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Loans and Asset Quality
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Loans and Asset Quality Loans and Asset Quality
Loans
Loans HFI by category and loans HFS are summarized below:
December 31,
(in thousands)20212020
Real estate:
Commercial real estate$670,293 $556,769 
One-to-four family residential474,420 442,889 
Construction and development106,339 127,321 
Commercial and industrial311,373 250,428 
SBA PPP, net of deferred income17,550 118,447 
Tax-exempt80,726 68,666 
Consumer23,131 23,926 
Total loans HFI$1,683,832 $1,588,446 
Total loans HFS$4,290 $29,116 
Deferred loan origination fees, including PPP loan fees, net of certain direct costs, were $1.6 million and $3.1 million as of December 31, 2021 and 2020, respectively. Deferred PPP loan fees were $626,000 and $2.8 million as of December 31, 2021 and 2020, respectively.
Related Party Transactions
In the ordinary course of business, certain officers, directors, and principal shareholders, as well as their immediate family members and their affiliates, maintain a variety of banking relationships with the Company. An analysis of loan activity to these related parties is as follows:
Years Ended December 31,
(in thousands)20212020
Balance - beginning of period$33,191 $30,609 
New loans/changes in relationships12,493 23,431 
Repayments/changes in relationships(21,892)(20,849)
Balance - end of period$23,792 $33,191 
Concentrations of Credit Risk
The majority of the lending activity occurs within the Bank’s Louisiana markets. The Bank maintains a diversified loan portfolio with a focus on commercial real estate, one-to-four family residential real estate, and commercial and industrial loans. Substantially all of the Bank’s real estate loans are secured by properties located within Louisiana.
Allowance for Loan Losses
The following table summarizes the activity in the allowance for loan losses by category for the year ended December 31, 2021:
(in thousands)Beginning
Balance		Provision
for Loan
Losses		Loans
Charged-off		RecoveriesEnding
Balance
Real estate:
Commercial real estate$5,798 $1,401 $(450)$— $6,749 
One-to-four family residential5,390 (23)(10)18 5,375 
Construction and development1,699 (375)— 2 1,326 
Commercial and industrial3,631 856 (74)27 4,440 
SBA PPP, net of deferred income318 (293)— — 25 
Tax-exempt680 69 — — 749 
Consumer435 265 (351)163 512 
Total allowance for loan losses$17,951 $1,900 $(885)$210 $19,176 
The following table summarizes the activity in the allowance for loan losses by category for the year ended December 31, 2020:
(in thousands)Beginning
Balance		Provision
for Loan
Losses		Loans
Charged-off		RecoveriesEnding
Balance
Real estate:
Commercial real estate$3,454 $2,344 $— $— $5,798 
One-to-four family residential3,323 2,057 — 10 5,390 
Construction and development1,211 501 (14)1 1,699 
Commercial and industrial5,175 551 (2,184)89 3,631 
SBA PPP, net of deferred income— 318 — — 318 
Tax-exempt334 346 — — 680 
Consumer440 176 (355)174 435 
Total allowance for loan losses$13,937 $6,293 $(2,553)$274 $17,951 
The balance in the allowance for loan losses and the related recorded investment in loans by category as of December 31, 2021, are as follows:
(in thousands)Individually
Evaluated
for
Impairment		Collectively
Evaluated
for
Impairment		Acquired with
Deteriorated
Credit
Quality		Total
Allowance for loan losses:
Real estate:
Commercial real estate$68 $6,681 $— $6,749 
One-to-four family residential— 5,375 — 5,375 
Construction and development— 1,326 — 1,326 
Commercial and industrial40 4,400 — 4,440 
SBA PPP, net of deferred income— 25 — 25 
Tax-exempt— 749 — 749 
Consumer118 394 — 512 
Total allowance for loan losses$226 $18,950 $— $19,176 
Loans:
Real estate:
Commercial real estate$5,011 $665,282 $— $670,293 
One-to-four family residential434 473,986 — 474,420 
Construction and development501 105,838 — 106,339 
Commercial and industrial77 311,296 — 311,373 
SBA PPP, net of deferred income— 17,550 — 17,550 
Tax-exempt— 80,726 — 80,726 
Consumer126 23,005 — 23,131 
Total loans HFI$6,149 $1,677,683 $— $1,683,832 
The balance in the allowance for loan losses and the related recorded investment in loans by category as of December 31, 2020, are as follows:
(in thousands)Individually
Evaluated
for
Impairment		Collectively
Evaluated
for
Impairment		Acquired with
Deteriorated
Credit
Quality		Total
Allowance for loan losses:
Real estate:
Commercial real estate$268 $5,530 $— $5,798 
One-to-four family residential45 5,345 — 5,390 
