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Loans and Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 2022

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

Schedule of Loan Portfolio

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

		September 30, 2022
		Bank				ALC				Total
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	36,740			$	—			$	36,740
Secured by 1-4 family residential properties			83,231				1,680				84,911
Secured by multi-family residential properties			72,446				—				72,446
Secured by non-farm, non-residential properties			200,505				—				200,505
Commercial and industrial loans and leases (1)			65,951				—				65,951
Consumer loans:
Direct consumer			5,685				6,594				12,279
Branch retail			—				16,278				16,278
Indirect			262,742				—				262,742
Total loans			727,300				24,552				751,852
Less: Unearned interest, fees and deferred cost			847				734				1,581
Allowance for loan and lease losses			8,033				1,340				9,373
Net loans		$	718,420			$	22,478			$	740,898

		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 September 30, 2022 and December 31, 2021, equipment finance leases totaled $10.8 million and $11.0 million, respectively, and PPP loans totaled $31 thousand and $1.7 million, respectively.

Allowance for Loan Losses

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

		As of and for the Nine Months Ended September 30, 2022
		Construction, Land Development, and Other				Real Estate 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			—				(10	)			—				—				—				(1,604	)			(423	)			(238	)			(2,275	)
Recoveries			2				23				—				4				—				387				97				34				547
Provision			(246	)			89				210				30				244				1,161				445				848				2,781
Ending balance		$	384			$	792			$	647			$	1,992			$	1,104			$	948			$	423			$	3,083			$	9,373
Ending balance of allowance attributable to    loans:
Individually evaluated for impairment		$	—			$	8			$	—			$	—			$	277			$	—			$	—			$	—			$	285
Collectively evaluated for impairment			384				784				647				1,992				827				948				423				3,083				9,088
Total allowance for loan and lease losses		$	384			$	792			$	647			$	1,992			$	1,104			$	948			$	423			$	3,083			$	9,373
Ending balance of loans receivable:
Individually evaluated for impairment		$	1,048			$	600			$	—			$	1,765			$	2,603			$	18			$	—			$	—			$	6,034
Collectively evaluated for impairment			35,692				84,311				72,446				198,740				63,348				12,261				16,278				262,742				745,818
Loans acquired with deteriorated credit quality			—				—				—				—				—				—				—				—				—
Total loans receivable		$	36,740			$	84,911			$	72,446			$	200,505			$	65,951			$	12,279			$	16,278			$	262,742			$	751,852

		As of and for the Nine Months Ended September 30, 2021
		Construction, Land Development, and Other				Real Estate 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	)			(6	)			—				—				(6	)			(848	)			(299	)			(365	)			(1,546	)
Recoveries			21				9				—				4				10				512				148				48				752
Provision			128				50				(89	)			415				(135	)			120				127				901				1,517
Ending balance		$	520			$	692			$	488			$	1,985			$	877			$	986			$	349			$	2,296			$	8,193
Ending balance of allowance attributable to    loans:
Individually evaluated for impairment		$	—			$	10			$	—			$	—			$	58			$	—			$	—			$	—			$	68
Collectively evaluated for impairment			520				682				488				1,985				819				986				349				2,296				8,125
Total allowance for loan and lease losses		$	520			$	692			$	488			$	1,985			$	877			$	986			$	349			$	2,296			$	8,193
Ending balance of loans receivable:
Individually evaluated for impairment		$	—			$	671			$	—			$	1,053			$	1,015			$	21			$	—			$	—			$	2,760
Collectively evaluated for impairment			58,175				72,430				51,420				197,692				76,664				25,824				29,764				194,154				706,123
Loans acquired with deteriorated credit quality			—				11				—				—				—				—				—				—				11
Total loans receivable		$	58,175			$	73,112			$	51,420			$	198,745			$	77,679			$	25,845			$	29,764			$	194,154			$	708,894

Loans By Credit Quality Indicators

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

		September 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		$	35,692			$	—			$	1,048			$	36,740
Secured by multi-family residential properties			72,446				—				—				72,446
Secured by non-farm, non-residential properties			198,004				656				1,845				200,505
Commercial and industrial loans			63,064				—				2,887				65,951
Total		$	369,206			$	656			$	5,780			$	375,642
As a percentage of total loans			98.29	%			0.17	%			1.54	%			100.00	%

		September 30, 2022
		Performing				Nonperforming				Total
		(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties		$	83,611			$	1,300			$	84,911
Consumer loans:
Direct consumer			12,112				167				12,279
Branch retail			16,130				148				16,278
Indirect			262,742				—				262,742
Total		$	374,595			$	1,615			$	376,210
As a percentage of total loans			99.57	%			0.43	%			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 September 30, 2022:

		As of September 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		$	—			$	—			$	—			$	—			$	36,740			$	36,740			$	—
Secured by 1-4 family residential    properties			288				15				223				526				84,385				84,911				—
Secured by multi-family residential    properties			—				—				—				—				72,446				72,446				—
Secured by non-farm, non-residential    properties			382				—				—				382				200,123				200,505				—
Commercial and industrial loans			406				—				—				406				65,545				65,951				—
Consumer loans:
Direct consumer			289				143				150				582				11,697				12,279				—
Branch retail			195				142				148				485				15,793				16,278				—
Indirect			101				—				59				160				262,583				262,742				—
Total		$	1,661			$	300			$	580			$	2,541			$	749,312			$	751,852			$	—
As a percentage of total loans			0.22	%			0.04	%			0.08	%			0.34	%			99.66	%			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 September 30, 2022 and December 31, 2021:

		Loans on Non-Accrual Status
		September 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			1,090				780
Secured by multi-family residential properties			—				—
Secured by non-farm, non-residential properties			—				—
Commercial and industrial loans			631				277
Consumer loans:
Direct consumer			149				743
Branch retail			148				206
Indirect			59				—
Total loans		$	2,077			$	2,008

Impaired Loans

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

		September 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		$	1,048			$	1,048			$	—
Secured by 1-4 family residential properties			585				585				—
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,765				1,765				—
Commercial and industrial			2,249				2,249				—
Direct consumer			18				18				—
Total loans with no related allowance recorded		$	5,665			$	5,665			$	—
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			354				354				277
Direct consumer			—				—				—
Total loans with an allowance recorded		$	369			$	369			$	285
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans		$	1,048			$	1,048			$	—
Secured by 1-4 family residential properties			600				600				8
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,765				1,765				—
Commercial and industrial			2,603				2,603				277
Direct consumer			18				18				—
Total impaired loans		$	6,034			$	6,034			$	285

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 nine months ended September 30, 2022 and the year ended December 31, 2021 were as follows:

		Nine Months Ended September 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		$	116			$	2			$	—
Secured by 1-4 family residential properties			624				4				4
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,116				38				35
Commercial and industrial			872				7				4
Direct consumer			19				1				1
Total		$	2,747			$	52			$	44

		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 September 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.

		September 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				613				2				621				617
Commercial loans			2				116				24				2				116				31
Total			7			$	903			$	649				7			$	903			$	660

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-Paragraph 16
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919258-210447

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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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