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Loans and Allowance for Loan Losses | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loans and Allowance for Loan Losses |
3. | Loans and Allowance for Loan Losses
Loans consisted of the following as of the dates indicated below: Schedule of Loans
|  | September 30, |  |  | December 31, |
(Dollars in thousands) |  | 2020 |  |  | 2019 |
One-to-four family residential real estate |  | $ | 162,344 |  |  | $ | 146,505 |
Construction and land |  |  | 28,094 |  |  |  | 22,459 |
Commercial real estate |  |  | 154,804 |  |  |  | 133,501 |
Commercial |  |  | 137,286 |  |  |  | 109,612 |
Paycheck protection program |  |  | 130,977 |  |  |  | - |
Agriculture |  |  | 99,430 |  |  |  | 98,558 |
Municipal |  |  | 2,389 |  |  |  | 2,656 |
Consumer |  |  | 23,988 |  |  |  | 25,101 |
Total gross loans |  |  | 739,312 |  |  |  | 538,392 |
Net deferred loan (fees)/costs and loans in process |  |  | (2,796 | ) |  |  | 255 |
Allowance for loan losses |  |  | (8,366 | ) |  |  | (6,467 | )
Loans, net |  | $ | 728,150 |  |  | $ | 532,180 |
The following tables provide information on the Company’s activity in the allowance for loan losses by loan class: Schedule of Allowance for Credit Losses on Financing Receivables
(Dollars in thousands) |  | Three and nine months ended September 30, 2020 |
|  | One-to-four family residential real estate |  |  | Construction and land |  |  | Commercial real estate |  |  | Commercial |  |  | Agriculture |  |  | Municipal |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at July 1, 2020 |  | $ | 707 |  |  | $ | 273 |  |  | $ | 1,693 |  |  | $ | 2,356 |  |  | $ | 2,565 |  |  | $ | 6 |  |  | $ | 147 |  |  | $ | 7,747 |
Charge-offs |  |  | (89 | ) |  |  | (91 | ) |  |  | - |  |  |  | (167 | ) |  |  | (3 | ) |  |  | - |  |  |  | (57 | ) |  |  | (407 | )
Recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 25 |  |  |  | 26 |
Provision for loan losses |  |  | 213 |  |  |  | 22 |  |  |  | 264 |  |  |  | 436 |  |  |  | 15 |  |  |  | - |  |  |  | 50 |  |  |  | 1,000 |
Balance at September 30, 2020 |  |  | 831 |  |  |  | 204 |  |  |  | 1,957 |  |  |  | 2,626 |  |  |  | 2,577 |  |  |  | 6 |  |  |  | 165 |  |  |  | 8,366 |
Balance at January 1, 2020 |  | $ | 501 |  |  | $ | 271 |  |  | $ | 1,386 |  |  | $ | 1,815 |  |  | $ | 2,347 |  |  | $ | 7 |  |  | $ | 140 |  |  | $ | 6,467 |
Charge-offs |  |  | (109 | ) |  |  | (191 | ) |  |  | (120 | ) |  |  | (200 | ) |  |  | (3 | ) |  |  | - |  |  |  | (180 | ) |  |  | (803 | )
Recoveries |  |  | - |  |  |  | - |  |  |  | 13 |  |  |  | 3 |  |  |  | - |  |  |  | 6 |  |  |  | 80 |  |  |  | 102 |
Provision for loan losses |  |  | 439 |  |  |  | 124 |  |  |  | 678 |  |  |  | 1,008 |  |  |  | 233 |  |  |  | (7 | ) |  |  | 125 |  |  |  | 2,600 |
Balance at September 30, 2020 |  |  | 831 |  |  |  | 204 |  |  |  | 1,957 |  |  |  | 2,626 |  |  |  | 2,577 |  |  |  | 6 |  |  |  | 165 |  |  |  | 8,366 |
(Dollars in thousands) |  | Three and nine months ended September 30, 2019 |
|  | One-to-four family residential real estate |  |  | Construction and land |  |  | Commercial real estate |  |  | Commercial |  |  | Agriculture |  |  | Municipal |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at July 1, 2019 |  | $ | 441 |  |  | $ | 255 |  |  | $ | 1,758 |  |  | $ | 1,404 |  |  | $ | 2,260 |  |  | $ | 7 |  |  | $ | 141 |  |  | $ | 6,266 |
Charge-offs |  |  | (15 | ) |  |  | (31 | ) |  |  | - |  |  |  | (284 | ) |  |  | - |  |  |  | - |  |  |  | (81 | ) |  |  | (411 | )
