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Note 4 - Allowance for Loan Losses

6 Months Ended

Jun. 30, 2022

Allowance for Credit Losses [Text Block]

Note 4. Allowance for Loan Losses

The following tables present, as of and during the periods ended June 30, 2022, December 31, 2021 and June 30, 2021, the total allowance for loan losses, the allowance by impairment methodology, and loans by impairment methodology (in thousands):

	June 30, 2022
	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, 2021	$	345		$	1,077		$	3,230	$	718		$	340		$	5,710
Charge-offs		—			(5	)		—		(8	)		(200	)		(213	)
Recoveries		7			10			4		146			138			305
Provision for (recovery of) loan losses		(9	)		(40	)		334		20			95			400
Ending Balance, June 30, 2022	$	343		$	1,042		$	3,568	$	876		$	373		$	6,202
Ending Balance:
Individually evaluated for impairment		—			—			—		—			—			—
Collectively evaluated for impairment		343			1,042			3,568		876			373			6,202
Loans:
Ending Balance	$	49,118		$	312,083		$	401,037	$	109,548		$	8,303		$	880,089
Individually evaluated for impairment		—			420			22		—			—			442
Collectively evaluated for impairment		49,118			311,663			401,015		109,548			8,303			879,647

	December 31, 2021
	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, 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

June 30, 2021

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, 2020
$ 306 $ 1,022 $ 4,956 $ 784 $ 417 $ 7,485

Charge-offs
— — (992 ) — (159 ) (1,151 )

Recoveries
— 4 1 4 122 131

Provision for (recovery of) loan losses
(32 ) (11 ) (893 ) (30 ) (34 ) (1,000 )

Ending Balance, June 30, 2021
$ 274 $ 1,015 $ 3,072 $ 758 $ 346 $ 5,465

Ending Balance:

Individually evaluated for impairment
— — — 78 — 78

Collectively evaluated for impairment
273 1,015 3,072 680 347 5,387

Loans:

Ending Balance
$ 25,035 $ 235,158 $ 245,455 $ 102,966 $ 8,734 $ 617,348

Individually evaluated for impairment
— 410 158 1,534 — 2,102

Collectively evaluated for impairment
25,035 234,748 245,297 101,432 8,734 615,246

Impaired loans and the related allowance as of and for the periods ended June 30, 2022, December 31, 2021 and June 30, 2021, were as follows (in thousands):

June 30, 2022

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:

Secured by 1-4 family residential
$ 552 $ 420 $ — $ 420 $ — $ 650 $ —

Other real estate loans
34 22 — 22 — 26 —

Commercial and industrial
— — — — — 1,241 —

Total
$ 586 $ 442 $ — $ 442 $ — $ 1,917 $ —

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 residential
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

June 30, 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
$ — $ — $ — $ — $ — $ 273 $ —

Secured by 1-4 family residential
544 410 — 410 — 429 —

Other real estate loans
169 158 — 158 — 4,447 1

Commercial and industrial
1,653 — 1,534 1,534 78 1,548 —

Total
$ 2,366 $ 568 $ 1,534 $ 2,102 $ 78 $ 6,697 $ 1

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, 2022, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $116 thousand. At June 30, 2022, none of the loans classified as TDRs were performing under the restructured terms and all were considered non-performing assets. There were $1.6 million in TDRs at December 31, 2021, $7 thousand 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 under TDRs during the three and six months ended June 30, 2022 and 2021.

For the three and six months ended June 30, 2022 and 2021, 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.

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 June 30, 2022, loans that were modified totaled $4.7 million. All modified loans were performing and were not considered TDRs because they were modified in accordance with relief provisions of the CARES Act.