XML 35 R19.htm IDEA: XBRL DOCUMENT v3.25.1
Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans and Allowance for Credit Losses

(6) Loans and Allowance for Credit Losses

 

Loans consisted of the following:

 

         
   As of December 31, 
(Dollars in thousands)  2024   2023 
         
One-to-four family residential real estate loans  $352,209   $302,544 
Construction and land loans   25,328    21,090 
Commercial real estate loans   345,159    320,962 
Commercial loans   192,325    180,942 
Agriculture loans   100,562    89,680 
Municipal loans   7,091    4,507 
Consumer loans   29,679    28,931 
Total gross loans   1,052,353    948,656 
Net deferred loan (fees) costs and loans in process   (307)   (429)
Allowance for credit losses   (12,825)   (10,608)
Loans, net  $1,039,221   $937,619 

 

 

The following tables provide information on the Company’s allowance for credit losses by loan class and allowance methodology:

 

                                 
(Dollars in thousands)                                
   Year ended December 31, 2024 
   One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                 
Allowance for credit losses:                                        
Balance at January 1, 2024  $      2,035   $        150   $4,518   $2,486   $1,190   $15   $214   $10,608 
Charge-offs   -    -    -    (186)   (64)   -    (409)   (659)
Recoveries   -    245    -    35    54    12    130    476 
Provision for credit losses   (270)   (252)   (12)   2,629    47    24    234    2,400 
Balance at December 31, 2024  $1,765   $143   $4,506   $4,964   $1,227   $51   $169   $12,825 

 

                                 
(Dollars in thousands)                                
   Year ended December 31, 2023 
   One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                 
Allowance for credit losses:                                        
Balance at January 1, 2023  $655   $117   $3,158   $2,753   $1,966   $5   $    137   $8,791 
Impact of adopting ASC 326   1,022    49    1,063    145    (824)        11    57    1,523 
Charge-offs   -    -    -    (479)   -    -    (371)   (850)
Recoveries   -    675    -    35    74    -    110    894 
Provision for credit losses   358        (691)   297    32    (26)   (1)   281    250 
Balance at December 31, 2023  $    2,035   $150   $4,518   $2,486   $1,190   $15   $214   $10,608 

 

   One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Paycheck protection loans   Agriculture loans   Municipal loans   Consumer loans   Total 
(Dollars in thousands)                                    
   Year ended December 31, 2022 
   One-to-four family residential real estate loans   Construction and land loans   Commercial real estate loans   Commercial loans   Paycheck protection loans   Agriculture loans   Municipal loans   Consumer loans   Total 
                                     
Allowance for credit losses:                                             
Balance at January 1, 2022  $623   $138   $3,051   $2,613   $-   $2,221   $6   $123   $8,775 
Charge-offs   -    -    -    -    -    -    -    (336)   (336)
Recoveries   -    165    -    38    -    59    6    84    352 
Provision for credit losses   32    (186)   107    102    -    (314)   (7)   266    - 
Balance at December 31, 2022  $655   $117   $3,158   $2,753   $-   $1,966   $5   $137   $8,791 
                                              
Allowance for credit losses:                                             
Individually evaluated for loss  $-   $-   $-   $636   $-   $18   $-   $-   $654 
Collectively evaluated for loss   655    117    3,158    2,117    -    1,948    5    137    8,137 
Total  $655   $117   $3,158   $2,753   $-   $1,966   $5   $137   $8,791 
                                              
Loan balances:                                             
Individually evaluated for loss  $326   $412   $1,224   $812   $-   $1,319   $36   $-   $4,129 
Collectively evaluated for loss   236,656    22,313    302,850    172,603    21    82,964    1,990    26,664    846,061 
Total  $236,982   $22,725   $304,074   $173,415   $21   $84,283   $2,026   $26,664   $850,190 

 

The Company recorded net loan charge offs of $183,000 during 2024 compared to net loan recoveries of $44,000 during 2023.

