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Loans
 12 Months Ended
Dec. 31, 2020
Loans [Abstract]  
Loans
(4)
Loans

The composition of the Company’s loan portfolio, by loan class, at December 31, is as follows:

  
2020
    
2019
  
Commercial
  
$
255,926
    
$
106,140
  
Commercial Real Estate
    
454,053
      
451,774
  
Agriculture
    
95,048
      
115,751
  
Residential Mortgage
    
64,497
      
64,943
  
Residential Construction
    
4,223
      
15,212
  
Consumer
    
19,467
      
26,825
  
                 
     
893,214
      
780,645
  
Allowance for loan losses
    
(15,416
)
    
(12,356
)
Net deferred origination fees and costs
    
(1,968
)
    
584
  
                 
Loans, net
  
$
875,830
    
$
768,873
  

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans and delinquencies, with particular attention to portfolio dynamics and loan mix. The Company strives to identify loans experiencing difficulty early enough to correct the problems, to record charge-offs promptly based on realistic assessments of collectability and current collateral values and to maintain an adequate allowance for loan losses at all times. Asset quality reviews of loans and other non-performing assets are administered using credit risk rating standards and criteria similar to those employed by state and federal banking regulatory agencies.

Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses. These loans are generally secured by the receivables, equipment, and other real property of the business and are susceptible to the related risks described above. Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Loans secured by owner-occupied real estate are primarily susceptible to changes in the market conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles. These same risks apply to Commercial loans whether secured by equipment, receivables or other personal property or unsecured. Problem commercial real estate loans are generally identified by periodic review of financial information that may include financial statements, tax returns, payment history of the borrower, and site inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.  Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default.  Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resulting over-supply of space. Losses are dependent on the value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means.


Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Agricultural loans are generally secured by inventory, receivables, equipment, and other real property. Agricultural loans primarily are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as adverse weather conditions such as drought or floods. Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.

Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks; non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfalls in collateral value. In general, non-payment is usually due to loss of employment and follows general economic trends in the economy, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts.

Construction loans, whether owner-occupied or non-owner occupied residential development loans, are not only susceptible to the related risks described above but the added risks of construction, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion. Losses are primarily related to underlying collateral value and changes therein as described above. Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Consumer loans, whether unsecured or secured, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfall in collateral value. In general, non-payment is usually due to loss of employment and will follow general economic trends in the economy, particularly the upward movements in the unemployment rate, loss of collateral value, and demand shifts.

Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Collateral valuations are obtained at origination of the credit. Once repayment is questionable, and the loan has been deemed classified, collateral valuations are obtained periodically (generally annually but may be more frequent depending on the collateral type).

At December 31, 2020, approximately 29% in principal amount of the Company’s loans were for general commercial uses, including professional, retail and small businesses. Approximately 51% in principal amount of the Company’s loans were secured by commercial real estate, which consists primarily of loans secured by commercial properties and construction and land development loans. Approximately 11% in principal amount of the Company’s loans were for agriculture, approximately 7% in principal amount of the Company’s loans were residential mortgage loans, approximately 0% in principal amount of the Company’s loans were residential construction loans and approximately 2% in principal amount of the Company’s loans were consumer loans.

Once a loan becomes delinquent or repayment becomes questionable, a Company collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral or a principal payment. If this is not forthcoming and payment of principal and interest in accordance with the contractual terms of the loan agreement becomes unlikely, the Company will consider the loan to be impaired and will estimate its probable loss, using the present value of future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. For collateral dependent loans, the Company will utilize a recent valuation of the underlying collateral less estimated costs of sale, and charge-off the loan down to the estimated net realizable amount. Depending on the length of time until final collection, the Company may periodically revalue the estimated loss and take additional charge-offs or specific reserves as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when the collateral is liquidated and the actual loss is confirmed. Unpaid balances on loans after or during collection and liquidation may also be pursued through legal action and attachment of wages or judgment liens on the borrower's other assets.

At December 31, 2020 and 2019, all loans were pledged under a blanket collateral lien to secure actual and potential borrowings from the Federal Home Loan Bank.


