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Note 5 - Credit Quality

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

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 be upgraded or downgraded to reflect current information identified during the loan review process. The general characteristics of each risk grade are as follows:

●

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 corrected, the prospect of repayment may worsen.

●

Substandard -- This grade is assigned to loans that have well defined weaknesses that may make payment default, or principal exposure, possible. These loans will likely be dependent on collateral liquidation, secondary repayment sources, or events outside the normal course of business to meet repayment terms.

●

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 imply that the asset has no recovery or salvage value, but simply means that it is not practical or desirable to defer writing off, either all or a portion of, the loan balance even though partial recovery may be realized in the future.

The following table presents the recorded investment of the loan portfolio, by loan class and credit quality, as of the dates indicated:

		*September 30, 2023*
						*Special*
(Amounts in thousands)		*Pass*				*Mention*				*Substandard*				*Doubtful*				*Loss*				*Total*
Commercial loans
Construction, development, and other land		$	111,792			$	1,567			$	431			$	-			$	-			$	113,790
Commercial and industrial			209,349				1,881				2,311				-				-				213,541
Multi-family residential			165,500				3,558				187				-				-				169,245
Single family non-owner occupied			221,021				2,039				7,776				-				-				230,836
Non-farm, non-residential			864,326				19,858				12,371				-				-				896,555
Agricultural			16,497				3,954				1,695				-				-				22,146
Farmland			14,246				498				1,253				-				-				15,997
Consumer real estate loans
Home equity lines			84,681				653				2,890				-				-				88,224
Single family owner occupied			677,149				2,402				24,238				-				-				703,789
Owner occupied construction			10,692				-				-				-				-				10,692
Consumer and other loans
Consumer loans			124,372				8				2,537				-				-				126,917
Other			1,740				-				-				-				-				1,740
Total loans		$	2,501,365			$	36,418			$	55,689			$	-			$	-			$	2,593,472

		*December 31, 2022*
						*Special*
(Amounts in thousands)		*Pass*				*Mention*				*Substandard*				*Doubtful*				*Loss*				*Total*

Commercial loans
Construction, development, and other land		$	115,972			$	853			$	349			$	-			$	-			$	117,174
Commercial and industrial			147,543				920				1,965				-				-				150,428
Multi-family residential			143,859				3,946				221				-				-				148,026
Single family non-owner occupied			195,775				2,303				8,043				-				-				206,121
Non-farm, non-residential			761,154				14,903				11,646				-				-				787,703
Agricultural			11,722				47				263				-				-				12,032
Farmland			9,868				573				1,338				-				-				11,779
Consumer real estate loans
Home equity lines			72,927				288				2,427				-				-				75,642
Single family owner occupied			706,952				1,958				25,630				-				-				734,540
Owner occupied construction			10,204				-				162				-				-				10,366
Consumer and other loans
Consumer loans			141,551				11				3,020				-				-				144,582
Other			1,804				-				-				-				-				1,804
Total loans		$	2,319,331			$	25,802			$	55,064			$	-			$	-			$	2,400,197

