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. Included in total loans December 31, 2020, 80%. December 31, 2021 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Commercial loans Construction, development, and other land $ 64,498 $ 451 $ 857 $ — $ — $ 65,806 Commercial and industrial 128,770 1,005 3,855 — — 133,630 Multi-family residential 98,457 1,090 855 — — 100,402 Single family non-owner occupied 186,184 3,607 8,977 10 — 198,778 Non-farm, non-residential 665,559 25,624 16,323 — — 707,506 Agricultural 8,758 70 513 — — 9,341 Farmland 11,939 633 2,441 — — 15,013 Consumer real estate loans Home equity lines 76,259 426 3,172 — — 79,857 Single family owner occupied 671,459 2,420 29,985 — — 703,864 Owner occupied construction 16,629 — 281 — — 16,910 Consumer and other loans Consumer loans 127,514 16 2,264 — — 129,794 Other 4,668 — — — — 4,668 Total loans $ 2,060,694 $ 35,342 $ 69,523 $ 10 $ — $ 2,165,569 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 December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Construction, development and other land Pass $ 40,207 $ 10,127 $ 3,081 $ 3,704 $ 1,308 $ 5,717 $ 354 $ 64,498 Special Mention - 266 - 128 - 21 36 451 Substandard - - 128 11 291 427 - 857 Doubtful - - - - - - - - Loss - - - - - - - - Total construction, development, and other land $ 40,207 $ 10,393 $ 3,209 $ 3,843 $ 1,599 $ 6,165 $ 390 $ 65,806 Commercial and industrial Pass $ 34,539 $ 18,887 $ 13,679 $ 13,772 $ 4,817 $ 5,890 $ 16,544 $ 108,128 Special Mention 32 60 597 192 28 - 96 1,005 Substandard 184 355 706 384 842 866 518 3,855 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial and industrial $ 34,755 $ 19,302 $ 14,982 $ 14,348 $ 5,687 $ 6,756 $ 17,158 $ 112,988 Paycheck Protection Loans Pass $ 16,482 $ 4,160 $ - $ - $ - $ - $ - $ 20,642 Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total Paycheck Protection Loans $ 16,482 $ 4,160 $ - $ - $ - $ - $ - $ 20,642 Multi-family residential Pass $ 11,307 $ 24,299 $ 4,644 $ 1,897 $ 8,413 $ 46,962 $ 935 $ 98,457 Special Mention - - - - - 1,090 - 1,090 Substandard - - - - - 855 - 855 Doubtful - - - - - - - - Loss - - - - - - - - Total multi-family residential $ 11,307 $ 24,299 $ 4,644 $ 1,897 $ 8,413 $ 48,907 $ 935 $ 100,402 Non-farm, non-residential Pass $ 147,978 $ 146,381 $ 62,651 $ 50,943 $ 43,776 $ 199,812 $ 14,018 $ 665,559 Special Mention 397 3,334 823 2,595 9,190 9,135 150 25,624 Substandard 1,161 711 2,508 2,531 3,232 5,953 227 16,323 Doubtful - - - - - - - - Loss - - - - - - - - Total non-farm, non-residential $ 149,536 $ 150,426 $ 65,982 $ 56,069 $ 56,198 $ 214,900 $ 14,395 $ 707,506 Agricultural Pass $ 4,564 $ 1,548 $ 998 $ 534 $ 346 $ 335 $ 433 $ 8,758 Special Mention 43 27 - - - - - 70 Substandard 44 11 282 39 17 120 - 513 Doubtful - - - - - - - - Loss - - - - - - - - Total agricultural $ 4,651 $ 1,586 $ 1,280 $ 573 $ 363 $ 455 $ 433 $ 9,341 Farmland Pass $ 428 $ 1,047 $ 82 $ 1,125 $ 887 $ 6,835 $ 1,535 $ 11,939 Special Mention 189 - - 240 5 199 - 633 Substandard - 14 519 249 264 1,395 - 2,441 Doubtful - - - - - - - - Loss - - - - - - - - Total farmland $ 617 $ 1,061 $ 601 $ 1,614 $ 1,156 $ 8,429 $ 1,535 $ 15,013 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Home equity lines Pass $ 115 $ 59 $ - $ 25 $ 2 $ 2,168 $ 73,890 $ 76,259 Special Mention - - - - - - 426 426 Substandard - - 28 249 128 1,316 1,451 3,172 Doubtful - - - - - - - - Loss - - - - - - - - Total home equity lines $ 115 $ 59 $ 28 $ 274 $ 130 $ 3,484 $ 75,767 $ 79,857 Single family Mortgage Pass $ 239,917 $ 225,294 $ 61,925 $ 46,716 $ 41,757 $ 240,845 $ 1,189 $ 857,643 Special Mention 399 510 937 