Non-accrual and Past Due Loans

The Company’s loans by delinquency and non-accrual status, as of December 31, 2020 and 2019, was as follows:

  
Current &
Accruing
    
30-59 Days
Past Due &
Accruing
    
60-89 Days
Past Due &
Accruing
    
90 Days or
more Past Due
& Accruing
    
Nonaccrual
    
Total Loans
  
December 31, 2020
                                    
Commercial
  
$
255,563
    
$
—
    
$
—
    
$
—
    
$
363
    
$
255,926
  
Commercial Real Estate
    
449,178
      
—
      
—
      
—
      
4,875
      
454,053
  
Agriculture
    
85,918
      
—
      
—
      
—
      
9,130
      
95,048
  
Residential Mortgage
    
64,344
      
—
      
—
      
—
      
153
      
64,497
  
Residential Construction
    
4,223
      
—
      
—
      
—
      
—
      
4,223
  
Consumer
    
18,777
      
—
      
—
      
—
      
690
      
19,467
  
Total
  
$
878,003
    
$
—
    
$
—
    
$
—
    
$
15,211
    
$
893,214
  
                                                 
December 31, 2019
                                                
Commercial
  
$
105,741
    
$
—
    
$
133
    
$
—
    
$
266
    
$
106,140
  
Commercial Real Estate
    
451,215
      
—
      
93
      
—
      
466
      
451,774
  
Agriculture
    
115,751
      
—
      
—
      
—
      
—
      
115,751
  
Residential Mortgage
    
64,771
      
—
      
—
      
—
      
172
      
64,943
  
Residential Construction
    
15,212
      
—
      
—
      
—
      
—
      
15,212
  
Consumer
    
26,472
      
100
      
—
      
—
      
253
      
26,825
  
Total
  
$
779,162
    
$
100
    
$
226
    
$
—
    
$
1,157
    
$
780,645
  

Non-accrual loans amounted to $15,211 at December 31, 2020 and were comprised of four commercial loans totaling $363, three commercial real estate loans totaling $4,875, three agriculture loans totaling $9,130, one residential mortgage loan totaling $153, and five consumer loans totaling $690. Non-accrual loans amounted to $1,157 at December 31, 2019, and were comprised of three commercial loans totaling $266, two commercial real estate loans totaling $466, one residential mortgage loans totaling $172, and four consumer loan totaling $253. All non-accrual loans are measured for impairment based upon the present value of future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of collateral, if the loan is collateral dependent. If the measurement of the non-accrual loan is less than the recorded investment in the loan, an impairment is recognized through the establishment of a specific reserve sufficient to cover expected losses and/or a charge-off against the allowance for loan losses. If the loan is considered to be collateral dependent, it is generally the Company's policy to charge-off the portion of any non-accrual loan that the Company does not expect to collect by writing the loan down to the estimated net realizable value of the underlying collateral. There were no commitments to lend additional funds to borrowers whose loan was on non-accrual status at December 31, 2020 and December 31, 2019.

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. Loans to be considered for impairment include non-accrual loans, troubled debt restructurings and loans with a risk rating of 5 (special mention) or worse and an aggregate exposure of $500,000 or more. Once identified, impaired loans are measured individually for impairment using one of three methods: present value of expected cash flows discounted at the loan's effective interest rate; the loan's observable market price; or fair value of collateral if the loan is collateral dependent. In general, any portion of the recorded investment in a collateral dependent loan in excess of the fair value of the collateral that can be identified as uncollectible, and is, therefore, deemed a confirmed loss, is promptly charged-off against the allowance for loan losses.


Impaired loans, segregated by loan class, as of December 31, 2020 and 2019, were as follows:

  
Unpaid
Contractual
Principal
Balance
    
Recorded
Investment
with no
Allowance
    
Recorded
Investment
with
Allowance
    
Total
Recorded
Investment
    
Related
Allowance
  
December 31, 2020
                              
Commercial
  
$
1,087
    
$
363
    
$
661
    
$
1,024
    
$
11
  
Commercial Real Estate
    
5,146
      
4,875
      
—
      
4,875
      
—
  
Agriculture
    
9,189
      
4,165
      
4,965
      
9,130
      
2,093
  
Residential Mortgage
    
1,046
      
153
      
883
      
1,036
      
159
  
Residential Construction
    
684
      
—
      
652
      
652
      
83
  
Consumer
    
773
      
690
      
64
      
754
      
1
  
Total
  
$
17,925
    
$
10,246
    
$
7,225
    
$
17,471
    
$
2,347
  
                                         
December 31, 2019
                                        
Commercial
  
$
1,694
    
$
266
    
$
1,385
    
$
1,651
    
$
26
  
Commercial Real Estate
    
715
      
466
      
250
      
716
      
19
  
Agriculture
    
—
      
—
      
—
      
—
      
—
  
Residential Mortgage
    
1,152
      
172
      
912
      
1,084
      
171
  
Residential Construction
    
724
      
—
      
691
      
691
      
56
  
Consumer
    
340
      
253
      
80
      
333
      
1
  
Total
  
$
4,625
    
$
1,157
    
$
3,318
    
$
4,475
    
$
273
  

The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the years ended December 31, 2020, 2019, and 2018, was as follows:

  
December 31, 2020
    
December 31, 2019
    
December 31, 2018
  
   
Average
Recorded
Investment
    
Interest
Income
Recognized
    
Average
Recorded
Investment
    
Interest
Income
Recognized
    
Average
Recorded
Investment
    
Interest
Income
Recognized
  
Commercial
  
$
1,344
    
$
60
    
$
2,184
    
$
128
    
$
2,986
    
$
181
  
Commercial Real Estate
    
3,489
      
58
      
636
      
182
      
1,681
      
15
  
Agriculture
    
5,481
      
—
      
1,922
      
240
      
966
      
—
  
Residential Mortgage
    
1,062
      
30
      
1,219
      
72
      
1,834
      
72
  
Residential Construction
    
671
      
34
      
681
      
35
      
612
      
28
  
Consumer
    
630
      
17
      
366
      
31
      
439
      
27
  
Total
  
$
12,677
    
$
199
    
$
7,008
    
$
688
    
$
8,518
    
$
323
  

None of the interest on impaired loans was recognized using a cash basis of accounting for the years ended December 31, 2020, 2019, and 2018.


Troubled Debt Restructurings

The Company's loan portfolio includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), which are loans on which concessions in terms have been granted because of the borrowers' financial difficulties and, as a result, the Company receives less than the current market-based compensation for the loan. These concessions may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are placed on non-accrual status at the time of restructure and may be returned to accruing status after considering the borrower's sustained repayment performance for a reasonable period, generally six months.

When a loan is modified, it is measured based upon the present value of future cash flows discounted at the contractual interest rate of the original loan agreement, or the fair value of collateral less selling costs if the loan is collateral dependent. If the value of the modified loan is less than the recorded investment in the loan, impairment is recognized through a specific allowance or a charge-off of the loan.

The Company had $2,325 and $3,413 in TDR loans as of December 31, 2020 and 2019, respectively. Specific reserves for TDR loans totaled $253 and $273 as of December 31, 2020 and 2019, respectively. TDR loans performing in compliance with modified terms totaled $2,260 and $3,318 as of December 31, 2020 and 2019, respectively. There were no commitments to advance additional funds on existing TDR loans as of December 31, 2020.

On March 22, 2020, the federal bank regulatory agencies issued joint guidance advising that the agencies have confirmed with the staff of the Financial Accounting Standards Board that short-term modifications due to COVID-19, made on a good faith basis to borrowers who were current prior to relief, are not TDRs. The CARES Act also provided relief from TDR classification for certain COVID-19 loan modifications. The Bank elected not to classify modifications that meet the criteria under either the CARES Act or the criteria specified by the regulatory agencies as TDRs.

There were no loans modified as TDRs during the year ended December 31, 2020.

