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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2020

Allowance For Loan And Lease Losses Writeoffs Net [Abstract]

As of March 31, 2020 and December 31, 2019, the composition of the loan portfolio by reporting segment and portfolio segment was as follows:

	March 31, 2020
	Bank		ALC		Total
	(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans	$	31,927	$	—	$	31,927
Secured by 1-4 family residential properties		95,166		5,020		100,186
Secured by multi-family residential properties		44,029		—		44,029
Secured by non-farm, non-residential properties		156,222		—		156,222
Commercial and industrial loans ⁽¹⁾		80,771		—		80,771
Consumer loans:
Direct consumer		7,839		28,468		36,307
Branch retail		—		31,568		31,568
Indirect sales ⁽²⁾		69,982		—		69,982
Total loans		485,936		65,056		550,992
Less: Unearned interest, fees and deferred cost		257		5,096		5,353
Allowance for loan losses		4,068		1,886		5,954
Net loans	$	481,611	$	58,074	$	539,685

	December 31, 2019
	Bank		ALC		Total
	(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans	$	30,820	$	—	$	30,820
Secured by 1-4 family residential properties		98,971		5,566		104,537
Secured by multi-family residential properties		50,910		—		50,910
Secured by non-farm, non-residential properties		162,981		—		162,981
Commercial and industrial loans ⁽¹⁾		90,957		—		90,957
Consumer loans:
Direct consumer		7,816		30,224		38,040
Branch retail		—		32,305		32,305
Indirect sales ⁽²⁾		—		45,503		45,503
Total loans		442,455		113,598		556,053
Less: Unearned interest, fees and deferred cost		262		4,786		5,048
Allowance for loan losses		3,483		2,279		5,762
Net loans	$	438,710	$	106,533	$	545,243

(1)

Includes equipment financing leases.

(2)

Effective January 1, 2020, the Company transferred a total of $45.5 million of its indirect sales portfolio from ALC to the Bank.

Summary of Acquired Loans

The carrying amount of PCI loans, which is included within loans on the balance sheet, is set forth in the table below as of March 31, 2020 and December 31, 2019:

	March 31, 2020			December 31, 2019
	(Dollars in Thousands)
Real estate loans:
Secured by 1-4 family residential properties	$	219		$	224
Outstanding balance		219			224
Fair value adjustment		(48	)		(49	)
Carrying amount, net of fair value adjustment	$	171		$	175

Allowance for Loan Losses

The following tables present changes in the allowance for loan losses during the three months ended March 31, 2020 and 2019 and the related loan balances by loan type as of March 31, 2020 and 2019:

	As of and for the Three Months Ended March 31, 2020
	Construction, Land Development, and Other		1-4 Family			Real Estate Multi- Family		Non- Farm Non- Residential		Commercial and Industrial			Direct Consumer			Branch Retail			Indirect Sales		Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	197	$	466		$	422	$	964	$	1,377		$	1,625		$	395		$	316	$	5,762
Charge-offs		—		(20	)		—		—		—			(492	)		(142	)		—		(654	)
Recoveries		—		12			—		5		—			205			44			—		266
Provision		68		67			16		217		(612	)		169			142			513		580
Ending balance	$	265	$	525		$	438	$	1,186	$	765		$	1,507		$	439		$	829	$	5,954
Ending balance of allowance attributable to loans:
Individually evaluated for impairment	$	—	$	14		$	—	$	—	$	63		$	3		$	—		$	—	$	80
Collectively evaluated for impairment		265		511			438		1,186		702			1,504			439			829		5,874
Total allowance for loan losses	$	265	$	525		$	438	$	1,186	$	765		$	1,507		$	439		$	829	$	5,954
Ending balance of loans receivable:
Individually evaluated for impairment	$	—	$	789		$	—	$	2,754	$	63		$	26		$	—		$	—	$	3,632
Collectively evaluated for impairment		31,927		99,226			44,029		153,468		80,708			36,281			31,568			69,982		547,189
Loans acquired with deteriorated credit quality		—		171			—		—		—			—			—			—		171
Total loans receivable	$	31,927	$	100,186		$	44,029	$	156,222	$	80,771		$	36,307		$	31,568		$	69,982	$	550,992

	As of and for the Three Months Ended March 31, 2019
	Construction, Land Development, and Other			1-4 Family			Real Estate Multi- Family		Non- Farm Non- Residential			Commercial and Industrial		Direct Consumer			Branch Retail			Indirect Sales			Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	241		$	346		$	128	$	831		$	1,138	$	1,799		$	427		$	145		$	5,055
Charge-offs		—			(53	)		—		—			—		(536	)		(98	)		(52	)		(739	)
Recoveries		—			9			—		—			1		173			25			—			208
Provision		(59	)		79			32		(58	)		44		232			55			75			400
Ending balance	$	182		$	381		$	160	$	773		$	1,183	$	1,668		$	409		$	168		$	4,924
Ending balance of allowance attributable to loans:
Individually evaluated for impairment	$	98		$	16		$	—	$	—		$	66	$	16		$	—		$	—		$	196
Collectively evaluated for impairment		84			365			160		773			1,117		1,652			409			168			4,728
Total allowance for loan losses	$	182		$	381		$	160	$	773		$	1,183	$	1,668		$	409		$	168		$	4,924
Ending balance of loans receivable:
Individually evaluated for impairment	$	421		$	919		$	—	$	510		$	66	$	38		$	—		$	—		$	1,954
Collectively evaluated for impairment		27,520			105,885			27,602		156,513			87,799		36,254			27,066			42,280			510,919
Loans acquired with deteriorated credit quality		73			187			—		—			—		—			—			—			260
Total loans receivable	$	28,014		$	106,991		$	27,602	$	157,023		$	87,865	$	36,292		$	27,066		$	42,280		$	513,133

