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Loans, Allowance For Loan Losses And OREO | 3 Months Ended
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Mar. 31, 2021
Loans, Allowance For Loan Losses And OREO [Abstract] |
Loans, Allowance For Loan Losses And OREO | ﻿ Note 8 – Loans, allowance for loan losses and OREO Management has an established methodology used to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Bank has segmented certain loans in the portfolio by product type. Within these segments, the Bank has sub-segmented its portfolio into classes, based on the associated risks. The classifications set forth below do not correspond directly to the classifications set forth in the call report (Form FFIEC 041). Management has determined that the classifications set forth below are more appropriate for use in identifying and managing risk in the loan portfolio.
Loan Segments: |  | Loan Classes: |
Commercial |  | Commercial and industrial loans
Commercial real estate |  | Commercial mortgages – owner occupied
﻿ |  | Commercial mortgages – non-owner occupied
﻿ |  | Commercial construction
Consumer |  | Consumer unsecured
﻿ |  | Consumer secured
Residential |  | Residential mortgages
﻿ |  | Residential consumer construction
A summary of loans, net is as follows (dollars in thousands):
﻿ |  |  |
﻿ | As of:
﻿ | March 31, |  | December 31,
﻿ | 202 1 |  | 20 20
﻿ |  |  |
﻿Com mercial | $155,235 |  | $145,145
﻿Commercial real estate | 311,826 |  | 309,563
﻿Consumer | 90,496 |  | 92,344
﻿Residential | 56,034 |  | 62,038
﻿ |  |  |
﻿ Total loans (1) | 613,591 |  | 609,090
﻿ |  |  |
﻿Less allowance for loan losses | 7,106 |  | 7,156
﻿ |  |  |
﻿ Net loans | $606,485 |  | $601,934
| (1) |  | Includes net deferred (fees) of ($716) and ($18) as of March 31, 2021 and December 31, 20 20, respectively.
The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis. Note 8 – Loans, allowance for loan losses and OREO (continued) Below is a summary and definition of the Bank’s risk rating categories:
﻿RATING 1 | Excellent
RATING 2 | Above Average
RATING 3 | Satisfactory
RATING 4 | Acceptable / Low Satisfactory
RATING 5 | Monitor
RATING 6 | Special Mention
RATING 7 | Substandard
RATING 8 | Doubtful
RATING 9 | Loss
We segregate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:
| · |  | “Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.
| · |  | “Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.
| · |  | “Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.
| · |  | “Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may
Note 8 – Loans, allowance for loan losses and OREO (continued) not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.
| · |  | “Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but with 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. The possibility of loss is extremely high.
| · |  | “Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.
﻿ |  |
﻿Loans on Non-Accrual Status
﻿(dollars in thousands)
﻿ | As of
﻿ | March 31, 2021 | December 31, 20 20
﻿Com mercial | $117 | $121
Commercial Real Estate:
﻿ Commercial Mortgages-Owner Occupied | 911 | 940
﻿ Commercial Mortgages-Non-Owner Occupied | 668 | 552
﻿ Commercial Construction | - | -
Consumer |  |
﻿ Consumer Unsecured | - | -
﻿ Consumer Secured | 60 | 240
Residential: |
﻿ Residential Mortgages | 207 | 210
﻿ Residential Consumer Construction | - | -
﻿ |  |
﻿ Totals | $1,963 | $2,063
We also classify other real estate owned (OREO) as a nonperforming asset. OREO represents real property owned by the Bank which was acquired through purchase at foreclosure or from the borrower through a deed in lieu of foreclosure. OREO decreased to $761 on March 31, 2021 from $1,105 on December 31, 20 20. The following table represents the changes in Note 8 – Loans, allowance for loan losses and OREO (continued) OREO balance during the three months ended March 31, 2021 and year ended December 31, 20 20.
