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Note 7 - Loans Receivable and Credit Disclosures | 9 Months Ended
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Sep. 30, 2021
Notes to Financial Statements |
Financing Receivables [Text Block] |
7. | Loans Receivable and Credit Disclosures
The composition of loans receivable as of September 30, 2021 and December 31, 2020 is as follows (in thousands):
|  | 2021 |  |  | 2020 |
Real estate - construction |  | $ | 37,476 |  |  | $ | 45,497 |
Real estate - 1 to 4 family residential |  |  | 231,468 |  |  |  | 213,562 |
Real estate - commercial |  |  | 519,112 |  |  |  | 496,357 |
Real estate - agricultural |  |  | 153,247 |  |  |  | 151,992 |
Commercial 1 |  |  | 85,569 |  |  |  | 122,535 |
Agricultural |  |  | 101,087 |  |  |  | 102,586 |
Consumer and other |  |  | 15,346 |  |  |  | 15,048 |
|  |  | 1,143,305 |  |  |  | 1,147,577 |
Less: |  |  |  |  |  |  |  |
Allowance for loan losses |  |  | (16,830 | ) |  |  | (17,215 | )
Deferred loan (fees) and costs, net 2 |  |  | (416 | ) |  |  | (857 | )
Loans receivable, net |  | $ | 1,126,059 |  |  | $ | 1,129,505 |
1 | Commercial loan portfolio includes $14.8 million and $50.9 million of Paycheck Protection Program ("PPP") loans as of September 30, 2021 and December 31, 2020, respectively.
2 | Deferred loan (fees) and costs, net includes $0.7 million and $0.9 million of fees, net of costs, related to the PPP loans as of September 30, 2021 and December 31, 2020, respectively.
The Paycheck Protection Program (PPP) was established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted on March 27, 2020, and expanded by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, enacted December 27, 2020 and the American Rescue Plan Act, enacted March 11, 2021, in response to the Coronavirus Disease 2019 (COVID-19) pandemic. The PPP is administered by the Small Business Administration (SBA). PPP loans may be forgiven by the SBA and are 100 percent guaranteed by the SBA. Activity in the allowance for loan losses, on a disaggregated basis, for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):
|  | Three Months Ended September 30, 2021 |
|  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Balance, June 30, 2021 |  | $ | 738 |  |  | $ | 2,603 |  |  | $ | 8,889 |  |  | $ | 1,614 |  |  | $ | 1,140 |  |  | $ | 1,675 |  |  | $ | 234 |  |  | $ | 16,893 |
Provision (credit) for loan losses |  |  | (156 | ) |  |  | 59 |  |  |  | 33 |  |  |  | (36 | ) |  |  | 64 |  |  |  | (59 | ) |  |  | 1 |  |  |  | (94 | )
Recoveries of loans charged-off |  |  | - |  |  |  | 1 |  |  |  | 1 |  |  |  | - |  |  |  | 1 |  |  |  | 43 |  |  |  | 1 |  |  |  | 47 |
Loans charged-off |  |  | - |  |  |  | (4 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (12 | ) |  |  | (16 | )
Balance, September 30, 2021 |  | $ | 582 |  |  | $ | 2,659 |  |  | $ | 8,923 |  |  | $ | 1,578 |  |  | $ | 1,205 |  |  | $ | 1,659 |  |  | $ | 224 |  |  | $ | 16,830 |
|  | Nine Months Ended September 30, 2021 |
|  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Balance, December 31, 2020 |  | $ | 725 |  |  | $ | 2,581 |  |  | $ | 8,930 |  |  | $ | 1,595 |  |  | $ | 1,453 |  |  | $ | 1,696 |  |  | $ | 235 |  |  | $ | 17,215 |
Provision (credit) for loan losses |  |  | (143 | ) |  |  | (155 | ) |  |  | (10 | ) |  |  | (17 | ) |  |  | (138 | ) |  |  | (85 | ) |  |  | 8 |  |  |  | (540 | )