Recoveries |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 23 |  |  |  | 24 |
Provision for loan losses |  |  | 249 |  |  |  | (156 | ) |  |  | (326 | ) |  |  | 490 |  |  |  | 40 |  |  |  | (1 | ) |  |  | 104 |  |  |  | 400 |
Balance at September 30, 2019 |  |  | 675 |  |  |  | 68 |  |  |  | 1,432 |  |  |  | 1,611 |  |  |  | 2,300 |  |  |  | 6 |  |  |  | 187 |  |  |  | 6,279 |
Balance at January 1, 2019 |  | $ | 449 |  |  | $ | 168 |  |  | $ | 1,686 |  |  | $ | 1,051 |  |  | $ | 2,238 |  |  | $ | 7 |  |  | $ | 166 |  |  | $ | 5,765 |
Charge-offs |  |  | (56 | ) |  |  | (31 | ) |  |  | - |  |  |  | (324 | ) |  |  | - |  |  |  | - |  |  |  | (183 | ) |  |  | (594 | )
Recoveries |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 52 |  |  |  | - |  |  |  | 6 |  |  |  | 49 |  |  |  | 108 |
Provision for loan losses |  |  | 281 |  |  |  | (69 | ) |  |  | (254 | ) |  |  | 832 |  |  |  | 62 |  |  |  | (7 | ) |  |  | 155 |  |  |  | 1,000 |
Balance at September 30, 2019 |  |  | 675 |  |  |  | 68 |  |  |  | 1,432 |  |  |  | 1,611 |  |  |  | 2,300 |  |  |  | 6 |  |  |  | 187 |  |  |  | 6,279 |
The following tables provide information on the Company’s activity in the allowance for loan losses by loan class and allowance methodology:
(Dollars in thousands) |  | As of September 30, 2020 |
|  | One-to-four family residential real estate |  |  | Construction and land |  |  | Commercial real estate |  |  | Commercial |  |  | Paycheck protection loans |  |  | Agriculture |  |  | Municipal |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for loss |  |  | 213 |  |  |  | - |  |  |  | - |  |  |  | 25 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 238 |
Collectively evaluated for loss |  |  | 618 |  |  |  | 204 |  |  |  | 1,957 |  |  |  | 2,601 |  |  |  | - |  |  |  | 2,577 |  |  |  | 6 |  |  |  | 165 |  |  |  | 8,128 |
Total |  |  | 831 |  |  |  | 204 |  |  |  | 1,957 |  |  |  | 2,626 |  |  |  | - |  |  |  | 2,577 |  |  |  | 6 |  |  |  | 165 |  |  |  | 8,366 |
Loan balances: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for loss |  |  | 1,259 |  |  |  | 1,198 |  |  |  | 4,929 |  |  |  | 2,055 |  |  |  | - |  |  |  | 1,059 |  |  |  | 58 |  |  |  | 2 |  |  |  | 10,560 |
Collectively evaluated for loss |  |  | 161,085 |  |  |  | 26,896 |  |  |  | 149,875 |  |  |  | 135,231 |  |  |  | 130,977 |  |  |  | 98,371 |  |  |  | 2,331 |  |  |  | 23,986 |  |  |  | 728,752 |
Total |  | $ | 162,344 |  |  | $ | 28,094 |  |  | $ | 154,804 |  |  | $ | 137,286 |  |  | $ | 130,977 |  |  | $ | 99,430 |  |  | $ | 2,389 |  |  | $ | 23,988 |  |  | $ | 739,312 |
(Dollars in thousands) |  | As of December 31, 2019 |
|  | One-to-four family residential real estate |  |  | Construction and land |  |  | Commercial real estate |  |  | Commercial |  |  | Paycheck protection loans |  |  | Agriculture |  |  | Municipal |  |  | Consumer |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for loss |  |  | 129 |  |  |  | 191 |  |  |  | 103 |  |  |  | 204 |  |  |  | - |  |  |  | 106 |  |  |  | - |  |  |  | - |  |  |  | 733 |
Collectively evaluated for loss |  |  | 372 |  |  |  | 80 |  |  |  | 1,283 |  |  |  | 1,611 |  |  |  | - |  |  |  | 2,241 |  |  |  | 7 |  |  |  | 140 |  |  |  | 5,734 |
Total |  |  | 501 |  |  |  | 271 |  |  |  | 1,386 |  |  |  | 1,815 |  |  |  | - |  |  |  | 2,347 |  |  |  | 7 |  |  |  | 140 |  |  |  | 6,467 |
