Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2023

Loans and Allowance for Loan Losses [Abstract]

A summary of loans at December 31, 2023 and December 31, 2022, are as follows (dollars in thousands):

	December 31,
	2023			2022

Construction & development	$	137,206		$	163,203
1 - 4 family real estate		100,576			76,928
Commercial real estate - other		518,622			439,001
Total commercial real estate	$	756,404		$	679,132

Commercial & industrial		526,185			513,011
Agricultural		66,495			66,145
Consumer		14,517			14,949

Gross loans		1,363,601			1,273,237

Less allowance for credit losses		(19,691	)		(14,734	)
Less deferred loan fees		(2,762	)		(2,781	)

Net loans	$	1,341,148		$	1,255,722

Activity in Allowance for Loan Losses by Portfolio Segment

The following table presents, by portfolio segment, the activity in the allowance for credit losses for the years ended December 31, 2023 and 2022 (dollars in thousands):

	Construction & Development			1 - 4 Family Real Estate			Commercial Real Estate - Other			Commercial & Industrial			Agricultural			Consumer			Total

December 31, 2023
Loans
Balance, beginning of period	$	1,889		$	890		$	5,080		$	5,937		$	765		$	173		$	14,734
Impact of CECL adoption		44			(138	)		(168	)		716			(149	)		(55	)		250

Charge-offs		-			-			-			(16,500	)		(7	)		(17	)		(16,524	)
Recoveries		-			-			-			40			2			8			50
Net (charge-offs) recoveries		-			-			-			(16,460	)		(5	)		(9	)		(16,474	)

Provision (credit) for credit losses		(516	)		519			1,977			19,044			17			140			21,181
Balance, end of period	$	1,417		$	1,271		$	6,889		$	9,237		$	628		$	249		$	19,691

Unfunded Commitments
Balance, beginning of period	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Impact of CECL adoption		171			4			24			274			25			2			500
Provision (credit) for credit losses		(13	)		-			(16	)		6			(14	)		1			(36	)
Balance, end of period	$	158		$	4		$	8		$	280		$	11		$	3		$	464

Total Allowance for Credit Losses	$	1,575		$	1,275		$	6,897		$	9,517		$	639		$	252		$	20,155
Total Provision for Credit Losses	$	(529	)	$	519		$	1,961		$	19,050		$	3		$	141		$	21,145

	Construction & Development		1 - 4 Family Real Estate		Commercial Real Estate - Other		Commercial & Industrial			Agricultural			Consumer			Total

December 31, 2022
Balance, beginning of period	$	1,695	$	630	$	3,399	$	3,621		$	730		$	241		$	10,316

Charge-offs		-		-		-		(2	)		(50	)		(22	)		(74	)
Recoveries		-		-		-		10			4			10			24
Net (charge-offs) recoveries		-		-		-		8			(46	)		(12	)		(50	)

Provision (credit) for credit losses		194		260		1,681		2,308			81			(56	)		4,468

Balance, end of period	$	1,889	$	890	$	5,080	$	5,937		$	765		$	173		$	14,734

Loan Portfolio Based on Internal Rating Category

The following table presents the amortized cost of the Company’s loan portfolio with the gross charge-offs for the twelve months ended by year of origination based on internal rating category as of December 31, 2023 (dollars in thousands):

