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Loans and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consisted of the following at June 30, 2023 and December 31, 2022:


		June 30, 2023				December 31, 2022
		(Dollars in thousands)
Commercial real estate (CRE)		$	88,051			$	80,506
Multifamily (MF)			7,787				8,185
Commercial and industrial (C+I)			24,168				24,059
Acquisition, development, and land (ADL)			14,999				18,490
1-4 family residential (RES)			259,562				251,466
Home equity line of credit (HELOC)			12,121				10,161
Consumer (CON)			7,824				7,189
Total loans			414,512				400,056
Net deferred loan costs			2,547				2,449
Allowance for credit losses on loans			(3,319	)			(3,581	)
Total loans, net		$	413,740			$	398,924

Schedule of Allowance For Loans And Leases Receivable Classification

Changes in the ACL for the three and six months ended June 30, 2023, under the CECL model, by portfolio segment, are summarized as follows:


(Dollars in thousands)		CRE				MF				C+I				ADL				RES				HELOC				CON				Unallocated				Total
Balance, March 31, 2023		$	725			$	49			$	281			$	96			$	1,904			$	88			$	119			$	25			$	3,287
Provision for credit losses on loans			81				—				(4	)			(26	)			6				(3	)			(7	)			(12	)			35
Charge-offs			—				—				—				—				—				—				(4	)			—				(4	)
Recoveries			—				—				—				—				—				—				1				—				1
Balance, June 30, 2023		$	806			$	49			$	277			$	70			$	1,910			$	85			$	109			$	13			$	3,319
Balance, December 31, 2022, Prior to Adoption of ASC 326		$	942			$	54			$	184			$	138			$	2,048			$	81			$	100			$	34			$	3,581
Impact of adopting ASC 326			(154	)			1				89				(18	)			(201	)			7				14				(33	)			(295	)
Provision for credit losses on loans			18				(6	)			4				(50	)			63				(3	)			(3	)			12				35
Charge-offs			—				—				—				—				—				—				(4	)			—				(4	)
Recoveries			—				—				—				—				—				—				2				—				2
Balance, June 30, 2023		$	806			$	49			$	277			$	70			$	1,910			$	85			$	109			$	13			$	3,319

Changes in the allowance for credit losses on loans for the three and six months ended June 30, 2022, under the incurred loss model, by portfolio segment, are summarized as follows:


(Dollars in thousands)		CRE				MF				C+I				ADL				RES				HELOC				CON				Unallocated				Total
Balance, March 31, 2022		$	894			$	78			$	218			$	116			$	2,188			$	62			$	86			$	—			$	3,642
Provision for loan losses			125				(21	)			(11	)			(6	)			(163	)			25				24				27				—
Charge-offs			—				—				—				—				—				—				—				—				—
Recoveries			—				—				1				—				—				—				1				—				2
Balance, June 30, 2022		$	1,019			$	57			$	208			$	110			$	2,025			$	87			$	111			$	27			$	3,644
Balance, December 31, 2021		$	833			$	80			$	194			$	178			$	2,139			$	63			$	75			$	28			$	3,590
Provision for loan losses			186				(23	)			13				(68	)			(114	)			24				43				(1	)			60
Charge-offs			—				—				—				—				—				—				(9	)			—				(9	)
Recoveries			—				—				1				—				—				—				2				—				3
Balance, June 30, 2022		$	1,019			$	57			$	208			$	110			$	2,025			$	87			$	111			$	27			$	3,644

As of June 30, 2023 and December 31, 2022, information about loans, the ACL and the ALL, by portfolio segment, are summarized below:


(Dollars in thousands)		CRE				MF				C+I				ADL				RES				HELOC				CON				Unallocated				Total
June 30, 2023 Loan Balances
Individually evaluated to determine expected credit losses		$	—			$	—			$	—			$	—			$	185			$	—			$	3			$	—			$	188
Collectively evaluated to determine expected credit losses			88,051				7,787				24,168				14,999				259,377				12,121				7,821				—				414,324
Total		$	88,051			$	7,787			$	24,168			$	14,999			$	259,562			$	12,121			$	7,824			$	—			$	414,512
ACL related to the loans
Individually evaluated to determine expected credit losses		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Collectively evaluated to determine expected credit losses			806				49				277				70				1,910				85				109				13				3,319
Total		$	806			$	49			$	277			$	70			$	1,910			$	85			$	109			$	13			$	3,319
December 31, 2022 Loan Balances
Individually evaluated for impairment		$	—			$	—			$	—			$	—			$	273			$	—			$	5			$	—			$	278
Collectively evaluated for impairment			80,506				8,185				24,059				18,490				251,193				10,161				7,184				—				399,778
Total		$	80,506			$	8,185			$	24,059			$	18,490			$	251,466			$	10,161			$	7,189			$	—			$	400,056
ALL related to the loans
Individually evaluated for impairment		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Collectively evaluated for impairment			942				54				184				138				2,048				81				100				34				3,581
Total		$	942			$	54			$	184			$	138			$	2,048			$	81			$	100			$	34			$	3,581