Construction and development— 1,699 — 1,699 
Commercial and industrial540 3,091 — 3,631 
SBA PPP, net of deferred income— 318 — 318 
Tax-exempt— 680 — 680 
Consumer111 324 — 435 
Total allowance for loan losses$964 $16,987 $— $17,951 
Loans:
Real estate:
Commercial real estate$3,617 $553,152 $— $556,769 
One-to-four family residential1,126 441,763 — 442,889 
Construction and development— 127,321 — 127,321 
Commercial and industrial3,979 246,449 — 250,428 
SBA PPP, net of deferred income— 118,447 — 118,447 
Tax-exempt— 68,666 — 68,666 
Consumer114 23,812 — 23,926 
Total loans HFI$8,836 $1,579,610 $— $1,588,446 
Past Due and Nonaccrual Loans
A summary of current, past due, and nonaccrual loans as of December 31, 2021, is as follows:
Accruing
(in thousands)Current30-89 Days
Past Due		90 Days
or More
Past Due		NonaccrualTotal
Loans
Real estate:
Commercial real estate$669,781 $461 $— $51 $670,293 
One-to-four family residential473,658 546 — 216 474,420 
Construction and development106,300 — 39 — 106,339 
Commercial and industrial311,321 39 — 13 311,373 
SBA PPP, net of deferred income17,550 — — — 17,550 
Tax-exempt80,726 — — — 80,726 
Consumer23,121 10 — — 23,131 
Total loans HFI$1,682,457 $1,056 $39 $280 $1,683,832 
A summary of current, past due, and nonaccrual loans as of December 31, 2020, is as follows:
Accruing
(in thousands)Current30-89 Days
Past Due		90 Days
or More
Past Due		NonaccrualTotal
Loans
Real estate:
Commercial real estate$554,861 $62 $— $1,846 $556,769 
One-to-four family residential442,096 219 — 574 442,889 
Construction and development127,258 63 — — 127,321 
Commercial and industrial249,453 93 — 882 250,428 
SBA PPP, net of deferred income118,447 — — — 118,447 
Tax-exempt68,666 — — — 68,666 
Consumer23,891 27 3 5 23,926 
Total loans HFI$1,584,672 $464 $3 $3,307 $1,588,446 
Impaired Loans
Impaired loans include TDRs and performing and nonperforming loans. Information pertaining to impaired loans as of December 31, 2021, is as follows:
(in thousands)Unpaid
Principal
Balance		Recorded
Investment		Related
Allowance		Average
Recorded
Investment		Interest
Income
Recognized
With no related allowance recorded:
Real estate:
Commercial real estate$1,599 $1,595 $— $1,969 $78 
One-to-four family residential483 434 — 539 19 
Construction and development501 501 — 400 32 
Commercial and industrial— — — 355 — 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer8 8 — 4 1 
Total with no related allowance2,591 2,538 — 3,267 130 
With allowance recorded:
Real estate:
Commercial real estate3,416 3,416 68 2,111 64 
One-to-four family residential— — — 145 — 
Construction and development— — — — — 
Commercial and industrial85 77 40 1,570 5 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer118 118 118 112 5 
Total with related allowance3,619 3,611 226 3,938 74 
Total impaired loans$6,210 $6,149 $226 $7,205 $204 
Information pertaining to impaired loans as of December 31, 2020, is as follows:
(in thousands)Unpaid
Principal
Balance		Recorded
Investment		Related
Allowance		Average
Recorded
Investment		Interest
Income
Recognized
With no related allowance recorded:
Real estate:
Commercial real estate$1,459 $1,428 $— $1,417 $68 
One-to-four family residential891 827 — 987 33 
Construction and development— — — — — 
Commercial and industrial92 92 — 1,173 5 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer1 1 — 2 — 
Total with no related allowance2,443 2,348 — 3,579 106 
With allowance recorded:
Real estate:
Commercial real estate2,402 2,189 268 1,533 26 
One-to-four family residential306 299 45 234 1 
Construction and development— — — 8 — 
Commercial and industrial4,854 3,887 540 6,521 139 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer114 113 111 103 5 
Total with related allowance7,676 6,488 964 8,399 171 
Total impaired loans$10,119 $8,836 $964 $11,978 $277 
Troubled Debt Restructurings
The restructuring of a loan is considered a TDR if the borrower is experiencing financial difficulties and the bank has granted a concession. Concessions grant terms to the borrower that would not be offered for new debt with similar risk characteristics. Concessions typically include interest rate reductions or below market interest rates, revising amortization schedules to defer principal and interest payments, and other changes necessary to provide payment relief to the borrower and minimize the risk of loss. There were no unfunded commitments to extend credit related to these loans during the years ended December 31, 2021 and 2020.
