Financing Receivables [Text Block] | Note 5 . 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%; June 30, 2020 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Non-covered loans Commercial loans Construction, development, and other land $ 35,181 $ 14,669 $ 2,735 $ - $ - $ 52,585 Commercial and industrial 153,507 22,852 7,939 - - 184,298 Multi-family residential 80,539 21,771 3,458 - - 105,768 Single family non-owner occupied 138,578 35,590 14,207 14 - 188,389 Non-farm, non-residential 474,297 207,483 41,320 - - 723,100 Agricultural 6,650 3,443 314 - - 10,407 Farmland 12,933 5,452 5,277 - - 23,662 Consumer real estate loans Home equity lines 94,694 1,397 3,475 - - 99,566 Single family owner occupied 565,016 3,245 35,185 - - 603,446 Owner occupied construction 14,498 202 611 - - 15,311 Consumer and other loans Consumer loans 112,537 109 1,905 - - 114,551 Other 4,477 - - - - 4,477 Total non-covered loans 1,692,907 316,213 116,426 14 - 2,125,560 Covered loans Commercial loans Construction, development, and other land - 27 - - - 27 Single family non-owner occupied 191 - - - - 191 Non-farm, non-residential - - 1 - - 1 Consumer real estate loans Home equity lines 7,803 379 330 - - 8,512 Single family owner occupied 1,890 272 364 - - 2,526 Total covered loans 9,884 678 695 - - 11,257 Total loans $ 1,702,791 $ 316,891 $ 117,121 $ 14 $ - $ 2,136,817 December 31, 2019 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Non-covered loans Commercial loans Construction, development, and other land $ 45,781 $ 2,079 $ 799 $ - $ - $ 48,659 Commercial and industrial 135,651 4,327 2,984 - - 142,962 Multi-family residential 118,045 2,468 1,327 - - 121,840 Single family non-owner occupied 149,916 7,489 5,776 - - 163,181 Non-farm, non-residential 683,481 27,160 16,620 - - 727,261 Agricultural 11,299 122 335 - - 11,756 Farmland 17,609 4,107 1,439 - - 23,155 Consumer real estate loans Home equity lines 106,246 2,014 1,818 - - 110,078 Single family owner occupied 580,580 17,001 23,116 - - 620,697 Owner occupied construction 16,341 179 721 - - 17,241 Consumer and other loans Consumer loans 108,065 1,341 621 - - 110,027 Other 4,742 - - - - 4,742 Total non-covered loans 1,977,756 68,287 55,556 - - 2,101,599 Covered loans Commercial loans Construction, development, and other land - 28 - - - 28 Single family non-owner occupied 199 - - - - 199 Non-farm, non-residential - - 3 - - 3 Consumer real estate loans Home equity lines 7,177 2,327 349 - - 9,853 Single family owner occupied 2,111 275 392 - - 2,778 Total covered loans 9,487 2,630 744 - - 12,861 Total loans $ 1,987,243 $ 70,917 $ 56,300 $ - $ - $ 2,114,460 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: June 30, 2020 December 31, 2019 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 $ 877 $ 1,101 $ - $ 552 $ 768 $ - Commercial and industrial 2,890 3,458 - 576 599 - Multi-family residential 341 772 - 1,254 1,661 - Single family non-owner occupied 5,027 5,760 - 2,652 3,176 - Non-farm, non-residential 7,659 9,433 - 4,158 4,762 - Agricultural 261 265 - 158 164 - Farmland 1,815 1,907 - 1,437 1,500 - Consumer real estate loans Home equity lines 1,604 1,756 - 1,372 1,477 - Single family owner occupied 16,717 19,858 - 15,588 17,835 - Owner occupied construction 540 548 - 648 648 - Consumer and other loans Consumer loans 500 507 - 290 294 - Total impaired loans with no allowance 38,231 45,365 - 28,685 32,884 - Impaired loans with a related allowance Commercial loans Commercial and industrial - - - - - - Multi-family residential 944 1,277 279 - - - Single family non-owner occupied - - - - - - Non-farm, non-residential 1,798 1,982 684 1,241 1,227 292 Farmland - - - - - - Consumer real estate loans Home equity lines - - - - - - Single family owner occupied 1,769 1,869 370 1,246 1,246 353 Consumer and other loans Consumer loans - - - - - - Total impaired loans with an allowance 4,511 5,128 1,333 2,487 2,473 645 Total impaired loans (1) $ 42,742 $ 50,493 $ 1,333 $ 31,172 $ 35,357 $ 645 ( 1 Total impaired loans include loans totaling $33.59 million as of June 30, 2020, December 31, 2019, not 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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 (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 $ 7 $ 882 $ 5 $ 790 $ 15 $ 1,091 $ 12 $ 795 Commercial and industrial 60 3,191 2 149 89 2,610 5 383 Multi-family residential 18 417 7 1,269 29 544 16 1,444 Single family non-owner occupied 37 5,203 28 3,237 72 4,652 56 3,116 Non-farm, non-residential 84 8,886 47 5,230 127 6,780 64 4,953 Agricultural 2 264 - 48 3 235 2 51 Farmland 15 1,835 10 1,438 36 1,698 26 1,444 Consumer real estate loans Home equity lines 7 1,652 7 1,484 16 1,560 14 1,446 Single family owner occupied 122 17,251 154 15,838 290 17,401 278 15,889 Owner occupied construction 4 534 2 223 10 434 4 222 Consumer and other loans Consumer loans 7 507 3 137 11 455 4 121 Total impaired loans with no related allowance 363 40,622 265 29,843 698 37,460 481 29,864 Impaired loans with a related allowance: Commercial loans Construction, development, and other land - - - - - - - - Commercial and industrial - - - - - - - - Multi-family residential - 944 - - - 943 - - Single family non-owner occupied - - - - - - - - Non-farm, non-residential 14 1,884 8 553 14 1,611 8 277 Farmland - - - - - - - - Consumer real estate loans Home equity lines - - - - - - - - Single family owner occupied 11 1,777 36 2,987 24 1,508 65 2,639 Owner occupied construction - - - - - - - - Total impaired loans with a related allowance 25 4,605 44 3,540 38 4,062 73 2,916 Total impaired loans $ 388 $ 45,227 $ 309 $ 33,383 $ 736 $ 41,522 $ 554 $ 32,780 The Company generally places a loan on nonaccrual status when it is 90 not June 30, 2020 December 31, 2019 (Amounts in thousands) Non-covered Covered Total Non-covered Covered Total Commercial loans Construction, development, and other land $ 540 $ - $ 540 $ 211 $ - $ 211 Commercial and industrial 1,379 - 1,379 530 - 530 Multi-family residential 1,205 - 1,205 1,144 - 1,144 Single family non-owner occupied 3,071 - 3,071 1,286 - 1,286 Non-farm, non-residential 6,556 - 6,556 3,400 - 3,400 Agricultural 262 - 262 158 - 158 Farmland 1,106 - 1,106 713 - 713 Consumer real estate loans Home equity lines 1,069 278 1,347 753 220 973 Single family owner occupied 8,521 21 8,542 7,259 24 7,283 Owner occupied construction 321 - 321 428 - 428 Consumer and other loans Consumer loans 441 - 441 231 - 231 Total nonaccrual loans $ 24,471 $ 299 $ 24,770 $ 16,113 $ 244 $ 16,357 The following tables present the aging of past due loans, by loan class, as of the dates indicated. Nonaccrual loans 30 not 90 June 30, 2020, December 31, 2019. June 30, 2020 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 $ - $ 82 $ 438 $ 520 $ 52,065 $ 52,585 Commercial and industrial 411 1,525 387 2,323 181,975 184,298 Multi-family residential 961 595 944 2,500 103,268 105,768 Single family non-owner occupied 976 1,114 2,315 4,405 183,984 188,389 Non-farm, non-residential 1,853 902 4,918 7,673 715,427 723,100 Agricultural 222 13 45 280 10,127 10,407 Farmland 14 99 1,025 1,138 22,524 23,662 Consumer real estate loans Home equity lines 294 143 597 1,034 98,532 99,566 Single family owner occupied 3,181 982 3,613 7,776 595,670 603,446 Owner occupied construction - - - - 15,311 15,311 Consumer and other loans Consumer loans 848 105 240 1,193 113,358 114,551 Other - - - - 4,477 4,477 Total non-covered loans 8,760 5,560 14,522 28,842 2,096,718 2,125,560 Covered loans Commercial loans Construction, development, and other land - - - - 27 27 Single family non-owner occupied - - - - 191 191 Non-farm, non-residential - - - - 1 1 Consumer real estate loans Home equity lines 62 113 114 289 8,223 8,512 Single family owner occupied 21 - - 21 2,505 2,526 Total covered loans 83 113 114 310 10,947 11,257 Total loans $ 8,843 $ 5,673 $ 14,636 $ 29,152 $ 2,107,665 $ 2,136,817 December 31, 2019 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 $ 63 $ 65 $ 211 $ 339 $ 48,320 $ 48,659 Commercial and industrial 1,913 238 507 2,658 140,304 142,962 Multi-family residential 375 - 1,144 1,519 120,321 121,840 Single family non-owner occupied 754 267 661 1,682 161,499 163,181 Non-farm, non-residential 917 1,949 3,027 5,893 721,368 727,261 Agricultural 86 164 - 250 11,506 11,756 Farmland 856 349 664 1,869 21,286 23,155 