XML 24 R14.htm IDEA: XBRL DOCUMENT

NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES

9 Months Ended

Sep. 30, 2020

NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES

Classes of loans at September 30, 2020 and December 31, 2019 were as follows:

		September 30,			December 31,
		2020			2019
		(In Thousands)

One- to four-family residential construction	$	38,503		$	33,963
Subdivision construction		10,466			16,088
Land development		40,224			40,431
Commercial construction		1,206,342			1,322,861
Owner occupied one- to four-family residential		478,113			387,016
Non-owner occupied one- to four-family residential		117,699			120,343
Commercial real estate		1,536,443			1,494,172
Other residential		1,018,359			866,006
Commercial business		439,199			313,209
Industrial revenue bonds		14,165			13,189
Consumer auto		99,284			151,854
Consumer other		41,333			46,720
Home equity lines of credit		114,357			118,988
Loans acquired and accounted for under ASC 310-30, net of discounts		106,128			127,206
		5,260,615			5,052,046
Undisbursed portion of loans in process		(782,865	)		(850,666	)
Allowance for loan losses		(54,238	)		(40,294	)
Deferred loan fees and gains, net		(9,748	)		(7,104	)
	$	4,413,764		$	4,153,982

Weighted average interest rate		4.28	%		4.97	%

		September 30, 2020
														Total Loans
												Total		> 90 Days
		30-59 Days		60-89 Days		90+ Days		Total				Loans		Past Due and
		Past Due		Past Due		Past Due		Past Due		Current		Receivable		Still Accruing
		(In Thousands)

One- to four-family
residential construction	$	79	$	-	$	-	$	79	$	38,424	$	38,503	$	-
Subdivision construction		-		-		-		-		10,466		10,466		-
Land development		236		39		-		275		39,949		40,224		-
Commercial construction		-		-		-		-		1,206,342		1,206,342		-
Owner occupied one- to four-
family residential		336		195		1,922		2,453		475,660		478,113		-
Non-owner occupied one-
to four- family residential		-		-		238		238		117,461		117,699		-
Commercial real estate		100		-		701		801		1,535,642		1,536,443		-
Other residential		-		-		-		-		1,018,359		1,018,359		-
Commercial business		-		-		140		140		439,059		439,199		-
Industrial revenue bonds		-		-		-		-		14,165		14,165		-
Consumer auto		384		45		267		696		98,588		99,284		-
Consumer other		177		6		112		295		41,038		41,333		-
Home equity lines of credit		109		129		457		695		113,662		114,357		-
Loans acquired and accounted
for under ASC 310-30,
net of discounts		331		348		3,966		4,645		101,483		106,128		-
		1,752		762		7,803		10,317		5,250,298		5,260,615		-
Less loans acquired an accountedd for under ASC 310-30,
net of discounts		331		348		3,966		4,645		101,483		106,128		-

Total	$	1,421	$	414	$	3,837	$	5,672	$	5,148,815	$	5,154,487	$	-

		December 31, 2019
														Total Loans
												Total		> 90 Days
		30-59 Days		60-89 Days		90+ Days		Total				Loans		Past Due and
		Past Due		Past Due		Past Due		Past Due		Current		Receivable		Still Accruing
		(In Thousands)

One- to four-family
residential construction	$	-	$	-	$	-	$	-	$	33,963	$	33,963	$	-
Subdivision construction		-		-		-		-		16,088		16,088		-
Land development		-		27		-		27		40,404		40,431		-
Commercial construction		15,085		-		-		15,085		1,307,776		1,322,861		-
Owner occupied one- to four-
family residential		1,453		1,631		1,198		4,282		382,734		387,016		-
Non-owner occupied one-
to four- family residential		152		-		181		333		120,010		120,343		-
Commercial real estate		549		119		632		1,300		1,492,872		1,494,172		-
Other residential		376		-		-		376		865,630		866,006		-
Commercial business		60		-		1,235		1,295		311,914		313,209		-
Industrial revenue bonds		-		-		-		-		13,189		13,189		-
Consumer auto		1,101		259		558		1,918		149,936		151,854		-
Consumer other		278		233		198		709		46,011		46,720		-
Home equity lines of credit		296		-		517		813		118,175		118,988		-
Loans acquired and accounted for under ASC 310-30,
net of discounts		2,177		709		6,191		9,077		118,129		127,206		-
		21,527		2,978		10,710		35,215		5,016,831		5,052,046		-
Less loans acquired and accounted for under
ASC 310-30, net of discounts		2,177		709		6,191		9,077		118,129		127,206		-

Total	$	19,350	$	2,269	$	4,519	$	26,138	$	4,898,702	$	4,924,840	$	-

Non-accruing loans (excluding FDIC-assisted acquired loans, net of discount) are summarized as follows:

		September 30,		December 31,
		2020		2019
		(In Thousands)

One- to four-family residential construction	$	-	$	-
Subdivision construction		-		-
Land development		-		-
Commercial construction		-		-
Owner occupied one- to four-family residential		1,922		1,198
Non-owner occupied one- to four-family residential		238		181
Commercial real estate		701		632
Other residential		-		-
Commercial business		140		1,235
Industrial revenue bonds		-		-
Consumer auto		267		558
Consumer other		112		198
Home equity lines of credit		457		517

Total	$	3,837	$	4,519

The portfolio segments used in the preceding three tables correspond to the loan classes used in all other tables in Note 6 as follows:

·The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes

·The other residential segment corresponds to the other residential class

·The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes

·The commercial construction segment includes the land development and commercial construction classes

·The commercial business segment corresponds to the commercial business class

·The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes

A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include not only nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties.

