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: June 30, 2022 Special (Amounts in thousands) Pass Mention Substandard Doubtful Loss Total Commercial loans Construction, development, and other land $ 91,872 $ 417 $ 551 $ - $ - $ 92,840 Commercial and industrial 136,353 982 2,457 - - 139,792 Multi-family residential 123,403 649 222 - - 124,274 Single family non-owner occupied 184,275 2,287 8,551 - - 195,113 Non-farm, non-residential 723,467 16,794 12,108 - - 752,369 Agricultural 9,754 54 179 - - 9,987 Farmland 10,584 603 1,646 - - 12,833 Consumer real estate loans Home equity lines 75,540 430 3,029 - - 78,999 Single family owner occupied 692,766 2,041 27,563 - - 722,370 Owner occupied construction 17,167 - 164 - - 17,331 Consumer and other loans Consumer loans 145,934 11 2,796 - - 148,741 Other 5,149 - - - - 5,149 Total loans $ 2,216,264 $ 24,268 $ 59,266 $ - $ - $ 2,299,798 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 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, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Construction, development and other land Pass $ 19,079 $ 49,774 $ 10,616 $ 2,732 $ 3,037 $ 6,280 $ 354 $ 91,872 Special Mention - - - - 111 270 36 417 Substandard - - 255 36 12 248 - 551 Doubtful - - - - - - - - Loss - - - - - - - - Total construction, development, and other land $ 19,079 $ 49,774 $ 10,871 $ 2,768 $ 3,160 $ 6,798 $ 390 $ 92,840 Commercial and industrial Pass $ 44,408 $ 28,875 $ 15,160 $ 10,273 $ 11,012 $ 8,013 $ 16,545 $ 134,286 Special Mention - 25 35 601 226 - 95 982 Substandard 145 176 222 588 231 578 517 2,457 Doubtful - - - - - - - - Loss - - - - - - - - Total commercial and industrial $ 44,553 $ 29,076 $ 15,417 $ 11,462 $ 11,469 $ 8,591 $ 17,157 $ 137,725 Paycheck Protection Loans Pass $ - $ 2,038 $ 29 $ - $ - $ - $ - $ 2,067 Special Mention - - - - - - - - Substandard - - - - - - - - Doubtful - - - - - - - - Loss - - - - - - - - Total Paycheck Protection Loans $ - $ 2,038 $ 29 $ - $ - $ - $ - $ 2,067 Multi-family residential Pass $ 33,938 $ 10,932 $ 23,800 $ 4,354 $ 1,807 $ 47,638 $ 934 $ 123,403 Special Mention - - - - - 649 - 649 Substandard - - - - - 222 - 222 Doubtful - - - - - - - - Loss - - - - - - - - Total multi-family residential $ 33,938 $ 10,932 $ 23,800 $ 4,354 $ 1,807 $ 48,509 $ 934 $ 124,274 Non-farm, non-residential Pass $ 134,331 $ 139,073 $ 129,979 $ 57,546 $ 39,902 $ 208,618 $ 14,018 $ 723,467 Special Mention - 1,969 868 1,216 2,571 10,020 150 16,794 Substandard - 1,144 692 2,471 722 6,851 228 12,108 Doubtful - - - - - - - - Loss - - - - - - - - Total non-farm, non-residential $ 134,331 $ 142,186 $ 131,539 $ 61,233 $ 43,195 $ 225,489 $ 14,396 $ 752,369 Agricultural Pass $ 2,560 $ 3,779 $ 1,258 $ 601 $ 407 $ 715 $ 434 $ 9,754 Special Mention - 37 17 - - - - 54 Substandard - 40 7 84 36 12 - 179 Doubtful - - - - - - - - Loss - - - - - - - - Total agricultural $ 2,560 $ 3,856 $ 1,282 $ 685 $ 443 $ 727 $ 434 $ 9,987 Farmland Pass $ 166 $ 727 $ 1,002 $ 77 $ 903 $ 6,176 $ 1,533 $ 10,584 Special Mention - 110 - - 232 261 - 603 Substandard - - 13 - 257 1,376 - 1,646 Doubtful - - - - - - - - Loss - - - - - - - - Total farmland $ 166 $ 837 $ 1,015 $ 77 $ 1,392 $ 7,813 $ 1,533 $ 12,833 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at June 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Home equity lines Pass $ 1,026 $ 102 $ - $ - $ 62 $ 861 $ 73,489 $ 75,540 Special Mention - - - - - - 430 430 Substandard - - 85 36 205 1,253 1,450 3,029 Doubtful - - - - - - - - Loss - - - - - - - - Total home equity lines $ 1,026 $ 102 $ 85 $ 36 $ 267 $ 2,114 $ 75,369 $ 78,999 Single family Mortgage Pass $ 92,181 $ 235,009 $ 213,126 $ 54,675 $ 39,796 $ 241,066 $ 1,188 $ 877,041 Special Mention - 387 85 372 266 3,218 - 4,328 Substandard 382 1,041 715 1,082 2,172 30,722 - 36,114 Doubtful - - - - - - - - Loss - - - - - - - - Total single family owner and non-owner occupied $ 92,563 $ 236,437 $ 213,926 $ 56,129 $ 42,234 $ 275,006 $ 1,188 $ 917,483 Owner occupied construction Pass $ 2,591 $ 11,768 $ 2,005 $ 32 $ 16 $ 755 $ - $ 17,167 Special Mention - - - - - - - - Substandard - - 163 - - 1 - 164 Doubtful - - - - - - - - Loss - - - - - - - - Total owner occupied construction $ 2,591 $ 11,768 $ 2,168 $ 32 $ 16 $ 756 $ - $ 17,331 Consumer loans Pass $ 53,360 $ 49,325 $ 22,059 $ 11,474 $ 3,844 $ 8,796 $ 2,225 $ 151,083 Special Mention - 3 - 7 - - 1 11 Substandard 55 1,049 730 645 52 189 76 2,796 Doubtful - - - - - - - - Loss - - - - - - - - Total consumer loans $ 53,415 $ 50,377 $ 22,789 $ 12,126 $ 3,896 $ 8,985 $ 2,302 $ 153,890 (Amounts in thousands) Term Loans Amortized Cost Basis by Origination Year Balance at June 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Total Loans Pass $ 383,640 $ 531,402 $ 