XML 27 R12.htm IDEA: XBRL DOCUMENT v3.24.0.1
Loans and Asset Quality
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Loans and Asset Quality Loans and Asset Quality
Loans
Loans HFI by category and loans HFS are summarized below:
December 31,
(in thousands)20232022
Real estate:
Commercial real estate$851,582 $794,723 
One-to-four family residential599,487 543,511 
Construction and development125,238 157,364 
Commercial and industrial315,327 310,067 
Tax-exempt72,913 83,166 
Consumer28,311 27,436 
Total loans HFI$1,992,858 $1,916,267 
Total loans HFS$1,306 $518 
Deferred loan origination fees, net of certain direct costs, were $1.4 million as of December 31, 2023 and 2022.
Accrued interest receivable on loans HFI totaled $6.8 million and $5.8 million as of December 31, 2023 and 2022, respectively, and was reported in accrued interest receivable on the accompanying consolidated balance sheets.
Concentrations of Credit Risk
The majority of the lending activity occurs within the Bank’s Louisiana markets. The Bank maintains a diversified loan portfolio with a focus on commercial real estate, one-to-four family residential real estate, and commercial and industrial loans. Substantially all of the Bank’s real estate loans are secured by properties located within Louisiana.
Allowance for Credit Losses
Effective January 1, 2023, the Company adopted the provisions of ASC 326 using the modified retrospective method. For reporting periods beginning on and after January 1, 2023, the Company maintains an ACL on all loans that reflects management’s estimate of expected credit losses for the full life of the loan portfolio.
The following table summarizes the activity in the ACL by category for the year ended December 31, 2023:
(in thousands)Beginning
Balance
Impact of ASC 326 Adoption
Provision
for Credit
Losses		Charge-offsRecoveriesEnding
Balance
Real estate:
Commercial real estate$7,720 $876 $522 $— $— $9,118 
One-to-four family residential5,682 1,231 584 (23)10 7,484 
Construction and development1,654 (444)108 (9)— 1,309 
Commercial and industrial4,350 (822)(947)(58)30 2,553 
Tax-exempt751 (427)251 — — 575 
Consumer471 (136)217 (383)128 297 
Total allowance for credit losses$20,628 $278 $735 $(473)$168 $21,336 
Allowance for Loan Losses
For reporting periods prior to January 1, 2023, the Company maintained an ALL on loans that represented management’s estimate of probable losses incurred in the portfolio category.
The following table summarizes the activity in the ALL by category for the year ended December 31, 2022:
(in thousands)Beginning
Balance		Provision
for Loan
Losses		Charge-offsRecoveriesEnding
Balance
Real estate:
Commercial real estate$6,749 $970 $— $1 $7,720 
One-to-four family residential5,375 296 — 11 5,682 
Construction and development1,326 328 (18)18 1,654 
Commercial and industrial4,465 (162)(39)86 4,350 
Tax-exempt749 2 — — 751 
Consumer512 316 (490)133 471 
Total allowance for loan losses$19,176 $1,750 $(547)$249 $20,628 
The following table summarizes the activity in the ALL by category for the year ended December 31, 2021:
(in thousands)Beginning
Balance		Provision
for Loan
Losses		Charge-offsRecoveriesEnding
Balance
Real estate:
Commercial real estate$5,798 $1,401 $(450)$— $6,749 
One-to-four family residential5,390 (23)(10)18 5,375 
Construction and development1,699 (375)— 2 1,326 
Commercial and industrial3,949 563 (74)27 4,465 
Tax-exempt680 69 — — 749 
Consumer435 265 (351)163 512 
Total allowance for loan losses$17,951 $1,900 $(885)$210 $19,176 
The balance in the ACL and the related recorded investment in loans by category as of December 31, 2023, are as follows:
(in thousands)Individually
Evaluated
for
Impairment		Collectively
Evaluated
for
Impairment		Total
Allowance for credit losses:
Real estate:
Commercial real estate$342 $8,776 $9,118 
One-to-four family residential57 7,427 7,484 
Construction and development— 1,309 1,309 
Commercial and industrial226 2,327 2,553 
Tax-exempt— 575 575 
Consumer104 193 297 
Total allowance for credit losses$729 $20,607 $21,336 
Loans:
Real estate:
Commercial real estate$1,379 $850,203 $851,582 
One-to-four family residential751 598,736 599,487 
Construction and development— 125,238 125,238 
Commercial and industrial972 314,355 315,327 
Tax-exempt— 72,913 72,913 
Consumer140 28,171 28,311 
Total loans HFI$3,242 $1,989,616 $1,992,858 
The balance in the ALL and the related recorded investment in loans by category as of December 31, 2022, are as follows:
(in thousands)Individually
Evaluated
for
Impairment		Collectively
Evaluated
for
Impairment		Total
Allowance for loan losses:
Real estate:
Commercial real estate$15 $7,705 $7,720 
One-to-four family residential16 5,666 5,682 
Construction and development— 1,654 1,654 
Commercial and industrial172 4,178 4,350 
Tax-exempt— 751 751 
Consumer111 360 471 
Total allowance for loan losses$314 $20,314 $20,628 
Loans:
Real estate:
Commercial real estate$4,513 $790,210 $794,723 
One-to-four family residential1,507 542,004 543,511 
Construction and development9 157,355 157,364 
Commercial and industrial1,402 308,665 310,067 
Tax-exempt— 83,166 83,166 
Consumer137 27,299 27,436 
Total loans HFI$7,568 $1,908,699 $1,916,267 
Nonaccrual and Past Due Loans
The following table presents nonaccrual loans as of December 31, 2023:
(in thousands)Nonaccrual with No ACLNonaccrual with ACLTotal Nonaccrual
Real estate:
Commercial real estate$— $714 $714 
One-to-four family residential— 269 269 
Construction and development— — — 
Commercial and industrial709 135 844 
Tax-exempt— — — 
Consumer— 132 132 
Total loans HFI$709 $1,250 $1,959 
No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the years ended December 31, 2023, 2022, or 2021.
The following table presents the aging analysis of the past due loans and loans 90 days or more past due and still accruing interest by loan category as of December 31, 2023:
Past Due
(in thousands)30-59 Days60-89 Days
Past Due		90 Days
or More		CurrentTotal
Loans HFI		90 Days or More Past Due and Accruing
Real estate:
Commercial real estate$36 $— $678 $850,868 $851,582 $— 
One-to-four family residential392 251 409 598,435 599,487 260 
Construction and development— — 265 124,973 125,238 265 
Commercial and industrial132 60 847 314,288 315,327 45 
Tax-exempt— — — 72,913 72,913 — 
Consumer27 16 46 28,222 28,311 4 
Total loans HFI$587 $327 $2,245 $1,989,699 $1,992,858 $574 
The following table presents the current, past due, and nonaccrual loans by category as of December 31, 2022:
Accruing
(in thousands)Current30-89 Days
Past Due		90 Days
or More
Past Due		NonaccrualTotal
Loans
Real estate:
Commercial real estate$793,540 $463 $— $720 $794,723 
One-to-four family residential542,666 602 — 243 543,511 
Construction and development157,355 — — 9 157,364 
Commercial and industrial308,611 165 — 1,291 310,067 
Tax-exempt83,166 — — — 83,166 
Consumer27,291 42 2 101 27,436 
Total loans HFI$1,912,629 $1,272 $2 $2,364 $1,916,267 
Impaired Loans
For reporting periods prior to January 1, 2023, when ASC 326 was adopted, the Company individually evaluated impaired loans, including TDRs and performing and nonperforming loans. Once a loan was deemed to be impaired, the difference between the loan value and the Bank’s exposure was charged-off or a specific reserve was established.
