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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

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

Schedule of Loan Portfolio

As of March 31, 2023 and December 31, 2022, the composition of the loan portfolio by reporting segment and portfolio segment was as follows:


		March 31, 2023
		Bank				ALC				Total
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	69,398			$	—			$	69,398
Secured by 1-4 family residential properties			85,353				1,269				86,622
Secured by multi-family residential properties			63,368				—				63,368
Secured by non-farm, non-residential properties			198,266				—				198,266
Commercial and industrial loans and leases (1)			65,708				—				65,708
Consumer loans:
Direct			5,069				3,366				8,435
Branch retail			—				12,222				12,222
Indirect			271,870				—				271,870
Total loans			759,032				16,857				775,889
Allowance for credit losses			9,624				1,975				11,599
Net loans		$	749,408			$	14,882			$	764,290


		December 31, 2022
		Bank				ALC				Total
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	53,914			$	—			$	53,914
Secured by 1-4 family residential properties			86,518				1,477				87,995
Secured by multi-family residential properties			67,852				—				67,852
Secured by non-farm, non-residential properties			200,156				—				200,156
Commercial and industrial loans and leases (1)			73,546				—				73,546
Consumer loans:
Direct			5,145				4,706				9,851
Branch retail			—				13,992				13,992
Indirect			266,567				—				266,567
Total loans			753,698				20,175				773,873
Allowance for loan and lease losses			8,057				1,365				9,422
Net loans		$	745,641			$	18,810			$	764,451

(1)

Includes equipment financing leases, which totaled $11.2 million and $10.3 million as of March 31, 2023 and December 31, 2022, respectively.

Allowance for Credit Losses

The following tables present changes in the allowance for credit losses during the three months ended March 31, 2023 and 2022:


		As of and for the Three Months Ended March 31, 2023
		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 Consumer				Total
		(Dollars in Thousands)
Allowance for credit losses:
Beginning balance		$	517			$	832			$	646			$	1,970			$	919			$	866			$	518			$	3,154			$	9,422
Impact of adopting CECL accounting guidance			(94	)			(39	)			(85	)			(147	)			(20	)			47				628				1,833				2,123
Charge-offs			—				(8	)			—				—				—				(215	)			(155	)			(156	)			(534	)
Recoveries			—				16				—				—				—				198				77				28				319
Provision for (recovery of) credit losses			97				(32	)			(52	)			(61	)			(117	)			(4	)			—				438				269
Ending balance		$	520			$	769			$	509			$	1,762			$	782			$	892			$	1,068			$	5,297			$	11,599


		As of and for the Three Months Ended March 31, 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 Consumer				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			—				(2	)			—				—				—				(601	)			(101	)			(25	)			(729	)
Recoveries			1				8				—				1				—				128				23				11				172
Provision for (recovery of) loan and lease losses			(142	)			(12	)			47				(185	)			29				533				295				156				721
Ending balance		$	487			$	684			$	484			$	1,774			$	889			$	1,064			$	521			$	2,581			$	8,484

Schedule of Loan and Lease Losses and Recorded Investment in Loans by Loan Classification and by Impairment Evaluation

The following table details the allowance for loan and lease losses and recorded investment in loans by loan classification and by impairment evaluation as of December 31, 2022, as determined in accordance with ASC 310, Receivables, prior to the adoption of ASC 326:


		As of the Year Ended December 31, 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 Consumer				Total
		(Dollars in Thousands)
Ending balance of allowance attributable to loans:
Individually evaluated for impairment		$	—			$	7			$	—			$	—			$	252			$	—			$	—			$	—			$	259
Collectively evaluated for impairment			517				825				646				1,970				667				886				518				3,154				9,163
Total allowance for loan and lease losses		$	517			$	832			$	646			$	1,970			$	919			$	886			$	518			$	3,154			$	9,422
Ending balance of loans receivable:
Individually evaluated for impairment		$	—			$	582			$	—			$	2,492			$	2,429			$	18			$	—			$	—			$	5,521
Collectively evaluated for impairment			53,914				87,413				67,852				197,664				71,117				9,833				13,992				266,567				768,352
Total loans receivable		$	53,914			$	87,995			$	67,852			$	200,156			$	73,546			$	9,851			$	13,992			$	266,567			$	773,873

Loans By Credit Quality Indicators

The tables below illustrate the carrying amount of loans by credit quality indicator and year of origination as of March 31, 2023:


				March 31, 2023
				Loans at Amortized Cost Basis by Origination Year
				2023				2022				2021				2020				2019				Prior				Total
				(Dollars in Thousands)
Commercial:

