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Loans | 3 Months Ended
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Mar. 31, 2025
Loans |
Loans | (5) Loans Major classifications of loans at March 31, 2025 and December 31, 2024 are summarized as follows:
(Dollars in thousands) |  |  |  |  |  |
|  | March 31, 2025 |  |  | December 31, 2024 |
Real estate loans: |  |  |  |  |  |
Construction and land development |  | $ | 126,645 |  |  |  | 122,328 |
Single-family residential |  |  | 387,901 |  |  |  | 384,509 |
Commercial |  |  | 479,194 |  |  |  | 471,444 |
Multifamily and farmland |  |  | 69,470 |  |  |  | 69,671 |
Total real estate loans |  |  | 1,063,210 |  |  |  | 1,047,952 |
Loans not secured by real estate: |  |  |  |  |  |  |  |
Commercial |  |  | 63,222 |  |  |  | 63,837 |
Farm |  |  | 481 |  |  |  | 401 |
Consumer |  |  | 6,338 |  |  |  | 6,475 |
All other |  |  | 18,829 |  |  |  | 19,739 |
Total loans |  |  | 1,152,080 |  |  |  | 1,138,404 |
Less allowance for credit losses |  |  | (10,047 | ) |  |  | (9,995 | )
Total net loans |  | $ | 1,142,033 |  |  |  | 1,128,409 |
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 March 31, 2025 and December 31, 2024:
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(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 |  | $ | 333 |  |  |  | 35 |  |  |  | 368 |  |  |  | 126,277 |  |  |  | 126,645 |  |  |  | - |
Single-family residential |  |  | 3,676 |  |  |  | 4,235 |  |  |  | 7,911 |  |  |  | 379,990 |  |  |  | 387,901 |  |  |  | - |
Commercial |  |  | 360 |  |  |  | 416 |  |  |  | 776 |  |  |  | 478,418 |  |  |  | 479,194 |  |  |  | - |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 69,470 |  |  |  | 69,470 |  |  |  | - |
Total real estate loans |  |  | 4,369 |  |  |  | 4,686 |  |  |  | 9,055 |  |  |  | 1,054,155 |  |  |  | 1,063,210 |  |  |  | - |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | - |  |  |  | 290 |  |  |  | 290 |  |  |  | 62,932 |  |  |  | 63,222 |  |  |  | - |
Farm |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 481 |  |  |  | 481 |  |  |  | - |
Consumer |  |  | 20 |  |  |  | 7 |  |  |  | 27 |  |  |  | 6,311 |  |  |  | 6,338 |  |  |  | - |
All other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 18,829 |  |  |  | 18,829 |  |  |  | - |
Total loans |  | $ | 4,389 |  |  |  | 4,983 |  |  |  | 9,372 |  |  |  | 1,142,708 |  |  |  | 1,152,080 |  |  |  | - |
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 |  |  |  | - |
The following table presents non-accrual loans as of March 31, 2025 and December 31, 2024:
|  | March 31, 2025 |
|  | Nonaccrual Loans |  |  | Nonaccrual Loans |  |  | Total |
|  | With No |  |  | With |  |  | Nonaccrual |
(Dollars in thousands) |  | Allowance |  |  | Allowance |  |  | Loans |
Real estate loans: |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | - |  |  |  | 35 |  |  |  | 35 |
Single-family residential |  |  | 1,345 |  |  |  | 2,890 |  |  |  | 4,235 |
Commercial |  |  | 416 |  |  |  | - |  |  |  | 416 |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |
Total real estate loans |  |  | 1,761 |  |  |  | 2,925 |  |  |  | 4,686 |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 223 |  |  |  | 67 |  |  |  | 290 |
Consumer |  |  | - |  |  |  | 7 |  |  |  | 7 |
Total |  | $ | 1,984 |  |  |  | 2,999 |  |  |  | 4,983 |
|  | 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 |
No interest income was recognized on non-accrual loans for the three months ended March 31, 2025 and 2024. 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 $2.0 million and $1.6 million at March 31, 2025 and December 31, 2024, respectively. Non-accrual loans evaluated collectively as a pool totaled $3.0 million and $2.8 million at March 31, 2025 and December 31, 2024, respectively. 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 March 31, 2025 and December 31, 2024.