Loans By Credit Quality Indicators

The tables below illustrate the carrying amount of loans by credit quality indicator as of March 31, 2020:

	March 31, 2020
	Pass 1-5		Special Mention 6		Substandard 7		Total
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	31,849	$	78	$	—	$	31,927
Secured by multi-family residential properties		44,029		—		—		44,029
Secured by non-farm, non-residential properties		151,142		2,814		2,266		156,222
Commercial and industrial loans		79,554		747		470		80,771
Total	$	306,574	$	3,639	$	2,736	$	312,949

	March 31, 2020
	Performing		Nonperforming		Total
	(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties	$	98,051	$	2,135	$	100,186
Consumer loans:
Direct consumer		35,765		542		36,307
Branch retail		31,332		236		31,568
Indirect sales		69,952		30		69,982
Total	$	235,100	$	2,943	$	238,043

The above amounts include PCI loans. As of March 31, 2020, $0.2 million of PCI loans were classified as “Nonperforming.”

The tables below illustrate the carrying amount of loans by credit quality indicator as of December 31, 2019:

	December 31, 2019
	Pass 1-5		Special Mention 6		Substandard 7		Total
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	30,466	$	354	$	—	$	30,820
Secured by multi-family residential properties		50,910		—		—		50,910
Secured by non-farm, non-residential properties		157,718		2,961		2,302		162,981
Commercial and industrial loans		88,463		714		1,780		90,957
Total	$	327,557	$	4,029	$	4,082	$	335,668

	December 31, 2019
	Performing		Nonperforming		Total
	(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties	$	102,176	$	2,361	$	104,537
Consumer loans:
Direct consumer		37,474		566		38,040
Branch retail		32,024		281		32,305
Indirect sales		45,503		—		45,503
Total	$	217,177	$	3,208	$	220,385

Aging Analysis of Past Due Loans

The following table provides an aging analysis of past due loans by class as of March 31, 2020:

	As of March 31, 2020
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—	$	—	$	—	$	—	$	31,927	$	31,927	$	—
Secured by 1-4 family residential properties		588		35		127		750		99,436		100,186		—
Secured by multi-family residential properties		—		—		—		—		44,029		44,029		—
Secured by non-farm, non-residential properties		200		—		1,416		1,616		154,606		156,222		—
Commercial and industrial loans		1,266		378		—		1,644		79,127		80,771		—
Consumer loans:
Direct consumer		318		273		542		1,133		35,174		36,307		—
Branch retail		252		122		237		611		30,957		31,568		—
Indirect sales		261		19		30		310		69,672		69,982		—
Total	$	2,885	$	827	$	2,352	$	6,064	$	544,928	$	550,992	$	—

The above amounts include PCI loans. As of March 31, 2020, $0.2 million of PCI loans were 60-89 days past due.

The following table provides an aging analysis of past due loans by class as of December 31, 2019:

	As of December 31, 2019
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—	$	—	$	—	$	—	$	30,820	$	30,820	$	—
Secured by 1-4 family residential properties		259		108		844		1,211		103,326		104,537		—
Secured by multi-family residential properties		—		—		—		—		50,910		50,910		—
Secured by non-farm, non-residential properties		30		—		1,419		1,449		161,532		162,981		—
Commercial and industrial loans		56		—		—		56		90,901		90,957		—
Consumer loans:
Direct consumer		387		287		531		1,205		36,835		38,040		—
Branch retail		444		189		281		914		31,391		32,305		—
Indirect sales		132		—		—		132		45,371		45,503		—
Total	$	1,308	$	584	$	3,075	$	4,967	$	551,086	$	556,053	$	—

The above amounts include PCI loans. As of December 31, 2019, $0.2 million of PCI loans were 60-89 days past due.

Non-accruing Loans

The following table provides an analysis of non-accruing loans by class as of March 31, 2020 and December 31, 2019:

	Loans on Non-Accrual Status
	March 31, 2020		December 31, 2019
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	8	$	8
Secured by 1-4 family residential properties		1,372		1,423
Secured by multi-family residential properties		—		—
Secured by non-farm, non-residential properties		1,423		1,426
Commercial and industrial loans		72		27
Consumer loans:
Direct consumer		553		558
Branch retail		237		281
Indirect sales		30		—
Total loans	$	3,695	$	3,723

Summarizes of All COVID19 Loan Payment Deferment and the Percentage of Loans

The table below summarizes all COVID-19 loan payment deferments made by the Company through April 30, 2020 and the percentages of these loans respective to the related portfolio balances as of March 31, 2020.

