
	Year Ended December 31,
	2021			2020
Balance, beginning of period	$	21,162		$	10,742
Charge-offs:
Real estate - residential	—			(7)
Real estate - commercial	(169)			(427)
Commercial and industrial	(4,919)			(6,336)
Consumer and other	(70)			(98)
Total charge-offs	(5,158)			(6,868)
Recoveries:
Real estate - commercial	78			—
Commercial and industrial	863			311
Consumer and other	7			77
Total recoveries	948			388
Net (charge-offs) recoveries	(4,210)			(6,480)
Provision for loan losses	(3,500)			16,900
Balance, end of period	$	13,452		$	21,162
Net charge-offs (recoveries) to total average loans held for investment	0.44		%	0.70		%

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by loan segment and based on impairment method at December 31, 2021. The government guaranteed loan balances are included in the collectively evaluated for impairment balances.


	Real Estate- Residential		Real Estate- Commercial		Real Estate - Construction and Land		Commercial and Industrial		Commercial and Industrial - PPP		Consumer and Other		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	91	$	—	$	902	$	—	$	—	$	—	$	993
Collectively evaluated for impairment	1,437		2,258		241		8,300		—		154		69		12,459
Total	$	1,437	$	2,349	$	241	$	9,202	$	—	$	154	$	69	$	13,452
Loans:
Individually evaluated for impairment	$	124	$	2,900	$	—	$	902	$	—	$	—	$	—	$	3,926
Collectively evaluated for impairment	87,111		160,577		18,632		216,253		80,158		3,581		—		566,312
Total	$	87,235	$	163,477	$	18,632	$	217,155	$	80,158	$	3,581	$	—	$	570,238

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by loan segment and based on impairment method at December 31, 2020. The government guaranteed loan balances are included in the collectively evaluated for impairment balances.


	Real Estate- Residential		Real Estate- Commercial		Real Estate - Construction and Land		Commercial and Industrial		Commercial and Industrial - PPP		Consumer and Other		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	162	$	—	$	948	$	—	$	—	$	—	$	1,110
Collectively evaluated for impairment	2,088		2,737		310		14,470		—		252		195		20,052
Total	$	2,088	$	2,899	$	310	$	15,418	$	—	$	252	$	195	$	21,162
Loans:
Individually evaluated for impairment	$	—	$	2,348	$	—	$	948	$	—	$	—	$	—	$	3,296
Collectively evaluated for impairment	64,724		112,536		15,113		192,979		838,847		2,896		—		1,227,095
Total	$	64,724	$	114,884	$	15,113	$	193,927	$	838,847	$	2,896	$	—	$	1,230,391


	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
Real estate - residential	$	124	$	124	$	—	$	31	$	—	$	—
Real estate - commercial	2,763		2,763		—		2,353		8		8
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	2,887		2,887		—		2,384		8		8
With an allowance recorded:
Real estate - residential	—		—		—		—		—		—
Real estate - commercial	137		137		91		360		—		—
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	902		902		902		874		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	1,039		1,039		993		1,234		—		—
Total	$	3,926	$	3,926	$	993	$	3,618	$	8	$	8


	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
Real estate - residential	$	—	$	—	$	—	$	23	$	—	$	—
Real estate - commercial	1,699		1,272		—		946		48		36
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	—		—		—		46		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	1,699		1,272		—		1,015		48		36
With an allowance recorded:
Real estate - residential	—		—		—		—		—		—
Real estate - commercial	1,076		1,076		162		1,085		—		—
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	948		948		948		2,008		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	2,024		2,024		1,110		3,093		—		—
Total	$	3,723	$	3,296	$	1,110	$	4,108	$	48	$	36

The unpaid principal balance represents the outstanding contractual balance. For purposes of the impaired loans by loan segment tables above, the unpaid principal balance and recorded investment do not include the government guaranteed balance. The government guaranteed balances of impaired loans at December 31, 2021 and December 31, 2020 were $6,197 and $6,259, respectively.

Nonaccrual loans and loans past due over 89 days still on accrual include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified impaired loans. The unguaranteed portions of government guaranteed loans that are under $100,000 are reserved in full. Impaired loans include commercial loans that are individually evaluated for impairment and deemed impaired as well as TDR for all loan portfolio segments. The sum of nonaccrual loans and loans past due over 89 days still on accrual will differ from the total impaired loan amount.

The following tables present the recorded investment in nonaccrual and loans past due over 89 days still on accrual by loan segment at December 31, 2021 and December 31, 2020. In the following table, the recorded investment does not include the government guaranteed balance.