Information pertaining to impaired loans as of and for the year ended December 31, 2022, is as follows:
(in thousands)Unpaid
Principal
Balance		Recorded
Investment		Related
Allowance		Average
Recorded
Investment		Interest
Income
Recognized
With no related allowance recorded:
Real estate:
Commercial real estate$3,804 $3,796 $— $3,194 $135 
One-to-four family residential1,458 1,387 — 797 68 
Construction and development9 9 — 104 — 
Commercial and industrial51 51 — 58 4 
Tax-exempt— — — — — 
Consumer26 26 — 9 1 
Total with no related allowance5,348 5,269 — 4,162 208 
With allowance recorded:
Real estate:
Commercial real estate717 717 15 1,264 33 
One-to-four family residential120 120 16 48 6 
Construction and development— — — — — 
Commercial and industrial1,360 1,351 172 623 4 
Tax-exempt— — — — — 
Consumer113 111 111 122 1 
Total with related allowance2,310 2,299 314 2,057 44 
Total impaired loans$7,658 $7,568 $314 $6,219 $252 
Information pertaining to impaired loans as of and for the year ended December 31, 2021, is as follows:
(in thousands)Unpaid
Principal
Balance		Recorded
Investment		Related
Allowance		Average
Recorded
Investment		Interest
Income
Recognized
With no related allowance recorded:
Real estate:
Commercial real estate$1,599 $1,595 $— $1,969 $78 
One-to-four family residential483 434 — 539 19 
Construction and development501 501 — 400 32 
Commercial and industrial— — — 355 — 
Tax-exempt— — — — — 
Consumer8 8 — 4 1 
Total with no related allowance2,591 2,538 — 3,267 130 
With allowance recorded:
Real estate:
Commercial real estate3,416 3,416 68 2,111 64 
One-to-four family residential— — — 145 — 
Construction and development— — — — — 
Commercial and industrial85 77 40 1,570 5 
Tax-exempt— — — — — 
Consumer118 118 118 112 5 
Total with related allowance3,619 3,611 226 3,938 74 
Total impaired loans$6,210 $6,149 $226 $7,205 $204 
Loan Modifications
The Company adopted ASU No. 2022-02 Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023, using the prospective method. This ASU eliminates the TDR recognition and measurement guidance and requires all loan modifications to be evaluated based on whether the modification represents a new loan or a continuation of an existing loan. Modifications are made to a borrower experiencing financial difficulty, and the modified terms are in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or a term extension in the current reporting period.
As of December 31, 2023, the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty during the year ended December 31, 2023 is as follows:
December 31, 2023
(dollars in thousands)Term ExtensionTotal Class of Loans ReceivableFinancial Effect
Real estate:
Commercial real estate$— — %
One-to-four family residential300 0.1 %
Amortization period was extended by a weighted-average of 2.34 years.
Construction and development— — %
Commercial and industrial— — %
Tax-exempt— — %
Consumer— — %
Total$300 0.1 %
Troubled Debt Restructurings
For reporting periods prior to January 1, 2023, when ASC 326 was adopted, the restructuring of a loan was considered a TDR if the borrower was experiencing financial difficulties and the Bank had granted a concession.
A summary of current, past due, and nonaccrual TDR loans as of December 31, 2022, is as follows:
(dollars in thousands)Current30-89
Days
Past Due		90 Days
or More
Past Due		NonaccrualTotal
TDRs
Real estate:
Commercial real estate$3,197 $— $— $42 $3,239 
One-to-four family residential797 151 — 22 970 
Construction and development— — — — — 
Commercial and industrial— — — — — 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer10 — — 101 111 
Total$4,004 $151 $— $165 $4,320 
Number of TDR loans11 2 — 3 16 
A summary of loans modified as TDRs that occurred during the years ended December 31, 2022 and 2021, is as follows:
December 31, 2022December 31, 2021
Recorded InvestmentRecorded Investment
(dollars in thousands)Loan
Count		Pre
Modification		Post
Modification		Loan
Count		Pre
Modification		Post
Modification
Real estate:
Commercial real estate1 $50 $50 1 $2,174 $2,184 
One-to-four family residential5 696 699 — — — 
Construction and development— — — — — — 
Commercial and industrial— — — — — — 
Tax-exempt— — — — — — 
Consumer1 104 104 1 20 27 
Total7 $850 $853 2 $2,194 $2,211 
The TDRs described above increased the ALL by $101,000 and $14,000 during the years ended December 31, 2022 and 2021, respectively. Additionally, there were no charge-offs of TDRs in 2022 or 2021, and there were no TDRs that subsequently defaulted in 2022 or 2021.
