Loan and Allowance for Credit Losses	6 Months Ended
Loan and Allowance for Credit Losses	Jun. 30, 2024
Loans And Leases Receivable Disclosure [Abstract]
Loans and leases receivable disclosure [Text Block]	NOTE 5: LOANS AND ALLOWANCE FOR CREDIT LOSSES June 30, December 31, (Dollars in thousands) 2024 2023 Commercial and industrial $ 77,627 $ 73,374 Construction and land development 73,688 68,329 Commercial real estate: Owner occupied 63,384 66,783 Hotel/motel 38,542 39,131 Multi-family 44,135 45,841 Other 151,171 135,552 Total commercial real estate 297,232 287,307 Residential real estate: Consumer mortgage 60,957 60,545 Investment property 58,470 56,912 Total residential real estate 119,427 117,457 Consumer installment 10,094 10,827 Total Loans $ 578,068 $ 557,294 Loans secured by real estate were approximately 84.8% of the Company’s total loan portfolio at June 30, 2024. At June 30, 2024, the Company’s geographic loan distribution was concentrated primarily in Lee County, Alabama, and surrounding areas. The loan portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. As part of the Company’s quarterly assessment of the allowance, the loan portfolio included the following portfolio segments: commercial and industrial, construction and land development, commercial real estate, residential real estate, and consumer installment. Where appropriate, the Company’s loan portfolio segments are further disaggregated into classes. A class is generally determined based on the initial measurement attribute, risk characteristics of the loan, and an entity’s method for monitoring and determining credit risk. The following describes the risk characteristics relevant to each of the portfolio segments and classes. Commercial and industrial (“C&I”) — includes loans to finance business operations, equipment purchases, or other needs for small and medium-sized commercial customers. Also included in this category are loans to finance agricultural production. Generally, the primary source of repayment is the cash flow from business operations and activities of the borrower. Construction and land development (“C&D”) — includes both loans and credit lines for the purpose of purchasing, carrying, and developing land into commercial developments or residential subdivisions. Also included are loans and credit lines for construction of residential, multi-family, and commercial buildings. Generally, the primary source of repayment is dependent upon the sale or refinance of the real estate collateral. Commercial real estate (“CRE”) — includes loans in these classes: ● Owner occupied – includes loans secured by business facilities to finance business operations, equipment and owner-occupied facilities primarily for small and medium-sized commercial customers. Generally, the primary source of repayment is the cash flow from business operations and activities of the borrower, who owns the property. ● Hotel/motel – includes loans for hotels and motels. Generally, the primary source of repayment is dependent upon income generated from the hotel/motel securing the loan. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the borrower. ● Multi-family – primarily includes loans to finance income-producing multi-family properties . These include loans for 5 or more unit residential properties and apartments leased to residents. Generally , the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the respective borrowers. ● Other – primarily includes loans to finance income-producing commercial properties other than hotels/motels and multi-family properties, and which are not owner occupied. Loans in this class include loans for neighborhood retail centers, medical and professional offices, single retail stores, industrial buildings, and warehouses leased to local and other businesses. Generally, the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the borrower. Residential real estate (“RRE”) — includes loans in these two classes: ● Consumer mortgage – primarily includes first or second lien mortgages and home equity lines of credit to consumers that are secured by a primary residence or second home. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history , and property value. ● Investment property – primarily includes loans to finance income-producing 1-4 family residential properties. Generally, the primary source of repayment is dependent upon income generated from leasing the property securing the loan. The underwriting of these loans takes into consideration the rental rates and property values, as well as the financial health of the borrowers. Consumer installment — includes loans to individuals, which may be secured by personal property or are unsecured. Loans include personal lines of credit, automobile loans, and other retail loans. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history, and, if applicable, property values. The following is a summary of current, accruing past due, and nonaccrual loans by portfolio segment and class as of June 30, 2024 and December 31, 2023. Accruing Accruing Total 30-89 Days Greater than Accruing Non- Total (Dollars in thousands) Current Past Due 90 days Loans Accrual Loans June 30, 2024: Commercial and industrial $ 77,625 2 — 77,627 — $ 77,627 Construction and land development 73,284 404 — 73,688 — 73,688 Commercial real estate: Owner occupied 62,631 — — 62,631 753 63,384 Hotel/motel 38,542 — — 38,542 — 38,542 Multi-family 44,135 — — 44,135 — 44,135 Other 151,171 — — 151,171 — 151,171 Total commercial real estate 296,479 — — 296,479 753 297,232 Residential real estate: Consumer mortgage 60,805 111 — 60,916 41 60,957 Investment property 58,372 98 — 58,470 — 58,470 Total residential real estate 119,177 209 — 119,386 41 119,427 Consumer installment 10,071 23 — 10,094 — 10,094 Total $ 576,636 638 — 577,274 794 $ 578,068 December 31, 2023: Commercial and industrial $ 73,108 266 — 73,374 — $ 73,374 Construction and land development 68,329 — — 68,329 — 68,329 Commercial real estate: Owner occupied 66,000 — — 66,000 783 66,783 Hotel/motel 39,131 — — 39,131 — 39,131 Multi-family 45,841 — — 45,841 — 45,841 Other 135,552 — — 135,552 — 135,552 Total commercial real estate 286,524 — — 286,524 783 287,307 Residential real estate: Consumer mortgage 60,442 — — 60,442 103 60,545 Investment property 56,597 290 — 56,887 25 56,912 Total residential real estate 117,039 290 — 117,329 128 117,457 Consumer installment 10,781 46 — 10,827 — 10,827 Total $ 555,781 602 — 556,383 911 $ 557,294 Credit Quality Indicators The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. These categories are utilized to develop the associated allowance for credit losses using historical losses adjusted for qualitative and environmental factors and are defined as follows: ● Pass – loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral. ● Special Mention – loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification. ● Substandard Accruing – loans that exhibit a well-defined weakness which presently jeopardizes debt repayment, even though they are currently performing. These loans are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected . ● Nonaccrual – includes loans where management has determined that full payment of principal and interest is not expected. Substandard accrual and nonaccrual loans are often collectively referred to as “classified.” The following tables presents credit quality indicators for the loan portfolio segments and classes by year of origination as of June 30, 2024 and December 31, 2023. The December 31, 2023 table has been revised to correct revolving loans and properly allocate loans by year of origination. See Note 1: Summary of Significant Accounting Policies – Correction of Error. Year of Origination 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) June 30, 2024: Commercial and industrial Pass $ 5,671 13,080 19,641 13,026 5,350 17,043 3,485 $ 77,296 Special mention — 74 — — — — — 74 Substandard 54 6 187 10 — — — 257 Nonaccrual — — — — — — — — Total commercial and industrial 5,725 13,160 19,828 13,036 5,350 17,043 3,485 77,627 Current period gross charge-offs — — 9 — — — — 9 Construction and land development Pass 17,898 27,794 23,510 1,544 1,823 144 — 72,713 Special mention 332 404 — — — — — 736 Substandard 239 — — — — — — 239 Nonaccrual — — — — — — — — Total construction and land development 18,469 28,198 23,510 1,544 1,823 144 — 73,688 