Loans
Loans totaled $135.7 million at September 30, 2023, up $2.2 million, or 2%, from June 30, 2023. The increase in total loans during the third quarter of 2023 was primarily due to growth in commercial and industrial and construction loans, which was partially offset by net declines in one- to four-family residential real estate loans. The increase in commercial and industrial loans was largely driven by equipment loans. Construction and land loan growth was mainly due to residential construction loans.
The following table sets forth the composition of the Company’s loan portfolio as of the dates indicated.
| | | | | | | | | | | | |
(Dollars in thousands) | | 9/30/2023 | | 6/30/2023 | | Increase (Decrease) |
Real estate loans | | | | | | | | | | | | |
One- to four-family residential | | $ | 83,973 | | $ | 85,655 | | $ | (1,682) | | (2) | % |
Commercial real estate | | | 19,113 | | | 19,175 | | | (62) | | - | |
Construction and land | | | 6,622 | | | 4,620 | | | 2,002 | | 43 | |
Multi-family residential | | | 3,424 | | | 3,094 | | | 330 | | 11 | |
Total real estate loans | | | 113,132 | | | 112,544 | | | 588 | | 1 | |
Other loans | | | | | | | | | | | | |
Commercial and industrial | | | 19,634 | | | 17,609 | | | 2,025 | | 11 | |
Consumer | | | 2,906 | | | 3,340 | | | (434) | | (13) | |
Total other loans | | | 22,540 | | | 20,949 | | | 1,591 | | 8 | |
Total loans | | $ | 135,672 | | $ | 133,493 | | $ | 2,179 | | 2 | % |
The majority of the Company’s loan portfolio consists of real estate loans secured by properties in our local market area, the Acadiana region of south Louisiana. Loans secured by one- to four-family residential properties accounted for 62% of total loans and commercial real estate loans accounted for 14% of total loans at September 30, 2023. Approximately 64% of our real estate loans have adjustable rates and, of our total real estate loans, approximately $54.7 million, or 48%, are scheduled to re-price or mature during the next 12 months.
Our non-real estate loans primarily consist of commercial and industrial loans, which amounted to 14% of total loans, at September 30, 2023. This segment of the portfolio largely consists of loans to local businesses involved in industrial manufacturing and equipment, communications, and professional services. Approximately 34% of our commercial and industrial loans have adjustable rates and, of total commercial and industrial loans, approximately $9.1 million, or 47% are scheduled to re-price or mature during the next 12 months.
Credit Quality and Allowance for Credit Losses
At September 30 and June 30, 2023, non-performing assets (“NPAs”) totaled $2.1 million and $2.2 million, respectively, and the ratio of NPAs to total assets was 0.82% at such dates. Non-performing loans (“NPLs”) totaled $2.1 million, or 1.54% of total loans, at September 30, 2023 and $1.9 million, or 1.42% of total loans, at June 30, 2023. At September 30, 2023 and June 30, 2023, over 94% of total NPLs were one- to four-family residential mortgage loans.
At September 30, 2023 the allowance for loan losses totaled $2.0 million, or 1.50% of total loans, compared to $2.1 million at June 30, 2023, or 1.56% of total loans. During the third quarter of 2023, $62,000 of the allowance for loan losses was reallocated to the allowance for credit losses on unfunded commitments due to an increase in unfunded commercial lending commitments.
Net loan recoveries totaled $17,000 during the third quarter of 2023, compared to net recoveries of $13,000 for the second quarter of 2023. The total provision for credit losses on loans and unfunded commitments was zero for the third quarter and the first nine months of 2023.