XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Loans and Allowance for Loan Losses
6 Months Ended
Jun. 30, 2020
Loans and Allowances for Loan Losses  
Loans and Allowance for Loan Losses

(2)   Loans and Allowance for Loan Losses

Loans

A summary of loans, by major class within the Company’s loan portfolio, at June 30, 2020 and December 31, 2019 is as follows:

June 30, 

December 31, 

(in thousands)

    

2020

    

2019

Commercial, financial, and agricultural (a)

$

296,323

$

199,022

Real estate construction - residential

 

27,188

 

23,035

Real estate construction - commercial

 

85,009

 

84,998

Real estate mortgage - residential

 

250,452

 

252,643

Real estate mortgage - commercial

 

592,855

 

576,635

Installment and other consumer

 

28,788

 

32,464

Total loans held for investment

$

1,280,615

$

1,168,797

(a)Includes $83.8 million SBA PPP loans, net  

The Bank grants real estate, commercial, installment, and other consumer loans to customers located within the Missouri communities surrounding Jefferson City, Columbia, Clinton, Warsaw, Springfield, St. Louis, and the greater Kansas City metropolitan area. As such, the Bank is susceptible to changes in the economic environment in these communities. The Bank does not have a concentration of credit in any one economic sector. Installment and other consumer loans consist primarily of the financing of automotive vehicles. At June 30, 2020, loans of $580.0 million were pledged to the Federal Home Loan Bank as collateral for borrowings and letters of credit.

Allowance for Loan Losses

The following table illustrates the changes in the allowance for loan losses by portfolio segment:

Three Months Ended June 30, 2020

Commercial,

Real Estate

Real Estate

Real Estate

Real Estate

Installment

 

Financial, &

Construction -

Construction -

Mortgage -

Mortgage -

and Other

Un-

 

(in thousands)

   

Agricultural

   

Residential

   

Commercial

   

Residential

   

Commercial

   

Consumer

   

allocated

   

Total

Balance at beginning of period

$

3,623

$

117

$

622

$

2,363

$

8,614

$

351

$

3

$

15,693

Additions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Provision for loan losses

 

(32)

 

22

 

100

 

354

 

435

 

(26)

 

47

 

900

Deductions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Loans charged off

 

43

 

 

 

33

 

2

 

39

 

 

117

Less recoveries on loans

 

(66)

 

(32)

 

 

(27)

 

(1)

 

(20)

 

 

(146)

Net loan charge-offs (recoveries)

 

(23)

 

(32)

 

 

6

 

1

 

19

 

 

(29)

Balance at end of period

$

3,614

$

171

$

722

$

2,711

$

9,048

$

306

$

50

$

16,622

Six Months Ended June 30, 2020

Commercial,

Real Estate

Real Estate

Real Estate

Real Estate

Installment

 

Financial, &

Construction -

Construction -

Mortgage -

Mortgage -

and Other

Un-

 

(in thousands)

    

Agricultural

    

Residential

    

Commercial

    

Residential

    

Commercial

    

Consumer

    

allocated

    

Total

Balance at beginning of period

$

2,918

$

64

$

369

$

2,118

$

6,547

$

381

$

80

$

12,477

Additions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Provision for loan losses

 

689

 

75

 

353

 

609

 

2,522

 

(18)

 

(30)

 

4,200

Deductions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Loans charged off

 

84

 

 

 

52

 

24

 

91

 

 

251

Less recoveries on loans

 

(91)

 

(32)

 

 

(36)

 

(3)

 

(34)

 

 

(196)

Net loan charge-offs (recoveries)

 

(7)

 

(32)

 

 

16

 

21

 

57

 

 

55

Balance at end of period

$

3,614

$

171

$

722

$

2,711

$

9,048

$

306

$

50

$

16,622

Three Months Ended June 30, 2019

Commercial,

Real Estate

Real Estate

Real Estate

Real Estate

Installment

 

Financial, &

Construction -

Construction -

Mortgage -

Mortgage -

and Other

Un-

 

