Company Quick10K Filing
Peoples Financial
Price13.00 EPS0
Shares5 P/E116
MCap64 P/FCF30
Net Debt-28 EBIT3
TEV36 TEV/EBIT11
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-12
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-13
10-Q 2019-03-31 Filed 2019-05-13
10-K 2018-12-31 Filed 2019-03-13
10-Q 2018-09-30 Filed 2018-11-13
10-Q 2018-06-30 Filed 2018-08-13
10-Q 2018-03-31 Filed 2018-05-11
10-K 2017-12-31 Filed 2018-03-14
10-Q 2017-09-30 Filed 2017-11-13
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-12
10-Q 2016-03-31 Filed 2016-05-11
10-K 2015-12-31 Filed 2016-03-15
10-Q 2015-09-30 Filed 2015-11-10
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-14
10-K 2014-12-31 Filed 2015-03-18
10-Q 2014-09-30 Filed 2014-11-13
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-18
10-Q 2013-09-30 Filed 2013-11-13
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-13
10-K 2012-12-31 Filed 2013-03-18
10-Q 2012-09-30 Filed 2012-11-13
10-Q 2012-06-30 Filed 2012-08-13
10-Q 2012-03-31 Filed 2012-05-14
10-K 2011-12-31 Filed 2012-03-21
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-11
10-K 2010-12-31 Filed 2011-03-16
10-Q 2010-09-30 Filed 2010-11-08
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-03-11
8-K 2020-04-23
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8-K 2019-04-24
8-K 2019-01-29
8-K 2018-12-03
8-K 2018-10-24
8-K 2018-09-26
8-K 2018-08-03
8-K 2018-07-25
8-K 2018-07-23
8-K 2018-05-07
8-K 2018-04-26
8-K 2018-04-25
8-K 2018-01-24

PFBX 10Q Quarterly Report

Part 1 - Financial Information
Item 1: Financial Statements
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 4: Controls and Procedures
Part II - Other Information
Item 1: Legal Proceedings
Item 5: Other Information
Item 6 - Exhibits
EX-31.1 ex_185429.htm
EX-31.2 ex_185430.htm
EX-32.1 ex_185431.htm
EX-32.2 ex_185432.htm

Peoples Financial Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

10-Q 1 pfbx20200331_10q.htm FORM 10-Q pfbx20200331_10q.htm
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended

                 March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number

                       001-12103 

 

PEOPLES FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Mississippi

 

    64-0709834

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

 

Lameuse and Howard Avenues, Biloxi, Mississippi

39533

(Address of principal executive offices) (Zip Code)

           

(228) 435-5511

(Registrant's telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class 

Trading

Symbol(s)

Name of each exchange on which registered
None PFBX None

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” , “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ Smaller reporting company ☒
Non-accelerated filer ☐   Emerging growth company ☐

 

1

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Peoples Financial Corporation has only one class of common stock authorized. At April 30, 2020, there were 15,000,000 shares of $1 par value common stock authorized, with 4,893,061 shares issued and outstanding.

 

2

 

 

Part 1 – Financial Information

Item 1: Financial Statements

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Condition

(in thousands except share data)

 

   

March 31, 2020

   

December 31, 2019

 
   

(unaudited)

   

(audited)

 
                 

Assets

               

Cash and due from banks

  $ 40,376     $ 29,424  
                 

Available for sale securities

    239,659       196,311  
                 

Held to maturity securities, fair value of $50,229 at March 31, 2020; $53,130 at December 31, 2019

    48,718       52,231  
                 

Other investments

    2,605       2,643  
                 

Federal Home Loan Bank Stock, at cost

    2,129       2,129  
                 

Loans

    270,928       268,949  
                 

Less: Allowance for loan losses

    4,191       4,207  
                 

Loans, net

    266,737       264,742  
                 

Bank premises and equipment, net of accumulated depreciation

    16,753       17,421  
                 

Other real estate

    6,573       7,453  
                 

Accrued interest receivable

    2,045       1,687  
                 

Cash surrender value of life insurance

    19,512       19,381  
                 

Other assets

    1,042       1,280  
                 

Total assets

  $ 646,149     $ 594,702  

 

