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Note 5 - Loans

9 Months Ended

Sep. 30, 2023

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 5 – LOANS

The loan portfolio is classified based on the underlying collateral utilized to secure each loan for financial reporting purposes. This classification is consistent with the Quarterly Report of Condition and Income filed by the Bank with the Federal Deposit Insurance Corporation (FDIC).

Commercial, financial and agricultural - Includes loans to business enterprises issued for commercial, industrial, agricultural production and/or other professional purposes. These loans are generally secured by equipment, inventory, and accounts receivable of the borrower and repayment is primarily dependent on business cash flows.

Real estate – construction – Includes loans secured by real estate to finance land development or the construction of industrial, commercial or residential buildings. Repayment is dependent upon the completion and eventual sale, refinance or operation of the related real estate project.

Owner-occupied commercial real estate mortgage – Includes loans secured by nonfarm nonresidential properties for which the primary source of repayment is the cash flow from the ongoing operations conducted by the party that owns the property.

1-4 family real estate mortgage – Includes loans secured by residential properties, including home equity lines of credit. Repayment is primarily dependent on the personal cash flow of the borrower.

Other real estate mortgage – Includes loans secured by nonowner-occupied properties, including office buildings, industrial buildings, warehouses, retail buildings, multifamily residential properties and farmland. Repayment is primarily dependent on income generated from the underlying collateral.

Consumer – Includes loans to individuals not secured by real estate. Repayment is dependent upon the personal cash flow of the borrower.

The following table details the Company’s loans at September 30, 2023 and December 31, 2022:

	September 30,			December 31,
	2023			2022

	(Dollars In Thousands)
Commercial, financial and agricultural	$	2,890,535		$	3,145,317
Real estate - construction		1,509,937			1,532,388
Real estate - mortgage:
Owner-occupied commercial		2,237,684			2,199,280
1-4 family mortgage		1,170,099			1,146,831
Other mortgage		3,766,124			3,597,750
Subtotal: Real estate - mortgage		7,173,907			6,943,861
Consumer		66,751			66,402
Total Loans		11,641,130			11,687,968
Less: Allowance for credit losses		(152,247	)		(146,297	)
Net Loans	$	11,488,883		$	11,541,671


Commercial, financial and agricultural		24.83	%		26.91	%
Real estate - construction		12.97	%		13.11	%
Real estate - mortgage:
Owner-occupied commercial		19.22	%		18.82	%
1-4 family mortgage		10.05	%		9.81	%
Other mortgage		32.36	%		30.78	%
Subtotal: Real estate - mortgage		61.63	%		59.41	%
Consumer		0.57	%		0.57	%
Total Loans		100.00	%		100.00	%

The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. The following table presents credit quality indicators for the loan credit portfolio segments and classes. These categories are utilized to develop the associated allowance for credit losses using historical losses adjusted for current economic conditions defined as follows:

●

Pass – loans which are well protected by the current net worth and paying capacity of the borrower (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral.

●

Special Mention – loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.

●

Substandard – loans that exhibit well-defined weakness or weaknesses that currently jeopardize debt repayment. These loans are characterized by the distinct possibility that the company will sustain some loss if the weaknesses are not corrected.

●

Doubtful – loans that have all the weaknesses inherent in loans classified substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

The table below presents loan balances classified by credit quality indicator, loan type and based on year of origination as of September 30, 2023 :

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving lines of credit converted to term loans		Total
	(In Thousands)
Commercial, financial and agricultural
Pass	$	259,905	$	482,415	$	411,742	$	174,227	$	107,571	$	167,772	$	1,180,671	$	565	$	2,784,868
Special Mention		504		2,368		8,285		6,070		1,629		6,317		25,731		13		50,917
Substandard - accruing		1,457		-		409		372		9,501		28,642		5,718		-		46,099
Substandard -Non-accrual		-		475		914		485		-		3,147		3,630		-		8,651
Total Commercial, financial and agricultural	$	261,866	$	485,258	$	421,350	$	181,154	$	118,701	$	205,878	$	1,215,750	$	578	$	2,890,535
Current-period gross charge-offs		1,213		4,677		2,531		-		4		476		1,497		-		10,398

