocation for those loans which have been individually evaluated. September 30, 2023 January 1, 2023 Loan Balance Specific Allocations Loan Balance Specific Allocations (Dollars in thousands) Real Estate Loans: Commercial $ 4,877 $ - $ 3,008 $ 1,915 Construction 2,350 528 1,424 513 Residential 1,567 - 1,558 3 Total Real Estate Loans 8,794 528 5,990 2,431 Commercial - - 6,096 1,779 Consumer and Other - - - - Total $ 8,794 $ 528 $ 12,086 $ 4,210 The following table sets forth, as of December 31, 2022 ( 2016 13 not not December 31, 2022 (Dollars in thousands) Real Estate: Real Estate: Real Estate: Consumer Commercial Construction Residential Commercial and Other Total Allowance for Loan Losses: Beginning Balance $ 10,515 $ 4,498 $ 4,565 $ 9,016 $ 518 $ 29,112 Charge-offs (51 ) (16 ) (191 ) (2,139 ) (424 ) (2,821 ) Recoveries 50 25 20 739 167 1,001 Provision 4,188 1,261 960 4,105 372 10,886 Ending Balance $ 14,702 $ 5,768 $ 5,354 $ 11,721 $ 633 $ 38,178 Ending Balance: Individually Evaluated for Impairment $ 59 $ 21 $ 99 $ 2,020 $ 15 $ 2,214 Collectively Evaluated for Impairment $ 14,643 $ 5,747 $ 5,255 $ 9,701 $ 618 $ 35,964 Purchased Credit Impaired $ - $ - $ - $ - $ - $ - Loans Receivable: Ending Balance $ 2,020,406 $ 722,074 $ 656,378 $ 1,153,873 $ 53,445 $ 4,606,176 Ending Balance: Individually Evaluated for Impairment $ 3,053 $ 992 $ 4,028 $ 6,442 $ 192 $ 14,707 Collectively Evaluated for Impairment $ 1,989,831 $ 720,129 $ 637,195 $ 1,141,957 $ 52,570 $ 4,541,682 Purchased Credit Impaired $ 27,522 $ 953 $ 15,155 $ 5,474 $ 683 $ 49,787 Credit Quality Indicators We utilize a risk grading matrix to assign a risk grade to each of our commercial loans. Loans are graded on a scale of 10 80. 60, 70 The following table sets forth the credit quality indicators, disaggregated by loan segment, as of September 30, 2023: September 30, 2023 Criticized Pass Special Mention Substandard Doubtful Loss Current Period Charge- (Risk Grade 10-45) (Risk Grade 50) (Risk Grade 60) (Risk Grade 70) (Risk Grade 80) Total offs (Dollars in thousands) Real Estate: Commercial Originated in 2023 $ 165,134 $ - $ 86 $ - $ - $ 165,220 $ - Originated in 2022 733,458 1,699 - - - 735,157 - Originated in 2021 423,682 6,150 71 - - 429,903 357 Originated in 2020 154,433 3,573 10 - - 158,016 - Originated in 2019 148,044 9,774 382 937 - 159,137 1,447 Originated Prior to 2019 382,109 8,138 10,187 472 - 400,906 23 Revolving 80,333 - 183 - - 80,516 - Revolving Loans Converted to Term - - - - - - - Total Real Estate: Commercial $ 2,087,193 $ 29,334 $ 10,919 $ 1,409 $ - $ 2,128,855 $ 1,827 Real Estate: Construction Originated in 2023 $ 105,036 $ - $ - $ - $ - $ 105,036 $ - Originated in 2022 360,157 - 214 - - 360,371 - Originated in 2021 105,193 - 1,270 - - 106,463 - Originated in 2020 35,309 31 - - - 35,340 - Originated in 2019 20,796 - 1,718 - - 22,514 1 Originated Prior to 2019 21,460 421 351 345 - 22,577 - Revolving 56,534 - - - - 56,534 - Revolving Loans Converted to Term - - - - - - - Total Real Estate: Construction $ 704,485 $ 452 $ 3,553 $ 345 $ - $ 708,835 $ 1 Real Estate: Residential Originated in 2023 $ 52,118 $ 33 $ - $ - $ - $ 52,151 $ - Originated in 2022 173,486 435 275 15 - 174,211 - Originated in 2021 108,118 - 715 - - 108,833 11 Originated in 2020 70,187 386 652 63 - 71,288 1 Originated in 2019 60,872 124 944 123 - 62,063 22 Originated Prior to 2019 103,755 1,248 5,811 325 - 111,139 7 Revolving 106,827 - 389 - - 107,216 1 Revolving Loans Converted to Term 20 - - - - 20 - Total Real Estate: Residential $ 675,383 $ 2,226 $ 8,786 $ 526 $ - $ 686,921 $ 42 Commercial Originated