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Note 4 - Allowance for Loan Losses | 6 Months Ended
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Jun. 30, 2020
Notes to Financial Statements |
Allowance for Credit Losses [Text Block] | Note 4. Allowance for Loan Losses The following tables present, as of June 30, 2020, December 31, 2019 and June 30, 2019, the total allowance for loan losses, the allowance by impairment methodology, and loans by impairment methodology (in thousands):
|  | June 30, 2020 |
|  | Construction and Land Development |  |  | Secured by 1-4 Family Residential |  |  | Other Real Estate |  |  | Commercial and Industrial |  |  | Consumer and Other Loans |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, December 31, 2019 |  | $ | 464 |  |  | $ | 776 |  |  | $ | 2,296 |  |  | $ | 562 |  |  | $ | 836 |  |  | $ | 4,934 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (69 | ) |  |  | (435 | ) |  |  | (504 | )
Recoveries |  |  | — |  |  |  | 4 |  |  |  | 1 |  |  |  | 7 |  |  |  | 154 |  |  |  | 166 |
Provision for (recovery of) loan losses |  |  | (68 | ) |  |  | 543 |  |  |  | 936 |  |  |  | 283 |  |  |  | 6 |  |  |  | 1,700 |
Ending Balance, June 30, 2020 |  | $ | 396 |  |  | $ | 1,323 |  |  | $ | 3,233 |  |  | $ | 783 |  |  | $ | 561 |  |  | $ | 6,296 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | — |  |  |  | 5 |  |  |  | 23 |  |  |  | — |  |  |  | — |  |  |  | 28 |
Collectively evaluated for impairment |  |  | 396 |  |  |  | 1,318 |  |  |  | 3,210 |  |  |  | 783 |  |  |  | 561 |  |  |  | 6,268 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  | $ | 31,981 |  |  | $ | 234,188 |  |  | $ | 248,495 |  |  | $ | 124,706 |  |  | $ | 12,146 |  |  | $ | 651,516 |
Individually evaluated for impairment |  |  | 400 |  |  |  | 497 |  |  |  | 4,896 |  |  |  | — |  |  |  | — |  |  |  | 5,793 |
Collectively evaluated for impairment |  |  | 31,581 |  |  |  | 233,691 |  |  |  | 243,599 |  |  |  | 124,706 |  |  |  | 12,146 |  |  |  | 645,723 |
|  | December 31, 2019 |
|  | Construction and Land Development |  |  | Secured by 1-4 Family Residential |  |  | Other Real Estate |  |  | Commercial and Industrial |  |  | Consumer and Other Loans |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, December 31, 2018 |  | $ | 561 |  |  | $ | 895 |  |  | $ | 2,160 |  |  | $ | 464 |  |  | $ | 929 |  |  | $ | 5,009 |
Charge-offs |  |  | (2 | ) |  |  | (58 | ) |  |  | (27 | ) |  |  | (2 | ) |  |  | (795 | ) |  |  | (884 | )
Recoveries |  |  | 50 |  |  |  | 9 |  |  |  | 1 |  |  |  | 8 |  |  |  | 291 |  |  |  | 359 |
Provision for (recovery of) loan losses |  |  | (145 | ) |  |  | (70 | ) |  |  | 162 |  |  |  | 92 |  |  |  | 411 |  |  |  | 450 |
Ending Balance, December 31, 2019 |  | $ | 464 |  |  | $ | 776 |  |  | $ | 2,296 |  |  | $ | 562 |  |  | $ | 836 |  |  | $ | 4,934 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | 22 |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |
Collectively evaluated for impairment |  |  | 442 |  |  |  | 765 |  |  |  | 2,296 |  |  |  | 562 |  |  |  | 836 |  |  |  | 4,901 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  | $ | 43,164 |  |  | $ | 229,438 |  |  | $ | 236,555 |  |  | $ | 50,153 |  |  | $ | 15,036 |  |  | $ | 574,346 |
Individually evaluated for impairment |  |  | 367 |  |  |  | 630 |  |  |  | 462 |  |  |  | — |  |  |  | — |  |  |  | 1,459 |
Collectively evaluated for impairment |  |  | 42,797 |  |  |  | 228,808 |  |  |  | 236,093 |  |  |  | 50,153 |  |  |  | 15,036 |  |  |  | 572,887 |
|  | June 30, 2019 |
|  | Construction and Land Development |  |  | Secured by 1-4 Family Residential |  |  | Other Real Estate |  |  | Commercial and Industrial |  |  | Consumer and Other Loans |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, December 31, 2018 |  | $ | 561 |  |  | $ | 895 |  |  | $ | 2,160 |  |  | $ | 464 |  |  | $ | 929 |  |  | $ | 5,009 |
Charge-offs |  |  | — |  |  |  | (58 | ) |  |  | — |  |  |  | (2 | ) |  |  | (387 | ) |  |  | (447 | )
Recoveries |  |  | 50 |  |  |  | 5 |  |  |  | — |  |  |  | 4 |  |  |  | 174 |  |  |  | 233 |
Provision for (recovery of) loan losses |  |  | (71 | ) |  |  | (64 | ) |  |  | 233 |  |  |  | 50 |  |  |  | 52 |  |  |  | 200 |
Ending Balance, June 30, 2019 |  | $ | 540 |  |  | $ | 778 |  |  | $ | 2,393 |  |  | $ | 516 |  |  | $ | 768 |  |  | $ | 4,995 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | 46 |  |  |  | 20 |  |  |  | 35 |  |  |  | — |  |  |  | — |  |  |  | 101 |
Collectively evaluated for impairment |  |  | 494 |  |  |  | 758 |  |  |  | 2,358 |  |  |  | 516 |  |  |  | 768 |  |  |  | 4,894 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  | $ | 46,281 |  |  | $ | 225,820 |  |  | $ | 237,370 |  |  | $ | 49,353 |  |  | $ | 16,130 |  |  | $ | 574,954 |
Individually evaluated for impairment |  |  | 391 |  |  |  | 866 |  |  |  | 518 |  |  |  | — |  |  |  | — |  |  |  | 1,775 |
Collectively evaluated for impairment |  |  | 45,890 |  |  |  | 224,954 |  |  |  | 236,852 |  |  |  | 49,353 |  |  |  | 16,130 |  |  |  | 573,179 |
Impaired loans and the related allowance at June 30, 2020, December 31, 2019 and June 30, 2019, were as follows (in thousands):
|  | June 30, 2020 |