Loan balances: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for loss |  |  | 1,256 |  |  |  | 1,479 |  |  |  | 3,461 |  |  |  | 1,298 |  |  |  | - |  |  |  | 1,124 |  |  |  | 58 |  |  |  | 4 |  |  |  | 8,680 |
Collectively evaluated for loss |  |  | 145,249 |  |  |  | 20,980 |  |  |  | 130,040 |  |  |  | 108,314 |  |  |  | - |  |  |  | 97,434 |  |  |  | 2,598 |  |  |  | 25,097 |  |  |  | 529,712 |
Total |  | $ | 146,505 |  |  | $ | 22,459 |  |  | $ | 133,501 |  |  | $ | 109,612 |  |  | $ | - |  |  | $ | 98,558 |  |  | $ | 2,656 |  |  | $ | 25,101 |  |  | $ | 538,392 |
The Company’s impaired loans increased from $8.7 million at December 31, 2019 to $10.6 million at September 30, 2020. The difference between the unpaid contractual principal and the impaired loan balance is a result of charge-offs recorded against impaired loans. The difference in the Company’s non-accrual loan balances and impaired loan balances at September 30, 2020 and December 31, 2019, was related to troubled debt restructurings (“TDR”) that are current and accruing interest, but still classified as impaired. Interest income recognized on a cash basis on impaired loans was immaterial during the three and nine month periods ended September 30, 2020 and 2019. The following tables present information on impaired loans: Schedule of Impaired Financing Receivables
(Dollars in thousands) |  | As of September 30, 2020 |
|  | Unpaid contractual principal |  |  | Impaired loan balance |  |  | Impaired loans without an allowance |  |  | Impaired loans with an allowance |  |  | Related allowance recorded |  |  | Year-to-date average loan balance |  |  | Year-to-date interest income recognized |
One-to-four family residential real estate |  | $ | 1,348 |  |  | $ | 1,259 |  |  | $ | 959 |  |  | $ | 300 |  |  | $ | 213 |  |  | $ | 1,319 |  |  | $ | 1 |
Construction and land |  |  | 2,933 |  |  |  | 1,198 |  |  |  | 1,198 |  |  |  | - |  |  |  | - |  |  |  | 1,225 |  |  |  | 19 |
Commercial real estate |  |  | 4,929 |  |  |  | 4,929 |  |  |  | 4,929 |  |  |  | - |  |  |  | - |  |  |  | 4,946 |  |  |  | 356 |
Commercial |  |  | 2,354 |  |  |  | 2,055 |  |  |  | 1,952 |  |  |  | 103 |  |  |  | 25 |  |  |  | 2,281 |  |  |  | 32 |
Agriculture |  |  | 1,274 |  |  |  | 1,059 |  |  |  | 1,059 |  |  |  | - |  |  |  | - |  |  |  | 1,155 |  |  |  | 61 |
Municipal |  |  | 58 |  |  |  | 58 |  |  |  | 58 |  |  |  | - |  |  |  | - |  |  |  | 58 |  |  |  | 1 |
Consumer |  |  | 2 |  |  |  | 2 |  |  |  | 2 |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | - |
Total impaired loans |  | $ | 12,898 |  |  | $ | 10,560 |  |  | $ | 10,157 |  |  | $ | 403 |  |  | $ | 238 |  |  | $ | 10,987 |  |  | $ | 470 |
(Dollars in thousands) |  | As of December 31, 2019 |
|  | Unpaid contractual principal |  |  | Impaired loan balance |  |  | Impaired loans without an allowance |  |  | Impaired loans with an allowance |  |  | Related allowance recorded |  |  | Year-to-date average loan balance |  |  | Year-to-date interest income recognized |
One-to-four family residential real estate |  | $ | 1,297 |  |  | $ | 1,256 |  |  | $ | 887 |  |  | $ | 369 |  |  | $ | 129 |  |  | $ | 1,291 |  |  | $ | 10 |
Construction and land |  |  | 3,214 |  |  |  | 1,479 |  |  |  | 1,288 |  |  |  | 191 |  |  |  | 191 |  |  |  | 1,631 |  |  |  | 36 |
Commercial real estate |  |  | 3,461 |  |  |  | 3,461 |  |  |  | 3,258 |  |  |  | 203 |  |  |  | 103 |  |  |  | 3,489 |  |  |  | 478 |
Commercial |  |  | 1,427 |  |  |  | 1,298 |  |  |  | 416 |  |  |  | 882 |  |  |  | 204 |  |  |  | 1,464 |  |  |  | 11 |
