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 table presents 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, 2021 December 31, 2020, June 30, 2021 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Commercial loans Construction, development, and other land $ 56,754 $ 1,176 $ 2,630 $ - $ - $ 60,560 Commercial and industrial 141,623 1,588 4,557 - - 147,768 Multi-family residential 92,541 6,164 1,642 - - 100,347 Single family non-owner occupied 173,524 5,628 10,844 12 - 190,008 Non-farm, non-residential 584,778 99,699 28,612 - - 713,089 Agricultural 7,712 409 544 - - 8,665 Farmland 13,536 1,122 3,627 - - 18,285 Consumer real estate loans Home equity lines 82,558 1,166 3,527 - - 87,251 Single family owner occupied 645,953 2,662 31,248 - - 679,863 Owner occupied construction 20,874 - 284 - - 21,158 Consumer and other loans Consumer loans 120,482 11 1,574 - - 122,067 Other 4,670 - - - - 4,670 Total loans $ 1,945,005 $ 119,625 $ 89,089 $ 12 $ - $ 2,153,731 December 31, 2020 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Commercial loans Construction, development, and other land $ 36,934 $ 4,975 $ 2,765 $ - $ - $ 44,674 Commercial and industrial 160,625 7,065 5,519 - - 173,209 Multi-family residential 103,291 8,586 3,284 - - 115,161 Single family non-owner occupied 165,146 9,602 12,838 12 - 187,598 Non-farm, non-residential 568,438 125,907 40,448 - - 734,793 Agricultural 7,724 1,686 339 - - 9,749 Farmland 13,527 2,597 3,637 - - 19,761 Consumer real estate loans - Home equity lines 91,712 1,488 3,326 - - 96,526 Single family owner occupied 623,860 3,859 33,335 - - 661,054 Owner occupied construction 17,232 201 287 - - 17,720 Consumer and other loans - Consumer loans 118,134 28 2,211 - - 120,373 Other 6,014 - - - - 6,014 Total loans $ 1,912,637 $ 165,994 $ 107,989 $ 12 $ - $ 2,186,632 The following tables present the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of the date indicated. (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at June 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Construction, development and other land Pass $ 22,604 $ 13,297 $ 6,228 $ 4,275 $ 1,984 $ 7,884 $ 482 $ 56,754 Special Mention - 276 - 144 675 45 36 1,176 Substandard - - 47 13 271 2,299 - 2,630 Doubtful - - - - - - - - Loss - - - - - - - - Total construction, development, and other land $ 22,604 $ 13,573 $ 6,275 $ 4,432 $ 2,930 $ 10,228 $ 518 $ 60,560 Commercial and industrial Pass $ 32,081 $ 7,490 $ 18,298 $ 16,740 $ 4,356 $ 5,864 $ 15,164 $ 99,993 Special Mention - 233 700 335 159 30 131 1,588 Substandard 6 400 903 261 1,148 789 1,050 4,557 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial and industrial $ 32,087 $ 8,123 $ 19,901 $ 17,336 $ 5,663 $ 6,683 $ 16,345 $ 106,138 Paycheck Protection Loans Pass $ 12,640 $ 28,990 $ - $ - $ - $ - $ - $ 41,630 Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total Paycheck Protection Loans $ 12,640 $ 28,990 $ - $ - $ - $ - $ - $ 41,630 Multi-family residential Pass $ 10,042 $ 25,747 $ 5,933 $ 2,125 $ 5,443 $ 42,386 $ 865 $ 92,541 Special Mention - - - - 2,563 3,601 - 6,164 Substandard - - - - 673 969 - 1,642 Doubtful - - - - - - - - Loss - - - - - - - - Total multi-family residential $ 10,042 $ 25,747 $ 5,933 $ 2,125 $ 8,679 $ 46,956 $ 865 $ 100,347 Non-farm, non-residential Pass $ 84,705 $ 142,842 $ 54,883 $ 65,458 $ 40,496 $ 182,786 $ 13,608 $ 584,778 Special Mention - 16,654 10,098 2,779 25,664 44,169 335 99,699 Substandard 1,184 724 3,880 5,754 9,877 6,833 360 28,612 Doubtful - - - - - - - - Loss - - - - - - - - Total non-farm, non-residential $ 85,889 $ 160,220 $ 68,861 $ 73,991 $ 76,037 $ 233,788 $ 14,303 $ 713,089 Agricultural Pass $ 1,770 $ 2,297 $ 1,317 $ 730 $ 768 $ 316 $ 514 $ 7,712 Special Mention 47 31 