As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total

Construction & development
Grade
1 (Pass)	$	26,915	$	2,266	$	3,182	$	201	$	98	$	44	$	103,711	$	136,417
2 (Watch)		-		-		-		-		-		-		-		-
3 (Special Mention)		563		-		-		-		-		-		226		789
4 (Substandard)		-		-		-		-		-		-		-		-
Total construction & development		27,478		2,266		3,182		201		98		44		103,937		137,206
Current-period gross charge-offs		-		-		-		-		-		-		-		-
1 - 4 family real estate
Grade
1 (Pass)		48,275		22,573		13,305		3,928		1,808		1,069		9,618		100,576
2 (Watch)		-		-		-		-		-		-		-		-
3 (Special Mention)		-		-		-		-		-		-		-		-
4 (Substandard)		-		-		-		-		-		-		-		-
Total 1 - 4 family real estate		48,275		22,573		13,305		3,928		1,808		1,069		9,618		100,576
Current-period gross charge-offs		-		-		-		-		-		-		-		-
Commercial real estate - other
Grade
1 (Pass)		187,086		153,764		32,641		36,278		2,613		4,043		86,370		502,795
2 (Watch)		-		-		-		-		-		-		-		-
3 (Special Mention)		14,612		-		-		-		-		1,089		-		15,701
4 (Substandard)		-		-		-		-		-		126		-		126
Total Commercial real estate - other		201,698		153,764		32,641		36,278		2,613		5,258		86,370		518,622
Current-period gross charge-offs		-		-		-		-		-		-		-		-
Commercial and industrial
Grade
1 (Pass)		158,062		59,265		38,093		2,777		1,706		4,059		221,471		485,433
2 (Watch)		-		-		-		-		-		-		4,094		4,094
3 (Special Mention)		4,151		-		-		-		-		-		1,616		5,767
4 (Substandard)		20,660		7,937		98		8		-		-		2,188		30,891
Total Commercial and industrial		186,967		67,202		38,191		2,785		1,706		4,059		225,275		526,185
Current-period gross charge-offs		16,500		-		-		-		-		-		-		16,500
Agriculural
Grade
1 (Pass)		9,283		5,789		23,205		4,283		927		1,104		21,904		66,495
2 (Watch)		-		-		-		-		-		-		-		-
3 (Special Mention)		-		-		-		-		-		-		-		-
4 (Substandard)		-		-		-		-		-		-		-		-
Total agriculural		9,283		5,789		23,205		4,283		927		1,104		21,904		66,495
Current-period gross charge-offs		-		7		-		-		-		-		-		7
Consumer
Grade
1 (Pass)		4,415		1,545		2,171		2,554		663		1,819		1,270		14,437
2 (Watch)		-		-		-		-		-		-		-		-
3 (Special Mention)		-		-		-		-		-		-		-		-
4 (Substandard)		-		-		-		-		-		80		-		80
Total consumer		4,415		1,545		2,171		2,554		663		1,899		1,270		14,517
Current-period gross charge-offs		17		-		-		-		-		-		-		17
Total loans held for investment	$	478,116	$	253,139	$	112,695	$	50,029	$	7,815	$	13,433	$	448,374	$	1,363,601
Total current-period gross charge-offs	$	16,517	$	7	$	-	$	-	$	-	$	-	$	-	$	16,524

The following table presents the credit risk profile of the Company’s loan portfolio based on internal rating category, prior to the adoption of ASU 2016-13, as of December 31, 2022 (dollars in thousands):

	Construction & Development		1 - 4 Family Real Estate		Commercial Real Estate - Other		Commercial & Industrial		Agricultural		Consumer		Total

December 31, 2022
Grade
1 (Pass)	$	163,203	$	76,928	$	397,295	$	493,412	$	65,857	$	14,927	$	1,211,622
2 (Watch)		-		-		14,976		-		288		-		15,264
3 (Special Mention)		-		-		24,747		584		-		-		25,331
4 (Substandard)		-		-		1,983		19,015		-		22		21,020

Total	$	163,203	$	76,928	$	439,001	$	513,011	$	66,145	$	14,949	$	1,273,237

Loan Portfolio Aging Analysis of Recorded Investment in Loans

The following table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2023 and December 31, 2022 (dollars in thousands):

	Past Due												Total Loans
	30–59 Days		60–89 Days		Greater than 90 Days		Total		Current		Total Loans		> 90 Days & Accruing

December 31, 2023
Construction & development	$	-	$	-	$	-	$	-	$	137,206	$	137,206	$	-
1 - 4 family real estate		-		-		-		-		100,576		100,576		-
Commercial real estate - other		-		-		-		-		518,622		518,622		-
Commercial & industrial⁽¹⁾		472		10,969		9,946		21,387		504,798		526,185		9,946
Agricultural		-		-		-		-		66,495		66,495		-
Consumer⁽²⁾		-		27		80		107		14,410		14,517		80

Total	$	472	$	10,996	$	10,026	$	21,494	$	1,342,107	$	1,363,601	$	10,026

December 31, 2022
Construction & development	$	-	$	-	$	-	$	-	$	163,203	$	163,203	$	-
1 - 4 family real estate		-		-		-		-		76,928		76,928		-
Commercial real estate - other		-		617		-		617		438,384		439,001		-
Commercial & industrial⁽¹⁾		21		-		9,923		9,944		503,067		513,011		9,923
Agricultural		4		-		-		4		66,141		66,145		-
Consumer		291		82		22		395		14,554		14,949		18

Total	$	316	$	699	$	9,945	$	10,960	$	1,262,277	$	1,273,237	$	9,941

⁽¹⁾	The $9.95 million and $9.92 million that is greater than 90 days past due as of December 31, 2023 and December 31, 2022, respectively, primarily consists of a single borrower that is well collateralized and for which collection is being diligently pursued.