Agriculture |  |  | 1,339 |  |  |  | 1,124 |  |  |  | 613 |  |  |  | 511 |  |  |  | 106 |  |  |  | 1,166 |  |  |  | 48 |
Municipal |  |  | 58 |  |  |  | 58 |  |  |  | 58 |  |  |  | - |  |  |  | - |  |  |  | 58 |  |  |  | 1 |
Consumer |  |  | 4 |  |  |  | 4 |  |  |  | 4 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |
Total impaired loans |  | $ | 10,800 |  |  | $ | 8,680 |  |  | $ | 6,524 |  |  | $ | 2,156 |  |  | $ | 733 |  |  | $ | 9,104 |  |  | $ | 584 |
The Company’s key credit quality indicator is a loan’s performance status, defined as accruing or non-accruing. Performing loans are considered to have a lower risk of loss. Non-accrual loans are those which the Company believes have a higher risk of loss. The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. There were no loans 90 days or more delinquent and accruing interest at September 30, 2020 or December 31, 2019. The following tables present information on the Company’s past due and non-accrual loans by loan class: Schedule of Past Due Financing Receivables
(Dollars in thousands) |  | As of September 30, 2020 |
|  | 30-59 days delinquent and accruing |  |  | 60-89 days delinquent and accruing |  |  | 90 days or more delinquent and accruing |  |  | Total past due loans accruing |  |  | Non-accrual loans |  |  | Total past due and non-accrual loans |  |  | Total loans not past due |
One-to-four family residential real estate |  | $ | 30 |  |  | $ | 425 |  |  | $ | - |  |  | $ | 455 |  |  | $ | 1,243 |  |  | $ | 1,698 |  |  | $ | 160,646 |
Construction and land |  |  | 598 |  |  |  | - |  |  |  | - |  |  |  | 598 |  |  |  | 697 |  |  |  | 1,295 |  |  |  | 26,799 |
Commercial real estate |  |  | - |  |  |  | 1,654 |  |  |  | - |  |  |  | 1,654 |  |  |  | 2,910 |  |  |  | 4,564 |  |  |  | 150,240 |
Commercial |  |  | 443 |  |  |  | 37 |  |  |  | - |  |  |  | 480 |  |  |  | 1,202 |  |  |  | 1,682 |  |  |  | 135,604 |
Paycheck protection loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 130,977 |
Agriculture |  |  | 476 |  |  |  | - |  |  |  | - |  |  |  | 476 |  |  |  | 292 |  |  |  | 768 |  |  |  | 98,662 |
Municipal |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,389 |
Consumer |  |  | 24 |  |  |  | 1 |  |  |  | - |  |  |  | 25 |  |  |  | 2 |  |  |  | 27 |  |  |  | 23,961 |
Total |  | $ | 1,571 |  |  | $ | 2,117 |  |  | $ | - |  |  | $ | 3,688 |  |  | $ | 6,346 |  |  | $ | 10,034 |  |  | $ | 729,278 |
Percent of gross loans |  |  | 0.21% |  |  |  | 0.29% |  |  |  | 0.00% |  |  |  | 0.50% |  |  |  | 0.86% |  |  |  | 1.36% |  |  |  | 98.64% |
(Dollars in thousands) |  | As of December 31, 2019 |
|  | 30-59 days delinquent and accruing |  |  | 60-89 days delinquent and accruing |  |  | 90 days or more delinquent and accruing |  |  | Total past due loans accruing |  |  | Non-accrual loans |  |  | Total past due and non-accrual loans |  |  | Total loans not past due |
One-to-four family residential real estate |  | $ | 79 |  |  | $ | 593 |  |  | $ | - |  |  | $ | 672 |  |  | $ | 1,088 |  |  | $ | 1,760 |  |  | $ | 144,745 |
Construction and land |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 898 |  |  |  | 898 |  |  |  | 21,561 |
Commercial real estate |  |  | 1,137 |  |  |  | 707 |  |  |  | - |  |  |  | 1,844 |  |  |  | 1,440 |  |  |  | 3,284 |  |  |  | 130,217 |
Commercial |  |  | 510 |  |  |  | 68 |  |  |  | - |  |  |  | 578 |  |  |  | 1,270 |  |  |  | 1,848 |  |  |  | 107,764 |
