Allowance for Credit Losses [Text Block] | Note 4. Allowance for Loan Losses The allowance for loan losses is maintained at a level believed to be sufficient to provide for estimated loan losses based on evaluating known and inherent risks in the loan portfolio. The allowance is provided based upon management's comprehensive analysis of the pertinent factors underlying the quality of the loan portfolio. These factors include changes in the amount and composition of the loan portfolio, delinquency levels, actual loss experience, current economic conditions, and detailed analysis of individual loans for which the full collectability may not A provision for loan losses is charged against operations and is added to the allowance for loan losses based on quarterly comprehensive analyses of the loan portfolio. The allowance for loan losses is allocated to certain loan categories based on the relative risk characteristics, asset classifications and actual loss experience of the loan portfolio. While management has allocated the allowance for loan losses to various loan portfolio segments, the allowance is general in nature and is available for the loan portfolio in its entirety. As noted in Note 1, zero March 31, 2021 December 31, 2020: Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) Construction & Development Farmland Residential Commercial Mortgage Commercial & Agricultural Consumer & Other Total For the Three Months Ended March 31, 2021 Allowance for loan losses: Balance, December 31, 2020 $ 499 $ 406 $ 2,167 $ 1,421 $ 293 $ 114 $ 4,900 Charge-offs - - - - - (34 ) (34 ) Recoveries - - 2 - 1 20 23 Provision 3 (22 ) 78 136 (35 ) 2 162 Balance, March 31, 2021 $ 502 $ 384 $ 2,247 $ 1,557 $ 259 $ 102 $ 5,051 For the Three Months Ended March 31, 2020 Allowance for loan losses: Balance, December 31, 2019 $ 305 $ 487 $ 1,822 $ 924 $ 211 $ 144 $ 3,893 Charge-offs - - - - - (53 ) (53 ) Recoveries 4 - 8 65 2 11 90 Provision 32 (22 ) 168 65 33 46 322 Balance, March 31, 2020 $ 341 $ 465 $ 1,998 $ 1,054 $ 246 $ 148 $ 4,252 March 31, 2021 Allowance for loan losses: Ending Balance $ 502 $ 384 $ 2,247 $ 1,557 $ 259 $ 102 $ 5,051 Ending balance: individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - Ending balance: collectively evaluated for impairment $ 502 $ 384 $ 2,247 $ 1,557 $ 259 $ 102 $ 5,051 Ending balance: purchased credit impaired loans $ - $ - $ - $ - $ - $ - $ - Loans outstanding: Ending Balance $ 45,901 $ 32,430 $ 284,763 $ 210,192 $ 35,034 $ 17,693 $ 626,013 Ending balance: individually evaluated for impairment $ 756 $ 2,439 $ - $ - $ - $ - $ 3,195 Ending balance: collectively evaluated for impairment $ 45,145 $ 29,991 $ 284,621 $ 210,082 $ 34,939 $ 17,693 $ 622,471 Ending balance: purchased credit impaired loans $ - $ - $ 142 $ 110 $ 95 $ - $ 347 December 31, 2020 Allowance for loan losses: Ending Balance $ 499 $ 406 $ 2,167 $ 1,421 $ 293 $ 114 $ 4,900 Ending balance: individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - Ending balance: collectively evaluated for impairment $ 499 $ 406 $ 2,167 $ 1,421 $ 293 $ 114 $ 4,900 Ending balance: purchased credit impaired loans $ - $ - $ - $ - $ - $ - $ - Loans outstanding: Ending Balance $ 46,053 $ 32,449 $ 279,893 $ 203,886 $ 33,663 $ 17,033 $ 612,977 Ending balance: individually evaluated for impairment $ - $ 2,580 $ - $ - $ - $ - $ 2,580 Ending balance: collectively evaluated for impairment $ 46,053 $ 29,869 $ 279,751 $ 203,773 $ 33,567 $ 17,033 $ 610,046 Ending balance: purchased credit impaired loans $ - $ - $ 142 $ 113 $ 96 $ - $ 351 As of March 31, 2021 December 31, 2020, no Management closely monitors the quality of the loan portfolio and has established a loan review process designed to help grade the quality of the Bank's loan portfolio. The Bank's loan ratings coincide with the “Substandard,” “Doubtful” and “Loss” classifications used by federal regulators in their examination of financial institutions. Generally, an asset is considered Substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. Substandard assets include those characterized by the distinct possibility that the insured financial institution will sustain some loss if the deficiencies are