in 2023 $ 232,137 $ 278 $ 9 $ - $ - $ 232,424 $ - Originated in 2022 282,674 272 897 - - 283,843 97 Originated in 2021 148,156 5,599 913 16 - 154,684 15 Originated in 2020 57,448 4,064 1,004 44 - 62,560 27 Originated in 2019 34,623 544 707 250 - 36,124 1,453 Originated Prior to 2019 62,637 4,029 3,318 269 - 70,253 613 Revolving 489,138 2,953 377 28 - 492,496 202 Revolving Loans Converted to Term - - - - - - - Total Commercial $ 1,306,813 $ 17,739 $ 7,225 $ 607 $ - $ 1,332,384 $ 2,407 Consumer and Other Originated in 2023 $ 9,230 $ - $ - $ - $ - $ 9,230 $ 8 Originated in 2022 8,157 - 46 - - 8,203 28 Originated in 2021 4,241 - 54 - - 4,295 25 Originated in 2020 2,199 - 94 - - 2,293 11 Originated in 2019 2,525 - 46 - - 2,571 18 Originated Prior to 2019 2,968 - 101 - - 3,069 58 Revolving 33,331 - 162 - - 33,493 965 Revolving Loans Converted to Term 124 - - - - 124 - Total Consumer and Other $ 62,775 $ - $ 503 $ - $ - $ 63,278 $ 1,113 Total Loans $ 4,836,649 $ 49,751 $ 30,986 $ 2,887 $ - $ 4,920,273 $ 5,390 The following table sets forth the credit quality indicators, disaggregated by loan segment, as of December 31, 2022 ( 2016 13 December 31, 2022 Pass Special Mention Substandard Doubtful (Risk Grade 10-45) (Risk Grade 50) (Risk Grade 60) (Risk Grade 70) Total (Dollars in thousands) Real Estate Loans: Commercial $ 1,972,611 $ 35,054 $ 10,478 $ 2,263 $ 2,020,406 Construction 716,071 3,496 2,157 350 722,074 Residential 643,763 3,780 7,925 910 656,378 Total Real Estate Loans 3,332,445 42,330 20,560 3,523 3,398,858 Commercial 1,137,555 6,646 6,960 2,712 1,153,873 Consumer and Other 53,041 - 404 - 53,445 Total $ 4,523,041 $ 48,976 $ 27,924 $ 6,235 $ 4,606,176 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, 2023, December 31, 2022, 90 September 30, 2023, December 31, 2022, 90 The following tables provide an analysis of the aging of loans and leases as of September 30, 2023, December 31, 2022. December 31, 2022, not no September 30, 2023. 90 Aged Analysis of Past Due Loans Receivable September 30, 2023 (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: Commercial $ 468 $ 1,995 $ 3,739 $ 6,202 $ 2,122,653 $ 2,128,855 $ 127 Construction 365 624 2,993 3,982 704,853 708,835 117 Residential 2,237 324 4,115 6,676 680,245 686,921 - Total Real Estate Loans 3,070 2,943 10,847 16,860 3,507,751 3,524,611 244 Commercial 4,678 420 1,241 6,339 1,326,045 1,332,384 - Consumer and Other 276 59 210 545 62,733 63,278 3 Total $ 8,024 $ 3,422 $ 12,298 $ 23,744 $ 4,896,529 $ 4,920,273 $ 247 December 31, 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: Commercial $ 1,491 $ 210 $ 1,681 $ 3,382 $ 2,017,024 $ 2,020,406 $ 98 Construction 320 41 638 999 721,075 722,074 - Residential 1,590 423 1,781 3,794 652,584 656,378 - Total Real Estate Loans 3,401 674 4,100 8,175 3,390,683 3,398,858 98 Commercial 1,183 1,934 2,186 5,303 1,148,570 1,153,873 222 Consumer and Other 295 28 182 505 52,940 53,445 15 Total $ 4,879 $ 2,636 $ 6,468 $ 13,983 $ 4,592,193 $ 4,606,176 $ 335 Upon adoption of ASU 2016 13, January 1, 2023. September 30, 2023, January 1, 2023, December 31, 2022, September 30, January 1, December 31, 2023 2023 2022 (Dollars in thousands) Real Estate Loans: Commercial $ 4,009 $ 5,847 $ 2,644 Construction 3,161 2,421 992 Residential 7,277 6,518 4,080 Total Real Estate Loans 14,447 14,786 7,716 Commercial 1,338 3,045 3,150 Consumer and Other 244 257 188 Total $ 16,029 $ 18,088 $ 11,054 Accrued interest receivable of $4.5 million and $5.4 million was outstanding as of September 30, 2023, December 31, 2022, 19 2020 2021. no At September 30, 2023 December 31, 2022, |