Recoveries of loans charged-off |  |  | - |  |  |  | 267 |  |  |  | 3 |  |  |  | - |  |  |  | 3 |  |  |  | 48 |  |  |  | 8 |  |  |  | 329 |
Loans charged-off |  |  | - |  |  |  | (34 | ) |  |  | - |  |  |  | - |  |  |  | (113 | ) |  |  | - |  |  |  | (27 | ) |  |  | (174 | )
Balance, September 30, 2021 |  | $ | 582 |  |  | $ | 2,659 |  |  | $ | 8,923 |  |  | $ | 1,578 |  |  | $ | 1,205 |  |  | $ | 1,659 |  |  | $ | 224 |  |  | $ | 16,830 |
|  | Three Months Ended September 30, 2020 |
|  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Balance, June 30, 2020 |  | $ | 849 |  |  | $ | 2,505 |  |  | $ | 6,864 |  |  | $ | 1,713 |  |  | $ | 1,994 |  |  | $ | 1,830 |  |  | $ | 250 |  |  | $ | 16,005 |
Provision (credit) for loan losses |  |  | (105 | ) |  |  | 80 |  |  |  | 583 |  |  |  | (15 | ) |  |  | (5 | ) |  |  | (14 | ) |  |  | 17 |  |  |  | 541 |
Recoveries of loans charged-off |  |  | - |  |  |  | 2 |  |  |  | 1 |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | 273 |  |  |  | 285 |
Loans charged-off |  |  | - |  |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | (582 | ) |  |  | (48 | ) |  |  | (268 | ) |  |  | (899 | )
Balance, September 30, 2020 |  | $ | 744 |  |  | $ | 2,586 |  |  | $ | 7,448 |  |  | $ | 1,698 |  |  | $ | 1,416 |  |  | $ | 1,768 |  |  | $ | 272 |  |  | $ | 15,932 |
|  | Nine Months Ended September 30, 2020 |
|  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Balance, December 31, 2019 |  | $ | 672 |  |  | $ | 2,122 |  |  | $ | 5,362 |  |  | $ | 1,326 |  |  | $ | 1,458 |  |  | $ | 1,478 |  |  | $ | 201 |  |  | $ | 12,619 |
Provision for loan losses |  |  | 71 |  |  |  | 477 |  |  |  | 2,527 |  |  |  | 372 |  |  |  | 573 |  |  |  | 338 |  |  |  | 66 |  |  |  | 4,424 |
Recoveries of loans charged-off |  |  | 1 |  |  |  | 5 |  |  |  | 3 |  |  |  | - |  |  |  | 13 |  |  |  | - |  |  |  | 277 |  |  |  | 299 |
Loans charged-off |  |  | - |  |  |  | (18 | ) |  |  | (444 | ) |  |  | - |  |  |  | (628 | ) |  |  | (48 | ) |  |  | (272 | ) |  |  | (1,410 | )
Balance, September 30, 2020 |  | $ | 744 |  |  | $ | 2,586 |  |  | $ | 7,448 |  |  | $ | 1,698 |  |  | $ | 1,416 |  |  | $ | 1,768 |  |  | $ | 272 |  |  | $ | 15,932 |
Allowance for loan losses disaggregated on the basis of impairment analysis method as of September 30, 2021 and December 31, 2020 is as follows (in thousands):
2021 |  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Individually evaluated for impairment |  | $ | - |  |  | $ | 40 |  |  | $ | 1,326 |  |  | $ | - |  |  | $ | 18 |  |  | $ | 132 |  |  | $ | 23 |  |  | $ | 1,539 |
Collectively evaluated for impairment |  |  | 582 |  |  |  | 2,619 |  |  |  | 7,597 |  |  |  | 1,578 |  |  |  | 1,187 |  |  |  | 1,527 |  |  |  | 201 |  |  |  | 15,291 |
Balance September 30, 2021 |  | $ | 582 |  |  | $ | 2,659 |  |  | $ | 8,923 |  |  | $ | 1,578 |  |  | $ | 1,205 |  |  | $ | 1,659 |  |  | $ | 224 |  |  | $ | 16,830 |
2020 |  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Individually evaluated for impairment |  | $ | - |  |  | $ | 150 |  |  | $ | 1,486 |  |  | $ | - |  |  | $ | 115 |  |  | $ | 40 |  |  | $ | 28 |  |  | $ | 1,819 |
Collectively evaluated for impairment |  |  | 725 |  |  |  | 2,431 |  |  |  | 7,444 |  |  |  | 1,595 |  |  |  | 1,338 |  |  |  | 1,656 |  |  |  | 207 |  |  |  | 15,396 |
