Restructurings for Borrowers Experiencing Financial Difficulty

9 Months Ended

Sep. 30, 2023

Restructurings for Borrowers Experiencing Financial Difficulty

NOTE 6. Restructurings for Borrowers Experiencing Financial Difficulty

The Company adopted the amendments in ASU 2022-02, which eliminated accounting guidance on TDR loans for creditors and requires enhanced disclosures for loan modifications to borrowers experiencing financial difficulty that we made on or after January 1, 2023.

The following table presents the amortized cost of loans that were modified during the nine months ended September 30, 2023 by loan portfolio segment:


	September 30, 2023
	(in thousands)
	Term Extension		Total		% of Total Class of Loans
Mortgage real estate loans:
Residential First Lien - Owner Occupied	$	355	$	355		0.22	%
Total	$	355	$	355

None of the loans that were modified defaulted during the nine months ended September 30, 2023 and the loans remain current with contractual payments as of September 30, 2023. The financial effects of the term extensions during the period added a weighted average of 1.0 years to the life of loans which reduced the payment amounts for the borrowers.

There were no loans to borrowers experiencing financial difficulty that were modified during the three months ended September 30, 2023.

Prior to the adoption of ASU 2022-02, the Company accounted for a modification to the contractual terms of a loan that resulting in granting a concession to a borrower experiencing financial difficulties as a TDR.

During the three and nine months ended September 30, 2022, the Company classified five and 11 loans, respectively as troubled debt restructurings.


	Three Months Ended
	September 30, 2022
	(in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer:
Installment		1	$	20	$	21
Residential:
Single Family		4		894		894
Total		5	$	914	$	915

	Nine Months Ended
	September 30, 2022
	(in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial Real Estate:
Owner Occupied		1	$	185	$	185
Non-Owner Occupied		1		161		161
Construction and Farmland:
Commercial		1		639		639
Consumer:
Installment		1		20		21
Residential:
Single family		7		1,433		1,451
Total		11	$	2,438	$	2,457

There were no payment defaults during the three and nine months ended September 30, 2022 for TDRs that were restructured within the preceding twelve-month period.

Management defines default as over 30 days contractually past due under the modified terms, the foreclosure and/or repossession of the collateral, or the charge-off of the loan during the twelve-month period subsequent to the modification.