﻿ |  |
﻿ |  |
OREO Changes |
(dollars in thousands) |
﻿ | Three Months Ended | Year Ended
﻿ | March 31, 2021 | December 31, 20 20
﻿Balance at the beginning of the year (net) | $1,105 | $2,339
﻿Transfers from loans | 66 | 18
﻿Capitalized costs | - | -
﻿Valuation adjustments | - | (437)
﻿Sales proceeds | (344) | (844)
﻿Gain (loss) on disposition | (66) | 29
﻿Balance at the end of the period (net) | $761 | $1,105
﻿ At March 31, 2021 and December 31, 20 20, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. The Company held no residential real estate property in other real estate owned as of March 31, 2021 and December 31, 20 20. Note 8 – Loans, allowance for loan losses and OREO (continued) ﻿
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  | Impaired Loans
﻿ |  | (dollars in thousands)
﻿ |  | As of and For the Three Months Ended March 31, 2021
﻿ |  |  |  | Unpaid |  |  |  | Average |  | Interest
﻿ |  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
﻿2021 |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
﻿With No Related Allowance Recorded: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ 277 |  | $ 327 |  | $ - |  | $ 309 |  | $ 6
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | 2,105 |  | 2,461 |  | - |  | 2,124 |  | 41
﻿ | Commercial Mortgage Non-Owner Occupied | 634 |  | 685 |  | - |  | 637 |  | 4
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | 223 |  | 223 |  | - |  | 283 |  | 4
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | 1,339 |  | 1,409 |  | - |  | 1,343 |  | 12
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  |  |  |  |  |  |  |  |  |
﻿With an Allowance Recorded: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ - |  | $ - |  | $ - |  | $ 2 |  | $ -
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | - |  | - |  | - |  | - |  | -
﻿ | Commercial Mortgage Non-Owner Occupied | - |  | - |  | - |  | - |  | -
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | - |  | - |  | - |  | - |  | -
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | - |  | - |  | - |  | - |  | -
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  |  |  |  |  |  |  |  |  |
﻿Totals: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ 277 |  | $ 327 |  | $ - |  | $ 311 |  | $ 6
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | 2,105 |  | 2,461 |  | - |  | 2,124 |  | 41
﻿ | Commercial Mortgage Non-Owner Occupied | 634 |  | 685 |  | - |  | 637 |  | 4
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | 223 |  | 223 |  | - |  | 283 |  | 4
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | 1,339 |  | 1,409 |  | - |  | 1,343 |  | 12
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  | $ 4,578 |  | $ 5,105 |  | $ - |  | $ 4,698 |  | $ 67
﻿ Note 8 – Loans, allowance for loan losses and OREO (continued) ﻿
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  | Impaired Loans
﻿ |  | (dollars in thousands)
﻿ |  | As of and For the Year Ended December 31, 2020
﻿ |  |  |  | Unpaid |  |  |  | Average |  | Interest
﻿ |  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
﻿2020 |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
﻿With No Related Allowance Recorded: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ 341 |  | $ 341 |  | $ - |  | $ 405 |  | $ 30
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | 2,143 |  | 2,496 |  | - |  | 2,305 |  | 135
﻿ | Commercial Mortgage Non-Owner Occupied | 639 |  | 677 |  | - |  | 601 |  | 43
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | 343 |  | 346 |  | - |  | 225 |  | 16
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | 1,347 |  | 1,415 |  | - |  | 1,319 |  | 62
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  |  |  |  |  |  |  |  |  |
﻿With an Allowance Recorded: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ 4 |  | $ 4 |  | $ 4 |  | $ 6 |  | $ -
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | - |  | - |  | - |  | 6 |  | -
﻿ | Commercial Mortgage Non-Owner Occupied | - |  | - |  | - |  | 7 |  | -