Past Due Financing Receivables

The following is an aging analysis of past due loans by portfolio segment as of June 30, 2023, including non-accrual loans without an ACL:


(Dollars in thousands)		30-59 Days				60-89 Days				90 + Days				Total Past Due				Current				Total Loans				Non-Accrual Loans
CRE		$	—			$	—			$	—			$	—			$	88,051			$	88,051			$	—
MF			—				—				—				—				7,787				7,787				—
C+I			—				—				—				—				24,168				24,168				—
ADL			—				—				—				—				14,999				14,999				—
RES			—				—				—				—				259,562				259,562				—
HELOC			—				—				—				—				12,121				12,121				—
CON			—				—				—				—				7,824				7,824				3
		$	—			$	—			$	—			$	—			$	414,512			$	414,512			$	3

The following is an aging analysis of past due loans by portfolio segment as of December 31, 2022:


(Dollars in thousands)		30-59 Days				60-89 Days				90 + Days				Total Past Due				Current				Total Loans				Non- Accrual Loans
CRE		$	—			$	—			$	—			$	—			$	80,506			$	80,506			$	—
MF			—				—				—				—				8,185				8,185				—
C+I			—				—				—				—				24,059				24,059				—
ADL			—				—				—				—				18,490				18,490				—
RES			—				84				—				84				251,382				251,466				84
HELOC			5				—				—				5				10,156				10,161				—
CON			7				—				—				7				7,181				7,189				5
		$	12			$	84			$	—			$	96			$	399,960			$	400,056			$	89

Impaired Financing Receivables

The following table provides information on impaired loans as of and for the year ended December 31, 2022:


		As of December 31, 2022												At December 31, 2022
(Dollars in thousands)		Recorded Carrying Value				Unpaid Principal Balance				Related Allowance				Average Recorded Investment				Interest Income Recognized
With no related allowance recorded:
CRE		$	—			$	—			$	—			$	—			$	—
MF			—				—				—				—				—
C+I			—				—				—				—				—
ADL			—				—				—				—				—
RES			273				273				—				446				32
HELOC			—				—				—				57				3
CON			5				5				—				2				—
Total		$	278			$	278			$	—			$	505			$	35

Schedule of risk category of loans by portfolio segment by vintage under CECL methodology

Based upon the most recent analysis performed, the risk category of loans by portfolio segment by vintage, reported under the CECL methodology, was as follows as of June 30, 2023:


(Dollars in thousands)		2023				2022				2021				2020				2019				Prior				Revolving Loans Amortized Cost Basis				Revolving Loans Converted to Term				Total
CRE:
Risk rating:
Pass		$	9,216			$	10,387			$	8,254			$	2,878			$	4,909			$	17,284			$	32,177			$	—			$	85,105
Special mention			—				—				—				—				—				—				2,946				—				2,946
Substandard			—				—				—				—				—				—				—				—				—
Total CRE			9,216				10,387				8,254				2,878				4,909				17,284				35,123				—				88,051
MF:
Risk rating:
Pass			—				152				5,243				1,104				—				1,288				—				—				7,787
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Total MF			—				152				5,243				1,104				—				1,288				—				—				7,787
C+I:
Risk rating:
Pass			2,580				7,271				4,621				3,137				1,734				2,592				2,233				—				24,168
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Total C+I			2,580				7,271				4,621				3,137				1,734				2,592				2,233				—				24,168
ADL:
Risk rating:
Pass			3,943				7,144				2,336				—				1,576				—				—				—				14,999
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Total ADL			3,943				7,144				2,336				—				1,576				—				—				—				14,999
RES:
Risk rating:
Pass			5,802				40,201				64,447				53,797				20,329				74,986				—				—				259,562
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Total RES			5,802				40,201				64,447				53,797				20,329				74,986				—				—				259,562
HELOC:
Risk rating:
Pass			—				—				—				—				—				—				12,121				—				12,121
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Total HELOC			—				—				—				—				—				—				12,121				—				12,121
CON:
Risk rating:
Pass			1,322				2,646				1,901				1,456				251				245				—				—				7,821
Special mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				3				—				—				3
Total CON			1,322				2,646				1,901				1,456				251				248				—				—				7,824
Total		$	22,863			$	67,801			$	86,802			$	62,372			$	28,799			$	96,398			$	49,477			$	—			$	414,512

Financing Receivable Credit Quality Indicators

The following presents the internal risk rating of loans by portfolio segment as of December 31, 2022:


(Dollars in thousands)		Pass				Special Mention				Substandard				Total
CRE		$	77,820			$	2,686			$	—			$	80,506
MF			8,185				—				—				8,185
C+I			24,059				—				—				24,059
ADL			18,490				—				—				18,490
RES			251,382				—				84				251,466
HELOC			10,161				—				—				10,161
CON			7,184				—				5				7,189
Total		$	397,281			$	2,686			$	89			$	400,056