3

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Condition (continued)

(in thousands except share data)

 

   

March 31, 2020

   

December 31, 2019

 
   

(unaudited)

   

(audited)

 

Liabilities and Shareholders' Equity

               

Liabilities:

               
                 

Deposits:

               
                 

Demand, non-interest bearing

  $ 133,549     $ 122,592  
                 

Savings and demand, interest bearing

    312,858       263,153  
                 

Time, $100,000 or more

    54,270       64,492  
                 

Other time deposits

    25,148       25,906  
                 

Total deposits

    525,825       476,143  
                 

Borrowings from Federal Home Loan Bank

    1,012       3,526  
                 

Employee and director benefit plans liabilities

    18,453       18,361  
                 

Other liabilities

    1,316       1,549  
                 

Total liabilities

    546,606       499,579  
                 

Shareholders' Equity:

               

Common stock, $1 par value, 15,000,000 shares authorized, 4,893,061 and 4,943,186 shares issued and outstanding at March 31, 2020 and December 31, 2019

    4,893       4,943  
                 

Surplus

    65,780       65,780  
                 

Undivided profits

    22,448       21,855  
                 

Accumulated other comprehensive income

    6,422       2,545  
                 

Total shareholders' equity

    99,543       95,123  
                 

Total liabilities and shareholders' equity

  $ 646,149     $ 594,702  

 

See Notes to Consolidated Financial Statements.

 

4

 

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Income

(in thousands except per share data) (unaudited)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 

Interest income:

               
                 

Interest and fees on loans

  $ 3,205     $ 3,689  
                 

Interest and dividends on securities:

               
                 

U.S. Treasuries

    291       294  
                 

U.S. Government agencies

    82       125  
                 

Mortgage-backed securities

    749       822  
                 

Collateralized mortgage obligations

    111       12  
                 

States and political subdivisions

    413       460  
                 

Other investments

    1       11  
                 

Interest on balances due from depository institutions

    155       87  
                 

Total interest income

    5,007       5,500  
                 

Interest expense:

               
                 

Deposits

    599       802  
                 

Borrowings from Federal Home Loan Bank

    12       78  
                 

Total interest expense

    611       880  
                 

Net interest income

    4,396       4,620  
                 

Provision for allowance for loan losses

    64       54  
                 

Net interest income after provision for allowance for loan losses

  $ 4,332     $ 4,566  

 

5

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Income (continued)

(in thousands except per share data) (unaudited)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 

Non-interest income:

               
                 

Trust department income and fees

  $ 371     $ 371  
                 

Service charges on deposit accounts

    911       882  
                 

Gain on sales and calls of available for sale securities

    433          
                 

Increase in cash surrender value of life insurance

    108       105  
                 

Other income

    443       108  
                 

Total non-interest income

    2,266       1,466  
                 

Non-interest expense:

               
                 

Salaries and employee benefits

    2,674       2,734  
                 

Net occupancy

    487       474  
                 

Equipment rentals, depreciation and maintenance

    794       833  
                 

FDIC and state banking assessments

    98       102  
                 

Data processing

    314       347  
                 

ATM expense

    185       169  
                 

Other real estate expense

    136       50  
                 

Loss from other investments

    38       60  
                 

Other expense

    749       858  
                 

Total non-interest expense

    5,475       5,627  
                 

Net income

  $ 1,123     $ 405  
                 

Basic and diluted earnings per share

  $ .23     $ .08  
Dividends declared per share   $       $    

 

See Notes to Consolidated Financial Statements.