(in thousands)

   

Agricultural

   

Residential

   

Commercial

   

Residential

   

Commercial

   

Consumer

   

allocated

   

Total

Balance at beginning of period

$

3,232

$

74

$

638

$

1,890

$

5,523

$

333

$

155

$

11,845

Additions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Provision for loan losses

 

(327)

 

(17)

 

66

 

(27)

 

591

 

(20)

 

(16)

 

250

Deductions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Loans charged off

 

140

 

 

 

96

 

8

 

39

 

 

283

Less recoveries on loans

 

(18)

 

(12)

 

 

(5)

 

(3)

 

(33)

 

 

(71)

Net loan charge-offs (recoveries)

 

122

 

(12)

 

 

91

 

5

 

6

 

 

212

Balance at end of period

$

2,783

$

69

$

704

$

1,772

$

6,109

$

307

$

139

$

11,883

Six Months Ended June 30, 2019

Commercial,

Real Estate

Real Estate

Real Estate

Real Estate

Installment

 

Financial, &

Construction -

Construction -

Mortgage -

Mortgage -

and Other

Un-

 

(in thousands)

    

Agricultural

    

Residential

    

Commercial

    

Residential

    

Commercial

    

Consumer

    

allocated

    

Total

Balance at beginning of period

$

3,237

$

140

$

757

$

2,071

$

4,914

$

334

$

199

$

11,652

Additions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Provision for loan losses

 

(388)

 

(83)

 

(53)

 

(223)

 

1,208

 

(1)

 

(60)

 

400

Deductions:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Loans charged off

 

193

 

 

 

180

 

16

 

91

 

 

480

Less recoveries on loans

 

(127)

 

(12)

 

 

(104)

 

(3)

 

(65)

 

 

(311)

Net loan charge-offs (recoveries)

 

66

 

(12)

 

 

76

 

13

 

26

 

 

169

Balance at end of period

$

2,783

$

69

$

704

$

1,772

$

6,109

$

307

$

139

$

11,883

Loans, or portions of loans, are charged off to the extent deemed uncollectible or a loss is confirmed. Loan charge-offs reduce the allowance for loan losses, and recoveries of loans previously charged off are added back to the allowance. If

management determines that it is probable that all amounts due on a loan will not be collected under the original terms of the loan agreement, the loan is considered to be impaired. These loans are evaluated individually for impairment, and in conjunction with current economic conditions and loss experience, specific reserves are estimated as further discussed below. Loans not individually evaluated are aggregated by risk characteristics and reserves are recorded using a consistent methodology that considers historical loan loss experience by loan type, delinquencies, current economic conditions, loan risk ratings and industry concentration.

In the first quarter of 2019, management adjusted the look-back period to begin with loss history in the first quarter 2012 as the starting point through the current quarter and it will continue to include this starting point going forward. At that time, Management determined that with the extended economic recovery then existing, the look-back period should be expanded to include the current economic cycle. The look-back period will be adjusted once a sustained loss producing downturn is recognized by allowing the look-back period to shift forward by eliminating the earliest loss period and replenishing it with losses from the most recent period. The look-back period is consistently evaluated for relevance given the current facts and circumstances.

As a result of rapidly increasing unemployment rates resulting from the COVID-19 virus, management determined that the first quarter 2020 allowance for loan loss economic qualitative adjustment should be temporarily adapted to utilize currently published statistics rather than the lagging statistics that had been utilized historically. While these lagging indicators have been very reliable for some time, they did not accurately capture the risk that has been brought about by rapid changes in the economy due to the pandemic. Based upon the change in the national unemployment rate available as of March 31, 2020, the economic qualitative adjustment was increased according to the Company’s methodology to account for uncertainty in economic conditions compared to the lookback period. As of June 30, 2020, and based on the continuing high rates of national unemployment as compared to historic levels, management believes this temporary alteration will be a better indicator until the economy stabilizes and the true impact can be measured.