 

 

The following tables present information on non-accrual status and loans past due over 89 days and still accruing:

 

   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
(Dollars in thousands)  As of December 31, 2024 
   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
             
One-to-four family residential real estate loans  $34   $-   $- 
Commercial real estate loans   782    -    - 
Commercial loans   314    10,939    - 
Agriculture loans   1,046    -           - 
Total loans  $2,176   $10,939   $- 

 

   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
(Dollars in thousands)  As of December 31, 2023 
   Non-accrual with no allowance for credit loss   Non-accrual with allowance for credit losses   Loans past due over 89 days still accruing 
             
One-to-four family residential real estate loans  $161   $31   $- 
Commercial loans   363    1,517    - 
Agriculture loans   295    -    - 
Consumer loans   24    -          - 
Total loans  $843   $1,548   $- 

 

The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following tables present information on the amortized cost basis and collateral type of collateral-dependent loans:

 

(Dollars in thousands)  As of December 31, 2024 
   Loan balance   Collateral Type 
         
One-to-four family residential real estate loans  $34    First mortgage on residential real estate 
Construction and land loans   -    First mortgage on residential or commercial real estate 
Commercial real estate loans   782    First mortgage on commercial real estate 
Commercial loans   3,150    Accounts receivable, equipment and real estate 
Agriculture loans   1,456    Crops, livestock, machinery and real estate 
Total loans  $5,422      

 

(Dollars in thousands)  As of December 31, 2023 
   Loan balance   Collateral Type 
         
One-to-four family residential real estate loans  $192    First mortgage on residential real estate 
Construction and land loans   192    First mortgage on residential or commercial real estate 
Commercial real estate loans   1,205    First mortgage on commercial real estate 
Commercial loans   2,054    Accounts receivable, equipment and real estate 
Agriculture loans   682    Crops, livestock, machinery and real estate 
Consumer loans   24    Personal property or second mortgages on real estate 
Total loans  $4,349      

 

 

The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Past due loans are determined in accordance with the contractual repayment terms. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans ninety days delinquent and accruing interest at December 31, 2024 or December 31, 2023.

 

The following tables present information on the Company’s past due and non-accrual loans by loan class:

 

   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
(Dollars in thousands)                            
   As of December 31, 2024 
   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
                             
One-to-four family residential real estate loans  $115   $323   $-   $438   $34   $472   $351,737 
Construction and land loans   -    118    -    118    -    118    25,210 
Commercial real estate loans   1,083    3,081    -    4,164    782    4,946    340,213 
Commercial loans   500    59    -    559    11,253    11,812    180,513 
Agriculture loans   864    -    -    864    1,046    1,910    98,652 
Municipal loans   -    -    -    -    -    -    7,091 
Consumer loans   33    25       -    58    -    58    29,621 
Total  $2,595   $3,606   $-   $6,201   $13,115   $19,316   $1,033,037 
                                    
Percent of gross loans   0.25%   0.34%   0.00%   0.59%   1.25%   1.84%   98.16%

 

   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or mvore delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
   As of December 31, 2023 
   30-59 days delinquent and accruing   60-89 days delinquent and accruing   90 days or more delinquent and accruing   Total past due loans accruing   Non-accrual loans   Total past due and non-accrual loans   Total loans not past due 
                             
One-to-four family residential real estate loans  $85   $247   $    -   $332   $192   $524   $302,020 
Construction and land loans   -    -    -    -    -    -    21,090 
Commercial real estate loans   153    -    -    153    -    153    320,809 
Commercial loans   399    332    -    731    1,880    2,611    178,331 
Agriculture loans   256    -    -    256    295    551    89,129 
Municipal loans   -    -    -    -    -    -    4,507 
Consumer loans   110    -    -    110    24    134    28,797 
Total  $1,003   $579   $-   $1,582   $2,391   $3,973   $944,683 
                                    
Percent of gross loans   0.11%   0.06%   0.00%   0.17%   0.25%   0.42%   99.58%

 

Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the years 2024, 2023 and 2022, would have increased interest income by $423,000, $96,000, and $137,000, respectively. No interest income related to non-accrual loans was included in interest income for the years ended December 31, 2024, 2023, and 2022.

