XML 49 R10.htm IDEA: XBRL DOCUMENT v3.25.0.1
Loans
 12 Months Ended
Dec. 31, 2024
Loans  
Loans

(3) Loans

 

Major classifications of loans at December 31, 2024 and 2023 are summarized as follows:

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

December 31, 2024

 

 

December 31, 2023

 

Real estate loans:

 

 

 

 

 

 

Construction and land development

 

$122,328

 

 

 

136,401

 

Single-family residential

 

 

384,509

 

 

 

372,825

 

Commercial

 

 

471,444

 

 

 

425,820

 

Multifamily and farmland

 

 

69,671

 

 

 

63,042

 

Total real estate loans

 

 

1,047,952

 

 

 

998,088

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

Commercial

 

 

63,837

 

 

 

70,544

 

Farm

 

 

401

 

 

 

550

 

Consumer

 

 

6,475

 

 

 

6,966

 

All other

 

 

19,739

 

 

 

16,918

 

 

 

 

 

 

 

 

 

 

Total loans

 

 

1,138,404

 

 

 

1,093,066

 

 

 

 

 

 

 

 

 

 

Less allowance for credit losses

 

 

(9,995)

 

 

(11,041)

 

 

 

 

 

 

 

 

 

Total net loans

 

$1,128,409

 

 

 

1,082,025

 

 

The above table includes deferred costs, net of deferred fees, totaling $714,000 and $807,000 at December 31, 2024 and December 31, 2023, respectively.

 

The Bank makes loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties and also in Mecklenburg, Wake, Rowan and Forsyth counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below:

 

 

·

Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.

 

 

 

 

·

Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

 

 

 

 

·

Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over the loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property.

 

 

 

 

·

Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.

 

 

 

 

·

Multifamily and farmland loans – Decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans.

 

Loans are considered past due if the required principal and interest payments have not been received within 30 days of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Generally, a loan is placed on non-accrual status when it is over 90 days past due and there is reasonable doubt that all principal will be collected. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. 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 following tables present an age analysis of past due loans, by loan type, as of December 31, 2024 and 2023:

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

 

Nonaccrual Loans

 

 

Total

Past Due Loans

 

 

Total Current Loans

 

 

Total

Loans

 

 

Accruing Loans 90 or More Days Past Due

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$131

 

 

 

37

 

 

 

168

 

 

 

122,160

 

 

 

122,328

 

 

 

-

 

Single-family residential

 

 

5,434

 

 

 

3,720

 

 

 

9,154

 

 

 

375,355

 

 

 

384,509

 

 

 

-

 

Commercial

 

 

87

 

 

 

426

 

 

 

513

 

 

 

470,931

 

 

 

471,444

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

 

 

69,671

 

 

 

69,671

 

 

 

-

 

Total real estate loans

 

 

5,652

 

 

 

4,183

 

 

 

9,835

 

 

 

1,038,117

 

 

 

1,047,952

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

360

 

 

 

248

 

 

 

608

 

 

 

63,229

 

 

 

63,837

 

 

 

-

 

Farm

 

 

-

 

 

 

-

 

 

 

-

 

 

 

401

 

 

 

401

 

 

 

-

 

Consumer

 

 

33

 

 

 

9

 

 

 

42

 

 

 

6,433

 

 

 

6,475

 

 

 

-

 

All other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,739

 

 

 

19,739

 

 

 

-

 

Total loans

 

$6,045

 

 

 

4,440

 

 

 

10,485

 

 

 

1,127,919

 

 

 

1,138,404

 

 

 

-

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

 

Nonaccrual Loans

 

 

Total

Past Due Loans

 

 

Total

Current Loans

 

 

Total

Loans

 

 

Accruing Loans 90 or More Days Past Due

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$5

 

 

 

45

 

 

 

50

 

 

 

136,351

 

 

 

136,401

 

 

 

-

 

Single-family residential

 

 

3,761

 

 

 

3,302

 

 

 

7,063

 

 

 

365,762

 

 

 

372,825

 

 

 

-

 

Commercial

 

 

13

 

 

 

-

 

 

 

13

 

 

 

425,807

 

 

 

425,820

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

76

 

 

 

76

 

 

 

62,966

 

 

 

63,042

 

 

 

-

 

Total real estate loans

 

 

3,779

 

 

 

3,423

 

 

 

7,202

 

 

 

990,886

 

 

 

998,088

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

125

 

 

 

463

 

 

 

588

 

 

 

69,956

 

 

 

70,544

 

 

 

-

 

Farm

 

 

-

 

 

 

1

 

 

 

1

 

 

 

549

 

 

 

550

 

 

 

-

 

Consumer

 

 

63

 

 

 

-

 

 

 

63

 

 

 

6,903

 

 

 

6,966

 

 

 

-

 

All other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16,918

 

 

 

16,918

 

 

 

