Loans and allowance for loan losses	12 Months Ended
Dec. 31, 2021
Loans and allowance for loan losses [Abstract]
Loans, Allowance For Loan Losses And OREO	Note 5 - Loans and allowance for loan losses The allowance represents an amount that, in management’s judgment, will be adequate to absorb probable losses inherent in the loan portfolio. Management’s judgment in determining the level of the allowance is based on evaluations of the collectability of loans while taking into consideration such factors as trends in delinquencies and charge-offs, changes in the nature and volume of the loan portfolio, current economic conditions that may affect a borrower’s ability to repay and the value of collateral, overall portfolio quality and review of specific potential losses. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. 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 by classes within the segments, based on the associated risks within these classes. 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 ‎ Note 5 - Loans and allowance for loan losses (continued) The evaluation also considers the following risk characteristics of each loan segment: Commercial loans carry risks associated with the successful operation of a business because the repayment of these loans may be dependent upon the profitability and cash flows of the business or project. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision.Commercial real estate loans carry risks associated with a real estate project and other risks associated with the ownership of real estate. In addition, for real estate construction loans there is a risk that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may, at any point in time, be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be a loan customer, may be unable to finish the construction project as planned because of financial pressure unrelated to the project.Consumer loans carry risks associated with the continued credit-worthiness of the borrower and the value of the collateral (e.g., rapidly-depreciating assets such as automobiles), or lack thereof. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. Unsecured consumer loans carry additional risks associated with the continued credit-worthiness of borrowers who may be unable to meet payment obligations.Residential mortgage and construction loans carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. Equity lines of credit carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. 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. 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 Based on the above criteria, we segregate loans into the above categories for special mention, substandard, doubtful and loss from non-classified, or pass rated, loans. We review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:‎Note 5 - Loans and allowance for loan losses (continued) “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 provide 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 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 5 - Loans and allowance for loan losses (continued) The Bank grants primarily commercial, real estate, and installment loans to customers throughout its market area. The real estate portfolio can be affected by the condition of the local real estate markets. The commercial and installment loan portfolio can be affected by the local economic conditions. A summary of loans, net is as follows: December 31, 2021 2020 Commercial$ 105,067 $ 145,145Commercial real estate 338,149 309,563Consumer 89,102 92,344Residential 51,066 62,038 Total loans (1) 583,384 609,090 Less allowance for loan losses 6,915 7,156 Net loans$ 576,469 $ 601,934 (1)Includes net deferred (fees) and costs/premiums of $372 and $(18) as of December 31, 2021 and 2020, respectively. The amounts of overdraft reclassified as loans were $182 and $43 as of December 31, 2021 and 2020, respectively. The Company’s officers, directors and their related interests have various types of loan relationships with the Bank. The total outstanding balances of these related party loans at December 31, 2021 and 2020 were $11,148 and $12,192 respectively. The beginning balance was adjusted during 2021 to include a $117 loan to a director that was not included as a related-party loan at the end of 2020. During 2021, new loans and advances amounted to $7,694 and repayments amounted to $8,738. ‎ Note 5 - Loans and allowance for loan losses (continued) The following tables set forth information regarding impaired and non-accrual loans as of December 31, 2021 and 2020: Loans