Note 5 - Loans

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

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

5.

Loans:

The composition of the loan portfolio at

March 31, 2020

and

December 31, 2019,

is as follows (in thousands):

	March 31, 2020		December 31, 2019
Gaming	$	22,083	$	19,899
Hotel/Motel		45,226		47,294
Real estate, construction		20,580		23,209
Real estate, mortgage		149,559		141,406
Commercial and industrial		27,460		30,626
Other		6,020		6,515
Total	$	270,928	$	268,949

The age analysis of the loan portfolio, segregated by class of loans, as of

March 31, 2020

and

December 31, 2019,

is as follows (in thousands):

													Loans Past
													Due Greater
	Number of Days Past Due												Than 90
					Greater		Total				Total		Days &
	30 - 59		60 - 89		Than 90		Past Due		Current		Loans		Still Accruing
March 31, 2020:
Gaming	$		$		$		$		$	22,083	$	22,083	$
Hotel/Motel										45,226		45,226
Real estate, construction		241		349		15		605		19,975		20,580
Real estate, mortgage		3,411		558		5,498		9,467		140,092		149,559		39
Commercial and industrial		86		15		216		317		27,143		27,460
Other		72		9				81		5,939		6,020
Total	$	3,810	$	931	$	5,729	$	10,470	$	260,458	$	270,928	$	39
December 31, 2019:
Gaming	$		$		$		$		$	19,899	$	19,899	$
Hotel/Motel										47,294		47,294
Real estate, construction		303		69		14		386		22,823		23,209
Real estate, mortgage		4,150		343		5,580		10,073		131,333		141,406
Commercial and industrial		92		58		218		368		30,258		30,626
Other		50		12				62		6,453		6,515
Total	$	4,595	$	482	$	5,812	$	10,889	$	258,060	$	268,949	$

The Company monitors the credit quality of its loan portfolio through the use of a loan grading system. A score of

1

–

5

is assigned to the loan based on factors including repayment ability, trends in net worth and/or financial condition of the borrower and guarantors, employment stability, management ability, loan to value fluctuations, the type and structure of the loan, conformity of the loan to bank policy and payment performance. Based on the total score, a loan grade of A, B, C, S, D, E or F is applied. A grade of A will generally be applied to loans for customers that are well known to the Company and that have excellent sources of repayment. A grade of B will generally be applied to loans for customers that have excellent sources of repayment which have

no

identifiable risk of collection. A grade of C will generally be applied to loans for customers that have adequate sources of repayment which have little identifiable risk of collection. A grade of S will generally be applied to loans for customers who meet the criteria for a grade of C but who also warrant additional monitoring by placement on the watch list. A grade of D will generally be applied to loans for customers that are inadequately protected by current sound net worth, paying capacity of the borrower, or pledged collateral. Loans with a grade of D have unsatisfactory characteristics such as cash flow deficiencies, bankruptcy filing by the borrower or dependence on the sale of collateral for the primary source of repayment, causing more than acceptable levels of risk. Loans

60

to

89

days past due receive a grade of D. A grade of E will generally be applied to loans for customers with weaknesses inherent in the “D” classification and in which collection or liquidation in full is questionable. In addition, on a monthly basis the Company determines which loans are

90

days or more past due and assigns a grade of E to them. A grade of F is applied to loans which are considered uncollectible and of such little value that their continuance in an active bank is

not

warranted. Loans with this grade are charged off, even though partial or full recovery

may

be possible in the future.

An analysis of the loan portfolio by loan grade, segregated by class of loans, as of

March 31, 2020

and

December 31, 2019,

is as follows (in thousands):

	Loans With A Grade Of:
	A, B or C		S		D		E		F	Total
March 31, 2020:
Gaming	$	17,980	$		$	4,103	$		$	$	22,083
Hotel/Motel		45,226									45,226
Real estate, construction		20,010				76		494			20,580
Real estate, mortgage		129,038		8,136		4,173		8,212			149,559
Commercial and industrial		21,547		5,585		50		278			27,460
Other		5,998				20		2			6,020
Total	$	239,799	$	13,721	$	8,422	$	8,986	$	$	270,928
December 31, 2019:
Gaming	$	19,899	$		$		$		$	$	19,899
Hotel/Motel		47,294									47,294
Real estate, construction		22,611				83		515			23,209
Real estate, mortgage		123,841		5,338		3,608		8,619			141,406
Commercial and industrial		21,609		8,627		59		331			30,626
Other		6,501				12		2			6,515
Total	$	241,755	$	13,965	$	3,762	$	9,467	$	$	268,949

A loan

may

be impaired but

not

on nonaccrual status when the loan is well secured and in the process of collection. Total loans on nonaccrual as of

March 31, 2020

and

December 31, 2019,

are as follows (in thousands):

	March 31, 2020		December 31, 2019
Real estate, construction	$	494	$	515
Real estate, mortgage		8,088		8,495
Commercial and industrial		251		256
Total	$	8,833	$	9,266

During the

first

quarter of

2020,

the Company modified

96

loans with a total balance of

$38,970,417

for certain customers by extending payments for

90

days as a result of the impact of COVID-

19.

All such loans were current at the time they were modified. Accordingly, such loans were

not

classified as troubled debt restructurings.

Prior to

2019,

certain loans were modified by granting interest rate concessions to these customers with such loans being classified as troubled debt restructurings. During

2019

and

2020,

the Company did

not

restructure any additional loans. Specific reserves of

$63,106

were allocated to troubled debt restructurings as of

March 31, 2020

and

December 31, 2019.

The Bank had

no

commitments to lend additional amounts to customers with outstanding loans classified as troubled debt restructurings as of

March 31, 2020

and

December 31, 2019.

Impaired loans, which include loans classified as nonaccrual and troubled debt restructurings, segregated by class of loans, as of

March 31, 2020

and

December 31, 2019,

are as follows (in thousands):

	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2020:
With no related allowance recorded:
Real estate, construction	$	281	$	281	$		$	284	$
Real estate, mortgage		8,520		8,520				8,546		6
Commercial and industrial		216		216				217
Total		9,017		9,017				9,047		6
With a related allowance recorded:
Real estate, construction		213		213		20		217
Real estate, mortgage		586		586		83		589		7
Commercial and industrial		35		35		4		36
Total		834		834		107		842		7
Total by class of loans:
Real estate, construction		494		494		20		501
Real estate, mortgage		9,106		9,106		83		9,135		13
Commercial and industrial		251		251		4		253
Total	$	9,851	$	9,851	$	107	$	9,889	$	13

	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2019:
With no related allowance recorded:
Real estate, construction	$	292	$	292	$		$	312	$
Real estate, mortgage		8,906		8,906				9,075		29
Commercial and industrial		217		217				217
Total		9,415		9,415				9,604		29
With a related allowance recorded:
Real estate, construction		223		223		20		230
Real estate, mortgage		624		624		98		614		27
Commercial and industrial		39		39		4		41
Total		886		886		122		885		27
Total by class of loans:
Real estate, construction		515		515		20		542
Real estate, mortgage		9,530		9,530		98		9,689		56
Commercial and industrial		256		256		4		258
Total	$	10,301	$	10,301	$	122	$	10,489	$	56