Deposit accounts in an overdrawn position and reclassified as loans totaled $106 and $141 at December 31, 2021 and 2020, respectively.

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, we were automatically authorized to originate PPP loans. The Company actively participated in assisting our customers with applications for resources through the program until its closing on August 8, 2020. PPP loans originated by the Company have: (a) an interest rate of 1.0%, (b)

two-year

and five-year loan terms to maturity; and (c) principal and interest payments deferred for ten months after the end date of the borrowers forgiveness period. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP. As part of the first round of this program, at December 31, 2021, we had funded 246 PPP loans totaling $30.3 million, of which all but $1 had been forgiven as of December 31, 2021.

On December 27, 2020, the Relief Act became law and provided an additional $284 billion for the PPP, as well as extending the PPP through March 31, 2021. Among the changes to the PPP as a result of the Relief Act include: (1) an opportunity for a second PPP forgivable loan for small businesses and nonprofits with 300 or fewer employees that can demonstrate a loss of 25% of gross receipts in any quarter during 2020 compared to the corresponding quarter in 2019 (or demonstrating a loss of 25% of gross receipts for the calendar year 2020 compared to calendar year 2019); (2) allowing qualified borrowers to apply for a PPP loan up to 2.5 times (or 3.5 times for small businesses in the restaurant and hospitality industries) the borrower’s average monthly payroll costs in the

one-year

period prior to the date on which the loan is made or calendar year 2019, limited to a maximum loan amount of $2.0 million; (3) the addition of personal protective equipment expenses, costs associated with outdoor dining, uninsured costs related to property damaged and vandalism or looting due to 2020 public disturbances, supplier costs and a broader category of operational expenses (including cloud computing services and other business software) as eligible and forgivable expenses; (4) simplifying the loan forgiveness process for loans of $150,000 or less; and (5) eliminating the requirement that Economic Injury Disaster Loan (“EIDL”)

dvances will reduce the borrower’s PPP loan forgiveness amount. Additionally, expenses paid with the proceeds of PPP loans that are forgiven (or are reasonably expected to be forgiven) are now

tax-deductible,

reversing previous guidance from the U.S. Department of the Treasury and the Internal Revenue Service, which did not allow deductions on expenses paid for with PPP loan proceeds which were forgiven (or reasonably expected to be forgiven). As of December 31, 2021, we had funded 143 second round PPP loans totaling $10.5 million, of which $5.1 million had been forgiven as of December 31, 2021.

The Company provides several types of loans to its customers, including commercial, residential, construction and consumer loans. Significant loan concentrations are considered to exist when there are amounts loaned to one borrower, or to multiple borrowers engaged in similar activities, that would cause them to be similarly impacted by economic or other conditions. While credit risks tend to be geographically concentrated in the Company’s metropolitan Milwaukee market area, and while a significant portion of the Company’s loan portfolio is secured by commercial and residential real estate, there are no significant concentrations whose primary sources of repayment are reliant upon an individual or group of related borrowers.

During the normal course of business, the Company may transfer a portion of a loan as a participation loan to another financial institution in order to manage portfolio risk. In order to be eligible for sales treatment, all cash flows from the loan must be divided proportionately, and rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties, and no loan holder can have the right to pledge or exchange the entire loan. As December 31, 2021 and December 31, 2020, respectively, the Company had transferred $32.1 million and $29.6 million in participation loans which were eligible for sales treatment to other financial institutions, all of which were being serviced by the Company.

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


December 31, 2021	Commercial		Residential		Consumer			Total
Allowance for loan losses
Beginning balance	$	1,609	$	745	$	349		$	2,703
Provision (credit) for loan losses		30		—		—			30
Loans charged-off		—		—		(19	)		(19	)
Recoveries		18		—		126			144

Ending balance	$	1,657	$	745	$	456		$	2,858


December 31, 2020	Commercial		Residential			Consumer			Total
Allowance for loan losses
Beginning balance	$	1,235	$	573		$	192		$	2,000
Provision (credit) for loan losses		360		100			40			500
Loans charged-off		—		(60	)		(8	)		(68	)
Recoveries		14		132			125			271