The following tables present the amortized cost basis and current period gross write-offs 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, 2023		*2023*				*2022*				*2021*				*2020*				*2019*				*Prior*				*Revolving*				*Total*
Construction, development and other land
Pass		$	9,463			$	66,682			$	21,568			$	4,214			$	2,768			$	4,409			$	2,688			$	111,792
Special mention			-				1,328				-				156				-				83				-				1,567
Substandard			-				-				-				-				181				250				-				431
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total construction, development, and other land		$	9,463			$	68,010			$	21,568			$	4,370			$	2,949			$	4,742			$	2,688			$	113,790
Current period gross write-offs		$	-			$	-			$	-			$	-			$	13			$	-			$	-			$	13
Commercial and industrial
Pass		$	34,735			$	68,271			$	21,700			$	12,935			$	6,447			$	14,313			$	50,948			$	209,349
Special mention			-				466				19				9				377				910				100				1,881
Substandard			120				395				401				110				540				745				-				2,311
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total commercial and industrial		$	34,855			$	69,132			$	22,120			$	13,054			$	7,364			$	15,968			$	51,048			$	213,541
Current period gross write-offs		$	-			$	169			$	143			$	37			$	32			$	-			$	-			$	381
Multi-family residential
Pass		$	3,854			$	48,919			$	36,874			$	30,303			$	3,308			$	38,420			$	3,822			$	165,500
Special mention			-				-				-				-				-				3,558				-				3,558
Substandard			-				-				-				-				-				187				-				187
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total multi-family residential		$	3,854			$	48,919			$	36,874			$	30,303			$	3,308			$	42,165			$	3,822			$	169,245
Current period gross write-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Non-farm, non-residential
Pass		$	63,691			$	239,671			$	151,689			$	118,814			$	54,564			$	224,907			$	10,990			$	864,326
Special mention			65				588				4,229				1,013				-				13,920				43				19,858
Substandard			1,204				241				1,980				522				3,214				4,989				221				12,371
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total non-farm, non-residential		$	64,960			$	240,500			$	157,898			$	120,349			$	57,778			$	243,816			$	11,254			$	896,555
Current period gross write-offs		$	-			$	8			$	-			$	-			$	-			$	4			$	-			$	12
Agricultural
Pass		$	4,441			$	4,863			$	2,604			$	773			$	723			$	2,203			$	890			$	16,497
Special mention			29				281				189				10				97				3,348				-				3,954
Substandard			-				24				110				-				1,301				260				-				1,695
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total agricultural		$	4,470			$	5,168			$	2,903			$	783			$	2,121			$	5,811			$	890			$	22,146
Current period gross write-offs		$	-			$	59			$	-			$	10			$	13			$	8			$	-			$	90
Farmland
Pass		$	1,197			$	1,614			$	1,641			$	950			$	766			$	7,242			$	836			$	14,246
Special mention			-				-				106				-				-				392				-				498
Substandard			-				-				-				-				-				1,253				-				1,253
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total farmland		$	1,197			$	1,614			$	1,747			$	950			$	766			$	8,887			$	836			$	15,997
Current period gross write-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

(Amounts in thousands)		*Term Loans Amortized Cost Basis by Origination Year*
Balance at September 30, 2023		*2023*				*2022*				*2021*				*2020*				*2019*				*Prior*				*Revolving*				*Total*
Home equity lines
Pass		$	393			$	914			$	94			$	74			$	70			$	4,098			$	79,038			$	84,681
Special mention			-				-				-				-				-				48				605				653
Substandard			-				12				-				27				35				1,827				989				2,890
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total home equity lines		$	393			$	926			$	94			$	101			$	105			$	5,973			$	80,632			$	88,224
Current period gross write-offs		$	-			$	-			$	20			$	-			$	-			$	199			$	-			$	219
Single family Mortgage
Pass		$	42,236			$	167,274			$	224,320			$	196,018			$	46,274			$	221,612			$	436			$	898,170
Special mention			-				-				469				96				109				3,767				-				4,441
Substandard			107				468				1,470				1,345				1,486				27,138				-				32,014
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total single family owner and non-owner occupied		$	42,343			$	167,742			$	226,259			$	197,459			$	47,869			$	252,517			$	436			$	934,625
Current period gross write-offs		$	-			$	-			$	47			$	-			$	-			$	185			$	-			$	232
Owner occupied construction
Pass		$	2,093			$	5,826			$	2,343			$	-			$	27			$	403			$	-			$	10,692
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total owner occupied construction		$	2,093			$	5,826			$	2,343			$	-			$	27			$	403			$	-			$	10,692
Current period gross write-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-
Consumer loans
Pass		$	29,131			$	49,752			$	24,035			$	9,264			$	4,051			$	1,307			$	8,572			$	126,112
Special mention			-				-				3				-				3				-				2				8
Substandard			159				942				599				384				192				200				61				2,537
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total consumer loans		$	29,290			$	50,694			$	24,637			$	9,648			$	4,246			$	1,507			$	8,635			$	128,657
Current period gross write-offs		$	772			$	2,726			$	1,549			$	391			$	163			$	44			$	128			$	5,773