Consumer real estate loans Home equity lines 1,436 165 503 2,104 107,974 110,078 Single family owner occupied 7,728 2,390 3,766 13,884 606,813 620,697 Owner occupied construction 207 - 428 635 16,606 17,241 Consumer and other loans Consumer loans 1,735 439 202 2,376 107,651 110,027 Other 22 - - 22 4,720 4,742 Total non-covered loans 16,092 6,026 11,113 33,231 2,068,368 2,101,599 Covered loans Commercial loans Construction, development, and other land - - - - 28 28 Single family non-owner occupied - - - - 199 199 Non-farm, non-residential - - - - 3 3 Consumer real estate loans Home equity lines 144 28 - 172 9,681 9,853 Single family owner occupied - 50 - 50 2,728 2,778 Total covered loans 144 78 - 222 12,639 12,861 Total loans $ 16,236 $ 6,104 $ 11,113 $ 33,453 $ 2,081,007 $ 2,114,460 The Company may $500 six not No June 30, 2020, December 31, 2019. The CARES Act included a provision allowing banks to not 19 March 1, 2020 December 31, 2020 60 19 not 30 December 31, 2019. Through June 30, 2020, 19 not 19 not The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: June 30, 2020 December 31, 2019 (Amounts in thousands) Nonaccrual (1) Accruing Total Nonaccrual (1) Accruing Total Commercial loans Construction, development, and other land $ - $ - $ - $ - $ - $ - Commercial and industrial - 1,498 1,498 - - - Single family non-owner occupied 543 1,279 1,822 552 595 1,147 Non-farm, non-residential - 2,425 2,425 - 307 307 Consumer real estate loans Home equity lines - 83 83 - 115 115 Single family owner occupied 1,748 5,886 7,634 1,790 5,305 7,095 Owner occupied construction - 218 218 - 221 221 Consumer and other loans Consumer loans - 31 31 - 32 32 Total TDRs $ 2,291 $ 11,420 $ 13,711 $ 2,342 $ 6,575 $ 8,917 Allowance for loan losses related to TDRs $ 470 $ 353 ( 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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Amounts in thousands) Interest income recognized $ 152 $ 84 $ 250 $ 147 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 June 30, 2020 2019 (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 and extended payment term Single family non-owner occupied - - - 1 80 81 Single family owner occupied 1 185 184 Total below market interest rate and extended payment term - - - 2 265 265 Payment deferral Commercial and industrial 1 1,106 1,106 - - - Non-farm, non-residential 2 1,538 1,538 - - - Single family owner occupied 1 70 54 - - - Total principal deferral 4 2,714 2,698 - - - Total 4 $ 2,714 $ 2,698 2 $ 265 $ 265 ( 1 Represents the loan balance immediately following modification Six Months Ended June 30, 2020 2019 (Amounts in thousands) Total Contracts Pre-modification Recorded Investment Post-modificatio Recorded Investment (1) Total Contracts Pre-modification Recorded Investment Post-modification Recorded Investment (1) Below market interest rate Single family non-owner occupied 1 50 50 - $ - $ - Total below market interest rate 1 50 50 - - - Below market interest rate and extended payment term Single family non-owner occupied - - - 3 454 432 Single family owner occupied 2 489 484 Total below market interest rate and extended payment term - - - 5 943 916 Payment deferral Construction, development, and other land 1 63 63 - - - Commercial and industrial 2 1,708 1,708 - - - Single family non-owner occupied 1 529 529 - - - Non-farm, non-residential 3 2,115 2,115 - - - Single family owner occupied 3 742 726 1 66 45 Home equity lines - - - 1 4 3 Total principal deferral 10 5,157 5,141 2 70 48 Total 11 $ 5,207 $ 5,191 7 $ 1,013 $ 964 ( 1 Represents the loan balance immediately following modification Payment defaults on loans modified as TDRs restructured within the previous 12 June 30, 2020, one none 2019. The following table provides information about other real estate owned (“OREO”), which consists of properties acquired through foreclosure, as of the dates indicated: June 30, 2020 December 31, 2019 (Amounts in thousands) OREO $ 2,181 $ 3,969 Total OREO $ 2,181 $ 3,969 OREO secured by residential real estate $ 949 $ 2,232 Residential real estate loans in the foreclosure process (1) 2,621 1,539 ( 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 |