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Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2022

Financing Receivable, Allowance for Credit Loss, Writeoff, after Recovery [Abstract]

Schedule of Loan Portfolio

As of June 30, 2022 and December 31, 2021, the composition of the loan portfolio by reporting segment and portfolio segment was as follows:

		June 30, 2022
		Bank				ALC				Total
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	40,625			$	—			$	40,625
Secured by 1-4 family residential properties			67,227				1,871				69,098
Secured by multi-family residential properties			66,848				—				66,848
Secured by non-farm, non-residential properties			187,041				—				187,041
Commercial and industrial loans and leases (1)			65,908				—				65,908
Consumer loans:
Direct consumer			6,605				8,814				15,419
Branch retail			—				18,634				18,634
Indirect			252,206				—				252,206
Total loans			686,460				29,319				715,779
Less: Unearned interest, fees and deferred cost			(36	)			1,178				1,142
Allowance for loan and lease losses			7,305				1,446				8,751
Net loans		$	679,191			$	26,695			$	705,886

		December 31, 2021
		Bank				ALC				Total
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	67,048			$	—			$	67,048
Secured by 1-4 family residential properties			70,439				2,288				72,727
Secured by multi-family residential properties			46,000				—				46,000
Secured by non-farm, non-residential properties			197,901				—				197,901
Commercial and industrial loans and leases (1)			73,947				—				73,947
Consumer loans:
Direct consumer			5,972				15,717				21,689
Branch retail			—				25,692				25,692
Indirect			205,940				—				205,940
Total loans			667,247				43,697				710,944
Less: Unearned interest, fees and deferred cost			(324	)			2,918				2,594
Allowance for loan and lease losses			7,038				1,282				8,320
Net loans		$	660,533			$	39,497			$	700,030

(1)Includes equipment financing leases and PPP loans. As of June 30, 2022 and December 31, 2021, equipment finance leases totaled $11.3 million and $11.0 million, respectively, and PPP loans totaled $0.1 million and $1.7 million, respectively.

Allowance for Loan Losses

The following tables present changes in the allowance for loan and lease losses during the six months ended June 30, 2022 and 2021 and the related loan balances by loan type as of June 30, 2022 and 2021:

		As of and for the Six Months Ended June 30, 2022
		Construction, Land Development, and Other				1-4 Family				Real Estate Multi- Family				Non- Farm Non- Residential				Commercial and Industrial				Direct Consumer				Branch Retail				Indirect				Total
		(Dollars in Thousands)
Allowance for loan and lease losses:
Beginning balance		$	628			$	690			$	437			$	1,958			$	860			$	1,004			$	304			$	2,439			$	8,320
Charge-offs			—				(7	)			—				—				—				(1,171	)			(240	)			(102	)			(1,520	)
Recoveries			2				14				—				2				—				247				57				13				335
Provision			(257	)			(24	)			199				(93	)			(50	)			812				437				592				1,616
Ending balance		$	373			$	673			$	636			$	1,867			$	810			$	892			$	558			$	2,942			$	8,751
Ending balance of allowance attributable to    loans:
Individually evaluated for impairment		$	—			$	8			$	—			$	—			$	55			$	—			$	—			$	—			$	63
Collectively evaluated for impairment			373				665				636				1,867				755				892				558				2,942				8,688
Total allowance for loan and lease losses		$	373			$	673			$	636			$	1,867			$	810			$	892			$	558			$	2,942			$	8,751
Ending balance of loans receivable:
Individually evaluated for impairment		$	—			$	613			$	—			$	1,030			$	602			$	19			$	—			$	—			$	2,264
Collectively evaluated for impairment			40,625				68,485				66,848				186,011				65,306				15,400				18,634				252,206				713,515
Loans acquired with deteriorated credit quality			—				—				—				—				—				—				—				—				—
Total loans receivable		$	40,625			$	69,098			$	66,848			$	187,041			$	65,908			$	15,419			$	18,634			$	252,206			$	715,779