Additionally, the funding of $87.6 million in PPP loans during the second quarter required management to assess the methodology that would be adopted in regard to the allowance for loan loss applicable to these loans. As the SBA PPP loans are expected to be mostly paid off in the next two to three months and carry a 100% credit guarantee from the SBA, management determined that no allowance for loan loss was deemed necessary for these loans.

The following table illustrates the allowance for loan losses and recorded investment by portfolio segment:

Commercial,

Real Estate

Real Estate

Real Estate

Real Estate

Installment

 

Financial, and

Construction -

Construction -

Mortgage -

Mortgage -

and Other

Un-

 

(in thousands)

    

Agricultural

    

Residential

    

Commercial

    

Residential

    

Commercial

    

Consumer

    

allocated

    

Total

June 30, 2020

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Allowance for loan losses:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

291

$

$

122

$

231

$

52

$

14

$

$

710

Collectively evaluated for impairment

 

3,323

 

171

 

600

 

2,480

 

8,996

 

292

 

50

 

15,912

Total

$

3,614

$

171

$

722

$

2,711

$

9,048

$

306

$

50

$

16,622

Loans outstanding:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

3,538

$

$

959

$

4,857

$

1,866

$

118

$

$

11,338

Collectively evaluated for impairment

 

292,785

 

27,188

 

84,050

 

245,595

 

590,989

 

28,670

 

 

1,269,277

Total

$

296,323

$

27,188

$

85,009

$

250,452

$

592,855

$

28,788

$

$

1,280,615

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

December 31, 2019

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Allowance for loan losses:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

311

$

$

$

264

$

23

$

17

$

$

615

Collectively evaluated for impairment

 

2,607

 

64

 

369

 

1,854

 

6,524

 

364

 

80

 

11,862

Total

$

2,918

$

64

$

369

$

2,118

$

6,547

$

381

$

80

$

12,477

Loans outstanding:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

1,514

$

$

137

$

3,856

$

1,711

$

177

$

$

7,395

Collectively evaluated for impairment

 

197,508

 

23,035

 

84,861

 

248,787

 

574,924

 

32,287

 

 

1,161,402

Total

$

199,022

$

23,035

$

84,998

$

252,643

$

576,635

$

32,464

$

$

1,168,797

Impaired Loans

Loans evaluated under ASC 310-10-35 include loans which are individually evaluated for impairment. All other loans are collectively evaluated for impairment under ASC 450-20. Impaired loans individually evaluated for impairment totaled $11.3 million and $7.4 million at June 30, 2020 and December 31, 2019, respectively, and are comprised of loans on non-accrual status and loans which have been classified as troubled debt restructurings (TDRs).

The net carrying value of impaired loans is based on the fair values of collateral obtained through independent appraisals or internal evaluations, or by discounting the total expected future cash flows. At June 30, 2020, $7.0 million of impaired loans were evaluated based on the fair value less estimated selling costs of the loans' collateral compared to $3.0 million at December 31, 2019. Once the impairment amount is calculated, a specific reserve allocation is recorded. At June 30, 2020, $710,000 of the Company’s allowance for loan losses was allocated to impaired loans totaling $11.3 million compared to $615,000 of the Company’s allowance for loan losses allocated to impaired loans totaling approximately $7.4 million at December 31, 2019. Management determined that $6.3 million, or 56%, of total impaired loans required no reserve allocation at June 30, 2020 compared to $2.6 million, or 35%, at December 31, 2019, primarily due to adequate collateral values, acceptable payment history and adequate cash flow ability.

The categories of impaired loans at June 30, 2020 and December 31, 2019 are as follows:

June 30, 

December 31, 

(in thousands)

    

2020

    

2019

Non-accrual loans

$

8,849

$

4,754

Non-performing TDRs - 90 days past due

106

Performing TDRs

 

2,489

 

2,535

Total impaired loans

$

11,338

$

7,395

The following tables provide additional information about impaired loans at June 30, 2020 and December 31, 2019, respectively, segregated between loans for which an allowance has been provided and loans for which no allowance has been provided.

