Loans

12 Months Ended

Dec. 31, 2021

Note 4

Loans

The Company originates commercial, industrial and real estate loans to businesses and faith-based ministries throughout the metropolitan St. Louis, Missouri area, Orange County, California, Colorado Springs, Colorado and other selected cities in the United States. The Company does not have any particular concentration of credit in any one economic sector; however, a substantial portion of the commercial and industrial loans is extended to privately-held commercial companies and franchises in these market areas and are generally secured by the assets of the business. The Company also has a substantial portion of real estate loans secured by mortgages that are extended to faith-based ministries in its market area and selected cities in the United States.

A summary of loan categories is as follows:


	December 31,
(In thousands)	2021		2020
Commercial and industrial	$	450,336	$	298,984
Real estate:
Commercial:
Mortgage	108,759		100,419
Construction	24,797		25,090
Faith-based:
Mortgage	355,582		333,661
Construction	14,664		23,818
PPP	6,299		109,704
Other	130		—
Total loans	$	960,567	$	891,676

The following table presents the aging of loans by loan categories at December 31, 2021:


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
Commercial and industrial	$	450,336	$	—	$	—	$	—	$	—	$	450,336
Real estate
Commercial:
Mortgage	108,759		—		—		—		—		108,759
Construction	24,797		—		—		—		—		24,797
Faith-based:
Mortgage	355,582		—		—		—		—		355,582
Construction	14,664		—		—		—		—		14,664
PPP	6,299		—		—		—		—		6,299
Other	130		—		—		—		—		130
Total	$	960,567	$	—	$	—	$	—	$	—	$	960,567

The following table presents the aging of loans by loan categories at December 31, 2020:


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
Commercial and industrial	$	298,984	$	—	$	—	$	—	$	—	$	298,984
Real estate
Commercial:
Mortgage	100,419		—		—		—		—		100,419
Construction	25,090		—		—		—		—		25,090
Faith-based:
Mortgage	333,661		—		—		—		—		333,661
Construction	23,818		—		—		—		—		23,818
PPP	109,704		—		—		—		—		109,704
Total	$	891,676	$	—	$	—	$	—	$	—	$	891,676

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of December 31, 2021:


(In thousands)	Loans Subject to Normal Monitoring(1)		Performing Loans Subject to Special Monitoring(2)		Nonperforming Loans Subject to Special Monitoring(2)		Total Loans
Commercial and industrial	$	440,607	$	9,729	$	—	$	450,336
Real estate
Commercial:
Mortgage	108,759		—		—		108,759
Construction	24,797		—		—		24,797
Faith-based:
Mortgage	352,717		2,865		—		355,582
Construction	14,664		—		—		14,664
PPP	6,299		—		—		6,299
Other	130		—		—		130
Total	$	947,973	$	12,594	$	—	$	960,567


(1)			Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk and have the apparent ability to satisfy their loan obligation.
(2)			Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

The Company had no loans that were considered individually evaluated credits at December 31, 2021.

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of December 31, 2020:


(In thousands)	Loans Subject to Normal Monitoring(1)		Performing Loans Subject to Special Monitoring(2)		Nonperforming Loans Subject to Special Monitoring(2)		Total Loans
Commercial and industrial	$	284,882	$	14,102	$	—	$	298,984
Real estate
Commercial:
Mortgage	99,044		1,375		—		100,419
Construction	25,090		—		—		25,090
Faith-based:
Mortgage	330,554		3,107		—		333,661
Construction	23,818		—		—		23,818
PPP	109,704		—		—		109,704
Total	$	873,092	$	18,584	$	—	$	891,676


(1)			Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk and have the apparent ability to satisfy their loan obligation.
(2)			Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

The Company had one loan that was considered an individually evaluated credit in the amount of $2,500,000 at December 31, 2020, with a specific allowance for credit loss of $500,000.

There were no loan modifications considered as troubled debt restructurings during the year ended December 31, 2021. The recorded investment by category for loans considered as troubled debt restructurings during the year ended December 31, 2020 is as follows:


(In thousands)	Number of Loans	Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
Commercial and industrial	1	$	8,773	$	8,773
Faith-based real estate	1	1,029		1,029
Total	2	$	9,802	$	9,802

During the year ended December 31, 2020, two loans were restructured to change the amortization schedule to reduce payments from the borrowers while the contractual interest rate remained unchanged. There were no loans restructured that subsequently defaulted during the years ended December 31, 2021 or 2020.

A summary of the ACL by category for the period ended December 31, 2021 is as follows:


(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Allowance for credit losses on loans:
Balance at December 31, 2020	$	4,635	$	1,175	$	5,717	$	417	$	11,944


Provision for (release of) credit losses (1)	387		(144)		(48)		(125)		70
Recoveries	12		—		15		—		27
Balance at December 31, 2021	$	5,034	$	1,031	$	5,684	$	292	$	12,041


(1)			For the period ended December 31, 2021, there was a release of credit losses of $200,000 for unfunded commitments.

A summary of the ACL by category for the period ended December 31, 2020 is as follows:


(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Allowance for credit losses on loans:
Balance at December 31, 2019	$	4,874	$	1,528	$	3,842	$	312	$	10,556
Cumulative effect of accounting change (ASU 2016-13)	(526)		(401)		1,636		14		—
Balance at January 1, 2020	4,348		1,127		5,478		326		11,279
Provision for credit losses	268		48		238		91		645
Recoveries	19		—		1		—		20
Balance at December 31, 2020	$	4,635	$	1,175	$	5,717	$	417	$	11,944


(1)			For the period ended December 31, 2020, there was a provision for credit losses of $165,000 for unfunded commitments.

As of December 31, 2021 and 2020, there were loans totaling $0 and $161,475, respectively, to affiliates of executive officers or directors.