Summary of Activity in Allowance for Loan and Lease Losses

A summary of the activity in the allowance for loan losses by portfolio segment is as follows:


	Commercial		Residential		Consumer			Total
	(in thousands)
Year ended December 31, 2023
Allowance for credit losses for loans
Beginning balance	$	1,944	$	752	$	507		$	3,203
Provision for credit losses		64		22		4			90
CECL Adoption Adjustment(1)		666		75		(329	)		412
Loans charged-off		—		—		(10	)		(10	)
Recoveries		19		—		20			39
Ending balance	$	2,693	$	849	$	192		$	3,734

Allowance for credit losses for unfunded loan commitments(2)
Beginning balance	$	—	$	—	$	—		$	—
Provision for credit losses		207		3		—			210
CECL Adoption Adjustment(1)		640		25		—		$	665
Ending balance	$	847	$	28	$	—		$	875

Total Allowance for credit losses for loans and unfunded loan commitments	$	3,540	$	877	$	192		$	4,609

Year ended December 31, 2022
Allowance for loan losses
Beginning balance	$	1,657	$	745	$	456		$	2,858
Provision for loan losses		222		—		—			222
Loans charged-off		—		—		(10	)		(10	)
Recoveries		65		7		61			133
Ending balance	$	1,944	$	752	$	507		$	3,203

(1) On January 1, 2023, the Company adopted ASU 2016-13 ("CECL"). See Note 1 for additional information regarding the adoption of ASU 2016-13.

(2) The allowance for credit losses for unfunded loan commitments is included in other liabilities on the Company's Consolidated Balance Sheets.

The following table presents the components of the provision for credit losses:


	Year ended December 31,
	2023		2022
	(in thousands)
Provision for credit losses for:
Loans	$	90	$	222
Unfunded loan commitments		210	N/A
Total	$	300	$	222

Summary of Internal Risk Ratings of Loans

A summary of the credit quality indicators for commercial loans, at amortized cost, prior to the adoption of CECL is presented below:


	December 31, 2022
	Pass		Watch and Special Mention		Substandard		Total
	(in thousands)
Commercial:
Real estate	$	206,655	$	2,932	$	1,271	$	210,858
Land development		—		—		—		—
Other		41,569		35		2,104		43,708
Total	$	248,224	$	2,967	$	3,375	$	254,566

Summary of Gross Charge-offs of Loans for Portfolio Class By Origination Year

The following table presents gross charge-offs of our loans for each portfolio class, by origination year, that occurred during 2023. See Note 1 for additional information on our charge-off policy.


	For the twelve months ended December 31, 2023
	2023	2022	2021	2020	2019	2018 and Prior	Revolving Lines of Credit	Revolving Lines of Credit Converted to Term Loans	Total Loans
	(in thousands)
Commercial:
Real estate	$-	$-	$-	$-	$-	$-	$-	$-	$-
Land development	-	-	-	-	-	-	-	-	-
Other	-	-	-	-	-	-	-	-	-
Total commercial loans	-	-	-	-	-	-	-	-	-
Residential real estate:
First mortgage	-	-	-	-	-	-	-	-	-
Construction	-	-	-	-	-	-	-	-	-
Total residential real estate	-	-	-	-	-	-	-	-	-
Consumer:
Home equity and lines of credit	-	-	-	-	-	-	-	-	-
Other	1	3	1	1	-	4	-	-	10
Total consumer	1	3	1	1	-	4	-	-	10
Total current period charge-offs	$1	$3	$1	$1	$-	$4	$-	$-	$10

Summary of Information Regarding Non-accrual Loans

The following table presents the amortized cost of our loans on nonaccrual status as of December 31, 2023 and December 31, 2022. All loans that were 90 days or more past due were on nonaccrual status as of December 31, 2023 and December 31, 2022.


	December 31, 2023			December 31, 2022
	(in thousands)
Commercial:
Real estate	$	422		$	—
Land development		—			—
Other		—			—
Residential real estate:
First mortgage		657			714
Construction		—			—
Consumer:
Home equity and lines of credit		31			55
Other		—			—
Total nonaccrual loans	$	1,110		$	769
Total nonaccrual loans to total loans		0.28	%		0.21	%
Total nonaccrual loans to total assets		0.20	%		0.14	%

Summary of Allowance for Loan and Lease Losses for Loans Evaluated Individually and Collectively for Impairment

A summary of loans evaluated individually and collectively for impairment, at amortized cost, and the related allowance for loan losses, prior to the adoption of CECL is presented below:


	December 31, 2022
	Commercial		Residential		Consumer		Total
	(in thousands)
Loans:
Individually evaluated for impairment	$	3,525	$	917	$	55	$	4,497
Collectively evaluated for impairment		251,041		87,775		18,634		357,450
Total loans	$	254,566	$	88,692	$	18,689	$	361,947

Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,944		752		507		3,203
Total allowance for loan losses	$	1,944	$	752	$	507	$	3,203