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Loans and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2021
Loans and Allowance for Loan Losses [Abstract] |
Loans and Allowance for Loan Losses | Note C - Loans and Allowance for Loan Losses Loans are comprised of the following at December 31:
|  | 2021 |  |  | 2020 |
Residential real estate |  | $ | 274,425 |  |  | $ | 305,478 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner-occupied |  |  | 71,979 |  |  |  | 51,863 |
Nonowner-occupied |  |  | 176,100 |  |  |  | 164,523 |
Construction |  |  | 33,718 |  |  |  | 37,063 |
Commercial and industrial |  |  | 141,525 |  |  |  | 157,692 |
Consumer: |  |  |  |  |  |  |  |
Automobile |  |  | 48,206 |  |  |  | 55,241 |
Home equity |  |  | 22,375 |  |  |  | 19,993 |
Other |  |  | 62,863 |  |  |  | 56,811 |
|  |  | 831,191 |  |  |  | 848,664 |
Less: Allowance for loan losses |  |  | (6,483 | ) |  |  | (7,160 | )
Loans, net |  | $ | 824,708 |  |  | $ | 841,504 |
Commercial and industrial loans include $446 of loans originated under the PPP at December 31, 2021, as compared to $27,933 at December 31, 2020. These loans are guaranteed by the SBA. The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021, and 2020:
December 31, 2021 |  | Residential Real Estate |  |  | Commercial Real Estate |  |  | Commercial & Industrial |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,480 |  |  | $ | 2,431 |  |  | $ | 1,776 |  |  | $ | 1,473 |  |  | $ | 7,160 |
Provision for loan losses |  |  | (615 | ) |  |  | (61 | ) |  |  | (258 | ) |  |  | 515 |  |  |  | (419 | )
Loans charged off |  |  | (84 | ) |  |  | (115 | ) |  |  | (120 | ) |  |  | (1,162 | ) |  |  | (1,481 | )
Recoveries |  |  | 199 |  |  |  | 293 |  |  |  | 173 |  |  |  | 558 |  |  |  | 1,223 |
Total ending allowance balance |  | $ | 980 |  |  | $ | 2,548 |  |  | $ | 1,571 |  |  | $ | 1,384 |  |  | $ | 6,483 |
December 31, 2020 |  | Residential Real Estate |  |  | Commercial Real Estate |  |  | Commercial & Industrial |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,250 |  |  | $ | 1,928 |  |  | $ | 1,447 |  |  | $ | 1,647 |  |  | $ | 6,272 |
Provision for loan losses |  |  | 413 |  |  |  | 946 |  |  |  | 443 |  |  |  | 1,178 |  |  |  | 2,980 |
Loans charged off |  |  | (340 | ) |  |  | (559 | ) |  |  | (185 | ) |  |  | (1,949 | ) |  |  | (3,033 | )
Recoveries |  |  | 157 |  |  |  | 116 |  |  |  | 71 |  |  |  | 597 |  |  |  | 941 |
Total ending allowance balance |  | $ | 1,480 |  |  | $ | 2,431 |  |  | $ | 1,776 |  |  | $ | 1,473 |  |  | $ | 7,160 |
The following table presents the balance in the allowance for loan losses and the recorded investment of loans by portfolio segment and based on impairment method as of December 31, 2021 and 2020:
December 31, 2021 |  | Residential Real Estate |  |  | Commercial Real Estate |  |  | Commercial & Industrial |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | — |  |  | $ | — |  |  | $ | 10 |  |  | $ | — |  |  | $ | 10 |
Collectively evaluated for impairment |  |  | 980 |  |  |  | 2,548 |  |  |  | 1,561 |  |  |  | 1,384 |  |  |  | 6,473 |
Total ending allowance balance |  | $ | 980 |  |  | $ | 2,548 |  |  | $ | 1,571 |  |  | $ | 1,384 |  |  | $ | 6,483 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | — |  |  | $ | 5,411 |  |  | $ | 4,531 |  |  | $ | 81 |  |  | $ | 10,023 |
Loans collectively evaluated for impairment |  |  | 274,425 |  |  |  | 276,386 |  |  |  | 136,994 |  |  |  | 133,363 |  |  |  | 821,168 |
Total ending loans balance |  | $ | 274,425 |  |  | $ | 281,797 |  |  | $ | 141,525 |  |  | $ | 133,444 |  |  | $ | 831,191 |
December 31, 2020 |  | Residential Real Estate |  |  | Commercial Real Estate |  |  | Commercial & Industrial |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Collectively evaluated for impairment |  |  | 1,480 |  |  |  | 2,431 |  |  |  | 1,776 |  |  |  | 1,473 |  |  |  | 7,160 |
Total ending allowance balance |  | $ | 1,480 |  |  | $ | 2,431 |  |  | $ | 1,776 |  |  | $ | 1,473 |  |  | $ | 7,160 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | 411 |  |  | $ | 5,845 |  |  | $ | 4,686 |  |  | $ | 84 |  |  | $ | 11,026 |