on Non-Accrual Status As of December 31, 2021 2020Commercial$ 25 $ 121Commercial Real Estate: Commercial Mortgages-Owner Occupied 501 940Commercial Mortgages-Non-Owner Occupied 138 552Commercial Construction — —Consumer Consumer Unsecured — —Consumer Secured 127 240Residential: Residential Mortgages 163 210Residential Consumer Construction — — Totals$ 954 $ 2,063 ‎ Note 5 - Loans and allowance for loan losses (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2021 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With No Related Allowance Recorded: Commercial$ 17 $ 67 $ - $ 179 $ 5 Commercial Real Estate Commercial Mortgages-Owner Occupied 2,592 2,971 - 2,368 154 Commercial Mortgage Non-Owner Occupied 102 102 - 371 13 Commercial Construction - - - - - Consumer Consumer Unsecured - - - - - Consumer Secured 59 60 - 201 2 Residential Residential Mortgages 1,316 1,390 - 1,332 47 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$ 17 $ 67 $ - $ 181 $ 5 Commercial Real Estate Commercial Mortgages-Owner Occupied 2,592 2,971 - 2,368 154 Commercial Mortgage Non-Owner Occupied 102 102 - 371 13 Commercial Construction - - - - - Consumer Consumer Unsecured - - - - - Consumer Secured 59 60 - 201 2 Residential Residential Mortgages 1,316 1,390 - 1,332 47 Residential Consumer Construction - - - - - $ 4,086 $ 4,590 $ - $ 4,453 $ 221 ‎ Note 5 - Loans and allowance for loan losses (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment RecognizedWith 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the allowance for loan losses activity for the years ended December 31, 2021 and 2020: Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Year Ended December 31, 2021 Commercial 2021Commercial Real Estate Consumer Residential Total Allowance for Loan Losses: Beginning Balance$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156Charge-Offs (53) - (38) - (91)Recoveries 112 72 29 137 350Provision (recovery) (589) 15 1 73 (500)Ending Balance 1,471 3,637 860 947 6,915 Ending Balance: Individually evaluated for impairment - - - - - Ending Balance: Collectively evaluated for impairment 1,471 3,637 860 947 6,915 Totals:$ 1,471 $ 3,637 $ 860 $ 947 $ 6,915 Financing Receivables: Ending Balance: Individually evaluated for impairment 17 2,694 59 1,316 4,086 Ending Balance: Collectively evaluated for impairment 105,050 335,455 89,043 49,750 579,298 Totals:$ 105,067 $ 338,149 $ 89,102 $ 51,066 $ 583,384 ‎Note 5 - Loans and allowance for loan losses (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 Total Allowance for Loan Losses: Beginning Balance$ 1,330 $ 1,932 $ 865 $ 702 $ 4,829Charge-Offs (96) (224) (75) (53) (448)Recoveries 20 139 53 15 227Provision 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the age analysis of past due loans as of the years ended December 31, 2021 and 2020: Age Analysis of Past Due Loans as of December 31, 2021 Recorded Greater Investment2021 30-59 Days 60-89 Days than Total Past Total > 90 Days & Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ — $ 1 $ 25 $ 26 $ 105,041 $ 105,067 $ —Commercial Real Estate: Commercial Mortgages-Owner Occupied 464 — 501 965 127,869 128,834 —Commercial Mortgages-Non-Owner Occupied 1,310 — — 1,310 177,803 179,113 —Commercial Construction — — — — 30,202 30,202 —Consumer: Consumer Unsecured 8 1 — 9 2,596 2,605 —Consumer Secured 111 3 118 232 86,265 86,497 —Residential: Residential Mortgages 948 — 163 1,111 30,814 31,925 —Residential Consumer Construction — — — — 19,141 19,141 —Total$ 2,841 $ 5 $ 807 $ 3,653 $ 579,731 $ 583,384 $ — Age Analysis of Past Due Loans as of December 31, 2020 Recorded2020 Investment 30-59 Days 60-89 Days Greater than Total Past Total > 90 Days & Past 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the credit quality information by segment as of the years ended December 31, 2021 and 2020: Credit Quality Information - by ClassDecember 31, 20212021 Pass Monitor Special Substandard Doubtful Totals Mention Commercial$ 92,789 $ 7,965 $ 4,262 $ 51 $ — $ 105,067Commercial Real Estate: Commercial Mortgages-Owner Occupied 116,098 5,986 4,130 2,620 — 128,834Commercial Mortgages-Non-Owner Occupied 176,291 2,506 — 316 — 179,113Commercial Construction 30,202 — — — — 30,202Consumer Consumer Unsecured 2,581 — 23 1 — 2,605Consumer Secured 86,265 — — 232 — 86,497Residential: Residential Mortgages 30,486 — — 1,439 — 31,925Residential Consumer Construction 19,141 — — — — 19,141 Totals$ 553,853 $ 16,457 $ 8,415 $ 4,659 $ — $ 583,384 Credit Quality Information - by ClassDecember 31, 20202020 Pass Monitor Special Substandard Doubtful Totals Mention Commercial$ 