	As of April 30, 2020
	Number of Loans Deferred		Principal Balance of Loans Deferred		% of Portfolio Balance as of March 31, 2020			Principal and Interest Deferments		Principal Only Deferments
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		3	$	16,666		52.2	%	$	9,513	$	7,153
Secured by 1-4 family residential properties		71		11,549		11.5	%		9,368		2,181
Secured by multi-family residential properties		11		24,482		55.6	%		5,421		19,061
Secured by non-farm, non-residential properties		53		49,851		31.9	%		45,575		4,276
Commercial and industrial loans		12		1,645		2.0	%		1,255		390
Consumer loans:
Direct consumer		830		3,774		10.4	%		3,774		—
Branch retail		283		2,825		8.9	%		2,825		—
Indirect sales		170		4,198		6.0	%		4,198		—
Total loans		1,433	$	114,990		20.9	%	$	81,929	$	33,061

Summarizes the At Risk Categories and the Relative Percentage of the Loan Portfolio

The table below summarizes the “at-risk” categories and the relative percentage of the Company’s loan portfolio for each as of March 31, 2020.

	March 31, 2020
At-Risk Loan Category Due to COVID-19	Balance of Risk Category		% of Total Loan Balance
	(Dollars in Thousands)
High-risk loan categories:
Hotels/motels	$	10,479		1.9	%
Dine-in restaurants		4,508		0.8	%
Total high-risk loans		14,987		2.7	%
Moderate-risk loan categories:
Fast food restaurants		5,067		0.9	%
Retail		34,073		6.2	%
1-4 family investment		25,620		4.7	%
Total moderate-risk loans		64,760		11.8	%
Total at-risk loans	$	79,747		14.5	%

Impaired Loans

As of March 31, 2020, the carrying amount of the Company’s impaired loans consisted of the following:

	March 31, 2020
	Carrying Amount		Unpaid Principal Balance		Related Allowances
	(Dollars in Thousands)
Impaired loans with no related allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		940		940		—
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		2,754		2,754		—
Commercial and industrial		—		—		—
Direct consumer		—		—		—
Total loans with no related allowance recorded	$	3,694	$	3,694	$	—
Impaired loans with an allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		20		20		14
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		—		—		—
Commercial and industrial		63		63		63
Direct consumer		26		26		3
Total loans with an allowance recorded	$	109	$	109	$	80
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		960		960		14
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		2,754		2,754		—
Commercial and industrial		63		63		63
Direct consumer		26		26		3
Total impaired loans	$	3,803	$	3,803	$	80

The above amounts include PCI loans. As of March 31, 2020, PCI loans comprised $0.2 million of impaired loans without a related allowance recorded.

As of December 31, 2019, the carrying amount of the Company’s impaired loans consisted of the following:

	December 31, 2019
	Carrying Amount		Unpaid Principal Balance		Related Allowances
	(Dollars in Thousands)
Impaired loans with no related allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		984		984		—
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		1,877		1,877		—
Commercial and industrial		—		—		—
Direct consumer		—		—		—
Total loans with no related allowance recorded	$	2,861	$	2,861	$	—
Impaired loans with an allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		21		21		14
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		—		—		—
Commercial and industrial		206		206		206
Direct consumer		29		29		7
Total loans with an allowance recorded	$	256	$	256	$	227
Total impaired loans
Loans secured by real estate	.
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		1,005		1,005		14
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		1,877		1,877		—
Commercial and industrial		206		206		206
Direct consumer		29		29		7
Total impaired loans	$	3,117	$	3,117	$	227

The average net investment in impaired loans and interest income recognized and received on impaired loans during the three months ended March 31, 2020 and the year ended December 31, 2019 were as follows:

	Three Months Ended March 31, 2020
	Average Recorded Investment		Interest Income Recognized		Interest Income Received
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		902		2		2
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		2,757		—		—
Commercial and industrial		110		2		2
Direct consumer		27		1		1
Total	$	3,796	$	5	$	5

	Year Ended December 31, 2019
	Average Recorded Investment		Interest Income Recognized		Interest Income Received
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	181	$	—	$	—
Secured by 1-4 family residential properties		1,021		48		48
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		645		29		29
Commercial and industrial		991		7		7
Direct consumer		38		2		2
Total	$	2,876	$	86	$	86

Loans Modified in a Troubled Debt Restructuring

The following table provides, as of March 31, 2020 and December 31, 2019, the number of loans remaining in each loan category that the Company had previously modified in a troubled debt restructuring, as well as the pre- and post-modification principal balance as of each date.

	March 31, 2020						December 31, 2019
	Number of Loans		Pre- Modification Outstanding Principal Balance		Post- Modification Principal Balance		Number of Loans		Pre- Modification Outstanding Principal Balance		Post- Modification Principal Balance
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		1	$	107	$	59		1	$	107	$	62
Secured by 1-4 family residential properties		2		59		12		2		59		14
Commercial loans		2		116		58		2		116		60
Total		5	$	282	$	129		5	$	282	$	136