Loans and allowance for loan losses (Tables)

6 Months Ended

Jun. 30, 2022

Loans and allowance for loan losses

Schedule of composition of loan portfolio (excluding mortgage loans held for sale)

Loans classified by type as of June 30, 2022  and December 31, 2021 are as follows (dollars in thousands):

	June 30, 2022				December 31, 2021
	Amount		%		Amount		%
Construction and land development
Residential	$	7,026	1.33	%	$	6,805	1.29	%
Commercial		30,002	5.69	%		42,344	8.05	%
		37,028	7.02	%		49,149	9.34	%
Commercial real estate
Owner occupied		124,496	23.61	%		113,108	21.48	%
Non-owner occupied		151,738	28.76	%		129,786	24.65	%
Multifamily		17,119	3.24	%		11,666	2.21	%
Farmland		916	0.17	%		977	0.19	%
		294,269	55.78	%		255,537	48.54	%
Consumer real estate
Home equity lines		19,938	3.78	%		17,977	3.41	%
Secured by 1-4 family residential,
First deed of trust		58,378	11.07	%		62,277	11.83	%
Second deed of trust		5,653	1.07	%		12,118	2.31	%
		83,969	15.92	%		92,372	17.55	%
Commercial and industrial loans
(except those secured by real estate)		85,119	16.13	%		100,421	19.07	%
Guaranteed student loans		23,413	4.44	%		25,975	4.93	%
Consumer and other		3,758	0.71	%		3,003	0.57	%
Total loans		527,556	100.0	%		526,457	100.0	%
Deferred fees and costs, net		574				(433)
Less: allowance for loan losses		(3,423)				(3,423)
	$	524,707			$	522,601

Schedule of information on nonaccrual loans

The following table provides information on nonaccrual loans segregated by type at the dates indicated (in thousands):

	June 30,		December 31,
	2022		2021
Commercial real estate
Non-owner occupied	$	279	$	286
		279		286
Consumer real estate
Home equity lines		300		300
Secured by 1-4 family residential
First deed of trust		345		556
Second deed of trust		276		198
		921		1,054
Commercial and industrial loans
(except those secured by real estate)		19		19
Total loans	$	1,219	$	1,359

Schedule of information on the risk rating of loans

The following tables provide information on the risk rating of loans at the dates indicated (in thousands):

	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1‑4		5		6		7		Loans
June 30, 2022
Construction and land development
Residential	$	7,026	$	—	$	—	$	—	$	7,026
Commercial		27,365		2,637		—		—		30,002
		34,391		2,637		—		—		37,028
Commercial real estate
Owner occupied		119,080		3,884		1,532		—		124,496
Non-owner occupied		146,012		5,446		280		—		151,738
Multifamily		17,119		—		—		—		17,119
Farmland		916		—		—		—		916
		283,127		9,330		1,812		—		294,269
Consumer real estate
Home equity lines		19,016		622		300		—		19,938
Secured by 1-4 family residential
First deed of trust		57,319		526		533		—		58,378
Second deed of trust		5,292		85		276		—		5,653
		81,627		1,233		1,109		—		83,969
Commercial and industrial loans
(except those secured by real estate)		83,477		1,553		89		—		85,119
Guaranteed student loans		23,413		—		—		—		23,413
Consumer and other		3,732		26		—		—		3,758
Total loans	$	509,767	$	14,779	$	3,010	$	—	$	527,556