    

    

Unpaid

    

Recorded

Principal

Specific

(in thousands)

Investment

Balance

Reserves

June 30, 2020

With no related allowance recorded:

 

  

 

  

 

  

Commercial, financial and agricultural

$

2,275

$

2,510

$

Real estate - construction commercial

393

443

Real estate - residential

 

2,560

 

2,711

 

Real estate - commercial

1,082

1,148

Installment and other consumer

 

10

 

11

 

Total

$

6,320

$

6,823

$

With an allowance recorded:

 

  

 

  

 

  

Commercial, financial and agricultural

$

1,263

$

1,577

$

291

Real estate - construction commercial

 

566

 

575

 

122

Real estate - residential

 

2,297

 

2,690

 

231

Real estate - commercial

 

784

 

900

 

52

Installment and other consumer

 

108

 

116

 

14

Total

$

5,018

$

5,858

$

710

Total impaired loans

$

11,338

$

12,681

$

710

    

    

Unpaid

    

Recorded

Principal

Specific

(in thousands)

Investment

Balance

Reserves

December 31, 2019

 

  

 

  

 

  

With no related allowance recorded:

 

  

 

  

 

  

Commercial, financial and agricultural

$

342

$

487

$

Real estate - construction commercial

137

173

Real estate - residential

 

697

 

784

 

Real estate - commercial

1,388

1,433

Installment and other consumer

 

12

 

12

 

Total

$

2,576

$

2,889

$

With an allowance recorded:

 

  

 

  

 

  

Commercial, financial and agricultural

$

1,172

$

1,470

$

311

Real estate - residential

 

3,159

 

3,482

 

264

Real estate - commercial

 

323

 

425

 

23

Installment and other consumer

 

165

 

189

 

17

Total

$

4,819

$

5,566

$

615

Total impaired loans

$

7,395

$

8,455

$

615

The following table presents by class, information related to the average recorded investment and interest income recognized on impaired loans during the periods indicated.

Three Months Ended June 30, 

Six Months Ended June 30, 

2020

2019

2020

2019

Interest

Interest

Interest

Interest

Average

Recognized

Average

Recognized

Average

Recognized

Average

Recognized

Recorded

For the

Recorded

For the

Recorded

For the

Recorded

For the

(in thousands)

    

Investment

    

Period Ended

    

Investment

    

Period Ended

    

Investment

    

Period Ended

    

Investment

    

Period Ended

With no related allowance recorded:

 

  

 

  

 

  

 

  

  

 

  

 

  

 

  

Commercial, financial and agricultural

$

3,059

$

$

1,189

$

$

1,370

$

$

1,304

$

Real estate - construction commercial

528

147

271

152

Real estate - residential

 

2,758

 

 

1,092

 

 

1,355

 

 

785

 

Real estate - commercial

 

1,448

 

7

 

107

 

 

1,178

 

13

 

144

 

Installment and other consumer

15

12

Total

$

7,808

$

7

$

2,535

$

$

4,186

$

13

$

2,385

$

With an allowance recorded:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial, financial and agricultural

$

1,615

$

11

$

1,079

$

11

$

1,195

$

19

$

1,115

$

21

Real estate - construction commercial

 

766

 

 

 

 

142

 

 

 

Real estate - residential

 

3,724

 

8

 

3,481

 

21

 

2,990

 

28

 

4,044

 

46

Real estate - commercial

 

540

 

3

 

1,170

 

7

 

438

 

6

 

927

 

16

Installment and other consumer

 

147

 

1

 

236

 

1

 

135

 

7

 

245

 

2

Total

$

6,792

$

23

$

5,966

$

40

$

4,900

$

60

$

6,331

$

85

Total impaired loans

$

14,600

$

30

$

8,501

$

40

$

9,086

$

73

$

8,716

$

85

The recorded investment varies from the unpaid principal balance primarily due to partial charge-offs taken resulting from current appraisals received. The amount recognized as interest income on impaired loans continuing to accrue interest, primarily related to troubled debt restructurings, was $30,000 and $73,000 for the three and six months ended June 30,

2020, respectively, compared to $40,000 and $85,000 for the three and six months ended June 30, 2019, respectively. The average recorded investment in impaired loans is calculated on a monthly basis during the periods reported.

Delinquent and Non-Accrual Loans

The delinquency status of loans is determined based on the contractual terms of the notes. Borrowers are generally classified as delinquent once payments become 30 days or more past due. The Company’s policy is to discontinue the accrual of interest income on any loan when, in the opinion of management, the ultimate collectability of interest or principal is no longer probable. In general, loans are placed on non-accrual when they become 90 days or more past due. However, management considers many factors before placing a loan on non-accrual, including the delinquency status of the loan, the overall financial condition of the borrower, the progress of management’s collection efforts and the value of the underlying collateral. Subsequent interest payments received on non-accrual loans are applied to principal if any doubt exists as to the collectability of such principal; otherwise, such receipts are recorded as interest income on a cash basis. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial condition of the borrower indicates that the timely collectability of interest and principal is probable and the borrower demonstrates the ability to pay under the terms of the note through a sustained period of repayment performance, which is generally six months.

The following table provides aging information for the Company’s past due and non-accrual loans at June 30, 2020 and December 31, 2019.

    

Current or

    

    

90 Days

    

    

Less Than

Past Due

30 Days

30 - 89 Days

And Still

(in thousands)

Past Due

Past Due

Accruing

Non-Accrual

Total

June 30, 2020

 

  

 

  

 

  

 

  

 

  

Commercial, Financial, and Agricultural

$

292,873

$

428

$

$

3,022

$

296,323

Real Estate Construction - Residential

 

27,188

 

 

 

 

27,188

Real Estate Construction - Commercial

 

84,050

 

 

 

959

 

85,009

Real Estate Mortgage - Residential

 

245,472

 

1,619

 

51

 

3,310

 

250,452

Real Estate Mortgage - Commercial

 

591,264

 

70

 

 

1,521

 

592,855

Installment and Other Consumer

 

28,699

 

45

 

7

 

37

 

28,788

Total

$

1,269,546

$

2,162

$

58

$

8,849

$

1,280,615

December 31, 2019

 

  

 

  

 

  

 

  

 

  

Commercial, Financial, and Agricultural

$

197,828

$

212

$

$

982

$

199,022

Real Estate Construction - Residential

 

22,468

 

567

 

 

 

23,035

Real Estate Construction - Commercial

 

84,861

 

 

 

137

 

84,998

Real Estate Mortgage - Residential

 

249,516

 

688

 

304

 

2,135

 

252,643

Real Estate Mortgage - Commercial

 

575,140

 

136

 

 

1,359

 

576,635

Installment and Other Consumer

 

32,179

 

132

 

12

 

141

 

32,464

Total

$

1,161,992

$

1,735

$

316

$

4,754

$

1,168,797

The Company's past due and non-accrual loans at June 30, 2020 do not include $287 million of loans accepting forbearance. Their delinquency status will not change through the forbearance period as they are fulfilling the agreement they have made with the bank.

Credit Quality

The Company categorizes loans into risk categories based upon an internal rating system reflecting management’s risk assessment. Loans are placed on watch status when one or more weaknesses are identified that may result in the borrower being unable to meet repayment terms or the Company’s credit position could deteriorate at some future date. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified may have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Such loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected. A loan is classified as a troubled debt restructuring (TDR) when a borrower is experiencing financial difficulties that lead to the restructuring of a loan, and the Company grants concessions to the borrower in the restructuring that it would not otherwise consider. Loans classified as TDRs that are accruing interest are classified as performing TDRs. Loans classified as TDRs, that are not accruing interest are classified as nonperforming TDRs and are included with all other nonaccrual loans for presentation purposes. It is the Company’s policy to discontinue the accrual of interest income on loans when management believes that the collection of interest or principal is doubtful.

The following table presents the risk categories by class at June 30, 2020 and December 31, 2019.