Impaired loans (excluding FDIC-assisted loans, net of discount), are summarized as follows:

		September 30, 2020
				Unpaid
		Recorded		Principal		Specific
		Balance		Balance		Allowance
		(In Thousands)

One- to four-family residential construction	$	-	$	-	$	-
Subdivision construction		22		22		-
Land development		-		-		-
Commercial construction		-		-		-
Owner occupied one- to four-family residential		3,342		3,460		78
Non-owner occupied one- to four-family residential		238		238		-
Commercial real estate		3,056		3,056		466
Other residential		-		-		-
Commercial business		197		210		15
Industrial revenue bonds		-		-		-
Consumer auto		1,024		1,040		166
Consumer other		333		355		17
Home equity lines of credit		553		558		4

Total	$	8,765	$	8,939	$	746

	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
		Average				Average
		Investment		Interest		Investment		Interest
		in Impaired		Income		in Impaired		Income
		Loans		Recognized		Loans		Recognized
	(In Thousands)

One- to four-family residential construction	$	-	$	-	$	-	$	-
Subdivision construction		22		-		147		3
Land development		-		-		-		-
Commercial construction		-		-		-		-
Owner occupied one- to four-family residential		3,146		44		2,850		124
Non-owner occupied one- to four-family residential		267		-		372		11
Commercial real estate		3,829		30		3,946		97
Other residential		-		-		-		-
Commercial business		538		5		1,008		30
Industrial revenue bonds		-		-		-		-
Consumer auto		889		37		945		77
Consumer other		293		17		281		33
Home equity lines of credit		528		7		535		26

Total	$	9,512	$	140	$	10,084	$	401

		At or for the Year Ended December 31, 2019
								Average
				Unpaid				Investment		Interest
		Recorded		Principal		Specific		in Impaired		Income
		Balance		Balance		Allowance		Loans		Recognized
		(In Thousands)

One- to four-family residential construction	$	-	$	-	$	-	$	-	$	-
Subdivision construction		251		251		96		277		9
Land development		-		-		-		328		101
Commercial construction		-		-		-		-		-
Owner occupied one- to four- family residential		2,300		2,423		82		2,598		131
Non-owner occupied one- to four-family residential		409		574		20		954		43
Commercial real estate		4,020		4,049		517		4,940		264
Other residential		-		-		-		-		-
Commercial business		1,286		1,771		13		1,517		81
Industrial revenue bonds		-		-		-		-		-
Consumer auto		1,117		1,334		181		1,128		125
Consumer other		356		485		16		383		48
Home equity lines of credit		528		548		4		362		37

Total	$	10,267	$	11,435	$	929	$	12,487	$	839

		September 30, 2019
				Unpaid
		Recorded		Principal		Specific
		Balance		Balance		Allowance
		(In Thousands)

One- to four-family residential construction	$	-	$	-	$	-
Subdivision construction		256		256		98
Land development		83		83		-
Commercial construction		-		-		-
Owner occupied one- to four-family residential		2,055		2,312		105
Non-owner occupied one- to four-family residential		795		980		21
Commercial real estate		4,286		4,312		569
Other residential		-		-		-
Commercial business		1,299		1,766		14
Industrial revenue bonds		-		-		-
Consumer auto		840		1,083		107
Consumer other		340		517		16
Home equity lines of credit		541		563		4

Total	$	10,495	$	11,872	$	934

	Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
		Average				Average
		Investment		Interest		Investment		Interest
		in Impaired		Income		in Impaired		Income
		Loans		Recognized		Loans		Recognized
	(In Thousands)

One- to four-family residential construction	$	-	$	-	$	-	$	-
Subdivision construction		269		2		285		7
Land development		83		2		428		101
Commercial construction		-		-		-		-
Owner occupied one- to four-family residential		2,042		23		2,745		80
Non-owner occupied one- to four-family residential		687		14		1,093		32
Commercial real estate		4,427		62		5,217		198
Other residential		-		-		-		-
Commercial business		1,370		7		1,590		65
Industrial revenue bonds		-		-		-		-
Consumer auto		883		21		1,121		64
Consumer other		331		12		399		34
Home equity lines of credit		447		13		318		30

Total	$	10,539	$	156	$	13,196	$	611

At September 30, 2020, $4.6 million of impaired loans had specific valuation allowances totaling $746,000. At December 31, 2019, $5.2 million of impaired loans had specific valuation allowances totaling $929,000.

Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. Troubled debt restructurings are loans that are modified by granting concessions to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The types of concessions made are factored into the estimation of the allowance for loan losses for troubled debt restructurings primarily using a discounted cash flow or collateral adequacy approach.

The following tables present newly restructured loans, which were considered troubled debt restructurings, during the three and nine months ended September 30, 2020 and 2019, respectively, by type of modification:

		Three Months Ended September 30, 2020
								Total
		Interest Only		Term		Combination		Modification
		(In Thousands)

One- to four-family residential		-		-		647		647
Commercial real estate		-		-		559		559
Commercial business		-		-		22		22
Consumer		-		-		1,771		1,771
	$	-	$	-	$	2,999	$	2,999

		Three Months Ended September 30, 2019
								Total
		Interest Only		Term		Combination		Modification
		(In Thousands)

Consumer	$	-	$	-	$	-	$	-

		Nine Months Ended September 30, 2020
								Total
		Interest Only		Term		Combination		Modification
		(In Thousands)

One- to four-family residential	$	-	$	-	$	777	$	777
Commercial real estate		-		-		559		559
Commercial business		-		-		22		22
Consumer		-		16		1,847		1,863
	$	-	$	16	$	3,205	$	3,221

		Nine Months Ended September 30, 2019
								Total
		Interest Only		Term		Combination		Modification
		(In Thousands)

Consumer	$	-	$	73	$	-	$	73

At September 30, 2020, the Company had $3.7 million of loans that were modified in troubled debt restructurings and impaired, as follows: $22,000 of construction and land development loans, $1.7 million of one- to four-family residential mortgage loans, $1.2 million of commercial real estate loans, $140,000 of commercial business loans and $680,000 of consumer loans. Of the total troubled debt restructurings at September 30, 2020, $1.9 million were accruing interest and $1.8 million were non-accrual assets. Of the $3.7 million in troubled debt restructurings, $2.4 million were classified as substandard using the Company’s internal grading system, which is described below. The Company had no troubled debt restructurings which were modified in the previous 12 months and subsequently defaulted during the nine months ended September 30, 2020. When loans modified as troubled debt restructurings have subsequent payment defaults, the defaults are factored into the determination of the allowance for loan losses to ensure specific valuation allowances reflect amounts considered uncollectible. At December 31, 2019, the Company had $1.9 million of loans that were modified in troubled debt restructurings and impaired, as follows: $251,000 of construction and land development loans, $768,000 of single family residential mortgage loans, $412,000 of commercial real estate loans, $156,000 of commercial business loans and $343,000 of consumer loans. Of the total troubled debt restructurings at December 31, 2019, $1.4 million were accruing interest and $562,000 were non-accrual assets and classified as substandard using the Company’s internal grading system. The Company had no troubled debt restructurings which were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2019.

During the three and nine months ended September 30, 2020, one $155,000 one- to- four family loan designated as a troubled debt restructuring met the criteria for placement back on accrual status. The criteria are generally a minimum of six months of consistent and timely payment performance under original or modified terms. During the three and nine months ended September 30, 2019, $0 and $63,000 of loans, respectively, all of which consisted of consumer loans, designated as troubled debt restructurings met the criteria for placement back on accrual status.

At September 30, 2020, the Company had remaining 88 modified commercial loans with an aggregate principal balance outstanding of $379 million and 407 modified consumer and mortgage loans with an aggregate principal balance outstanding of $17 million. The loan modifications are within the guidance provided by the CARES Act, the federal banking regulatory agencies, the Securities and Exchange Commission and the Financial Accounting Standards Board; therefore, they are not considered troubled debt restructurings or classified assets for regulatory purposes.

The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. Special mention loans possess potential weaknesses that deserve management’s

		September 30, 2020
						Special
		Satisfactory		Watch		Mention		Substandard		Doubtful		Total
		(In Thousands)

One- to four-family residential
construction	$	37,303	$	1,200	$	-	$	-	$	-	$	38,503
Subdivision construction		10,444		-		-		22		-		10,466
Land development		40,224		-		-		-		-		40,224
Commercial construction		1,206,342		-		-		-		-		1,206,342
Owner occupied one- to four-
family residential		475,479		-		-		2,634		-		478,113
Non-owner occupied one- to four-
family residential		117,141		321		-		237		-		117,699
Commercial real estate		1,480,891		52,496		-		3,056		-		1,536,443
Other residential		1,018,359		-		-		-		-		1,018,359
Commercial business		428,800		10,258		-		141		-		439,199
Industrial revenue bonds		14,165		-		-		-		-		14,165
Consumer auto		98,659		18		-		607		-		99,284
Consumer other		41,003		86		-		244		-		41,333
Home equity lines of credit		113,793		40		-		524		-		114,357
Loans acquired and accounted
for under ASC 310-30,
net of discounts		106,117		-		-		11		-		106,128

Total	$	5,188,720	$	64,419	$	-	$	7,476	$	-	$	5,260,615