-

 

Total loans

 

$3,967

 

 

 

3,887

 

 

 

7,854

 

 

 

1,085,212

 

 

 

1,093,066

 

 

 

-

 

 

The following table presents the Bank’s non-accrual loans as of December 31, 2024 and 2023:

 

 

 

December 31, 2024

 

 

 

 Nonaccrual

Loans

 

 

 Nonaccrual

Loans

 

 

 Total

 

 

 

 With No

 

 

 With

 

 

 Nonaccrual 

 

(Dollars in thousands)

 

Allowance

 

 

Allowance

 

 

 Loans

 

Real estate loans:

 

 

 

 

 

 

 

 

 

Construction and land development

 

$37

 

 

 

-

 

 

 

37

 

Single-family residential

 

 

3,720

 

 

 

-

 

 

 

3,720

 

Commercial

 

 

426

 

 

 

-

 

 

 

426

 

     Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

Total real estate loans

 

 

4,183

 

 

 

-

 

 

 

4,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

248

 

 

 

-

 

 

 

248

 

Consumer

 

 

9

 

 

 

-

 

 

 

9

 

Total

 

$4,440

 

 

 

-

 

 

 

4,440

 

 

 

December 31, 2023

 

 

 

 Nonaccrual

Loans

 

 

 Nonaccrual

Loans

 

 

 Total

 

 

 

 With No

 

 

 With

 

 

 Nonaccrual 

 

(Dollars in thousands)

 

Allowance

 

 

Allowance

 

 

 Loans

 

Real estate loans:

 

 

 

 

 

 

 

 

 

Construction and land development

 

$45

 

 

 

-

 

 

 

45

 

Single-family residential

 

 

3,302

 

 

 

-

 

 

 

3,302

 

     Multifamily and farmland

 

 

76

 

 

 

-

 

 

 

76

 

Total real estate loans

 

 

3,423

 

 

 

-

 

 

 

3,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

31

 

 

 

432

 

 

 

463

 

Consumer

 

 

1

 

 

 

-

 

 

 

1

 

Total

 

$3,455

 

 

 

432

 

 

 

3,887

 

 

No interest income was recognized on non-accrual loans for the years ended December 31, 2024 and 2023.

 

The following table represents the accrued interest receivables written off by reversing interest income during the years ended December 31, 2024 and 2023:

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

For the Year Ended

 

 

For the Year Ended

 

 

 

December 31, 2024

 

 

December 31, 2023

 

Real estate loans:

 

 

 

 

 

 

Single-family residential

 

$39

 

 

 

33

 

Commercial

 

 

9

 

 

 

-

 

Total real estate loans

 

 

48

 

 

 

33

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

Commercial

 

 

8

 

 

 

12

 

Consumer

 

 

2

 

 

 

1

 

 

 

 

 

 

 

 

 

 

Total

 

$58

 

 

 

46

 

 

A loan may be individually evaluated for determining the allowance for credit losses when it is determined that it does not share similar risk characteristics with other assets. Non-accrual loans with an outstanding balance of $250,000 or greater are individually evaluated and totaled $1.6 million at December 31, 2024. Nonaccrual loans evaluated collectively as a pool totaled $2.8 million at December 31, 2024. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Collateral dependent loans require an analysis of the collateral. The fair value of the collateral is discounted by estimated liquidation costs. If the discounted fair value of the collateral is greater than the amortized loan balance, no allowance is required. Otherwise the difference between the balance and the collateral is charged off if deemed uncollectible.

 

The following table details the amortized cost of collateral dependent loans and any related allowance at December 31, 2024.

 

 

 

December 31, 2024

 

 

 

 

 

Allowance for

 

(Dollars in thousands)

 

Amortized Cost

 

 

Credit Losses

 

Real estate loans:

 

 

 

 

 

 

Construction and land development

 

$37

 

 

 

-

 

Single-family residential

 

 

3,720

 

 

 

-

 

Commercial

 

 

426

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

Total real estate loans

 

 

4,183

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

Commercial

 

 

248

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

Total

 

$4,431

 

 

 

-

 

 

The following table details the amortized cost of non-accrual loans and any related allowance at December 31, 2023.

 

 

 

December 31, 2023

 

 

 

 

 

Allowance for

 

(Dollars in thousands)

 

Amortized Cost

 

 

Credit Losses

 

Real estate loans:

 

 

 

 

 

 

Construction and land development

 

$-

 

 

 

-

 

Single-family residential

 

 

-

 

 

 

-

 

Commercial

 

 

-

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

Total real estate loans

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

Commercial

 

 

432

 

 

 

432

 

Consumer

 

 

-

 

 

 

-

 

Total

 

$432

 

 

 

432

 

The following tables provide a breakdown of collateral dependent loans by collateral type and collateral coverage at December 31, 2024 and 2023. These tables also show non-accrual loans not considered to be collateral dependent at December 31, 2024 and 2023.