Loans collectively evaluated for impairment |  |  | 305,067 |  |  |  | 247,604 |  |  |  | 153,006 |  |  |  | 131,961 |  |  |  | 837,638 |
Total ending loans balance |  | $ | 305,478 |  |  | $ | 253,449 |  |  | $ | 157,692 |  |  | $ | 132,045 |  |  | $ | 848,664 |
The following table presents information related to loans individually evaluated for impairment by class of loans as of the years ended December 31, 2021, and 2020:
December 31, 2021 |  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance for Loan Losses Allocated |  |  | Average Impaired Loans |  |  | Interest Income Recognized |  |  | Cash Basis Interest Recognized |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,993 |  |  | $ | 1,993 |  |  | $ | 10 |  |  | $ | 1,987 |  |  | $ | 94 |  |  | $ | 94 |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  |  | 5,052 |  |  |  | 5,027 |  |  |  | — |  |  |  | 5,151 |  |  |  | 309 |  |  |  | 309 |
Nonowner-occupied |  |  | 384 |  |  |  | 384 |  |  |  | — |  |  |  | 387 |  |  |  | 29 |  |  |  | 29 |
Commercial and industrial |  |  | 2,538 |  |  |  | 2,538 |  |  |  | — |  |  |  | 2,981 |  |  |  | 139 |  |  |  | 139 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  |  | 31 |  |  |  | 31 |  |  |  | — |  |  |  | 32 |  |  |  | 2 |  |  |  | 2 |
Other |  |  | 50 |  |  |  | 50 |  |  |  | — |  |  |  | 49 |  |  |  | 2 |  |  |  | 2 |
Total |  | $ | 10,048 |  |  | $ | 10,023 |  |  | $ | 10 |  |  | $ | 10,587 |  |  | $ | 575 |  |  | $ | 575 |
December 31, 2020 |  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance for Loan Losses Allocated |  |  | Average Impaired Loans |  |  | Interest Income Recognized |  |  | Cash Basis Interest Recognized |
With an allowance recorded: |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  | 418 |  |  |  | 411 |  |  |  | — |  |  |  | 423 |  |  |  | 21 |  |  |  | 21 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  |  | 5,256 |  |  |  | 5,256 |  |  |  | — |  |  |  | 3,417 |  |  |  | 260 |  |  |  | 260 |
Nonowner-occupied |  |  | 632 |  |  |  | 589 |  |  |  | — |  |  |  | 626 |  |  |  | 29 |  |  |  | 29 |
Commercial and industrial |  |  | 4,686 |  |  |  | 4,686 |  |  |  | — |  |  |  | 3,772 |  |  |  | 196 |  |  |  | 196 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  |  | 34 |  |  |  | 34 |  |  |  | — |  |  |  | 28 |  |  |  | 2 |  |  |  | 2 |
Other |  |  | 50 |  |  |  | 50 |  |  |  | — |  |  |  | 10 |  |  |  | 2 |  |  |  | 2 |
Total |  | $ | 11,076 |  |  | $ | 11,026 |  |  | $ | — |  |  | $ | 8,276 |  |  | $ | 510 |  |  | $ | 510 |
The recorded investment of a loan excludes accrued interest and net deferred origination fees and costs due to immateriality. Nonaccrual loans and loans past due 90 days or more and still accruing include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified as impaired loans. The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu). As of December 31, 2021 and December 31, 2020, other real estate owned for residential real estate properties totaled $15 and $49, respectively. In addition, nonaccrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $316 and $1,097 as of December 31, 2021 and December 31, 2020, respectively. The following table presents the recorded investment of nonaccrual loans and loans past due 90 days or more and still accruing by class of loans as of December 31, 2021 and 2020:
|  | Loans Past Due 90 Days And Still Accruing |  |  | Nonaccrual |
December 31, 2021 |  |  |  |  |  |
Residential real estate |  | $ | 10 |  |  | $ | 2,683 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner-occupied |  |  | — |  |  |  | 1,055 |
Nonowner-occupied |  |  | — |  |  |  | — |
Construction |  |  | — |  |  |  | 146 |
Commercial and industrial |  |  | 65 |  |  |  | 150 |
Consumer: |  |  |  |  |  |  |  |
Automobile |  |  | 55 |  |  |  | 147 |
Home equity |  |  | — |  |  |  | 148 |
Other |  |  | 160 |  |  |  | 17 |
Total |  | $ | 290 |  |  | $ | 4,346 |
|  | Loans Past Due 90 Days And Still Accruing |  |  | Nonaccrual |
December 31, 2020 |  |  |  |  |  |
