Loans and allowance for loan losses (Tables)

9 Months Ended

Sep. 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 September 30, 2022  and December 31, 2021 are as follows (dollars in thousands):

	September 30, 2022				December 31, 2021
	Amount		%		Amount		%
Construction and land development
Residential	$	8,437	1.56	%	$	6,805	1.29	%
Commercial		32,109	5.94	%		42,344	8.05	%
		40,546	7.50	%		49,149	9.34	%
Commercial real estate
Owner occupied		122,067	22.59	%		113,108	21.48	%
Non-owner occupied		155,981	28.85	%		129,786	24.65	%
Multifamily		11,309	2.09	%		11,666	2.22	%
Farmland		564	0.10	%		977	0.19	%
		289,921	53.63	%		255,537	48.54	%
Consumer real estate
Home equity lines		19,891	3.68	%		17,977	3.41	%
Secured by 1-4 family residential,
First deed of trust		65,704	12.15	%		62,277	11.83	%
Second deed of trust		6,930	1.28	%		12,118	2.31	%
		92,525	17.11	%		92,372	17.55	%
Commercial and industrial loans
(except those secured by real estate)		91,603	16.94	%		100,421	19.07	%
Guaranteed student loans		22,010	4.07	%		25,975	4.93	%
Consumer and other		4,078	0.75	%		3,003	0.57	%
Total loans		540,683	100.0	%		526,457	100.0	%
Deferred fees and costs, net		592				(433)
Less: allowance for loan losses		(3,370)				(3,423)
	$	537,905			$	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):

	September 30,		December 31,
	2022		2021
Commercial real estate
Non-owner occupied	$	275	$	286
		275		286
Consumer real estate
Home equity lines		300		300
Secured by 1-4 family residential
First deed of trust		166		556
Second deed of trust		224		198
		690		1,054
Commercial and industrial loans
(except those secured by real estate)		19		19
Total loans	$	984	$	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
September 30, 2022
Construction and land development
Residential	$	8,437	$	—	$	—	$	—	$	8,437
Commercial		29,472		2,637		—		—		32,109
		37,909		2,637		—		—		40,546
Commercial real estate
Owner occupied		118,343		2,454		1,270		—		122,067
Non-owner occupied		151,609		4,097		275		—		155,981
Multifamily		11,309		—		—		—		11,309
Farmland		564		—		—		—		564
		281,825		6,551		1,545		—		289,921
Consumer real estate
Home equity lines		19,026		565		300		—		19,891
Secured by 1-4 family residential
First deed of trust		64,661		553		490		—		65,704
Second deed of trust		6,608		72		250		—		6,930
		90,295		1,190		1,040		—		92,525
Commercial and industrial loans
(except those secured by real estate)		91,088		426		89		—		91,603
Guaranteed student loans		22,010		—		—		—		22,010
Consumer and other		4,054		—		24		—		4,078
Total loans	$	527,181	$	10,804	$	2,698	$	—	$	540,683

	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
September 30, 2022
Construction and land development
Residential	$	—	$	—	$	—	$	—	$	8,437	$	8,437	$	—
Commercial		—		—		—		—		32,109		32,109		—
		—		—		—		—		40,546		40,546		—
Commercial real estate
Owner occupied		—		—		—		—		122,067		122,067		—
Non-owner occupied		—		—		—		—		155,981		155,981		—
Multifamily		—		—		—		—		11,309		11,309		—
Farmland		—		—		—		—		564		564		—
		—		—		—		—		289,921		289,921		—
Consumer real estate
Home equity lines		—		—		—		—		19,891		19,891		—
Secured by 1‑4 family residential
First deed of trust		—		—		—		—		65,704		65,704		—
Second deed of trust		—		—		—		—		6,930		6,930		—
		—		—		—		—		92,525		92,525		—
Commercial and industrial loans
(except those secured by real estate)		377		—		—		377		91,226		91,603		—
Guaranteed student loans		783		396		1,714		2,893		19,117		22,010		1,714
Consumer and other		—		—		—		—		4,078		4,078		—
Total loans	$	1,160	$	396	$	1,714	$	3,270	$	537,413	$	540,683	$	1,714

