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Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2020

Allowance For Loan And Lease Losses Writeoffs Net [Abstract]

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

	December 31, 2020
	Bank			ALC		Total
	(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans	$	37,282		$	—	$	37,282
Secured by 1-4 family residential properties		85,271			3,585		88,856
Secured by multi-family residential properties		54,326			—		54,326
Secured by non-farm, non-residential properties		184,528			—		184,528
Commercial and industrial loans ⁽¹⁾		81,735			—		81,735
Consumer loans:
Direct consumer		6,344			23,444		29,788
Branch retail		—			32,094		32,094
Indirect sales ⁽²⁾		141,514			—		141,514
Total loans		591,000			59,123		650,123
Less: Unearned interest, fees and deferred cost		(213	)		4,492		4,279
Allowance for loan losses		5,917			1,553		7,470
Net loans	$	585,296		$	53,078	$	638,374

	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		—		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 and PPP loans. As of December 31, 2020 and 2019, equipment financing leases totaled $7.0 million and $8.2 million, respectively. As of December 31, 2020, PPP loans totaled $11.9 million.

(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 December 31, 2020 and 2019:

	December 31, 2020			December 31, 2019
	(Dollars in Thousands)
Real estate loans:
Secured by 1-4 family residential properties	$	191		$	224
Outstanding balance	$	191		$	224
Fair value adjustment		(31	)		(49	)
Carrying amount, net of fair value adjustment	$	160		$	175

Allowance for Loan Losses

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

	As of and for the Year Ended December 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 and lease losses:
Beginning balance	$	197	$	466		$	422	$	964	$	1,377		$	1,625		$	395		$	316		$	5,762
Charge-offs		—		(61	)		—		—		—			(1,621	)		(374	)		(152	)		(2,208	)
Recoveries		—		22			—		14		10			725			186			14			971
Provision		196		212			155		588		(379	)		473			166			1,534			2,945
Ending balance	$	393	$	639		$	577	$	1,566	$	1,008		$	1,202		$	373		$	1,712		$	7,470
Ending balance of allowance attributable to loans:
Individually evaluated for impairment	$	—	$	12		$	—	$	—	$	61		$	1		$	—		$	—		$	74
Collectively evaluated for impairment		393		627			577		1,566		947			1,201			373			1,712			7,396
Loans acquired with deteriorated credit quality		—		—			—		—		—			—			—			—			—
Total allowance for loan and lease losses	$	393	$	639		$	577	$	1,566	$	1,008		$	1,202		$	373		$	1,712		$	7,470
Ending balance of loans receivable:
Individually evaluated for impairment	$	—	$	743		$	—	$	5,594	$	590		$	24		$	—		$	—		$	6,951
Collectively evaluated for impairment		37,282		87,953			54,326		178,934		81,145			29,764			32,094			141,514			643,012
Loans acquired with deteriorated credit quality		—		160			—		—		—			—			—			—			160
Total loans receivable	$	37,282	$	88,856		$	54,326	$	184,528	$	81,735		$	29,788		$	32,094		$	141,514		$	650,123

	As of and for the Year Ended December 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 and lease losses:
Beginning balance	$	241		$	346		$	128	$	831	$	1,138	$	1,799		$	427		$	145		$	5,055
Charge-offs		—			(101	)		—		—		—		(2,000	)		(425	)		(301	)		(2,827	)
Recoveries		—			47			—		—		3		648			116			6			820
Provision		(44	)		174			294		133		236		1,178			277			466			2,714
Ending balance	$	197		$	466		$	422	$	964	$	1,377	$	1,625		$	395		$	316		$	5,762
Ending balance of allowance attributable to loans:
Individually evaluated for impairment	$	—		$	14		$	—	$	—	$	206	$	7		$	—		$	—		$	227
Collectively evaluated for impairment		197			452			422		964		1,171		1,618			395			316			5,535
Loans acquired with deteriorated credit quality		—			—			—		—		—		—			—			—			—
Total allowance for loan and lease losses	$	197		$	466		$	422	$	964	$	1,377	$	1,625		$	395		$	316		$	5,762
Ending balance of loans receivable:
Individually evaluated for impairment	$	—		$	830		$	—	$	1,877	$	206	$	29		$	—		$	—		$	2,942
Collectively evaluated for impairment		30,820			103,532			50,910		161,104		90,751		38,011			32,305			45,503			552,936
Loans acquired with deteriorated credit quality		—			175			—		—		—		—			—			—			175
Total loans receivable	$	30,820		$	104,537		$	50,910	$	162,981	$	90,957	$	38,040		$	32,305		$	45,503		$	556,053

Loans By Credit Quality Indicators

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

	December 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	$	36,719		$	558		$	5		$	37,282
Secured by multi-family residential properties		54,326			—			—			54,326
Secured by non-farm, non-residential properties		170,338			8,572			5,618			184,528
Commercial and industrial loans		79,754			542			1,439			81,735
Total	$	341,137		$	9,672		$	7,062		$	357,871
As a percentage of total loans		95.33	%		2.70	%		1.97	%		100.00	%

	December 31, 2020
	Performing			Nonperforming			Total
	(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties	$	86,665		$	2,191		$	88,856
Consumer loans:
Direct consumer		29,679			109			29,788
Branch retail		31,816			278			32,094
Indirect sales		141,514			—			141,514
Total	$	289,674		$	2,578		$	292,252
As a percentage of total loans		99.12	%		0.88	%		100.00	%

The above amounts include PCI loans. As of December 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
As a percentage of total loans		97.58	%		1.20	%		1.22	%		100.00	%

	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
As a percentage of total loans		98.54	%		1.46	%		100.00	%

The above amounts include PCI loans. As of December 31, 2019, $0.2 million of PCI loans were classified as “Nonperforming.”