Balance December 31, 2020 |  | $ | 725 |  |  | $ | 2,581 |  |  | $ | 8,930 |  |  | $ | 1,595 |  |  | $ | 1,453 |  |  | $ | 1,696 |  |  | $ | 235 |  |  | $ | 17,215 |
Loans receivable disaggregated on the basis of impairment analysis method as of September 30, 2021 and December 31, 2020 is as follows (in thousands):
2021 |  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Individually evaluated for impairment |  | $ | - |  |  | $ | 1,000 |  |  | $ | 9,954 |  |  | $ | 576 |  |  | $ | 295 |  |  | $ | 638 |  |  | $ | 30 |  |  | $ | 12,493 |
Collectively evaluated for impairment |  |  | 37,476 |  |  |  | 230,468 |  |  |  | 509,158 |  |  |  | 152,671 |  |  |  | 85,274 |  |  |  | 100,449 |  |  |  | 15,316 |  |  |  | 1,130,812 |
Balance September 30, 2021 |  | $ | 37,476 |  |  | $ | 231,468 |  |  | $ | 519,112 |  |  | $ | 153,247 |  |  | $ | 85,569 |  |  | $ | 101,087 |  |  | $ | 15,346 |  |  | $ | 1,143,305 |
2020 |  |  |  |  |  | 1-4 Family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Construction |  |  | Residential |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | and Other |  |  | Total |
Individually evaluated for impairment |  | $ | 167 |  |  | $ | 1,340 |  |  | $ | 10,258 |  |  | $ | 1,664 |  |  | $ | 940 |  |  | $ | 859 |  |  | $ | 45 |  |  | $ | 15,273 |
Collectively evaluated for impairment |  |  | 45,330 |  |  |  | 212,222 |  |  |  | 486,099 |  |  |  | 150,328 |  |  |  | 121,595 |  |  |  | 101,727 |  |  |  | 15,003 |  |  |  | 1,132,304 |
Balance December 31, 2020 |  | $ | 45,497 |  |  | $ | 213,562 |  |  | $ | 496,357 |  |  | $ | 151,992 |  |  | $ | 122,535 |  |  | $ | 102,586 |  |  | $ | 15,048 |  |  | $ | 1,147,577 |
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payment of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. The Company applies its normal loan review procedures to identify loans that should be evaluated for impairment. Impaired loans, on a disaggregated basis, as of September 30, 2021 and December 31, 2020 (in thousands):
|  | 2021 |  |  | 2020 |
|  |  |  |  |  | Unpaid |  |  |  |  |  |  |  |  |  |  | Unpaid |  |  |  |  |
|  | Recorded |  |  | Principal |  |  | Related |  |  | Recorded |  |  | Principal |  |  | Related |
|  | Investment |  |  | Balance |  |  | Allowance |  |  | Investment |  |  | Balance |  |  | Allowance |
With no specific reserve recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 167 |  |  | $ | 167 |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 694 |  |  |  | 747 |  |  |  | - |  |  |  | 416 |  |  |  | 475 |  |  |  | - |
Real estate - commercial |  |  | 127 |  |  |  | 142 |  |  |  | - |  |  |  | 242 |  |  |  | 578 |  |  |  | - |
Real estate - agricultural |  |  | 576 |  |  |  | 631 |  |  |  | - |  |  |  | 1,664 |  |  |  | 1,698 |  |  |  | - |
Commercial |  |  | 238 |  |  |  | 271 |  |  |  | - |  |  |  | 274 |  |  |  | 318 |  |  |  | - |
Agricultural |  |  | 323 |  |  |  | 523 |  |  |  | - |  |  |  | 377 |  |  |  | 542 |  |  |  | - |
Consumer and other |  |  | 7 |  |  |  | 9 |  |  |  | - |  |  |  | 8 |  |  |  | 10 |  |  |  | - |
Total loans with no specific reserve: |  |  | 1,965 |  |  |  | 2,323 |  |  |  | - |  |  |  | 3,148 |  |  |  | 3,788 |  |  |  | - |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 306 |  |  |  | 316 |  |  |  | 40 |  |  |  | 924 |  |  |  | 1,278 |  |  |  | 150 |
Real estate - commercial |  |  | 9,827 |  |  |  | 10,081 |  |  |  | 1,326 |  |  |  | 10,016 |  |  |  | 10,157 |  |  |  | 1,486 |