 

The Company also categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Non-classified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions:

 

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

 

 

Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

 

Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

 

The following table provides information on the Company’s risk category of loans by type and year of origination:

 

   2024   2023   2022   2021   2020   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
(Dollars in thousands)  As of December 31, 2024 
   2024   2023   2022   2021   2020   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
                                     
One-to-four family residential real estate loans                                             
Nonclassified  $86,701   $84,467   $75,517   $37,411   $27,293   $35,112   $5,552   $122   $352,175 
Classified   -    -    -    -    -    34    -    -    34 
Total  $86,701   $84,467   $75,517   $37,411   $27,293   $35,146   $5,552   $122   $352,209 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Construction and land loans                                             
Nonclassified  $6,481   $11,202   $1,937   $1,697   $2,569   $1,340   $102   $-   $25,328 
Classified   -    -    -    -    -    -    -    -    - 
Total  $6,481   $11,202   $1,937   $1,697   $2,569   $1,340   $102   $-   $25,328 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate loans                                             
Nonclassified  $59,717   $47,624   $68,854   $53,868   $41,862   $67,351   $3,217   $85   $342,578 
Classified   360    -    -    476    151    1,594    -    -    2,581 
Total  $60,077   $47,624   $68,854   $54,344   $42,013   $68,945   $3,217   $85   $345,159 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial loans                                             
Nonclassified  $31,083   $27,158   $23,574   $9,813   $7,930   $2,203   $68,282   $135   $170,178 
Classified   11,364    1,851    1,897    39    3,637    13    1,969    1,377    22,147 
Total  $42,447   $29,009   $25,471   $9,852   $11,567   $2,216   $70,251   $1,512   $192,325 
Charge-offs  $-   $-   $16   $114   $56        $-   $-   $186 
Agriculture loans                                             
Nonclassified  $21,379   $3,659   $8,404   $3,616   $3,297   $14,215   $44,458   $217   $99,245 
Classified  $29   $178   $257   $419   $9   $73   $352   $-    1,317 
Total  $21,408   $3,837   $8,661   $4,035   $3,306   $14,288   $44,810   $217   $100,562 
Charge-offs  $-   $-   $-   $-   $-   $64   $-   $-   $64 
Municipal loans                                             
Nonclassified  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Classified   -    -    -    -    -    -    -    -    - 
Total  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer loans                                             
Nonclassified  $2,850   $3,229   $645   $1,072   $682   $3,167   $17,896   $138   $29,679 
Classified   -    -    -    -    -    -    -    -    - 
Total  $2,850   $3,229   $645   $1,072   $682   $3,167   $17,896   $138   $29,679 
Charge-offs  $376   $7   $1        $-   $24   $-   $1   $409 
Total loans                                             
Nonclassified  $213,776   $177,339   $179,021   $107,477   $83,633   $124,824   $139,507   $697   $1,026,274 
Classified  $11,753   $2,029   $2,154   $934   $3,797   $1,714   $2,321   $1,377    26,079 
Total  $225,529   $179,368   $181,175   $108,411   $87,430   $126,538   $141,828   $2,074   $1,052,353 
Charge-offs  $376   $7   $17   $114   $56   $88   $-   $1   $659 

 

 

   2023   2022   2021   2020   2019   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
(Dollars in thousands)  As of December 31, 2023 
   2023   2022   2021   2020   2019   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
                                     
