Financing Receivables [Text Block] | Note 4 . Credit Quality The Company uses a risk grading matrix to assign a risk grade to each loan in its portfolio. Loan risk ratings may ● Pass -- This grade is assigned to loans with acceptable credit quality and risk. The Company further segments this grade based on borrower characteristics that include capital strength, earnings stability, liquidity, leverage, and industry conditions. ● Special Mention -- This grade is assigned to loans that require an above average degree of supervision and attention. These loans have the characteristics of an asset with acceptable credit quality and risk; however, adverse economic or financial conditions exist that create potential weaknesses deserving of management’s close attention. If potential weaknesses are not may ● Substandard -- This grade is assigned to loans that have well defined weaknesses that may ● Doubtful -- This grade is assigned to loans that have the weaknesses inherent in substandard loans; however, the weaknesses are so severe that collection or liquidation in full is unlikely based on current facts, conditions, and values. Due to certain specific pending factors, the amount of loss cannot yet be determined. ● Loss -- This grade is assigned to loans that will be charged off or charged down when payments, including the timing and value of payments, are uncertain. This risk grade does not no not may The following tables present the recorded investment of the loan portfolio, by loan class and credit quality, as of the dates indicated. Losses on covered loans are generally reimbursable by the FDIC at the applicable loss share percentage, 80%; September 30, 2018 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Non-covered loans Commercial loans Construction, development, and other land $ 60,665 $ 800 $ 1,192 $ - $ - $ 62,657 Commercial and industrial 102,590 2,187 826 - - 105,603 Multi-family residential 106,488 4,077 2,145 - - 112,710 Single family non-owner occupied 133,820 4,500 4,271 - - 142,591 Non-farm, non-residential 588,273 8,556 9,825 146 - 606,800 Agricultural 8,716 198 102 - - 9,016 Farmland 18,427 626 1,819 - - 20,872 Consumer real estate loans Home equity lines 94,401 648 1,770 - - 96,819 Single family owner occupied 491,179 4,562 24,622 - - 520,363 Owner occupied construction 17,588 - 301 - - 17,889 Consumer and other loans Consumer loans 69,611 5 354 - 4 69,974 Other 5,132 - - - - 5,132 Total non-covered loans 1,696,890 26,159 47,227 146 4 1,770,426 Covered loans Commercial loans Construction, development, and other land - 35 - - - 35 Single family non-owner occupied 230 - 15 - - 245 Non-farm, non-residential - - 7 - - 7 Consumer real estate loans Home equity lines 9,864 6,329 611 - - 16,804 Single family owner occupied 2,610 372 410 - - 3,392 Total covered loans 12,704 6,736 1,043 - - 20,483 Total loans $ 1,709,594 $ 32,895 $ 48,270 $ 146 $ 4 $ 1,790,909 December 31, 2017 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Non-covered loans Commercial loans Construction, development, and other land $ 57,768 $ 1,367 $ 882 $ - $ - $ 60,017 Commercial and industrial 87,181 3,721 1,286 - - 92,188 Multi-family residential 118,509 5,663 1,030 - - 125,202 Single family non-owner occupied 130,689 7,271 3,710 - - 141,670 Non-farm, non-residential 596,616 12,493 7,351 173 - 616,633 Agricultural 6,639 294 102 - - 7,035 Farmland 22,875 210 2,564 - - 25,649 Consumer real estate loans Home equity lines 100,833 618 1,754 - - 103,205 Single family owner occupied 471,382 5,480 25,824 - - 502,686 Owner occupied construction 38,947 - 231 - - 39,178 Consumer and other loans Consumer loans 70,448 13 311 - - 70,772 Other 5,001 - - - - 5,001 Total non-covered