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | - |  | - |  | - |  | - |  | -
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | - |  | - |  | - |  | 70 |  | -
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  |  |  |  |  |  |  |  |  |
﻿Totals: |  |  |  |  |  |  |  |  |
﻿ | Commercial | $ 345 |  | $ 345 |  | $ 4 |  | $ 411 |  | $ 30
﻿ | Commercial Real Estate |  |  |  |  |  |  |  |  |
﻿ | Commercial Mortgages-Owner Occupied | 2,143 |  | 2,496 |  | - |  | 2,311 |  | 135
﻿ | Commercial Mortgage Non-Owner Occupied | 639 |  | 677 |  | - |  | 608 |  | 43
﻿ | Commercial Construction | - |  | - |  | - |  | - |  | -
﻿ | Consumer |  |  |  |  |  |  |  |  |
﻿ | Consumer Unsecured | - |  | - |  | - |  | - |  | -
﻿ | Consumer Secured | 343 |  | 346 |  | - |  | 225 |  | 16
﻿ | Residential |  |  |  |  |  |  |  |  |
﻿ | Residential Mortgages | 1,347 |  | 1,415 |  | - |  | 1,389 |  | 62
﻿ | Residential Consumer Construction | - |  | - |  | - |  | - |  | -
﻿ |  | $ 4,817 |  | $ 5,279 |  | $ 4 |  | $ 4,944 |  | $ 286
﻿ Note 8 – Loans, allowance for loan losses and OREO (continued) ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ | Allowance for Loan Losses and Recorded Investment in Loans
﻿ | (dollars in thousands)
﻿ | As of and For the Three Months Ended March 31, 2021
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | Commercial |  |  |  |  |  |
﻿2021 | Commercial |  | Real Estate |  | Consumer |  | Residential |  | Total
﻿ |  |  |  |  |  |  |  |  |
﻿Allowance for Credit Losses: |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿Beginning Balance | $ 2,001 |  | $ 3,550 |  | $ 868 |  | $ 737 |  | $ 7,156
﻿ Charge-Offs | (54) |  | - |  | (10) |  | - |  | (64)
﻿ Recoveries | 4 |  | 3 |  | 6 |  | 1 |  | 14
﻿ Provision | 127 |  | (81) |  | (34) |  | (12) |  | -
﻿Ending Balance | 2,078 |  | 3,472 |  | 830 |  | 726 |  | 7,106
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Individually evaluated for impairment | - |  | - |  | - |  | - |  | -
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Collectively evaluated for impairment | 2,078 |  | 3,472 |  | 830 |  | 726 |  | 7,106
﻿ |  |  |  |  |  |  |  |  |
﻿Totals: | $ 2,078 |  | $ 3,472 |  | $ 830 |  | $ 726 |  | $ 7,106
﻿ |  |  |  |  |  |  |  |  |
﻿Financing Receivables: |  |  |  |  |  |  |  |  |
﻿Ending Balance: Individually evaluated for impairment | 277 |  | 2,739 |  | 223 |  | 1,339 |  | 4,578
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Collectively evaluated for impairment | 154,958 |  | 309,087 |  | 90,273 |  | 54,695 |  | 609,013
﻿ |  |  |  |  |  |  |  |  |
﻿Totals: | $ 155,235 |  | $ 311,826 |  | $ 90,496 |  | $ 56,034 |  | $ 613,591
﻿ ﻿ ﻿ ﻿ ﻿ Note 8 – Loans, allowance for loan losses and OREO (continued) ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿ | Allowance for Loan Losses and Recorded Investment in Loans
﻿ | (dollars in thousands)
﻿ | As of and For the Year Ended December 31, 2020
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | Commercial |  |  |  |  |  |
﻿2020 | Commercial |  | Real Estate |  | Consumer |  | Residential |  | Total
﻿ |  |  |  |  |  |  |  |  |
﻿Allowance for Credit Losses: |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |
﻿Beginning Balance | $ 1,330 |  | $ 1,932 |  | $ 865 |  | $ 702 |  | $ 4,829
﻿ Charge-Offs | (96) |  | (224) |  | (75) |  | (53) |  | (448)
﻿ Recoveries | 20 |  | 139 |  | 53 |  | 15 |  | 227
﻿ Provision | 747 |  | 1,703 |  | 25 |  | 73 |  | 2,548
﻿Ending Balance | 2,001 |  | 3,550 |  | 868 |  | 737 |  | 7,156
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Individually evaluated for impairment | 4 |  | - |  | - |  | - |  | 4
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Collectively evaluated for impairment | 1,997 |  | 3,550 |  | 868 |  | 737 |  | 7,152
﻿ |  |  |  |  |  |  |  |  |
﻿Totals: | $ 2,001 |  | $ 3,550 |  | $ 868 |  | $ 737 |  | $ 7,156
﻿ |  |  |  |  |  |  |  |  |
﻿Financing Receivables: |  |  |  |  |  |  |  |  |
﻿Ending Balance: Individually evaluated for impairment | 345 |  | 2,782 |  | 343 |  | 1,347 |  | 4,817
﻿ |  |  |  |  |  |  |  |  |
﻿Ending Balance: Collectively evaluated for impairment | 144,800 |  | 306,781 |  | 92,001 |  | 60,691 |  | 604,273
﻿ |  |  |  |  |  |  |  |  |
﻿Totals: | $ 145,145 |  | $ 309,563 |  | $ 92,344 |  | $ 62,038 |  | $ 609,090
﻿ ﻿ ﻿ ﻿ ﻿ Note 8 – Loans, allowance for loan losses and OREO (continued)
﻿ |  |  |  |  |  |  |
﻿ | Age Analysis of Past Due Loans as of
﻿ | March 31, 2021
﻿ | (dollars in thousands)
﻿ |  |  | Greater |  |  |  | Recorded Investment
﻿ | 30-59 Days | 60-89 Days | than | Total Past |  | Total | > 90 Days &
2021 | Past Due | Past Due | 90 Days | Due | Current | Loans | Accruing
﻿Commercial | $ - | $31 | $ - | $31 | $155,204 | $155,235 | $ -
Commercial Real Estate: |  |  |  |  |  |  |
﻿Commercial Mortgages- Owner Occupied | 108 | - | 633 | 741 | 108,933 | 109,674 | -
﻿Commercial Mortgages-Non-Owner Occupied | 100 | - | 627 | 727 | 169,722 | 170,449 | -
﻿ Commercial Construction | - | - | - | - | 31,703 | 31,703 | -
Consumer: |  |  |  |  |  |  |
﻿ Consumer Unsecured | 63 | - | - | 63 | 3,722 | 3,785 | -
﻿ Consumer Secured | 201 | 6 | 49 | 256 | 86,455 | 86,711 | -
Residential: |  |  |  |  |  |  |
﻿ Residential Mortgages | 264 | 68 | 207 | 539 | 42,315 | 42,854 | -
﻿ Residential Consumer Construction | - | - | - | - | 13,180 | 13,180 | -
﻿Total | $736 | $105 | $1,516 | $2,357 | $611,234 | $613,591 | $ -
﻿
﻿ |  |  |  |  |  |  |
﻿ | Age Analysis of Past Due Loans as of
﻿ | December 31, 2020
﻿ | (dollars in thousands)
﻿ |  |  | Greater |  |  |  | Recorded Investment
﻿ | 30-59 Days | 60-89 Days | than | Total Past |  | Total | > 90 Days &
2020 | Past Due | Past Due | 90 Days | Due | Current | Loans | Accruing
﻿Commercial | $157 | $ - | $ - | $157 | $144,988 | $145,145 | $ -
Commercial Real Estate: |  |  |  |  |  |  |
﻿Commercial Mortgages-Owner Occupied | 38 | - | 842 | 880 | 107,342 | 108,222 | -
﻿Commercial Mortgages-Non-Owner Occupied | 252 | 116 | 394 | 762 | 170,307 | 171,069 | -
﻿ Commercial Construction | - | - | - | - | 30,272 | 30,272 | -
Consumer: |  |  |  |  |  |  |
﻿ Consumer Unsecured | 7 | - | - | 7 | 3,764 | 3,771 | -
﻿ Consumer Secured | 309 | 27 | 229 | 565 | 88,008 | 88,573 | -
Residential: |  |  |  |  |  |  |
﻿ Residential Mortgages | 575 | 243 | 210 | 1,028 | 45,868 | 46,896 | -
﻿Residential Consumer Construction | - | - | - | - | 15,142 | 15,142 | -
﻿Total | $1,338 | $386 | $1,675 | $3,399 | $605,691 | $609,090 | $ -
﻿ Note 8 – Loans, allowance for loan losses and OREO (continued)
﻿ |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |
﻿ |  |
﻿ |  | Credit Quality Information - by Class
﻿ |  | March 31, 2021
﻿ |  | (dollars in thousands)
2021 |  | Pass | Monitor | Special | Substandard | Doubtful | Totals
﻿ |  |  |  | Mention |  |  |
﻿Commercial | $143,337 | $4,530 | $7,050 | $318 | $ - | $155,235
Commercial Real Estate: |  |  |  |  |
﻿ Commercial Mortgages-Owner Occupied | 99,739 | 3,406 | 4,424 | 2,105 | - | 109,674
﻿Commercial Mortgages-Non-Owner Occupied | 161,407 | 7,213 | 1,028 | 801 | - | 170,449
﻿Commercial Construction | 31,703 | - | - | - | - | 31,703
Consumer |  |  |  |  |  |  |
﻿Consumer Unsecured | 3,758 | - | 26 | 1 | - | 3,785
﻿Consumer Secured | 86,363 | - | - | 348 | - | 86,711
Residential: |  |  |  |  |  |
﻿Residential Mortgages | 41,408 | - | - | 1,446 | - | 42,854
﻿Residential Consumer Construction | 13,180 | - | - | - | - | 13,180
﻿ |  |  |  |  |  |  |
﻿Totals |  | $580,895 | $15,149 | $12,528 | $5,019 | $ - | $613,591
﻿
﻿ |  |  |  |  |  |  |
﻿ |  |
﻿ |  | Credit Quality Information - by Class
﻿ |  | December 31, 2020
﻿ |  | (dollars in thousands)
2020 |  | Pass | Monitor | Special | Substandard | Doubtful | Totals
﻿ |  |  |  | Mention |  |  |
﻿Commercial | $133,075 | $4,332 | $7,386 | $352 | $ - | $145,145
Commercial Real Estate: |  |  |  |  |
﻿Commercial Mortgages-Owner Occupied | 98,623 | 3,028 | 4,428 | 2,143 | - | 108,222
﻿Commercial Mortgages-Non -Owner Occupied | 161,300 | 7,277 | 1,682 | 810 | - | 171,069