	Risk Rated		Risk Rated		Risk Rated		Risk Rated		Total
	1‑4		5		6		7		Loans
December 31, 2021
Construction and land development
Residential	$	6,805	$	—	$	—	$	—	$	6,805
Commercial		39,707		2,637		—		—		42,344
		46,512		2,637		—		—		49,149
Commercial real estate
Owner occupied		103,370		6,181		3,557		—		113,108
Non-owner occupied		114,168		15,332		286		—		129,786
Multifamily		11,666		—		—		—		11,666
Farmland		977		—		—		—		977
		230,181		21,513		3,843		—		255,537
Consumer real estate
Home equity lines		17,054		623		300		—		17,977
Secured by 1-4 family residential
First deed of trust		57,932		3,605		740		—		62,277
Second deed of trust		11,492		429		197		—		12,118
		86,478		4,657		1,237		—		92,372
Commercial and industrial loans
(except those secured by real estate)		98,362		1,806		253		—		100,421
Guaranteed student loans		25,975		—		—		—		25,975
Consumer and other		2,972		31		—		—		3,003
Total loans	$	490,480	$	30,644	$	5,333	$	—	$	526,457

Schedule of aging of recorded investment in past due loans and leases

The following table presents the aging of the recorded investment in past due loans and leases as of the dates indicated (in thousands):

					Greater								Investment >
	30‑59 Days		60‑89 Days		Than		Total Past				Total		90 Days and
	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
June 30, 2022
Construction and land development
Residential	$	—	$	—	$	—	$	—	$	7,026	$	7,026	$	—
Commercial		—		—		—		—		30,002		30,002		—
		—		—		—		—		37,028		37,028		—
Commercial real estate
Owner occupied		—		—		—		—		124,496		124,496		—
Non-owner occupied		—		—		—		—		151,738		151,738		—
Multifamily		—		—		—		—		17,119		17,119		—
Farmland		—		—		—		—		916		916		—
		—		—		—		—		294,269		294,269		—
Consumer real estate
Home equity lines		—		—		—		—		19,938		19,938		—
Secured by 1‑4 family residential
First deed of trust		42		—		—		42		58,336		58,378		—
Second deed of trust		—		6		—		6		5,647		5,653		—
		42		6		—		48		83,921		83,969		—
Commercial and industrial loans
(except those secured by real estate)		423		157		—		580		84,539		85,119		—
Guaranteed student loans		1,141		790		1,638		3,569		19,844		23,413		1,638
Consumer and other		—		—		—		—		3,758		3,758		—
Total loans	$	1,606	$	953	$	1,638	$	4,197	$	523,359	$	527,556	$	1,638

													Recorded
					Greater								Investment >
	30-59 Days		60-89 Days		Than		Total Past				Total		90 Days and
	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
December 31, 2021
Construction and land development
Residential	$	—	$	—	$	—	$	—	$	6,805	$	6,805	$	—
Commercial		—		—		—		—		42,344		42,344		—
		—		—		—		—		49,149		49,149		—
Commercial real estate
Owner occupied		—		—		—		—		113,108		113,108		—
Non-owner occupied		—		—		—		—		129,786		129,786		—
Multifamily		—		—		—		—		11,666		11,666		—
Farmland		—		—		—		—		977		977		—
		—		—		—		—		255,537		255,537		—
Consumer real estate
Home equity lines		—		—		—		—		17,977		17,977		—
Secured by 1-4 family residential
First deed of trust		—		—		—		—		62,277		62,277		—
Second deed of trust		—		—		—		—		12,118		12,118		—
		—		—		—		—		92,372		92,372		—
Commercial and industrial loans
(except those secured by real estate)		1,031		—		—		1,031		99,390		100,421		—
Guaranteed student loans		956		791		1,961		3,708		22,267		25,975		1,961
Consumer and other		—		—		—		—		3,003		3,003		—
Total loans	$	1,987	$	791	$	1,961	$	4,739	$	521,718	$	526,457	$	1,961