	Nonaccrual				Loans Past Due Over 89 Days Still Accruing
	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Real estate - residential	$	124	$	—	$	126	$	573
Real estate - commercial	2,815		1,806		—		—
Commercial and industrial	902		948		—		—
Total	$	3,841	$	2,754	$	126	$	573


	30-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due (1)		Total Loans
Real estate - residential	$	57	$	250	$	307	$	86,928	$	87,235
Real estate - commercial	192		1,778		1,970		161,507		163,477
Real estate - construction and land	—		—		—		18,632		18,632
Commercial and industrial	991		424		1,415		215,740		217,155
Commercial and industrial - PPP	—		—		—		80,158		80,158
Consumer and other	—		—		—		3,581		3,581
Total	$	1,240	$	2,452	$	3,692	$	566,546	$	570,238

(1) For the purposes of the table above, $10,360 of balances 30-89 days past due and $2,807 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guaranty, $11,089 of commercial and industrial PPP loans are primarily due to delinquencies from borrowers with only a PPP loan and no other First Home Bank product. These borrowers were non-responsive to requests for forgiveness applications and payments, and applications were subsequently submitted to the SBA for their 100% guarantee purchase from the Bank.


	30-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due		Loans Not Past Due (1)		Total Loans
Real estate - residential	$	654	$	573	$	1,227	$	63,497	$	64,724
Real estate - commercial	954		1,743		2,697		112,187		114,884
Real estate - construction and land	—		—		—		15,113		15,113
Commercial and industrial	1,613		—		1,613		192,314		193,927
Commercial and industrial - PPP	—		—		—		838,847		838,847
Consumer and other	4		—		4		2,892		2,896
Total	$	3,225	$	2,316	$	5,541	$	1,224,850	$	1,230,391

(1) For the purposes of the table above, $252 of balances 30-89 days past due and $5,023 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guaranty.

Internal risk-rating grades are assigned to loans by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This analysis is performed at least annually. The Bank uses the following definitions for its risk ratings:

Special Mention – These credits constitute an undue and unwarranted credit risk, but not to a point of justifying a classification of “Substandard”. They have weaknesses that, if not checked or corrected, weaken the asset or inadequately protect the Bank.

Substandard – These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – These loans have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.


	Pass		Special Mention		Substandard		Doubtful		Total Loans
Real estate - residential	$	87,233	$	—	$	2	$	—	$	87,235
Real estate - commercial	160,492		170		2,815		—		163,477
Real estate - construction and land	18,632		—		—		—		18,632
Commercial and industrial	212,544		1,850		2,761		—		217,155
Commercial and industrial - PPP	80,158		—		—		—		80,158
Consumer and other	3,581		—		—		—		3,581
Loans held for investment, at amortized cost	$	562,640	$	2,020	$	5,578	$	—	$	570,238


	Pass		Special Mention		Substandard		Doubtful		Total Loans
Real estate - residential	$	64,593	$	—	$	131	$	—	$	64,724
Real estate - commercial	112,260		431		2,193		—		114,884
Real estate - construction and land	15,113		—		—		—		15,113
Commercial and industrial	186,781		5,177		1,896		73		193,927
Commercial and industrial - PPP	838,847		—		—		—		838,847
Consumer and other	2,896		—		—		—		2,896
Loans held for investment, at amortized cost	$	1,220,490	$	5,608	$	4,220	$	73	$	1,230,391

The Company had not committed to lend any additional amounts to the loans classified as TDR at December 31, 2021 and December 31, 2020. The Company estimated $38 and $0 of impaired loan loss reserves for these loans at December 31, 2021 and December 31, 2020, respectively. There were no loans which were modified in the previous twelve months that defaulted during the year ended December 31, 2021.

The CARES Act signed into law on March 27, 2020, permits financial institutions to suspend requirements under GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDR and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. The CAA signed into law on December 27, 2020, extends the applicable period to include modifications to loans held by financial institutions executed between March 1, 2020 and the earlier of (i) January 1, 2022 or (ii) 60 days after the date of the termination of the COVID-19 national emergency. In addition, federal bank regulatory authorities have issued guidance to encourage financial institutions to make loan modifications for borrowers affected by COVID-19 and have assured financial institutions that they will neither receive supervisory criticism for such prudent loan modifications, nor be required by examiners to automatically categorize COVID-19-related loan modifications as TDR. The Company is applying this guidance to qualifying loan modifications.


	December 31, 2021			December 31, 2020
	Number of Loans	Outstanding Recorded Investment		Number of Loans	Outstanding Recorded Investment
Real estate - residential	1	$	258	11	$	7,106
Real estate - commercial	—	—		4	1,849
Real estate - construction and land	—	—		2	1,424
Commercial and industrial	23	1,113		220	9,624
Total loan modifications related to COVID-19	24	$	1,371	237	$	20,003