190 28 35 19 59 409 Substandard - 13 252 69 28 182 - 544 Doubtful - - - - - - - - Loss - - - - - - - - Total agricultural $ 1,817 $ 2,341 $ 1,759 $ 827 $ 831 $ 517 $ 573 $ 8,665 Farmland Pass $ 657 $ 1,216 $ 107 $ 1,182 $ 529 $ 8,129 $ 1,716 $ 13,536 Special Mention 113 - - 267 448 294 - 1,122 Substandard 81 15 832 250 258 2,191 - 3,627 Doubtful - - - - - - - - Loss - - - - - - - - Total farmland $ 851 $ 1,231 $ 939 $ 1,699 $ 1,235 $ 10,614 $ 1,716 $ 18,285 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at June 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Home equity lines Pass $ 160 $ 267 $ - $ 25 $ 1 $ 5,701 $ 76,404 $ 82,558 Special Mention - - - 124 - 102 940 1,166 Substandard - - 23 123 121 1,528 1,732 3,527 Doubtful - - - - - - - - Loss - - - - - - - - Total home equity lines $ 160 $ 267 $ 23 $ 272 $ 122 $ 7,331 $ 79,076 $ 87,251 Single family Mortgage Pass $ 118,905 $ 235,227 $ 70,800 $ 53,587 $ 51,466 $ 288,601 $ 891 $ 819,477 Special Mention 334 807 948 387 1,163 4,422 229 8,290 Substandard 754 742 1,833 2,262 2,468 34,033 - 42,092 Doubtful - - - - - 12 - 12 Loss - - - - - - - - Total single family owner occupied $ 119,993 $ 236,776 $ 73,581 $ 56,236 $ 55,097 $ 327,068 $ 1,120 $ 869,871 Owner occupied construction Pass $ 2,409 $ 12,076 $ 2,470 $ 1,479 $ 448 $ 1,992 $ - $ 20,874 Special Mention - - - - - - - - Substandard - - - - - 284 - 284 Doubtful - - - - - - - - Loss - - - - - - - - Total owner occupied construction $ 2,409 $ 12,076 $ 2,470 $ 1,479 $ 448 $ 2,276 $ - $ 21,158 Consumer loans Pass $ 35,655 $ 43,108 $ 24,125 $ 7,190 $ 3,213 $ 9,373 $ 2,488 $ 125,152 Special Mention - - 10 - - - 1 11 Substandard - 278 782 123 154 156 81 1,574 Doubtful - - - - - - - - Loss - - - - - - - - Total consumer loans $ 35,655 $ 43,386 $ 24,917 $ 7,313 $ 3,367 $ 9,529 $ 2,570 $ 126,737 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at June 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans Pass $ 321,628 $ 512,557 $ 184,161 $ 152,791 $ 108,704 $ 553,032 $ 112,132 $ 1,945,005 Special Mention 494 18,001 11,946 4,064 30,707 52,682 1,731 119,625 Substandard 2,025 2,172 8,552 8,855 14,998 49,264 3,223 89,089 Doubtful - - - - - 12 - 12 Loss - - - - - - - - Total loans $ 324,147 $ 532,730 $ 204,659 $ 165,710 $ 154,409 $ 654,990 $ 117,086 $ 2,153,731 Prior to the adoption of ASU 2016 13, 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 date indicated prior to the adoption of ASU 2016 13: December 31, 2020 Unpaid Recorded Principal Related (Amounts in thousands) Investment Balance Allowance Impaired loans with no related allowance Commercial loans Construction, development, and other land $ 616 $ 891 $ - Commercial and industrial 2,341 2,392 - Multi-family residential 946 1,593 - Single family non-owner occupied 4,816 5,785 - Non-farm, non-residential 8,238 9,467 - Agricultural 218 226 - Farmland 1,228 1,311 - Consumer real estate loans Home equity lines 1,604 1,772 - Single family owner occupied 16,778 19,361 - Owner occupied construction 216 216 - Consumer and other loans Consumer loans 818 833 - Total impaired loans with no allowance 37,819 43,847 - Impaired loans with a related allowance Commercial loans Commercial and industrial - - - Multi-family residential - - - Single family non-owner occupied - - - Non-farm, non-residential 1,068 1,121 319 Farmland - - - Consumer real estate loans Home equity lines - - - Single family owner occupied 338 338 108 Consumer and other loans Consumer loans - - - Total impaired loans with an allowance 1,406 1,459 427 Total impaired loans(1) $ 39,225 $ 45,306 $ 427 ( 1 Total recorded investment of impaired loans include loans totaling $31.18 million as of December 31, 2020 not Prior to the adoption of ASU 2016 13, Three Months Ended June 30, Six Months Ended June 30, 2020 2020 Average Average Interest Income Recorded Interest Income Recorded (Amounts in thousands) Recognized Investment Recognized Investment Impaired loans with no related allowance: Commercial loans Construction, development, and other land $ 7 $ 882 $ 15 $ 1,091 Commercial and industrial 60 3,191 89 2,610 Multi-family residential 18 417 29 544 Single family non-owner occupied 37 5,203 72 4,652 Non-farm, non-residential 84 8,886 127 6,780 Agricultural 2 264 3 235 Farmland 15 1,835 36 1,698 Consumer real estate loans Home equity lines 7 1,652 16 1,560 Single family owner occupied 122 17,251 290 17,401 Owner occupied construction 4 534 10 434 Consumer and other loans Consumer loans 7 507 11 455 Total impaired loans with no related allowance 363 40,622 698 37,460 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 14 1,611 Farmland - - - - Consumer real estate loans Home equity lines - - - - Single family owner occupied 11 1,777 24 1,508 Owner occupied construction - - - - Total impaired loans with a related allowance 25 4,605 38 4,062 Total impaired loans $ 388 $ 45,227 $ 736 $ 41,522 The Company generally places a loan on nonaccrual status when it is 90 June 30, 2021; June 30, 2021 (Amounts in thousands) No Allowance With an Allowance Total Commercial loans Construction, development, and other land $ 364 $ - $ 364 Commercial and industrial 1,853 - 1,853 Multi-family residential 328 - 328 Single family non-owner occupied 4,077 - 4,077 Non-farm, non-residential 5,796 287 6,083 Agricultural 135 - 135 Farmland 480 - 480 Consumer real estate loans - Home equity lines 979 - 979 Single family owner occupied 9,234 - 9,234 Owner occupied construction - - - Consumer and other loans - Consumer loans 552 - 552 Total nonaccrual loans $ 23,798 $ 287 $ 24,085 During the three 2021, six 2021 The following table presents nonaccrual loans prior to the adoption of ASU 2016 13. not December 31, 2020; (Amounts in thousands) December 31, 2020 Commercial loans Construction, development, and other land $ 244 Commercial and industrial 895 Multi-family residential 946 Single family non-owner occupied 2,990 Non-farm, non-residential 6,343 Agricultural 217 Farmland 489 Consumer real estate loans Home equity lines 1,122 Single family owner occupied 7,976 Owner occupied construction - Consumer and other loans Consumer loans 781 Total nonaccrual loans $ 22,003 The following table presents the aging of past due loans, by loan class, as of the date indicated. Nonaccrual loans 30 June 30, 2021 Amortized Cost of 30 - 59 Days 60 - 89 Days 90+ Days Total Current Total > 90 Days Accruing (Amounts in thousands) Past Due Past Due Past Due Past Due Loans Loans No Allowance Commercial loans Construction, development, and other land $ 766 $ - $ 357 $ 1,123 $ 59,437 $ 60,560 $ - Commercial and industrial 601 413 1,234 2,248 145,520 147,768 - Multi-family residential - - 328 328 100,019 100,347 - Single family non-owner occupied 725 563 2,264 3,552 186,456 190,008 211 Non-farm, non-residential 638 356 2,859 3,853 709,236 713,089 - Agricultural 123 206 21 350 8,315 8,665 - Farmland - 8 333 341 17,944 18,285 - Consumer real estate loans Home equity lines 288 135 696 1,119 86,132 87,251 95 Single family owner occupied 2,751 1,551 3,865 8,167 671,696 679,863 - Owner occupied construction - - - - 21,158 21,158 - Consumer and other loans Consumer loans 1,897 368 255 2,520 119,547 122,067 21 Other - - - - 4,670 4,670 - Total loans $ 7,789 $ 3,600 $ 12,212 $ 23,601 $ 2,130,130 $ 2,153,731 $ 327 The following table presents the aging of past due loans, by loan class, as of the date indicated prior to the adoption of ASU 2016 13. 