Schedule of impaired loans

	June 30, 2022						December 31, 2021
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate
Owner occupied	$	4,172	$	4,187	$	—	$	4,776	$	4,791	$	—
Non-owner occupied		1,083		1,083		—		1,458		1,458		—
		5,255		5,270		—		6,234		6,249		—
Consumer real estate
Home equity lines		300		300		—		300		300		—
Secured by 1‑4 family residential
First deed of trust		1,792		1,792		—		1,873		1,873		—
Second deed of trust		176		344		—		238		406		—
		2,268		2,436		—		2,411		2,579		—
Commercial and industrial loans
(except those secured by real estate)		89		89		—		185		185		—
		7,612		7,795		—		8,830		9,013		—
With an allowance recorded
Commercial real estate
Owner occupied		259		259		3		267		267		4
		259		259		3		267		267		4
Consumer real estate
Secured by 1-4 family residential
First deed of trust		141		141		6		146		146		7
Second deed of trust		34		34		19		—		—		—
		175		175		25		146		146		7
		434		434		28		413		413		11
Total
Owner occupied		4,431		4,446		3		5,043		5,058		4
Non-owner occupied		1,083		1,083		—		1,458		1,458		—
		5,514		5,529		3		6,501		6,516		4
Consumer real estate
Home equity lines		300		300		—		300		300		—
Secured by 1-4 family residential,
First deed of trust		1,933		1,933		6		2,019		2,019		7
Second deed of trust		210		378		19		238		406		—
		2,443		2,611		25		2,557		2,725		7
Commercial and industrial loans
(except those secured by real estate)		89		89		—		185		185		—
	$	8,046	$	8,229	$	28	$	9,243	$	9,426	$	11

Schedule of average recorded investment in impaired loans

The following is a summary of average recorded investment in impaired loans with and without a valuation allowance and interest income recognized on those loans for the periods indicated (in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 30, 2022				June 30, 2022
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate
Owner occupied	$	4,461	$	35		4,694	$	66
Non-owner occupied		1,264		8		1,457		25
		5,725		43		6,151		91
Consumer real estate
Home equity lines		300		15		300		15
Secured by 1-4 family residential
First deed of trust		1,800		17		1,831		37
Second deed of trust		373		2		335		5
		2,473		34		2,466		57
Commercial and industrial loans
(except those secured by real estate)		135		—		162		1
		8,333		77		8,779		149
With an allowance recorded
Commercial real estate
Owner occupied		261		—		197		7
		261		—		197		7
Consumer real estate
Secured by 1-4 family residential
First deed of trust		142		3		144		4
Second deed of trust		98		—		49		—
		240		3		193		4
Commercial and industrial loans
(except those secured by real estate)		—		—		—		—
		501		3		390		11
Total
Commercial real estate
Owner occupied		4,722		35		4,891		73
Non-owner occupied		1,264		8		1,457		25
		5,986		43		6,348		98
Consumer real estate
Home equity lines		300		15		300		15
Secured by 1-4 family residential,
First deed of trust		1,942		20		1,975		41
Second deed of trust		471		2		384		5
		2,713		37		2,659		61
Commercial and industrial loans
(except those secured by real estate)		135		—		162		1
	$	8,834	$	80	$	9,169	$	160

Schedule of troubled debt restructurings on financing receivables

							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
June 30, 2022
Commercial real estate
Owner occupied	$	3,158	$	3,158	$	—	$	3
Non-owner occupied		1,084		804		280		—
		4,242		3,962		280		3
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		1,436		1,259		177		6
Second deeds of trust		93		36		57		—
		1,529		1,295		234		6
Commercial and industrial loans
(except those secured by real estate)		19		—		19		—
	$	5,790	$	5,257	$	533	$	9
Number of loans		26		22		4		2

							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
December 31, 2021
Commercial real estate
Owner occupied	$	3,243	$	3,243	$	—	$	4
Non-owner occupied		1,458		1,172		286		—
		4,701		4,415		286		4
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		1,666		1,279		387		7
Second deeds of trust		99		40		59		—
		1,765		1,319		446		7
Commercial and industrial loans
(except those secured by real estate)		19		—		19		—
	$	6,485	$	5,734	$	751	$	11
Number of loans		28		23		5		3

Schedule of troubled debt restructurings on financing receivables modification

The following table provides information about TDRs identified during the indicated periods (dollars in thousands).