 

6

 

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(in thousands) (unaudited)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 
                 

Net income

  $ 1,123     $ 405  
                 

Other comprehensive income:

               
                 

Net unrealized gain on available for sale securities

    4,310       3,346  
                 

Reclassification adjustment for realized gains on available for sale securities called or sold in current year

    (433 )        
                 

Total other comprehensive income

    3,877       3,346  
                 

Total comprehensive income

  $ 5,000     $ 3,751  

 

See Notes to Consolidated Financial Statements.

 

7

 

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(in thousands except share data)

 

                                   

Accumulated

         
   

Number of

                           

Other

         
   

Common

   

Common

           

Undivided

   

Comprehensive

         
   

Shares

   

Stock

   

Surplus

   

Profits

   

Income (Loss)

   

Total

 
                                                 

Balance, January 1, 2019

    4,943,186     $ 4,943     $ 65,780     $ 20,324     $ (4,113 )   $ 86,934  
                                                 

Net income

                            405               405  
                                                 

Other comprehensive income

                                    3,346       3,346  
                                                 

Balance, March 31, 2019

    4,943,186     $ 4,943     $ 65,780     $ 20,729     $ (767 )   $ 90,685  
                                                 
                                                 
                                                 

Balance, January 1, 2020

    4,943,186     $ 4,943     $ 65,780     $ 21,855     $ 2,545     $ 95,123  
                                                 

Net income

                            1,123               1,123  
                                                 

Other comprehensive income

                                    3,877       3,877  
                                                 

Stock retirement

    (50,125 )     (50 )             (530 )             (580 )
                                                 

Balance, March 31, 2020

    4,893,061     $ 4,893     $ 65,780     $ 22,448     $ 6,422     $ 99,543  

 

Note: Balances as of January 1, 2019 and 2020 were audited.

 

See Notes to Consolidated Financial Statements.

 

8

 

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows 

(in thousands) (unaudited)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 

Cash flows from operating activities:

               

Net income

  $ 1,123     $ 405  
                 

Adjustments to reconcile net income to net cash provided by operating activities:

               
                 

Depreciation

    471       488  
                 

Provision for allowance for loan losses

    64       54  
                 

Writedown of other real estate

    98          
                 

(Gain) loss on sales of other real estate

    (42 )     20  
                 

Loss from other investments

    38       60  
                 

Gain on liquidation, sales and calls of securities

    (433 )        
                 

Gain from sale of banking house

    (318 )        
                 

Amortization (accretion) of available for sale securities

    (71 )     50  
                 

Amortization of held to maturity securities

    63       66  
                 

Change in accrued interest receivable

    (358 )     (349 )
                 

Increase in cash surrender value of life insurance

    (108 )     (105 )
                 

Change in other assets

    238       (75 )
                 

Change in other liabilities

    (141 )     (333 )

Net cash provided by operating activities

  $ 624     $ 281  

 

9

 

Peoples Financial Corporation and Subsidiaries

Consolidated Statements of Cash Flows (continued)

(in thousands) (unaudited)

 

   

Three Months Ended March 31,

 
   

2020

   

2019

 

Cash flows from investing activities:

               

Proceeds from maturities, sales or calls of available for securities

  $ 57,886     $ 8,104  
                 

Purchases of available for sale securities

    (96,853 )     (4,817 )
                 

Proceeds from maturities of held to maturity securities

    5,950       520  
                 

Purchases of held to maturity securities

    (2,500 )     (620 )
                 

Purchases of Federal Home Loan Bank stock

            (8 )
                 

Proceeds from sales of other real estate

    747       419  
                 

Proceeds from insurance on other real estate

    77          
                 

Loans, net change

    (2,059 )     5,467  
                 

Acquisition of bank premises and equipment

    (32 )     (171 )
                 

Proceeds from sale of banking premises and equipment

    547          
                 

Investment in cash surrender value of life insurance

    (23 )     (36 )

Net cash provided by (used in) investing activities

    (36,260 )     8,858  

Cash flows from financing activities:

               

Demand and savings deposits, net change

    60,662       37,944  
                 

Time deposits, net change

    (10,980 )     9,887  
                 

Borrowings from Federal Home Loan Bank

    59,500       223,250  
                 

Repayments to Federal Home Loan Bank

    (62,014 )     (258,324 )
                 

Retirement of common stock

    (580 )        
                 

Net cash provided by financing activities

    46,588       12,757  

Net increase in cash and cash equivalents

    10,952       21,896  

Cash and cash equivalents, beginning of period

    29,424       17,191  

Cash and cash equivalents, end of period

  $ 40,376     $ 39,087  

 

See Notes to Consolidated Financial Statements.

 

10

 

PEOPLES FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the three Months Ended March 31, 2020 and 2019

 

 

1. Basis of Presentation:

Peoples Financial Corporation (the “Company”) is a one-bank holding company headquartered in Biloxi, Mississippi. The Company has two subsidiaries, PFC Service Corp., an inactive company, and The Peoples Bank, Biloxi, Mississippi (the “Bank”). The Bank provides a full range of banking, financial and trust services to state, county and local government entities and individuals and small and commercial businesses operating in those portions of Mississippi, Louisiana and Alabama which are within a fifty mile radius of the Waveland, Wiggins and Gautier branches, the Bank’s three most outlying locations (the “trade area”).

 

The accompanying unaudited consolidated financial statements and notes thereto contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the financial position of the Company and its subsidiaries as of March 31, 2020 and the results of their operations and their cash flows for the periods presented. The interim financial information should be read in conjunction with the annual consolidated financial statements and the notes thereto included in the Company’s 2019 Annual Report and Form 10-K.

 

The results of operations for the quarter ended March 31, 2020, are not necessarily indicative of the results to be expected for the full year.

 

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for loan losses, the valuation of other real estate acquired in connection with foreclosure or in satisfaction of loans and valuation allowances associated with the realization of deferred tax assets, which are based on future taxable income.

 

Summary of Significant Accounting Policies - The accounting and reporting policies of the Company conform to GAAP and general practices within the banking industry. There have been no material changes or developments in the application of principles or in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies as disclosed in our Form 10-K for the year ended December 31, 2019.

 

Accounting Standards Update – In January 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2020-01 (“ASU 2020-01”), Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323) and Derivatives and Hedging (Topic 815). The amendments in this update improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

 

11

 

In February 2020, the FASB issued Accounting Standards Update 2020-02 (“ASU 2020-02”), Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 843) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Lease (Topic 842) . This update adds an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 relating the credit losses and addresses the adoption of new lease guidance. ASU 2020-02 is effective upon issuance. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

 

In March 2020, the FASB issued Accounting Standards Update 2020-03 (“ASU 2020-03”), Codification Improvements to Financial Instruments. This update amends or clarifies specific issues relating to fair value option disclosures, alignment of certain disclosures for depository and lending institutions, and improvement of guidance for debt instruments and net asset value practical expedient, leases, transfers and servicing. ASU 2020-03 is effective for various fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019 and beginning after December 15, 2022. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

 

 

2. Earnings Per Share:

Per share data is based on the weighted average shares of common stock outstanding of 4,927,616 and 4,943,186 for the three months ended March 31, 2020 and 2019, respectively.

 

 

3. Statements of Cash Flows:

The Company has defined cash and cash equivalents as cash and due from banks. The Company paid $611,708 and $852,975 for the three months ended March 31, 2020 and 2019, respectively, for interest on deposits and borrowings. No income tax payments were made during the three months ended March 31, 2020 and 2019. Loans transferred to other real estate amounted to $369,054 during the three months ended March 31, 2019. No loans were transferred to other real estate during the three months ended March 31, 2020.