Real estate - construction
Pass	$	137,298	$	867,332	$	353,340	$	55,083	$	6,071	$	21,297	$	67,763	$	-	$	1,508,184
Special Mention		3		556		-		-		-		-		-		-		559
Substandard - accruing		-		-		-		-		-		994		-		-		994
Substandard -Non-accrual		-		-		-		-		-		-		-		200		200
Total Real estate - construction	$	137,301	$	867,888	$	353,340	$	55,083	$	6,071	$	22,291	$	67,763	$	200	$	1,509,937
Current-period gross charge-offs		-		-		19		-		-		-		-		-		19

Owner-occupied commercial
Pass	$	93,823	$	455,222	$	533,643	$	305,149	$	186,042	$	546,139	$	64,968	$	854	$	2,185,840
Special Mention		5,380		1,426		7,757		8,344		8,605		7,591		-		-		39,103
Substandard - accruing		1,383		-		-		-		-		4,353		-		-		5,736
Substandard -Non-accrual		-		-		-		-		2,329		4,676		-		-		7,005
Total Owner-occupied commercial	$	100,586	$	456,648	$	541,400	$	313,493	$	196,976	$	562,759	$	64,968	$	854	$	2,237,684
Current-period gross charge-offs		-		-		-		-		117		-		-		-		117

1-4 family mortgage
Pass	$	111,341	$	373,591	$	234,258	$	77,861	$	47,905	$	65,376	$	248,681	$	-	$	1,159,013
Special Mention		622		379		2,075		1,022		100		230		1,427		-		5,855
Substandard - accruing		-		-		-		-		-		429		253		-		682
Substandard -Non-accrual		-		903		976		729		763		1,178		-		-		4,549
Total 1-4 family mortgage	$	111,963	$	374,873	$	237,309	$	79,612	$	48,768	$	67,213	$	250,361	$	-	$	1,170,099
Current-period gross charge-offs		-		40		-		-		-		-		-		-		40

Other mortgage
Pass	$	86,069	$	1,105,884	$	1,116,900	$	498,233	$	282,615	$	562,626	$	100,756	$	247	$	3,753,330
Special Mention		-		-		-		-		-		-		1,050		-		1,050
Substandard - accruing		-		231		-		-		-		11,007		-		-		11,238
Substandard -Non-accrual		-		-		-		-		130		376		-		-		506
Total Other mortgage	$	86,069	$	1,106,115	$	1,116,900	$	498,233	$	282,745	$	574,009	$	101,806	$	247	$	3,766,124

Consumer
Pass	$	20,592	$	4,014	$	4,781	$	2,077	$	1,412	$	2,752	$	31,123	$	-	$	66,751
Special Mention		-		-		-		-		-		-		-		-		-
Substandard - accruing		-		-		-		-		-		-		-		-		-
Total Consumer	$	20,592	$	4,014	$	4,781	$	2,077	$	1,412	$	2,752	$	31,123	$	-	$	66,751
Current-period gross charge-offs		-		-		-		-		-		-		842		-		842

Total Loans
Pass	$	709,028	$	3,288,458	$	2,654,664	$	1,112,630	$	631,616	$	1,365,962	$	1,693,962	$	1,666	$	11,457,986
Special Mention		6,509		4,729		18,117		15,436		10,334		14,138		28,208		13		97,484
Substandard - accruing		2,840		231		409		372		9,501		45,425		5,971		-		64,749
Substandard -Non-accrual		-		1,378		1,890		1,214		3,222		9,377		3,630		200		20,911
Total Loans	$	718,377	$	3,294,796	$	2,675,080	$	1,129,652	$	654,673	$	1,434,902	$	1,731,771	$	1,879	$	11,641,130
Current-period gross charge-offs	$	1,213	$	4,717	$	2,550	$	-	$	121	$	476	$	2,339	$	-	$	11,416

The table below presents loan balances classified by credit quality indicator, loan type and based on year of origination as of December 31, 2022:

													Revolving
	2022		2021		2020		2019		2018		Prior		Loans		Total
	(In Thousands)
Commercial, financial and agricultural
Pass	$	691,817	$	502,648	$	223,096	$	144,587	$	78,477	$	134,893	$	1,267,333	$	3,042,851
Special Mention		6,906		3,737		1,101		1,748		570		898		29,516		44,476
Substandard		200		-		379		9,501		16,329		16,595		14,986		57,990
Total Commercial, financial and agricultural	$	698,923	$	506,385	$	224,576	$	155,836	$	95,376	$	152,386	$	1,311,835	$	3,145,317

Real estate - construction
Pass	$	618,578	$	638,126	$	156,834	$	15,197	$	12,063	$	14,847	$	72,172	$	1,527,817
Special Mention		2,500		-		-		-		-		873		-		3,373
Substandard		-		-		-		-		1,198		-		-		1,198
Total Real estate - construction	$	621,078	$	638,126	$	156,834	$	15,197	$	13,261	$	15,720	$	72,172	$	1,532,388

Owner-occupied commercial
Pass	$	424,321	$	496,298	$	352,375	$	199,987	$	157,204	$	477,926	$	64,152	$	2,172,263
Special Mention		2,362		-		-		2,723		4,682		6,917		1,687		18,371
Substandard		-		-		-		73		-		8,573		-		8,646
Total Owner-occupied commercial	$	426,683	$	496,298	$	352,375	$	202,783	$	161,886	$	493,416	$	65,839	$	2,199,280

1-4 family mortgage
Pass	$	388,778	$	273,515	$	93,272	$	52,209	$	28,999	$	57,512	$	243,302	$	1,137,587
Special Mention		315		445		816		375		294		881		2,854		5,980
Substandard		-		279		404		648		346		1,224		363		3,264
Total 1-4 family mortgage	$	389,093	$	274,239	$	94,492	$	53,232	$	29,639	$	59,617	$	246,519	$	1,146,831

Other mortgage
Pass	$	1,027,747	$	976,208	$	517,392	$	380,104	$	130,228	$	470,699	$	75,669	$	3,578,047
Special Mention		231		-		-		-		-		7,161		-		7,392
Substandard		-		-		-		130		4,569		7,612		-		12,311
Total Other mortgage	$	1,027,978	$	976,208	$	517,392	$	380,234	$	134,797	$	485,472	$	75,669	$	3,597,750

Consumer
Pass	$	21,132	$	5,845	$	4,203	$	1,759	$	440	$	2,988	$	30,021	$	66,388
Special Mention		-		-		-		-		-		14		-		14
Substandard		-		-		-		-		-		-		-		-
Total Consumer	$	21,132	$	5,845	$	4,203	$	1,759	$	440	$	3,002	$	30,021	$	66,402

Total Loans
Pass	$	3,172,373	$	2,892,640	$	1,347,172	$	793,843	$	407,411	$	1,158,865	$	1,752,649	$	11,524,953
Special Mention		12,314		4,182		1,917		4,846		5,546		16,744		34,057		79,606
Substandard		200		279		783		10,352		22,442		34,004		15,349		83,409
Total Loans	$	3,184,887	$	2,897,101	$	1,349,872	$	809,041	$	435,399	$	1,209,613	$	1,802,055	$	11,687,968

Loans by performance status as of September 30, 2023 and December 31, 2022 were as follows:

September 30, 2023	Performing		Nonperforming		Total

	(In Thousands)
Commercial, financial and agricultural	$	2,881,861	$	8,674	$	2,890,535
Real estate - construction		1,509,737		200		1,509,937
Real estate - mortgage:
Owner-occupied commercial		2,230,678		7,006		2,237,684
1-4 family mortgage		1,164,055		6,044		1,170,099
Other mortgage		3,765,618		506		3,766,124
Total real estate mortgage		7,160,351		13,556		7,173,907
Consumer		66,578		173		66,751
Total	$	11,618,527	$	22,603	$	11,641,130

December 31, 2022	Performing		Nonperforming		Total

	(In Thousands)
Commercial, financial and agricultural	$	3,138,014	$	7,303	$	3,145,317
Real estate - construction		1,532,388		-		1,532,388
Real estate - mortgage:
Owner-occupied commercial		2,195,968		3,312		2,199,280
1-4 family mortgage		1,144,713		2,118		1,146,831
Other mortgage		3,592,732		5,018		3,597,750
Total real estate mortgage		6,933,413		10,448		6,943,861
Consumer		66,312		90		66,402
Total	$	11,670,127	$	17,841	$	11,687,968

Loans by past due status as of September 30, 2023 and December 31, 2022 were as follows:

September 30, 2023	Past Due Status (Accruing Loans)
							Total Past		Total						Nonaccrual
	30-59 Days		60-89 Days		90+ Days		Due		Nonaccrual		Current		Total Loans		With no ACL