	Six Months Ended					Six Months Ended
	June 30, 2022					June 30, 2021
		Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Loans	Balance		Balance		Loans	Balance		Balance
Secured by 1-4 family residential
First deed of trust	—	$	—	$	—	1	$	267	$	267
	—	$	—	$	—	1	$	267	$	267

A TDR payment default occurs when, within 12 months of the original TDR modification, either a full or partial charge-off occurs or a TDR becomes 90 days or more past due.  The specific reserve associated with a TDR is reevaluated when a TDR payment default occurs. There were no defaults on TDR’s that were modified as TDRs during the prior 12 month period ended June 30, 2022 and 2021.

Schedule of activity in the allowance for loan losses

Activity in the allowance for loan losses is as follows for the periods indicated (in thousands):

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Three Months Ended June 30, 2022
Construction and land development
Residential	$	46	$	11	$	—	$	—	$	57
Commercial		199		(28)		—		—		171
		245		(17)		—		—		228
Commercial real estate
Owner occupied		892		(24)		—		—		868
Non-owner occupied		1,106		161		—		—		1,267
Multifamily		37		13		—		—		50
Farmland		2		—		—		—		2
		2,037		150		—		—		2,187
Consumer real estate
Home equity lines		12		—		—		—		12
Secured by 1-4 family residential
First deed of trust		118		(5)		—		1		114
Second deed of trust		80		(32)		—		1		49
		210		(37)		—		2		175
Commercial and industrial loans
(except those secured by real estate)		446		56		—		31		533
Student loans		63		10		(13)		—		60
Consumer and other		35		10		—		—		45
Unallocated		367		(172)		—		—		195
	$	3,403	$	—	$	(13)	$	33	$	3,423

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Three Months Ended June 30, 2021
Construction and land development
Residential	$	100	$	(34)	$	—	$	—	$	66
Commercial		168		35		—		—		203
		268		1		—		—		269
Commercial real estate
Owner occupied		899		(97)		—		—		802
Non-owner occupied		1,286		(241)		—		14		1,059
Multifamily		38		(3)		—		—		35
Farmland		1		1		—		—		2
		2,224		(340)		—		14		1,898
Consumer real estate
Home equity lines		15		(14)		—		10		11
Secured by 1-4 family residential
First deed of trust		146		(41)		—		8		113
Second deed of trust		67		86		(84)		3		72
		228		31		(84)		21		196
Commercial and industrial loans
(except those secured by real estate)		410		3		—		9		422
Student loans		76		9		(5)		—		80
Consumer and other		38		16		(18)		—		36
Unallocated		748		(220)		—		—		528
	$	3,992	$	(500)	$	(107)	$	44	$	3,429

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Six Months Ended June 30, 2022
Construction and land development
Residential	$	57	$	—	$	—	$	—	$	57
Commercial		229		(58)		—		—		171
		286		(58)		—		—		228
Commercial real estate
Owner occupied		833		35		—		—		868
Non-owner occupied		1,083		184		—		—		1,267
Multifamily		35		15		—		—		50
Farmland		2		—		—		—		2
		1,953		234		—		—		2,187
Consumer real estate
Home equity lines		12		(58)		—		58		12
Secured by 1-4 family residential
First deed of trust		123		(11)		—		2		114
Second deed of trust		47		(301)		—		303		49
		182		(370)		—		363		175
Commercial and industrial loans
(except those secured by real estate)		486		(12)		—		59		533
Student loans		65		17		(22)		—		60
Consumer and other		29		16		—		—		45
Unallocated		422		(227)		—		—		195
	$	3,423	$	(400)	$	(22)	$	422	$	3,423