Real estate - agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial |  |  | 57 |  |  |  | 58 |  |  |  | 18 |  |  |  | 666 |  |  |  | 1,247 |  |  |  | 115 |
Agricultural |  |  | 315 |  |  |  | 315 |  |  |  | 132 |  |  |  | 482 |  |  |  | 484 |  |  |  | 40 |
Consumer and other |  |  | 23 |  |  |  | 24 |  |  |  | 23 |  |  |  | 37 |  |  |  | 39 |  |  |  | 28 |
Total loans with specific reserve: |  |  | 10,528 |  |  |  | 10,794 |  |  |  | 1,539 |  |  |  | 12,125 |  |  |  | 13,205 |  |  |  | 1,819 |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 167 |  |  |  | 167 |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 1,000 |  |  |  | 1,063 |  |  |  | 40 |  |  |  | 1,340 |  |  |  | 1,753 |  |  |  | 150 |
Real estate - commercial |  |  | 9,954 |  |  |  | 10,223 |  |  |  | 1,326 |  |  |  | 10,258 |  |  |  | 10,735 |  |  |  | 1,486 |
Real estate - agricultural |  |  | 576 |  |  |  | 631 |  |  |  | - |  |  |  | 1,664 |  |  |  | 1,698 |  |  |  | - |
Commercial |  |  | 295 |  |  |  | 329 |  |  |  | 18 |  |  |  | 940 |  |  |  | 1,565 |  |  |  | 115 |
Agricultural |  |  | 638 |  |  |  | 838 |  |  |  | 132 |  |  |  | 859 |  |  |  | 1,026 |  |  |  | 40 |
Consumer and other |  |  | 30 |  |  |  | 33 |  |  |  | 23 |  |  |  | 45 |  |  |  | 49 |  |  |  | 28 |
|  | $ | 12,493 |  |  | $ | 13,117 |  |  | $ | 1,539 |  |  | $ | 15,273 |  |  | $ | 16,993 |  |  | $ | 1,819 |
Average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2021 and 2020 (in thousands):
|  | Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |
|  | Recorded |  |  | Income |  |  | Recorded |  |  | Income |
|  | Investment |  |  | Recognized |  |  | Investment |  |  | Recognized |
With no specific reserve recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  | $ | - |  |  | $ | - |  |  | $ | 83 |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 813 |  |  |  | 8 |  |  |  | 305 |  |  |  | - |
Real estate - commercial |  |  | 132 |  |  |  | - |  |  |  | 11,091 |  |  |  | - |
Real estate - agricultural |  |  | 602 |  |  |  | - |  |  |  | 1,966 |  |  |  | - |
Commercial |  |  | 255 |  |  |  | - |  |  |  | 735 |  |  |  | 21 |
Agricultural |  |  | 318 |  |  |  | - |  |  |  | 813 |  |  |  | 340 |
Consumer and other |  |  | 6 |  |  |  | - |  |  |  | 8 |  |  |  | - |
Total loans with no specific reserve: |  |  | 2,126 |  |  |  | 8 |  |  |  | 15,001 |  |  |  | 361 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 164 |  |  |  | - |  |  |  | 957 |  |  |  | - |
Real estate - commercial |  |  | 9,922 |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial |  |  | 29 |  |  |  | - |  |  |  | 627 |  |  |  | - |
Agricultural |  |  | 327 |  |  |  | - |  |  |  | 531 |  |  |  | - |
Consumer and other |  |  | 30 |  |  |  | - |  |  |  | 30 |  |  |  | - |
Total loans with specific reserve: |  |  | 10,472 |  |  |  | - |  |  |  | 2,145 |  |  |  | - |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | - |  |  |  | - |  |  |  | 83 |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 977 |  |  |  | 8 |  |  |  | 1,262 |  |  |  | - |
Real estate - commercial |  |  | 10,054 |  |  |  | - |  |  |  | 11,091 |  |  |  | - |
Real estate - agricultural |  |  | 602 |  |  |  | - |  |  |  | 1,966 |  |  |  | - |
Commercial |  |  | 284 |  |  |  | - |  |  |  | 1,362 |  |  |  | 21 |
Agricultural |  |  | 645 |  |  |  | - |  |  |  | 1,344 |  |  |  | 340 |