Loans modified as troubled debt restructurings during the years ended December 31, 2019 and 2018, were as follows:

  
Year Ended December 31, 2019
  
   
Number of
Contracts
    
Pre-modification
outstanding
recorded
investment
    
Post-
modification
outstanding
recorded
investment
  
Residential Construction
    
2
    
$
189
    
$
189
  
Total
    
2
    
$
189
    
$
189
  

 
Year Ended December 31, 2018
  
   
Number of
Contracts
    
Pre-modification
outstanding
recorded
investment
    
Post-
modification
outstanding
recorded
investment
  
Consumer
    
1
    
$
191
    
$
191
  
Total
    
1
    
$
191
    
$
191
  

Loan modifications generally involve reductions in the interest rate, payment extensions, forgiveness of principal, or forbearance. No loans were modified as a TDR within the previous 12 months that subsequently defaulted during the years ended December 31, 2020, 2019 and 2018. The Company considers a loan to be in payment default when it is 90 days or more past due.


Credit Quality Indicators

All new loans are rated using the credit risk ratings and criteria adopted by the Company. Risk ratings are adjusted as future circumstances warrant. All credits risk rated 1, 2, 3 or 4 equate to a Pass as indicated by Federal and State regulatory agencies; a 5 equates to a Special Mention; a 6 equates to Substandard; a 7 equates to Doubtful; and an 8 equates to a Loss. General definitions for each risk rating are as follows:

Risk Rating “1” – Pass (High Quality):  This category is reserved for loans fully secured by Company CDs or savings accounts and properly margined (as defined in the Company’s Credit Policy) and actively traded securities (including stocks, as well as corporate, municipal and U.S. Government bonds).

Risk Rating “2” – Pass (Above Average Quality): This category is reserved for borrowers with strong balance sheets that are well structured with manageable levels of debt and good liquidity. Cash flow is sufficient to service all debt, including the Company’s, as agreed. Historical earnings, cash flow, and payment performance have all been strong and trends are positive and consistent.  Collateral protection is better than the Company’s Credit Policy guidelines.

Risk Rating “3” – Pass (Average Quality): Credits within this category are considered to be of average, but acceptable, quality.  Loan characteristics, including term and collateral advance rates, meet the Company’s Credit Policy guidelines; unsecured lines to borrowers with above average liquidity and cash flow may be considered for this category; the borrower’s financial strength is well documented, with adequate, but consistent, cash flow to meet all obligations. Liquidity should be sufficient and leverage should be moderate. Monitoring of collateral may be required, including a borrowing base or construction budget. Alternative financing is typically available.

Risk Rating “4” – Pass (Below Average Quality): Credits within this category are considered sound, but merit additional attention due to industry concentrations within the borrower’s customer base, problems within their industry, deteriorating financial or earnings trends, declining collateral values, increased frequency of past due payments and/or overdrafts, discovery of documentation deficiencies which may impair our borrower’s ability to repay, or the Company’s ability to liquidate collateral. Financial performance is average but inconsistent. There also may be changes of ownership, management or professional advisors, which could be detrimental to the borrower’s future performance.

Risk Rating “5” – Special Mention (Criticized): Loans in this category are currently protected by their collateral value and have no loss potential identified, but have potential weaknesses which may, if not monitored or corrected, weaken our ability to collect payments from the borrower or satisfactorily liquidate our collateral position. Loans where terms have been modified due to their failure to perform as agreed may be included in this category. Adverse trends in the borrower’s operation, such as reporting losses or inadequate cash flow, increasing and unsatisfactory leverage, or an adverse change in economic or market conditions may have weakened the borrower’s business and impaired their ability to repay based on original terms. The condition or value of the collateral has deteriorated to the point where adequate protection for our loan may be jeopardized in the future. Loans in this category are in transition and, generally, do not remain in this category beyond 12 months. During this time, efforts are focused on strategies aimed at upgrading the credit or locating alternative financing.

Risk Rating “6” – Substandard (Classified): Loans in this category are inadequately protected by the borrower’s net worth, capacity to repay or collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. There exists a strong possibility of loss if the deficiencies are not corrected. Loans that are dependent on the liquidation of collateral to repay are included in this category, as well as borrowers in bankruptcy or where legal action is required to effect collection of our debt.

Risk Rating “7” – Doubtful (Classified): Loans in this category indicate all of the weaknesses of a Substandard classification, however, collection of loan principal, in full, is highly questionable and improbable; possibility of loss is very high, but there is still a possibility that certain collection strategies may, yet, be successful, rendering a definitive loss difficult to estimate, at this time. Loans in this category are in transition and, generally, do not remain in this category more than 6 months.


