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%; September 30, 2020 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Non-covered loans Commercial loans Construction, development, and other land $ 35,889 $ 8,419 $ 2,477 $ - $ - $ 46,785 Commercial and industrial 153,153 19,369 7,192 - - 179,714 Multi-family residential 81,528 20,937 3,182 - - 105,647 Single family non-owner occupied 143,235 32,649 13,368 13 - 189,265 Non-farm, non-residential 507,094 201,975 39,746 - - 748,815 Agricultural 6,804 3,216 342 - - 10,362 Farmland 13,281 5,139 4,553 - - 22,973 Consumer real estate loans - Home equity lines 89,729 1,317 3,010 - - 94,056 Single family owner occupied 607,616 3,815 33,167 - - 644,598 Owner occupied construction 16,684 202 574 - - 17,460 Consumer and other loans - Consumer loans 116,786 197 1,755 - - 118,738 Other 5,838 - - - - 5,838 Total non-covered loans 1,777,637 297,235 109,366 13 - 2,184,251 Covered loans Commercial loans Construction, development, and other land - 27 - - - 27 Single family non-owner occupied 155 33 - - - 188 Consumer real estate loans - Home equity lines 7,365 386 328 - - 8,079 Single family owner occupied 1,832 269 349 - - 2,450 Total covered loans 9,352 715 677 - - 10,744 Total loans $ 1,786,989 $ 297,950 $ 110,043 $ 13 $ - $ 2,194,995 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: September 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 $ 869 $ 1,097 $ - $ 552 $ 768 $ - Commercial and industrial 3,242 3,302 - 576 599 - Multi-family residential 923 1,009 - 1,254 1,661 - Single family non-owner occupied 5,011 5,663 - 2,652 3,176 - Non-farm, non-residential 7,712 8,362 - 4,158 4,762 - Agricultural 267 275 - 158 164 - Farmland 1,517 1,591 - 1,437 1,500 - Consumer real estate loans Home equity lines 1,540 1,697 - 1,372 1,477 - Single family owner occupied 16,100 18,467 - 15,588 17,835 - Owner occupied construction 503 511 - 648 648 - Consumer and other loans Consumer loans 413 424 - 290 294 - Total impaired loans with no allowance 38,097 42,398 - 28,685 32,884 - Impaired loans with a related allowance Commercial loans Commercial and industrial - - - - - - Multi-family residential 944 1,278 222 - - - Single family non-owner occupied - - - - - - Non-farm, non-residential 1,779 1,970 565 1,241 1,227 292 Farmland - - - - - - Consumer real estate loans Home equity lines - - - - - - Single family owner occupied 1,418 1,522 239 1,246 1,246 353 Consumer and other loans Consumer loans - - - - - - Total impaired loans with an allowance 4,141 4,770 1,026 2,487 2,473 645 Total impaired loans (1) $ 42,238 $ 47,168 $ 1,026 $ 31,172 $ 35,357 $ 645 ( 1 Total recorded investment of impaired loans include loans totaling $33.48 million as of September 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Average Average Average Average Interest Income Recorded Interest Income Recorded Interest Income Recorded Interest Income Recorded (Amounts in thousands) Recognized Investment Recognized Investment Recognized Investment Recognized Investment Impaired loans with no related allowance: Commercial loans Construction, development, and other land $ 6 $ 882 $ 5 $ 570 $ 21 $ 1,021 $ 17 $ 720 Commercial and industrial 46 3,315 2 66 135 2,845 7 277 Multi-family residential 9 967 5 1,269 38 685 21 1,385 Single family non-owner occupied 54 5,090 41 2,958 126 4,798 97 3,063 Non-farm, non-residential 79 7,786 20 4,590 206 7,115 84 4,832 Agricultural 4 272 9 223 7 247 11 108 Farmland 12 1,526 19 1,536 48 1,640 45 1,474 Consumer real estate loans Home equity lines 13 1,588 17 1,463 29 1,569 31 1,452 Single family owner occupied 120 16,328 176 16,593 410 17,044 454 16,123 Owner occupied construction 2 542 3 224 12 470 7 223 Consumer and other loans Consumer loans 8 420 6 319 19 445 10 187 Total impaired loans with no related allowance 353 38,716 303 29,811 1,051 37,879 784 29,844 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 8 1,789 20 1,254 22 1,670 28 602 Farmland - - - - - - - - Consumer real estate loans Home equity lines - - - - - - - - Single family owner occupied 3 1,423 (30 ) 1,253 27 1,480 35 2,177 Owner occupied construction - - - - - - - - Total impaired loans with a related allowance 11 4,156 (10 ) 2,507 49 4,093 63 2,779 Total impaired loans $ 364 $ 42,872 $ 293 $ 32,318 $ 1,100 $ 41,972 $ 847 $ 32,623 The Company generally places a loan on nonaccrual status when it is 90 not September 30, 2020 December 31, 2019 (Amounts in thousands) Non-covered Covered Total Non-covered Covered Total Commercial loans Construction, development, and other land $ 285 $ - $ 285 $ 211 $ - $ 211 Commercial and industrial 1,765 - 1,765 530 - 530 