XML 25 R14.htm IDEA: XBRL DOCUMENT v3.25.1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses

3. Loans and Allowance for Credit Losses

 

Loans consisted of the following as of the dates indicated below:

  

   March 31,   December 31, 
(Dollars in thousands)  2025   2024 
         
One-to-four family residential real estate loans  $355,632   $352,209 
Construction and land loans   28,645    25,328 
Commercial real estate loans   359,579    345,159 
Commercial loans   190,881    192,325 
Agriculture loans   101,808    100,562 
Municipal loans   7,082    7,091 
Consumer loans   31,297    29,679 
Total gross loans   1,074,924    1,052,353 
Net deferred loan fees and loans in process   (426)   (307)
Allowance for credit losses   (12,802)   (12,825)
Loans, net  $1,061,696   $1,039,221 

 

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

  

                                 
   Three months ended March 31, 2025 
(Dollars in thousands)  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, 2025  $1,765   $143   $4,506   $4,964   $1,227   $51   $169   $12,825 
Charge-offs   -    -    -    (19)   -    -    (89)   (108)
Recoveries   -    5    -    9    -    6    65    85 
Provision for credit losses   15    1    188    (265)   21    (10)   50    - 
Balance at March 31, 2025  $1,780   $149   $4,694   $4,689   $1,248   $47   $195   $12,802 

 

                                 
   Three months ended March 31, 2024 
(Dollars in thousands)  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   -    -    -    (70)   -    -    (71)   (141)
Recoveries   -    80    -    11    -    7    36    134 
Provision for credit losses   51    (56)   12    224    (46)   28    37    250 
Balance at March 31, 2024  $2,086   $174   $4,530   $2,651   $1,144   $50   $216   $10,851 

 

The Company recorded net loan charge-offs of $23,000 during the first quarter of 2025, compared to net loan charge-offs of $7,000 during the first quarter of 2024.

 

 

The following table presents information regarding non-accrual and loans past due over 89 days and still accruing as of the dates indicated:

  

  

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 March 31, 2025 
  

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  $105   $-   $    - 
Commercial real estate loans   1,100    -    - 
Commercial loans   126    10,988    - 
Agriculture loans   961    -    - 
Total loans  $2,292   $10,988   $- 

 

  

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 loans   782    -    - 
Agriculture loans   314    10,939    - 
Consumer loans   1,046    -    - 
Total loans  $2,176   $10,939   $- 

 

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 table presents information regarding the amortized cost basis and collateral type of collateral-dependent loans as of the dates indicated:

  

(Dollars in thousands)  As of March 31, 2025
   Loan balance   Collateral Type
        
Commercial real estate loans  $1,100   First mortgage on commercial real estate
Commercial loans   3,156   Accounts receivable, equipment and real estate
Agriculture loans   946   Crops, livestock, machinery and real estate
Total loans  $5,202    

 

(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
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    

 

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. 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 90 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 90 days or more delinquent and accruing interest at either March 31, 2025 or December 31, 2024.

 

 

The following tables present information regarding the Company’s past due and non-accrual loans by loan class, as of the dates indicated:

  

   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 March 31, 2025 
   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  $1,331   $241   $-   $1,572   $105   $1,677   $353,955 
Construction and land loans   54    -    -    54    -    54    28,591 
Commercial real estate loans   3,615    1,458    -    5,073    1,100    6,173    353,406 
Commercial loans   2,788    131    -    2,919    11,114    14,033    176,848 
Agriculture loans   266    -    -    266    961    1,227    100,581 
Municipal loans   -    -    -    -    -    -    7,082 
Consumer loans   76    17    -    93    -    93    31,204 
Total  $8,130   $1,847   $-   $9,977   $13,280   $23,257   $1,051,667 
Percent of gross loans   0.75%   0.17%   0.00%   0.93%   1.24%   2.16%   97.84%

 

(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%

 

Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the three months ended March 31, 2025 and 2024 would have increased interest income by $232,000 and $72,000, respectively. No interest income related to non-accrual loans was included in interest income for the three months ended March 31, 2025 and 2024.

 

The Company also categorizes loans into risk categories based on relevant information about the ability of 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. Nonclassified 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 are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.