|  | March 31, 2025 |  |  | December 31, 2024 |
|  |  |  |  | Allowance for |  |  |  |  |  | Allowance for |
(Dollars in thousands) |  | Amortized Cost |  |  | Credit Losses |  |  | Amortized Cost |  |  | Credit Losses |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 34 |  |  |  | 1 |  |  |  | 37 |  |  |  | - |
Single-family residential |  |  | 4,235 |  |  |  | 26 |  |  |  | 3,720 |  |  |  | - |
Commercial |  |  | 416 |  |  |  | - |  |  |  | 426 |  |  |  | - |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total real estate loans |  |  | 4,685 |  |  |  | 27 |  |  |  | 4,183 |  |  |  | - |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 261 |  |  |  | - |  |  |  | 248 |  |  |  | - |
Consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 4,946 |  |  |  | 27 |  |  |  | 4,431 |  |  |  | - |
The following tables provide a breakdown of collateral dependent loans by collateral type and collateral coverage at March 31, 2025 and 2024. These tables also show non-accrual loans not considered to be collateral dependent at March 31, 2025 and December 31, 2024.
|  | March 31, 2025 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Financial Assets |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Not Considered |  |  |  |
(Dollars in thousands) |  | Residential Property |  |  | Developed Land |  |  | Commercial Property |  |  | Business Assets |  |  | Collateral Dependent |  |  | Total |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | - |  |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 34 |
Single-family residential |  |  | 4,235 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,235 |
Commercial |  |  | - |  |  |  | - |  |  |  | 416 |  |  |  | - |  |  |  | - |  |  |  | 416 |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total real estate loans |  |  | 4,235 |  |  |  | 34 |  |  |  | 416 |  |  |  | - |  |  |  | - |  |  |  | 4,685 |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 261 |  |  |  | - |  |  |  | 261 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 37 |  |  |  | 37 |
Total |  | $ | 4,235 |  |  |  | 34 |  |  |  | 416 |  |  |  | 261 |  |  |  | 37 |  |  |  | 4,983 |
Collateral Value |  | $ | 12,234 |  |  |  | 88 |  |  |  | 655 |  |  |  | 273 |  |  |  |  |  |  |  |  |
|  | December 31, 2024 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Financial Assets |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Not Considered |  |  |  |
(Dollars in thousands) |  | Residential Property |  |  | Developed Land |  |  | Commercial Property |  |  | Business Assets |  |  | Collateral 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 |  |  |  |  |  |  |  |  |
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. No loans to borrowers experiencing financial difficulty were modified during the three months ended March 31, 2025. The following table shows the amortized cost basis at March 31, 2024 of the loans to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2024, disaggregated by loan class and type of concession granted.
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |
|  | Amortized Cost Basis at March 31, 2024 |  |  | % of Loan Class |  |  | Modification Type |  | Financial Effect |
Loan class: |  |  |  |  |  |  |  |  |  |  |
Commercial not secured by real estate |  |  | 73 |  |  |  | 0.11 | % |  | Term Extension |  | Line of credit converted to amortizing term loan. |
Total |  | $ | 73 |  |  |  |  |  |  |  |  |  |
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 were modified in the three months ended March 31, 2024.
March 31, 2024 |  |  |  |  |  |  |  |  |
(Dollars in thousands) |  |  |  |  |  |  |  |  |
|  | Payment Status (Amortized Cost Basis) |
|  | Current |  |  | 30 - 89 Days Past Due |  |  | 90 + Days Past Due |
Loan type: |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 73 |  |  |  | - |  |  |  | - |
Total |  | $ | 73 |  |  |  | - |  |  |  | - |
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 an independent 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 of the allowance, and any provision, 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. An 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 three months ended March 31, 2025 and 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 |
Three months ended March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,385 |  |  |  | 3,386 |  |  |  | 2,322 |  |  |  | 246 |  |  |  | 446 |  |  |  | 1 |  |  |  | 209 |  |  |  | 9,995 |
Charge-offs |  |  | - |  |  |  | (5 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (107 | ) |  |  | (112 | )
Recoveries |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 71 |  |  |  | 81 |
Provision (recovery) for |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
loan losses (1) |  |  | 78 |  |  |  | (24 | ) |  |  | 15 |  |  |  | (4 | ) |  |  | (12 | ) |  |  | - |  |  |  | 30 |  |  |  | 83 |