		As of and for the Six Months Ended June 30, 2021
		Construction, Land Development, and Other				1-4 Family				Real Estate Multi- Family				Non- Farm Non- Residential				Commercial and Industrial				Direct Consumer				Branch Retail				Indirect				Total
		(Dollars in Thousands)
Allowance for loan and lease losses:
Beginning balance		$	393			$	639			$	577			$	1,566			$	1,008			$	1,202			$	373			$	1,712			$	7,470
Charge-offs			(22	)			(5	)			—				—				—				(626	)			(222	)			(310	)			(1,185	)
Recoveries			21				6				—				3				9				369				107				27				542
Provision			80				112				(66	)			346				(324	)			14				66				671				899
Ending balance		$	472			$	752			$	511			$	1,915			$	693			$	959			$	324			$	2,100			$	7,726
Ending balance of allowance attributable to    loans:
Individually evaluated for impairment		$	—			$	11			$	—			$	—			$	59			$	—			$	—			$	—			$	70
Collectively evaluated for impairment			472				741				511				1,915				634				959				324				2,100				7,656
Total allowance for loan and lease losses		$	472			$	752			$	511			$	1,915			$	693			$	959			$	324			$	2,100			$	7,726
Ending balance of loans receivable:
Individually evaluated for impairment		$	—			$	687			$	—			$	1,056			$	58			$	22			$	—			$	—			$	1,823
Collectively evaluated for impairment			53,425				78,120				53,811				190,342				77,301				26,915				31,688				176,116				687,718
Loans acquired with deteriorated credit quality			—				8				—				—				—				—				—				—				8
Total loans receivable		$	53,425			$	78,815			$	53,811			$	191,398			$	77,359			$	26,937			$	31,688			$	176,116			$	689,549

Loans By Credit Quality Indicators

The tables below illustrate the carrying amount of loans by credit quality indicator as of June 30, 2022:

		June 30, 2022
		Pass 1-5				Special Mention 6				Substandard 7				Total
		(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		$	40,625			$	—			$	—			$	40,625
Secured by multi-family residential properties			66,848				—				—				66,848
Secured by non-farm, non-residential properties			183,943				2,085				1,013				187,041
Commercial and industrial loans			64,386				627				895				65,908
Total		$	355,802			$	2,712			$	1,908			$	360,422
As a percentage of total loans			98.72	%			0.75	%			0.53	%			100.00	%

		June 30, 2022
		Performing				Nonperforming				Total
		(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties		$	67,774			$	1,324			$	69,098
Consumer loans:
Direct consumer			15,144				275				15,419
Branch retail			18,424				210				18,634
Indirect			252,206				—				252,206
Total		$	353,548			$	1,809			$	355,357
As a percentage of total loans			99.49	%			0.51	%			100.00	%

The tables below illustrate the carrying amount of loans by credit quality indicator as of December 31, 2021:

		December 31, 2021
		Pass 1-5				Special Mention 6				Substandard 7				Total
		(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		$	67,046			$	—			$	2			$	67,048
Secured by multi-family residential properties			43,472				2,528				—				46,000
Secured by non-farm, non-residential properties			189,425				7,442				1,034				197,901
Commercial and industrial loans			72,116				333				1,498				73,947
Total		$	372,059			$	10,303			$	2,534			$	384,896
As a percentage of total loans			96.66	%			2.68	%			0.66	%			100.00	%

		December 31, 2021
		Performing				Nonperforming				Total
		(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties		$	71,526			$	1,201			$	72,727
Consumer loans:
Direct consumer			20,939				750				21,689
Branch retail			25,486				206				25,692
Indirect			205,940				—				205,940
Total		$	323,891			$	2,157			$	326,048
As a percentage of total loans			99.34	%			0.66	%			100.00	%

Aging Analysis of Past Due Loans

The following table provides an aging analysis of past due loans by class as of June 30, 2022:

		As of June 30, 2022
		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		$	—			$	—			$	—			$	—			$	40,625			$	40,625			$	—
Secured by 1-4 family residential    properties			170				229				297				696				68,402				69,098				—
Secured by multi-family residential    properties			—				—				—				—				66,848				66,848				—
Secured by non-farm, non-residential    properties			—				—				—				—				187,041				187,041				—
Commercial and industrial loans			29				—				—				29				65,879				65,908				—
Consumer loans:
Direct consumer			388				205				256				849				14,570				15,419				—
Branch retail			290				116				210				616				18,018				18,634				—
Indirect			—				—				—				—				252,206				252,206				—
Total		$	877			$	550			$	763			$	2,190			$	713,589			$	715,779			$	—
As a percentage of total loans			0.12	%			0.08	%			0.11	%			0.31	%			99.69	%			100.00	%