 

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Assets Not Considered

 

 

 

 

(Dollars in thousands)

 

 Residential 

 

 

 Developed 

 

 

 Commercial

 

 

 Business 

 

 

 Collateral  

 

 

 

 

 

 

Property

 

 

Land

 

 

Property

 

 

Assets

 

 

Dependent

 

 

 Total

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$-

 

 

 

37

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37

 

Single-family residential

 

 

3,720

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,720

 

Commercial

 

 

-

 

 

 

-

 

 

 

426

 

 

 

-

 

 

 

-

 

 

 

426

 

Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total real estate loans

 

 

3,720

 

 

 

37

 

 

 

426

 

 

 

-

 

 

 

-

 

 

 

4,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

-

 

 

 

-

 

 

 

-

 

 

 

248

 

 

 

-

 

 

 

248

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9

 

 

 

9

 

Total

 

$3,720

 

 

 

37

 

 

 

426

 

 

 

248

 

 

 

9

 

 

 

4,440

 

Collateral Value

 

$9,648

 

 

 

88

 

 

 

944

 

 

 

272

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Financial Assets Not Considered

 

 

 

 

(Dollars in thousands)

 

 Residential 

 

 

 Developed 

 

 

 Multifamily

 

 

 Business 

 

 

Collateral

 

 

 

 

 

 

Property

 

 

Land

 

 

Property

 

 

Assets

 

 

 Dependent

 

 

 Total

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Single-family residential

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Commercial

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total real estate loans

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

-

 

 

 

-

 

 

 

-

 

 

 

350

 

 

 

82

 

 

 

432

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

 

$-

 

 

 

-

 

 

 

-

 

 

 

350

 

 

 

82

 

 

 

432

 

Collateral Value

 

$-

 

 

 

-

 

 

 

-

 

 

 

350

 

 

 

 

 

 

 

 

 

 

The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

 

A change to the allowance for credit losses is evaluated based on the nature of the modification. Occasionally, the Bank modifies loans by providing principal forgiveness on certain loans. When principal forgiveness is provided, the amortized cost basis of the asset is written off against the allowance for credit losses. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.

 

In some cases, the Bank may modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

 

The following tables show the amortized cost basis at December 31, 2024 and 2023 of the loans to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2024 and 2023, disaggregated by loan class and type of concession granted.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis at December 31, 2024

 

 

% of Loan Class

 

 

Modification Type

 

Financial Effect

 

Loan class:

 

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

$229

 

 

 

0.06%

 

Interest rate reduction and term extension

 

Adjustable rate loan converted to fixed rate loan and HELOC converted to amortizing term loan

 

Total

 

$229

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis at December 31, 2023

 

 

% of Loan Class

 

 

Modification Type

 

Financial Effect

 

Loan class:

 

 

 

 

 

 

 

 

 

 

 

Single-family residential

 

$149

 

 

 

0.04%

 

Term extension

 

Forbearance agreement on matured home equity line of credit (HELOC) that was modified to 180 month term.

 

Commercial real estate

 

 

669

 

 

 

0.16%

 

Term extension

 

Extended existing amortization from 148 months to 173 months to keep existing payment the same with the current market rate.

 

Commercial not secured by real estate

 

 

350

 

 

 

0.49%

 

Term extension

 

Matured balloon loan converted to amortizing term loan.

 

Total

 

$1,168

 

 

 

 

 

 

 

 

 

 

 

One $71,000 commercial loan not secured by real estate that was modified in the year ended December 31, 2024 that were made to borrowers experiencing financial difficulty was written off at December 31, 2024. No loans modified in the year ended December 31, 2023 that were made to borrowers experiencing financial difficulty had been written off at December 31, 2023.

 

The Bank closely monitors the performance of those loans that are modified because borrowers are experiencing financial difficulty so as to understand the effectiveness of its modification efforts. The following tables show the performance of loans that have been modified in the years ended December 31, 2024 and 2023.

 

December 31, 2024

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 Payment Status (Amortized Cost Basis)

 

 

 

Current

 

 

30 - 89 Days

Past Due

 

 

90 + Days

Past Due

 

Loan type:

 

 

 

 

 

 

 

 

 

Single-family residential

 

$229

 

 

 

 

 

 

 

Total

 

$229

 

 

 

-

 

 

 

-

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 Payment Status (Amortized Cost Basis)

 

 

 

Current

 

 

30 - 89 Days

Past Due

 

 

90 + Days

Past Due

 

Loan type:

 

 

 

 

 

 

 

 

 

Single-family residential

 

$149

 

 

 

-

 

 

 

-

 

Commercial real estate

 

 

669

 

 

 

-

 

 

 

-

 

Commercial not secured by real estate

 

 

350

 

 

 

 

 

 

 

 

 

Total

 

$1,168

 

 

 