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 509 12,454 7,030 17,282 9,469 9,711 4,991 61,446 Special mention 931 254 — — — — — 1,185 Substandard — — — — — — — — Nonaccrual — — — — — 753 — 753 Total owner occupied 1,440 12,708 7,030 17,282 9,469 10,464 4,991 63,384 Current period gross charge-offs — — — — — — — — Hotel/motel Pass 245 8,822 9,677 3,142 1,397 14,993 266 38,542 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 245 8,822 9,677 3,142 1,397 14,993 266 38,542 Current period gross charge-offs — — — — — — — — Year of Origination 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) June 30, 2024: Multi-family Pass 192 11,710 17,279 1,916 5,967 6,505 566 44,135 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total multi-family 192 11,710 17,279 1,916 5,967 6,505 566 44,135 Current period gross charge-offs — — — — — — — — Other Pass 26,641 21,591 26,844 25,885 13,606 18,612 16,961 150,140 Special mention 905 — — — — — — 905 Substandard — — — — 126 — — 126 Nonaccrual — — — — — — — — Total other 27,546 21,591 26,844 25,885 13,732 18,612 16,961 151,171 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 3,621 18,043 18,685 2,614 2,612 12,084 2,272 59,931 Special mention — — — — — 490 — 490 Substandard — — — — — 495 — 495 Nonaccrual — — — — — 41 — 41 Total consumer mortgage 3,621 18,043 18,685 2,614 2,612 13,110 2,272 60,957 Current period gross charge-offs — — — — — — — — Investment property Pass 7,691 12,004 11,111 8,908 12,301 5,773 281 58,069 Special mention — — — — — — — — Substandard — 82 95 — 224 — — 401 Nonaccrual — — — — — — — — Total investment property 7,691 12,086 11,206 8,908 12,525 5,773 281 58,470 Current period gross charge-offs — — — — — — — — Consumer installment Pass 3,216 3,443 2,098 359 123 191 582 10,012 Special mention — 9 27 10 — — — 46 Substandard 10 21 5 — — — — 36 Nonaccrual — — — — — — — — Total consumer installment 3,226 3,473 2,130 369 123 191 582 10,094 Current period gross charge-offs — 18 24 1 — — — 43 Total loans Pass 65,684 128,941 135,875 74,676 52,648 85,056 29,404 572,284 Special mention 2,168 741 27 10 — 490 — 3,436 Substandard 303 109 287 10 350 495 — 1,554 Nonaccrual — — — — — 794 — 794 Total loans $ 68,155 129,791 136,189 74,696 52,998 86,835 29,404 $ 578,068 Total current period gross charge-offs $ — 18 33 1 — — — 52 Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Total Loans (Dollars in thousands) December 31, 2023: Commercial and industrial Pass $ 11,571 18,074 13,746 5,602 7,298 7,819 9,003 $ 73,113 Special mention — — — — — — — — Substandard 55 203 — — 3 — — 261 Nonaccrual — — — — — — — — Total commercial and industrial 11,626 18,277 13,746 5,602 7,301 7,819 9,003 73,374 Current period gross charge-offs — — 13 — 151 — — 164 Construction and land development Pass 38,646 25,382 1,716 1,526 120 157 782 68,329 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total construction and land development 38,646 25,382 1,716 1,526 120 157 782 68,329 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 12,966 7,337 18,548 10,458 3,948 9,786 2,647 65,690 Special mention 260 — — — — — — 260 Substandard — — — — 50 — — 50 Nonaccrual — — — — 783 — — 783 Total owner occupied 13,226 7,337 18,548 10,458 4,781 9,786 2,647 66,783 Current period gross charge-offs — — — — — — — — Hotel/motel Pass 9,025 9,873 3,205 1,493 3,881 11,654 — 39,131 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 9,025 9,873 3,205 1,493 3,881 11,654 — 39,131 Current period gross charge-offs — — — — — — — — Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Total Loans (Dollars in thousands) December 31, 2023: Multi-family Pass 12,379 17,955 1,953 6,112 3,790 3,043 609 45,841 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total multi-family 12,379 17,955 1,953 6,112 3,790 3,043 609 45,841 Current period gross charge-offs — — — — — — — — Other Pass 25,810 36,076 31,687 14,597 10,736 15,440 1,052 135,398 Special mention — — — — — — — — Substandard — — — 154 — — — 154 Nonaccrual — — — — — — — — Total other 25,810 36,076 31,687 14,751 10,736 15,440 1,052 135,552 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 20,147 20,177 2,683 2,665 1,281 12,217 249 59,419 Special mention — — — — 190 305 — 495 Substandard — — — — — 528 — 528 