The following table provides an aging analysis of past due loans by class as of December 31, 2021:

		As of December 31, 2021
		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		$	—			$	—			$	—			$	—			$	67,048			$	67,048			$	—
Secured by 1-4 family residential    properties			349				23				20				392				72,335				72,727				—
Secured by multi-family residential    properties			—				—				—				—				46,000				46,000				—
Secured by non-farm, non-residential    properties			403				—				—				403				197,498				197,901				—
Commercial and industrial loans			54				—				234				288				73,659				73,947				—
Consumer loans:
Direct consumer			652				589				730				1,971				19,718				21,689				—
Branch retail			377				182				206				765				24,927				25,692				—
Indirect			43				14				—				57				205,883				205,940				—
Total		$	1,878			$	808			$	1,190			$	3,876			$	707,068			$	710,944			$	—
As a percentage of total loans			0.27	%			0.11	%			0.17	%			0.55	%			99.45	%			100.00	%

Non-accruing Loans

The following table provides an analysis of non-accruing loans by class as of June 30, 2022 and December 31, 2021:

		Loans on Non-Accrual Status
		June 30, 2022				December 31, 2021
		(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		$	—			$	2
Secured by 1-4 family residential properties			938				780
Secured by multi-family residential properties			—				—
Secured by non-farm, non-residential properties			—				—
Commercial and industrial loans			17				277
Consumer loans:
Direct consumer			257				743
Branch retail			210				206
Indirect			33				—
Total loans		$	1,455			$	2,008

Impaired Loans

As of June 30, 2022, the carrying amount of the Company’s impaired loans consisted of the following:

		June 30, 2022
		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			598				598				—
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,030				1,030				—
Commercial and industrial			547				547				—
Direct consumer			19				19				—
Total loans with no related allowance recorded		$	2,194			$	2,194			$	—
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			15				15				8
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			—				—				—
Commercial and industrial			55				55				55
Direct consumer			—				—				—
Total loans with an allowance recorded		$	70			$	70			$	63
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans		$	—			$	—			$	—
Secured by 1-4 family residential properties			613				613				8
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,030				1,030				—
Commercial and industrial			602				602				55
Direct consumer			19				19				—
Total impaired loans		$	2,264			$	2,264			$	63

As of December 31, 2021, the carrying amount of the Company’s impaired loans consisted of the following:

		December 31, 2021
		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			630				630				—
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,051				1,051				—
Commercial and industrial			823				823				—
Direct consumer			21				21				—
Total loans with no related allowance recorded		$	2,525			$	2,525			$	—
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			16				16				10
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			—				—				—
Commercial and industrial			57				57				57
Direct consumer			—				—				—
Total loans with an allowance recorded		$	73			$	73			$	67
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans		$	—			$	—			$	—
Secured by 1-4 family residential properties			646				646				10
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,051				1,051				—
Commercial and industrial			880				880				57
Direct consumer			21				21				—
Total impaired loans		$	2,598			$	2,598			$	67

The average net investment in impaired loans and interest income recognized and received on impaired loans during the six months ended June 30, 2022 and the year ended December 31, 2021 were as follows:

		Six Months Ended June 30, 2022
		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			633				2				3
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,038				25				25
Commercial and industrial			683				11				9
Direct consumer			20				1				1
Total		$	2,374			$	39			$	38

		Year Ended December 31, 2021
		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			773				31				31
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			2,377				140				108
Commercial and industrial			637				61				40
Direct consumer			22				9				2
Total		$	3,809			$	241			$	181

Loans Modified in a Troubled Debt Restructuring

The following table provides, as of June 30, 2022 and December 31, 2021, 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.

		June 30, 2022												December 31, 2021
		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			$	—
Secured by 1-4 family residential properties			2				59				12				2				59				12
Secured by non-farm, non-residential properties			2				621				615				2				621				617
Commercial loans			2				116				26				2				116				31
Total			7			$	903			$	653				7			$	903			$	660

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- Definition

Tabular disclosure of financing receivable modified as troubled debt restructuring.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 33
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953676-111524

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953682-111524

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