Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Loans

v3.22.1
Note 5 - Loans
3 Months Ended
Mar. 31, 2022
Notes to Financial Statements  
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 ServisFirst 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.

 

In light of the U.S. and global economic crisis brought about by the COVID-19 pandemic, the Company prioritized assisting its clients. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided for Paycheck Protection Program (“PPP”) loans to be made by banks to employers with less than 500 employees if they continued to employ their existing workers. The American Rescue Plan Act of 2021, which was signed into law on March 21, 2021, provided additional relief for businesses, states, municipalities and individuals by, among other things, allocating additional funds for the PPP. Effective May 28, 2021, the PPP was closed to new applications. The Company funded approximately 7,400 loans for a total amount of $1.5 billion for clients under the PPP since April 2020. At  March 31, 2022 and December 31, 2021, unaccreted deferred loan origination fees, net of costs, related to PPP loans totaled $3.1 million and $7.2 million, respectively. PPP loan origination fees recorded to interest income totaled $4.5 million and $9.1 million for the three months ended  March 31, 2022 and 2021, respectively. PPP loans outstanding totaled $107.6 million and $230.2 million at March 31, 2022 and December 31, 2021, respectively. PPP loans are included within the Commercial, financial and agricultural loan category in the table below.

 

The following table details the Company’s loans at March 31, 2022 and December 31, 2021:

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 
   

(Dollars In Thousands)

 

Commercial, financial and agricultural

  $ 2,955,927     $ 2,984,053  

Real estate - construction

    1,164,690       1,103,076  

Real estate - mortgage:

               

Owner-occupied commercial

    1,919,811       1,874,103  

1-4 family mortgage

    926,697       826,765  

Other mortgage

    2,869,158       2,678,084  

Subtotal: Real estate - mortgage

    5,715,666       5,378,952  

Consumer

    62,674       66,853  

Total Loans

    9,898,957       9,532,934  

Less: Allowance for credit losses

    (119,463 )     (116,660 )

Net Loans

  $ 9,779,494     $ 9,416,274  
                 
                 

Commercial, financial and agricultural

    29.86

%

    31.30

%

Real estate - construction

    11.77

%

    11.57

%

Real estate - mortgage:

               

Owner-occupied commercial

    19.39

%

    19.66

%

1-4 family mortgage

    9.36

%

    8.67

%

Other mortgage

    28.99

%

    28.10

%

Subtotal: Real estate - mortgage

    57.74

%

    56.43

%

Consumer

    0.63

%

    0.70

%

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 credit loss 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 obligor (or obligors, 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 presently jeopardize debt repayment. These loans are characterized by the distinct possibility that the institution 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 March 31, 2022:

 

                                                   

Revolving

         
   

2022

   

2021

   

2020

   

2019

   

2018

   

Prior

   

Loans

   

Total

 
   

(In Thousands)

 

Commercial, financial and agricultural

                                                         

Pass

  $ 140,149     $ 657,397     $ 269,415     $ 180,675     $ 120,063     $ 212,701     $ 1,283,888     $ 2,864,288  

Special Mention

    -       935       1,325       695       20       1,750       23,487       28,212  

Substandard

    -       295       702       9,955       526       8,768       43,181       63,427  

Total Commercial, financial and agricultural

  $ 140,149     $ 658,627     $ 271,442     $ 191,325     $ 120,609     $ 223,219     $ 1,350,556     $ 2,955,927  
                                                                 

Real estate - construction

                                                               

Pass

  $ 95,286     $ 645,872     $ 231,563     $ 69,614     $ 13,804     $ 30,519     $ 73,375     $ 1,160,033  

Special Mention

    -       -       -       -       2,500       917       -       3,417  

Substandard

    -       -       -       -       1,240       -       -       1,240  

Total Real estate - construction

  $ 95,286     $ 645,872     $ 231,563     $ 69,614     $ 17,544     $ 31,436     $ 73,375     $ 1,164,690  
                                                                 

Owner-occupied commercial

                                                               

Pass

  $ 94,900     $ 454,961     $ 350,982     $ 225,994     $ 174,338     $ 543,117     $ 61,812     $ 1,906,104  

Special Mention

    -       200       -       2,396       632       6,202       -       9,430  

Substandard

    -       218       -       -       -       4,059       -       4,277  

Total Owner-occupied commercial

  $ 94,900     $ 455,379     $ 350,982     $ 228,390     $ 174,970     $ 553,378     $ 61,812     $ 1,919,811  
                                                                 

1-4 family mortgage

                                                               

Pass

  $ 126,001     $ 303,142     $ 113,577     $ 62,000     $ 40,808     $ 70,229     $ 202,134     $ 917,891  

Special Mention

    -       326       850       380       -       905       2,794       5,255  

Substandard

    -       -       252       859       235       1,092       1,113       3,551  

Total 1-4 family mortgage

  $ 126,001     $ 303,468     $ 114,679     $ 63,239     $ 41,043     $ 72,226     $ 206,041     $ 926,697  
                                                                 

Other mortgage

                                                               

Pass

  $ 220,057     $ 928,191     $ 501,880     $ 408,445     $ 162,634     $ 565,459     $ 61,886     $ 2,848,552  

Special Mention

    -       -       -       130       376       7,334       -       7,840  

Substandard

    -       -       -       -       4,473       8,293       -       12,766  

Total Other mortgage

  $ 220,057     $ 928,191     $ 501,880     $ 408,575     $ 167,483     $ 581,086     $ 61,886     $ 2,869,158  
                                                                 

Consumer

                                                               

Pass

  $ 3,056     $ 9,069     $ 4,396     $ 2,253     $ 662     $ 4,131     $ 39,087     $ 62,654  

Special Mention

    -       -       -       -       -       20       -       20  

Substandard

    -       -       -       -       -       -       -       -  

Total Consumer

  $ 3,056     $ 9,069     $ 4,396     $ 2,253     $ 662     $ 4,151     $ 39,087     $ 62,674  
                                                                 

Total Loans

                                                               

Pass

  $ 679,449     $ 2,998,632     $ 1,471,813     $ 948,981     $ 512,309     $ 1,426,156     $ 1,722,182     $ 9,759,522  

Special Mention

    -       1,461       2,175       3,601       3,528       17,128       26,281       54,174  

Substandard

    -       513       954       10,814       6,474       22,212       44,294       85,261  

Total Loans

  $ 679,449     $ 3,000,606     $ 1,474,942     $ 963,396     $ 522,311     $ 1,465,496     $ 1,792,757     $ 9,898,957  

 

Loans by credit quality indicator, loan type and based on year of origination as of December 31, 2021 were as follows:

 

                                                   

Revolving

         
   

2021

   

2020

   

2019

   

2018

   

2017

   

Prior

   

Loans

   

Total

 
   

(In Thousands)

 

Commercial, financial and agricultural

                                                         

Pass

  $ 800,822     $ 294,841     $ 209,086     $ 130,579     $ 114,870     $ 127,572     $ 1,216,153     $ 2,893,923  

Special Mention

    1,245       1,323       942       846       915       784       19,801       25,856  

Substandard

    -       387       10,039       1,741       1,501       7,966       42,640       64,274  

Total Commercial, financial and agricultural

  $ 802,067     $ 296,551     $ 220,067     $ 133,166     $ 117,286     $ 136,322     $ 1,278,594     $ 2,984,053  
                                                                 

Real estate - construction

                                                               

Pass

  $ 597,497     $ 260,723     $ 110,671     $ 16,452     $ 13,704     $ 17,356     $ 76,662     $ 1,093,065  

Special Mention

    -       -       6,594       2,500       -       917       -       10,011  

Substandard

    -       -       -       -       -       -       -       -  

Total Real estate - construction

  $ 597,497     $ 260,723     $ 117,265     $ 18,952     $ 13,704     $ 18,273     $ 76,662     $ 1,103,076  
                                                                 

Owner-occupied commercial

                                                               

Pass

  $ 406,473     $ 352,642     $ 231,197     $ 182,812     $ 162,648     $ 430,638     $ 96,860     $ 1,863,270  

Special Mention

    101       -       2,417       779       476       2,688       -       6,461  

Substandard

    -       -       -       -       -       4,372       -       4,372  

Total Owner-occupied commercial

  $ 406,574     $ 352,642     $ 233,614     $ 183,591     $ 163,124     $ 437,698     $ 96,860     $ 1,874,103  
                                                                 

1-4 family mortgage

                                                               

Pass

  $ 299,686     $ 117,579     $ 68,044     $ 46,954     $ 37,374     $ 37,970     $ 210,338     $ 817,945  

Special Mention

    -       1,000       517       116       260       912       3,033       5,838  

Substandard

    -       150       593       241       231       611       1,156       2,982  

Total 1-4 family mortgage

  $ 299,686     $ 118,729     $ 69,154     $ 47,311     $ 37,865     $ 39,493     $ 214,527     $ 826,765  
                                                                 

Other mortgage

                                                               

Pass

  $ 882,849     $ 481,012     $ 411,426     $ 174,700     $ 272,555     $ 353,621     $ 81,202     $ 2,657,365  

Special Mention

    -       -       130       376       2,720       4,656       -       7,882  

Substandard

    -       -       -       4,497       8,340       -       -       12,837  

Total Other mortgage

  $ 882,849     $ 481,012     $ 411,556     $ 179,573     $ 283,615     $ 358,277     $ 81,202     $ 2,678,084  
                                                                 

Consumer

                                                               

Pass

  $ 16,303     $ 4,845     $ 2,896     $ 983     $ 903     $ 3,649     $ 37,250     $ 66,829  

Special Mention

    -       -       -       -       -       24       -       24  

Substandard

    -       -       -       -       -       -       -       -  

Total Consumer

  $ 16,303     $ 4,845     $ 2,896     $ 983     $ 903     $ 3,673     $ 37,250     $ 66,853  
                                                                 

Total Loans

                                                               

Pass

  $ 3,003,630     $ 1,511,642     $ 1,033,320     $ 552,480     $ 602,054     $ 970,806     $ 1,718,465     $ 9,392,397  

Special Mention

    1,346       2,323       10,600       4,617       4,371       9,981       22,834       56,072  

Substandard

    -       537       10,632       6,479       10,072       12,949       43,796       84,465  

Total Loans

  $ 3,004,976     $ 1,514,502     $ 1,054,552     $ 563,576     $ 616,497     $ 993,736     $ 1,785,095     $ 9,532,934  

 

Loans by performance status as of March 31, 2022 and December 31, 2021 were as follows:

 

March 31, 2022

 

Performing

   

Nonperforming

   

Total

 
   

(In Thousands)

 

Commercial, financial and agricultural

  $ 2,947,094     $ 8,833     $ 2,955,927  

Real estate - construction

    1,164,690       -       1,164,690  

Real estate - mortgage:

                       

Owner-occupied commercial

    1,916,539       3,272       1,919,811  

1-4 family mortgage

    924,957       1,740       926,697  

Other mortgage

    2,863,594       5,564       2,869,158  

Total real estate - mortgage

    5,705,090       10,576       5,715,666  

Consumer

    62,659       15       62,674  

Total

  $ 9,879,533     $ 19,424     $ 9,898,957  

 

December 31, 2021

 

Performing

   

Nonperforming

   

Total

 
   

(In Thousands)

 

Commercial, financial and agricultural

  $ 2,979,671     $ 4,382     $ 2,984,053  

Real estate - construction

    1,103,076       -       1,103,076  

Real estate - mortgage:

                       

Owner-occupied commercial

    1,873,082       1,021       1,874,103  

1-4 family mortgage

    824,756       2,009       826,765  

Other mortgage

    2,673,428       4,656       2,678,084  

Total real estate - mortgage

    5,371,266       7,686       5,378,952  

Consumer

    66,824       29       66,853  

Total

  $ 9,520,837     $ 12,097     $ 9,532,934  

 

Loans by past due status as of March 31, 2022 and December 31, 2021 were as follows:

 

March 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

  $ 1,982     $ 495     $ 38     $ 2,515     $ 8,795     $ 2,944,617     $ 2,955,927     $ 6,784  

Real estate - construction

    917       -       -       917       -       1,163,773       1,164,690       -  

Real estate - mortgage:

                                                               

Owner-occupied commercial

    632       -       -       632       3,272       1,915,907       1,919,811       3,272  

1-4 family mortgage

    658       163       -       821       1,740       924,136       926,697       432  

Other mortgage

    -       -       4,633       4,633       931       2,863,594       2,869,158       -  

Total real estate - mortgage

    1,290       163       4,633       6,086       5,943       5,703,637       5,715,666       3,704  

Consumer

    61       44       15       120       -       62,554       62,674       -  

Total

  $ 4,250     $ 702     $ 4,686     $ 9,638     $ 14,738     $ 9,874,581     $ 9,898,957     $ 10,488  

 

December 31, 2021

 

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

  $ 516     $ 77     $ 39     $ 632     $ 4,343     $ 2,979,078     $ 2,984,053     $ 2,059  

Real estate - construction

    -       -       -       -       -       1,103,076       1,103,076       -  

Real estate - mortgage:

                                                               

Owner-occupied commercial

    143       -       -       143       1,021       1,872,939       1,874,103       1,021  

1-4 family mortgage

    -       703       611       1,314       1,398       824,053       826,765       483  

Other mortgage

    -       -       4,656       4,656       -       2,673,428       2,678,084       -  

Total real estate - mortgage

    143       703       5,267       6,113       2,419       5,370,420       5,378,952       1,504  

Consumer

    93       23       29       145       -       66,708       66,853       -  

Total

  $ 752     $ 803     $ 5,335     $ 6,890     $ 6,762     $ 9,519,282     $ 9,532,934     $ 3,563  

 

Under the current expected credit losses (“CECL”) methodology, the 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 revolving lines of credit and credit cards. 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 March 31, 2022 and December 31, 2021, 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 national unemployment to be generally improved compared to the December 31, 2021 forecast with a stable national GDP growth rate.

 

The Company uses a loss-rate method to estimate expected credit losses for its commercial revolving lines of credit and credit card pools. The commercial 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 and industrial loans include risks associated with 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 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 months ended March 31, 2022 and March 31, 2021.

 

   

Commercial,

                                 
   

financial and

   

Real estate -

   

Real estate -

                 
   

agricultural

   

construction

   

mortgage

   

Consumer

   

Total

 
   

(In Thousands)

 
   

Three Months Ended March 31, 2022

 

Allowance for credit losses:

                                       

Balance at January 1, 2022

  $ 41,869     $ 26,994     $ 45,829     $ 1,968     $ 116,660  

Charge-offs

    (2,574 )     -       (27 )     (75 )     (2,676 )

Recoveries

    105       -       12       -       117  

Provision

    2,017       827       2,734       (216 )     5,362  

Balance at March 31, 2022

  $ 41,417     $ 27,821     $ 48,548     $ 1,677     $ 119,463  
                                         
   

Three Months Ended March 31, 2021

 

Allowance for credit losses:

                                       

Balance at January 1, 2021

  $ 36,370     $ 16,057     $ 33,722     $ 1,793     $ 87,942  

Charge-offs

    (477 )     -       (12 )     (87 )     (576 )