Aging Analysis of Past Due Loans

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

	As of December 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	$	—		$	—		$	—		$	—		$	37,282		$	37,282		$	—
Secured by 1-4 family residential properties		799			244			72			1,115			87,741			88,856			—
Secured by multi-family residential properties		—			—			—			—			54,326			54,326			—
Secured by non-farm, non-residential properties		287			—			1,337			1,624			182,904			184,528			—
Commercial and industrial loans		683			561			—			1,244			80,491			81,735			—
Consumer loans:
Direct consumer		257			191			214			662			29,126			29,788			—
Branch retail		176			61			144			381			31,713			32,094
Indirect sales		234			39			49			322			141,192			141,514			—
Total	$	2,436		$	1,096		$	1,816		$	5,348		$	644,775		$	650,123		$	—
As a percentage of total loans		0.37	%		0.17	%		0.28	%		0.82	%		99.18	%		100.00	%

The above amounts include PCI loans. As of December 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		$	—
As a percentage of total loans		0.24	%		0.11	%		0.55	%		0.89	%		99.11	%		100.00	%

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 December 31, 2020 and 2019:

	Loans on Non-Accrual Status
	December 31, 2020		December 31, 2019
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	12	$	8
Secured by 1-4 family residential properties		1,248		1,423
Secured by multi-family residential properties		—		—
Secured by non-farm, non-residential properties		1,340		1,426
Commercial and industrial loans		74		27
Consumer loans:
Direct consumer		219		558
Branch retail		144		281
Indirect sales		49		—
Total loans	$	3,086	$	3,723

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

The table below summarizes the deferments that remained as of December 31, 2020, compared to the two previous quarter-end dates.

	As of December 31, 2020							As of September 30, 2020							As of June 30, 2020
	Number of Loans Deferred		Principal Balance of Loans Deferred		% of Portfolio Balance			Number of Loans Deferred		Principal Balance of Loans Deferred		% of Portfolio Balance			Number of Loans Deferred		Principal Balance of Loans Deferred		% of Portfolio Balance
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		—	$	—		—			1	$	2,259		6.4	%		7	$	4,544		14.5	%
Secured by 1-4 family residential properties		6		314		0.4	%		8		398		0.4	%		50		9,474		10.2	%
Secured by multi-family residential properties		—		—		—			—		—		—			12		29,726		60.9	%
Secured by non-farm, non-residential properties		6		6,615		3.6	%		10		14,084		7.7	%		49		42,797		26.6	%
Commercial and industrial loans		2		530		0.6	%		2		529		0.6	%		9		1,460		1.7	%
Consumer loans:
Direct consumer		50		201		0.7	%		77		284		0.9	%		442		2,188		6.6	%
Branch retail		43		336		1.0	%		36		353		1.1	%		172		1,856		5.6	%
Indirect sales		3		65		0.1	%		19		509		0.4	%		123		3,199		3.6	%
Total loans		110	$	8,061		1.2	%		153	$	18,416		2.9	%		864	$	95,244		16.5	%

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

The table below summarizes the “high-risk” categories and the relative percentage of the Company’s loan portfolio as of December 31, 2020 compared to the two previous quarter-end dates.

	December 31, 2020					September 30, 2020					June 30, 2020
	Balance of Risk Category		% of Total Loan Balance			Balance of Risk Category		% of Total Loan Balance			Balance of Risk Category		% of Total Loan Balance
	(Dollars in Thousands)
High-risk loan categories:
Hotels/motels	$	10,393		1.6	%	$	10,459		1.6	%	$	10,410		1.8	%
Dine-in restaurants		3,114		0.5	%		4,379		0.7	%		4,459		0.8	%
Total high-risk loans	$	13,507		2.1	%	$	14,838		2.3	%	$	14,869		2.6	%

Impaired Loans

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

	December 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		885		885		—
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		5,594		5,594		—
Commercial and industrial		530		530		—
Direct consumer		—		—		—
Total impaired loans with no related allowance recorded	$	7,009	$	7,009	$	—
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		18		18		12
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		—		—		—
Commercial and industrial		60		60		61
Direct consumer		24		24		1
Total impaired loans with an allowance recorded	$	102	$	102	$	74
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		903		903		12
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		5,594		5,594		—
Commercial and industrial		590		590		61
Direct consumer		24		24		1
Total impaired loans	$	7,111	$	7,111	$	74

The above amounts include PCI loans. As of December 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 impaired 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 impaired 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 years ended December 31, 2020 and 2019 was as follows:

	Year Ended December 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		923		10		10
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		2,467		28		28
Commercial and industrial		118		7		7
Direct consumer		25		1		2
Total	$	3,533	$	46	$	47

	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 December 31, 2020 and 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.

	December 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	$	—		1	$	107	$	62
Secured by 1-4 family residential properties		2		59		12		2		59		14
Commercial loans		2		116		39		2		116		60
Total		5	$	282	$	51		5	$	282	$	136