Mid-Southern Bancorp, Inc. - 10-Q filing on 2020-11-13

Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2020


	September 30,		December 31,
(In thousands)	2020		2019
Real estate mortgage loans:
One-to-four family residential	$	67,468	$	71,606
Multi-family residential		8,613		9,260
Residential construction		689		367
Commercial real estate		29,232		32,311
Commercial real estate construction		3,244		2,867
Commercial business loans		6,162		6,456
Consumer loans		1,445		1,875
Total loans		116,853		124,742

Deferred loan origination fees and costs, net		(4)		28
Allowance for loan losses		(1,582)		(1,498)

Loans, net	$	115,267	$	123,272

Schedule of components of Company's recorded investment in loans

The following table provides the components of the Company’s recorded investment in loans at September 30, 2020:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	67,468	$	8,613	$	3,933	$	29,232	$	6,162	$	1,445	$	116,853

Accrued interest receivable		208		32		10		117		16		5		388

Net deferred loan fees/costs		5		(6)		(32)		(12)		6		35		(4)

Recorded investment in loans	$	67,681	$	8,639	$	3,911	$	29,337	$	6,184	$	1,485	$	117,237

Recorded Investment in Loans as Evaluated for Impairments:
Individually evaluated for impairment	$	1,497	$	—	$	—	$	610	$	396	$	—	$	2,503

Collectively evaluated for impairment		66,184		8,639		3,911		28,727		5,788		1,485		114,734

Ending balance	$	67,681	$	8,639	$	3,911	$	29,337	$	6,184	$	1,485	$	117,237

The following table provides the components of the Company’s recorded investment in loans at December 31, 2019:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	71,606	$	9,260	$	3,234	$	32,311	$	6,456	$	1,875	$	124,742

Accrued interest receivable		254		25		11		88		26		6		410

Net deferred loan fees/costs		23		(11)		(36)		(6)		10		48		28

Recorded investment in loans	$	71,883	$	9,274	$	3,209	$	32,393	$	6,492	$	1,929	$	125,180

Recorded Investment in Loans as Evaluated for Impairments:
Individually evaluated for impairment	$	1,431	$	—	$	—	$	600	$	412	$	—	$	2,443

Collectively evaluated for impairment		70,452		9,274		3,209		31,793		6,080		1,929		122,737

Ending balance	$	71,883	$	9,274	$	3,209	$	32,393	$	6,492	$	1,929	$	125,180

Schedule of analysis of allowance for loan losses

An analysis of the allowance for loan losses as of September 30, 2020 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	24	$	—	$	—	$	25	$	28	$	—	$	77

Collectively evaluated for impairment		968		101		53		304		55		24		1,505

Ending balance	$	992	$	101	$	53	$	329	$	83	$	24	$	1,582

An analysis of the allowance for loan losses as of December 31, 2019 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	25	$	—	$	—	$	19	$	34	$	—	$	78

Collectively evaluated for impairment		930		83		44		270		68		25		1,420

Ending balance	$	955	$	83	$	44	$	289	$	102	$	25	$	1,498

An analysis of the changes in the allowance for loan losses for the three months ended September 30, 2020 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	984	$	94	$	50	$	320	$	83	$	25	$	1,556
Provisions		9		7		3		9		—		2		30
Charge-offs		(2)		—		—		—		—		(4)		(6)
Recoveries		1		—		—		—		—		1		2

Ending balance	$	992	$	101	$	53	$	329	$	83	$	24	$	1,582

An analysis of the changes in the allowance for loan losses for the nine months ended September 30, 2020 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	955	$	83	$	44	$	289	$	102	$	25	$	1,498
Provisions		48		18		9		40		(19)		6		102
Charge-offs		(14)		—		—		—		—		(14)		(28)
Recoveries		3		—		—		—		—		7		10

