Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2021

The composition of loans at June 30, 2021 and December 31, 2020 was as follows:

	June 30,			December 31,
	2021			2020
	(in thousands)
Mortgage loans on real estate:
Construction and land development	$	59,288		$	42,544
Secured by farmland		15,334			15,846
Secured by 1-4 family residential properties		249,517			248,246
Multifamily		19,523			21,496
Commercial		343,873			334,661
Commercial and industrial loans		135,849			140,762
Consumer installment loans		42,287			21,321
All other loans		10,896			10,773
Total loans	$	876,567		$	835,649
Net deferred loan costs		802			685
Allowance for loan losses		(8,098	)		(7,096	)
	$	869,271		$	829,238

Changes In Allowance For Loan Losses

Changes in the allowance for loan losses for the six months ended June 30, 2021 and 2020 and the year ended December 31, 2020 were as follows:

	Six Months Ended			Year Ended			Six Months Ended
	June 30,			December 31,			June 30,
	2021			2020			2020
				(in thousands)
Balance, beginning	$	7,096		$	4,973		$	4,973
Provision for loan losses		883			1,457			655
Recoveries added to the allowance		143			1,131			880
Loan losses charged to the allowance		(24	)		(465	)		(143	)
Balance, ending	$	8,098		$	7,096		$	6,365

Nonaccrual And Past Due Loans By Class

Nonaccrual and past due loans by class at June 30, 2021 and December 31, 2020 were as follows:

	June 30, 2021
	(in thousands)
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans		90 or More Days Past Due Still Accruing		Nonaccrual Loans
Commercial - Non Real Estate:
Commercial & Industrial	$	—	$	—	$	—	$	—	$	135,849	$	135,849	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—		—		167,493		167,493		—		1,004
Non-owner occupied		131		—		500		631		175,749		176,380		500		2,229
Construction and Farmland:
Residential		—		—		—		—		12,599		12,599		—		—
Commercial		108		—		—		108		61,915		62,023		—		108
Consumer:
Installment		6		—		—		6		42,281		42,287		—		4
Residential:
Equity Lines		—		—		—		—		32,800		32,800		—		33
Single family		393		419		193		1,005		215,712		216,717		—		1,054
Multifamily		—		—		—		—		19,523		19,523		—		—
All Other Loans		—		—		—		—		10,896		10,896		—		—
Total	$	638	$	419	$	693	$	1,750	$	874,817	$	876,567	$	500	$	4,432

	December 31, 2020
	(in thousands)
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans		90 or More Past Due Still Accruing		Nonaccrual Loans
Commercial - Non Real Estate:
Commercial & Industrial	$	43	$	—	$	—	$	43	$	140,719	$	140,762	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		157		157		165,764		165,921		—		1,227
Non-owner occupied		500		—		122		622		168,118		168,740		—		2,405
Construction and Farmland:
Residential		—		—		—		—		10,644		10,644		—		—
Commercial		—		—		69		69		47,677		47,746		—		69
Consumer:
Installment		5		—		—		5		21,316		21,321		—		5
Residential:
Equity Lines		13		—		—		13		31,239		31,252		—		42
Single family		249		123		581		953		216,041		216,994		—		1,006
Multifamily		—		—		—		—		21,496		21,496		—		—
All Other Loans		—		—		—		—		10,773		10,773		—		—
Total	$	810	$	123	$	929	$	1,862	$	833,787	$	835,649	$	—	$	4,754

Allowance For Loan Losses By Segment

Allowance for loan losses by segment at June 30, 2021 and December 31, 2020 were as follows:

	As of and For the Three Months Ended
	June 30, 2021
	(in thousands)
	Construction and Farmland		Residential Real Estate		Commercial Real Estate		Commercial		Consumer			All Other Loans			Unallocated		Total
Allowance for credit losses:
Beginning Balance	$	1,604	$	1,929	$	1,645	$	1,374	$	198		$	346		$	—	$	7,096
Charge-Offs		—		—		—		—		(10	)		(14	)		—		(24	)
Recoveries		9		109		—		4		15			6			—		143
Provision		669		96		40		159		(92	)		11			—		883
Ending balance	$	2,282	$	2,134	$	1,685	$	1,537	$	111		$	349		$	—	$	8,098
Ending balance: Individually evaluated for impairment	$	—	$	58	$	—	$	—	$	—		$	—		$	—	$	58
Ending balance: collectively evaluated for impairment	$	2,282	$	2,076	$	1,685	$	1,537	$	111		$	349		$	—	$	8,040
Loans:
Ending balance	$	74,622	$	269,040	$	343,873	$	135,849	$	42,287		$	10,896		$	—	$	876,567
Ending balance individually evaluated for impairment	$	140	$	3,228	$	3,233	$	128	$	19		$	—		$	—	$	6,748
Ending balance collectively evaluated for impairment	$	74,482	$	265,812	$	340,640	$	135,721	$	42,268		$	10,896		$	—	$	869,819

	December 31, 2020
	(in thousands)
	Construction and Farmland			Residential Real Estate			Commercial Real Estate			Commercial			Consumer			All Other Loans			Unallocated			Total
Allowance for credit losses:
Beginning Balance	$	446		$	1,601		$	1,991		$	565		$	54		$	120		$	196		$	4,973
Charge-Offs		(119	)		(20	)		(155	)		(49	)		(83	)		(39	)		—			(465	)
Recoveries		7			275			302			498			41			8			—			1,131
Provision		1,270			73			(493	)		360			186			257			(196	)		1,457
Ending balance	$	1,604		$	1,929		$	1,645		$	1,374		$	198		$	346		$	—		$	7,096
Ending balance: Individually evaluated for impairment	$	—		$	72		$	—		$	—		$	—		$	—		$	—		$	72
Ending balance: collectively evaluated for impairment	$	1,604		$	1,857		$	1,645		$	1,374		$	198		$	346		$	—		$	7,024
Loans:
Ending balance	$	58,390		$	269,742		$	334,661		$	140,762		$	21,321		$	10,773		$	—		$	835,649
Ending balance individually evaluated for impairment	$	105		$	3,869		$	3,632		$	147		$	15		$	—		$	—		$	7,768
Ending balance collectively evaluated for impairment	$	58,285		$	265,873		$	331,029		$	140,615		$	21,306		$	10,773		$	—		$	827,881

Impaired Loans By Class

Impaired loans by class as of and for the periods ended June 30, 2021 and December 31, 2020 were as follows:

	As of
	June 30, 2021
	(in thousands)
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial - Non Real Estate:
Commercial & Industrial	$	203	$	128	$	—	$	151	$	6
Commercial Real Estate:
Owner Occupied		1,086		1,004		—		1,022		—
Non-owner occupied		2,548		2,229		—		2,234		—
Construction and Farmland:
Residential		—		—		—		—		—
Commercial		149		140		—		144		3
Consumer:
Installment		20		19		—		21		—
Residential
Equity lines		38		33		—		34		—
Single family		2,389		2,210		—		2,233		38
Multifamily		—		—		—		—		—
Other Loans		—		—		—		—		—
	$	6,433	$	5,763	$	—	$	5,839	$	47
With an allowance recorded:
Commercial - Non Real Estate:
Commercial & Industrial	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Construction and Farmland:
Residential		—		—		—		—		—
Commercial		—		—		—		—		—
Consumer:
Installment		—		—		—		—		—
Residential
Equity lines		—		—		—		—		—
Single family		1,019		999		58		1,006		14
Multifamily		—		—		—		—		—
Other Loans		—		—		—		—		—
	$	1,019	$	999	$	58	$	1,006	$	14
Total:
Commercial	$	203	$	128	$	—	$	151	$	6
Commercial Real Estate		3,634		3,233		—		3,256		—
Construction and Farmland		149		140		—		144		3
Consumer		20		19		—		21		—
Residential		3,446		3,242		58		3,273		52
Other		—		—		—		—		—
Total	$	7,452	$	6,762	$	58	$	6,845	$	61

(1)	Recorded investment is defined as the summation of the outstanding principal balance, accrued interest, net deferred loan fees or costs, and any partial charge-offs. Accrued interest and net deferred loan fees or costs totaled $14 thousand at June 30, 2021.