One-to-four family residential real estate loans                                             
Nonclassified  $95,290   $84,718   $42,533   $32,081   $12,776   $29,694   $5,097   $163   $302,352 
Classified   -    -    -    -    -    192    -    -    192 
Total  $95,290   $84,718   $42,533   $32,081   $12,776   $29,886   $5,097   $163   $302,544 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Construction and land loans                                             
Nonclassified  $6,283   $5,267   $5,367   $2,665   $916   $492   $100   $-   $21,090 
Classified   -    -    -    -    -    -    -    -    - 
Total  $6,283   $5,267   $5,367   $2,665   $916   $492   $100   $-   $21,090 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate loans                                             
Nonclassified  $41,644   $77,427   $58,327   $50,744   $30,551   $57,502   $3,017   $92   $319,304 
Classified   -    -    481    22    180    975    -    -    1,658 
Total  $41,644   $77,427   $58,808   $50,766   $30,731   $58,477   $3,017   $92   $320,962 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial loans                                             
Nonclassified  $38,818   $32,764   $16,747   $15,511   $2,514   $4,386   $61,046   $4,121   $175,907 
Classified   226    2,000    158    460    57    -    1,952    182    5,035 
Total  $39,044   $34,764   $16,905   $15,971   $2,571   $4,386   $62,998   $4,303   $180,942 
Charge-offs  $-   $(28)  $(407)  $(44)  $-   $-   $-   $-   $(479)
Agriculture loans                                             
Nonclassified  $7,862   $11,718   $4,864   $4,092   $3,902   $12,114   $44,352   $214   $89,118 
Classified   -    16    171    -    131    113    131    -    562 
Total  $7,862   $11,734   $5,035   $4,092   $4,033   $12,227   $44,483   $214   $89,680 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Municipal loans                                             
Nonclassified  $2,774   $128   $-   $-   $-   $1,605   $-   $-   $4,507 
Classified   -    -    -    -    -    -    -    -    - 
Total  $2,774   $128   $-   $-   $-   $1,605   $-   $-   $4,507 
Charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer loans                                             
Nonclassified  $4,705   $1,332   $1,340   $1,380   $1   $4,906   $15,221   $21   $28,906 
Classified   -    -    -    -    -    -    25    -    25 
Total  $4,705   $1,332   $1,340   $1,380   $1   $4,906   $15,246   $21   $28,931 
Charge-offs  $-   $-   $(3)  $-   $-   $-   $(368)  $-   $(371)
Total loans                                             
Nonclassified  $197,376   $213,354   $129,178   $106,473   $50,660   $110,699   $128,833   $4,611   $941,184 
Classified   226    2,016    810    482    368    1,280    2,108    182    7,472 
Total  $197,602   $215,370   $129,988   $106,955   $51,028   $111,979   $130,941   $4,793   $948,656 
Charge-offs  $-   $(28)  $(410)  $(44)  $-   $-   $(368)  $-   $(850)

 

The following table provides information on the Company’s allowance for credit losses related to unfunded loan commitments.

 

         
   Years ended December 31, 
(dollars in thousands)  2024   2023 
Balance at beginning of period  $250   $170 
Impact of adopting ASC 326   -    - 
Provision (benefit) for credit losses   (100)   80 
Balance at end of period  $150   $250 

 

 

The following tables present the amortized cost basis of loans at December 31, 2024 and 2023 that were both experiencing financial difficulty and modified by class, type of modification and includes the financial effect of the modification.

 

(Dollars in thousands)  As of December 31, 2024
   Amortized cost basis   % of loan class total   Financial effect
            
Interest Only:             
Commercial  $8,230    4.5%  6 month interest only payments
Term extension:             
Commercial  $954    0.5%  5 month principal payment deferral

 

(Dollars in thousands)  As of December 31, 2023
    Amortized cost basis    % of loan class total   Financial effect
              
Term extension:             
Commercial  $141    0.1%  90 day payment deferral

 

As of December 31, 2024, all loans experiencing both financial difficulty and modified during the twelve months ended December 31, 2024 were current under the terms of the agreements. There were no commitments to lend additional funds to the borrowers and there were no charge-offs recorded against the loans. The Company had a $1.8 million allowance for credit losses recorded against these loans as of December 31, 2024. The Company did not have any loan modifications that had a payment default during the twelve months ended December 31, 2024.

 

The Company had loans and unfunded commitments to directors and officers, and to affiliated parties, at December 31, 2024 and 2023. A summary of such loans is as follows:

 

(Dollars in thousands)     
      
Balance at December 31, 2023  $13,056 
New loans   3,500 
Repayments   (2,364)
Balance at December 31, 2024  $14,192