Agriculture |  |  | 316 |  |  |  | - |  |  |  | - |  |  |  | 316 |  |  |  | 846 |  |  |  | 1,162 |  |  |  | 97,396 |
Municipal |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,656 |
Consumer |  |  | 27 |  |  |  | - |  |  |  | - |  |  |  | 27 |  |  |  | 4 |  |  |  | 31 |  |  |  | 25,070 |
Total |  | $ | 2,069 |  |  | $ | 1,368 |  |  | $ | - |  |  | $ | 3,437 |  |  | $ | 5,546 |  |  | $ | 8,983 |  |  | $ | 529,409 |
Percent of gross loans |  |  | 0.39% |  |  |  | 0.25% |  |  |  | 0.00% |  |  |  | 0.64% |  |  |  | 1.03% |  |  |  | 1.67% |  |  |  | 98.33% |
Under the original terms of the Company’s non-accrual loans, interest earned on such loans for the nine months ended September 30, 2020 and 2019 would have increased interest income by $264,000 and $171,000, respectively. No interest income related to non-accrual loans was included in interest income for the nine months ended September 30, 2020 and 2019. The Company also categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Non-classified loans generally include those loans that are expected to be repaid in accordance with contractual loan terms. Classified loans are those that are assigned a special mention, substandard or doubtful risk rating using the following definitions: Special Mention: Loans are currently protected by the current net worth and paying capacity of the obligor or of the collateral pledged but such protection is potentially weak. These loans constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of substandard. The credit risk may be relatively minor, yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset. Substandard: Loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following table provides information on the Company’s risk categories by loan class: Schedule of Risk Categories by Loan Class
(Dollars in thousands) |  | As of September 30, 2020 |  |  | As of December 31, 2019 |
|  | Non-classified |  |  | Classified |  |  | Non-classified |  |  | Classified |
One-to-four family residential real estate |  | $ | 161,026 |  |  | $ | 1,318 |  |  | $ | 145,311 |  |  | $ | 1,194 |
Construction and land |  |  | 26,799 |  |  |  | 1,295 |  |  |  | 21,560 |  |  |  | 899 |
Commercial real estate |  |  | 149,712 |  |  |  | 5,092 |  |  |  | 130,714 |  |  |  | 2,787 |
Commercial |  |  | 129,882 |  |  |  | 7,404 |  |  |  | 101,678 |  |  |  | 7,934 |
Payroll protection loan |  |  | 130,977 |  |  |  | - |  |  |  | - |  |  |  | - |
Agriculture |  |  | 89,405 |  |  |  | 10,025 |  |  |  | 93,259 |  |  |  | 5,299 |
Municipal |  |  | 2,389 |  |  |  | - |  |  |  | 2,656 |  |  |  | - |
Consumer |  |  | 23,986 |  |  |  | 2 |  |  |  | 25,097 |  |  |  | 4 |
Total |  | $ | 714,176 |  |  | $ | 25,136 |  |  | $ | 520,275 |  |  | $ | 18,117 |
At September 30, 2020, the Company had twelve loan relationships consisting of 22 outstanding loans that were classified as TDRs. During the three and nine months ended September 30, 2020, the Company modified the payment terms for two agriculture loans totaling $571,000 and classified the restructurings as TDRs. A commercial loan totaling $33,000 and a $1.4 million loan relationship consisting of two commercial real estate loans and one construction loan were classified as TDRs during the three and nine months ended September 30, 2020 after negotiating restructuring agreements with the borrowers. One commercial loan relationship with five loans totaling $827,000 were classified as TDRs during the nine months ended September 30, 2020, after the payments were modified to