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 5 - Loans and allowance for loan losses (continued) Troubled Debt Restructurings (TDRs) There were no loan modifications that were classified as Troubled Debt Restructurings (TDR) during the twelve months ended December 31, 2021 or 2020. Loans that were previously classified as TDRs in prior periods and currently outstanding are factored into the determination of the allowance for loan losses and are included in the Bank’s impaired loan analysis and individually evaluated for impairment. At December 31, 2021 and December 31, 2020, the Bank had no outstanding commitments to disburse additional funds on loans classified as TDRs. There were no loan modifications classified as TDRs within the last twelve months that defaulted (90 days past due) during the twelve months ended December 31, 2021 and 2020. We previously 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 included 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. During the year ended December 31, 2020, the Bank modified a total of 191 loans with principal balances totaling approximately $95 million. As of December 31, 2021, none of the 191 previously modified loans remained in deferment and all have returned to previously agreed upon repayment schedules. No loans were modified in the year ended December 31, 2021. If a customer requested a second modification, an extensive evaluation of the circumstances surrounding the need for the request was conducted. Procedurally, a commercial borrower was 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 was granted. Retail borrowers were also required to submit in writing the reason for the need for a second deferral request before an additional deferral was granted. 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 period established by Section 4013 of the CARES Act for providing temporary relief from Note 5 - Loans and allowance for loan losses (continued) TDR classification to the earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.

Loans and allowance for loan losses

12 Months Ended

Dec. 31, 2021

Loans and allowance for loan losses [Abstract]

Loans, Allowance For Loan Losses And OREO

Note 5 - Loans and allowance for loan losses The allowance represents an amount that, in management’s judgment, will be adequate to absorb probable losses inherent in the loan portfolio. Management’s judgment in determining the level of the allowance is based on evaluations of the collectability of loans while taking into consideration such factors as trends in delinquencies and charge-offs, changes in the nature and volume of the loan portfolio, current economic conditions that may affect a borrower’s ability to repay and the value of collateral, overall portfolio quality and review of specific potential losses. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. 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 by classes within the segments, based on the associated risks within these classes. 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 ‎ Note 5 - Loans and allowance for loan losses (continued) The evaluation also considers the following risk characteristics of each loan segment: Commercial loans carry risks associated with the successful operation of a business because the repayment of these loans may be dependent upon the profitability and cash flows of the business or project. In addition, there is risk associated with the value of collateral other than real estate which may depreciate over time and cannot be appraised with as much precision.Commercial real estate loans carry risks associated with a real estate project and other risks associated with the ownership of real estate. In addition, for real estate construction loans there is a risk that the project will not be finished according to schedule, the project will not be finished according to budget and the value of the collateral may, at any point in time, be less than the principal amount of the loan. Construction loans also bear the risk that the general contractor, who may or may not be a loan customer, may be unable to finish the construction project as planned because of financial pressure unrelated to the project.Consumer loans carry risks associated with the continued credit-worthiness of the borrower and the value of the collateral (e.g., rapidly-depreciating assets such as automobiles), or lack thereof. Consumer loans are more likely than real estate loans to be immediately adversely affected by job loss, divorce, illness or personal bankruptcy. Unsecured consumer loans carry additional risks associated with the continued credit-worthiness of borrowers who may be unable to meet payment obligations.Residential mortgage and construction loans carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. Equity lines of credit carry risks associated with the continued credit-worthiness of the borrower and changes in the value of the collateral. 