 

12

 

 

4. Investments:

The amortized cost and fair value of securities at March 31, 2020 and December 31, 2019, are as follows (in thousands):

 

           

Gross

   

Gross

         
           

Unrealized

   

Unrealized

         

March 31, 2020

 

Amortized Cost

   

Gains

   

Losses

   

Fair Value

 

Available for sale securities:

                               
                                 

U.S. Treasuries

  $ 95,901     $ 518     $       $ 96,419  
                                 

U.S. Government agencies

    7,500       161               7,661  
                                 

Mortgage-backed securities

    99,664       4,419       (158 )     103,925  
                                 

Collateralized mortgage obligations

    27,431       744       (163 )     28,012  
                                 

States and political subdivisions

    3,622       20               3,642  
                                 

Total available for sale securities

  $ 234,118     $ 5,862     $ (321 )   $ 239,659  
                                 

Held to maturity securities:

                               

States and political subdivisions

  $ 48,718     $ 1,541     $ (30 )   $ 50,229  
                                 

Total held to maturity securities

  $ 48,718     $ 1,541     $ (30 )   $ 50,229  

 

           

Gross

   

Gross

         
           

Unrealized

   

Unrealized

         

December 31, 2019

 

Amortized Cost

   

Gains

   

Losses

   

Fair Value

 

Available for sale securities:

                               
                                 

U.S. Treasuries

  $ 55,922     $ 6     $ (275 )   $ 55,653  
                                 

U.S. Government agencies

    12,493       93       (16 )     12,570  
                                 

Mortgage-backed securities

    104,414       1,832       (93 )     106,153  
                                 

Collateralized mortgage obligations

    15,440       251       (203 )     15,488  
                                 

States and political subdivisions

    6,412       35               6,447  
                                 

Total available for sale securities

  $ 194,681     $ 2,217     $ (587 )   $ 196,311  
                                 

Held to maturity securities:

                               

U.S. Government agencies

  $ 5,000     $       $ (20 )   $ 4,980  
                                 

States and political subdivisions

    47,231       985       (66 )     48,150  
                                 

Total held to maturity securities

  $ 52,231     $ 985     $ (86 )   $ 53,130  

 

13

 

The amortized cost and fair value of debt securities at March 31, 2020 (in thousands), by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

   

Amortized Cost

   

Fair Value

 

Available for sale securities:

               

Due in one year or less

  $ 77,057     $ 77,248  

Due after one year through five years

    27,326       27,708  

Due after five years through ten years

    27,571       28,152  

Due after ten years

    2,500       2,626  

Mortgage-backed securities

    99,664       103,925  

Totals

  $ 234,118     $ 239,659  
                 

Held to maturity securities:

               

Due in one year or less

  $ 2,496     $ 2,498  

Due after one year through five years

    19,033       19,450  

Due after five years through ten years

    20,388       21,057  

Due after ten years

    6,801       7,224  

Totals

  $ 48,718     $ 50,229  

 

14

 

Available for sale and held to maturity securities with gross unrealized losses at March 31, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows (in thousands):

 

   

Less Than Twelve Months

   

Over Twelve Months

   

Total

 
           

Gross

           

Gross

           

Gross

 
           

Unrealized

           

Unrealized

           

Unrealized

 
   

Fair Value

   

Losses

   

Fair Value

   

Losses

   

Fair Value

   

Losses

 

March 31, 2020:

                                               

Mortgage-backed securities

  $ 7,755     $ 158     $       $       $ 7,755     $ 158  
                                                 

Collateralized mortgage obligations

    9,866       163                       9,866       163  
                                                 

States and political subdivisions

    1,006       30                       1,006       30  

TOTAL

  $ 18,627     $ 351     $       $       $ 18,627     $ 351  

December 31, 2019:

                                               

U.S. Treasuries

  $ 4,894     $ 44     $ 49,753     $ 231     $ 54,647     $ 275  
                                                 

U.S. Government agencies

    4,978       16       4,979       20       9,957       36  
                                                 

Mortgage-backed securities

    10,941       93                       10,941       93  
                                                 

Collateralized mortgage obligations

    10,398       203                       10,398       203  
                                                 

States and political subdivisions

    4,602       61       608       5       5,210       66  

TOTAL

  $ 35,813     $ 417     $ 55,340     $ 256     $ 91,153     $ 673  

 

At March 31, 2020, 6 of the 47 mortgage-backed securities, 2 of the 6 collateralized mortgage obligations and 12 of the 125 securities issued by states and political subdivisions contained unrealized losses.