-

 

 

 

-

 

 

The following table presents impaired loans as of and for the year ended December 31, 2022, under the incurred loss methodology:

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

$110

 

 

 

-

 

 

 

110

 

 

 

110

 

 

 

2

 

 

 

75

 

 

 

8

 

Single-family residential

 

 

14,353

 

 

 

236

 

 

 

13,048

 

 

 

13,284

 

 

 

671

 

 

 

13,951

 

 

 

746

 

Commercial

 

 

1,785

 

 

 

421

 

 

 

1,346

 

 

 

1,767

 

 

 

9

 

 

 

1,916

 

 

 

93

 

Multifamily and farmland

 

 

104

 

 

 

-

 

 

 

91

 

 

 

91

 

 

 

-

 

 

 

96

 

 

 

5

 

Total impaired real estate loans

 

 

16,352

 

 

 

657

 

 

 

14,595

 

 

 

15,252

 

 

 

682

 

 

 

16,038

 

 

 

852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

116

 

 

 

-

 

 

 

116

 

 

 

116

 

 

 

1

 

 

 

137

 

 

 

8

 

Consumer

 

 

11

 

 

 

-

 

 

 

9

 

 

 

9

 

 

 

-

 

 

 

15

 

 

 

2

 

Total impaired loans

 

$16,479

 

 

 

657

 

 

 

14,720

 

 

 

15,377

 

 

 

683

 

 

 

16,190

 

 

 

862

 

 

Impaired loans collectively evaluated for impairment totaled $4.9 million at December 31, 2022 and are included in the tables above. Allowance on impaired loans collectively evaluated for impairment totaled $44,000 at December 31, 2022.

 

Management uses several measures to assess and monitor the credit risks in the loan portfolio, including a loan grading system that begins upon loan origination and continues until the loan is collected or collectability becomes doubtful. Upon loan origination, the Bank’s originating loan officer evaluates the quality of the loan and assigns one of eight risk grades. The loan officer monitors the loan’s performance and credit quality and makes changes to the credit grade as conditions warrant. When originated or renewed, all loans over a certain dollar amount receive in-depth reviews and risk assessments by the Bank’s Credit Administration. Before making any changes in these risk grades, management considers assessments as determined by the third-party credit review firm (as described below), regulatory examiners and the Bank’s Credit Administration. Any issues regarding the risk assessments are addressed by the Bank’s senior credit administrators and factored into management’s decision to originate or renew the loan. The Bank Board reviews, on a monthly basis, an analysis of the Bank’s reserves relative to the range of reserves estimated by the Bank’s Credit Administration.

 

As an additional measure, the Bank engages an independent third party to review the underwriting, documentation and risk grading analyses. This independent third party reviews and evaluates loan relationships greater than or equal to $1.5 million as well as a periodic sample of commercial relationships with exposures below $1.5 million, excluding loans in default, and loans in process of litigation or liquidation. The third party’s evaluation and report is shared with management and the Bank Board. 

 

Management considers certain commercial loans with weak credit risk grades to be individually impaired and measures such impairment based upon available cash flows and the value of the collateral. Allowance or reserve levels are estimated for all other graded loans in the portfolio based on their assigned credit risk grade, type of loan and other matters related to credit risk.

Management uses the information developed from the procedures described above in evaluating and grading the loan portfolio. This continual grading process is used to monitor the credit quality of the loan portfolio and to assist management in estimating the allowance. The provision for credit losses charged or credited to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb probable incurred losses in the loan portfolio at the balance sheet date. The amount each quarter is dependent upon many factors, including growth and changes in the composition of the loan portfolio, net charge-offs, delinquencies, management’s assessment of loan portfolio quality, the value of collateral, and other macro-economic factors and trends. The evaluation of these factors is performed quarterly by management through an analysis of the appropriateness of the allowance.

 

The following tables present changes in the allowance for credit losses for the years ended December 31, 2024, 2023 and 2022. The December 31, 2024 and 2023 tables reflect the CECL methodology and the December 31, 2022 table reflects the Incurred Loss methodology. No loans were individually evaluated as of December 31, 2024.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and Land Development

 

 

Single-Family Residential

 

 

Commercial

 

 

Multifamily and Farmland

 

 

Commercial

 

 

Farm

 

 

Consumer and All Other

 

 

Total

 

Twelve months ended December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$3,913

 

 

 

3,484

 

 

 

2,317

 

 

 

268

 

 

 

812

 

 

 

2

 

 

 

245

 

 

 

11,041

 

Charge-offs

 

 

-

 

 

 

(131)

 

 

-

 

 

 

-

 

 

 

(1,134)

 

 

-

 

 

 

(716)

 

 

(1,981)

Recoveries

 

 

-

 

 

 

129

 

 

 

202

 

 

 

-

 

 

 

55

 

 

 

-

 

 

 

165

 

 