(Amounts in thousands)		*Term Loans Amortized Cost Basis by Origination Year*
Balance at September 30, 2023		*2023*				*2022*				*2021*				*2020*				*2019*				*Prior*				*Revolving*				*Total*
Total loans
Pass		$	191,234			$	653,786			$	486,868			$	373,345			$	118,998			$	518,914			$	158,220			$	2,501,365
Special mention			94				2,663				5,015				1,284				586				26,026				750				36,418
Substandard			1,590				2,082				4,560				2,388				6,949				36,849				1,271				55,689
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total loans		$	192,918			$	658,531			$	496,443			$	377,017			$	126,533			$	581,789			$	160,241			$	2,593,472
Current period gross write-offs		$	772			$	2,962			$	1,759			$	438			$	221			$	440			$	128			$	6,720

(Amounts in thousands)		*Term Loans Amortized Cost Basis by Origination Year*
Balance at December 31, 2022		*2022*				*2021*				*2020*				*2019*				*2018*				*Prior*				*Revolving*				*Total*
Construction, development
and other land
Pass		$	58,770			$	39,995			$	4,602			$	3,050			$	2,485			$	5,608			$	1,462			$	115,972
Special mention			-				225				-				-				94				534				-				853
Substandard			-				-				267				71				11				-				-				349
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total construction, development, and other land		$	58,770			$	40,220			$	4,869			$	3,121			$	2,590			$	6,142			$	1,462			$	117,174
Commercial and industrial
Pass		$	69,678			$	23,746			$	12,047			$	7,729			$	9,121			$	8,890			$	16,332			$	147,543
Special mention			227				20				21				367				185				1				99				920
Substandard			130				112				114				620				192				797				-				1,965
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total commercial and industrial		$	70,035			$	23,878			$	12,182			$	8,716			$	9,498			$	9,688			$	16,431			$	150,428
Multi-family residential
Pass		$	45,261			$	20,881			$	31,087			$	3,733			$	1,328			$	41,063			$	506			$	143,859
Special mention			-				-				-				-				-				3,946				-				3,946
Substandard			-				-				-				-				-				221				-				221
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total multi-family residential		$	45,261			$	20,881			$	31,087			$	3,733			$	1,328			$	45,230			$	506			$	148,026
Non-farm, non-residential
Pass		$	218,595			$	145,675			$	114,840			$	52,575			$	35,564			$	185,448			$	8,457			$	761,154
Special mention			-				1,927				852				1,193				2,708				8,076				147				14,903
Substandard			-				1,267				675				2,509				1,531				5,664				-				11,646
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total non-farm, non-residential		$	218,595			$	148,869			$	116,367			$	56,277			$	39,803			$	199,188			$	8,604			$	787,703
Agricultural
Pass		$	6,244			$	3,225			$	1,003			$	376			$	154			$	214			$	506			$	11,722
Special mention			-				33				14				-				-				-				-				47
Substandard			124				37				1				66				24				11				-				263
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total agricultural		$	6,368			$	3,295			$	1,018			$	442			$	178			$	225			$	506			$	12,032
Farmland
Pass		$	646			$	713			$	796			$	77			$	869			$	6,150			$	617			$	9,868
Special mention			-				109				-				-				222				242				-				573
Substandard			-				-				12				-				253				1,073				-				1,338
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total farmland		$	646			$	822			$	808			$	77			$	1,344			$	7,465			$	617			$	11,779