A summary of current, past due, and nonaccrual TDR loans as of December 31, 2021, is as follows:
(dollars in thousands)Current30-89
Days
Past Due		90 Days
or More
Past Due
Nonaccrual(1)
Total
TDRs
Real estate:
Commercial real estate$3,634 $— $— $— $3,634 
One-to-four family residential289 — — — 289 
Construction and development— — — — — 
Commercial and industrial— — — — — 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer21 — — — 21 
Total$3,944 $— $— $— $3,944 
Number of TDR loans11 — — 1 12 
(1)This loan has a contractual obligation to the Company despite carrying a zero balance.
A summary of current, past due, and nonaccrual TDR loans as of December 31, 2020, is as follows:
(dollars in thousands)Current30-89
Days
Past Due		90 Days
or More
Past Due		NonaccrualTotal
TDRs
Real estate:
Commercial real estate$1,151 $— $— $1,212 $2,363 
One-to-four family residential303 — — — 303 
Construction and development— — — — — 
Commercial and industrial— — — 5 5 
SBA PPP, net of deferred income— — — — — 
Tax-exempt— — — — — 
Consumer— — — — — 
Total$1,454 $— $— $1,217 $2,671 
Number of TDR loans8 — — 4 12 
A summary of loans modified as TDRs that occurred during the years ended December 31, 2021 and 2020, is as follows:
December 31, 2021December 31, 2020
Recorded InvestmentRecorded Investment
(dollars in thousands)Loan
Count		Pre
Modification		Post
Modification		Loan
Count		Pre
Modification		Post
Modification
Real estate:
Commercial real estate1 $2,174 $2,184 — $— $— 
One-to-four family residential— — — 1 90 91 
Construction and development— — — — — — 
Commercial and industrial— — — — — — 
SBA PPP, net of deferred income— — — — — — 
Tax-exempt— — — — — — 
Consumer2 20 27 — — — 
Total3 $2,194 $2,211 1 $90 $91 
The TDRs described above increased the allowance for loan losses by $14,000 and $12,000 during the years ended December 31, 2021 and 2020, respectively. Additionally, there were no charge-offs of TDRs in 2021 or 2020. There were no TDRs that subsequently defaulted in 2021 or 2020.
Credit Quality Indicators
Loans are categorized based on the degree of risk inherent in the credit and the ability of the borrower to service the debt. A description of the general characteristics of the Bank’s risk rating grades follows:
Pass - These loans are of satisfactory quality and do not require a more severe classification.
Special Mention - This category includes loans with potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan.
Substandard - Loans in this category have well defined weaknesses which jeopardize normal repayment of principal and interest.
Doubtful - Loans in this category have well defined weaknesses that make full collection improbable.
Loss - Loans classified in this category are considered uncollectible and charged-off to the allowance for loan losses.
The following table summarizes loans by risk rating as of December 31, 2021:
(in thousands)PassSpecial
Mention		SubstandardDoubtfulLossTotal
Real estate:
Commercial real estate$666,838 $499 $2,956 $— $— $670,293 
One-to-four family residential473,638 321 461 — — 474,420 
Construction and development105,838 — 501 — — 106,339 
Commercial and industrial306,925 1,551 2,897 — — 311,373 
SBA PPP, net of deferred income17,550 — — — — 17,550 
Tax-exempt80,726 — — — — 80,726 
Consumer23,003 21 107 — — 23,131 
Total loans HFI$1,674,518 $2,392 $6,922 $— $— $1,683,832 
The following table summarizes loans by risk rating as of December 31, 2020:
(in thousands)PassSpecial
Mention		SubstandardDoubtfulLossTotal
Real estate:
Commercial real estate$551,954 $555 $4,260 $— $— $556,769 
One-to-four family residential441,374 486 1,029 — — 442,889 
Construction and development126,542 — 779 — — 127,321 
Commercial and industrial245,043 1,310 4,075 — — 250,428 
SBA PPP, net of deferred income118,447 — — — — 118,447 
Tax-exempt68,666 — — — — 68,666 
Consumer23,813 — 113 — — 23,926 
Total loans HFI$1,575,839 $2,351 $10,256 $— $— $1,588,446 
Commitments to Extend Credit
Commitments to extend credit are agreements to lend to a customer if all conditions of the commitment have been met. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s evaluation of the customer’s ability to repay. Unfunded loan commitments totaled approximately $357.9 million and $283.3 million as of December 31, 2021 and 2020, respectively.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Commitments under standby letters of credit totaled approximately $12.5 million and $10.5 million as of December 31, 2021 and 2020, respectively. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.