    

Commercial,

    

Real Estate

    

Real Estate

    

Real Estate

    

Real Estate

    

Installment

    

Financial, &

Construction -

Construction -

Mortgage -

Mortgage -

and other

(in thousands)

Agricultural

Residential

Commercial

Residential

Commercial

Consumer

Total

At June 30, 2020

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Watch

$

19,892

$

743

$

9,132

$

14,934

$

58,022

$

$

102,723

Substandard

 

1,220

 

 

 

1,426

 

590

 

 

3,236

Performing TDRs

 

516

 

 

 

1,547

 

345

 

81

 

2,489

Non-accrual loans

 

3,022

 

 

959

 

3,310

 

1,521

 

37

 

8,849

Total

$

24,650

$

743

$

10,091

$

21,217

$

60,478

$

118

$

117,297

At December 31, 2019

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Watch

$

16,288

$

763

$

8,484

$

15,280

$

37,271

$

$

78,086

Substandard

 

3,249

 

 

273

 

2,291

 

677

 

 

6,490

Performing TDRs

 

532

 

 

 

1,615

 

352

 

36

 

2,535

Non-performing TDRs - 90 days past due

106

106

Non-accrual loans

 

982

 

 

137

 

2,135

 

1,359

 

141

 

4,754

Total

$

21,051

$

763

$

8,894

$

21,427

$

39,659

$

177

$

91,971

Troubled Debt Restructurings

At June 30, 2020, loans classified as TDRs totaled $3.8 million, of which $1.3 million were classified as non-performing TDRs and $2.5 million were classified as performing TDRs. At December 31, 2019, loans classified as TDRs totaled $4.1 million, of which $1.6 million were classified as non-performing TDRs and $2.5 million were classified as performing TDRs. Both performing and nonperforming TDRs are considered impaired loans. When an individual loan is determined to be a TDR, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the underlying collateral less applicable selling costs. Accordingly, specific reserves of $353,000 and $442,000 related to TDRs were allocated to the allowance for loan losses at June 30, 2020 and December 31, 2019, respectively.

The CARES Act provides all banks with the option to elect either or both of the following from March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the termination of the national emergency:

(i) to suspend the requirements under GAAP for loan modifications related to the COVID–19 pandemic that would otherwise be categorized as a TDR; and/or

(ii) to suspend any determination of a loan modified as a result of the effects of the COVID–19 pandemic as being a TDR, including impairment for accounting purposes.

If a bank elects a suspension noted above, the suspension (i) will be effective for the term of the loan modification, but solely with respect to any modification, including a forbearance arrangement, an interest rate modification, a repayment plan, and any other similar arrangement that defers or delays the payment of principal or interest, that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019; and (ii) will not apply to any adverse impact on the credit of a borrower that is not related to the COVID–19 pandemic.

As provided for by the CARES Act, the Company offered three-month payment modifications to borrowers. At June 30, 2020, 568 loans totaling $286.8 million or 22.4% of total loans had entered into some form of a modification. These loan modifications include $177.2 million, or 61.8%, on interest only, and $109.6 million, or 38.2%, on full deferral. (See table below titled Loan Portfolio GranularityLoan Modifications under the CARES Act by NAICS Code.)

Additionally, some borrowers have requested an additional three-month payment modification. This includes forty loans totaling $58.3 million, or 20.3% of the previously modified loans. These loan modifications include $22.6 million on interest only and $35.8 million on full deferral (See table below titled Loan Portfolio Granularity – Loan Modifications under the CARES Act for Six Months by NAICS Code.)