Risk Rating “8” – Loss (Classified):

Active Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been or are in the process of being liquidated and the borrower/guarantor may or may not be cooperative in repayment of the debt. Recovery prospects are unknown at this time, but we are still actively engaged in the collection of the loan.

Inactive Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been liquidated and the borrower/guarantor has nothing of any value remaining to apply to the repayment of our loan. Any further collection activities would be of little value.

The following table presents the risk ratings by loan class as of December 31, 2020 and 2019.

  
Pass
    
Special
Mention
    
Substandard
    
Doubtful
    
Loss
    
Total
  
December 31, 2020
                                    
Commercial
  
$
244,327
    
$
10,731
    
$
868
    
$
—
    
$
—
    
$
255,926
  
Commercial Real Estate
    
431,381
      
9,255
      
13,417
      
—
      
—
      
454,053
  
Agriculture
    
83,493
      
—
      
11,555
      
—
      
—
      
95,048
  
Residential Mortgage
    
64,018
      
—
      
479
      
—
      
—
      
64,497
  
Residential Construction
    
4,223
      
—
      
—
      
—
      
—
      
4,223
  
Consumer
    
18,697
      
—
      
770
      
—
      
—
      
19,467
  
Total
  
$
846,139
    
$
19,986
    
$
27,089
    
$
—
    
$
—
    
$
893,214
  
                                                 
December 31, 2019
                                                
Commercial
  
$
104,944
    
$
428
    
$
768
    
$
—
    
$
—
    
$
106,140
  
Commercial Real Estate
    
427,991
      
17,739
      
6,044
      
—
      
—
      
451,774
  
Agriculture
    
105,573
      
7,823
      
2,355
      
—
      
—
      
115,751
  
Residential Mortgage
    
64,596
      
—
      
347
      
—
      
—
      
64,943
  
Residential Construction
    
15,212
      
—
      
—
      
—
      
—
      
15,212
  
Consumer
    
25,933
      
500
      
392
      
—
      
—
      
26,825
  
Total
  
$
744,249
    
$
26,490
    
$
9,906
    
$
—
    
$
—
    
$
780,645
  

Allowance for Loan Losses

The following table details activity in the allowance for loan losses by loan category for the years ended December 31, 2020, 2019 and 2018.

  
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Unallocated
    
Total
  
Balance as of December 31, 2019
  
$
2,354
    
$
6,846
    
$
2,054
    
$
466
    
$
201
    
$
236
    
$
199
    
$
12,356
  
Provision for loan losses
    
(91
)
    
1,069
      
1,780
      
169
      
(73
)
    
(43
)
    
239
      
3,050
  
                                                                 
Charge-offs
    
(212
)
    
—
      
—
      
—
      
—
      
(15
)
    
—
      
(227
)
Recoveries
    
201
      
—
      
—
      
—
      
—
      
36
      
—
      
237
  
Net charge-offs
    
(11
)
    
—
      
—
      
—
      
—
      
21
      
—
      
10
  
Ending Balance
    
2,252
      
7,915
      
3,834
      
635
      
128
      
214
      
438
      
15,416
  
Period-end amount allocated to:
                                                                
Loans individually evaluated for impairment
    
11
      
—
      
2,093
      
159
      
83
      
1
      
—
      
2,347
  
Loans collectively evaluated for impairment
    
2,241
      
7,915
      
1,741
      
476
      
45
      
213
      
438
      
13,069
  
Balance as of December 31, 2020
  
$
2,252
    
$
7,915
    
$
3,834
    
$
635
    
$
128
    
$
214
    
$
438
    
$
15,416
  

 
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Unallocated
    
Total
  
Balance as of December 31, 2018
  
$
3,198
    
$
5,890
    
$
1,632
    
$
643
    
$
318
    
$
279
    
$
862
    
$
12,822
  
Provision for loan losses
    
(415
)
    
956
      
520
      
(251
)
    
(138
)
    
(9
)
    
(663
)
    
—
  
                                                                 
Charge-offs
    
(638
)
    