 

551

 

Provision (recovery) for credit losses (1)

 

 

(528)

 

 

(96)

 

 

(197)

 

 

(22)

 

 

713

 

 

 

(1)

 

 

515

 

 

 

384

 

Ending balance

 

$3,385

 

 

 

3,386

 

 

 

2,322

 

 

 

246

 

 

 

446

 

 

 

1

 

 

 

209

 

 

 

9,995

 

Allowance for credit loss-loans

 

$3,385

 

 

 

3,386

 

 

 

2,322

 

 

 

246

 

 

 

446

 

 

 

1

 

 

 

209

 

 

 

9,995

 

Allowance for credit loss unfunded loan commitments

 

 

1,096

 

 

 

3

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2

 

 

 

1,101

 

Total allowance for credit losses

 

$4,481

 

 

 

3,389

 

 

 

2,322

 

 

 

246

 

 

 

446

 

 

 

1

 

 

 

211

 

 

 

11,096

 

 

(1) Excludes provision for credit losses related to unfunded commitments. Note 11,"Commitments and Contingencies" in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and Land Development

 

 

Single-Family Residential

 

 

Commercial

 

 

Multifamily and Farmland

 

 

Commercial

 

 

Farm

 

 

Consumer and All Other

 

 

Unallocated

 

 

Total

 

Twelve months ended December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$1,415

 

 

 

3,085

 

 

 

3,207

 

 

 

164

 

 

 

657

 

 

 

-

 

 

 

214

 

 

 

1,752

 

 

 

10,494

 

Adjustment for CECL implementation (1)

 

 

1,584

 

 

 

64

 

 

 

(986)

 

 

115

 

 

 

(295)

 

 

2

 

 

 

48

 

 

 

(1,752)

 

 

(1,220)

Charge-offs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(129)

 

 

-

 

 

 

(569)

 

 

-

 

 

 

(698)

Recoveries

 

 

-

 

 

 

171

 

 

 

6

 

 

 

-

 

 

 

67

 

 

 

-

 

 

 

147

 

 

 

-

 

 

 

391

 

Provision (recovery) for credit losses (1)

 

 

914

 

 

 

164

 

 

 

90

 

 

 

(11)

 

 

512

 

 

 

-

 

 

 

405

 

 

 

-

 

 

 

2,074

 

Ending balance

 

$3,913

 

 

 

3,484

 

 

 

2,317

 

 

 

268

 

 

 

812

 

 

 

2

 

 

 

245

 

 

 

-

 

 

 

11,041

 

Allowance for credit loss-loans

 

$3,913

 

 

 

3,484

 

 

 

2,317

 

 

 

268

 

 

 

812

 

 

 

2

 

 

 

245

 

 

 

-

 

 

 

11,041

 

Allowance for credit loss unfunded loan commitments

 

 

1,759

 

 

 

8

 

 

 

-

 

 

 

1

 

 

 

2

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,770

 

Total allowance for credit losses

 

$5,672

 

 

 

3,492

 

 

 

2,317

 

 

 

269

 

 

 

814

 

 

 

2

 

 

 

245

 

 

 

-

 

 

 

12,811

 

 

(1) Excludes provision for credit losses related to unfunded commitments. Note 11,"Commitments and Contingencies" in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and Land Development

 

 

Single-Family Residential

 

 

Commercial

 

 

Multifamily and Farmland

 

 

Commercial

 

 

Farm

 

 

Consumer and All Other

 

 

Unallocated

 

 

Total

 

Twelve months ended December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$1,193

 

 

 

2,877

 

 

 

2,234

 

 

 

150

 

 

 

711

 

 

 

-

 

 

 

110

 

 

 

2,080

 

 

 

9,355

 

Charge-offs

 

 

-

 

 

 

(128)

 

 

-

 

 

 

-

 

 

 

(33)

 

 

-

 

 

 

(591)

 

 

-

 

 

 

(752)

Recoveries

 

 

-

 

 

 

229

 

 

 

9

 

 

 

-

 

 

 

72

 

 

 

-

 

 

 

109

 

 

 

-

 

 

 

419

 

Provision

 

 

222

 

 

 

107

 

 

 

964

 

 

 

14

 

 

 

(93)

 

 

-

 

 

 

586

 

 

 

(328)

 

 

1,472

 

Ending balance

 

$1,415

 

 

 

3,085

 

 

 

3,207

 

 

 

164

 

 

 

657

 

 

 

-

 

 

 

214

 

 

 

1,752

 

 

 

10,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance: individually evaluated for impairment

 

$-

 

 

 

633

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

639

 

Ending balance: collectively evaluated for impairment

 

 

1,415

 

 

 

2,452

 

 

 

3,201

 

 

 

164

 

 

 

657

 

 

 

-

 

 

 

214

 

 

 

1,752

 

 

 

9,855

 

Ending balance

 

