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Note 4 - Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Allowance for Credit Losses [Text Block] | Note 4. Allowance for Loan Losses The following tables present, as of December 31, 2021 and 2020, the total allowance for loan losses, the allowance by impairment methodology, and loans by impairment methodology (in thousands).
|  | December 31, 2021 |
|  | Construction and Land Development |  |  | Secure by 1-4 Family Residential |  |  | Other Real Estate |  |  | Commercial and Industrial |  |  | Consumer and Other Loans |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, December 31, 2020 |  | $ | 306 |  |  | $ | 1,022 |  |  | $ | 4,956 |  |  | $ | 784 |  |  | $ | 417 |  |  | $ | 7,485 |
Charge-offs |  |  | — |  |  |  | (15 | ) |  |  | (992 | ) |  |  | (6 | ) |  |  | (434 | ) |  |  | (1,447 | )
Recoveries |  |  | 6 |  |  |  | 65 |  |  |  | 3 |  |  |  | 7 |  |  |  | 241 |  |  |  | 322 |
Provision for (recovery of) loan losses |  |  | 33 |  |  |  | 5 |  |  |  | (737 | ) |  |  | (67 | ) |  |  | 116 |  |  |  | (650 | )
Ending Balance, December 31, 2021 |  | $ | 345 |  |  | $ | 1,077 |  |  | $ | 3,230 |  |  | $ | 718 |  |  | $ | 340 |  |  | $ | 5,710 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |  |  |  | — |  |  |  | 55 |
Collectively evaluated for impairment |  |  | 345 |  |  |  | 1,077 |  |  |  | 3,230 |  |  |  | 663 |  |  |  | 340 |  |  |  | 5,655 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  | 55,721 |  |  |  | 291,990 |  |  |  | 364,921 |  |  |  | 99,805 |  |  |  | 12,681 |  |  |  | 825,118 |
Individually evaluated for impairment |  |  | — |  |  |  | 765 |  |  |  | 30 |  |  |  | 1,509 |  |  |  | — |  |  |  | 2,304 |
Collectively evaluated for impairment |  |  | 55,721 |  |  |  | 291,225 |  |  |  | 364,891 |  |  |  | 98,296 |  |  |  | 12,681 |  |  |  | 822,814 |
|  | December 31, 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 | ) |  |  | (715 | ) |  |  | (784 | )
Recoveries |  |  | 2 |  |  |  | 8 |  |  |  | 2 |  |  |  | 18 |  |  |  | 305 |  |  |  | 335 |
Provision for (recovery of) loan losses |  |  | (160 | ) |  |  | 238 |  |  |  | 2,658 |  |  |  | 273 |  |  |  | (9 | ) |  |  | 3,000 |
Ending Balance, December 31, 2020 |  | $ | 306 |  |  | $ | 1,022 |  |  | $ | 4,956 |  |  | $ | 784 |  |  | $ | 417 |  |  | $ | 7,485 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | — |  |  |  | — |  |  |  | 2,065 |  |  |  | 158 |  |  |  | — |  |  |  | 2,223 |
Collectively evaluated for impairment |  |  | 306 |  |  |  | 1,022 |  |  |  | 2,891 |  |  |  | 626 |  |  |  | 417 |  |  |  | 5,262 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  | 27,328 |  |  |  | 235,814 |  |  |  | 246,883 |  |  |  | 109,838 |  |  |  | 10,051 |  |  |  | 629,914 |
Individually evaluated for impairment |  |  | 276 |  |  |  | 449 |  |  |  | 4,441 |  |  |  | 1,548 |  |  |  | — |  |  |  | 6,714 |
Collectively evaluated for impairment |  |  | 27,052 |  |  |  | 235,365 |  |  |  | 242,442 |  |  |  | 108,290 |  |  |  | 10,051 |  |  |  | 623,200 |
Impaired loans and the related allowance at December 31, 2021 and 2020, were as follows (in thousands):
|  | December 31, 2021 |
|  | 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 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 91 |  |  | $ | — |
Secured by 1-4 family |  |  | 889 |  |  |  | 766 |  |  |  | — |  |  |  | 766 |  |  |  | — |  |  |  | 429 |  |  |  | 9 |
Other real estate loans |  |  | 40 |  |  |  | 29 |  |  |  | — |  |  |  | 29 |  |  |  | — |  |  |  | 2,384 |  |  |  | — |
Commercial and industrial |  |  | 1,673 |  |  |  | — |  |  |  | 1,509 |  |  |  | 1,509 |  |  |  | 55 |  |  |  | 1,613 |  |  |  | — |
Total |  | $ | 2,602 |  |  | $ | 795 |  |  | $ | 1,509 |  |  | $ | 2,304 |  |  | $ | 55 |  |  | $ | 4,517 |  |  | $ | 9 |
|  | December 31, 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 |  |  | $ | 276 |  |  | $ | — |  |  | $ | 276 |  |  | $ | — |  |  | $ | 344 |  |  | $ | — |
Secured by 1-4 family |  |  | 568 |  |  |  | 449 |  |  |  | — |  |  |  | 449 |  |  |  | — |  |  |  | 517 |  |  |  | 1 |
Other real estate loans |  |  | 4,492 |  |  |  | 171 |  |  |  | 4,270 |  |  |  | 4,441 |  |  |  | 2,065 |  |  |  | 2,623 |  |  |  | 109 |
Commercial and industrial |  |  | 1,582 |  |  |  | — |  |  |  | 1,548 |  |  |  | 1,548 |  |  |  | 158 |  |  |  | 393 |  |  |  | 77 |
Total |  | $ | 6,967 |  |  | $ | 896 |  |  | $ | 5,818 |  |  | $ | 6,714 |  |  | $ | 2,223 |  |  | $ | 3,877 |  |  | $ | 187 |
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 December 31, 2021, loans classified as TDRs and included in impaired loans in the disclosure above totaled $1.6 million. At December 31, 2021, none of the loans classified as TDRs were performing under the restructured terms and all were considered non-performing assets. There were $6.0 million in TDRs at December 31, 2020, 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 were no loans modified as TDRs during the year ended December 31, 2021. The TDRs described above increased the specific reserve component of the allowance for loan losses by $55 thousand at December 31, 2021. In response to the COVID-19 pandemic, the Company created and implemented a loan payment deferral program for individual and business customers beginning in the first quarter of 2020, which provided them the opportunity to defer monthly payments for 90 days. As of December 31, 2021, there were no loans remaining in the program. These loans were not considered TDRs because they were modified in accordance with relief provisions of the CARES Act and recent interagency regulatory guidance. During the fourth quarter of 2020, the Company modified terms of certain loans for customers that continued to be negatively impacted by the COVID-19 pandemic. The loan modifications lowered borrower loan payments by allowing interest only payments for periods ranging between 6 and 24 months. As of December 31, 2021, loans that were modified totaled $11.5 million. These loans were not considered TDRs because they were modified in accordance with relief provisions of the CARES Act. For the years ended December 31, 2021 and 2020, there were no TDRs that subsequently defaulted within twelve months of the loan modification. Management defines default as over 90 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. There were no non-accrual loans excluded from impaired loan disclosure at December 31, 2021 and December 31, 2020. Had non-accrual loans performed in accordance with their original contract terms, the Company would have recognized additional interest income in the amount of $155 thousand and $271 thousand during the years ended December 31, 2021 and 2020, respectively.

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