Note 4: Loans

The following table presents the components of the loan portfolio at March 31, 2020 and December 31, 2019:


	March 31,		December 31,
	2020		2019
Commercial	$	299,425	$	276,035
Construction and Land Development		183,350		196,776
Real Estate Mortgage:
1-4 Family Mortgage		272,590		260,611
Multifamily		536,380		515,014
CRE Owner Occupied		75,207		66,584
CRE Non-owner Occupied		631,541		592,545
Total Real Estate Mortgage Loans		1,515,718		1,434,754
Consumer and Other		4,324		4,473
Total Loans, Gross		2,002,817		1,912,038
Allowance for Loan Losses		(24,585)		(22,526)
Net Deferred Loan Fees		(5,336)		(5,512)
Total Loans, Net	$	1,972,896	$	1,884,000

The following tables present the activity in the allowance for loan losses, by segment, for the three months ended March 31, 2020 and 2019:


			Construction						CRE		CRE
			and Land		1-‑4 Family				Owner		Non‑owner		Consumer
Three Months Ended March 31, 2020	Commercial		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Unallocated		Total
Allowance for Loan Losses:
Beginning Balance	$	3,058	$	2,202	$	2,839	$	5,824	$	792	$	6,972	$	85	$	754	$	22,526
Provision for Loan Losses		531		(71)		361		732		146		1,031		18		(648)		2,100
Loans Charged-off		(34)		—		—		—		—		—		(13)		—		(47)
Recoveries of Loans		2		—		2		—		—		—		2		—		6
Total Ending Allowance Balance	$	3,557	$	2,131	$	3,202	$	6,556	$	938	$	8,003	$	92	$	106	$	24,585

Three Months Ended March 31, 2019
Allowance for Loan Losses:
Beginning Balance	$	2,898	$	2,451	$	2,597	$	4,644	$	808	$	5,872	$	65	$	696	$	20,031
Provision for Loan Losses		480		(354)		5		71		(18)		477		12		(73)		600
Loans Charged-off		(19)		—		—		—		—		—		(17)		—		(36)
Recoveries of Loans		2		—		9		—		—		—		1		—		12
Total Ending Allowance Balance	$	3,361	$	2,097	$	2,611	$	4,715	$	790	$	6,349	$	61	$	623	$	20,607

The following tables present the balance in the allowance for loan losses and the recorded investment in loans, by segment, based on impairment method as of March 31, 2020 and December 31, 2019:


			Construction						CRE		CRE
			and Land		1-‑4 Family				Owner		Non‑owner		Consumer
Allowance for Loan Losses at March 31, 2020	Commercial		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Unallocated		Total
Individually Evaluated for Impairment	$	35	$	—	$	—	$	—	$	—	$	—	$	14	$	—	$	49
Collectively Evaluated for Impairment		3,522		2,131		3,202		6,556		938		8,003		78		106		24,536
Totals	$	3,557	$	2,131	$	3,202	$	6,556	$	938	$	8,003	$	92	$	106	$	24,585

Allowance for Loan Losses at December 31, 2019
Individually Evaluated for Impairment	$	31	$	—	$	—	$	—	$	—	$	—	$	14	$	—	$	45
Collectively Evaluated for Impairment		3,027		2,202		2,839		5,824		792		6,972		71		754		22,481
Totals	$	3,058	$	2,202	$	2,839	$	5,824	$	792	$	6,972	$	85	$	754	$	22,526


			Construction						CRE		CRE
			and Land		1-‑4 Family				Owner		Non‑owner		Consumer
Loans at March 31, 2020	Commercial		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Total
Individually Evaluated for Impairment	$	267	$	170	$	1,243	$	—	$	1,847	$	224	$	14	$	3,765
Collectively Evaluated for Impairment		299,158		183,180		271,347		536,380		73,360		631,317		4,310		1,999,052
Totals	$	299,425	$	183,350	$	272,590	$	536,380	$	75,207	$	631,541	$	4,324	$	2,002,817

Loans at December 31, 2019
Individually Evaluated for Impairment	$	273	$	176	$	1,059	$	—	$	236	$	—	$	14	$	1,758
Collectively Evaluated for Impairment		275,762		196,600		259,552		515,014		66,348		592,545		4,459		1,910,280
Totals	$	276,035	$	196,776	$	260,611	$	515,014	$	66,584	$	592,545	$	4,473	$	1,912,038

The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of March 31, 2020 and December 31, 2019:


	March 31, 2020						December 31, 2019
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Loans With No Related Allowance for Loan Losses:
Commercial	$	157	$	157	$	—	$	167	$	167	$	—
Construction and Land Development		170		779		—		176		785		—
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		303		490		—		302		489		—
1st REM - Rentals		940		940		—		757		757		—
CRE Owner Occupied		1,847		1,847		—		236		236		—
CRE Non Owner Occupied		224		224		—		—		—		—
Totals		3,641		4,437		—		1,638		2,434		—

Loans With An Allowance for Loan Losses:
Commercial		110		113		35		106		109		31
Consumer and Other		14		14		14		14		14		14
Totals		124		127		49		120		123		45
Grand Totals	$	3,765	$	4,564	$	49	$	1,758	$	2,557	$	45