(Amounts in thousands)		*Term Loans Amortized Cost Basis by Origination Year*
Balance at December 31, 2022		*2022*				*2021*				*2020*				*2019*				*2018*				*Prior*				*Revolving*				*Total*
Home equity lines
Pass		$	1,960			$	198			$	241			$	-			$	24			$	7,429			$	63,075			$	72,927
Special mention			-				-				-				-				-				117				171				288
Substandard			-				-				27				35				114				1,253				998				2,427
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total home equity lines		$	1,960			$	198			$	268			$	35			$	138			$	8,799			$	64,244			$	75,642
Single family Mortgage
Pass		$	157,890			$	237,363			$	207,480			$	48,795			$	36,678			$	214,148			$	373			$	902,727
Special mention			-				376				90				363				262				3,170				-				4,261
Substandard			461				1,196				740				1,217				1,991				28,068				-				33,673
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total single family owner and non-owner occupied		$	158,351			$	238,935			$	208,310			$	50,375			$	38,931			$	245,386			$	373			$	940,661
Owner occupied construction
Pass		$	6,357			$	3,344			$	-			$	23			$	11			$	469			$	-			$	10,204
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				162				-				-				-				-				162
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total owner occupied construction		$	6,357			$	3,344			$	162			$	23			$	11			$	469			$	-			$	10,366
Consumer loans
Pass		$	69,579			$	37,603			$	16,033			$	7,640			$	2,528			$	2,040			$	7,932			$	143,355
Special mention			-				5				-				6				-				-				-				11
Substandard			881				1,002				466				416				36				159				60				3,020
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total consumer loans		$	70,460			$	38,610			$	16,499			$	8,062			$	2,564			$	2,199			$	7,992			$	146,386

(Amounts in thousands)		*Term Loans Amortized Cost Basis by Origination Year*
Balance at December 31, 2022		*2022*				*2021*				*2020*				*2019*				*2018*				*Prior*				*Revolving*				*Total*
Total loans
Pass		$	634,980			$	512,743			$	388,129			$	123,998			$	88,762			$	471,459			$	99,260			$	2,319,331
Special mention			227				2,695				977				1,929				3,471				16,086				417				25,802
Substandard			1,596				3,614				2,464				4,934				4,152				37,246				1,058				55,064
Doubtful			-				-				-				-				-				-				-				-
Loss			-				-				-				-				-				-				-				-
Total loans		$	636,803			$	519,052			$	391,570			$	130,861			$	96,385			$	524,791			$	100,735			$	2,400,197

The Company generally places a loan on nonaccrual status when it is 90 days or more past due. The following table presents nonaccrual loans, by loan class, as of the dates indicated:

		*September 30, 2023*												*December 31, 2022*
(Amounts in thousands)		*No Allowance*				*With an Allowance*				*Total*				*No Allowance*				*With an Allowance*				*Total*
Commercial loans
Construction, development, and other land		$	178			$	-			$	178			$	31			$	-			$	31
Commercial and industrial			654				-				654				438				-				438
Multi-family residential			187				-				187				220				-				220
Single family non-owner occupied			968				-				968				984				-				984
Non-farm, non-residential			1,149				1,203				2,352				1,771				-				1,771
Agricultural			1,379				-				1,379				9				-				9
Farmland			123				-				123				133				-				133
Consumer real estate loans
Home equity lines			1,318				-				1,318				400				-				400
Single family owner occupied			9,209				-				9,209				8,228				589				8,817
Owner occupied construction			-				-				-				-				-				-
Consumer and other loans
Consumer loans			1,998				-				1,998				2,405				-				2,405
Total nonaccrual loans		$	17,163			$	1,203			$	18,366			$	14,619			$	589			$	15,208

There was no material nonaccrual loan interest recognized in income during the quarter or for the nine months of both 2023 and 2022.

