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3. Loans (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Major classifications of loans

(Dollars in thousands)
		September 30, 2020				December 31, 2019
Real estate loans:
Construction and land development		$	96,866				92,596
Single-family residential			272,246				269,475
Single-family residential - Banco de la Gente non-traditional			28,099				30,793
Commercial			318,596				291,255
Multifamily and farmland			49,584				48,090
Total real estate loans			765,391				732,209
Loans not secured by real estate:
Commercial loans			182,862				100,263
Farm loans			851				1,033
Consumer loans			7,341				8,432
All other loans			13,787				7,937
Total loans			970,232				849,874
Less allowance for loan losses			9,892				6,680
Total net loans		$	960,340				843,194

Age analysis of past due loans, by loan type

September 30, 2020
(Dollars in thousands)
		Loans 30-89 Days Past Due				Loans 90 or More Days Past Due				Total Past Due Loans				Total Current Loans				Total Loans				Accruing Loans 90 or More Days Past Due
Real estate loans:
Construction and land development		$	8				—				8				96,858				96,866				—
Single-family residential			837				378				1,215				271,031				272,246				—
Single-family residential - Banco de la Gente non-traditional			428				131				559				27,540				28,099				84
Commercial			—				—				—				318,596				318,596				—
Multifamily and farmland			—				—				—				49,584				49,584				—
Total real estate loans			1,273				509				1,782				763,609				765,391				84
Loans not secured by real estate:
Commercial loans			130				—				130				182,732				182,862				—
Farm loans			—				—				—				851				851				—
Consumer loans			84				2				86				7,255				7,341				—
All other loans			—				—				—				13,787				13,787				—
Total loans		$	1,487				511				1,998				968,234				970,232				84

December 31, 2019
(Dollars in thousands)
		Loans 30-89 Days Past Due				Loans 90 or More Days Past Due				Total Past Due Loans				Total Current Loans				Total Loans				Accruing Loans 90 or More Days Past Due
Real estate loans:
Construction and land development		$	803				—				803				91,793				92,596				—
Single-family residential			3,000				126				3,126				266,349				269,475				—
Single-family residential - Banco de la Gente non-traditional			4,834				413				5,247				25,546				30,793				—
Commercial			504				176				680				290,575				291,255				—
Multifamily and farmland			—				—				—				48,090				48,090				—
Total real estate loans			9,141				715				9,856				722,353				732,209				—
Loans not secured by real estate:
Commercial loans			432				—				432				99,831				100,263				—
Farm loans			—				—				—				1,033				1,033				—
Consumer loans			170				22				192				8,240				8,432				—
All other loans			—				—				—				7,937				7,937				—
Total loans		$	9,743				737				10,480				839,394				849,874				—

Non-accrual loans

(Dollars in thousands)
		September 30, 2020				December 31, 2019
Real estate loans:
Construction and land development		$	—				—
Single-family residential			1,019				1,378
Single-family residential - Banco de la Gente non-traditional			1,733				1,764
Commercial			451				256
Total real estate loans			3,203				3,398
Loans not secured by real estate:
Commercial loans			255				122
Consumer loans			17				33
Total		$	3,475				3,553

Impaired loans

The following table presents impaired loans as of September 30, 2020:

September 30, 2020
(Dollars in thousands)
		Unpaid Contractual Principal Balance				Recorded Investment With No Allowance				Recorded Investment With Allowance				Recorded Investment in Impaired Loans				Related Allowance
Real estate loans:
Construction and land development		$	113				—				113				113				4
Single-family residential			5,110				388				4,309				4,697				18
Single-family residential - Banco de la Gente stated income			13,854				—				13,055				13,055				865
Commercial			2,579				351				2,206				2,557				13
Multifamily and farmland			—				—				—				—				—
Total impaired real estate loans			21,656				739				19,683				20,422				900
Loans not secured by real estate:
Commercial loans			569				255				259				514				2
Consumer loans			53				—				49				49				1
Total impaired loans		$	22,278				994				19,991				20,985				903

The following table presents the average impaired loan balance and the interest income recognized by loan class for the three and nine months ended September 30, 2020 and 2019.