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. 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 Based on the above criteria, we segregate loans into the above categories for special mention, substandard, doubtful and loss from non-classified, or pass rated, loans. We review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:‎Note 5 - Loans and allowance for loan losses (continued) “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 provide 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 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 5 - Loans and allowance for loan losses (continued) The Bank grants primarily commercial, real estate, and installment loans to customers throughout its market area. The real estate portfolio can be affected by the condition of the local real estate markets. The commercial and installment loan portfolio can be affected by the local economic conditions. A summary of loans, net is as follows: December 31, 2021 2020 Commercial$ 105,067 $ 145,145Commercial real estate 338,149 309,563Consumer 89,102 92,344Residential 51,066 62,038 Total loans (1) 583,384 609,090 Less allowance for loan losses 6,915 7,156 Net loans$ 576,469 $ 601,934 (1)Includes net deferred (fees) and costs/premiums of $372 and $(18) as of December 31, 2021 and 2020, respectively. The amounts of overdraft reclassified as loans were $182 and $43 as of December 31, 2021 and 2020, respectively. The Company’s officers, directors and their related interests have various types of loan relationships with the Bank. The total outstanding balances of these related party loans at December 31, 2021 and 2020 were $11,148 and $12,192 respectively. The beginning balance was adjusted during 2021 to include a $117 loan to a director that was not included as a related-party loan at the end of 2020. During 2021, new loans and advances amounted to $7,694 and repayments amounted to $8,738. ‎ Note 5 - Loans and allowance for loan losses (continued) The following tables set forth information regarding impaired and non-accrual loans as of December 31, 2021 and 2020: Loans on Non-Accrual Status As of December 31, 2021 2020Commercial$ 25 $ 121Commercial Real Estate: Commercial Mortgages-Owner Occupied 501 940Commercial Mortgages-Non-Owner Occupied 138 552Commercial Construction — —Consumer Consumer Unsecured — —Consumer Secured 127 240Residential: Residential Mortgages 163 210Residential Consumer Construction — — Totals$ 954 $ 2,063 ‎ Note 5 - Loans and allowance for loan losses (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2021 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With No Related Allowance Recorded: Commercial$ 17 $ 67 $ - $ 179 $ 5 Commercial Real Estate Commercial Mortgages-Owner Occupied 2,592 2,971 - 2,368 154 Commercial Mortgage Non-Owner Occupied 102 102 - 371 13 Commercial Construction - - - - - Consumer Consumer Unsecured - - - - - Consumer Secured 59 60 - 201 2 Residential Residential Mortgages 1,316 1,390 - 1,332 47 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$ 17 $ 67 $ - $ 181 $ 5 Commercial Real Estate Commercial Mortgages-Owner Occupied 2,592 2,971 - 2,368 154 Commercial Mortgage Non-Owner Occupied 102 102 - 371 13 Commercial Construction - - - - - Consumer Consumer Unsecured - - - - - Consumer Secured 59 60 - 201 2 Residential Residential Mortgages 1,316 1,390 - 1,332 47 Residential Consumer Construction - - - - - $ 4,086 $ 4,590 $ - $ 4,453 $ 221 ‎ Note 5 - Loans and allowance for loan losses (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment RecognizedWith 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the allowance for loan losses activity for the years ended December 31, 2021 and 2020: Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Year Ended December 31, 2021 Commercial 2021Commercial Real Estate Consumer Residential Total Allowance for Loan Losses: Beginning Balance$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156Charge-Offs (53) - (38) - (91)Recoveries 112 72 29 137 350Provision (recovery) (589) 15 1 73 (500)Ending Balance 1,471 3,637 860 947 6,915 Ending Balance: Individually evaluated for impairment - - - - - Ending Balance: Collectively evaluated for impairment 1,471 3,637 