XML 26 R16.htm IDEA: XBRL DOCUMENT
v3.21.2

Loans, Allowance For Loan Losses And OREO | 9 Months Ended
--- | ---
Sep. 30, 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 loansCommercial real estate Commercial mortgages – owner occupied Commercial mortgages – non-owner occupied Commercial constructionConsumer Consumer unsecured Consumer securedResidential Residential mortgages Residential consumer construction A summary of loans, net is as follows (dollars in thousands): As of: September 30, December 31, 2021 2020Commercial$ 116,923 $ 145,145Commercial real estate 327,665 309,563Consumer 92,633 92,344Residential 53,627 62,038 Total loans (1) 590,848 609,090 Less allowance for loan losses 7,276 7,156 Net loans$ 583,572 $ 601,934 (1)Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, 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 ExcellentRATING 2 Above AverageRATING 3 SatisfactoryRATING 4 Acceptable / Low SatisfactoryRATING 5 MonitorRATING 6 Special MentionRATING 7 SubstandardRATING 8 DoubtfulRATING 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 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.‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Loans on Non-Accrual Status(dollars in thousands) As of September 30, 2021 December 31, 2020Commercial$ 293 $ 121Commercial Real Estate: Commercial Mortgages-Owner Occupied 650 940 Commercial Mortgages-Non-Owner Occupied 529 552 Commercial Construction — —Consumer Consumer Unsecured — — Consumer Secured 267 240Residential: Residential Mortgages 165 210 Residential Consumer Construction — — Totals$ 1,904 $ 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 $806 on September 30, 2021 from $1,105 on December 31, 2020. The following table represents the changes in OREO balance during the nine months ended September 30, 2021 and year ended December 31, 2020. OREO Changes(dollars in thousands) Nine Months Ended Year Ended September 30, 2021 December 31, 2020Balance at the beginning of the year (net)$ 1,105 $ 2,339Transfers from loans 111 18Capitalized costs — —Valuation adjustments — (437)Sales proceeds (344) (844)Gain (loss) on disposition (66) 29Balance at the end of the period (net)$ 806 $ 1,105 At September 30, 2021 and December 31, 2020, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. The Company held one residential real estate property in other real estate owned as of September 30, 2021 and no residential properties in OREO as of December 31, 2020.‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Impaired Loans (dollars in thousands) As of and For the Nine Months Ended September 30, 2021 Unpaid Average Interest Recorded Principal Related Recorded Income 2021Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 250 $ 305 $ — $ 296 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 60 60 — 202 2Residential Residential Mortgages 1,321 1,394 — 1,334 36 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 173 180 15 87 1Residential Residential Mortgages — — — — — Residential Consumer Construction — — — — — Totals: Commercial$ 250 $ 305 $ — $ 298 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 233 240 15 289 3Residential Residential Mortgages 1,321 1,394 — 1,334 36 Residential Consumer Construction — — — — — $ 4,229 $ 4,734 $ 15 $ 4,525 $ 163 ‎ 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 2020Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 341 $ 341 $ — $ 405 $ 30Commercial 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 16Residential 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 $ 30Commercial 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 16Residential 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 Nine Months Ended September 30, 2021 Commercial 2021Commercial Real Estate Consumer Residential TotalAllowance for Credit Losses: Beginning Balance$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156 Charge-Offs (53) — (27) — (80) Recoveries 107 70 22 1 200 Provision (124) 87 (4) 41 —Ending Balance 1,931 3,707 859 779 7,276 Ending Balance: Individually evaluated for impairment — — 15 — 15 Ending Balance: Collectively evaluated for impairment 1,931 3,707 844 779 7,261 Totals:$ 1,931 $ 3,707 $ 859 $ 779 $ 7,276 Financing Receivables: Ending Balance: Individually evaluated for impairment 250 2,425 233 1,321 4,229 Ending Balance: Collectively evaluated for impairment 116,673 325,240 92,400 52,306 586,619 Totals:$ 116,923 $ 327,665 $ 92,633 $ 53,627 $ 590,848 ‎ 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 2020Commercial Real Estate Consumer Residential TotalAllowance 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 2,548Ending 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 September 30, 2021 (dollars in thousands) Greater Recorded Investment 30-59 Days 60-89 Days than Total Past Total > 90 Days &2021Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 179 $ — $ 103 $ 282 $ 116,641 $ 116,923 $ —Commercial Real Estate: Commercial Mortgages- Owner Occupied 68 — 502 570 122,460 123,030 —Commercial Mortgages-Non-Owner Occupied 98 106 384 588 177,505 178,093 — Commercial Construction — — — — 26,542 26,542 —Consumer: Consumer Unsecured 12 — — 12 4,759 4,771 — Consumer Secured 172 53 258 483 87,379 87,862 —Residential: Residential Mortgages 238 — 165 403 34,291 34,694 — Residential Consumer Construction — — — — 18,933 18,933 —Total$ 767 $ 159 $ 1,412 $ 2,338 $ 588,510 $ 590,848 $ — 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 &2020Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 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 September 30, 2021 (dollars in thousands)2021 Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 104,909 $ 4,430 $ 7,294 $ 290 $ — $ 116,923Commercial Real Estate: Commercial Mortgages-Owner Occupied 113,498 3,309 4,265 1,958 — 123,030Commercial Mortgages-Non-Owner Occupied 174,834 2,547 59 653 — 178,093Commercial Construction 26,542 — — — — 26,542Consumer Consumer Unsecured 4,746 — 24 1 — 4,771Consumer Secured 87,474 — — 388 — 87,862Residential: Residential Mortgages 33,248 — — 1,446 — 34,694Residential Consumer Construction 18,933 — — — — 18,933 Totals$ 564,184 $ 10,286 $ 11,642 $ 4,736 $ — $ 590,848 Credit Quality Information - by Class December 31, 2020 (dollars in thousands) 2020Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 133,075 $ 4,332 $ 7,386 $ 352 $ — $ 145,145Commercial Real Estate: Commercial Mortgages-Owner Occupied 98,623 3,028 4,428 2,143 — 108,222Commercial Mortgages-Non -Owner Occupied 161,300 7,277 1,682 810 — 171,069Commercial Construction 30,272 — — — — 30,272Consumer Consumer Unsecured 3,740 — 30 1 — 3,771Consumer Secured 88,044 — — 529 — 88,573Residential: Residential Mortgages 45,441 — — 1,455 — 46,896Residential 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 and nine months ended September 30, 2021 and 2020. There were no loan modifications classified as TDRs within the last twelve months that defaulted during the three and nine months ended September 30, 2021 and 2020. At September 30, 2021 and December 31, 2020, 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 September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remain in deferment and all such previously deferred loans are current. 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 are not TDRs. In December 2020, the Consolidated Appropriations Act extended the period established by Section 4013 of the CARES Act for providing temporary relief from TDR classification to the earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.

X
- 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
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration