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. Included in total loans December 31, 2020, 80%. 2020. September 30, 2021 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Commercial loans Construction, development, and other land $ 54,228 $ 1,151 $ 1,087 $ - $ - $ 56,466 Commercial and industrial 127,972 1,270 4,681 - - 133,923 Multi-family residential 92,782 6,115 1,547 - - 100,444 Single family non-owner occupied 182,006 4,931 9,999 10 - 196,946 Non-farm, non-residential 653,550 39,020 19,291 - - 711,861 Agricultural 9,006 149 629 - - 9,784 Farmland 13,032 1,069 3,513 - - 17,614 Consumer real estate loans Home equity lines 78,975 1,049 3,055 - - 83,079 Single family owner occupied 650,705 2,535 31,690 - - 684,930 Owner occupied construction 25,268 - 283 - - 25,551 Consumer and other loans Consumer loans 124,805 17 1,756 - - 126,578 Other 4,927 - - - - 4,927 Total loans $ 2,017,256 $ 57,306 $ 77,531 $ 10 $ - $ 2,152,103 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 September 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Construction, development and other land Pass $ 28,542 $ 9,501 $ 3,687 $ 3,908 $ 1,564 $ 6,672 $ 354 $ 54,228 Special Mention - 245 - 136 684 50 36 1,151 Substandard - - 129 11 281 666 - 1,087 Doubtful - - - - - - - - Loss - - - - - - - - Total construction, development, and other land $ 28,542 $ 9,746 $ 3,816 $ 4,055 $ 2,529 $ 7,388 $ 390 $ 56,466 Commercial and industrial Pass $ 23,780 $ 21,186 $ 15,178 $ 15,115 $ 5,599 $ 3,641 $ 16,543 $ 101,042 Special Mention 32 165 653 209 86 30 95 1,270 Substandard 187 196 833 390 1,242 1,316 517 4,681 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial and industrial $ 23,999 $ 21,547 $ 16,664 $ 15,714 $ 6,927 $ 4,987 $ 17,155 $ 106,993 Paycheck Protection Loans Pass $ 22,680 $ 4,250 $ - $ - $ - $ - $ - $ 26,930 Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total Paycheck Protection Loans $ 22,680 $ 4,250 $ - $ - $ - $ - $ - $ 26,930 Multi-family residential Pass $ 8,908 $ 25,468 $ 4,774 $ 1,960 $ 4,972 $ 45,766 $ 934 $ 92,782 Special Mention 5 - - - 2,663 3,447 - 6,115 Substandard - - - - 680 867 - 1,547 Doubtful - - - - - - - - Loss - - - - - - - - Total multi-family residential $ 8,913 $ 25,468 $ 4,774 $ 1,960 $ 8,315 $ 50,080 $ 934 $ 100,444 Non-farm, non-residential Pass $ 102,761 $ 149,981 $ 64,144 $ 62,563 $ 56,696 $ 203,387 $ 14,018 $ 653,550 Special Mention 386 3,351 852 2,778 9,276 22,227 150 39,020 Substandard 1,115 689 2,989 2,856 4,804 6,611 227 19,291 Doubtful - - - - - - - - Loss - - - - - - - - Total non-farm, non-residential $ 104,262 $ 154,021 $ 67,985 $ 68,197 $ 70,776 $ 232,225 $ 14,395 $ 711,861 Agricultural Pass $ 4,326 $ 1,825 $ 1,152 $ 612 $ 379 $ 278 $ 434 $ 9,006 Special Mention 44 29 26 8 32 10 - 149 Substandard 43 11 373 47 22 133 - 629 Doubtful - - - - - - - - Loss - - - - - - - - Total agricultural $ 4,413 $ 1,865 $ 1,551 $ 667 $ 433 $ 421 $ 434 $ 9,784 Farmland Pass $ 632 $ 1,073 $ 86 $ 1,158 $ 508 $ 8,041 $ 1,534 $ 13,032 Special Mention 20 - - 262 409 378 - 1,069 Substandard - 10 970 155 265 2,113 - 3,513 Doubtful - - - - - - - - Loss - - - - - - - - Total farmland $ 652 $ 1,083 $ 1,056 $ 1,575 $ 1,182 $ 10,532 $ 1,534 $ 17,614 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at September 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Home equity lines Pass $ 199 $ 1 $ - $ 26 $ - $ 5,259 $ 73,490 $ 78,975 Special Mention - - - 124 - 100 825 1,049 Substandard - - 26 136 108 1,334 1,451 3,055 Doubtful - - - - - - - - Loss - - - - - - - - Total home equity lines $ 199 $ 1 $ 26 $ 286 $ 108 $ 6,693 $ 75,766 $ 83,079 Single family Mortgage Pass $ 184,220 $ 228,685 $ 66,797 $ 48,592 $ 43,567 $ 259,661 $ 1,189 $ 832,711 Special Mention 395 523 956 372 1,058 4,162 - 7,466 Substandard 1,461 632 1,586 2,472 2,396 33,142 - 41,689 Doubtful - - - - - 10 - 10 Loss - - - - - - - - Total single family owner and non-owner occupied $ 186,076 $ 229,840 $ 69,339 $ 51,436 $ 47,021 $ 296,975 $ 1,189 $ 881,876 Owner occupied construction Pass $ 6,327 $ 12,978 $ 2,350 $ 1,448 $ 316 $ 1,849 $ - $ 25,268 Special Mention - - - - - - - - Substandard - - - - - 283 - 283 Doubtful - - - - - - - - Loss - - - - - - - - Total owner occupied construction $ 6,327 $ 12,978 $ 2,350 $ 1,448 $ 316 $ 2,132 $ - $ 25,551 Consumer loans Pass $ 53,230 $ 36,762 $ 20,291 $ 5,842 $ 2,273 $ 9,108 $ 2,226 $ 129,732 Special Mention - - 16 - - - 1 17 Substandard 99 409 866 77 83 144 78 1,756 Doubtful - - - - - - - - Loss - - - - - - - - Total consumer loans $ 53,329 $ 37,171 $ 21,173 $ 5,919 $ 2,356 $ 9,252 $ 2,305 $ 131,505 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at September 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans Pass $ 435,605 $ 491,710 $ 178,459 $ 141,224 $ 115,874 $ 543,662 $ 110,722 $ 2,017,256 Special Mention 882 4,313 2,503 3,889 14,208 30,404 1,107 57,306 Substandard 2,905 1,947 7,772 6,144 9,881 46,609 2,273 77,531 Doubtful - - - - - 10 - 10 Loss - - - - - - - - Total loans $ 439,392 $ 497,970 $ 188,734 $ 151,257 $ 139,963 $ 620,685 $ 114,102 $ 2,152,103 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 September 30, Nine Months Ended September 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 $ 6 $ 882 $ 21 $ 1,021 Commercial and industrial 46 3,315 135 2,845 Multi-family residential 9 967 38 685 Single family non-owner occupied 54 5,090 126 4,798 Non-farm, non-residential 79 7,786 206 7,115 Agricultural 4 272 7 247 Farmland 12 1,526 48 1,640 Consumer real estate loans Home equity lines 13 1,588 29 1,569 Single family owner occupied 120 16,328 410 17,044 Owner occupied construction 2 542 12 470 Consumer and other loans Consumer loans 8 420 19 445 Total impaired loans with no related allowance 353 38,716 1,051 37,879 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 22 1,670 Farmland - - - - Consumer real estate loans Home equity lines - - - - Single family owner occupied 3 1,423 27 1,480 Owner occupied construction - - - - Total impaired loans with a related allowance 11 4,156 49 4,093 Total impaired loans $ 364 $ 42,872 $ 1,100 $ 41,972 The Company generally places a loan on nonaccrual status when it is 90 September 30, 2021 (Amounts in thousands) No Allowance With an Allowance Total Commercial loans Construction, development, and other land $ 385 $ - $ 385 Commercial and industrial 1,933 - 1,933 Multi-family residential 251 - 251 Single family non-owner occupied 2,759 - 2,759 Non-farm, non-residential 3,127 2,599 5,726 Agricultural 221 - 221 Farmland 222 - 222 Consumer real estate loans - Home equity lines 702 - 702 Single family owner occupied 9,086 - 9,086 Owner occupied construction - - - Consumer and other loans - Consumer loans 782 - 782 Total nonaccrual loans $ 19,468 $ 2,599 $ 22,067 During the three 2021, nine 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 September 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 $ 80 $ 9 $ 381 $ 470 $ 55,996 $ 56,466 $ - Commercial and industrial 534 197 1,309 2,040 131,883 133,923 - Multi-family residential - 98 35 133 100,311 100,444 - Single family non-owner occupied 454 354 1,234 2,042 194,904 196,946 - Non-farm, non-residential 1,199 1,577 2,430 5,206 706,655 711,861 - Agricultural 31 19 181 231 9,553 9,784 - Farmland - 7 222 229 17,385 17,614 - Consumer real estate loans Home equity lines 555 87 452 1,094 81,985 83,079 - Single family owner occupied 4,137 1,584 3,694 9,415 675,515 684,930 - Owner occupied construction - - - - 25,551 25,551 - Consumer and other loans Consumer loans 2,753 761 363 3,877 122,701 126,578 5 Other - - - - 4,927 4,927 - Total loans $ 9,743 $ 4,693 $ 10,301 $ 24,737 $ 2,127,366 $ 2,152,103 $ 5 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 September 30, 2021 (Amounts in thousands) Balance Collateral Coverage % Commercial Real Estate Hotel $ - $ - - Office - - - Other 2,769 2,769 100.00 % Retail - - - Multi-Family Industrial - - - Office - - - Other - - - Commercial and industrial Industrial - - - Other - - - Home equity loans 40 40 100.00 % Consumer owner occupied 183 183 100.00 % Consumer - - - Total collateral dependent loans $ 2,992 $ 2,992 100.00 % 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, September 30, 2021 19 not 19 not September 30, 2021 19 The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: September 30, 2021 December 31, 2020 (Amounts in thousands) Nonaccrual(1) Accruing Total Nonaccrual(1) Accruing Total Commercial loans Construction, development, and other land $ - $ 213 $ 213 $ - $ - $ - Commercial and industrial 405 495 900 - 1,326 1,326 Single family non-owner occupied 871 356 1,227 1,585 1,265 2,850 Non-farm, non-residential 1,369 2,049 3,418 - 2,407 2,407 Consumer real estate loans Home equity lines - 69 69 - 77 77 Single family owner occupied 959 4,975 5,934 229 4,927 5,156 Owner occupied construction - - - - 216 216 Consumer and other loans Consumer loans - 28 28 - 30 30 Total TDRs $ 3,604 $ 8,185 $ 11,789 $ 1,814 $ 10,248 $ 12,062 Allowance for credit losses related to TDRs $ 154 $ - ( 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, 2021 2020 2021 2020 (Amounts in thousands) Interest income recognized $ 92 $ 122 $ 290 $ 372 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, 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 2 302 283 - - - Total below market interest rate and extended payment term 2 302 283 - - - Payment deferral Construction, development, and other land - - - - - - Commercial and industrial - - - - - - Single family non-owner occupied - - - - - - Non-farm, non-residential - - - - - - Single family owner occupied - - - - - - Total principal deferral - - - - - - Total 2 $ 302 $ 283 - $ - $ - ( 1 Represents the loan balance immediately following modification Nine Months Ended September 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 2 302 283 - - - Total below market interest rate and extended payment term 2 302 283 - - - 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 1 1,390 1,368 3 2,115 2,115 Single family owner occupied - - - 3 742 726 Home equity lines - - - - - - Total principal deferral 1 1,390 1,368 11 5,157 5,141 Total 3 $ 1,692 $ 1,651 12 $ 5,207 $ 5,191 ( 1 Represents the loan balance immediately following modification There was one 12 September 30, 2021 one September 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: September 30, 2021 December 31, 2020 (Amounts in thousands) OREO $ 1,240 $ 2,083 OREO secured by residential real estate $ 540 $ 769 Residential real estate loans in the foreclosure process (1) $ 3,114 $ 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 |