Ending balance	$	992	$	101	$	53	$	329	$	83	$	24	$	1,582

An analysis of the changes in the allowance for loan losses for the three months ended September 30, 2019 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	952	$	86	$	30	$	296	$	98	$	26	$	1,488
Provisions		(15)		1		1		8		1		10		6
Charge-offs		—		—		—		—		—		(6)		(6)
Recoveries		—		—		—		—		—		—		—

Ending balance	$	937	$	87	$	31	$	304	$	99	$	30	$	1,488

An analysis of the changes in the allowance for loan losses for the nine months ended September 30, 2019 is as follows:


	One-to-Four
	Family		Multi-Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,012	$	59	$	48	$	259	$	98	$	28	$	1,504
Provisions		(57)		28		(17)		45		1		6		6
Charge-offs		(32)		—		—		—		—		(12)		(44)
Recoveries		14		—		—		—		—		8		22

Ending balance	$	937	$	87	$	31	$	304	$	99	$	30	$	1,488

Schedule of impaired loans

The following table summarizes the Company’s impaired loans as of September 30, 2020 and for the three and nine months ended September 30, 2020. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three- and nine-month periods ended September 30, 2020.


							Three Months Ended				Nine Months Ended
	At September 30, 2020						September 30, 2020				September 30, 2020
	Unpaid						Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
	(In thousands)
Loans with no related allowance recorded:
One-to-four family residential	$	1,244	$	1,338	$	—	$	1,255	$	1	$	1,188	$	4
Commercial real estate		273		259		—		281		—		262		—
Commercial business		21		22		—		22		—		27		1
	$	1,538	$	1,619	$	—	$	1,558	$	1	$	1,477	$	5

Loans with an allowance recorded:
One-to-four family residential	$	253	$	279	$	24	$	253	$	2	$	256	$	5
Commercial real estate		337		348		25		328		5		345		13
Commercial business		375		394		28		380		5		378		15
	$	965	$	1,021	$	77	$	961	$	12	$	979	$	33

Total:
One-to-four family residential	$	1,497	$	1,617	$	24	$	1,508	$	3	$	1,444	$	9
Commercial real estate		610		607		25		609		5		607		13
Commercial business		396		416		28		402		5		405		16
	$	2,503	$	2,640	$	77	$	2,519	$	13	$	2,456	$	38

The following table summarizes the Company’s impaired loans for the three- and nine-month periods ended September 30, 2019. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three- and nine-month periods ended September 30, 2019.


	Three Months Ended				Nine Months Ended
	September 30, 2019				September 30, 2019
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
	(In thousands)
Loans with no related allowance recorded:
One-to-four family residential	$	1,258	$	2	$	1,341	$	18
Commercial real estate		350		1		368		3
Commercial business		38		1		43		2
Consumer		1		—		1		—
	$	1,647	$	4	$	1,753	$	23

Loans with an allowance recorded:
One-to-four family residential	$	261	$	3	$	358	$	8
Commercial real estate		296		4		325		13
Commercial business		395		6		405		18
Consumer		—		—		—		—
	$	952	$	13	$	1,088	$	39

Total:
One-to-four family residential	$	1,519	$	5	$	1,699	$	26
Commercial real estate		646		5		693		16
Commercial business		433		7		448		20
Consumer		1		—		1		—
	$	2,599	$	17	$	2,841	$	62

The following table summarizes the Company’s impaired loans as of December 31, 2019:


	At December 31, 2019
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In thousands)
Loans with no related allowance recorded:
One-to-four family residential	$	1,172	$	1,457	$	—
Commercial real estate		235		389		—
Commercial business		32		32		—
	$	1,439	$	1,878	$	—

Loans with an allowance recorded:
One-to-four family residential	$	259	$	284	$	25
Commercial real estate		365		364		19
Commercial business		380		426		34
	$	1,004	$	1,074	$	78

Total:
One-to-four family residential	$	1,431	$	1,741	$	25
Commercial real estate		600		753		19
Commercial business		412		458		34
	$	2,443	$	2,952	$	78