Consumer and other |  |  | 36 |  |  |  | - |  |  |  | 38 |  |  |  | - |
|  | $ | 12,598 |  |  | $ | 8 |  |  | $ | 17,146 |  |  | $ | 361 |
|  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |
|  | Recorded |  |  | Income |  |  | Recorded |  |  | Income |
|  | Investment |  |  | Recognized |  |  | Investment |  |  | Recognized |
With no specific reserve recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  | $ | 84 |  |  | $ | - |  |  | $ | 41 |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 587 |  |  |  | 19 |  |  |  | 294 |  |  |  | - |
Real estate - commercial |  |  | 162 |  |  |  | 297 |  |  |  | 8,221 |  |  |  | - |
Real estate - agricultural |  |  | 990 |  |  |  | 25 |  |  |  | 1,202 |  |  |  | 6 |
Commercial |  |  | 400 |  |  |  | - |  |  |  | 586 |  |  |  | 23 |
Agricultural |  |  | 339 |  |  |  | 14 |  |  |  | 1,896 |  |  |  | 340 |
Consumer and other |  |  | 6 |  |  |  | - |  |  |  | 26 |  |  |  | - |
Total loans with no specific reserve: |  |  | 2,568 |  |  |  | 355 |  |  |  | 12,266 |  |  |  | 369 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 336 |  |  |  | - |  |  |  | 938 |  |  |  | - |
Real estate - commercial |  |  | 9,969 |  |  |  | - |  |  |  | 244 |  |  |  | - |
Real estate - agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial |  |  | 181 |  |  |  | - |  |  |  | 356 |  |  |  | - |
Agricultural |  |  | 385 |  |  |  | - |  |  |  | 380 |  |  |  | - |
Consumer and other |  |  | 35 |  |  |  | - |  |  |  | 15 |  |  |  | - |
Total loans with specific reserve: |  |  | 10,906 |  |  |  | - |  |  |  | 1,933 |  |  |  | - |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - construction |  |  | 84 |  |  |  | - |  |  |  | 41 |  |  |  | - |
Real estate - 1 to 4 family residential |  |  | 923 |  |  |  | 19 |  |  |  | 1,232 |  |  |  | - |
Real estate - commercial |  |  | 10,131 |  |  |  | 297 |  |  |  | 8,465 |  |  |  | - |
Real estate - agricultural |  |  | 990 |  |  |  | 25 |  |  |  | 1,202 |  |  |  | 6 |
Commercial |  |  | 581 |  |  |  | - |  |  |  | 942 |  |  |  | 23 |
Agricultural |  |  | 724 |  |  |  | 14 |  |  |  | 2,276 |  |  |  | 340 |
Consumer and other |  |  | 41 |  |  |  | - |  |  |  | 41 |  |  |  | - |
|  | $ | 13,474 |  |  | $ | 355 |  |  | $ | 14,199 |  |  | $ | 369 |
The interest foregone on nonaccrual loans for the three months ended September 30, 2021 and 2020 was approximately $154 thousand and $247 thousand, respectively. The interest foregone on nonaccrual loans for the nine months ended September 30, 2021 and 2020 was approximately $523 thousand and $747 thousand, respectively. Nonaccrual loans at September 30, 2021 and December 31, 2020 were $12.5 million and $15.3 million, respectively. The Company had loans meeting the definition of a troubled debt restructuring (TDR) of $10.6 million as of September 30, 2021, all of which were included in impaired and nonaccrual loans. The Company had TDRs of $11.3 million as of December 31, 2020, all of which were included in impaired and nonaccrual loans. The Company’s TDRs, on a disaggregated basis, occurring in the three and nine months ended September 30, 2021 and 2020, were as follows (dollars in thousands):
|  | Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |  |  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |  |  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |  |  | Number of |  |  | Recorded |  |  | Recorded |