	(In Thousands)
Commercial, financial and agricultural	$	2,810	$	105	$	24	$	2,939	$	8,650	$	2,878,946	$	2,890,535	$	4,564
Real estate - construction		511		-		-		511		200		1,509,226		1,509,937		8,320
Real estate - mortgage:
Owner-occupied commercial		95		-		-		95		7,006		2,230,583		2,237,684		6,841
1-4 family mortgage		2,786		26		1,495		4,307		4,549		1,161,243		1,170,099		874
Other mortgage		-		1,050		-		1,050		506		3,764,568		3,766,124		506
Total real estate - mortgage		2,881		1,076		1,495		5,452		12,061		7,156,394		7,173,907		8,221
Consumer		256		25		173		454		-		66,297		66,751		-
Total	$	6,458	$	1,206	$	1,692	$	9,356	$	20,911	$	11,610,863	$	11,641,130	$	21,105

December 31, 2022	Past Due Status (Accruing Loans)
							Total Past		Total						Nonaccrual
	30-59 Days		60-89 Days		90+ Days		Due		Nonaccrual		Current		Total Loans		With no ACL

	(In Thousands)
Commercial, financial and agricultural	$	1,075	$	409	$	195	$	1,679	$	7,108	$	3,136,530	$	3,145,317	$	3,238
Real estate - construction		-		711		-		711		-		1,531,677		1,532,388		-
Real estate - mortgage:
Owner-occupied commercial		83		452		-		535		3,312		2,195,433		2,199,280		57
1-4 family mortgage		405		580		594		1,579		1,524		1,143,728		1,146,831		491
Other mortgage		231		-		4,512		4,743		506		3,592,501		3,597,750		-
Total real estate - mortgage		719		1,032		5,106		6,857		5,342		6,931,662		6,943,861		548
Consumer		174		128		90		392		-		66,010		66,402		621
Total	$	1,968	$	2,280	$	5,391	$	9,639	$	12,450	$	11,665,879	$	11,687,968	$	4,407

Under the current expected credit losses (“CECL”) methodology, the allowance for credit losses ("ACL") is measured on a collective basis for pools of loans with similar risk characteristics. For loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable forecast period losses are reverted to long-term historical averages. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses.

The Company uses the discounted cash flow (“DCF”) method to estimate ACL for all loan pools except for commercial and industrial ("C&I") revolving lines of credit and credit cards. C&I revolving lines of credit and credit cards are members of the Commercial, financial and agricultural and Consumer portfolios, respectively. For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment rate as a loss driver. The Company also utilizes and forecasts GDP growth as a second loss driver for its agricultural and consumer loan pools. Consistent forecasts of the loss drivers are used across the loan segments. At September 30, 2023 and December 31, 2022, the Company utilized a reasonable and supportable forecast period of twelve months followed by a six-month straight-line reversion to long term averages. The Company leveraged economic projections from reputable and independent sources to inform its loss driver forecasts. The Company expects the national unemployment rate to decline and the national GDP growth rate to improve compared to the December 31, 2022 forecast.

The Company uses a loss-rate method to estimate expected credit losses for its C&I revolving lines of credit and credit card pools. The C&I revolving lines of credit pool incorporates a probability of default (“PD”) and loss given default (“LGD”) modeling approach. This approach involves estimating the pool average life and then using historical correlations of default and loss experience over time to calculate the lifetime PD and LGD. These two inputs are then applied to the outstanding pool balance. The credit card pool incorporates a remaining life modeling approach, which utilizes an attrition-based method to estimate the remaining life of the pool. A quarterly average loss rate is then calculated using the Company’s historical loss data. The model reduces the pool balance quarterly on a straight-line basis over the estimated life of the pool. The quarterly loss rate is multiplied by the outstanding balance at each period-end resulting in an estimated loss for each quarter. The sum of estimated loss for all quarters is the total calculated reserve for the pool. Management has applied the loss-rate method to C&I lines of credit and to credit cards due to their generally short-term nature. An expected loss ratio is applied based on internal and peer historical losses.

Each loan pool is adjusted for qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions.

Inherent risks in the loan portfolio will differ based on type of loan. Specific risk characteristics by loan portfolio segment are listed below:

Commercial, financial and agricultural loans include risks associated with the borrower’s cash flow, debt service coverage, and management’s expertise. These loans are subject to the risk that the Company may have difficulty converting collateral to a liquid asset if necessary, as well as risks associated with the degree of specialization, mobility, and general collectability in a default situation. These commercial loans may be subject to many different types of risks, including fraud, bankruptcy, economic downturn, deteriorated or non-existent collateral, and changes in interest rates.