Construction, land development and other land loans		Pass		$	—			$	31,710			$	31,359			$	5,625			$	—			$	704			$	69,398
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	—			$	31,710			$	31,359			$	5,625			$	—			$	704			$	69,398

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—

Secured by multi-family residential properties		Pass		$	320			$	16,533			$	14,459			$	701			$	7,325			$	24,030			$	63,368
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	320			$	16,533			$	14,459			$	701			$	7,325			$	24,030			$	63,368

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—

Secured by non-farm, non-residential properties		Pass		$	516			$	37,109			$	24,459			$	59,612			$	19,152			$	52,144			$	192,992
		Special Mention			—				—				1,319				546				—				645				2,510
		Substandard			—				—				—				—				—				2,764				2,764
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	516			$	37,109			$	25,778			$	60,158			$	19,152			$	55,553			$	198,266

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—

Commercial and industrial loans		Pass		$	2,332			$	8,894			$	17,835			$	4,992			$	4,195			$	24,938			$	63,186
		Special Mention			—				190				1,100				249				93				—				1,632
		Substandard			—				49				328				37				179				297				890
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	2,332			$	9,133			$	19,263			$	5,278			$	4,467			$	25,235			$	65,708

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—

Total commercial		Pass		$	3,168			$	94,246			$	88,112			$	70,930			$	30,672			$	101,816			$	388,944
		Special Mention			—				190				2,419				795				93				645				4,142
		Substandard			—				49				328				37				179				3,061				3,654
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
				$	3,168			$	94,485			$	90,859			$	71,762			$	30,944			$	105,522			$	396,740

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—


				March 31, 2023
				Loans at Amortized Cost Basis by Origination Year
				2023				2022				2021				2020				2019				Prior				Total
				(Dollars in Thousands)
Consumer:

Secured by 1-4 family residential properties		Performing		$	1,762			$	21,937			$	16,092			$	12,095			$	10,346			$	23,337			$	85,569
		Non-performing			—				—				—				—				164				889				1,053
		Subtotal		$	1,762			$	21,937			$	16,092			$	12,095			$	10,510			$	24,226			$	86,622

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	8			$	8

Direct		Performing		$	740			$	2,021			$	3,378			$	1,467			$	533			$	273			$	8,412
		Non-performing			—				—				6				—				—				17				23
		Subtotal		$	740			$	2,021			$	3,384			$	1,467			$	533			$	290			$	8,435

		Current period gross charge-offs		$	—			$	—			$	149			$	47			$	1			$	18			$	215

Branch retail		Performing		$	—			$	—			$	3,215			$	3,743			$	2,173			$	3,077			$	12,208
		Non-performing			—				—				—				14				—				—				14
		Subtotal		$	—			$	—			$	3,215			$	3,757			$	2,173			$	3,077			$	12,222

		Current period gross charge-offs		$	—			$	—			$	40			$	44			$	20			$	51			$	155

Indirect		Performing		$	18,453			$	102,067			$	76,676			$	60,415			$	6,674			$	7,560			$	271,845
		Non-performing			—				—				—				11				14				—				25
		Subtotal		$	18,453			$	102,067			$	76,676			$	60,426			$	6,688			$	7,560			$	271,870

		Current period gross charge-offs		$	—			$	45			$	42			$	40			$	—			$	29			$	156

Total consumer:		Performing		$	20,955			$	126,025			$	99,361			$	77,720			$	19,726			$	34,247			$	378,034
		Non-performing			—				—				6				25				178				906				1,115
				$	20,955			$	126,025			$	99,367			$	77,745			$	19,904			$	35,153			$	379,149

		Current period gross charge-offs		$	—			$	45			$	231			$	131			$	21			$	106			$	534

The tables below illustrate the carrying amount of loans by credit quality indicator as of December 31, 2022:


		December 31, 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		$	53,914			$	—			$	—			$	53,914
Secured by multi-family residential properties			67,852				—				—				67,852
Secured by non-farm, non-residential properties			197,004				651				2,501				200,156
Commercial and industrial loans			70,500				—				3,046				73,546
Total		$	389,270			$	651			$	5,547			$	395,468
As a percentage of total loans			98.43	%			0.17	%			1.40	%			100.00	%


		December 31, 2022
		Performing				Nonperforming				Total
		(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties		$	86,871			$	1,124			$	87,995
Consumer loans:
Direct			9,805				46				9,851
Branch retail			13,960				32				13,992
Indirect			266,496				71				266,567
Total		$	377,132			$	1,273			$	378,405
As a percentage of total loans			99.66	%			0.34	%			100.00	%