|  | Contracts |  |  | Investment |  |  | Investment |  |  | Contracts |  |  | Investment |  |  | Investment |
Real estate - construction |  |  | - |  |  | $ | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 10,157 |  |  |  | 10,157 |
Real estate - agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial |  |  | 1 |  |  |  | 6 |  |  |  | 6 |  |  |  | - |  |  |  | - |  |  |  | - |
Agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | 56 |  |  |  | 56 |
Consumer and other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 27 |  |  |  | 27 |
|  |  | 1 |  |  | $ | 6 |  |  | $ | 6 |  |  |  | 5 |  |  | $ | 10,240 |  |  | $ | 10,240 |
|  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |  |  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |  |  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |  |  | Number of |  |  | Recorded |  |  | Recorded |
|  | Contracts |  |  | Investment |  |  | Investment |  |  | Contracts |  |  | Investment |  |  | Investment |
Real estate - construction |  |  | - |  |  | $ | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 3 |  |  |  | 578 |  |  |  | 578 |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate - commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | 10,341 |  |  |  | 10,341 |
Real estate - agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial |  |  | 2 |  |  |  | 64 |  |  |  | 64 |  |  |  | 1 |  |  |  | 61 |  |  |  | 61 |
Agricultural |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | 56 |  |  |  | 56 |
Consumer and other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 27 |  |  |  | 27 |
|  |  | 5 |  |  | $ | 642 |  |  | $ | 642 |  |  |  | 7 |  |  | $ | 10,485 |  |  | $ | 10,485 |
During the three months ended September 30, 2021, the Company granted concessions to one borrower facing financial difficulties which was unrelated to COVID-19. The loan was restructured with a lower interest rate and accrued interest was waived. During the three months ended September 30, 2020, the Company granted concessions to three borrowers facing financial difficulties which were unrelated to COVID-19. Payments on these loans were deferred for an extended period of time and the interest rate was reduced below the market interest rate. During the nine months ended September 30, 2021, the Company granted concessions to four borrowers facing financial difficulties. The loans were restructured with a lower interest rate or amortization periods longer than a typical loan. During the nine months ended September 30, 2020, the Company granted concessions to five borrowers facing financial difficulties. Payments on these loans were deferred for an extended period of time and the interest rate was reduced below the market interest rate. There were no TDR loans that were modified during the twelve months ended September 30, 2021 that had payment defaults. The Company considers TDR loans to have payment default when it is past due 60 days or more. There were no net charge-offs and $15 thousand of net charge-offs related to TDRs for the three months ended September 30, 2021 and 2020, respectively. There were $262 thousand of net recoveries and $31 thousand of net charge-offs related to TDRs for the nine months ended September 30, 2021 and 2020, respectively. No additional specific reserve was provided for the three and nine months