Multi-family residential 1,536 - 1,536 1,144 - 1,144 Single family non-owner occupied 3,289 - 3,289 1,286 - 1,286 Non-farm, non-residential 6,612 - 6,612 3,400 - 3,400 Agricultural 267 - 267 158 - 158 Farmland 814 - 814 713 - 713 Consumer real estate loans Home equity lines 951 313 1,264 753 220 973 Single family owner occupied 8,012 20 8,032 7,259 24 7,283 Owner occupied construction 536 - 536 428 - 428 Consumer and other loans Consumer loans 357 - 357 231 - 231 Total nonaccrual loans $ 24,424 $ 333 $ 24,757 $ 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 September 30, 2020 December 31, 2019 September 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 $ - $ - $ 285 $ 285 $ 46,500 $ 46,785 Commercial and industrial 1,280 163 1,061 2,504 177,210 179,714 Multi-family residential 810 334 1,202 2,346 103,301 105,647 Single family non-owner occupied 842 636 2,255 3,733 185,532 189,265 Non-farm, non-residential 608 1,856 3,619 6,083 742,732 748,815 Agricultural 1 16 84 101 10,261 10,362 Farmland 125 - 737 862 22,111 22,973 Consumer real estate loans Home equity lines 509 248 443 1,200 92,856 94,056 Single family owner occupied 2,894 1,286 3,533 7,713 636,885 644,598 Owner occupied construction 71 91 394 556 16,904 17,460 Consumer and other loans Consumer loans 1,679 436 187 2,302 116,436 118,738 Other - - - - 5,838 5,838 Total non-covered loans 8,819 5,066 13,800 27,685 2,156,566 2,184,251 Covered loans Commercial loans Construction, development, and other land - - - - 27 27 Single family non-owner occupied - - - - 188 188 Non-farm, non-residential - - - - - - Consumer real estate loans Home equity lines 123 - 263 386 7,693 8,079 Single family owner occupied 20 - - 20 2,430 2,450 Total covered loans 143 - 263 406 10,338 10,744 Total loans $ 8,962 $ 5,066 $ 14,063 $ 28,091 $ 2,166,904 $ 2,194,995 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 September 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 September 30, 2020 19 not 19 not September, 30, 2020, The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: September 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 - 1,342 1,342 - - - Single family non-owner occupied 538 1,274 1,812 552 595 1,147 Non-farm, non-residential - 2,419 2,419 - 307 307 Consumer real estate loans Home equity lines - 81 81 - 115 115 Single family owner occupied 1,535 5,573 7,108 1,790 5,305 7,095 Owner occupied construction - 217 217 - 221 221 Consumer and other loans Consumer loans - 30 30 - 32 32 Total TDRs $ 2,073 $ 10,936 $ 13,009 $ 2,342 $ 6,575 $ 8,917 Allowance for loan losses related to TDRs $ 347 $ 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Amounts in thousands) Interest income recognized $ 122 $ 56 $ 372 $ 203 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, 2020 2019 Post-modification Post-modification Total Pre-modification Recorded Total Pre-modification Recorded (Amounts in thousands) Contracts Recorded Investment Investment(1) Contracts Recorded Investment Investment(1) Below market interest rate and extended payment term Single family non-owner occupied - - - - - - Single family owner occupied - - - Total below market interest rate and extended payment term - - - - - - Payment deferral Commercial and industrial - - - - - - Non-farm, non-residential - - - - - - Single family owner occupied - - - 1 33 29 Total principal deferral - - - 1 33 29 Total - $ - $ - 1 $ 33 $ 29 ( 1 Represents the loan balance immediately following modification Nine Months Ended September 30, 2020 2019 Post-modification Post-modification Total Pre-modification Recorded Total Pre-modification Recorded (Amounts in thousands) Contracts Recorded Investment Investment(1) Contracts Recorded Investment 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 - - - 2 221 218 Single family owner occupied - - - 2 488 480 Total below market interest rate and extended payment term - - - 4 709 698 Payment deferral Construction, development, and other land 1 63 63 - - - Commercial and industrial 3 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 33 29 Home equity lines - - - - - - Total principal deferral 11 5,157 5,141 1 33 29 Total 12 $ 5,207 $ 5,191 5 $ 742 $ 727 ( 1 Represents the loan balance immediately following modification Payment defaults on loans modified as TDRs restructured within the previous 12 September 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: September 30, 2020 December 31, 2019 (Amounts in thousands) OREO $ 2,103 $ 3,969 OREO secured by residential real estate $ 767 $ 2,232 Residential real estate loans in the foreclosure process (1) 2,938 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 |