Ending balance	$	1,609	$	745		$	349		$	2,703

Information about how loans were evaluated for impairment and the related allowance for loan losses follows:


December 31, 2021	Commercial		Residential		Consumer		Total
Loans:
Individually evaluated for impairment	$	4,833	$	1,357	$	37	$	6,227
Collectively evaluated for impairment		219,950		82,692		17,123		319,765

Total loans	$	224,783	$	84,049	$	17,160	$	325,992

Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,657		745		456		2,858

Total allowance for loan losses	$	1,657	$	745	$	456	$	2,858


December 31, 2020	Commercial		Residential		Consumer		Total
Loans:
Individually evaluated for impairment	$	10,573	$	411	$	21	$	11,005
Collectively evaluated for impairment		226,394		71,511		22,688		320,593

Total loans	$	236,967	$	71,922	$	22,709	$	331,598

Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,609		745		349		2,703

Total allowance for loan losses	$	1,609	$	745	$	349	$	2,703

Information regarding impaired loans follows:


	Recorded Investment		Unpaid Principal		Reserve		Average Investment		Interest Recognized
December 31, 2021
Impaired loans with reserve:
Commercial:
Real estate	$	—	$	—	$	—	$	—	$	—
Land development		—		—		—		—		—
Other		—		—		—		—		—
Residential real estate:
First mortgages		—		—		—		—		—
Construction		—		—		—		—		—
Consumer:
Home equity and lines of credit		—		—		—		—		—
Other		—		—		—		—		—

Total impaired loans with reserve		—		—		—		—		—

Impaired loans with no reserve:
Commercial:
Real estate	$	4,088	$	4,089		NA	$	5,615	$	213
Land development		—		—		NA		734		33
Other		745		796		NA		1,478		35
Residential real estate:
First mortgages		1,357		1,572		NA		914		34
Construction		—		—		NA		—		—
Consumer:
Home equity and lines of credit		37		41		NA		17		22
Other		—		—		NA		—		—

Total impaired loans with no reserve		6,227		6,498		NA		8,758		337

Total impaired loans	$	6,227	$	6,498	$	—	$	8,758	$	337

Information regarding impaired loans follows:


	Recorded Investment		Unpaid Principal		Reserve		Average Investment		Interest Recognized
December 31, 2020
Impaired loans with reserve:
Commercial:
Real estate	$	—	$	—	$	—	$	—	$	—
Land development		—		—		—		—		—
Other		—		—		—		—		—
Residential real estate:
First mortgages		—		—		—		36		—
Construction		—		—		—		—		—
Consumer:
Home equity and lines of credit		—		—		—		4		—
Other		—		—		—		—		—

Total impaired loans with reserve		—		—		—		40		—

Impaired loans with no reserve:
Commercial:
Real estate	$	6,277	$	6,277		NA	$	6,268	$	332
Land development		1,492		1,492		NA		503		40
Other		2,804		2,804		NA		2,301		138
Residential real estate:
First mortgages		411		495		NA		568		261
Construction		—		—		NA		—		—
Consumer:
Home equity and lines of credit		21		51		NA		24		3
Other		—		—		NA		—		—

Total impaired loans with no reserve		11,005		11,119		NA		9,664		774

Total impaired loans	$	11,005	$	11,119	$	—	$	9,704	$	774

Management regularly monitors impaired loan relationships. In the event facts and circumstances change, additional reserves may be necessary.

There were no additional funds committed to impaired loans as of December 31, 2021 and 2020, respectively.

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan.

“Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.

“Watch / Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability may not be adequate, though the collectability of the contractual loan payments is still probable.

“Substandard” ratings are assigned to loans that do not have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is no longer probable.