	As of
	December 31, 2020
	(in thousands)
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial - Non Real Estate:
Commercial & Industrial	$	246	$	147	$	—	$	186	$	16
Commercial Real Estate:
Owner Occupied		1,282		1,227		—		1,258		18
Non-owner occupied		2,682		2,405		—		2,444		34
Construction and Farmland:
Residential		—		—		—		—		—
Commercial		233		105		—		109		3
Consumer:
Installment		16		15		—		22		1
Residential:
Equity lines		272		42		—		44		—
Single family		2,655		2,413		—		2,514		76
Multifamily		—		—		—		—		—
Other Loans		—		—		—		—		—
	$	7,386	$	6,354	$	—	$	6,577	$	148
With an allowance recorded:
Commercial - Non Real Estate:
Commercial & Industrial	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Construction and Farmland:
Residential		—		—		—		—		—
Commercial		—		—		—		—		—
Consumer:
Installment		—		—		—		—		—
Residential:
Equity lines		—		—		—		—		—
Single family		1,449		1,431		72		1,448		38
Multifamily		—		—		—		—		—
Other Loans		—		—		—		—		—
	$	1,449	$	1,431	$	72	$	1,448	$	38
Total:
Commercial	$	246	$	147	$	—	$	186	$	16
Commercial Real Estate		3,964		3,632		—		3,702		52
Construction and Farmland		233		105		—		109		3
Consumer		16		15		—		22		1
Residential		4,376		3,886		72		4,006		114
Other		—		—		—		—		—
Total	$	8,835	$	7,785	$	72	$	8,025	$	186

(1)	Recorded investment is defined as the summation of the outstanding principal balance, accrued interest, net deferred loan fees or costs, and any partial charge-offs. Accrued interest and net deferred loan fees or costs totaled $17 thousand at December 31, 2020.

Credit Quality Information By Class

Credit quality information by class at June 30, 2021 and December 31, 2020 was as follows:

	As of
	June 30, 2021
	(in thousands)
INTERNAL RISK RATING GRADES	Pass		Pass Monitored		Special Mention		Substandard		Doubtful		Loss		Total
Commercial - Non Real Estate:
Commercial & Industrial	$	129,046	$	4,664	$	2,133	$	6	$	—	$	—	$	135,849
Commercial Real Estate:
Owner Occupied		110,771		48,055		7,662		1,005		—		—		167,493
Non-owner occupied		128,333		33,108		12,306		2,633		—		—		176,380
Construction and Farmland:
Residential		7,310		5,289		—		—		—		—		12,599
Commercial		24,476		29,777		7,577		193		—		—		62,023
Residential:
Equity Lines		32,001		719		47		33		—		—		32,800
Single family		197,619		13,518		3,453		2,007		120		—		216,717
Multifamily		12,689		5,665		1,169		—		—		—		19,523
All other loans		10,764		132		—		—		—		—		10,896
Total	$	653,009	$	140,927	$	34,347	$	5,877	$	120	$	—	$	834,280

		Performing				Nonperforming
Consumer Credit Exposure by Payment Activity		$	42,281			$	6

	As of
	December 31, 2020
	(in thousands)
INTERNAL RISK RATING GRADES	Pass		Pass Monitored		Special Mention		Substandard		Doubtful		Loss		Total
Commercial - Non Real Estate:
Commercial & Industrial	$	137,566	$	2,750	$	439	$	7	$	—	$	—	$	140,762
Commercial Real Estate:
Owner Occupied		126,839		31,927		5,929		1,226		—		—		165,921
Non-owner occupied		101,026		42,338		22,555		2,821		—		—		168,740
Construction and Farm land:
Residential		8,131		2,513		—		—		—		—		10,644
Commercial		19,599		24,982		3,004		161		—		—		47,746
Residential:
Equity Lines		31,087		124		—		36		5		—		31,252
Single family		193,579		16,639		3,594		3,053		129		—		216,994
Multifamily		10,923		8,700		1,873		—		—		—		21,496
All other loans		8,438		—		2,335		—		—		—		10,773
Total	$	637,188	$	129,973	$	39,729	$	7,304	$	134	$	—	$	814,328

		Performing				Nonperforming
Consumer Credit Exposure by Payment Activity		$	21,316			$	5