Residential real estate |  | $ | 127 |  |  | $ | 5,256 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner-occupied |  |  | — |  |  |  | 205 |
Nonowner-occupied |  |  | — |  |  |  | 362 |
Construction |  |  | — |  |  |  | 156 |
Commercial and industrial |  |  | 15 |  |  |  | 149 |
Consumer: |  |  |  |  |  |  |  |
Automobile |  |  | 146 |  |  |  | 129 |
Home equity |  |  | — |  |  |  | 210 |
Other |  |  | 136 |  |  |  | 36 |
Total |  | $ | 424 |  |  | $ | 6,503 |
The following table presents the aging of the recorded investment of past due loans by class of loans as of December 31, 2021 and 2020:
December 31, 2021 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days Or More Past Due |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
Residential real estate |  | $ | 2,208 |  |  | $ | 1,218 |  |  | $ | 921 |  |  | $ | 4,347 |  |  | $ | 270,078 |  |  | $ | 274,425 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  |  | 895 |  |  |  | — |  |  |  | 153 |  |  |  | 1,048 |  |  |  | 70,931 |  |  |  | 71,979 |
Nonowner-occupied |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | 100 |  |  |  | 176,000 |  |  |  | 176,100 |
Construction |  |  | 36 |  |  |  | 53 |  |  |  | 33 |  |  |  | 122 |  |  |  | 33,596 |  |  |  | 33,718 |
Commercial and industrial |  |  | 517 |  |  |  | 60 |  |  |  | 215 |  |  |  | 792 |  |  |  | 140,733 |  |  |  | 141,525 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Automobile |  |  | 656 |  |  |  | 148 |  |  |  | 194 |  |  |  | 998 |  |  |  | 47,208 |  |  |  | 48,206 |
Home equity |  |  | 35 |  |  |  | 165 |  |  |  | 47 |  |  |  | 247 |  |  |  | 22,128 |  |  |  | 22,375 |
Other |  |  | 401 |  |  |  | 133 |  |  |  | 177 |  |  |  | 711 |  |  |  | 62,152 |  |  |  | 62,863 |
Total |  | $ | 4,848 |  |  | $ | 1,777 |  |  | $ | 1,740 |  |  | $ | 8,365 |  |  | $ | 822,826 |  |  | $ | 831,191 |
December 31, 2020 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days Or More Past Due |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
Residential real estate |  | $ | 2,845 |  |  | $ | 496 |  |  | $ | 1,663 |  |  | $ | 5,004 |  |  | $ | 300,474 |  |  | $ | 305,478 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  |  | 470 |  |  |  | 1,003 |  |  |  | 193 |  |  |  | 1,666 |  |  |  | 50,197 |  |  |  | 51,863 |
Nonowner-occupied |  |  | 94 |  |  |  | — |  |  |  | 362 |  |  |  | 456 |  |  |  | 164,067 |  |  |  | 164,523 |
Construction |  |  | — |  |  |  | 82 |  |  |  | — |  |  |  | 82 |  |  |  | 36,981 |  |  |  | 37,063 |
Commercial and industrial |  |  | 1,112 |  |  |  | 11 |  |  |  | 164 |  |  |  | 1,287 |  |  |  | 156,405 |  |  |  | 157,692 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Automobile |  |  | 831 |  |  |  | 131 |  |  |  | 258 |  |  |  | 1,220 |  |  |  | 54,021 |  |  |  | 55,241 |
Home equity |  |  | 204 |  |  |  | 81 |  |  |  | 113 |  |  |  | 398 |  |  |  | 19,595 |  |  |  | 19,993 |
Other |  |  | 446 |  |  |  | 76 |  |  |  | 172 |  |  |  | 694 |  |  |  | 56,117 |  |  |  | 56,811 |
Total |  | $ | 6,002 |  |  | $ | 1,880 |  |  | $ | 2,925 |  |  | $ | 10,807 |  |  | $ | 837,857 |  |  | $ | 848,664 |
Troubled Debt Restructurings: A troubled debt restructuring (“TDR”) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty. All TDRs are considered to be impaired. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction in the contractual principal and interest payments of the loan; or short-term interest-only payment terms. The Company has allocated reserves for a portion of its TDRs to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer. The following table presents the types of TDR loan modifications by class of loans as of December 31, 2021 and December 31, 2020:
|  | TDRs Performing to Modified Terms |  |  | TDRs Not Performing to Modified Terms |  |  | Total TDRs |
December 31, 2021 |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |
Owner-occupied |  |  |  |  |  |  |  |  |
Reduction of principal and interest payments |  | $ | 1,455 |  |  | $ | — |  |  | $ | 1,455 |
Maturity extension at lower stated rate than market rate |  |  | 268 |  |  |  | — |  |  |  | 268 |