(Dollars in thousands)
		Three months ended																Nine months ended
		September 30, 2020								September 30, 2019								September 30, 2020								September 30, 2019
		Average Balance				Interest Income Recognized				Average Balance				Interest Income Recognized				Average Balance				Interest Income Recognized				Average Balance				Interest Income Recognized
Real estate loans:
Construction and land development		$	153				—				188				3				123				7				232				9
Single-family residential			5,107				63				4,360				70				4,451				181				4,724				188
Single-family residential - Banco de la Gente stated income			13,402				197				14,805				241				13,785				617				14,916				732
Commercial			2,665				31				1,808				26				2,772				103				1,823				71
Multifamily and farmland			—				—				—				—				—				—				—				—
Total impaired real estate loans			21,327				291				21,161				340				21,131				908				21,695				1,000
Loans not secured by real estate:
Commercial loans			494				7				153				16				553				22				127				20
Consumer loans			74				1				94				1				57				4				102				5
Total impaired loans		$	21,895				299				21,408				357				21,741				934				21,924				1,025

The following table presents impaired loans as of and for the year ended December 31, 2019:

December 31, 2019
(Dollars in thousands)
		Unpaid Contractual Principal Balance				Recorded Investment With No Allowance				Recorded Investment With Allowance				Recorded Investment in Impaired Loans				Related Allowance				Average Outstanding Impaired Loans				YTD Interest Income Recognized
Real estate loans:
Construction and land development		$	183				—				183				183				7				231				12
Single-family residential			5,152				403				4,243				4,646				36				4,678				269
Single-family residential - Banco de la Gente non-traditional			15,165				—				14,371				14,371				944				14,925				956
Commercial			1,879				—				1,871				1,871				7				1,822				91
Total impaired real estate loans			22,379				403				20,668				21,071				994				21,656				1,328
Loans not secured by real estate:
Commercial loans			180				92				84				176				—				134				9
Consumer loans			100				—				96				96				2				105				7
Total impaired loans		$	22,659				495				20,848				21,343				996				21,895				1,344

Changes in the allowance for loan losses

(Dollars in thousands)
			Real Estate Loans
			Construction and Land Development				Single-Family Residential				Single-Family Residential - Banco de la Gente Non-traditional				Commercial				Multifamily and Farmland				Commercial				Farm				Consumer and All Other				Unallocated				Total
Nine months ended September 30, 2020:
Allowance for loan losses:
Beginning balance		$	694				1,274				1,073				1,305				120				688				—				138				1,388				6,680
Charge-offs			(5	)			(65	)			—				(7	)			—				(109	)			—				(343	)			—				(529	)
Recoveries			2				59				—				45				—				27				—				148				—				281
Provision			573				482				(11	)			751				(4	)			355				—				254				1,060				3,460
Ending balance		$	1,264				1,750				1,062				2,094				116				961				—				197				2,448				9,892
Allowance for loan losses:
Beginning balance		$	1,531				1,813				1,114				2,051				115				980				—				162				1,667				9,433
Charge-offs			—				(65	)			—				—				—				—				—				(87	)			—				(152	)
Recoveries			—				34				—				11				—				2				—				42				—				89
Provision			(267	)			(32	)			(52	)			32				1				(21	)			—				80				781				522
Ending balance		$	1,264				1,750				1,062				2,094				116				961				—				197				2,448				9,892
Allowance for loan losses at September 30, 2020:
Ending balance: individually evaluated for impairment		$	2				4				859				11				—				—				—				—				—				876
Ending balance: collectively evaluated for impairment			1,262				1,746				203				2,083				116				961				—				197				2,448				9,016
Ending balance		$	1,264				1,750				1,062				2,094				116				961				—				197				2,448				9,892
Loans at September 30, 2020:
Ending balance		$	96,866				272,246				28,099				318,596				49,584				182,862				851				21,128				—				970,232
Ending balance: individually evaluated for impairment		$	8				1,582				11,630				1,685				—				255				—				—				—				15,160
Ending balance: collectively evaluated for impairment		$	96,858				270,664				16,469				316,911				49,584				182,607				851				21,128				—				955,072