Real estate construction loans include risks associated with the borrower’s credit-worthiness, contractor’s qualifications, borrower and contractor performance, and the overall risk and complexity of the proposed project. Construction lending is also subject to risks associated with sub-market dynamics, including population, employment trends and household income. During times of economic stress, this type of loan has typically had a greater degree of risk than other loan types.

Real estate mortgage loans consist of loans secured by commercial and residential real estate. Commercial real estate lending is dependent upon successful management, marketing and expense supervision necessary to maintain the property. Repayment of these loans may be adversely affected by conditions in the real estate market or the general economy. Also, commercial real estate loans typically involve relatively large loan balances to a single borrower. Residential real estate lending risks are generally less significant than those of other loans. Real estate lending risks include fluctuations in the value of real estate, bankruptcies, economic downturn and customer financial problems.

Consumer loans carry a moderate degree of risk compared to other loans. They are generally more risky than traditional residential real estate loans but less risky than commercial loans. Risk of default is usually determined by the well-being of the local economies. During times of economic stress, there is usually some level of job loss both nationally and locally, which directly affects the ability of the consumer to repay debt.

The following table presents changes in the ACL, segregated by loan type, for the three and nine months ended September 30, 2023 and September 30, 2022.

	Commercial,
	financial and			Real estate -			Real estate -
	agricultural			construction			mortgage			Consumer			Total

	(In Thousands)
	Three Months Ended September 30, 2023
Allowance for credit losses:
Balance at July 1, 2023	$	43,465		$	40,443		$	66,237		$	2,127		$	152,272
Charge-offs		(4,783	)		(19	)		-			(341	)		(5,143	)
Recoveries		825			-			-			11			836
Provision		6,454			(2,401	)		37			192			4,282
Balance at September 30, 2023	$	45,961		$	38,023		$	66,274		$	1,989		$	152,247

	Three Months Ended September 30, 2022
Allowance for credit losses:
Balance at July 1, 2022	$	41,610		$	35,992		$	48,793		$	1,992		$	128,387
Charge-offs		(2,902	)		-			(170	)		(260	)		(3,332	)
Recoveries		297			-			-			12			309
Provision		3,829			4,024			7,420			330			15,603
Balance at September 30, 2022	$	42,834		$	40,016		$	56,043		$	2,074		$	140,967

	Nine Months Ended September 30, 2023
Allowance for credit losses:
Balance at January 1, 2023	$	42,830		$	42,889		$	58,652		$	1,926		$	146,297
Charge-offs		(10,398	)		(19	)		(157	)		(842	)		(11,416	)
Recoveries		2,187			3			-			43			2,233
Provision		11,342			(4,850	)		7,779			862			15,133
Balance at September 30, 2023	$	45,961		$	38,023		$	66,274		$	1,989		$	152,247

	Nine Months Ended September 30, 2022
Allowance for credit losses:
Balance at January 1, 2022	$	41,869		$	26,994		$	45,829		$	1,968		$	116,660
Charge-offs		(7,141	)		-			(221	)		(459	)		(7,821	)
Recoveries		1,619			-			-			37			1,656
Provision		6,487			13,022			10,435			528			30,472
Balance at September 30, 2022	$	42,834		$	40,016		$	56,043		$	2,074		$	140,967

We maintain an ACL on unfunded lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheet within other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense. The ACL on unfunded commitments was $575,000 at both September 30, 2023 and at December 31, 2022. There was no provision expense for the three and nine months ended September 30, 2023, respectively, and provision expense was $329,000 and $629,000 for the three and nine months ended September 30, 2022, respectively.