30 not 90 December 31, 2020 December 31, 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 Commercial loans Construction, development, and other land $ 1,039 $ - $ 235 $ 1,274 $ 43,400 $ 44,674 Commercial and industrial 669 230 700 1,599 171,425 173,024 Multi-family residential 103 - 946 1,049 114,112 115,161 Single family non-owner occupied 925 488 2,144 3,557 184,226 187,783 Non-farm, non-residential 601 296 3,368 4,265 730,528 734,793 Agricultural 70 189 88 347 9,402 9,749 Farmland 43 - 457 500 19,261 19,761 Consumer real estate loans Home equity lines 649 380 425 1,454 95,072 96,526 Single family owner occupied 5,317 2,265 3,891 11,473 649,581 661,054 Owner occupied construction 82 - - 82 17,638 17,720 Consumer and other loans Consumer loans 2,637 746 651 4,034 116,339 120,373 Other - - - - 6,014 6,014 Total loans $ 12,135 $ 4,594 $ 12,905 $ 29,634 $ 2,156,998 $ 2,186,632 ASC 326 may June 30, 2021 (Amounts in thousands) Balance Collateral Coverage % Commercial Real Estate Hotel $ - $ - - Office - - - Other 2,791 2,858 102.40 % Retail - - - Multi-Family Industrial - - - Office - - - Other - - - Commercial and industrial Industrial - - - Other - - - Home equity loans 41 41 100.00 % Consumer owner occupied 185 185 100.00 % Consumer - - - Total collateral dependent loans $ 3,017 $ 3,084 102.22 % The Company may six The CARES Act included a provision allowing banks to not 19 March 1, 2020, December 31, 2021, 60 19 not 30 December 31, 2019. From March, 2020, June 30, 2021 19 not 19 not June 30, 2021, 19 The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: June 30, 2021 December 31, 2020 (Amounts in thousands) Nonaccrual(1) Accruing Total Nonaccrual(1) Accruing Total Commercial loans Construction, development, and other land $ - $ - $ - $ - $ - $ - Commercial and industrial 405 619 1,024 - 1,326 1,326 Single family non-owner occupied 655 592 1,247 1,585 1,265 2,850 Non-farm, non-residential 1,374 2,076 3,450 - 2,407 2,407 Consumer real estate loans Home equity lines - 72 72 - 77 77 Single family owner occupied 1,198 4,707 5,905 229 4,927 5,156 Owner occupied construction - 214 214 - 216 216 Consumer and other loans Consumer loans - 29 29 - 30 30 Total TDRs $ 3,632 $ 8,309 $ 11,941 $ 1,814 $ 10,248 $ 12,062 Allowance for credit losses related to TDRs $ 159 $ - ( 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, 2021 2020 2021 2020 (Amounts in thousands) Interest income recognized $ 94 $ 152 $ 198 $ 250 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, 2021 2020 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 Construction, development, and other land - - - - - - Commercial and industrial - - - 1 1,106 1,106 Single family non-owner occupied - - - - - - 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 ( 1 Represents the loan balance immediately following modification Six Months Ended June 30, 2021 2020 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 - - - - - - Single family owner occupied - - - - - - Total below market interest rate and extended payment term - - - - - - 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 1 1,390 1,374 3 2,115 2,115 Single family owner occupied - - - 3 742 726 Home equity lines - - - - - - Total principal deferral 1 1,390 1,374 10 5,157 5,141 Total 1 $ 1,390 $ 1,374 11 $ 5,207 $ 5,191 ( 1 Represents the loan balance immediately following modification There were no payment defaults on loans modified as TDRs restructured within the previous 12 June 30, 2021 one June 30, 2020. 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, 2021 December 31, 2020 (Amounts in thousands) OREO $ 1,324 $ 2,083 OREO secured by residential real estate $420 $ 769 Residential real estate loans in the foreclosure process (1) 3,606 4,141 ( 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 |