Credit extension at lower stated rate than market rate |  |  | 375 |  |  |  | — |  |  |  | 375 |
Nonowner-occupied |  |  |  |  |  |  |  |  |  |  |  |
Credit extension at lower stated rate than market rate |  |  | 385 |  |  |  | — |  |  |  | 385 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |
Interest only payments |  |  | 2,301 |  |  |  | — |  |  |  | 2,301 |
Total TDRs |  | $ | 4,784 |  |  | $ | — |  |  | $ | 4,784 |
|  | TDRs Performing to Modified Terms |  |  | TDRs Not Performing to Modified Terms |  |  | Total TDRs |
December 31, 2020 |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |
Interest only payments |  | $ | 202 |  |  | $ | — |  |  | $ | 202 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  |  |  |  |  |  |  |  |  |  |  |
Reduction of principal and interest payments |  |  | 1,486 |  |  |  | — |  |  |  | 1,486 |
Maturity extension at lower stated rate than market rate |  |  | 351 |  |  |  | — |  |  |  | 351 |
Credit extension at lower stated rate than market rate |  |  | 384 |  |  |  | — |  |  |  | 384 |
Nonowner-occupied |  |  |  |  |  |  |  |  |  |  |  |
Credit extension at lower stated rate than market rate |  |  | 390 |  |  |  | — |  |  |  | 390 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |
Interest only payments |  |  | 4,400 |  |  |  | — |  |  |  | 4,400 |
Total TDRs |  | $ | 7,213 |  |  | $ | — |  |  | $ | 7,213 |
The Company had no specific allocations in reserves to customers whose loan terms have been modified in TDRs at December 31, 2021 and 2020. At December 31, 2021, the Company had $3,199 in commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs, as compared to $1,100 at December 31, 2020. There were no TDR loan modifications that occurred during the years ended December 31, 2021 and 2020 that impacted provision expense or the allowance for loan losses. During the years ended December 31, 2021, and 2020, the Company had no TDRs that experienced any payment defaults within twelve months following their loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020 and provided guidance on the modification of loans as a result of COVID-19, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers are considered current if they are less than 30 days past due on their contractual payments at the time of modification.As of December 31, 2021, the Company had modified 655 loans related to COVID-19 with an outstanding loan balance of $124,657 that were not reported as TDRs. As of December 31, 2021, the Company had 30 of those modified loans still operating under their COVID-19 related deferral terms with an outstanding loan balance of $374 that were not reported as TDRs in the tables presented above. The terms of certain other loans were modified during the years ended December 31, 2021 and 2020 that did not meet the definition of a TDR. These loans have a total recorded investment of $23,171 as of December 31, 2021 and $16,624 as of December 31, 2020. The modification of these loans primarily involved the modification of the terms of a loan to borrowers who were not experiencing financial difficulties. Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 11. The Company analyzes loans individually with a higher credit risk rating and groups these loans into categories called “criticized” and ”classified” assets. The Company considers its criticized assets to be loans that are graded 8 and its classified assets to be loans that are graded 9 through 11. The Company’s risk categories are reviewed at least annually on loans that have aggregate borrowing amounts that meet or exceed $1,000. The Company uses the following definitions for its criticized loan risk ratings: Special Mention. Loans classified as special mention indicate considerable risk due to deterioration of repayment (in the earliest stages) due to potential weak primary repayment source, or payment delinquency. These loans will be under constant supervision, are not classified and do not expose the institution to sufficient risks to warrant classification. These deficiencies should be correctable within the normal course of business, although significant changes in company structure or policy may be necessary to correct the deficiencies. These loans are considered bankable assets with no apparent loss of principal or interest envisioned. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. Credits that are defined as a troubled debt restructuring should be graded no higher than special mention until they have been reported as performing over one year after restructuring. The Company uses the following definitions for its classified loan risk ratings: Substandard. Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt. Doubtful. Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, and receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard. Loss. Loans classified as loss are considered uncollectible and are of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset yielding such a minimum value even though partial recovery may be affected in the future. Amounts classified as loss should be promptly charged off. Criticized and classified loans will mostly consist of commercial and industrial and commercial real estate loans. The Company considers its loans that do not meet the criteria for a criticized and classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 7 (Watch). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date. As of December 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:
December 31, 2021 |  | Pass |  |  | Criticized |  |  | Classified |  |  | Total |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  | $ | 66,999 |  |  | $ | 618 |  |  | $ | 4,362 |  |  | $ | 71,979 |
Nonowner-occupied |  |  | 175,901 |  |  |  | — |  |  |  | 199 |  |  |  | 176,100 |
Construction |  |  | 33,685 |  |  |  | — |  |  |  | 33 |  |  |  | 33,718 |
Commercial and industrial |  |  | 134,983 |  |  |  | 1,862 |  |  |  | 4,680 |  |  |  | 141,525 |
Total |  | $ | 411,568 |  |  | $ | 2,480 |  |  | $ | 9,274 |  |  | $ | 423,322 |
December 31, 2020 |  | Pass |  |  | Criticized |  |  | Classified |  |  | Total |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied |  | $ | 46,604 |  |  | $ | 669 |  |  | $ | 4,590 |  |  | $ | 51,863 |
Nonowner-occupied |  |  | 160,324 |  |  |  | 3,629 |  |  |  | 570 |  |  |  | 164,523 |
Construction |  |  | 37,063 |  |  |  | — |  |  |  | — |  |  |  | 37,063 |
Commercial and industrial |  |  | 150,786 |  |  |  | 2,064 |  |  |  | 4,842 |  |  |  | 157,692 |
Total |  | $ | 394,777 |  |  | $ | 6,362 |  |  | $ | 10,002 |  |  | $ | 411,141 |
The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau) but not thereafter. The Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower’s credit score to be a significant influence in the determination of a loan’s credit risk grading. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of December 31, 2021 and December 31, 2020:
|  | Consumer |  |  |  |  |  |  |
December 31, 2021 |  | Automobile |  |  | Home Equity |  |  | Other |  |  | Residential Real Estate |  |  | Total |
Performing |  | $ | 48,004 |  |  | $ | 22,227 |  |  | $ | 62,686 |  |  | $ | 271,732 |  |  | $ | 404,649 |
Nonperforming |  |  | 202 |  |  |  | 148 |  |  |  | 177 |  |  |  | 2,693 |  |  |  | 3,220 |
Total |  | $ | 48,206 |  |  | $ | 22,375 |  |  | $ | 62,863 |  |  | $ | 274,425 |  |  | $ | 407,869 |
|  | Consumer |  |  |  |  |  |  |
December 31, 2020 |  | Automobile |  |  | Home Equity |  |  | Other |  |  | Residential Real Estate |  |  | Total |
Performing |  | $ | 54,966 |  |  | $ | 19,783 |  |  | $ | 56,639 |  |  | $ | 300,095 |  |  | $ | 431,483 |
Nonperforming |  |  | 275 |  |  |  | 210 |  |  |  | 172 |  |  |  | 5,383 |  |  |  | 6,040 |
Total |  | $ | 55,241 |  |  | $ | 19,993 |  |  | $ | 56,811 |  |  | $ | 305,478 |  |  | $ | 437,523 |
The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the southeastern area of Ohio as well as the western counties of West Virginia. Approximately 4.45% of total loans were unsecured at December 31, 2021, up from 4.22% at December 31, 2020.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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