—
      
(98
)
    
—
      
—
      
(43
)
    
—
      
(779
)
Recoveries
    
209
      
—
      
—
      
74
      
21
      
9
      
—
      
313
  
Net charge-offs
    
(429
)
    
—
      
(98
)
    
74
      
21
      
(34
)
    
—
      
(466
)
Ending Balance
    
2,354
      
6,846
      
2,054
      
466
      
201
      
236
      
199
      
12,356
  
Period-end amount allocated to:
                                                                
Loans individually evaluated for impairment
    
26
      
19
      
—
      
171
      
56
      
1
      
—
      
273
  
Loans collectively evaluated for impairment
    
2,328
      
6,827
      
2,054
      
295
      
145
      
235
      
199
      
12,083
  
Balance as of December 31, 2019
  
$
2,354
    
$
6,846
    
$
2,054
    
$
466
    
$
201
    
$
236
    
$
199
    
$
12,356
  


 
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Unallocated
    
Total
  
Balance as of December 31, 2017
  
$
2,625
    
$
5,460
    
$
1,547
    
$
628
    
$
360
    
$
342
    
$
171
    
$
11,133
  
Provision for loan losses
    
1,036
      
572
      
85
      
(19
)
    
(173
)
    
(92
)
    
691
      
2,100
  
                                                                 
Charge-offs
    
(509
)
    
(142
)
    
—
      
—
      
—
      
(34
)
    
—
      
(685
)
Recoveries
    
46
      
—
      
—
      
34
      
131
      
63
      
—
      
274
  
Net charge-offs
    
(463
)
    
(142
)
    
—
      
34
      
131
      
29
      
—
      
(411
)
Ending Balance
    
3,198
      
5,890
      
1,632
      
643
      
318
      
279
      
862
      
12,822
  
Period-end amount allocated to:
                                                                
Loans individually evaluated for impairment
    
496
      
21
      
—
      
287
      
49
      
2
      
—
      
855
  
Loans collectively evaluated for impairment
    
2,702
      
5,869
      
1,632
      
356
      
269
      
277
      
862
      
11,967
  
Balance as of December 31, 2018
  
$
3,198
    
$
5,890
    
$
1,632
    
$
643
    
$
318
    
$
279
    
$
862
    
$
12,822
  

The Company’s investment in loans as of December 31, 2020, 2019, and 2018 related to each balance in the allowance for loan losses by loan category and disaggregated on the basis of the Company’s impairment methodology was as follows:

  
Commercial
    
Commercial
Real Estate
    
Agriculture
    
Residential
Mortgage
    
Residential
Construction
    
Consumer
    
Total
  
December 31, 2020
  
Loans individually evaluated for impairment
  
$
1,024
    
$
4,875
    
$
9,130
    
$
1,036
    
$
652
    
$
754
    
$
17,471
  
Loans collectively evaluated for impairment
    
254,902
      
449,178
      
85,918
      
63,461
      
3,571
      
18,713
      
875,743
  
Ending Balance
  
$
255,926
    
$
454,053
    
$
95,048
    
$
64,497
    
$
4,223
    
$
19,467
    
$
893,214
  
   
December 31, 2019
  
Loans individually evaluated for impairment
  
$
1,651
    
$
716
    
$
—
    
$
1,084
    
$
691
    
$
333
    
$
4,475
  
Loans collectively evaluated for impairment
    
104,489
      
451,058
      
115,751
      
63,859
      
14,521
      
26,492
      
776,170
  
Ending Balance
  
$
106,140
    
$
451,774
    
$
115,751
    
$
64,943
    
$
15,212
    
$
26,825
    
$
780,645
  
December 31, 2018
  
Loans individually evaluated for impairment
  
$
2,902
    
$
642
    
$
4,830
    
$
1,551
    
$
560
    
$
389
    
$
10,874
  
Loans collectively evaluated for impairment
    
122,275
      
419,464
      
118,796
      
49,513
      
19,564
      
35,008
      
764,620
  
Ending Balance
  
$
125,177
    
$
420,106
    
$
123,626
    
$
51,064
    
$
20,124
    
$
35,397
    
$
775,494