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Note 4 - Allowance for Loan Losses

9 Months Ended

Sep. 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 September 30, 2022, December 31, 2021 and September 30, 2021, the total allowance for loan losses, the allowance by impairment methodology, and loans by impairment methodology (in thousands):

	September 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		—		(6	)		—		—		(387	)		(393	)
Recoveries		10		15			12		144		194			375
Provision for (recovery of) loan losses		99		(22	)		331		69		123			600
Ending Balance, September 30, 2022	$	454	$	1,064		$	3,573	$	931	$	270		$	6,292
Ending Balance:
Individually evaluated for impairment		—		—			—		—		—			—
Collectively evaluated for impairment		454		1,064			3,573		931		270			6,292
Loans:
Ending Balance	$	51,352	$	317,414		$	417,504	$	112,145	$	8,099		$	906,514
Individually evaluated for impairment		—		549			17		—		—			566
Collectively evaluated for impairment		51,352		316,865			417,487		112,145		8,099			905,948

	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

September 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
— (15 ) (992 ) — (255 ) (1,262 )

Recoveries
— 46 2 6 157 211

(Recovery of) provision for loan losses
(25 ) (97 ) (813 ) (81 ) 16 (1,000 )

Ending Balance, September 30, 2021
$ 281 $ 956 $ 3,153 $ 709 $ 335 $ 5,434

Ending Balance:

Individually evaluated for impairment
— — — 84 — 84

Collectively evaluated for impairment
281 956 3,153 625 335 5,350

Loans:

Ending Balance
$ 45,120 $ 294,216 $ 362,643 $ 105,664 $ 14,768 $ 822,411

Individually evaluated for impairment
— 470 153 1,535 — 2,158

Collectively evaluated for impairment
45,120 293,746 362,490 104,129 14,768 820,253

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

September 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
$ 560 $ 549 $ — $ 549 $ — $ 593 $ 11

Other real estate loans
29 17 — 17 — 24 —

Commercial and industrial
— — — — — 823 —

Total
$ 589 $ 566 $ — $ 566 $ — $ 1,440 $ 11

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

September 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
611 470 — 470 — 420 3

Other real estate loans
167 153 — 153 — 3,159 1

Commercial and industrial
1,655 — 1,535 1,535 84 1,548 —

Total
$ 2,433 $ 623 $ 1,535 $ 2,158 $ 84 $ 5,400 $ 4

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, 2022, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $110 thousand. At September 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 nine months ended September 30, 2022 and 2021.

For the three and nine months ended September 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.