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Note 5 - Allowance for Loan Losses on Loans and Nonperforming Assets | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Allowance for Credit Losses [Text Block] | Note 5: Allowance for Credit Losses on Loans and Nonperforming Assets Please refer to Note 1: Summary of Significant Accounting Policies for information on evaluation of collectively evaluated loans and individually evaluated loans and associated reserves, and policies regarding nonaccruals, past due status and charge-offs. A detailed analysis showing the allowance roll-forward by portfolio segment for the periods indicated follows:
|  | Activity in the Allowance for Credit Losses on Loans for the Year Ended December 31, 2023 |
|  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non- Real Estate |  |  | Unallocated |  |  | Total |
Balance, December 31, 2022 |  | $ | 450 |  |  | $ | 2,199 |  |  | $ | 3,642 |  |  | $ | 930 |  |  | $ | 319 |  |  | $ | 506 |  |  | $ | 179 |  |  | $ | 8,225 |
Adoption of ASU 2016-13 |  |  | (21 | ) |  |  | 1,261 |  |  |  | 700 |  |  |  | 216 |  |  |  | (15 | ) |  |  | 72 |  |  |  | 129 |  |  |  | 2,342 |
Charge-offs |  |  | - |  |  |  | (17 | ) |  |  | - |  |  |  | (214 | ) |  |  | - |  |  |  | (247 | ) |  |  | - |  |  |  | (478 | )
Recoveries |  |  | - |  |  |  | 103 |  |  |  | 45 |  |  |  | 6 |  |  |  | - |  |  |  | 129 |  |  |  | - |  |  |  | 283 |
(Recovery of) provision for credit losses |  |  | (21 | ) |  |  | (384 | ) |  |  | (811 | ) |  |  | (256 | ) |  |  | 29 |  |  |  | 123 |  |  |  | 42 |  |  |  | (1,278 | )
Balance, December 31, 2023 |  | $ | 408 |  |  | $ | 3,162 |  |  | $ | 3,576 |  |  | $ | 682 |  |  | $ | 333 |  |  | $ | 583 |  |  | $ | 350 |  |  | $ | 9,094 |
|  | Activity in the Allowance for Loan Losses by Segment for the Year Ended December 31, 2022 |
|  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non- Real Estate |  |  | Unallocated |  |  | Total |
Balance, December 31, 2021 |  | $ | 422 |  |  | $ | 1,930 |  |  | $ | 3,121 |  |  | $ | 1,099 |  |  | $ | 297 |  |  | $ | 444 |  |  | $ | 361 |  |  | $ | 7,674 |
Charge-offs |  |  | - |  |  |  | (13 | ) |  |  | - |  |  |  | (2 | ) |  |  | - |  |  |  | (352 | ) |  |  | - |  |  |  | (367 | )
Recoveries |  |  | - |  |  |  | 29 |  |  |  | 49 |  |  |  | 11 |  |  |  | - |  |  |  | 123 |  |  |  | - |  |  |  | 212 |
Provision for (recovery of) loan losses |  |  | 28 |  |  |  | 253 |  |  |  | 472 |  |  |  | (178 | ) |  |  | 22 |  |  |  | 291 |  |  |  | (182 | ) |  |  | 706 |
Balance, December 31, 2022 |  | $ | 450 |  |  | $ | 2,199 |  |  | $ | 3,642 |  |  | $ | 930 |  |  | $ | 319 |  |  | $ | 506 |  |  | $ | 179 |  |  | $ | 8,225 |
A detailed analysis showing the allowance and loan portfolio by segment and evaluation method as of the dates indicated follows:
|  | Allowance for Credit Losses on Loans by Segment and Evaluation Method as of |
December 31, 2023 |  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non- Real Estate |  |  | Unallocated |  |  | Total |
Individually evaluated |  | $ | - |  |  | $ | 74 |  |  | $ | 367 |  |  | $ | 126 |  |  | $ | - |  |  | $ | 5 |  |  | $ | - |  |  | $ | 572 |
Collectively evaluated |  |  | 408 |  |  |  | 3,088 |  |  |  | 3,209 |  |  |  | 556 |  |  |  | 333 |  |  |  | 578 |  |  |  | 350 |  |  |  | 8,522 |
Total |  | $ | 408 |  |  | $ | 3,162 |  |  | $ | 3,576 |  |  | $ | 682 |  |  | $ | 333 |  |  | $ | 583 |  |  | $ | 350 |  |  | $ | 9,094 |
|  | Loans by Segment and Evaluation Method as of |
December 31, 2023 |  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non-Real Estate |  |  | Total |