$1,415

 

 

 

3,085

 

 

 

3,207

 

 

 

164

 

 

 

657

 

 

 

-

 

 

 

214

 

 

 

1,752

 

 

 

10,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans at December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$114,446

 

 

 

342,281

 

 

 

406,750

 

 

 

65,562

 

 

 

81,307

 

 

 

938

 

 

 

21,324

 

 

 

-

 

 

 

1,032,608

 

Ending balance: individually evaluated for impairment

 

$-

 

 

 

9,092

 

 

 

1,388

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,480

 

Ending balance: collectively evaluated for impairment

 

$114,446

 

 

 

333,189

 

 

 

405,362

 

 

 

65,562

 

 

 

81,307

 

 

 

938

 

 

 

21,324

 

 

 

-

 

 

 

1,022,128

 

 

 

The Bank utilizes several credit quality indicators to manage credit risk in an ongoing manner. The Bank uses an internal risk grade system that categorizes loans into pass, watch or substandard categories.

 

The Bank uses the following credit quality indicators:

 

 

·

Pass – Includes loans ranging from excellent quality with a minimal amount of credit risk to loans with higher risk and servicing needs but still are considered to be acceptable. The higher risk loans in this category are not problem credits presently, but may be in the future if the borrower is unable to change its present course.

 

·

Watch – These loans are currently performing satisfactorily, but there has been some recent past due history on repayment and there are potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank’s position at some future date.

 

·

Substandard – A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged (if there is any). There is a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

 

·

Doubtful – Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

 

·

Loss – Loans classified Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future.

The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of December 31, 2024.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

Revolving

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

Converted to

 

 

Total

 

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Loans

 

 

Term Loans

 

 

Loans

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$41,171

 

 

 

29,503

 

 

 

34,495

 

 

 

6,836

 

 

 

5,792

 

 

 

4,020

 

 

 

-

 

 

 

-

 

 

 

121,817

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

443

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

443

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

68

 

 

 

-

 

 

 

-

 

 

 

68

 

Total Construction and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

land development

 

$41,171

 

 

 

29,503

 

 

 

34,495

 

 

 

7,279

 

 

 

5,792

 

 

 

4,088

 

 

 

-

 

 

 

-

 

 

 

122,328

 

Single family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$22,169

 

 

 

35,865

 

 

 

73,663

 

 

 

43,900

 

 

 

22,363

 

 

 

66,074

 

 

 

113,067

 

 

 

-

 

 

 

377,101

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,469

 

 

 

993

 

 

 

-

 

 

 

2,462

 

Substandard

 

 

-

 

 

 

31

 

 

 

1,000

 

 

 

-

 

 

 

124

 

 

 

3,467

 

 

 

324

 

 

 

-

 

 

 

4,946

 

Total single family

 

$22,169

 

 

 

35,896

 

 

 

74,663

 

 

 

43,900

 

 

 

22,487

 

 

 

71,010

 

 

 

114,384

 

 

 

-

 

 

 

384,509

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$56,411

 

 

 

46,589

 

 

 

135,881

 

 

 

71,066

 

 

 

58,223

 

 

 

97,122

 

 

 

2,296

 

 

 

-

 

 

 

467,588

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

87

 

 

 

2,943

 

 

 

-

 

 

 

-

 

 

 

3,030

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

400

 

 

 

426

 

 

 

-

 

 

 

-

 

 

 

826

 

Total commercial

 

$56,411

 

 

 

46,589

 

 

 

135,881

 

 

 

71,066

 

 

 

58,710

 

 

 

100,491

 

 

 

2,296

 

 

 

-

 

 

 

471,444

 

Multifamily and farmland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$998

 

 

 

8,455

 

 

 

20,786

 

 

 

20,638

 

 

 

6,055

 

 

 

12,186

 

 

 

443

 

 

 

-

 

 

 

69,561

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

43

 

 

 

-

 

 

 

-

 

 

 

43

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

67

 

 

 

-

 

 

 

-

 

 

 

67

 

Total multifamily and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

farmland

 

$998

 

 

 

8,455

 

 

 

20,786

 

 

 

20,638

 

 

 

6,055

 

 

 

12,296

 

 

 

443

 

 

 

-

 

 

 

69,671

 

Total real estate loans

 

$120,749

 

 

 

120,443

 

 

 

265,825

 

 

 

142,883

 

 

 

93,044

 

 

 

187,885

 

 

 

117,123

 

 

 

-

 

 

 

1,047,952

 

Loans not secured by real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$9,153

 

 

 

11,335

 

 

 

6,045

 

 

 

3,107

 

 

 

1,707

 

 

 

11,864

 

 

 

20,032

 

 

 

-

 

 

 

63,243

 

Watch

 

 

-

 

 

 

-

 

 

 

136

 

 

 

19

 

 

 

23

 

 

 

167

 

 