not not not one March 31, 2021 December 31, 2020, no The following table lists the loan grades utilized by the Bank and the corresponding total of outstanding loans in each category as of March 31, 2021 December 31, 2020: Credit Risk Profile by Internally Assigned Grades Loan Grades (dollars in thousands) Pass Watch Special Mention Substandard Total March 31, 2021 Real Estate Secured: Construction & development $ 44,767 $ - $ 120 $ 1,014 $ 45,901 Farmland 25,783 416 492 5,739 32,430 Residential 283,044 459 - 1,260 284,763 Commercial mortgage 193,096 8,295 5,546 3,255 210,192 Non-Real Estate Secured: Commercial & agricultural 34,098 362 133 441 35,034 SBA-PPP 71,672 - - - 71,672 Consumer & other 17,689 - - 4 17,693 Total $ 670,149 $ 9,532 $ 6,291 $ 11,713 $ 697,685 December 31, 2020 Real Estate Secured: Construction & development $ 44,909 $ 427 $ 122 $ 595 $ 46,053 Farmland 25,607 419 496 5,927 32,449 Residential 277,811 659 - 1,423 279,893 Commercial mortgage 188,156 8,692 3,647 3,391 203,886 Non-Real Estate Secured: Commercial & agricultural 32,467 468 161 567 33,663 SBA-PPP 51,118 - - - 51,118 Consumer & other 17,028 - - 5 17,033 Total $ 637,096 $ 10,665 $ 4,426 $ 11,908 $ 664,095 Loans may may first The following table presents an age analysis of nonaccrual and past due loans by category as of March 31, 2021 December 31, 2020: Analysis of Past Due and Nonaccrual Loans (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans 90+ Days Past Due and Still Accruing Nonaccrual Loans March 31, 2021 Real Estate Secured: Construction & development $ 467 $ - $ - $ 467 $ 45,434 $ 45,901 $ - $ 436 Farmland 305 - 797 1,102 31,328 32,430 - 1,641 Residential 292 46 224 562 284,201 284,763 - 531 Commercial mortgage 7 - 24 31 210,161 210,192 - 106 Non-Real Estate Secured: Commercial & agricultural 2 - 154 156 34,878 35,034 - 168 SBA-PPP - - - - 71,672 71,672 - - Consumer & other - 3 - 3 17,690 17,693 - - Total $ 1,073 $ 49 $ 1,199 $ 2,321 $ 695,364 $ 697,685 $ - $ 2,882 December 31, 2020 Real Estate Secured: Construction & development $ 71 $ - $ - $ 71 $ 45,982 $ 46,053 $ - $ 11 Farmland 100 - 914 1,014 31,435 32,449 - 3,937 Residential 386 29 240 655 279,238 279,893 - 557 Commercial mortgage - - 24 24 203,862 203,886 - 109 Non-Real Estate Secured: Commercial & agricultural 14 15 155 184 33,479 33,663 - 189 SBA-PPP - - - - 51,118 51,118 - - Consumer & other 7 - - 7 17,026 17,033 - - Total $ 578 $ 44 $ 1,333 $ 1,955 $ 662,140 $ 664,095 $ - $ 4,803 Impaired Loans A loan is considered impaired when it is probable that the Bank will be unable to collect all contractual principal and interest payments due in accordance with the original or modified terms of the loan agreement. Smaller balance homogenous loans may not may third third may As of March 31, 2021 December 31, 2020, $6.4 $6.2 March 31, 2021 December 31, 2020, $3.2 $2.6 March 31, 2021 December 31, 2020, $2.9 $2.6 not $3.8 $3.9 March 31, 2021 December 31, 2020, The categories of non-accrual loans and impaired loans overlap, although they are not Management collectively evaluates performing TDRs with a loan balance of $250,000 March 31, 2021 December 31, 2020, $3.2 $3.6 $189 $192 The following table is a summary of information related to impaired loans as of March 31, 2021 December 31, 2020: Impaired Loans Three months ended (dollars in thousands) Recorded Investment 1 Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized March 31, 2021 With no related allowance recorded: Construction & development $ 426 $ 425 $ - $ 426 $ (5 ) Farmland 2,439 3,098 - 2,509 19 Residential - - - 38 8 Commercial mortgage - - - - - Commercial & agricultural - - - - - Consumer & other - - - 1 - Subtotal 2,865 3,523 - 2,974 22 With an allowance recorded: Construction & development 493 493 10 497 7 Farmland 127 143 2 127 2 Residential 2,836 3,012 174 2,848 39 Commercial mortgage 7 52 - 8 1 Commercial & agricultural 44 44 3 45 1 Consumer & other - - - - - Subtotal 3,507 3,744 189 3,525 50 Totals: Construction & development 919 918 10 923 2 Farmland 2,566 3,241 2 2,636 21 Residential 2,836 3,012 174 2,886 47 Commercial mortgage 7 52 - 8 1 Commercial & agricultural 44 44 3 45 1 Consumer & other - - - 