Individually evaluated |  | $ | 286 |  |  | $ | 1,183 |  |  | $ | 8,805 |  |  | $ | 227 |  |  | $ | - |  |  | $ | 43 |  |  | $ | 10,544 |
Collectively evaluated |  |  | 55,093 |  |  |  | 240,381 |  |  |  | 410,325 |  |  |  | 41,328 |  |  |  | 60,551 |  |  |  | 38,953 |  |  |  | 846,631 |
Total |  | $ | 55,379 |  |  | $ | 241,564 |  |  | $ | 419,130 |  |  | $ | 41,555 |  |  | $ | 60,551 |  |  | $ | 38,996 |  |  | $ | 857,175 |
|  | Allowance for Loan Losses by Segment and Evaluation Method as of |
December 31, 2022 |  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non- Real Estate |  |  | Unallocated |  |  | Total |
Individually evaluated |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Collectively evaluated |  |  | 450 |  |  |  | 2,199 |  |  |  | 3,642 |  |  |  | 930 |  |  |  | 319 |  |  |  | 506 |  |  |  | 179 |  |  |  | 8,225 |
Total |  | $ | 450 |  |  | $ | 2,199 |  |  | $ | 3,642 |  |  | $ | 930 |  |  | $ | 319 |  |  | $ | 506 |  |  | $ | 179 |  |  | $ | 8,225 |
|  | Loans by Segment and Evaluation Method as of |
December 31, 2022 |  | Real Estate Construction |  |  | Consumer Real Estate |  |  | Commercial Real Estate |  |  | Commercial Non-Real Estate |  |  | Public Sector and IDA |  |  | Consumer Non- Real Estate |  |  | Total |
Individually evaluated |  | $ | - |  |  | $ | 186 |  |  | $ | 2,583 |  |  | $ | 263 |  |  | $ | - |  |  | $ | - |  |  | $ | 3,032 |
Collectively evaluated |  |  | 54,579 |  |  |  | 220,866 |  |  |  | 435,305 |  |  |  | 57,389 |  |  |  | 48,074 |  |  |  | 33,948 |  |  |  | 850,161 |
Total |  | $ | 54,579 |  |  | $ | 221,052 |  |  | $ | 437,888 |  |  | $ | 57,652 |  |  | $ | 48,074 |  |  | $ | 33,948 |  |  | $ | 853,193 |
A summary of ratios for the allowance for credit losses, as of the dates indicated, follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |
Ratio of ACLL to the end of period loans, net of unearned income and deferred fees and costs |  |  | 1.06 | % |  |  | 0.96 | %
Ratio of net charge-offs to average loans, net of unearned income and deferred fees and costs |  |  | 0.02 | % |  |  | 0.02 | %
The following table presents nonaccrual loans, by class, as of the dates indicated:
|  | CECL |  |  | Incurred Loss |
|  | December 31, 2023 |  |  | December 31, 2022 |
Nonaccrual Loans |  | With No Allowance |  |  | With an Allowance |  |  | Total |  |  |  |  |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential closed-end first liens |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 91 |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate owner-occupied |  |  | 2,177 |  |  |  | 231 |  |  |  | 2,408 |  |  |  | 2,493 |
Commercial Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | - |  |  |  | 221 |  |  |  | 221 |  |  |  | 263 |
Total |  | $ | 2,177 |  |  | $ | 452 |  |  | $ | 2,629 |  |  | $ | 2,847 |
In accordance with CECL, the Company identifies individually evaluated loans when their risk characteristics become different from their pool. Under previous GAAP, the Company identified loans for potential impairment through a variety of means, including, but not limited to, ongoing loan review, renewal processes, delinquency data, market communications, and public information. When the Company determined that it was probable all principal and interest amounts due would not be collected in accordance with the contractual terms of the loan agreement, the loan was generally deemed impaired and individually evaluated. For further information on the impairment process under previous GAAP, please refer to the Company’s 2022 Form 10-K. A summary of individually evaluated loans as of the date indicated follows.