													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

	September 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	$	4,134	$	4,149	$	—	$	4,776	$	4,791	$	—
Non-owner occupied		589		589		—		1,458		1,458		—
		4,723		4,738		—		6,234		6,249		—
Consumer real estate
Home equity lines		300		300		—		300		300		—
Secured by 1‑4 family residential
First deed of trust		1,847		1,847		—		1,873		1,873		—
Second deed of trust		264		348		—		238		406		—
		2,411		2,495		—		2,411		2,579		—
Commercial and industrial loans
(except those secured by real estate)		89		89		—		185		185		—
		7,223		7,322		—		8,830		9,013		—
With an allowance recorded
Commercial real estate
Owner occupied		255		255		3		267		267		4
		255		255		3		267		267		4
Consumer real estate
Secured by 1-4 family residential
First deed of trust		65		65		6		146		146		7
		65		65		6		146		146		7
Consumer and other		24		24		1		—		—		—
		344		344		10		413		413		11
Total
Owner occupied		4,389		4,404		3		5,043		5,058		4
Non-owner occupied		589		589		—		1,458		1,458		—
		4,978		4,993		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		1,912		1,912		6		2,019		2,019		7
Second deed of trust		264		348		—		238		406		—
		2,476		2,560		6		2,557		2,725		7
Commercial and industrial loans
(except those secured by real estate)		89		89		—		185		185		—
Consumer and other		24		24		1		—		—		—
	$	7,567	$	7,666	$	10	$	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 Nine Months Ended
	September 30, 2022				September 30, 2022
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate
Owner occupied	$	4,352	$	34		4,450	$	100
Non-owner occupied		1,039		4		1,144		29
		5,391		38		5,594		129
Consumer real estate
Home equity lines		100		6		300		21
Secured by 1-4 family residential
First deed of trust		1,816		23		1,830		60
Second deed of trust		337		3		228		8
		2,253		32		2,358		89
Commercial and industrial loans
(except those secured by real estate)		119		2		136		3
		7,763		72		8,088		221
With an allowance recorded
Commercial real estate
Owner occupied		259		4		261		11
		259		4		261		11
Consumer real estate
Secured by 1-4 family residential
First deed of trust		116		—		124		4
Second deed of trust		65		3		49		3
		181		3		173		7
Consumer and other		12		—		6		—
		452		7		440		18
Total
Commercial real estate
Owner occupied		4,611		38		4,711		111
Non-owner occupied		1,039		4		1,144		29
		5,650		42		5,855		140
Consumer real estate
Home equity lines		100		6		300		21
Secured by 1-4 family residential,
First deed of trust		1,932		23		1,954		64
Second deed of trust		402		6		277		11
		2,434		35		2,531		96
Commercial and industrial loans
(except those secured by real estate)		119		2		136		3
Consumer and other		12		—		6		—
	$	8,215	$	79	$	8,528	$	239

Schedule of troubled debt restructurings on financing receivables

							Specific
							Valuation
	Total		Performing		Nonaccrual		Allowance
September 30, 2022
Commercial real estate
Owner occupied	$	3,119	$	3,119	$	—	$	3
Non-owner occupied		589		314		275		—
		3,708		3,433		275		3
Consumer real estate
Secured by 1-4 family residential
First deeds of trust		1,422		1,422		—		6
Second deeds of trust		91		35		56		—
		1,513		1,457		56		6
Commercial and industrial loans
(except those secured by real estate)		19		—		19		—
	$	5,240	$	4,890	$	350	$	9
Number of loans		25		22		3		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

There were no TDRs identified for the three month periods ended September 30, 2022 and 2021.  The following table provides information about TDRs identified during the indicated periods (dollars in thousands).

	Nine Months Ended					Nine Months Ended
	September 30, 2022					September 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 September 30, 2022 and 2021.

Schedule of troubled debt restructurings on financing receivables modification

There were no TDRs identified for the three month periods ended September 30, 2022 and 2021.  The following table provides information about TDRs identified during the indicated periods (dollars in thousands).

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 September 30, 2022
Construction and land development
Residential	$	57	$	12	$	—	$	—	$	69
Commercial		171		4		—		—		175
		228		16		—		—		244
Commercial real estate
Owner occupied		868		7		—		—		875
Non-owner occupied		1,267		40		—		—		1,307
Multifamily		50		(17)		—		—		33
Farmland		2		(1)		—		—		1
		2,187		29		—		—		2,216
Consumer real estate
Home equity lines		12		—		—		—		12
Secured by 1-4 family residential
First deed of trust		114		13		—		2		129
Second deed of trust		49		(11)		(27)		27		38
		175		2		(27)		29		179
Commercial and industrial loans
(except those secured by real estate)		533		201		(157)		5		582
Student loans		60		9		(2)		—		67
Consumer and other		45		(7)		(1)		—		37
Unallocated		195		(150)		—		—		45
	$	3,423	$	100	$	(187)	$	34	$	3,370