269 137 3,775 - 6,027 Substandard 1,213 799 1,475 1,668 1,878 31,929 - 38,962 Doubtful - - - - - 10 - 10 Loss - - - - - - - - Total single family owner and non-owner occupied $ 241,529 $ 226,603 $ 64,337 $ 48,653 $ 43,772 $ 276,559 $ 1,189 $ 902,642 Owner occupied construction Pass $ 9,689 $ 4,729 $ 178 $ 22 $ 428 $ 1,583 $ - $ 16,629 Special Mention - - - - - - - - Substandard - - - - - 281 - 281 Doubtful - - - - - - - - Loss - - - - - - - - Total owner occupied construction $ 9,689 $ 4,729 $ 178 $ 22 $ 428 $ 1,864 $ - $ 16,910 Consumer loans Pass $ 65,018 $ 31,065 $ 16,548 $ 4,980 $ 2,306 $ 10,040 $ 2,225 $ 132,182 Special Mention - - 16 - - - - 16 Substandard 328 663 824 107 78 186 78 2,264 Doubtful - - - - - - - - Loss - - - - - - - - Total consumer loans $ 65,346 $ 31,728 $ 17,388 $ 5,087 $ 2,384 $ 10,226 $ 2,303 $ 134,462 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans Pass $ 570,244 $ 467,596 $ 163,786 $ 123,718 $ 104,040 $ 520,187 $ 111,123 $ 2,060,694 Special Mention 1,060 4,197 2,373 3,424 9,360 14,220 708 35,342 Substandard 2,930 2,553 6,470 5,238 6,730 43,328 2,274 69,523 Doubtful - - - - - 10 - 10 Loss - - - - - - - - Total loans $ 574,234 $ 474,346 $ 172,629 $ 132,380 $ 120,130 $ 577,745 $ 114,105 $ 2,165,569 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 Non-farm, non-residential 1,068 1,121 319 Consumer real estate loans Single family owner occupied 338 338 108 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, Year Ended December 31, 2020 2019 (Amounts in thousands) 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 $ 25 $ 935 $ 22 $ 704 Commercial and industrial 155 2,749 34 363 Multi-family residential 19 808 24 1,356 Single family non-owner occupied 189 4,890 123 2,979 Non-farm, non-residential 295 7,450 123 4,683 Agricultural 9 241 9 121 Farmland 63 1,569 55 1,469 Consumer real estate loans Home equity lines 51 1,594 46 1,439 Single family owner occupied 578 17,044 599 16,058 Owner occupied construction 10 407 29 308 Consumer and other loans Consumer loans 42 543 13 213 Total impaired loans with no related allowance 1,436 38,230 1,077 29,693 Impaired loans with a related allowance: Commercial loans Multi-family residential — 707 — — Single family non-owner occupied — — — — Non-farm, non-residential 17 1,524 48 766 Farmland — — — — Consumer real estate loans Home equity lines — — — — Single family owner occupied 29 1,196 46 1,947 Total impaired loans with a related allowance 46 3,427 94 2,713 Total impaired loans $ 1,482 $ 41,657 $ 1,171 $ 32,406 The Company generally places a loan on nonaccrual status when it is 90 December 31, 2021 (Amounts in thousands) No Allowance With an Allowance Total Commercial loans Construction, development, and other land $ 409 $ — $ 409 Commercial and industrial 1,734 — 1,734 Multi-family residential 208 — 208 Single family non-owner occupied 2,304 — 2,304 Non-farm, non-residential 3,439 1,100 4,539 Agricultural 136 — 136 Farmland 222 — 222 Consumer real estate loans — Home equity lines 767 — 767 Single family owner occupied 8,957 — 8,957 Owner occupied construction — — — Consumer and other loans — Consumer loans 1,492 — 1,492 Total nonaccrual loans $ 19,668 $ 1,100 $ 20,768 During 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 December 31, 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 $ 52 $ — $ 120 $ 172 $ 65,634 $ 65,806 $ — Commercial and industrial 325 35 1,394 1,754 131,876 133,630 — Multi-family residential 97 — — 97 100,305 100,402 — Single family non-owner occupied 1,210 583 795 2,588 196,190 198,778 — Non-farm, non-residential 1,002 441 2,333 3,776 703,730 707,506 — Agricultural 73 7 101 181 9,160 9,341 — Farmland 52 — 222 274 14,739 15,013 — Consumer real estate loans Home equity lines 275 388 333 996 78,861 79,857 — Single family owner occupied 4,740 2,584 3,880 11,204 692,660 703,864 — Owner occupied construction 139 — — 139 16,771 16,910 — Consumer and other loans Consumer loans 3,469 1,182 1,049 5,700 124,094 129,794 — Other — — — — 4,668 4,668 — Total loans $ 11,434 $ 5,220 $ 10,227 $ 26,881 $ 2,138,688 $ 2,165,569 $ — 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 December 31, 2021 (Amounts in thousands) Balance Collateral Coverage Coverage Ratio Commercial Real Estate Hotel $ - $ - - Office - - - Other 2,216 2,312 104.33 % Retail - - - Multi-Family Industrial - - - Office - - - Other - - - Commercial and industrial Industrial - - - Other - - - Home equity loans - - - Consumer owner occupied - - - Consumer - - - Total collateral dependent loans $ 2,216 $ 2,312 104.33 % The Company may six The CARES Act included a provision allowing banks to not 19 March 1, 2020 December 31, 2020, 60 19 not 30 December 31, 2019. From March, 2020, December 31, 2021 19 not 19 not December 31, 2021 19 The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: December 31, 2021 2020 (Amounts in thousands) Nonaccrual(1) Accruing Total Nonaccrual(1) Accruing Total Commercial loans Commercial and industrial $ 396 $ 470 $ 866 $ — $ 1,326 $ 1,326 Single family non-owner occupied 857 1,100 1,957 1,585 1,265 2,850 Non-farm, non-residential — 2,021 2,021 — 2,407 2,407 Consumer real estate loans Home equity lines — 67 67 — 77 77 Single family owner occupied 1,266 4,755 6,021 229 4,927 5,156 Owner occupied construction — 212 212 — 216 216 Consumer and other loans — Consumer loans — 27 27 — 30 30 Total TDRs $ 2,519 $ 8,652 $ 11,171 $ 1,814 $ 10,248 $ 12,062 Allowance for credit/loan losses related to TDRs $ — $ — ( 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: Year Ended December 31, 2021 2020 2019 (Amounts in thousands) Interest income recognized $ 422 $ 473 $ 277 The following table presents loans modified as TDRs, by type of concession made and loan class, that were restructured during the periods indicated. Year Ended December 31, 2021 2020 (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 $ 50 $ 50 Below market interest rate and extended payment term Single family non-owner occupied 1 165 165 — — — Single family owner occupied 4 402 402 — — — Total below market interest rate and extended payment term 5 567 567 — — — Principal deferral Construction, development, and other land development — — — 3 1,708 1,708 Non-farm, non-residential — — — 3 2,115 2,115 Home equity — — — — — — Single family non-owner occupied 1 753 753 Single family owner occupied 1 41 41 5 4,908 4,877 Total principal deferral 2 794 794 11 4,908 4,877 Total 7 $ 1,361 $ 1,361 12 $ 4,958 $ 4,927 ( 1 Represents the loan balance immediately following modification The following table presents loans modified as TDRs, by loan class, that were restructured within the previous 12 Year Ended December 31, 2021 2020 Total Recorded Total Recorded Contracts Investment Contracts Investment (Amounts in thousands) Single family owner occupied — $ — 1 $ 53 Total — $ — 1 $ 53 The following table provides information about OREO, which consists of properties acquired through foreclosure, as of the dates indicated: December 31, 2021 December 31, 2020 (Amounts in thousands) Total OREO $ 1,015 $ 2,083 OREO secured by residential real estate $ 337 $ 769 Residential real estate loans in the foreclosure process(1) $ 2,210 $ 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 |