loans 1,706,888 37,130 45,045 173 - 1,789,236 Covered loans Commercial loans Construction, development, and other land 1 38 - - - 39 Single family non-owner occupied 265 - 19 - - 284 Non-farm, non-residential - - 9 - - 9 Consumer real estate loans Home equity lines 11,338 11,685 697 - - 23,720 Single family owner occupied 2,996 411 489 - - 3,896 Total covered loans 14,600 12,134 1,214 - - 27,948 Total loans $ 1,721,488 $ 49,264 $ 46,259 $ 173 $ - $ 1,817,184 The Company identifies loans for potential impairment through a variety of means, including, but not not The following table presents the recorded investment, unpaid principal balance, and related allowance for loan losses for impaired loans, excluding PCI loans, as of the dates indicated: September 30, 2018 December 31, 2017 Unpaid Unpaid Recorded Principal Related Recorded Principal Related (Amounts in thousands) Investment Balance Allowance Investment Balance Allowance Impaired loans with no related allowance Commercial loans Construction, development, and other land $ 903 $ 918 $ - $ 727 $ 988 $ - Commercial and industrial 300 321 - 315 1,142 - Multi-family residential 1,380 1,445 - 499 1,010 - Single family non-owner occupied 2,448 2,782 - 2,042 3,521 - Non-farm, non-residential 3,859 4,759 - 3,022 5,955 - Agricultural 102 107 - 102 107 - Farmland 1,404 1,478 - 395 414 - Consumer real estate loans Home equity lines 1,451 1,589 - 1,621 1,770 - Single family owner occupied 14,963 17,868 - 16,633 18,964 - Owner occupied construction 227 227 - 231 231 - Consumer and other loans Consumer loans 203 209 - 141 144 - Total impaired loans with no allowance 27,240 31,703 - 25,728 34,246 - Impaired loans with a related allowance Commercial loans Commercial and industrial - - - 343 343 270 Multi-family residential 536 536 235 - - - Single family non-owner occupied 842 842 238 446 446 62 Non-farm, non-residential - - - 262 263 15 Farmland 410 418 158 936 974 233 Consumer real estate loans Home equity lines 65 68 66 - - - Single family owner occupied 4,907 4,951 1,017 5,586 5,606 1,978 Total impaired loans with an allowance 6,760 6,815 1,714 7,573 7,632 2,558 Total impaired loans (1) $ 34,000 $ 38,518 $ 1,714 $ 33,301 $ 41,878 $ 2,558 ________________________________________________________________________________________________ ( 1 Total impaired loans include loans totaling $25.42 September 30, 2018, $20.13 December 31, 2017, not first 2018, $250 $500 The following table presents the average recorded investment and interest income recognized on impaired loans, excluding PCI loans, for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (Amounts in thousands) Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Impaired loans with no related allowance: Commercial loans Construction, development, and other land $ - $ 910 $ 32 $ 907 $ 14 $ 950 $ 32 $ 309 Commercial and industrial 3 311 5 754 6 378 8 468 Multi-family residential 5 1,402 - 509 15 832 3 474 Single family non-owner occupied 8 2,529 11 3,304 56 2,599 88 3,313 Non-farm, non-residential - 3,926 68 5,244 39 5,028 93 3,766 Agricultural - 103 4 127 - 187 4 127 Farmland 23 1,425 17 1,003 38 1,066 17 1,004 Consumer real estate loans Home equity lines 3 1,514 15 1,683 20 1,719 35 1,259 Single family owner occupied 15 15,832 137 17,478 208 15,222 317 15,209 Owner occupied construction - 229 1 235 6 249 6 234 Consumer and other loans Consumer loans - 210 1 62 6 164 3 52 Total impaired loans with no related allowance 57 28,391 291 31,306 408 28,394 606 26,215 Impaired loans with a related allowance: Commercial loans Construction, development, and other land - - - - - - - 143 Commercial and industrial - - 50 2,516 - - 103 1,727 Multi-family residential - 541 - - - 271 - - Single family non-owner occupied - 849 8 778 7 644 21 488 Non-farm, non-residential - - - 872 - 770 15 964 Farmland - 413 - 413 - 409 - 275 Consumer real estate loans Home equity lines 1 67 - - 3 69 - 139 Single family owner occupied 35 4,999 24 3,814 126 5,838 92 4,527 Owner occupied construction - - - - - - - 1 Total impaired loans with a related allowance 36 6,869 82 8,393 136 8,001 231 8,264 Total impaired loans $ 93 $ 35,260 $ 373 $ 39,699 $ 544 $ 36,395 $ 837 $ 34,479 There were no September 30, 2018, December 31, 2017. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (Amounts in thousands) Interest income recognized $ - $ - $ - $ 20 Average recorded investment - - - 705 The Company generally places a loan on nonaccrual status when it is 90 not September 30, 2018 December 31, 2017 (Amounts in thousands) Non-covered Covered Total Non-covered Covered Total Commercial loans Construction, development, and other land $ 485 $ - $ 485 $ - $ - $ - Commercial and industrial 284 - 284 211 - 211 Multi-family residential 1,861 - 1,861 498 - 498 Single family non-owner occupied 1,328 15 1,343 851 19 870 Non-farm, non-residential 3,960 - 3,960 2,448 - 2,448 Agricultural 102 - 102 102 - 102 Farmland 1,055 - 1,055 805 - 805 Consumer real estate loans Home equity lines 758 277 1,035 882 306 1,188 Single family owner occupied 10,574 38 10,612 13,108 17 13,125 Consumer and other loans Consumer loans 135 - 135 92 - 92 Total nonaccrual loans $ 20,542 $ 330 $ 20,872 $ 18,997 $ 342 $ 19,339 The following tables present the aging of past due loans, by loan class, as of the dates indicated. Nonaccrual loans 30 not 90 $46 September 30, 2018, $1 December 31, 2017. September 30, 2018 30 - 59 Days 60 - 89 Days 90+ Days Total Current Total (Amounts in thousands) Past Due Past Due Past Due Past Due Loans Loans Non-covered loans Commercial loans Construction, development, and other land $ 87 $ - $ 478 $ 565 $ 62,092 $ 62,657 Commercial and industrial 174 260 216 650 104,953 105,603 Multi-family residential 148 - 1,515 1,663 111,047 112,710 Single family non-owner occupied 762 281 881 1,924 140,667 142,591 Non-farm, non-residential 795 74 2,559 3,428 603,372 606,800 Agricultural - - - - 9,016 9,016 Farmland 201 321 410 932 19,940 20,872 Consumer real estate loans Home equity lines 379 199 499 1,077 95,742 96,819 Single family owner occupied 3,247 1,802 3,938 8,987 511,376 520,363 Owner occupied construction 90 - - 90 17,799 17,889 Consumer and other loans Consumer loans 484 169 117 770 69,204 69,974 Other - - - - 5,132 5,132 Total non-covered loans 6,367 3,106 10,613 20,086 1,750,340 1,770,426 Covered loans Commercial loans Construction, development, and other land - - - - 35 35 Single family non-owner occupied - - - - 245 245 Non-farm, non-residential - - - - 7 7 Consumer real estate loans Home equity lines 184 239 26 449 16,355 16,804 Single family owner occupied 59 - 30 89 3,303 3,392 Total covered loans 243 239 56 538 19,945 20,483 Total loans $ 6,610 $ 3,345 $ 10,669 $ 20,624 $ 1,770,285 $ 1,790,909 December 31, 2017 30 - 59 Days 60 - 89 Days 90+ Days Total Current Total (Amounts in thousands) Past Due Past Due Past Due Past Due Loans Loans Non-covered loans Commercial loans Construction, development, and other land $ 20 $ 365 $ - $ 385 $ 59,632 $ 60,017 Commercial and industrial 232 40 142 414 91,774 92,188 Multi-family residential 544 - 185 729 124,473 125,202 Single family non-owner occupied 223 302 331 856 140,814 141,670 Non-farm, non-residential 2,433 383 1,536 4,352 612,281 616,633 Agricultural 123 - - 123 6,912 7,035 Farmland 113 - 692 805 24,844 25,649 Consumer real estate loans Home equity lines 226 198 485 909 102,296 103,205 Single family