 

1

 

 

 

-

 

 

 

346

 

Substandard

 

 

-

 

 

 

25

 

 

 

223

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

248

 

Total Commercial

 

$9,153

 

 

 

11,360

 

 

 

6,404

 

 

 

3,126

 

 

 

1,730

 

 

 

12,031

 

 

 

20,033

 

 

 

-

 

 

 

63,837

 

Farm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$53

 

 

 

195

 

 

 

17

 

 

 

50

 

 

 

-

 

 

 

-

 

 

 

86

 

 

 

-

 

 

 

401

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total farm

 

$53

 

 

 

195

 

 

 

17

 

 

 

50

 

 

 

-

 

 

 

-

 

 

 

86

 

 

 

-

 

 

 

401

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,777

 

 

 

1,232

 

 

 

666

 

 

 

176

 

 

 

99

 

 

 

64

 

 

 

2,397

 

 

 

-

 

 

 

6,411

 

Watch

 

 

-

 

 

 

-

 

 

 

53

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

53

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8

 

 

 

3

 

 

 

-

 

 

 

11

 

Total consumer

 

$1,777

 

 

 

1,232

 

 

 

719

 

 

 

176

 

 

 

99

 

 

 

72

 

 

 

2,400

 

 

 

-

 

 

 

6,475

 

All other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$972

 

 

 

-

 

 

 

10,002

 

 

 

376

 

 

 

217

 

 

 

2,878

 

 

 

5,164

 

 

 

-

 

 

 

19,609

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

130

 

 

 

-

 

 

 

-

 

 

 

130

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total all other

 

$972

 

 

 

-

 

 

 

10,002

 

 

 

376

 

 

 

217

 

 

 

3,008

 

 

 

5,164

 

 

 

-

 

 

 

19,739

 

Total loans not secured

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by real estate

 

$11,955

 

 

 

12,787

 

 

 

17,142

 

 

 

3,728

 

 

 

2,046

 

 

 

15,111

 

 

 

27,683

 

 

 

-

 

 

 

90,452

 

Total loans

 

$132,704

 

 

 

133,230

 

 

 

282,967

 

 

 

146,611

 

 

 

95,090

 

 

 

202,996

 

 

 

144,806

 

 

 

-

 

 

 

1,138,404

 

The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs as of December 31, 2024.

 

December 31, 2024

 

Gross Loan Charge-offs by Origination Year

 

 

 

 

Revolving

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

Converted to

 

 

Total

 

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Loans

 

 

Term Loans

 

 

Loans

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Single-family residential

 

 

-

 

 

 

-

 

 

 

126

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

132

 

Commercial

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total real estate loans

 

 

-

 

 

 

-

 

 

 

126

 

 

 

-

 

 

 

-

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

132

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

-

 

 

 

447

 

 

 

397

 

 

 

74

 

 

 

179

 

 

 

36

 

 

 

-

 

 

 

-

 

 

 

1,133

 

Consumer

 

 

5

 

 

 

37

 

 

 

9

 

 

 

-

 

 

 

1

 

 

 

557

 

 

 

-

 

 

 

-

 

 

 

609

 

All other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

107

 

 

 

-

 

 

 

-

 

 

 

107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total gross charge-offs

 

$5

 

 

 

484

 

 

 

532

 

 

 

74

 

 

 

180

 

 

 

706

 

 

 

-

 

 

 

-

 

 

 

1,981

 

The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of December 31, 2023.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

Revolving

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

Converted to

 

 

Total

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Loans

 

 

Term Loans

 

 

Loans

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$40,034

 

 

 

71,429

 

 

 

10,736

 

 

 

6,692

 

 

 

1,721

 

 

 

3,914

 

 

 

1,337

 

 

 

-

 

 

 

135,863

 

Watch

 

 

-

 

 

 

-

 

 

 

448

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

448

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

90

 

 

 

-

 

 

 

-

 

 

 

90

 

Total Construction and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

land development

 

$40,034

 

 

 

71,429

 

 

 

11,184

 

 

 

6,692

 

 

 

1,721

 

 

 

4,004

 

 

 

1,337

 

 

 

-

 

 

 

136,401

 

Single family

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$32,333

 

 

 

76,326

 

 

 

47,490

 

 

 

24,813

 

 

 

12,984

 

 

 

64,847

 

 

 

106,962

 

 

 

-

 

 

 

365,755

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

89

 

 

 

1,389

 

 

 

860

 

 

 

-

 

 

 

2,338

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11

 

 

 

4,342

 

 

 

379

 

 

 

-

 

 

 

4,732

 

Total single family

 

$32,333

 

 

 

76,326

 

 

 

47,490

 

 

 

24,813

 

 

 

13,084

 

 

 

70,578

 

 

 

108,201

 

 

 

-

 

 

 

372,825

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$45,755

 

 

 

109,255

 

 

