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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

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

Schedule of Loan Portfolio

As of September 30, 2023 and December 31, 2022, the composition of the loan portfolio by portfolio segment was as follows:


	September 30, 2023			December 31, 2022
Real estate loans:
Construction, land development and other land loans	$	90,051		$	53,914
Secured by 1-4 family residential properties		83,876			87,995
Secured by multi-family residential properties		56,506			67,852
Secured by non-farm, non-residential properties		199,116			200,156
Commercial and industrial loans and leases (1)		59,369			73,546
Consumer loans:
Direct		6,544			9,851
Branch retail		9,648			13,992
Indirect		310,190			266,567
Total loans		815,300			773,873
Allowance for credit losses		11,380			9,422
Net loans	$	803,920		$	764,451

(1)

Includes equipment financing leases, which totaled $10.2 million and $10.3 million as of September 30, 2023 and December 31, 2022, respectively.

Allowance for Credit Losses on Loans and Leases

The following tables present changes in the allowance for credit losses on loans and leases during the nine months ended September 30, 2023 and 2022:


		As of and for the Nine Months Ended September 30, 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			—				(96	)			—				—				—				(521	)			(359	)			(500	)			(1,476	)
Recoveries			—				39				—				—				—				499				195				40				773
Provision for (recovery of) credit losses			157				18				(156	)			(201	)			(369	)			(404	)			(147	)			1,640				538
Ending balance		$	580			$	754			$	405			$	1,622			$	530			$	487			$	835			$	6,167			$	11,380


		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 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			—				(10	)			—				—				—				(1,604	)			(423	)			(238	)			(2,275	)
Recoveries			2				23				—				4				—				387				97				34				547
Provision for (recovery of) loan and lease losses			(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

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			$	9,183
Total allowance for loan and lease losses		$	517			$	832			$	646			$	1,970			$	919			$	886			$	518			$	3,154			$	9,442
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 and leases by credit quality indicator and year of origination as of September 30, 2023:


				September 30, 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		$	3,716			$	38,961			$	40,404			$	6,377			$	—			$	593			$	90,051
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	3,716			$	38,961			$	40,404			$	6,377			$	—			$	593			$	90,051

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

Secured by multi-family residential properties		Pass		$	383			$	28,513			$	5,991			$	686			$	7,151			$	13,782			$	56,506
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	383			$	28,513			$	5,991			$	686			$	7,151			$	13,782			$	56,506

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

Secured by non-farm, non-residential properties		Pass		$	8,683			$	35,499			$	25,519			$	56,913			$	18,618			$	47,516			$	192,748
		Special Mention			—				536				1,295				347				—				1,690				3,868
		Substandard			—				—				—				152				—				2,348				2,500
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	8,683			$	36,035			$	26,814			$	57,412			$	18,618			$	51,554			$	199,116

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

Commercial and industrial loans and leases		Pass		$	7,435			$	7,401			$	15,424			$	2,494			$	3,802			$	20,643			$	57,199
		Special Mention			—				170				899				199				57				—				1,325
		Substandard			—				44				209				25				305				262				845
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	7,435			$	7,615			$	16,532			$	2,718			$	4,164			$	20,905			$	59,369

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

Total commercial		Pass		$	20,217			$	110,374			$	87,338			$	66,470			$	29,571			$	82,534			$	396,504
		Special Mention			—				706				2,194				546				57				1,690				5,193
		Substandard			—				44				209				177				305				2,610				3,345
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
				$	20,217			$	111,124			$	89,741			$	67,193			$	29,933			$	86,834			$	405,042

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


				September 30, 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		$	4,282			$	21,592			$	14,886			$	12,028			$	9,323			$	20,917			$	83,028
		Non-performing			—				—				—				—				—				848				848
		Subtotal		$	4,282			$	21,592			$	14,886			$	12,028			$	9,323			$	21,765			$	83,876

		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	96			$	96

Direct		Performing		$	2,052			$	1,379			$	1,961			$	739			$	288			$	125			$	6,544
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	2,052			$	1,379			$	1,961			$	739			$	288			$	125			$	6,544

		Current period gross charge-offs		$	—			$	5			$	274			$	115			$	39			$	88			$	521

Branch retail		Performing		$	—			$	—			$	2,405			$	2,990			$	1,794			$	2,459			$	9,648
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	—			$	—			$	2,405			$	2,990			$	1,794			$	2,459			$	9,648

		Current period gross charge-offs		$	—			$	—			$	84			$	127			$	28			$	120			$	359

Indirect		Performing		$	82,347			$	92,898			$	69,122			$	53,564			$	5,878			$	6,239			$	310,048
		Non-performing			—				34				—				108				—				—				142
		Subtotal		$	82,347			$	92,932			$	69,122			$	53,672			$	5,878			$	6,239			$	310,190

		Current period gross charge-offs		$	—			$	128			$	171			$	153			$	13			$	35			$	500

Total consumer		Performing		$	88,681			$	115,869			$	88,374			$	69,321			$	17,283			$	29,740			$	409,268
		Non-performing			—				34				—				108				—				848				990
				$	88,681			$	115,903			$	88,374			$	69,429			$	17,283			$	30,588			$	410,258

		Current period gross charge-offs		$	—			$	133			$	529			$	395			$	80			$	339			$	1,476

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 September 30, 2023:


		As of September 30, 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		$	—			$	—			$	—			$	—			$	90,051			$	90,051			$	—
Secured by 1-4 family residential properties			93				36				—				129				83,747				83,876				—
Secured by multi-family residential properties			—				—				—				—				56,506				56,506				—
Secured by non-farm, non-residential properties			1,314				—				—				1,314				197,802				199,116				—
Commercial and industrial loans			22				—				62				84				59,285				59,369				—
Consumer loans:											—
Direct			52				—				—				52				6,492				6,544				—
Branch retail			100				—				—				100				9,548				9,648				—
Indirect			335				171				142				648				309,542				310,190				—
Total		$	1,916			$	207			$	204			$	2,327			$	812,973			$	815,300			$	—
As a percentage of total loans			0.24	%			0.02	%			0.03	%			0.29	%			99.71	%			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

September 30, 2023. Also presented is the balance of loans on nonaccrual status at September 30, 2023 for which there was no related allowance for credit losses recorded.


		Loans on Non-Accrual Status
		September 30, 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			891			462			—
Secured by multi-family residential properties			—			—			—
Secured by non-farm, non-residential properties			1,314			1,314			—
Commercial and industrial loans			85			77			—
Consumer loans:									—
Direct			—			—			—
Branch retail			—			—			—
Indirect			142			—			—
Total loans		$	2,432		$	1,853		$	—

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

Schedule of Amortized Cost Basis of Collateral Dependent Loans

The following table presents the amortized cost basis of collateral dependent loans as of September 30, 2023, which loans are individually evaluated to determine credit losses:


		September 30, 2023
		Real Estate				Other				Total
		(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans		$	—			$	—			$	—
Secured by 1-4 family residential properties			498				—				498
Secured by multi-family residential properties			—				—				—
Secured by non-farm, non-residential properties			2,353				—				2,353
Commercial and industrial			—				126				126
Direct consumer			—				—				—
Total loans individually evaluated		$	2,851			$	126			$	2,977

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 nine months ended September 30, 2022, respectively, related to impaired loans as determined under ASC 310 prior to the adoption of ASC 326:


		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