Ending balance |  | $ | 3,463 |  |  |  | 3,362 |  |  |  | 2,337 |  |  |  | 242 |  |  |  | 439 |  |  |  | 1 |  |  |  | 203 |  |  |  | 10,047 |
Allowance for credit loss-loans |  | $ | 3,463 |  |  |  | 3,362 |  |  |  | 2,337 |  |  |  | 242 |  |  |  | 439 |  |  |  | 1 |  |  |  | 203 |  |  |  | 10,047 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
loan commitments |  |  | 1,274 |  |  |  | 3 |  |  |  | 7 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1,286 |
Total allowance for credit losses |  | $ | 4,737 |  |  |  | 3,365 |  |  |  | 2,344 |  |  |  | 243 |  |  |  | 439 |  |  |  | 1 |  |  |  | 204 |  |  |  | 11,333 |
(1) Excludes provision for credit losses related to unfunded commitments. Note 7,"Commitments and Contingencies" in the condensed 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 |  |  | Total |
Three months ended March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,913 |  |  |  | 3,484 |  |  |  | 2,317 |  |  |  | 268 |  |  |  | 812 |  |  |  | 2 |  |  |  | 245 |  |  |  | 11,041 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (446 | ) |  |  | - |  |  |  | (210 | ) |  |  | (656 | )
Recoveries |  |  | - |  |  |  | 56 |  |  |  | 201 |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 36 |  |  |  | 299 |
Provision (recovery) for |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
loan losses (1) |  |  | (233 | ) |  |  | 57 |  |  |  | (173 | ) |  |  | 45 |  |  |  | 300 |  |  |  | - |  |  |  | 167 |  |  |  | 163 |
Ending balance |  | $ | 3,680 |  |  |  | 3,597 |  |  |  | 2,345 |  |  |  | 313 |  |  |  | 672 |  |  |  | 2 |  |  |  | 238 |  |  |  | 10,847 |
Allowance for credit loss-loans |  | $ | 3,680 |  |  |  | 3,597 |  |  |  | 2,345 |  |  |  | 313 |  |  |  | 672 |  |  |  | 2 |  |  |  | 238 |  |  |  | 10,847 |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
loan commitments |  |  | 1,692 |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1,698 |
Total allowance for credit losses |  | $ | 5,372 |  |  |  | 3,602 |  |  |  | 2,345 |  |  |  | 313 |  |  |  | 672 |  |  |  | 2 |  |  |  | 239 |  |  |  | 12,545 |
(1) Excludes provision for credit losses related to unfunded commitments. Note 7,"Commitments and Contingencies" in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments.
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 March 31, 2025.
|  | Term Loans by Origination Year |  |  |  |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Converted to |  |  |  |
(dollars in thousands) |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Revolving Loans |  |  | Term Loans |  |  | Total Loans |
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 11,959 |  |  |  | 43,989 |  |  |  | 28,700 |  |  |  | 26,681 |  |  |  | 4,916 |  |  |  | 9,824 |  |  |  | - |  |  |  | 72 |  |  |  | 126,141 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 441 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 441 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 63 |  |  |  | - |  |  |  | - |  |  |  | 63 |
Total Construction and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
land development |  | $ | 11,959 |  |  |  | 43,989 |  |  |  | 28,700 |  |  |  | 26,681 |  |  |  | 5,357 |  |  |  | 9,887 |  |  |  | - |  |  |  | 72 |  |  |  | 126,645 |
Single family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 8,864 |  |  |  | 22,893 |  |  |  | 34,893 |  |  |  | 72,155 |  |  |  | 43,050 |  |  |  | 85,136 |  |  |  | 114,182 |  |  |  | - |  |  |  | 381,173 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,322 |  |  |  | - |  |  |  | - |  |  |  | 1,322 |
Substandard |  |  | - |  |  |  | - |  |  |  | 31 |  |  |  | 1,345 |  |  |  | 96 |  |  |  | 3,617 |  |  |  | 317 |  |  |  | - |  |  |  | 5,406 |
Total single family |  | $ | 8,864 |  |  |  | 22,893 |  |  |  | 34,924 |  |  |  | 73,500 |  |  |  | 43,146 |  |  |  | 90,075 |  |  |  | 114,499 |  |  |  | - |  |  |  | 387,901 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 14,052 |  |  |  | 57,648 |  |  |  | 45,650 |  |  |  | 137,429 |  |  |  | 69,605 |  |  |  | 148,915 |  |  |  | 2,377 |  |  |  | - |  |  |  | 475,676 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 453 |  |  |  | - |  |  |  | 2,253 |  |  |  | - |  |  |  | - |  |  |  | 2,706 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 812 |  |  |  | - |  |  |  | - |  |  |  | 812 |
Total commercial |  | $ | 14,052 |  |  |  | 57,648 |  |  |  | 45,650 |  |  |  | 137,882 |  |  |  | 69,605 |  |  |  | 151,980 |  |  |  | 2,377 |  |  |  | - |  |  |  | 479,194 |
Multifamily and farmland |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 991 |  |  |  | 990 |  |  |  | 8,279 |  |  |  | 20,616 |  |  |  | 20,455 |  |  |  | 17,788 |  |  |  | 310 |  |  |  | - |  |  |  | 69,429 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 41 |  |  |  | - |  |  |  | - |  |  |  | 41 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total multifamily and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