Aging Analysis of Past Due Loans

The following table provides an aging analysis of past due loans by class as of March 31, 2023:


		As of March 31, 2023
		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		$	—			$	—			$	—			$	—			$	69,398			$	69,398			$	—
Secured by 1-4 family residential properties			262				18				56				336				86,286				86,622				—
Secured by multi-family residential properties			—				—				—				—				63,368				63,368				—
Secured by non-farm, non-residential properties			—				—				—				—				198,266				198,266				—
Commercial and industrial loans			3				—				173				176				65,532				65,708				—
Consumer loans:
Direct			97				45				24				166				8,269				8,435				—
Branch retail			92				23				14				129				12,093				12,222				—
Indirect			179				—				25				204				271,666				271,870				—
Total		$	633			$	86			$	292			$	1,011			$	774,878			$	775,889			$	—
As a percentage of total loans			0.08	%			0.01	%			0.04	%			0.13	%			99.87	%			100.00	%

The following table provides an aging analysis of past due loans by class as of December 31, 2022:


		As of December 31, 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		$	—			$	—			$	—			$	—			$	53,914			$	53,914			$	—
Secured by 1-4 family residential properties			801				87				78				966				87,029				87,995				—
Secured by multi-family residential properties			—				—				—				—				67,852				67,852				—
Secured by non-farm, non-residential properties			137				—				—				137				200,019				200,156				—
Commercial and industrial loans			61				—				300				361				73,185				73,546				—
Consumer loans:
Direct			251				50				30				330				9,521				9,851				—
Branch retail			258				85				32				375				13,617				13,992				—
Indirect			186				55				71				312				266,255				266,567				—
Total		$	1,694			$	277			$	511			$	2,481			$	771,392			$	773,873			$	—
As a percentage of total loans			0.21	%			0.04	%			0.07	%			0.32	%			99.68	%			100.00	%

Non-accruing Loans

March 31, 2023. Also presented is the balance of loans on nonaccrual status at March 31, 2023 for which there was no related allowance for credit losses recorded.


		Loans on Non-Accrual Status
		March 31, 2023
		(Dollars in Thousands)
		Total nonaccrual loans			Nonaccrual loans with no allowance for credit losses			Loans past due 90 days or more and still accruing
Loans secured by real estate:
Construction, land development and other land loans		$	—		$	—		$	—
Secured by 1-4 family residential properties			856			483			—
Secured by multi-family residential properties			—			—			—
Secured by non-farm, non-residential properties			—			—			—
Commercial and industrial loans			296			113			—
Consumer loans:									—
Direct			23			17			—
Branch retail			14			—			—
Indirect			25			—			—
Total loans		$	1,214		$	613		$	—

The following table provides an analysis of nonaccruing loans by portfolio segment as of December 31, 2022:


	Loans on Non-Accrual Status
	December 31, 2022
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—
Secured by 1-4 family residential properties		914
Secured by multi-family residential properties		—
Secured by non-farm, non-residential properties		—
Commercial and industrial loans		605
Consumer loans:
Direct		29
Branch retail		32
Indirect		71
Total loans	$	1,651

Loans Individually Evaluated, as well as any Related Allowance for Loans and Lease Losses

The following table presents impaired loans as of December 31, 2022 as determined under ASC 310 prior to the adoption of ASC 326. Impaired loans generally include nonaccrual loans and other loans deemed to be impaired but that continue to accrue interest. Presented are the carrying amount, unpaid principal balance and related allowance of impaired loans as of December 31, 2022 by portfolio segment:


		December 31, 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			568				568				—
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			2,492				2,492				—
Commercial and industrial			2,076				2,076				—
Direct consumer			18				18				—
Total impaired loans with no related allowance recorded		$	5,154			$	5,154			$	—
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			14				14				7
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			—				—				—
Commercial and industrial			353				353				252
Direct consumer			—				—				—
Total impaired loans with an allowance recorded		$	367			$	367			$	259
Total impaired loans
Loans secured by real estate
Construction, land development and other land loans		$	—			$	—			$	—
Secured by 1-4 family residential properties			582				582				7
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			2,492				2,492				—
Commercial and industrial			2,429				2,429				252
Direct consumer			18				18				—
Total impaired loans		$	5,521			$	5,521			$	259

The following table details the average recorded investment and the amount of interest income recognized and received for the three months ended March 31, 2022, respectively, related to impaired loans as determined under ASC 310 prior to the adoption of ASC 326:


		Three Months Ended March 31, 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			642				2				1
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			1,043				13				15
Commercial and industrial			739				5				5
Direct consumer			20				—				1
Total		$	2,444			$	20			$	22