(Dollars in thousands)
			Real Estate Loans
			Construction and Land Development				Single-Family Residential				Single-Family Residential - Banco de la Gente Non-traditional				Commercial				Multifamily and Farmland				Commercial				Farm				Consumer and All Other				Unallocated				Total
Nine months ended September 30, 2019:
Allowance for loan losses:
Beginning balance		$	813				1,325				1,177				1,278				83				626				—				161				982				6,445
Charge-offs			(21	)			(42	)			—				—				—				(389	)			—				(459	)			—				(911	)
Recoveries			44				59				—				27				—				80				—				157				—				367
Provision			(141	)			22				(87	)			(26	)			35				333				—				303				238				677
Ending balance		$	695				1,364				1,090				1,279				118				650				—				162				1,220				6,578
Three months ended September 30, 2019:
Allowance for loan losses:
Beginning balance		$	763				1,312				1,116				1,334				110				548				—				161				1,197				6,541
Charge-offs			—				(19	)			—				—				—				(388	)			—				(144	)			—				(551	)
Recoveries			41				6				—				4				—				66				—				49				—				166
Provision			(109	)			65				(26	)			(59	)			8				424				—				96				23				422
Ending balance		$	695				1,364				1,090				1,279				118				650				—				162				1,220				6,578
Allowance for loan losses at September 30, 2019:
Ending balance: individually evaluated for impairment		$	—				2				948				10				—				—				—				—				—				960
Ending balance: collectively evaluated for impairment			695				1,362				142				1,269				118				650				—				162				1,220				5,618
Ending balance		$	695				1,364				1,090				1,279				118				650				—				162				1,220				6,578
Loans at September 30, 2019:
Ending balance		$	95,622				269,304				31,673				281,607				47,266				99,382				1,101				19,644				—				845,599
Ending balance: individually
Ending balance: individually evaluated for impairment		$	11				1,719				13,196				1,628				—				100				—				—				—				16,654
Ending balance: collectively evaluated for impairment		$	95,611				267,585				18,477				279,979				47,266				99,282				1,101				19,644				—				828,945

Credit risk profile of each loan type based on internally assigned risk grade

September 30, 2020
(Dollars in thousands)
			Real Estate Loans
			Construction and Land Development				Single-Family Residential				Single-Family Residential - Banco de la Gente non-traditional				Commercial				Multifamily and Farmland				Commercial				Farm				Consumer				All Other				Total
1- Excellent Quality		$	230				9,184				—				—				—				739				—				675				—				10,828
2- High Quality			17,962				125,821				—				30,959				261				24,377				—				2,373				1,643				203,396
3- Good Quality			70,142				112,716				10,896				236,533				44,393				143,379				785				3,917				11,424				634,185
4- Management Attention			5,506				18,472				12,643				41,687				4,344				12,555				66				336				720				96,329
5- Watch			2,939				2,997				2,003				8,517				586				1,500				—				7				—				18,549
6- Substandard			87				3,056				2,557				900				—				312				—				33				—				6,945
7- Doubtful			—				—				—				—				—				—				—				—				—				—
8- Loss			—				—				—				—				—				—				—				—				—				—
Total		$	96,866				272,246				28,099				318,596				49,584				182,862				851				7,341				13,787				970,232

December 31, 2019
(Dollars in thousands)
			Real Estate Loans
			Construction and Land Development				Single-Family Residential				Single-Family Residential - Banco de la Gente non-traditional				Commercial				Multifamily and Farmland				Commercial				Farm				Consumer				All Other				Total
1- Excellent Quality		$	—				8,819				—				—				—				330				—				693				—				9,842
2- High Quality			32,029				128,757				—				21,829				256				20,480				—				2,708				1,860				207,919
3- Good Quality			52,009				107,246				12,103				231,003				42,527				72,417				948				4,517				5,352				528,122
4- Management Attention			5,487				18,409				13,737				35,095				4,764				6,420				85				458				725				85,180
5- Watch			3,007				3,196				2,027				3,072				543				492				—				8				—				12,345
6- Substandard			64				3,048				2,926				256				—				124				—				48				—				6,466
7- Doubtful			—				—				—				—				—				—				—				—				—				—
8- Loss			—				—				—				—				—				—				—				—				—				—
Total		$	92,596				269,475				30,793				291,255				48,090				100,263				1,033				8,432				7,937				849,874

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