|  | Individually Evaluated Loans under Incurred Loss as of December 31, 2022 |
|  | Principal Balance |  |  | Recorded Investment(1) |  |  | Recorded Investment(1) for Which There is No Related Allowance |  |  | Recorded Investment(1) for Which There is a Related Allowance |  |  | Related Allowance |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investor-owned residential real estate |  | $ | 186 |  |  | $ | 186 |  |  | $ | 186 |  |  | $ | - |  |  | $ | - |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate, owner occupied |  |  | 3,248 |  |  |  | 2,583 |  |  |  | 2,583 |  |  |  | - |  |  |  | - |
Commercial Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 285 |  |  |  | 263 |  |  |  | 263 |  |  |  | - |  |  |  | - |
Total |  | $ | 3,719 |  |  | $ | 3,032 |  |  | $ | 3,032 |  |  | $ | - |  |  | $ | - |
| (1) | Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.
The following table shows the average recorded investment and interest income recognized for individually evaluated loans under the incurred loss model for the period indicated. Only classes with individually evaluated loans are presented.
|  | For the Year Ended December 31, 2022 |
|  | Average Recorded Investment(1) |  |  | Interest Income Recognized |
Consumer Real Estate |  |  |  |  |  |  |  |
Investor-owned residential real estate |  | $ | 188 |  |  | $ | 13 |
Commercial Real Estate |  |  |  |  |  |  |  |
Commercial real estate, owner occupied |  |  | 2,587 |  |  |  | 5 |
Commercial real estate, other |  |  | 729 |  |  |  | - |
Commercial Non-Real Estate |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 272 |  |  |  | - |
Total |  | $ | 3,776 |  |  | $ | 18 |
| (1) | Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.
The following tables present the aging of past due loans, by loan pool, as of the dates indicated.
December 31, 2023 |  | Accruing Current Loans |  |  | Accruing Loans 30 – 89 Days Past Due |  |  | Accruing Loans 90 or More Days Past Due |  |  | Nonaccrual Loans |  |  | Total Loans |  |  | Accruing and Nonaccrual 90 or More Days Past Due |
Real Estate Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, 1-4 family residential |  | $ | 13,442 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 13,442 |  |  | $ | - |
Construction, other |  |  | 41,916 |  |  |  | 21 |  |  |  | - |  |  |  | - |  |  |  | 41,937 |  |  |  | - |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity line |  |  | 17,178 |  |  |  | 104 |  |  |  | - |  |  |  | - |  |  |  | 17,282 |  |  |  | - |
Residential closed-end first liens |  |  | 124,886 |  |  |  | 662 |  |  |  | 131 |  |  |  | - |  |  |  | 125,679 |  |  |  | 131 |
Residential closed-end junior liens |  |  | 5,027 |  |  |  | 12 |  |  |  | - |  |  |  | - |  |  |  | 5,039 |  |  |  | - |
Investor-owned residential real estate |  |  | 93,564 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 93,564 |  |  |  | - |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Multifamily residential real estate |  |  | 119,052 |  |  |  | 195 |  |  |  | - |  |  |  | - |  |  |  | 119,247 |  |  |  | - |
Commercial real estate owner-occupied |  |  | 114,477 |  |  |  | 336 |  |  |  | - |  |  |  | 2,408 |  |  |  | 117,221 |  |  |  | 231 |
Commercial real estate, other |  |  | 182,662 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 182,662 |  |  |  | - |
Commercial Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 41,249 |  |  |  | 57 |  |  |  | 28 |  |  |  | 221 |  |  |  | 41,555 |  |  |  | 28 |
Public Sector and IDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  |  | 60,551 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 60,551 |  |  |  | - |
Consumer Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit cards |  |  | 4,648 |  |  |  | 17 |  |  |  | 3 |  |  |  | - |  |  |  | 4,668 |  |  |  | 3 |
Automobile |  |  | 12,126 |  |  |  | 135 |  |  |  | - |  |  |  | - |  |  |  | 12,261 |  |  |  | - |
Other consumer loans |  |  | 21,934 |  |  |  | 107 |  |  |  | 26 |  |  |  | - |  |  |  | 22,067 |  |  |  | 26 |
Total |  | $ | 852,712 |  |  | $ | 1,646 |  |  | $ | 188 |  |  | $ | 2,629 |  |  | $ | 857,175 |  |  | $ | 419 |