The following tables presents the aging of past due loans, by loan class, as of the dates indicated. Nonaccrual loans 30 days or more past due are included in the applicable delinquency category:

		*September 30, 2023*
																										*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		$	198			$	7			$	23			$	228			$	113,562			$	113,790			$	-
Commercial and industrial			729				1,109				279				2,117				211,424				213,541				-
Multi-family residential			185				-				-				185				169,060				169,245				-
Single family non-owner occupied			1,067				165				106				1,338				229,498				230,836				-
Non-farm, non-residential			975				120				205				1,300				895,255				896,555				-
Agricultural			423				-				1,379				1,802				20,344				22,146				-
Farmland			-				-				-				-				15,997				15,997				-
Consumer real estate loans
Home equity lines			376				345				877				1,598				86,626				88,224				-
Single family owner occupied			4,366				1,825				4,211				10,402				693,387				703,789				-
Owner occupied construction			196				-				-				196				10,496				10,692				-
Consumer and other loans
Consumer loans			3,930				1,330				953				6,213				120,704				126,917				-
Other			-				-				-				-				1,740				1,740				-
Total loans		$	12,445			$	4,901			$	8,033			$	25,379			$	2,568,093			$	2,593,472			$	-

		*December 31, 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		$	393			$	8			$	23			$	424			$	116,750			$	117,174			$	-
Commercial and industrial			756				129				217				1,102				149,326				150,428				-
Multi-family residential			-				-				83				83				147,943				148,026				-
Single family non-owner occupied			990				122				299				1,411				204,710				206,121				-
Non-farm, non-residential			646				52				548				1,246				786,457				787,703				-
Agricultural			36				135				9				180				11,852				12,032				-
Farmland			-				-				133				133				11,646				11,779				-
Consumer real estate loans
Home equity lines			519				115				262				896				74,746				75,642				-
Single family owner occupied			5,951				2,322				3,166				11,439				723,101				734,540				-
Owner occupied construction			-				-				-				-				10,366				10,366				-
Consumer and other loans
Consumer loans			4,282				1,960				1,459				7,701				136,881				144,582				-
Other			-				-				-				-				1,804				1,804				-
Total loans		$	13,573			$	4,843			$	6,199			$	24,615			$	2,375,582			$	2,400,197			$	-

ASC 326 prescribes that when an entity determines foreclosure is probable, the expected credit loss can be measured based on the fair value of the collateral. As a practical expedient, an entity may use the fair value as of the reporting date when recording the net carrying amount of the asset. For the collateral dependent asset ("CDA") a credit loss expense is recorded for loan amounts in excess of fair value of the collateral. The table below summarizes collateral dependent loans, where foreclosure is probable, by type of collateral, and the extent to which they are collateralized during the period.

		*September 30, 2023*												*December 31, 2022*
(Amounts in thousands)		*Balance*				*Collateral Coverage*				%				*Balance*				*Collateral Coverage*				%
Commercial Real Estate
Hotel		$	-			$	-				-			$	-			$	-				-
Office			-				-				-				-				-				-
Other			1,203				825				68.58	%			-				-				-
Retail			-				-				-				-				-				-
Multi-Family
Industrial			-				-				-				-				-				-
Office			-				-				-				-				-				-
Other			-				-				-				-				-				-
Commercial and industrial
Industrial			-				-				-				-				-				-
Other			-				-				-				-				-				-
Home equity loans			-				-				-				-				-				-
Consumer owner occupied			-				-				-				589				574				97.45	%
Consumer			-				-				-				-				-				-
Total collateral dependent loans		$	1,203			$	825				68.58	%		$	589			$	574				97.45	%

The Company may make concessions in interest rates, loan terms and/or amortization terms when restructuring loans for borrowers experiencing financial difficulty. Effective, January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures. The amendments eliminated TDR accounting guidance for issuers that adopted ASU 2016-13, created a single loan modification accounting model, and clarified disclosure requirements for loan modifications and write-offs. Presented below are the amortized cost basis and percentage of loan class for loan modifications made to borrowers experiencing financial difficulty by loan class, concession type, and financial effect as of the date indicated:

		Payment Delays
		Amortized Cost Basis				% of Total Class of
		September 30, 2023				Financing Receivable			Financial Effect

(Amounts in thousands)
Non farm, non residential property		$	661				0.07	%	Deferred six months of interest to loan maturity.
Single family owner occupied			562				0.08	%	Deferred $66 thousand in principal to loan maturity
Total		$	1,223

		*Term Extensions*
		*Amortized Cost Basis*				*% of Total Class of*
		*September 30, 2023*				*Financing Receivable*			*Financial Effect*

(Amounts in thousands)
Consumer		$	7				0.01	%	Extended term from 60 to 84 months
Total		$	7


		*Principal Forgiveness*
		*Amortized Cost Basis*				*% of Total Class of*
		*September 30, 2023*				*Financing Receivable*			*Financial Effect*

(Amounts in thousands)
Single family owner occupied		$	7				0.00	%	Reduced amortized cost basis by $13 thousand
Total		$	7


		*Term Extension and Rate Reduction*
		*Amortized Cost Basis*				*% of Total Class of*
		*September 30, 2023*				*Financing Receivable*			*Financial Effect*

(Amounts in thousands)
Single family owner occupied		$	437				0.06	%	Reduced interest income and extended time to recover principal.
Total		$	437

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. As of September 30, 2023, there were no modified loans (or portions of a loan) deemed uncollectible.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last three months:

		*September 30, 2023*
		*Payment Status (Amortized Cost Basis)*
		*Current*				*30-89 Days Past Due*				*90+ Days Past Due*

(Amounts in thousands)
Non farm, non residential property		$	661			$	-			$	-
Single family owner occupied			744				262				-
Consumer			7				-				-
Total		$	1,412			$	262			$	-

The Company did not retroactively adopt ASU 2022-02 January 1, 2023; as such the periods are not comparable. Prior to the adoption of ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures below is the presentation of loans modified as TDRs, by loan class and accrual status, as of the dates indicated:

		December 31, 2022
(Amounts in thousands)		Nonaccrual(1)				Accruing				Total
Commercial loans
Commercial and industrial		$	-			$	374			$	374
Single family non-owner occupied			142				838				980
Non-farm, non-residential			-				747				747
Consumer real estate loans
Home equity lines			-				55				55
Single family owner occupied			1,182				5,073				6,255
Owner occupied construction			-				-				-
Consumer and other loans
Consumer loans			-				25				25
Total TDRs		$	1,324			$	7,112			$	8,436

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 September 30,*				*Nine Months Ended September 30,*
		*2022*				*2022*
(Amounts in thousands)
Interest income recognized		$	97			$	299

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,*
		*2022*
(Amounts in thousands)		*Total Contracts*				*Pre-modification Recorded Investment*				*Post-modification Recorded Investment(1)*
Payment deferral
Single family owner occupied			1			$	94			$	72
Total			1			$	94			$	72

		*Nine Months Ended September 30,*
		*2022*
(Amounts in thousands)		*Total Contracts*				*Pre-modification Recorded Investment*				*Post-modification Recorded Investment(1)*
Below market interest rate
Single family owner occupied			1			$	31			$	32
Total below market interest rate			1				31				32
Below market interest rate and extended payment term
Single family owner occupied			3			$	331			$	317
Total below market interest rate and extended payment term			3			$	331			$	317
Total			4			$	362			$	349

(1)	Represents the loan balance immediately following modification

As of September 30, 2022, there were no payments in default for loans modified as TDRs restructured within the previous 12 months.

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, 2023*				*December 31, 2022*
(Amounts in thousands)
OREO		$	243			$	703

OREO secured by residential real estate		$	243			$	407
Residential real estate loans in the foreclosure process⁽¹⁾		$	1,966			$	1,474

(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