 

78,645

 

 

 

61,973

 

 

 

29,579

 

 

 

92,753

 

 

 

2,158

 

 

 

-

 

 

 

420,118

 

Watch

 

 

232

 

 

 

-

 

 

 

-

 

 

 

116

 

 

 

-

 

 

 

4,943

 

 

 

-

 

 

 

-

 

 

 

5,291

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

411

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

411

 

Total commercial

 

$45,987

 

 

 

109,255

 

 

 

78,645

 

 

 

62,500

 

 

 

29,579

 

 

 

97,696

 

 

 

2,158

 

 

 

-

 

 

 

425,820

 

Multifamily and farmland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$7,987

 

 

 

13,286

 

 

 

21,512

 

 

 

6,624

 

 

 

3,158

 

 

 

9,851

 

 

 

501

 

 

 

-

 

 

 

62,919

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

47

 

 

 

-

 

 

 

-

 

 

 

47

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

76

 

 

 

-

 

 

 

-

 

 

 

76

 

Total multifamily and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

farmland

 

$7,987

 

 

 

13,286

 

 

 

21,512

 

 

 

6,624

 

 

 

3,158

 

 

 

9,974

 

 

 

501

 

 

 

-

 

 

 

63,042

 

Total real estate loans

 

$126,341

 

 

 

270,296

 

 

 

158,831

 

 

 

100,629

 

 

 

47,542

 

 

 

182,252

 

 

 

112,197

 

 

 

-

 

 

 

998,088

 

Loans not secured by real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$9,561

 

 

 

14,122

 

 

 

4,841

 

 

 

2,942

 

 

 

2,232

 

 

 

12,030

 

 

 

23,411

 

 

 

-

 

 

 

69,139

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

57

 

 

 

102

 

 

 

783

 

 

 

-

 

 

 

942

 

Substandard

 

 

31

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

31

 

Loss

 

 

-

 

 

 

82

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

350

 

 

 

 

 

 

 

432

 

Total Commercial

 

$9,592

 

 

 

14,204

 

 

 

4,841

 

 

 

2,942

 

 

 

2,289

 

 

 

12,132

 

 

 

24,544

 

 

 

-

 

 

 

70,544

 

Farm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$198

 

 

 

42

 

 

 

83

 

 

 

-

 

 

 

1

 

 

 

27

 

 

 

199

 

 

 

-

 

 

 

550

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total farm

 

$198

 

 

 

42

 

 

 

83

 

 

 

-

 

 

 

1

 

 

 

27

 

 

 

199

 

 

 

-

 

 

 

550

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$2,262

 

 

 

1,352

 

 

 

404

 

 

 

222

 

 

 

72

 

 

 

58

 

 

 

2,591

 

 

 

-

 

 

 

6,961

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

 

 

-

 

 

 

5

 

Total consumer

 

$2,262

 

 

 

1,352

 

 

 

406

 

 

 

222

 

 

 

72

 

 

 

58

 

 

 

2,594

 

 

 

-

 

 

 

6,966

 

All other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$79

 

 

 

6,401

 

 

 

474

 

 

 

274

 

 

 

599

 

 

 

3,698

 

 

 

5,256

 

 

 

-

 

 

 

16,781

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

74

 

 

 

63

 

 

 

-

 

 

 

137

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total all other

 

$79

 

 

 

6,401

 

 

 

474

 

 

 

274

 

 

 

599

 

 

 

3,772

 

 

 

5,319

 

 

 

-

 

 

 

16,918

 

Total loans not secured

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by real estate

 

$12,131

 

 

 

21,999

 

 

 

5,804

 

 

 

3,438

 

 

 

2,961

 

 

 

15,989

 

 

 

32,656

 

 

 

-

 

 

 

94,978

 

Total loans

 

$138,472

 

 

 

292,295

 

 

 

164,635

 

 

 

104,067

 

 

 

50,503

 

 

 

198,241

 

 

 

144,853

 

 

 

-

 

 

 

1,093,066

 

The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs as of December 31, 2023.

 

December 31, 2023

 

Gross Loan Charge-offs by Origination Year

 

 

 

 

 

Revolving

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving

 

 

Converted to

 

 

Total

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Loans

 

 

Term Loans

 

 

Loans

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Single-family residential

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Commercial

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Multifamily and farmland

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total real estate loans

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Loans not secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

-

 

 

 

49

 

 

 

51

 

 

 

16

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

-

 

 

 

129

 

Farm

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Consumer

 

 

-

 

 

 

41

 

 

 

53

 

 

 

6

 

 

 

1

 

 

 

468

 

 

 

-

 

 

 

-

 

 

 

569

 

All other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total gross charge-offs

 

$-

 

 

 

90

 

 

 

104

 

 

 

22

 

 

 

1

 

 

 

481

 

 

 

-

 

 

 

-

 

 

 

698