⁽²⁾	The $80,000 that is greater than 90 days past due as of December 31, 2023, consists of a single borrower that is well secured and for which collection is being diligently pursued.

Nonaccrual Loans

The following table presents information regarding nonaccrual loans as of December 31, 2023 (dollars in thousands):

	With an Allowance		No Allowance		Total Non- Accrual Loans		Related Allowance		Interest Income Recognized

December 31, 2023
Construction & development	$	-	$	-	$	-	$	-	$	-
1 - 4 Family Real Estate		-		-		-		-		-
Commercial Real Estate - other		-		126		126		-		24
Commercial & industrial		10,255		8,560		18,815		2,147		3,625
Agricultural		-		-		-		-		-
Consumer		-		-		-		-		-

Total	$	10,255	$	8,686	$	18,941	$	2,147	$	3,649

Impaired Loans

The following table presents impaired loans, prior to the adoption of ASU 2016-13, as of December 31, 2022 (dollars in thousands):

	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with an Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2022
Construction & development	$	-	$	-	$	-	$	-	$	-	$	21	$	-
1 - 4 Family Real Estate		-		-		-		-		-		-		-
Commercial Real Estate - other		2,808		1,983		-		1,983		-		11,749		141
Commercial & industrial		19,882		18,882		133		19,015		133		11,773		1,214
Agricultural		-		-		-		-		-		14		-
Consumer		31		22		-		22		-		27		-

Total	$	22,721	$	20,887	$	133	$	21,020	$	133	$	23,584	$	1,355

Collateral-Dependent Gross Loans Held for Investment

The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows (dollars in thousands):

	Collateral Type
			Business						Specific
	Real Estate		Assets		Other Assets		Total		Allocation
December 31, 2023
Construction & development	$	-	$	-	$	-	$	-	$	-
1 - 4 Family Real Estate		-		-		-		-		-
Commercial Real Estate - other		126		-		-		126		-
Commercial & industrial		-		20,848		9,932		30,780		2,038
Agricultural		-		-		-		-		-
Consumer		27		-		80		107		-

Total	$	153	$	20,848	$	10,012	$	31,013	$	2,038

Loans Modified to Borrowers Experiencing Financial Difficulty

The following tables present the amortized cost basis at the end of the reporting period of loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification made, as well as the financial effect of the modifications made as of December 31, 2023:

	Term Extension and Payment Deferral
	Amortized Cost Basis		% of Total Class			Financial Effect

December 31, 2023
Construction & development	$	-		-	%
1 - 4 Family Real Estate		-		-
Commercial Real Estate - other		-		-
Commercial & industrial		10,108		1.9		Extended the maturity of loan by four months, and payment of principal and interest deferred until the sale of collateral
Agricultural		-		-
Consumer		-		-

Total	$	10,108		1.9	%

Performance of Loans Modified in Last 12 Months

The following table depicts the performance of loans that have been modified in the last 12 months:

	Current		30-89 Days Past Due		90+ Days Past Due		Non-Accruing

December 31, 2023
Construction & development	$	-	$	-	$	-	$	-
1 - 4 Family Real Estate		-		-		-		-
Commercial Real Estate - other		-		-		-		-
Commercial & industrial		-		-		-		10,108
Agricultural		-		-		-		-
Consumer		-		-		-		-

Total	$	-	$	-	$	-	$	10,108

Information Regarding Nonperforming Assets

The following table represents information regarding nonperforming assets at December 31, 2022 (dollars in thousands):

	Construction & Development		1 - 4 Family Real Estate		Commercial Real Estate - Other		Commercial & Industrial		Agricultural		Consumer		Total

December 31, 2022
Nonaccrual loans	$	-	$	-	$	1,348	$	6,686	$	-	$	5	$	8,039
Troubled-debt restructurings (1)		-		-		-		-		-		-		-
Accruing loans 90 or more days past due		-		-		-		9,923		-		18		9,941

Total nonperforming loans	$	-	$	-	$	1,348	$	16,609	$	-	$	23	$	17,980

(1) $1.2 million of TDRs as of December 31, 2022, are included in the nonaccrual loans balance.