The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three months ended March 31, 2020 and 2019:



	Three Months Ended March 31,
	2020				2019
	Average		Interest		Average		Interest
	Investment		Recognized		Investment		Recognized
Loans With No Related Allowance for Loan Losses:
Commercial	$	163	$	3	$	—	$	—
Construction and Land Development		175		—		198		—
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		329		—		157		2
1st REM - Rentals		932		11		1,637		9
CRE Owner Occupied		1,837		25		449		6
CRE Non Owner Occupied		225		3		—		—
Consumer and Other		—		—		57		—
Totals		3,661		42		2,498		17

Loans With An Allowance for Loan Losses:
Commercial		111		—		688		9
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		—		—		308		—
Consumer and Other		14		—		—		—
		125		—		996		9
Grand Totals	$	3,786	$	42	$	3,494	$	26

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The process of analyzing loans for changes in risk rating is ongoing through routine monitoring of the portfolio and annual internal credit reviews for credits meeting certain thresholds.

The following tables present the risk category of loans by loan segment as of March 31, 2020 and December 31, 2019, based on the most recent analysis performed by management:


	March 31, 2020
	Pass		Watch		Substandard		Total
Commercial	$	277,533	$	21,625	$	267	$	299,425
Construction and Land Development		183,045		135		170		183,350
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		30,790		138		—		30,928
1st REM - 1-4 Family		34,253		123		176		34,552
LOCs and 2nd REM - Rentals		19,156		476		303		19,935
1st REM - Rentals		185,643		768		764		187,175
Multifamily		536,380		—		—		536,380
CRE Owner Occupied		72,540		820		1,847		75,207
CRE Non-owner Occupied		609,598		21,719		224		631,541
Consumer and Other		4,310		—		14		4,324
Totals	$	1,953,248	$	45,804	$	3,765	$	2,002,817


	December 31, 2019
	Pass			Watch			Substandard		Total
Commercial	$	275,741	$		21	$		273	$	276,035
Construction and Land Development		196,462			138			176		196,776
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		28,483			138			—		28,621
1st REM - 1-4 Family		36,370			124			177		36,671
LOCs and 2nd REM - Rentals		17,890			479			302		18,671
1st REM - Rentals		174,781			1,287			580		176,648
Multifamily		515,014			—			—		515,014
CRE Owner Occupied		65,411			—			1,173		66,584
CRE Non-owner Occupied		589,457			3,088			—		592,545
Consumer and Other		4,459			—			14		4,473
Totals	$	1,904,068		$	5,275		$	2,695	$	1,912,038

The following tables present the aging of the recorded investment in past due loans by loan segment as of March 31, 2020 and December 31, 2019:


	Accruing Interest
			30-89 Days		90 Days or
March 31, 2020	Current		Past Due		More Past Due		Nonaccrual		Total
Commercial	$	299,397	$	21	$	—	$	7	$	299,425
Construction and Land Development		183,180		—		—		170		183,350
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		30,928		—		—		—		30,928
1st REM - 1-4 Family		34,552		—		—		—		34,552
LOCs and 2nd REM - Rentals		19,632		—		—		303		19,935
1st REM - Rentals		187,049		—		—		126		187,175
Multifamily		536,380		—		—		—		536,380
CRE Owner Occupied		75,207		—		—		—		75,207
CRE Non-owner Occupied		631,541		—		—		—		631,541
Consumer and Other		4,324		—		—		—		4,324
Totals	$	2,002,190	$	21	$	—	$	606	$	2,002,817


	Accruing Interest
			30-89 Days		90 Days or
December 31, 2019	Current		Past Due		More Past Due		Nonaccrual		Total
Commercial	$	276,028	$	—	$	—	$	7	$	276,035
Construction and Land Development		196,600		—		—		176		196,776
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		28,621		—		—		—		28,621
1st REM - 1-4 Family		36,671		—		—		—		36,671
LOCs and 2nd REM - Rentals		18,527		—		—		144		18,671
1st REM - Rentals		176,114		400		—		134		176,648
Multifamily		515,014		—		—		—		515,014
CRE Owner Occupied		66,584		—		—		—		66,584
CRE Non-owner Occupied		592,545		—		—		—		592,545
Consumer and Other		4,470		3		—		—		4,473
Totals	$	1,911,174	$	403	$	—	$	461	$	1,912,038

At March 31, 2020, there were four loans classified as troubled debt restructurings with a current outstanding balance of $839. At December 31, 2019, there were three loans classified as troubled debt restructurings with an outstanding balance of $452. There was one new loan classified as a troubled debt restructuring during the three month period ended March 31, 2020, and no loans classified as troubled debt restructurings during the previous twelve months subsequently defaulted during the three months ended March 31, 2020.

In response to the COVID-19 pandemic, the Company is offering short-term loan modifications to borrowers who were current and otherwise not past due as of December 31, 2019. These include short-term modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. In accordance with regulatory guidance, these modifications are not considered to be troubled debt restructurings. The modifications completed in the three months ended March 31, 2020 were immaterial.