farmland |  | $ | 991 |  |  |  | 990 |  |  |  | 8,279 |  |  |  | 20,616 |  |  |  | 20,455 |  |  |  | 17,829 |  |  |  | 310 |  |  |  | - |  |  |  | 69,470 |
Total real estate loans |  | $ | 35,866 |  |  |  | 125,520 |  |  |  | 117,553 |  |  |  | 258,679 |  |  |  | 138,563 |  |  |  | 269,771 |  |  |  | 117,186 |  |  |  | 72 |  |  |  | 1,063,210 |
Loans not secured by real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,239 |  |  |  | 8,400 |  |  |  | 12,023 |  |  |  | 5,105 |  |  |  | 2,598 |  |  |  | 12,860 |  |  |  | 19,386 |  |  |  | - |  |  |  | 62,611 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 136 |  |  |  | 18 |  |  |  | 166 |  |  |  | 1 |  |  |  | - |  |  |  | 321 |
Substandard |  |  | - |  |  |  | 13 |  |  |  | 25 |  |  |  | 223 |  |  |  | - |  |  |  | 29 |  |  |  | - |  |  |  | - |  |  |  | 290 |
Total Commercial |  | $ | 2,239 |  |  |  | 8,413 |  |  |  | 12,048 |  |  |  | 5,464 |  |  |  | 2,616 |  |  |  | 13,055 |  |  |  | 19,387 |  |  |  | - |  |  |  | 63,222 |
Farm |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 51 |  |  |  | 49 |  |  |  | 190 |  |  |  | 29 |  |  |  | - |  |  |  | - |  |  |  | 162 |  |  |  | - |  |  |  | 481 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total farm |  | $ | 51 |  |  |  | 49 |  |  |  | 190 |  |  |  | 29 |  |  |  | - |  |  |  | - |  |  |  | 162 |  |  |  | - |  |  |  | 481 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 532 |  |  |  | 1,496 |  |  |  | 1,079 |  |  |  | 574 |  |  |  | 142 |  |  |  | 137 |  |  |  | 2,348 |  |  |  | - |  |  |  | 6,308 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 20 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 20 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8 |  |  |  | 2 |  |  |  | - |  |  |  | 10 |
Total consumer |  | $ | 532 |  |  |  | 1,496 |  |  |  | 1,079 |  |  |  | 594 |  |  |  | 142 |  |  |  | 145 |  |  |  | 2,350 |  |  |  | - |  |  |  | 6,338 |
All other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 130 |  |  |  | 468 |  |  |  | - |  |  |  | 9,680 |  |  |  | 351 |  |  |  | 2,969 |  |  |  | 5,231 |  |  |  | - |  |  |  | 18,829 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total all other |  | $ | 130 |  |  |  | 468 |  |  |  | - |  |  |  | 9,680 |  |  |  | 351 |  |  |  | 2,969 |  |  |  | 5,231 |  |  |  | - |  |  |  | 18,829 |
Total loans not secured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
by real estate |  | $ | 2,952 |  |  |  | 10,426 |  |  |  | 13,317 |  |  |  | 15,767 |  |  |  | 3,109 |  |  |  | 16,169 |  |  |  | 27,130 |  |  |  | - |  |  |  | 88,870 |
Total loans |  | $ | 38,818 |  |  |  | 135,946 |  |  |  | 130,870 |  |  |  | 274,446 |  |  |  | 141,672 |  |  |  | 285,940 |  |  |  | 144,316 |  |  |  | 72 |  |  |  | 1,152,080 |
The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs for the three months ended March 31, 2025.
March 31, 2025 |  | Gross Loan Charge-offs by Origination Year |  |  |  |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  |  |
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Converted to |  |  | Total |
|  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Loans |  |  | Term Loans |  |  | Loans |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Single-family residential |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 5 |
Commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total real estate loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 5 |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 102 |  |  |  | - |  |  |  | - |  |  |  | 107 |
All other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total gross charge-offs |  | $ | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 107 |  |  |  | - |  |  |  | - |  |  |  | 112 |
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 during the year ended 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 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 131 |
Commercial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Multifamily and farmland |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total real estate loans |  |  | - |  |  |  | - |  |  |  | 126 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 131 |
Loans not secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | - |  |  |  | 447 |  |  |  | 397 |  |  |  | 74 |  |  |  | 179 |  |  |  | 37 |  |  |  | - |  |  |  | - |  |  |  | 1,134 |
Consumer |  |  | 5 |  |  |  | 37 |  |  |  | 9 |  |  |  | - |  |  |  | 1 |  |  |  | 557 |  |  |  | - |  |  |  | - |  |  |  | 609 |
All other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 107 |  |  |  | - |  |  |  | - |  |  |  | 107 |
Total gross charge-offs |  | $ | 5 |  |  |  | 484 |  |  |  | 532 |  |  |  | 74 |  |  |  | 180 |  |  |  | 706 |  |  |  | - |  |  |  | - |  |  |  | 1,981 |

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