ended September 30, 2021 and 2020. Section 4013 of the CARES Act, “Temporary Relief From TDRs,” allows financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time during the COVID-19 pandemic. This temporary suspension may only be applied to modifications of loans that were not more than 30 days past due as of December 31, 2019 and may not be applied to modifications that are not related to the COVID-19 pandemic. If elected, the temporary suspension may be applied to eligible modifications executed during the period beginning on March 1, 2020 and ending on the earlier of December 31, 2020, extended to January 1, 2022 under the Coronavirus Response and Relief Supplemental Appropriations Act, or 60 days after the termination of the COVID-19 national emergency. In March 2020, federal banking regulators in consultation with the FASB issued interagency statements that include similar guidance on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement provided that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. As of December 31, 2020, the Company had 24 COVID-19 related loan modifications still in the modification period with a total outstanding principal balance of $45.9 million. As of September 30, 2021, substantially all the remaining COVID-19 related loan modifications have returned to normal payment status. Modified loans continued to accrue interest and were evaluated for past due status based on the revised payment terms. An aging analysis of the recorded investments in loans, on a disaggregated basis, as of September 30, 2021 and December 31, 2020, is as follows (in thousands):
2021 |  |  |  |  |  | 90 Days |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 90 Days |
|  | 30-89 |  |  | or Greater |  |  | Total |  |  |  |  |  |  |  |  |  |  | or Greater |
|  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Current |  |  | Total |  |  | Accruing |
Real estate - construction |  | $ | 140 |  |  | $ | - |  |  | $ | 140 |  |  | $ | 37,336 |  |  | $ | 37,476 |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 1,080 |  |  |  | 170 |  |  |  | 1,250 |  |  |  | 230,218 |  |  |  | 231,468 |  |  |  | 84 |
Real estate - commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 519,112 |  |  |  | 519,112 |  |  |  | - |
Real estate - agricultural |  |  | 1,139 |  |  |  | - |  |  |  | 1,139 |  |  |  | 152,108 |  |  |  | 153,247 |  |  |  | - |
Commercial |  |  | 495 |  |  |  | - |  |  |  | 495 |  |  |  | 85,074 |  |  |  | 85,569 |  |  |  | - |
Agricultural |  |  | 136 |  |  |  | 315 |  |  |  | 451 |  |  |  | 100,636 |  |  |  | 101,087 |  |  |  | - |
Consumer and other |  |  | 56 |  |  |  | - |  |  |  | 56 |  |  |  | 15,290 |  |  |  | 15,346 |  |  |  | - |
|  | $ | 3,046 |  |  | $ | 485 |  |  | $ | 3,531 |  |  | $ | 1,139,774 |  |  | $ | 1,143,305 |  |  | $ | 84 |
2020 |  |  |  |  |  | 90 Days |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 90 Days |
|  | 30-89 |  |  | or Greater |  |  | Total |  |  |  |  |  |  |  |  |  |  | or Greater |
|  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Current |  |  | Total |  |  | Accruing |
Real estate - construction |  | $ | 169 |  |  | $ | 167 |  |  | $ | 336 |  |  | $ | 45,161 |  |  | $ | 45,497 |  |  | $ | - |
Real estate - 1 to 4 family residential |  |  | 1,523 |  |  |  | 176 |  |  |  | 1,699 |  |  |  | 211,863 |  |  |  | 213,562 |  |  |  | 6 |