Recoveries

    26       50       1       12       89  

Provision

    2,313       3,284       1,896       (42 )     7,451  

Balance at March 31, 2021

  $ 38,232     $ 19,391     $ 35,607     $ 1,676     $ 94,906  

 

We maintain an ACL on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The ACL 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 $1.6 million at March 31, 2022 and $1.3 million at December 31, 2021. The provision expense for unfunded commitments for the three months ended March 31, 2022 and 2021 was $300,000 and $600,000, 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

 

March 31, 2022

 

Real Estate

   

Receivable

   

Equipment

   

Other

   

Total

   

Allocation

 
   

(In Thousands)

 

Commercial, financial and agricultural

  $ 12,332     $ 5,132     $ 17,864     $ 28,097     $ 63,425     $ 9,503  

Real estate - construction

    -       -       -       1,240       1,240       -  

Real estate - mortgage:

                                               

Owner-occupied commercial

    4,279       -       -       -       4,279       1,484  

1-4 family mortgage

    3,551       -       -       -       3,551       285  

Other mortgage

    12,771       -       -       -       12,771       629  

Total real estate - mortgage

    20,601       -       -       -       20,601       2,398  

Consumer

    -       -       -       -       -       -  

Total

  $ 32,933     $ 5,132     $ 17,864     $ 29,337     $ 85,266     $ 11,901  

 

           

Accounts

                           

ACL

 

December 31, 2021

 

Real Estate

   

Receivable

   

Equipment

   

Other

   

Total

   

Allocation

 
   

(In Thousands)

 

Commercial, financial and agricultural

  $ 13,067     $ 5,075     $ 18,533     $ 27,599     $ 64,274     $ 9,727  

Real estate - construction

    -       -       -       -       -       -  

Real estate - mortgage:

                                               

Owner-occupied commercial

    4,372       -       -       -       4,372       1,371  

1-4 family mortgage

    2,982       -       -       -       2,982       163  

Other mortgage

    12,837       -       -       -       12,837       31  

Total real estate - mortgage

    20,191       -       -       -       20,191       1,565  

Consumer

    -       -       -       -       -       -  

Total

  $ 33,258     $ 5,075     $ 18,533     $ 27,599     $ 84,465     $ 11,292  

 

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 GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 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 terminates. 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 is 60 days after the date on which the national COVID-19 emergency terminates. 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.

 

TDRs at March 31, 2022, December 31, 2021 and March 31, 2021 totaled $2.5 million, $2.6 million and $3.5 million, respectively. The portion of those TDRs accruing interest at March 31, 2022, December 31, 2021 and March 31, 2021 totaled $426,000, $431,000 and $794,000, respectively. There were no modifications made to new TDRs or renewals of existing TDRs for the three months ended March 31, 2022. The following table presents loans modified in a TDR during the period ended March 31, 2021 by portfolio segment and the financial impact of those modifications. The table includes modifications made to new TDRs, as well as renewals of existing TDRs.

 

   

Three Months Ended March 31, 2021

 
           

Pre-

   

Post-

 
           

Modification

   

Modification

 
           

Outstanding

   

Outstanding

 
   

Number of

   

Recorded

   

Recorded

 
   

Contracts

   

Investment

   

Investment

 
   

(In Thousands)

 

Troubled Debt Restructurings

                       

Commercial, financial and agricultural

    2     $ 1,155     $ 1,155  

Real estate - construction

    -       -       -  

Real estate - mortgage:

                       

Owner-occupied commercial

    1       991       991  

1-4 family mortgage

    -       -       -  

Other mortgage

    -       -       -  

Total real estate mortgage

    1       991       991  

Consumer

    -       -       -  
      3     $ 2,146     $ 2,146  

 

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 months ended March 31, 2022 and March 31, 2021. For purposes of this disclosure, default is defined as 90 days past due and still accruing or placement on nonaccrual status.