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Three Months Ended September 30, 2021
Construction and land development
Residential	$	66	$	10	$	—	$	—	$	76
Commercial		203		28		—		—		231
		269		38		—		—		307
Commercial real estate
Owner occupied		802		58		—		—		860
Non-owner occupied		1,059		30		—		—		1,089
Multifamily		35		1		—		—		36
Farmland		2		—		—		—		2
		1,898		89		—		—		1,987
Consumer real estate
Home equity lines		11		—		—		—		11
Secured by 1-4 family residential
First deed of trust		113		(3)		—		1		111
Second deed of trust		72		(3)		—		21		90
		196		(6)		—		22		212
Commercial and industrial loans
(except those secured by real estate)		422		55		—		3		480
Student loans		80		1		(11)		—		70
Consumer and other		36		(4)		—		—		32
Unallocated		528		(173)		—		—		355
	$	3,429	$	—	$	(11)	$	25	$	3,443

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Nine Months Ended September 30, 2022
Construction and land development
Residential	$	57	$	12	$	—	$	—	$	69
Commercial		229		(54)		—		—		175
		286		(42)		—		—		244
Commercial real estate
Owner occupied		833		42		—		—		875
Non-owner occupied		1,083		224		—		—		1,307
Multifamily		35		(2)		—		—		33
Farmland		2		(1)		—		—		1
		1,953		263		—		—		2,216
Consumer real estate
Home equity lines		12		(58)		—		58		12
Secured by 1-4 family residential
First deed of trust		123		2		—		4		129
Second deed of trust		47		(312)		(27)		330		38
		182		(368)		(27)		392		179
Commercial and industrial loans
(except those secured by real estate)		486		189		(157)		64		582
Student loans		65		26		(24)		—		67
Consumer and other		29		9		(1)		—		37
Unallocated		422		(377)		—		—		45
	$	3,423	$	(300)	$	(209)	$	456	$	3,370

			Provision for
	Beginning		(Recovery of)						Ending
	Balance		Loan Losses		Charge-offs		Recoveries		Balance
Nine Months Ended September 30, 2021
Construction and land development
Residential	$	214	$	(138)	$	—	$	—	$	76
Commercial		285		(54)		—		—		231
		499		(192)		—		—		307
Commercial real estate
Owner occupied		1,047		(187)		—		—		860
Non-owner occupied		1,421		(346)		—		14		1,089
Multifamily		47		(11)		—		—		36
Farmland		2		—		—		—		2
		2,517		(544)		—		14		1,987
Consumer real estate
Home equity lines		24		(23)		—		10		11
Secured by 1-4 family residential
First deed of trust		166		(65)		—		10		111
Second deed of trust		79		57		(84)		38		90
		269		(31)		(84)		58		212
Commercial and industrial loans
(except those secured by real estate)		408		45		—		27		480
Student loans		87		7		(24)		—		70
Consumer and other		36		14		(18)		—		32
Unallocated		154		201		—		—		355
	$	3,970	$	(500)	$	(126)	$	99	$	3,443

			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
Nine Months Ended September 30, 2022
Construction and land development
Residential	$	69	$	—	$	69	$	8,437	$	—	$	8,437
Commercial		175		—		175		32,109		—		32,109
		244		—		244		40,546		—		40,546
Commercial real estate
Owner occupied		875		3		872		122,067		4,389		117,678
Non-owner occupied		1,307		—		1,307		155,981		589		155,392
Multifamily		33		—		33		11,309		—		11,309
Farmland		1		—		1		564		—		564
		2,216		3		2,213		289,921		4,978		284,943
Consumer real estate
Home equity lines		12		—		12		19,891		300		19,591
Secured by 1-4 family residential
First deed of trust		129		6		123		65,704		1,912		63,792
Second deed of trust		38		—		38		6,930		264		6,666
		179		6		173		92,525		2,476		90,049
Commercial and industrial loans
(except those secured by real estate)		582		—		582		91,603		89		91,514
Student loans		67		—		67		22,010		—		22,010
Consumer and other		82		1		81		4,078		24		4,054
	$	3,370	$	10	$	3,360	$	540,683	$	7,567	$	533,116
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