Real estate - commercial |  |  | 152 |  |  |  | 56 |  |  |  | 208 |  |  |  | 496,149 |  |  |  | 496,357 |  |  |  | - |
Real estate - agricultural |  |  | 574 |  |  |  | 1,618 |  |  |  | 2,192 |  |  |  | 149,800 |  |  |  | 151,992 |  |  |  | - |
Commercial |  |  | 283 |  |  |  | 3 |  |  |  | 286 |  |  |  | 122,249 |  |  |  | 122,535 |  |  |  | 3 |
Agricultural |  |  | 79 |  |  |  | 458 |  |  |  | 537 |  |  |  | 102,049 |  |  |  | 102,586 |  |  |  | 30 |
Consumer and other |  |  | 18 |  |  |  | 16 |  |  |  | 34 |  |  |  | 15,014 |  |  |  | 15,048 |  |  |  | - |
|  | $ | 2,798 |  |  | $ | 2,494 |  |  | $ | 5,292 |  |  | $ | 1,142,285 |  |  | $ | 1,147,577 |  |  | $ | 39 |
The credit risk profile by internally assigned grade, on a disaggregated basis, as of September 30, 2021 and December 31, 2020 is as follows (in thousands):
2021 |  | Construction |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | Total |
Pass |  | $ | 35,797 |  |  | $ | 381,055 |  |  | $ | 125,868 |  |  | $ | 72,151 |  |  | $ | 84,960 |  |  | $ | 699,831 |
Watch |  |  | 326 |  |  |  | 79,194 |  |  |  | 21,037 |  |  |  | 8,077 |  |  |  | 14,717 |  |  |  | 123,351 |
Special Mention |  |  | 1,353 |  |  |  | 24,687 |  |  |  | 167 |  |  |  | 1,370 |  |  |  | - |  |  |  | 27,577 |
Substandard |  |  | - |  |  |  | 24,222 |  |  |  | 5,599 |  |  |  | 3,676 |  |  |  | 772 |  |  |  | 34,269 |
Substandard-Impaired |  |  | - |  |  |  | 9,954 |  |  |  | 576 |  |  |  | 295 |  |  |  | 638 |  |  |  | 11,463 |
|  | $ | 37,476 |  |  | $ | 519,112 |  |  | $ | 153,247 |  |  | $ | 85,569 |  |  | $ | 101,087 |  |  | $ | 896,491 |
2020 |  | Construction |  |  | Commercial |  |  | Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Real Estate |  |  | Real Estate |  |  | Real Estate |  |  | Commercial |  |  | Agricultural |  |  | Total |
Pass |  | $ | 39,980 |  |  | $ | 346,591 |  |  | $ | 110,925 |  |  | $ | 101,858 |  |  | $ | 80,075 |  |  | $ | 679,429 |
Watch |  |  | 5,350 |  |  |  | 88,113 |  |  |  | 33,144 |  |  |  | 15,897 |  |  |  | 20,793 |  |  |  | 163,297 |
Special Mention |  |  | - |  |  |  | 23,753 |  |  |  | 175 |  |  |  | 52 |  |  |  | - |  |  |  | 23,980 |
Substandard |  |  | - |  |  |  | 27,642 |  |  |  | 6,084 |  |  |  | 3,788 |  |  |  | 859 |  |  |  | 38,373 |
Substandard-Impaired |  |  | 167 |  |  |  | 10,258 |  |  |  | 1,664 |  |  |  | 940 |  |  |  | 859 |  |  |  | 13,888 |
|  | $ | 45,497 |  |  | $ | 496,357 |  |  | $ | 151,992 |  |  | $ | 122,535 |  |  | $ | 102,586 |  |  | $ | 918,967 |
The credit risk profile based on payment activity, on a disaggregated basis, as of September 30, 2021 and December 31, 2020 is as follows (in thousands):
2021 |  | 1-4 Family |  |  |  |  |  |  |  |  |
|  | Residential |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | and Other |  |  | Total |
Performing |  | $ | 230,385 |  |  | $ | 15,343 |  |  | $ | 245,728 |
Non-performing |  |  | 1,083 |  |  |  | 3 |  |  |  | 1,086 |
|  | $ | 231,468 |  |  | $ | 15,346 |  |  | $ | 246,814 |
2020 |  | 1-4 Family |  |  |  |  |  |  |  |  |
|  | Residential |  |  | Consumer |  |  |  |  |
|  | Real Estate |  |  | and Other |  |  | Total |
Performing |  | $ | 212,282 |  |  | $ | 15,003 |  |  | $ | 227,285 |
Non-performing |  |  | 1,280 |  |  |  | 45 |  |  |  | 1,325 |
|  | $ | 213,562 |  |  | $ | 15,048 |  |  | $ | 228,610 |

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