Loan Modifications under the CARES Act by NAICS Code

Industry Category

Interest Only

% Loans

Full Deferral

% Loans

Totals

(in thousands)

Real Estate and Rental and Leasing

$

123,792

43.2

%

$

34,534

12.0

%

$

158,326

Accommodations and Food Services

9,936

 

3.5

44,467

15.5

54,403

Construction

8,758

3.1

8,424

2.9

17,182

Manufacturing

 

8,002

2.8

1,089

 

0.4

 

9,091

Other Services

6,141

2.1

1,820

0.6

7,961

Cinemas

1,061

0.4

6,191

2.2

7,252

Health Care and Social Assistance

6,367

2.2

1,193

0.4

7,560

Retail Trade

4,338

1.5

846

0.3

5,184

Arts, Entertainment, Recreation

1,235

0.4

3,209

1.1

4,444

Non-NAICS (Consumer)

292

0.1

4,115

1.4

4,407

Other

 

7,299

 

2.5

3,701

 

1.3

 

11,000

Total modifications

$

177,221

61.8

%

$

109,589

38.2

%

$

286,810

Total loans held for investment

$

1,280,615

Percent of portfolio

22.4

%

Loan Modifications under the CARES Act for Six Months by NAICS Code

Industry Category

Interest Only

% Loans

Full Deferral

% Loans

Totals

(in thousands)

Real Estate and Rental and Leasing

$

14,700

25.2

%

$

5,790

9.9

%

$

20,490

Accommodations and Food Services

7,059

 

12.1

22,469

38.5

29,528

Construction

505

0.9

720

1.2

1,225

Cinemas

-

6,191

10.6

6,191

Retail Trade

-

119

0.2

119

Arts, Entertainment, Recreation

65

0.1

65

Non-NAICS (Consumer)

-

142

0.3

142

Other

 

253

 

0.4

320

0.6

 

573

Total modifications

$

22,582

38.7

%

$

35,751

61.3

%

$

58,333

Total loans held for investment

$

1,280,615

Total CARES Act modifications

$

286,810

Percent of portfolio

4.6

%

Percent of modifications

20.3

%

The following table summarizes loans that were modified as TDRs during the periods indicated.

Three Months Ended June 30, 

2020

2019

Recorded Investment (1)

Recorded Investment (1)

Number of

Pre-

Post-

Number of

Pre-

Post-

(in thousands)

    

Contracts

    

Modification

    

Modification

    

Contracts

    

Modification

    

Modification

Troubled Debt Restructurings

 

  

 

  

 

  

 

  

 

  

 

  

Real estate mortgage - residential

 

1

$

111

$

119

 

$

 

$

Total

 

1

$

111

$

119

 

$

$

Six Months Ended June 30, 

2020

2019

Recorded Investment (1)

Recorded Investment (1)

Number of

Pre-

Post-

Number of

Pre-

Post-

(in thousands)

    

Contracts

    

Modification

    

Modification

    

Contracts

    

Modification

    

Modification

Troubled Debt Restructurings

 

  

 

  

 

  

 

  

 

  

 

Commercial, financial and agricultural

 

$

$

 

2

$

80

$

80

Real estate mortgage - residential

 

1

 

111

 

119

 

 

 

Installment and other consumer

1

 

6

 

 

5

 

 

 

Total

 

2

$

117

$

124

 

2

$

80

$

80

(1)The amounts reported post-modification are inclusive of all partial pay-downs and charge-offs, and no portion of the debt was forgiven. Loans modified as a TDR that were fully paid down, charged-off or foreclosed upon during the period ended are not reported.

The Company’s portfolio of loans classified as TDRs include concessions for the borrower given their financial condition such as interest rates below the current market rate, deferring principal payments, and extending maturity dates. The Company considers a TDR to be in default when it is 90 days or more past due under the modified terms, a charge-off occurs, or in the process of foreclosure. There was one loan and no loans modified as a TDR that defaulted during any of

the three and six months ended June 30, 2020 and 2019, respectively, and within twelve months of their modification date. See Lending and Credit Management section for further information.

Loans Held For Sale

The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company carries them at the lower of cost or fair value. The loans are primarily sold to Freddie Mac, Fannie Mae, PennyMac, and other various secondary market investors. At June 30, 2020, the carrying amount of these loans was $9.0 million compared to $428,000 and $121,000 at December 31, 2019 and June 30, 2019, respectively.