 

Management evaluates securities for other-than-temporary impairment on a monthly basis. In performing this evaluation, the length of time and the extent to which the fair value has been less than cost, the fact that the Company’s securities are primarily issued by U.S. Treasury and U.S. Government Agencies and the cause of the decline in value are considered. In addition, the Company does not intend to sell, and it is not more likely than not that it will be required to sell these securities before maturity. While some available for sale securities have been sold for liquidity purposes or for gains, the Company has traditionally held its securities, including those classified as available for sale, until maturity. As a result of the evaluation of these securities, the Company has determined that the unrealized losses summarized in the tables above are not deemed to be other-than-temporary.

 

Proceeds from sales or calls of available for sale debt securities were $22,360,747 for the three months ended March 31, 2020 for a realized gain of $432,779. There were no sales or calls of available for sale debt securities during the three months ended March 31, 2019.

 

Securities with a fair value of $288,143,602 and $230,065,621 at March 31, 2020 and December 31, 2019, respectively, were pledged to secure public deposits, federal funds purchased and other balances required by law.

 

15

 

 

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  

 

16

 

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.

 

17

 

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  

 

18

 

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.

 

19

 

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  

 

20

 

   

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  

 

21

 

 

6. Allowance for Loan Losses:

Transactions in the allowance for loan losses for the three months ended March 31, 2020 and 2019, and the balances of loans, individually and collectively evaluated for impairment, as of March 31, 2020 and 2019, are as follows (in thousands):

 

   

Gaming

   

Hotel/Motel

   

Real Estate, Construction

   

Real Estate, Mortgage

   

Commercial

and Industrial

   

Other

   

Total

 

For the Quarter Ended March 31, 2020:

                                                       

Allowance for Loan Losses:

                                                       

Beginning Balance

  $ 223     $ 779     $ 102     $ 2,454     $ 553     $ 96     $ 4,207  

Charge-offs

                            (8 )     (46 )     (88 )     (142 )

Recoveries

                                    16       46       62  

Provision

    (25 )     (45 )     (26 )     181       (52 )     31       64  

Ending Balance

  $ 198     $ 734     $ 76     $ 2,627     $ 471     $ 85     $ 4,191  
                                                         

Allowance for loan losses, March 31, 2020:

                                                       

Ending balance: individually evaluated for impairment

  $       $       $ 20     $ 212     $ 5     $ 4     $ 241  

Ending balance: collectively evaluated for impairment

  $ 198     $ 734     $ 56     $ 2,415     $ 466     $ 81     $ 3,950  
                                                         

Total Loans, March 31, 2020:

                                                       

Ending balance: individually evaluated for impairment

  $ 4,103     $       $ 570     $ 12,385     $ 328     $ 22     $ 17,408  

Ending balance: collectively evaluated for impairment

  $ 17,980     $ 45,226     $ 20,010     $ 137,174     $ 27,132     $ 5,998     $ 253,520  

 

22

 

   

Gaming

   

Hotel/Motel

   

Real Estate, Construction

   

Real Estate, Mortgage

   

Commercial

and Industrial

   

Other

   

Total

 

For the Quarter Ended March 31, 2019:

                                                       

Allowance for Loan Losses:

                                                       

Beginning Balance

  $ 416     $ 1,443     $ 429     $ 2,443     $ 476     $ 133     $ 5,340  

Charge-offs