860 947 6,915 Totals:$ 1,471 $ 3,637 $ 860 $ 947 $ 6,915 Financing Receivables: Ending Balance: Individually evaluated for impairment 17 2,694 59 1,316 4,086 Ending Balance: Collectively evaluated for impairment 105,050 335,455 89,043 49,750 579,298 Totals:$ 105,067 $ 338,149 $ 89,102 $ 51,066 $ 583,384 ‎Note 5 - Loans and allowance for loan losses (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 Total Allowance for Loan Losses: Beginning Balance$ 1,330 $ 1,932 $ 865 $ 702 $ 4,829Charge-Offs (96) (224) (75) (53) (448)Recoveries 20 139 53 15 227Provision 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the age analysis of past due loans as of the years ended December 31, 2021 and 2020: Age Analysis of Past Due Loans as of December 31, 2021 Recorded Greater Investment2021 30-59 Days 60-89 Days than Total Past Total > 90 Days & Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ — $ 1 $ 25 $ 26 $ 105,041 $ 105,067 $ —Commercial Real Estate: Commercial Mortgages-Owner Occupied 464 — 501 965 127,869 128,834 —Commercial Mortgages-Non-Owner Occupied 1,310 — — 1,310 177,803 179,113 —Commercial Construction — — — — 30,202 30,202 —Consumer: Consumer Unsecured 8 1 — 9 2,596 2,605 —Consumer Secured 111 3 118 232 86,265 86,497 —Residential: Residential Mortgages 948 — 163 1,111 30,814 31,925 —Residential Consumer Construction — — — — 19,141 19,141 —Total$ 2,841 $ 5 $ 807 $ 3,653 $ 579,731 $ 583,384 $ — Age Analysis of Past Due Loans as of December 31, 2020 Recorded2020 Investment 30-59 Days 60-89 Days Greater than Total Past Total > 90 Days & Past 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 5 - Loans and allowance for loan losses (continued) The following tables set forth the credit quality information by segment as of the years ended December 31, 2021 and 2020: Credit Quality Information - by ClassDecember 31, 20212021 Pass Monitor Special Substandard Doubtful Totals Mention Commercial$ 92,789 $ 7,965 $ 4,262 $ 51 $ — $ 105,067Commercial Real Estate: Commercial Mortgages-Owner Occupied 116,098 5,986 4,130 2,620 — 128,834Commercial Mortgages-Non-Owner Occupied 176,291 2,506 — 316 — 179,113Commercial Construction 30,202 — — — — 30,202Consumer Consumer Unsecured 2,581 — 23 1 — 2,605Consumer Secured 86,265 — — 232 — 86,497Residential: Residential Mortgages 30,486 — — 1,439 — 31,925Residential Consumer Construction 19,141 — — — — 19,141 Totals$ 553,853 $ 16,457 $ 8,415 $ 4,659 $ — $ 583,384 Credit Quality Information - by ClassDecember 31, 20202020 Pass Monitor Special Substandard Doubtful Totals Mention Commercial$ 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 5 - Loans and allowance for loan losses (continued) Troubled Debt Restructurings (TDRs) There were no loan modifications that were classified as Troubled Debt Restructurings (TDR) during the twelve months ended December 31, 2021 or 2020. Loans that were previously classified as TDRs in prior periods and currently outstanding are factored into the determination of the allowance for loan losses and are included in the Bank’s impaired loan analysis and individually evaluated for impairment. At December 31, 2021 and December 31, 2020, the Bank had no outstanding commitments to disburse additional funds on loans classified as TDRs. There were no loan modifications classified as TDRs within the last twelve months that defaulted (90 days past due) during the twelve months ended December 31, 2021 and 2020. We previously 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 included 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. During the year ended December 31, 2020, the Bank modified a total of 191 loans with principal balances totaling approximately $95 million. As of December 31, 2021, none of the 191 previously modified loans remained in deferment and all have returned to previously agreed upon repayment schedules. No loans were modified in the year ended December 31, 2021. If a customer requested a second modification, an extensive evaluation of the circumstances surrounding the need for the request was conducted. Procedurally, a commercial borrower was 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 was granted. Retail borrowers were also required to submit in writing the reason for the need for a second deferral request before an additional deferral was granted. 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 period established by Section 4013 of the CARES Act for providing temporary relief from Note 5 - Loans and allowance for loan losses (continued) TDR classification to the earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.