interest only. All of the loans classified as TDRs were experiencing financial difficulties prior to the COVID-19 pandemic. One agriculture loan previously classified as a TDR paid off during 2020. No loans were classified as TDRs during the first nine months of 2019. The Company evaluates each TDR individually and returns the loan to accrual status when a payment history is established after the restructuring and future payments are reasonably assured. There were no loans modified as TDRs for which there was a payment default within 12 months of modification as of September 30, 2020 and 2019. The Company did not record any charge-offs against loans classified as TDRs in the first nine months of 2020 or 2019. No provision for loan losses were recorded against TDRs in the three months ended September 30, 2020 as compared to a credit provision of $1,000 recorded in the three months ended September 30, 2019. No provision for loan losses was recorded against TDRs in the nine months ended September 30, 2020 compared to a credit provision of $1,000 in the nine months ended September 30, 2019. The Company allocated $9,000 of the allowance for loan losses against loans classified as TDRs at September 30, 2020 and December 31, 2019, respectively. The following table presents information on loans that are classified as TDRs: Schedule of Troubled Debt Restructurings On Financing Receivables
(Dollars in thousands) |  | As of September 30, 2020 |  |  | As of December 31, 2019 |
|  | Number of loans |  |  | Non-accrual balance |  |  | Accruing balance |  |  | Number of loans |  |  | Non-accrual balance |  |  | Accruing balance |
One-to-four family residential real estate |  |  | 1 |  |  | $ | - |  |  | $ | 15 |  |  |  | 2 |  |  | $ | - |  |  | $ | 168 |
Construction and land |  |  | 5 |  |  |  | 697 |  |  |  | 501 |  |  |  | 4 |  |  |  | 510 |  |  |  | 581 |
Commercial real estate |  |  | 3 |  |  |  | 1,227 |  |  |  | 2,019 |  |  |  | 1 |  |  |  | - |  |  |  | 2,021 |
Commercial |  |  | 7 |  |  |  | 33 |  |  |  | 853 |  |  |  | 1 |  |  |  | - |  |  |  | 28 |
Agriculture |  |  | 5 |  |  |  | - |  |  |  | 767 |  |  |  | 4 |  |  |  | - |  |  |  | 278 |
Municipal |  |  | 1 |  |  |  | - |  |  |  | 58 |  |  |  | 1 |  |  |  | - |  |  |  | 58 |
Total troubled debt restructurings |  |  | 22 |  |  | $ | 1,957 |  |  | $ | 4,213 |  |  |  | 13 |  |  | $ | 510 |  |  | $ | 3,134 |
As of September 30, 2020, the Company had 33 loan modifications on outstanding loan balances of $22.9 million in connection with the COVID-19 pandemic. These modifications consisted of payment deferrals that consisted of either the full loan payment or just the principal component. Between March 31, 2020 and September 30, 2020, 107 loans with outstanding loan balances of $35.7 million had reached the end of their initial deferral periods and returned to their respective contractual payment terms. Additionally, as of September 30, 2020, only three borrowers with aggregate loans outstanding of $6.8 million were granted a second deferral. The Company also entered into short-term forbearance plans or short-term repayment plans on eight one-to-four family residential mortgage loans totaling $982,000 as of September 30, 2020. Consistent with the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and Joint Interagency Regulatory Guidance, these loan modifications were not classified as TDRs and are excluded from the table above.

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