“Doubtful” ratings are assigned to loans that do not have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

Information regarding the credit quality indicators most closely monitored for commercial loans by class follows:


December 31, 2021	Pass		Watch and Special Mention		Substandard		Total
Commercial:
Real estate	$	172,172	$	8,963	$	4,088	$	185,223
Land development		1,400		—		—		1,400
Other		37,414		1		745		38,160

Total	$	210,986	$	8,964	$	4,833	$	224,783


December 31, 2020	Pass		Watch and Special Mention		Substandard		Total
Commercial:
Real estate	$	163,961	$	19,272	$	6,058	$	189,291
Land development		—		—		1,492		1,492
Other		37,675		5,705		2,804		46,184

Total	$	201,636	$	24,977	$	10,354	$	236,967

There were no loans rated as doubtful at December 31, 2021 and December 31, 2020.

Residential real estate and consumer loans are generally evaluated based on whether or not the loan is performing according to the contractual terms of the loan. Management determines that a loan is impaired or

non-performing

when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent.

Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class follows:


December 31, 2021	Performing		Non-Performing		Total
Residential real estate:
First mortgage	$	79,722	$	939	$	80,661
Construction		3,388		—		3,388
Consumer:
Home equity and lines of credit		16,954		78		17,032
Other		128		—		128

Total	$	100,192	$	1,017	$	101,209


December 31, 2020	Performing		Non-Performing		Total
Residential real estate:
First mortgage	$	67,817	$	1,151	$	68,968
Construction		2,954		—		2,954
Consumer:
Home equity and lines of credit		22,212		136		22,348
Other		361		—		361

Total	$	93,344	$	1,287	$	94,631

Loan aging and

non-accrual

information follows:


December 31, 2021	Current Loans		Loans Past Due 30-89 Days		Loans Past Due 90+ Days		Total Loans		Non-accrual Loans
Commercial:
Real estate	$	185,223	$	—	$	—	$	185,223	$	—
Land development		1,400		—		—		1,400		—
Other		38,127		33		—		38,160		—
Residential real estate:
First mortgage		80,319		342		—		80,661		939
Construction		3,388		—		—		3,388		—
Consumer:
Home equity and lines of credit		17,032		—		—		17,032		78
Other		128		—		—		128		—

Total	$	325,617	$	375	$	—	$	325,992	$	1,017

				Total non-accrual loans to total loans						0.31	%
				Total non-accrual loans to total assets						0.19	%


December 31, 2020	Current Loans		Loans Past Due 30-89 Days		Loans Past Due 90+ Days		Total Loans		Non-accrual Loans
Commercial:
Real estate	$	189,050	$	241	$	—	$	189,291	$	—
Land development		1,492		—		—		1,492		—
Other		46,151		33		—		46,184		—
Residential real estate:
First mortgage		68,147		684		137		68,968		1,151
Construction		2,954		—		—		2,954		—
Consumer:
Home equity and lines of credit		22,204		121		23		22,348		136
Other		361		—		—		361		—

Total	$	330,359	$	1,079	$	160	$	331,598	$	1,287

				Total non-accrual loans to total loans						0.39	%
				Total non-accrual loans to total assets						0.25	%

There are no loans 90 or more days past due and accruing interest as of December 31, 2021 or 2020.

Non-performing

loans are as follows:


	Years ended December 31,
	2021		2020
Nonaccrual loans, other than troubled debt restructurings	$	826	$	1,068
Nonaccrual loans, troubled debt restructurings		191		219

Total nonperforming loans (NPLs)	$	1,017	$	1,287

Troubled debt restructurings, accruing	$	418	$	432

There were no loans modified as troubled debt restructurings during years ended December 31, 2021 and December 31, 2020.

The provisions of the CARES Act included an election to not apply the guidance on accounting for troubled debt restructurings to loan modifications, such as extensions or deferrals, related to

COVID-19

made between March 1, 2020 and the earlier of (i) December 31, 2020 or (ii) 60 days after the end of the

COVID-19

national emergency. The relief can only be applied to modifications for loans that were not more than 30 days past due as of December 31, 2019. The Company elected to adopt these provisions of the CARES Act. As of December 31, 2021, the Company had deferrals of $383 in interest, escrow and principal payments on $11.2 million in outstanding loans.

The Company considers a troubled debt restructuring in default if it becomes past due more than 90 days. No troubled debt restructurings defaulted within twelve months of their modification date during the years ended December 31, 2021 and 2020.