December 31, 2022 |  | Accruing Current Loans |  |  | Accruing Loans 30 – 89 Days Past Due |  |  | Accruing Loans 90 or More Days Past Due |  |  | Nonaccrual Loans |  |  | Total Loans |  |  | Accruing and Nonaccrual 90 or More Days Past Due |
Real Estate Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, 1-4 family residential |  | $ | 12,538 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 12,538 |  |  | $ | - |
Construction, other |  |  | 42,041 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 42,041 |  |  |  | - |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity line |  |  | 15,010 |  |  |  | 16 |  |  |  | - |  |  |  | - |  |  |  | 15,026 |  |  |  | - |
Residential closed-end first liens |  |  | 121,807 |  |  |  | 750 |  |  |  | - |  |  |  | 91 |  |  |  | 122,648 |  |  |  | 91 |
Residential closed-end junior liens |  |  | 2,446 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,446 |  |  |  | - |
Investor-owned residential real estate |  |  | 80,524 |  |  |  | 408 |  |  |  | - |  |  |  | - |  |  |  | 80,932 |  |  |  | - |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Multifamily residential real estate |  |  | 127,312 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 127,312 |  |  |  | - |
Commercial real estate owner-occupied |  |  | 126,640 |  |  |  | - |  |  |  | - |  |  |  | 2,493 |  |  |  | 129,133 |  |  |  | 252 |
Commercial real estate, other |  |  | 181,443 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 181,443 |  |  |  | - |
Commercial Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 57,373 |  |  |  | 16 |  |  |  | - |  |  |  | 263 |  |  |  | 57,652 |  |  |  | - |
Public Sector and IDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  |  | 48,074 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 48,074 |  |  |  | - |
Consumer Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit cards |  |  | 4,592 |  |  |  | 3 |  |  |  | 2 |  |  |  | - |  |  |  | 4,597 |  |  |  | 2 |
Automobile |  |  | 9,833 |  |  |  | 102 |  |  |  | - |  |  |  | - |  |  |  | 9,935 |  |  |  | - |
Other consumer loans |  |  | 19,317 |  |  |  | 93 |  |  |  | 6 |  |  |  | - |  |  |  | 19,416 |  |  |  | 6 |
Total |  | $ | 848,950 |  |  | $ | 1,388 |  |  | $ | 8 |  |  | $ | 2,847 |  |  | $ | 853,193 |  |  | $ | 351 |
Collateral Dependent Loans Loans are collateral dependent when repayment is expected substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Collateral dependent loans are individually evaluated. The Company measures the ACL on collateral dependent loans based upon the fair value of the collateral, as permitted by ASU 2016-13. Fair value of the collateral is adjusted for liquidation costs/discounts. If the fair value of the collateral falls below the amortized cost of the loan, the shortfall is recognized in the ACLL. If the fair value of the collateral exceeds the amortized cost, no ACL is required. As of December 31, 2023, three of the Company’s individually evaluated loans were considered collateral dependent, and all are secured by real estate. The following table provides details on collateral dependent loans:
December 31, 2023 |  | Amortized Cost |  |  | Related Allowance |
Consumer Real Estate |  |  |  |  |  |  |  |
Residential closed-end first lien |  | $ | 7 |  |  | $ | - |
Commercial Real Estate |  |  |  |  |  |  |  |
Commercial real estate owner-occupied |  |  | 2,177 |  |  |  | - |
Total Loans |  | $ | 2,184 |  |  | $ | - |
Credit Quality The Company categorizes loans by risk based on relevant information about the ability of borrowers to service their debt, including: collateral and financial information, historical payment experience, credit documentation and current economic trends, among other factors. At origination, each loan is assigned a risk rating. Ongoing analysis of the loan portfolio adjusts risk ratings on an individual loan basis to reflect updated information. General descriptions of risk ratings are as follows:
| ● | Pass: loans with acceptable credit quality are rated pass.