Schedule of recorded investment in nonperforming loans


	At September 30, 2020						At December 31, 2019
			Loans 90+						Loans 90+
			Days		Total				Days		Total
	Nonaccrual		Past Due		Nonperforming		Nonaccrual		Past Due		Nonperforming
	Loans		Still Accruing		Loans		Loans		Still Accruing		Loans
	(In thousands)
One-to-four family residential	$	1,166	$	—	$	1,166	$	947	$	—	$	947
Commercial real estate		273		—		273		235		—		235

Total	$	1,439	$	—	$	1,439	$	1,182	$	—	$	1,182

Schedule of aging of the recorded investment in past due loans


					Over
	30‑59 Days		60‑89 Days		90 Days		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans
	(In thousands)
September 30, 2020
One-to-four family residential	$	624	$	409	$	65	$	1,098	$	66,583	$	67,681
Multi-family residential		—		—		—		—		8,639		8,639
Construction		—		—		—		—		3,911		3,911
Commercial real estate		2		38		—		40		29,297		29,337
Commercial business		—		—		—		—		6,184		6,184
Consumer		50		—		—		50		1,435		1,485

Total	$	676	$	447	$	65	$	1,188	$	116,049	$	117,237


December 31, 2019
One-to-four family residential	$	1,425	$	575	$	238	$	2,238	$	69,645	$	71,883
Multi-family residential		—		—		—		—		9,274		9,274
Construction		152		—		—		152		3,057		3,209
Commercial real estate		477		134		—		611		31,782		32,393
Commercial business		—		—		—		—		6,492		6,492
Consumer		7		—		—		7		1,922		1,929

Total	$	2,061	$	709	$	238	$	3,008	$	122,172	$	125,180

Schedule of risk category of loans by recorded investment


	One-to-		Multi-
	Four Family		Family				Commercial		Commercial
	Residential		Residential		Construction		Real Estate		Business		Consumer		Total
	(In thousands)
September 30, 2020
Pass	$	66,290	$	8,639	$	3,679	$	28,702	$	5,788	$	1,485	$	114,583
Special mention		—		—		232		215		—		—		447
Substandard		1,391		—		—		420		396		—		2,207
Doubtful		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—

Total	$	67,681	$	8,639	$	3,911	$	29,337	$	6,184	$	1,485	$	117,237

December 31, 2019
Pass	$	70,611	$	9,274	$	3,209	$	31,949	$	6,080	$	1,929	$	123,052
Special mention		—		—		—		—		—		—		—
Substandard		1,272		—		—		444		412		—		2,128
Doubtful		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—

Total	$	71,883	$	9,274	$	3,209	$	32,393	$	6,492	$	1,929	$	125,180

Schedule of TDRs by accrual status


	September 30, 2020								December 31, 2019
							Related								Related
							Allowance for								Allowance for
	Accruing		Nonaccrual		Total		Loan Losses		Accruing		Nonaccrual		Total		Loan Losses
	(In thousands)
One-to-four family residential	$	331	$	230	$	561	$	24	$	484	$	—		484	$	25
Commercial real estate		337		178		515		25		365		137		502		19
Commercial business		396		—		396		28		412		—		412		34

Total	$	1,064	$	408	$	1,472	$	77	$	1,261	$	137	$	1,398	$	78

Schedule of troubled debt restructurings

The following table summarizes information in regards to TDRs that were restructured during the three and nine months ended September 30, 2020.


	Three Months Ended September 30, 2020					Nine Months Ended September 30, 2020
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding		Number of	Outstanding		Outstanding
	Contracts	Balance		Balance		Contracts	Balance		Balance
	(Dollars in thousands)
One-to-four family residential	2	$	81	$	81	5	$	230	$	230
Commercial real estate	—		—		—	1		51		51

Total	2	$	81	$	81	6	$	281	$	281

The following table summarizes information in regard to TDRs that were restructured during the nine months ended September 30, 2019:


	Nine Months Ended September 30, 2019
		Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding
	Contracts	Balance		Balance
	(Dollars in thousands)
Commercial real estate	1	$	155	$	155

Total	1	$	155	$	155