 

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 presents information regarding the Company’s risk category of loans by type and year of origination, as of the dates indicated:

  

                                     
(Dollars in thousands)  As of March 31, 2025 
   2025   2024   2023   2022   2021   Prior   Revolving loans amortized cost   Revolving loans converted to term   Total 
                                     
One-to-four family residential real estate loans                                             
Nonclassified  $14,788   $84,391   $82,891   $73,560   $36,091   $58,909   $4,831   $115   $355,576 
Classified   -    -    -    -    -    56    -    -    56 
Total  $14,788   $84,391   $82,891   $73,560   $36,091   $58,965   $4,831   $115   $355,632 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Construction and land loans                                             
Nonclassified  $3,660   $5,638   $11,907   $1,804   $1,672   $3,864   $100   $-   $28,645 
Classified   -    -    -    -    -    -    -    -    - 
Total  $3,660   $5,638   $11,907   $1,804   $1,672   $3,864   $100   $-   $28,645 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate loans                                             
Nonclassified  $21,185   $58,840   $48,944   $64,410   $53,222   $106,907   $3,141   $83    356,732 
Classified   -    817    -    -    475    1,555    -    -    2,847 
Total  $21,185   $59,657   $48,944   $64,410   $53,697   $108,462   $3,141   $83   $359,579 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial loans                                             
Nonclassified  $10,469   $34,142   $20,044   $19,767   $9,235   $9,157   $66,832   $116   $169,762 
Classified   461    11,030    1,666    1,875    34    3,484    1,604    965    21,119 
Total  $10,930   $45,172   $21,710   $21,642   $9,269   $12,641   $68,436   $1,081   $190,881 
Gross charge-offs  $-   $8   $-   $-   $11   $-   $-   $-   $19 
Agriculture loans                                             
Nonclassified  $4,505   $18,762   $3,452   $8,027   $3,552   $16,343   $43,098   $209   $97,948 
Classified   -    1,736    61    256    417    80    1,310    -    3,860 
Total  $4,505   $20,498   $3,513   $8,283   $3,969   $16,423   $44,408   $209   $101,808 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Municipal loans                                             
Nonclassified  $-   $-   $5,552   $81   $-   $1,449   $-   $-   $7,082 
Classified   -    -    -    -    -    -    -    -    - 
Total  $-   $-   $5,552   $81   $-   $1,449   $-   $-   $7,082 
Gross charge-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer loans                                             
Nonclassified  $3,337   $1,966   $3,052   $574   $988   $3,171   $18,116   $93   $31,297 
Classified   -    -    -    -    -    -    -    -    - 
Total  $3,337   $1,966   $3,052   $574   $988   $3,171   $18,116   $93   $31,297 
Gross charge-offs  $89   $-   $-   $-   $-   $-   $-   $-   $89 
Total loans                                             
Nonclassified  $57,944   $203,739   $175,842   $168,223   $104,760   $199,800   $136,118   $616   $1,047,042 
Classified   461    13,583    1,727    2,131    926    5,175    2,914    965    27,882 
Total  $58,405   $217,322   $177,569   $170,354   $105,686   $204,975   $139,032   $1,581   $1,074,924 
Gross charge-offs for the three months ended March 31, 2025  $89   $8   $-   $-   $11   $-   $-   $-   $108 

 

 

   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 
Gross 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 
Gross 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 
Gross 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 
Gross 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 
Gross charge-offs  $-   $-   $-   $-   $-   $64   $-   $-   $64 
Municipal loans                                             
Nonclassified  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Classified  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Total  $5,565   $-   $90   $-   $-   $1,436   $-   $-   $7,091 
Gross 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 
Gross 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 
Gross charge-offs for the year ended December 31, 2024  $376   $7   $17   $114   $56   $88   $-   $1   $659 

 

 

The following table provides information regarding the Company’s allowance for credit losses related to unfunded loan commitments for the periods indicated:

  

   2025   2024 
   Three months ended 
(dollars in thousands)  March 31, 
   2025   2024 
Balance at beginning of period  $150    250 
Provision for credit losses   -    50 
Balance at end of period  $150   $300 

 

The Company made two loan modifications to a single borrower experiencing financial difficulty during the three months ended March 31, 2025. The following table presents the amortized cost basis of loans at March 31, 2025 and March 31, 2024 that were both experiencing financial difficulty and modified during the three months ended March 31, 2025 and March 31, 2024 by class, type of modification and includes the financial effect of the modification.

  

(Dollars in thousands)  As of March 31, 2025
  

Amortized cost

basis

  

% of loan class

total

   Financial effect
            
Term extension:             
Commercial  $282    0.1%  Renewal of existing loan

 

(Dollars in thousands)  As of March 31, 2024
   Amortized cost basis   % of loan class total   Financial effect
            
Term extension:             
Commercial  $137    0.1%   90 day payment deferral