| ● | Special mention: loans with potential weaknesses due to challenging economic or financial conditions are rated special mention.
| ● | Classified: loans with well-defined weaknesses that heighten the risk of default are rated classified.
The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of the date indicated.
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  | Revolving Loans |  |  |  |
December 31, 2023 |  | Prior |  |  | 2019 |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | Revolving |  |  | Converted to Term |  |  | Total |
Construction, residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | - |  |  | $ | - |  |  | $ | 246 |  |  | $ | 158 |  |  | $ | 3,275 |  |  | $ | 5,157 |  |  | $ | 4,606 |  |  | $ | - |  |  | $ | 13,442 |
Construction, other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,741 |  |  | $ | 1,094 |  |  | $ | 1,305 |  |  | $ | 12,671 |  |  | $ | 17,397 |  |  | $ | 4,884 |  |  | $ | 1,559 |  |  | $ | - |  |  | $ | 41,651 |
Classified |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 286 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 286 |
Total |  | $ | 2,741 |  |  | $ | 1,094 |  |  | $ | 1,305 |  |  | $ | 12,957 |  |  | $ | 17,397 |  |  | $ | 4,884 |  |  | $ | 1,559 |  |  | $ | - |  |  | $ | 41,937 |
Equity lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 51 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 17,182 |  |  | $ | - |  |  | $ | 17,233 |
Classified |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 49 |  |  |  | - |  |  |  | 49 |
Total |  | $ | 51 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 17,231 |  |  | $ | - |  |  | $ | 17,282 |
Residential closed-end first liens |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 32,404 |  |  | $ | 5,806 |  |  | $ | 14,634 |  |  | $ | 31,414 |  |  | $ | 29,787 |  |  | $ | 11,208 |  |  | $ | - |  |  | $ | - |  |  | $ | 125,253 |
Classified |  |  | 426 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 426 |
Total |  | $ | 32,830 |  |  | $ | 5,806 |  |  | $ | 14,634 |  |  | $ | 31,414 |  |  | $ | 29,787 |  |  | $ | 11,208 |  |  | $ | - |  |  | $ | - |  |  | $ | 125,679 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | 17 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 17 |
Residential closed-end junior liens |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,499 |  |  | $ | 116 |  |  | $ | - |  |  | $ | 172 |  |  | $ | 1,387 |  |  | $ | 1,850 |  |  | $ | - |  |  | $ | 15 |  |  | $ | 5,039 |
Investor-owned residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 24,556 |  |  | $ | 5,162 |  |  | $ | 23,649 |  |  | $ | 19,062 |  |  | $ | 14,166 |  |  | $ | 4,880 |  |  | $ | 1,283 |  |  | $ | 98 |  |  | $ | 92,856 |
Classified |  |  | 708 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 708 |
Total |  | $ | 25,264 |  |  | $ | 5,162 |  |  | $ | 23,649 |  |  | $ | 19,062 |  |  | $ | 14,166 |  |  | $ | 4,880 |  |  | $ | 1,283 |  |  | $ | 98 |  |  | $ | 93,564 |
Multifamily residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 40,092 |  |  | $ | 1,806 |  |  | $ | 2,148 |  |  | $ | 40,544 |  |  | $ | 25,681 |  |  | $ | 8,850 |  |  | $ | 126 |  |  | $ | - |  |  | $ | 119,247 |
Commercial real estate, owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 41,573 |  |  | $ | 11,091 |  |  | $ | 23,407 |  |  | $ | 4,792 |  |  | $ | 16,720 |  |  | $ | 7,914 |  |  | $ | 2,919 |  |  | $ | - |  |  | $ | 108,416 |
Special mention |  |  | 6,396 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,396 |