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Six Months Ended June 30, 2021
Construction and land development
Residential	$	214	$	(148)	$	—	$	—	$	66
Commercial		285		(82)		—		—		203
		499		(230)		—		—		269
Commercial real estate
Owner occupied		1,047		(245)		—		—		802
Non-owner occupied		1,421		(376)		—		14		1,059
Multifamily		47		(12)		—		—		35
Farmland		2		—		—		—		2
		2,517		(633)		—		14		1,898
Consumer real estate
Home equity lines		24		(23)		—		10		11
Secured by 1-4 family residential
First deed of trust		166		(62)		—		9		113
Second deed of trust		79		60		(84)		17		72
		269		(25)		(84)		36		196
Commercial and industrial loans
(except those secured by real estate)		408		(10)		—		24		422
Student loans		87		6		(13)		—		80
Consumer and other		36		18		(18)		—		36
Unallocated		154		374		—		—		528
	$	3,970	$	(500)	$	(115)	$	74	$	3,429

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Year Ended December 31, 2021
Construction and land development
Residential	$	214	$	(157)	$	—	$	—	$	57
Commercial		285		(56)		—		—		229
		499		(213)		—		—		286
Commercial real estate
Owner occupied		1,047		(214)		—		—		833
Non-owner occupied		1,421		(352)		—		14		1,083
Multifamily		47		(12)		—		—		35
Farmland		2		—		—		—		2
		2,517		(578)		—		14		1,953
Consumer real estate
Home equity lines		24		(23)		—		11		12
Secured by 1-4 family residential
First deed of trust		166		(54)		—		11		123
Second deed of trust		79		1		(84)		51		47
		269		(76)		(84)		73		182
Commercial and industrial loans
(except those secured by real estate)		408		47		—		31		486
Student loans		87		13		(35)		—		65
Consumer and other		36		39		(46)		—		29
Unallocated		154		268		—		—		422
	$	3,970	$	(500)	$	(165)	$	118	$	3,423

Schedule of loans evaluated for impairment

	Recorded Investment in Loans
	Allowance						Loans
	Ending						Ending
	Balance		Individually		Collectively		Balance		Individually		Collectively
Six Months Ended June 30, 2022
Construction and land development
Residential	$	57	$	—	$	57	$	7,026	$	—	$	7,026
Commercial		171		—		171		30,002		—		30,002
		228		—		228		37,028		—		37,028
Commercial real estate
Owner occupied		868		3		865		124,496		4,431		120,065
Non-owner occupied		1,267		—		1,267		151,738		1,083		150,655
Multifamily		50		—		50		17,119		—		17,119
Farmland		2		—		2		916		—		916
		2,187		3		2,184		294,269		5,514		288,755
Consumer real estate
Home equity lines		12		—		12		19,938		300		19,638
Secured by 1-4 family residential
First deed of trust		114		6		108		58,378		1,933		56,445
Second deed of trust		49		19		30		5,653		210		5,443
		175		25		150		83,969		2,443		81,526
Commercial and industrial loans
(except those secured by real estate)		533		—		533		85,119		89		85,030
Student loans		60		—		60		23,413		—		23,413
Consumer and other		240		—		240		3,758		—		3,758
	$	3,423	$	28	$	3,395	$	527,556	$	8,046	$	519,510
Year Ended December 31, 2021
Construction and land development
Residential	$	57	$	—	$	57	$	6,805	$	—	$	6,805
Commercial		229		—		229		42,344		—		42,344
		286		—		286		49,149		—		49,149
Commercial real estate
Owner occupied		833		4		829		113,108		5,043		108,065
Non-owner occupied		1,083		—		1,083		129,786		1,458		128,328
Multifamily		35		—		35		11,666		—		11,666
Farmland		2		—		2		977		—		977
		1,953		4		1,949		255,537		6,501		249,036
Consumer real estate
Home equity lines		12		—		12		17,977		300		17,677
Secured by 1-4 family residential
First deed of trust		123		7		116		62,277		2,019		60,258
Second deed of trust		47		—		47		12,118		238		11,880
		182		7		175		92,372		2,557		89,815
Commercial and industrial loans
(except those secured by real estate)		486		—		486		100,421		185		100,236
Student loans		65		—		65		25,975		—		25,975
Consumer and other		451		—		451		3,003		—		3,003
	$	3,423	$	11	$	3,412	$	526,457	$	9,243	$	517,214