1 - Total $ 6,372 $ 7,267 $ 189 $ 6,499 $ 72 1 Recorded investment is the loan balance, net of any charge-offs (dollars in thousands) Recorded Investment 1 Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized December 31, 2020 With no related allowance recorded: Construction & development $ - $ - $ - $ - $ - Farmland 2,580 3,151 - 2,731 18 Residential - - - - - Commercial mortgage - - - - - Commercial & agricultural - - - - - Consumer & other - - - - - Subtotal 2,580 3,151 - 2,731 18 With an allowance recorded: Construction & development 501 501 27 522 31 Farmland 127 144 2 375 11 Residential 2,906 3,082 159 4,057 222 Commercial mortgage 8 53 1 10 3 Commercial & agricultural 46 46 3 49 3 Consumer & other 1 1 - 2 - Subtotal 3,589 3,827 192 5,015 270 Totals: Construction & development 501 501 27 522 31 Farmland 2,707 3,295 2 3,106 29 Residential 2,906 3,082 159 4,057 222 Commercial mortgage 8 53 1 10 3 Commercial & agricultural 46 46 3 49 3 Consumer & other 1 1 - 2 - Total $ 6,169 $ 6,978 $ 192 $ 7,746 $ 288 1 Recorded investment is the loan balance, net of any charge-offs Troubled Debt Restructuring A troubled debt restructured loan is a loan for which the Bank, for reasons related to the borrower's financial difficulties, grants a concession to the borrower that the Bank would not The loan terms which have been modified or restructured due to a borrower's financial difficulty, include but are not The following table sets forth information with respect to the Bank's troubled debt restructurings as of March 31, 2021 March 31, 2020: For the Three Months Ended March 31, 2021 (dollars in thousands) TDRs identified during the period TDRs identified in the last twelve months that subsequently defaulted (1) Number of contracts Pre- modification outstanding recorded investment Post- modification outstanding recorded investment Number of contracts Pre- modification outstanding recorded investment Post- modification outstanding recorded investment Construction & development - $ - $ - - $ - $ - Farmland - - - - - - Residential - - - - - - Commercial mortgage - - - - - - Commercial & agricultural - - - - - - Consumer & other - - - - - - Total - $ - $ - - $ - $ - ( 1 30 During the three March 31, 2021, no For the Three Months Ended March 31, 2020 (dollars in thousands) TDRs identified during the period TDRs identified in the last twelve months that subsequently defaulted (1) Number of contracts Pre- modification outstanding recorded investment Post- modification outstanding recorded investment Number of contracts Pre- modification outstanding recorded investment Post- modification outstanding recorded investment Construction & development 1 $ 344 $ 344 - $ - $ - Farmland - - - - - - Residential - - - - - - Commercial mortgage - - - - - - Commercial & agricultural - - - - - - Consumer & other - - - - - - Total 1 $ 344 $ 344 - $ - $ - ( 1 30 During the three March 31, 2020, one one No twelve March 31, 2020. Modifications in response to COVID- 19 The Company began offering short-term loan modifications to assist borrowers during the COVID- 19 six 19 19. six 12 not 19 not not 1 The Bank began receiving requests for loan deferments on March 23, 2020 March 31, 2021, 250 $66.5 March 31, 2021 December 31, 2020 (dollars in thousands) 2021 2020 Classification # of Loans Balance # of Loans Balance Commercial Loans w/ First Deferment Accommodation & Retail Services 2 $ 2,785 - $ - Construction - - 1 47 Agriculture 1 87 - - Commercial Loans w/ Second Deferment Accommodation & Retail Services - - 1 752 Retail Trade 1 159 - - Construction 2 83 1 36 Agriculture - - 2 603 Real Estate Rental - - 2 2,146 Commercial Loans w/ Third Deferment Accommodation & Retail Services - - 2 4,438 Manufacturing - - 1 153 Consumer Loans w/ First Deferment 4 235 7 782 Consumer Loans w/ Second Deferment - - 1 52 Total 10 $ 3,349 18 $ 9,009 Purchased Credit Impaired Loans During 2018, not March 31, 2021 December 31, 2020 (dollars in thousands) 2021 2020 Residential $ 142 $ 142 Commercial mortgage 110 113 Commercial & agricultural 95 96 Outstanding balance $ 347 $ 351 Carrying amount $ 347 $ 351 There was no There were no three March 31, 2021 December 31, 2020. not |