Classified |  |  | 2,409 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,409 |
Total |  | $ | 50,378 |  |  | $ | 11,091 |  |  | $ | 23,407 |  |  | $ | 4,792 |  |  | $ | 16,720 |  |  | $ | 7,914 |  |  | $ | 2,919 |  |  | $ | - |  |  | $ | 117,221 |
Commercial real estate, other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 68,889 |  |  | $ | 21,841 |  |  | $ | 19,098 |  |  | $ | 36,157 |  |  | $ | 22,697 |  |  | $ | 13,279 |  |  | $ | 701 |  |  | $ | - |  |  | $ | 182,662 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 6,004 |  |  | $ | 438 |  |  | $ | 1,060 |  |  | $ | 12,667 |  |  | $ | 6,954 |  |  | $ | 6,938 |  |  | $ | 7,267 |  |  | $ | - |  |  | $ | 41,328 |
Classified |  |  | 220 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 227 |
Total |  | $ | 6,224 |  |  | $ | 438 |  |  | $ | 1,060 |  |  | $ | 12,667 |  |  | $ | 6,961 |  |  | $ | 6,938 |  |  | $ | 7,267 |  |  | $ | - |  |  | $ | 41,555 |
YTD gross charge-offs |  | $ | - |  |  | $ | 12 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 12 |  |  | $ | 190 |  |  | $ | - |  |  | $ | 214 |
Public sector and IDA |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 20,817 |  |  | $ | - |  |  | $ | 235 |  |  | $ | 26,702 |  |  | $ | 6,335 |  |  | $ | 6,462 |  |  | $ | - |  |  | $ | - |  |  | $ | 60,551 |
Credit cards |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 4,668 |  |  | $ | - |  |  | $ | 4,668 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 39 |  |  | $ | - |  |  | $ | 39 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 78 |  |  | $ | 204 |  |  | $ | 563 |  |  | $ | 1,619 |  |  | $ | 2,750 |  |  | $ | 7,047 |  |  | $ | - |  |  | $ | - |  |  | $ | 12,261 |
YTD gross charge-offs |  | $ | - |  |  | $ | 3 |  |  | $ | - |  |  | $ | 1 |  |  | $ | 38 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 42 |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 93 |  |  | $ | 334 |  |  | $ | 811 |  |  | $ | 1,943 |  |  | $ | 5,815 |  |  | $ | 12,356 |  |  | $ | 672 |  |  | $ | - |  |  | $ | 22,024 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 17 |  |  |  | - |  |  |  | - |  |  |  | 17 |
Classified |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 11 |  |  |  | 15 |  |  |  | - |  |  |  | - |  |  |  | 26 |
Total |  | $ | 93 |  |  | $ | 334 |  |  | $ | 811 |  |  | $ | 1,943 |  |  | $ | 5,826 |  |  | $ | 12,388 |  |  | $ | 672 |  |  | $ | - |  |  | $ | 22,067 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 19 |  |  | $ | 52 |  |  | $ | 95 |  |  | $ | - |  |  | $ | - |  |  | $ | 166 |
Total Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 238,797 |  |  | $ | 47,892 |  |  | $ | 87,156 |  |  | $ | 187,901 |  |  | $ | 152,964 |  |  | $ | 90,825 |  |  | $ | 40,983 |  |  | $ | 113 |  |  | $ | 846,631 |
Special mention |  |  | 6,396 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 17 |  |  |  | - |  |  |  | - |  |  |  | 6,413 |
Classified |  |  | 3,763 |  |  |  | - |  |  |  | - |  |  |  | 286 |  |  |  | 18 |  |  |  | 15 |  |  |  | 49 |  |  |  | - |  |  |  | 4,131 |
Total |  | $ | 248,956 |  |  | $ | 47,892 |  |  | $ | 87,156 |  |  | $ | 188,187 |  |  | $ | 152,982 |  |  | $ | 90,857 |  |  | $ | 41,032 |  |  | $ | 113 |  |  | $ | 857,175 |
YTD gross charge-offs |  | $ | - |  |  | $ | 15 |  |  | $ | 17 |  |  | $ | 20 |  |  | $ | 90 |  |  | $ | 107 |  |  | $ | 229 |  |  | $ | - |  |  | $ | 478 |
The following table presents the recorded investment of collectively evaluated loans by loan pool and credit quality as of the date indicated.
