XML 25 R13.htm IDEA: XBRL DOCUMENT

Note 4 - Allowance for Loan Losses

9 Months Ended

Sep. 30, 2020

Allowance for Credit Losses [Text Block]

Note 4. Allowance for Loan Losses

The following tables present, as of September 30, 2020, December 31, 2019 and September 30, 2019, the total allowance for loan losses, the allowance by impairment methodology, and loans by impairment methodology (in thousands):

	September 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	)		(550	)		(619	)
Recoveries		2			6		2		17			235			262
Provision for (recovery of) loan losses		(164	)		305		2,691		398			(30	)		3,200
Ending Balance, September 30, 2020	$	302		$	1,087	$	4,989	$	908		$	491		$	7,777
Ending Balance:
Individually evaluated for impairment		—			—		2,108		181			—			2,289
Collectively evaluated for impairment		302			1,087		2,881		727			491			5,488
Loans:
Ending Balance	$	27,472		$	234,198	$	250,319	$	125,277		$	11,102		$	648,368
Individually evaluated for impairment		283			469		4,674		1,548			—			6,974
Collectively evaluated for impairment		27,189			233,729		245,645		123,729			11,102			641,394

	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

September 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 ) (543 ) (603 )

Recoveries
50 8 — 6 242 306

Provision for (recovery of) loan losses
(119 ) (71 ) 166 98 126 200

Ending Balance, September 30, 2019
$ 492 $ 774 $ 2,326 $ 566 $ 754 $ 4,912

Ending Balance:

Individually evaluated for impairment
31 16 27 — — 74

Collectively evaluated for impairment
461 758 2,299 566 754 4,838

Loans:

Ending Balance
$ 45,193 $ 226,828 $ 233,067 $ 50,557 $ 15,608 $ 571,253

Individually evaluated for impairment
376 690 500 — — 1,566

Collectively evaluated for impairment
44,817 226,138 232,567 50,557 15,608 569,687

Impaired loans and the related allowance at September 30, 2020, December 31, 2019 and September 30, 2019, were as follows (in thousands):

	September 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	$	325	$	283	$	—	$	283	$	—	$	366	$	—
Secured by 1-4 family		578		469		—		469		—		536		1
Other real estate loans		4,698		361		4,313		4,674		2,108		1,974		109
Commercial and industrial		1,548		—		1,548		1,548		181		6		77
Total	$	7,149	$	1,113	$	5,861	$	6,974	$	2,289	$	2,882	$	187

	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

	September 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	$	403	$	—	$	376	$	376	$	31	$	368	$	1
Secured by 1-4 family		781		543		147		690		16		800		1
Other real estate loans		515		473		27		500		27		858		3
Commercial and industrial		—		—		—		—		—		30		—
Total	$	1,699	$	1,016	$	550	$	1,566	$	74	$	2,056	$	5

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 September 30, 2020, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $6.0 million. At September 30, 2020, none of the loans classified as TDRs were performing under the restructured terms and all were 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 commercial and industrial loan modified as a TDR during the three months ended September 30, 2020 because interest and principal payments on the loan were deferred for a significant period of time. In addition to this loan, there was one loan secured by commercial real estate modified as a TDR during the nine months ended September 30, 2020 because the loan was converted to interest only. The loans modified as TDRs during the three and nine months ended September 30, 2020 increased the specific reserve component of the allowance for loan losses by $2.3 million at September 30, 2020. There were no loans modified under TDRs during the three months ended September 30, 2019. There was one loan secured by 1-4 family residential real estate modified as a TDR during the nine months ended September 30, 2019 because the loan was extended with terms considered to be below market. The loan modified as a TDR during the nine months ended September 30, 2019 did not have an impact on the allowance for loan losses at September 30, 2019.

In response to the COVID-19 pandemic, the Company offered a payment deferral program for its individual and business customers adversely affected by the pandemic. As of September 30, 2020, loans participating in the program totaled $22.6 million, or 3% of the Bank's loan balances. These loans were not considered TDRs because they were modified in accordance with the relief provisions of the CARES Act and recent interagency regulatory guidance.

For the three and nine months ended September 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.