|  | Unpaid Principal Balance |  |  | Recorded Investment with No Allowance |  |  | Recorded Investment with Allowance |  |  | Total Recorded Investment |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 439 |  |  | $ | 400 |  |  | $ | — |  |  | $ | 400 |  |  | $ | — |  |  | $ | 383 |  |  | $ | — |
Secured by 1-4 family |  |  | 595 |  |  |  | 280 |  |  |  | 217 |  |  |  | 497 |  |  |  | 5 |  |  |  | 563 |  |  |  | 1 |
Other real estate loans |  |  | 4,948 |  |  |  | 583 |  |  |  | 4,313 |  |  |  | 4,896 |  |  |  | 23 |  |  |  | 574 |  |  |  | 127 |
Total |  | $ | 5,982 |  |  | $ | 1,263 |  |  | $ | 4,530 |  |  | $ | 5,793 |  |  | $ | 28 |  |  | $ | 1,520 |  |  | $ | 128 |
|  | December 31, 2019 |
|  | Unpaid Principal Balance |  |  | Recorded Investment with No Allowance |  |  | Recorded Investment with Allowance |  |  | Total Recorded Investment |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 401 |  |  | $ | 70 |  |  | $ | 297 |  |  | $ | 367 |  |  | $ | 22 |  |  | $ | 369 |  |  | $ | 1 |
Secured by 1-4 family |  |  | 729 |  |  |  | 488 |  |  |  | 142 |  |  |  | 630 |  |  |  | 11 |  |  |  | 769 |  |  |  | 1 |
Other real estate loans |  |  | 509 |  |  |  | 462 |  |  |  | — |  |  |  | 462 |  |  |  | — |  |  |  | 766 |  |  |  | 3 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | — |
Total |  | $ | 1,639 |  |  | $ | 1,020 |  |  | $ | 439 |  |  | $ | 1,459 |  |  | $ | 33 |  |  | $ | 1,926 |  |  | $ | 5 |
|  | June 30, 2019 |
|  | Unpaid Principal Balance |  |  | Recorded Investment with No Allowance |  |  | Recorded Investment with Allowance |  |  | Total Recorded Investment |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 410 |  |  | $ | — |  |  | $ | 391 |  |  | $ | 391 |  |  | $ | 46 |  |  | $ | 360 |  |  | $ | 1 |
Secured by 1-4 family |  |  | 941 |  |  |  | 715 |  |  |  | 151 |  |  |  | 866 |  |  |  | 20 |  |  |  | 802 |  |  |  | 2 |
Other real estate loans |  |  | 528 |  |  |  | 483 |  |  |  | 35 |  |  |  | 518 |  |  |  | 35 |  |  |  | 1,035 |  |  |  | 3 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45 |  |  |  | — |
Total |  | $ | 1,879 |  |  | $ | 1,198 |  |  | $ | 577 |  |  | $ | 1,775 |  |  | $ | 101 |  |  | $ | 2,242 |  |  | $ | 6 |
The “Recorded Investment” amounts in the table above represent the outstanding principal balance on each loan represented in the table. The “Unpaid Principal Balance” represents the outstanding principal balance on each loan represented in the table plus any amounts that have been charged off on each loan and/or payments that have been applied towards principal on non-accrual loans. Only loan classes with balances are included in the tables above. As of June 30, 2020, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $4.5 million. At June 30, 2020, $4.3 million of the loans classified as TDRs were performing under the restructured terms and were not considered non-performing assets. There were $360 thousand in TDRs at December 31, 2019, none of which were performing under the restructured terms. Modified terms under TDRs may include rate reductions, extension of terms that are considered to be below market, conversion to interest only, and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. There was one loan secured by commercial real estate modified as a TDR during the three and six months ended June 30, 2020 because the loan was converted to interest only. The loan modified as a TDR during the three and six months ended June 30, 2020 increased the specific reserve component of the allowance for loan losses by $23 thousand at June 30, 2020. There were no loans modified under TDRs during the three months ended June 30, 2019. There was one loan secured by 1-4 family residential real estate modified as a TDR during the six months ended June 30, 2019 because the loan was extended with terms considered to be below market. The loan modified as a TDR during the six months ended June 30, 2019 did not have an impact on the allowance for loan losses at June 30, 2019. In response to the COVID-19 pandemic, the Company is executing a payment deferral program for its individual and business customers adversely affected by the pandemic. As of June 30, 2020, loans participating in the program totaled $182.6 million, or 28% of the Bank's loan balances. The majority of the loan deferral periods were for 90 days and were for loans not more than 30 days past due as of December 31, 2019. As such, they were not considered TDRs based on the relief provisions of the CARES Act and recent interagency regulatory guidance. For the three and six months ended June 30, 2020 and 2019, there were no TDRs that subsequently defaulted within twelve months of the loan modification. Management defines default as over ninety days past due or the foreclosure and repossession of the collateral or charge-off of the loan during the twelve month period subsequent to the modification.

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- Definition The entire disclosure for allowance for credit losses. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI http://asc.fasb.org/topic&trid=2196771 + Details
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