Credit Quality Indicators
Loans are categorized based on the degree of risk inherent in the credit and the ability of the borrower to service the debt. A description of the general characteristics of the Bank’s risk rating grades follows:
Pass - These loans are of satisfactory quality and do not require a more severe classification.
Special Mention - This category includes loans with potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan. However, the loss potential does not warrant substandard classification.
Substandard - Loans in this category have well-defined weaknesses that jeopardize normal repayment of principal and interest. Prompt corrective action is required to reduce exposure and to assure adequate remedial actions are taken by the borrower. If these weaknesses do not improve, loss is possible.
Doubtful - Loans in this category have well-defined weaknesses that make full collection improbable.
Loss - Loans classified in this category are considered uncollectible and charged-off to the ACL.
As of December 31, 2023, the Company had no loans classified as doubtful or loss. The following table summarizes loans by risk rating and year of origination as of December 31, 2023:
Year of Origination
(in thousands)20232022202120202019Prior YearsRevolving LinesTotal
Real estate:
Commercial real estate
Pass$124,134 $256,707 $239,364 $76,754 $63,475 $61,957 $18,467 $840,858 
Special mention73 — 3,186 — 1,031 4,082 — 8,372 
Substandard184 779 675 — — 714 — 2,352 
Total$124,391 $257,486 $243,225 $76,754 $64,506 $66,753 $18,467 $851,582 
One-to-four family residential
Pass$122,004 $134,583 $129,388 $90,190 $31,110 $74,077 $16,472 $597,824 
Special mention— — — — — 261 — 261 
Substandard— 79 — 37 385 827 74 1,402 
Total$122,004 $134,662 $129,388 $90,227 $31,495 $75,165 $16,546 $599,487 
Construction and development
Pass$54,189 $55,515 $10,333 $1,742 $2,158 $1,015 $286 $125,238 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Total$54,189 $55,515 $10,333 $1,742 $2,158 $1,015 $286 $125,238 
Commercial and industrial
Pass$73,653 $49,637 $51,012 $13,863 $7,409 $813 $107,171 $303,558 
Special mention1,208 937 4,659 — 310 509 3,173 10,796 
Substandard4 — 59 5 54 51 800 973 
Total$74,865 $50,574 $55,730 $13,868 $7,773 $1,373 $111,144 $315,327 
Tax-exempt
Pass$959 $15,679 $8,174 $13,919 $4,250 $29,932 $— $72,913 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Total$959 $15,679 $8,174 $13,919 $4,250 $29,932 $— $72,913 
Consumer
Pass$16,947 $6,385 $2,325 $858 $363 $133 $1,173 $28,184 
Special mention— — — — — — — — 
Substandard— 29 — — — 90 8 127 
Total$16,947 $6,414 $2,325 $858 $363 $223 $1,181 $28,311 
Total loans HFI$393,355 $520,330 $449,175 $197,368 $110,545 $174,461 $147,624 $1,992,858 
Current period gross charge-offs$12 $20 $1 $— $10 $25 $405 $473 
The following table summarizes loans by risk rating as of December 31, 2022:
(in thousands)PassSpecial
Mention		SubstandardDoubtfulLossTotal
Real estate:
Commercial real estate$786,394 $5,759 $2,570 $— $— $794,723 
One-to-four family residential542,112 62 1,337 — — 543,511 
Construction and development157,355 — 9 — — 157,364 
Commercial and industrial297,166 11,428 1,473 — — 310,067 
Tax-exempt83,166 — — — — 83,166 
Consumer27,298 — 138 — — 27,436 
Total loans HFI$1,893,491 $17,249 $5,527 $— $— $1,916,267 
Commitments to Extend Credit
Commitments to extend credit are agreements to lend to a customer if all conditions of the commitment have been met. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s evaluation of the customer’s ability to repay. Unfunded loan commitments totaled approximately $372.0 million and $377.6 million as of December 31, 2023 and 2022, respectively.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Commitments under standby letters of credit totaled approximately $15.4 million and $14.6 million as of December 31, 2023 and 2022, respectively. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.
Effective January 1, 2023, the Company adopted the provision of ASC 326 using the modified retrospective method and established a reserve for unfunded commitments based on estimates of expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. As of December 31, 2023, the reserve on unfunded commitments was $442,000.