Loans that no longer share similar risk characteristics with collectively evaluated pools are estimated on an individual basis. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following table summarizes collateral-dependent gross loans held for investment by collateral type as follows:

			Accounts								ACL
September 30, 2023	Real Estate		Receivable		Equipment		Other		Total		Allocation
	(In Thousands)
Commercial, financial and agricultural	$	20,457	$	10,686	$	830	$	23,917	$	55,890	$	15,025
Real estate - construction		200		-		-		994		1,194		90
Real estate - mortgage:
Owner-occupied commercial		12,029		-		-		709		12,738		1.530
1-4 family mortgage		10,933		-		-		-		10,933		73
Other mortgage		5,944		-		-		-		5,944		411
Total real estate - mortgage		28,906		-		-		709		29,615		2,014
Consumer		-		-		-		-		-		-
Total	$	49,563	$	10,686	$	830	$	25,620	$	86,699	$	17,129

			Accounts								ACL
December 31, 2022	Real Estate		Receivable		Equipment		Other		Total		Allocation
	(In Thousands)
Commercial, financial and agricultural	$	20,061	$	12,092	$	837	$	24,998	$	57,988	$	9,910
Real estate - construction		-		-		-		1,198		1,198		7
Real estate - mortgage:
Owner-occupied commercial		8,573		-		-		74		8,647		154
1-4 family mortgage		3,260		-		-		-		3,260		316
Other mortgage		12,311		-		-		-		12,311		-
Total real estate - mortgage		24,144		-		-		74		24,218		470
Consumer		-		-		-		-		-		-
Total	$	44,205	$	12,092	$	837	$	26,270	$	83,404	$	10,387

On March 22, 2020, an Interagency Statement was issued by banking regulators that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act further provides that a qualified loan modification is exempt by law from classification as a Troubled Debt Restructuring (“TDR”) as defined by U.S. GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that was 60 days after the date on which the national emergency concerning the COVID-19 outbreak declared by the President of the United States under the National Emergencies Act terminated. The Interagency Statement was subsequently revised in April 2020 to clarify the interaction of the original guidance with Section 4013 of the CARES Act, as well as setting forth the banking regulators’ views on consumer protection considerations. On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act 2021, which extended the period established by Section 4013 of the CARES Act to the earlier of January 1, 2022 or the date that was 60 days after the date on which the national COVID-19 emergency terminated. In accordance with such guidance, the Bank offered short-term modifications made in response to COVID-19 to borrowers who are current and otherwise not past due. These include short-term (180 days or less) modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant.

The Bank adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of TDRs and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.

The table below details the amortized cost basis at the end of the reporting period for loans made to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2023:

	Three Months Ended September 30, 2023
			Payment Deferral
	Term		and Term				Percentage of
	Extensions		Extensions		Total		Total Loans
	(In Thousands)

Commercial, financial and agricultural	$	25,339	$	-	$	25,339		0.22	%
Other mortgage		303		-		303		-	%
Total	$	25,642	$	-	$	25,642		0.22	%

	Nine Months Ended September 30, 2023
			Payment Deferral
	Term		and Term				Percentage of
	Extensions		Extensions		Total		Total Loans
	(In Thousands)

Commercial, financial and agricultural	$	39,631	$	-	$	39,631		0.34	%
Real estate - construction		200		-		200		-	%
Owner-occupied commercial		15,208		-		15,208		0.13	%
Other mortgage		11,236		-		11,236		0.10	%
Total	$	66,275	$	-	$	66,275		0.57	%

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023:

	Three Months Ended September 30, 2023
			Total Payment
	Term Extensions		Deferral
	(In months)		(In Thousands)
Commercial, financial and agricultural		3 to 12	$	-
Real estate - construction		-		-
Owner-occupied commercial		3		-
1-4 family mortgage		-		-
Other mortgage		-		-

	Nine Months Ended September 30, 2023
			Total Payment
	Term Extensions		Deferral
	(In months)		(In Thousands)
Commercial, financial and agricultural		3 to 65	$	-
Real estate - construction		6		-
Owner-occupied commercial		3 to 60		49
1-4 family mortgage		3		-
Other mortgage		3 to 36		59

No loans modified on or after January 1, 2023, the date the Company adopted ASU 2022-02, were past due greater than 30 days or on non-accrual as of September 30, 2023.

As of September 30, 2023, the Company did not have any loans made to borrowers experiencing financial difficulty that were modified during the three and nine months of September 30, 2023 that subsequently defaulted. For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.

TDRs at December 31, 2022 and September 30, 2022 totaled $2.5 million and $2.0 million, respectively. The portion of those TDRs accruing interest at December 31, 2022 and September 30, 2022 totaled $431,000 and $236,000, respectively. There were no modifications made to new TDRs or renewals of existing TDRs for the three and nine months ended September 30, 2022.There were no loans which were modified in the previous twelve months (i.e., the twelve months prior to default) that defaulted during the three and nine months of September 30, 2022. For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.