December 31, 2022 |  | Pass |  |  | Special Mention |  |  | Classified |
Real Estate Construction |  |  |  |  |  |  |  |  |  |  |  |
Construction, 1-4 family residential |  | $ | 12,538 |  |  | $ | - |  |  | $ | - |
Construction, other |  |  | 41,741 |  |  |  | - |  |  |  | 300 |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |
Equity lines |  |  | 15,026 |  |  |  | - |  |  |  | - |
Residential closed-end first liens |  |  | 122,187 |  |  |  | - |  |  |  | 461 |
Residential closed-end junior liens |  |  | 2,446 |  |  |  | - |  |  |  | - |
Investor-owned residential real estate |  |  | 80,143 |  |  |  | - |  |  |  | 603 |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |
Multifamily residential real estate |  |  | 127,312 |  |  |  | - |  |  |  | - |
Commercial real estate owner-occupied |  |  | 126,550 |  |  |  | - |  |  |  | - |
Commercial real estate, other |  |  | 181,443 |  |  |  | - |  |  |  | - |
Commercial Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 57,381 |  |  |  | - |  |  |  | 8 |
Public Sector and IDA |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions |  |  | 48,074 |  |  |  | - |  |  |  | - |
Consumer Non-Real Estate |  |  |  |  |  |  |  |  |  |  |  |
Credit cards |  |  | 4,597 |  |  |  | - |  |  |  | - |
Automobile |  |  | 9,932 |  |  |  | - |  |  |  | 3 |
Other consumer |  |  | 19,398 |  |  |  | - |  |  |  | 18 |
Total |  | $ | 848,768 |  |  | $ | - |  |  | $ | 1,393 |
Loan Modifications to Borrowers Experiencing Financial Difficulty The Company modifies loans for a variety of reasons. At the date of modification, the Company assesses whether the borrower is experiencing financial difficulty. If the borrower is experiencing financial difficulty, the loan’s risk rating is evaluated and is typically changed to special mention or classified, which results in individual evaluation of the loan for the ACLL. The Company modified one loan to a borrower experiencing financial difficulty during the year ended December 31, 2023. The following table presents information on the modification.
|  | Interest Only Payments
Year Ended December 31, 2023 |  | Amortized Cost Basis |  |  | % of Portfolio |  |  | Financial Effect
Commercial Real Estate |  |  |  |  |  |  |  |  |  |
Commercial real estate owner-occupied |  | $ | 6,396 |  |  |  | 5.46 | % |  | 6 months of interest only payments, after which remaining balance will be re-amortized to the contractual maturity date.
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty. The commercial real estate owner-occupied loan is in current status as of December 31, 2023. The loan is rated special mention and is individually evaluated using the discounted cash flow method, resulting in a specific reserve of $347. There were no loans to borrowers experiencing financial difficulty that defaulted during the year ended December 31, 2023 and were modified in the twelve months prior to that default. The Company designates three circumstances that indicate default: one or more payments that occur more than 90 days past the due date, charge-off, or foreclosure after the date of modification. Under GAAP in effect for December 31, 2022, the Company reported TDRs totaling $3,032. No new TDRs were recognized during 2022. Of the Company’s TDRs in default status as of December 31, 2022, none were modified within 12 months prior to default. ACL on Unfunded Commitments The following table presents information on the ACL for unfunded commitments for the year ended December 31, 2023:
Allowance for Credit Losses on Unfunded Commitments |
Balance, December 31, 2022 |  | $ | 35 |
Adoption of ASU 2016-13 |  |  | 207 |
Provision for credit losses |  |  | 17 |
Balance, December 31, 2023 |  | $ | 259 |

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