﻿Commercial Construction | 30,272 | - | - | - | - | 30,272
Consumer |  |  |  |  |  |  |
﻿Consumer Unsecured | 3,740 | - | 30 | 1 | - | 3,771
﻿Consumer Secured | 88,044 | - | - | 529 | - | 88,573
Residential: |  |  |  |  |  |
﻿Residential Mortgages | 45,441 | - | - | 1,455 | - | 46,896
﻿Residential Consumer Construction | 15,142 | - | - | - | - | 15,142
﻿ |  |  |  |  |  |  |
﻿Totals |  | $575,637 | $14,637 | $13,526 | $5,290 | $ - | $609,090
Note 8 – Loans, allowance for loan losses and OREO (continued) Troubled Debt Restructurings (TDR) There were no loan modifications that would have been classified as TDRs during the three months ended March 31, 2021 and 20 20. There were no loan modifications classified as TDRs within the last twelve months that defaulted during the three months ended March 31, 2021 and 20 20. At March 31, 2021 and December 31, 20 20, the Bank had no outstanding commitments to disburse additional funds on loans classified as TDRs. We have developed relief programs to assist borrowers in financial need due to the effects of the COVID-19 pandemic. Accordingly, we offered short-term modifications made in response to COVID-19 to certain borrowers who were current and otherwise not past due. These include short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, deferral of principal only (interest only payments), or other delays in payment that are insignificant. Since the beginning of the pandemic in the spring of 2020, the Bank has modified a total of 191 loans. The principal balances of these loans on March 31, 2021 (adjusted for payoffs) totaled approximately $90 million. As of March 31, 2020, 5 of the 191 previously modified loans remain in deferment. The principal balance of these 5 loans is approximately $6.12 million, which represents 1.00% of the total loan portfolio. Of the total deferrals, all 5 loans are for deferrals of principal only. There are no loans for which principal and interested are being deferred. If a customer requests a second modification, an extensive evaluation of the circumstances surrounding the need for the request is conducted. Procedurally, a commercial borrower will be required to present financial forecasts, proof of business sustainability, and verification of sources of repayment to the primary loan officer, the Chief Lending Officer, and the Chief Credit Officer before a second deferral is granted. Retail borrowers are also required to submit in writing the reason for the need for a second deferral request before an additional deferral is granted. Relationships whose situations do not warrant a second deferral will most likely be downgraded and subsequently evaluated for specific impairment within the allowance for loan loss. We are not currently evaluating any relationships, for additional deferrals. In accordance with provisions of Section 4013 of the CARES Act (March 2020) and the Joint Interagency Regulatory Guidance (March 2020, revised April 2020), the above modifications were not considered to be TDRs. The CARES Act addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. The Interagency Guidance encouraged financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19 and explained that in consultation with the Financial Accounting Standards Board (FASB) staff, the federal banking agencies concluded that short-term modifications (e.g. six months or less) made on a good faith basis to borrowers who were current as of the implementation date of a relief program and not TDRs. In December 2020, the Consolidated Appropriations Act extended the peri od established by Section 4013 o f the CARES Act for providing temporary relief from TDR classification to the Note 8 - Loans and allowance for loan losses (continued) earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.

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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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