owner occupied 6,959 2,418 8,186 17,563 485,123 502,686 Owner occupied construction 326 79 - 405 38,773 39,178 Consumer and other loans Consumer loans 439 97 17 553 70,219 70,772 Other - - - - 5,001 5,001 Total non-covered loans 11,638 3,882 11,574 27,094 1,762,142 1,789,236 Covered loans Commercial loans Construction, development, and other land - - - - 39 39 Single family non-owner occupied - - - - 284 284 Non-farm, non-residential - - - - 9 9 Consumer real estate loans Home equity lines 402 - 173 575 23,145 23,720 Single family owner occupied 70 - - 70 3,826 3,896 Total covered loans 472 - 173 645 27,303 27,948 Total loans $ 12,110 $ 3,882 $ 11,747 $ 27,739 $ 1,789,445 $ 1,817,184 The Company may $250 $250 six not No September 30, 2018, December 31, 2017. The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: September 30, 2018 December 31, 2017 (Amounts in thousands) Nonaccrual (1) Accruing Total Nonaccrual (1) Accruing Total Commercial loans Single family non-owner occupied $ 332 $ 311 $ 643 $ 364 $ 528 $ 892 Non-farm, non-residential - 315 315 - 295 295 Consumer real estate loans Home equity lines - 130 130 - 145 145 Single family owner occupied 1,881 6,124 8,005 1,565 6,496 8,061 Owner occupied construction - 227 227 - 233 233 Consumer and other loans Consumer loans - 35 35 - 37 37 Total TDRs $ 2,213 $ 7,142 $ 9,355 $ 1,929 $ 7,734 $ 9,663 Allowance for loan losses related to TDRs $ 632 $ 642 __________________________________________________________________________________ ( 1 Nonaccrual TDRs are included in total nonaccrual loans disclosed in the nonaccrual table above. The following table presents interest income recognized on TDRs for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (Amounts in thousands) Interest income recognized $ 73 $ 74 $ 207 $ 159 The following tables present loans modified as TDRs, by type of concession made and loan class, that were restructured during the periods indicated: Three Months Ended September 30, 2018 2017 (Amounts in thousands) Total Contracts Pre-modification Recorded Investment Post-modification Recorded Investment (1) Total Contracts Pre-modification Recorded Investment Post-modification Recorded Investment (1) Below market interest rate Single family owner occupied 1 $ 11 $ 11 - $ - $ - Below market interest rate and extended payment term Single family owner occupied - - - 1 42 42 Total 1 $ 11 $ 11 1 $ 42 $ 42 ________________________________________________________________________ ( 1 Nine Months Ended September 30, 2018 2017 (Amounts in thousands) Total Contracts Pre-modification Recorded Investment Post-modification Recorded Investment (1) Total Contracts Pre-modification Recorded Investment Post-modification Recorded Investment (1) Below market interest rate Single family owner occupied 1 $ 11 $ 11 - $ - $ - Below market interest rate and extended payment term Single family owner occupied 1 41 41 3 141 141 Total 2 $ 52 $ 52 3 $ 141 $ 141 ________________________________________________________________________ ( 1 There were no 12 September 30, 2018 2017. The following table provides information about other real estate owned (“OREO”), which consists of properties acquired through foreclosure, as of the dates indicated: September 30, 2018 December 31, 2017 (Amounts in thousands) Non-covered OREO $ 4,754 $ 2,409 Covered OREO 44 105 Total OREO $ 4,798 $ 2,514 Non-covered OREO secured by residential real estate $ 3,331 $ 2,209 Residential real estate loans in the foreclosure process (1) 7,129 9,921 ( 1 The recorded investment in consumer mortgage loans collateralized by residential real estate that are in the process of foreclosure according to local requirements of the applicable jurisdiction |