419,034 $ 141,764 $ 100,786 $ 528,918 $ 110,720 $ 2,216,264 Special Mention - 2,531 1,005 2,196 3,406 14,418 712 24,268 Substandard 582 3,450 2,882 4,942 3,687 41,452 2,271 59,266 Doubtful - - - - - - - - Loss - - - - - - - - Total loans $ 384,222 $ 537,383 $ 422,921 $ 148,902 $ 107,879 $ 584,788 $ 113,703 $ 2,299,798 (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 The Company generally places a loan on nonaccrual status when it is 90 June 30, 2022 December 31, 2021 (Amounts in thousands) No Allowance With an Allowance Total No Allowance With an Allowance Total Commercial loans Construction, development, and other land $ 277 $ - $ 277 $ 409 $ - $ 409 Commercial and industrial 435 - 435 1,734 - 1,734 Multi-family residential 266 - 266 208 - 208 Single family non-owner occupied 2,132 - 2,132 2,304 - 2,304 Non-farm, non-residential 2,815 - 2,815 3,439 1,100 4,539 Agricultural 22 - 22 136 - 136 Farmland 133 - 133 222 - 222 Consumer real estate loans Home equity lines 775 - 775 767 - 767 Single family owner occupied 8,816 - 8,816 8,957 - 8,957 Owner occupied construction - - - - - - Consumer and other loans Consumer loans 2,155 - 2,155 1,492 - 1,492 Total nonaccrual loans $ 17,826 $ - $ 17,826 $ 19,668 $ 1,100 $ 20,768 During the second 2022 2021 first six 2022 2021 The following tables presents the aging of past due loans, by loan class, as of the dates indicated. Nonaccrual loans 30 June 30, 2022 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 $ 231 $ 252 $ 25 $ 508 $ 92,332 $ 92,840 $ - Commercial and industrial 346 84 192 622 139,170 139,792 - Multi-family residential 148 - - 148 124,126 124,274 - Single family non-owner occupied 180 327 502 1,009 194,104 195,113 - Non-farm, non-residential 90 16 2,050 2,156 750,213 752,369 - Agricultural 16 - 13 29 9,958 9,987 - Farmland - - 133 133 12,700 12,833 - Consumer real estate loans Home equity lines 405 123 469 997 78,002 78,999 - Single family owner occupied 3,977 2,471 3,017 9,465 712,905 722,370 - Owner occupied construction - - - - 17,331 17,331 - Consumer and other loans Consumer loans 3,002 1,035 1,176 5,213 143,528 148,741 - Other - - - - 5,149 5,149 - Total loans $ 8,395 $ 4,308 $ 7,577 $ 20,280 $ 2,279,518 $ 2,299,798 $ - 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 $ - ASC 326 may June 30, 2022 December 31, 2021 (Amounts in thousands) Balance Collateral Coverage % Balance Collateral Coverage % Commercial Real Estate Hotel $ - $ - - $ - $ - - Office - - - - - - Other 766 972 126.89 % 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 $ 766 $ 972 126.89 % $ 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, 2021, 60 19 not 30 December 31, 2019. The following table presents loans modified as TDRs, by loan class and accrual status, as of the dates indicated: June 30, 2022 December 31, 2021 (Amounts in thousands) Nonaccrual(1) Accruing Total Nonaccrual(1) Accruing Total Commercial loans Commercial and industrial $ - $ 432 $ 432 $ 396 $ 470 $ 866 Single family non-owner occupied 150 853 1,003 857 1,100 1,957 Non-farm, non-residential - 1,963 1,963 - 2,021 2,021 Consumer real estate loans Home equity lines - 61 61 - 67 67 Single family owner occupied 1,284 4,978 6,262 1,266 4,755 6,021 Owner occupied construction - - - - 212 212 Consumer and other loans Consumer loans - 26 26 - 27 27 Total TDRs $ 1,434 $ 8,313 $ 9,747 $ 2,519 $ 8,652 $ 11,171 Allowance for credit 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: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (Amounts in thousands) Interest income recognized $ 97 $ 94 $ 202 $ 198 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, 2022 2021 (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) Extended term Single family owner occupied 2 $ 238 $ 245 - $ - $ - Total extended term 2 238 245 - - - Total 2 $ 238 $ 245 - $ - $ - ( 1 Represents the loan balance immediately following modification Six Months Ended June 30, 2022 2021 (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 $ 31 $ 31 - $ - $ - Total below market interest rate 1 $ 31 $ 31 - - - Extended payment term Single family owner occupied 2 238 245 - - - Total extended payment term 2 238 245 - - - Payment deferral Non-farm, non-residential - - - 1 1,390 1,374 Total principal deferral - - - 1 1,390 1,374 Total 3 $ 269 $ 276 1 $ 1,390 $ 1,374 ( 1 Represents the loan balance immediately following modification There was one 39 thousand 12 June 30, 2022 none June 30, 2021 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, 2022 December 31, 2021 (Amounts in thousands) OREO $ 579 $ 1,015 OREO secured by residential real estate $ 221 $ 337 Residential real estate loans in the foreclosure process (1) $ 2,741 $ 2,210 ( 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 |