Nonaccrual — — — — — 103 — 103 Total consumer mortgage 20,147 20,177 2,683 2,665 1,471 13,153 249 60,545 Current period gross charge-offs — — — — — — — — Investment property Pass 13,398 12,490 9,397 12,209 5,485 1,865 1,478 56,322 Special mention 41 — — — — — — 41 Substandard 43 248 — 233 — — — 524 Nonaccrual — — — — — 25 — 25 Total investment property 13,482 12,738 9,397 12,442 5,485 1,890 1,478 56,912 Current period gross charge-offs — — — — — — — — Consumer installment Pass 5,688 3,837 740 206 106 141 — 10,718 Special mention 9 25 9 2 — — — 45 Substandard 37 11 5 11 — — — 64 Nonaccrual — — — — — — — — Total consumer installment 5,734 3,873 754 219 106 141 — 10,827 Current period gross charge-offs 34 57 13 1 — — — 105 Total loans Pass 149,630 151,201 83,675 54,868 36,645 62,122 15,820 553,961 Special mention 310 25 9 2 190 305 — 841 Substandard 135 462 5 398 53 528 — 1,581 Nonaccrual — — — — 783 128 — 911 Total loans $ 150,075 151,688 83,689 55,268 37,671 63,083 15,820 $ 557,294 Total current period gross charge-offs $ 34 57 26 1 151 — — 269 Allowance for Credit Losses The Company adopted ASC 326 on January 1, 2023, which introduced the CECL methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology, the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics, and for loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. The composition of the provision for (reversal of) credit losses for the respective periods is presented below. Quarter ended June 30, Six months ended June 30, (Dollars in thousands) 2024 2023 2024 2023 Provision for credit losses: Loans $ (64) $ (331) $ 221 $ (291) Reserve for unfunded commitments (59) (31) (10) (5) Total provision for (reversal of) credit losses $ (123) $ (362) $ 211 $ (296) The following table details the changes in the allowance for credit losses for loans, by portfolio segment, for the respective periods. (Dollars in thousands) Commercial and industrial Construction and land development Commercial real estate Residential real estate Consumer installment Total Quarter ended: June 30, 2024 Beginning balance $ 1,415 840 4,202 613 145 $ 7,215 Charge-offs (9) — — — (19) (28) Recoveries 8 — — 2 9 19 Net (charge-offs) recoveries (1) — — 2 (10) (9) Provision for (reversal of) credit losses (48) 102 (111) (12) 5 (64) Ending balance $ 1,366 942 4,091 603 140 $ 7,142 Six months ended: June 30, 2024 Beginning balance $ 1,288 960 3,921 546 148 $ 6,863 Charge-offs (9) — — — (43) (52) Recoveries 74 — — 5 31 110 Net recoveries (charge-offs) 65 — — 5 (12) 58 Provision for (reversal of) credit losses 13 (18) 170 52 4 221 Ending balance $ 1,366 942 4,091 603 140 $ 7,142 (Dollars in thousands) Commercial and industrial Construction and land development Commercial real estate Residential real estate Consumer installment Total Quarter ended: June 30, 2023 Beginning balance $ 1,232 1,021 3,966 497 105 $ 6,821 Charge-offs — — — — (56) (56) Recoveries 194 — — 5 1 200 Net recoveries (charge-offs) 194 — — 5 (55) 144 Provision for (reversal of) credit losses (228) (16) (178) 27 64 (331) Ending balance $ 1,198 1,005 3,788 529 114 $ 6,634 Six months ended: June 30, 2023 Beginning balance $ 747 949 3,109 828 132 $ 5,765 Impact of adopting ASC 326 532 (17) 873 (347) (22) 1,019 Charge-offs — — — — (67) (67) Recoveries 196 — — 10 2 208 Net recoveries (charge-offs) 196 — — 10 (65) 141 Provision for (reversal of) credit losses (277) 73 (194) 38 69 (291) Ending balance $ 1,198 1,005 3,788 529 114 $ 6,634 The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of March 31, 2024 and December 31, 2023: (Dollars in thousands) Real Estate Total Loans June 30, 2024: Commercial real estate $ 753 $ 753 Total $ 753 $ 753 December 31, 2023: Commercial real estate $ 783 $ 783 Total $ 783 $ 783 The following table is a summary of the Company’s nonaccrual loans by major categories as of March 31, 2024 and December 31, 2023. CECL Nonaccrual loans Nonaccrual loans Total (Dollars in thousands) with no Allowance with an Allowance Nonaccrual Loans June 30, 2024 Commercial real estate $ 753 — 753 Residential real estate — 41 41 Total $ 753 41 794 December 31, 2023 Commercial real estate $ 783 — 783 Residential real estate — 128 128 Total $ 783 128 911