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Loans and Related Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2021

The following table presents the loan portfolio by class at September 30, 2021 and December 31, 2020.


(Dollars in thousands)
	September 30, 2021		December 31, 2020
Commercial, financial and agricultural	$	59,847	$	73,057
Real estate - commercial		155,198		122,698
Real estate - construction		40,612		61,051
Real estate - mortgage		132,665		141,438
Obligations of states and political subdivisions		18,728		18,550
Personal		4,714		5,867
Total	$	411,764	$	422,661

Activity in the Allowance for Loan Losses by Loan Class

The following table summarizes the activity in the allowance for loan losses by loan class, for the three and nine months ended September 30, 2021 and 2020.


(Dollars in thousands)							Obligations
	Commercial,						of states
	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
Three Months Ended
September 30, 2021
Balance, beginning of period	$	289	$	1,435	$	924	$	33	$	1,164	$	61	$	3,906
Provision for loan losses		(9)		(104)		(81)		(5)		(54)		(4)		(257)
Charge-offs		—		—		—		—		—		(2)		(2)
Recoveries		—		36		27		—		12		3		78
Balance, end of period	$	280	$	1,367	$	870	$	28	$	1,122	$	58	$	3,725
September 30, 2020
Balance, beginning of period	$	311	$	878	$	1,137	$	22	$	1,149	$	61	$	3,558
Provision for loan losses		(40)		(10)		145		(1)		(12)		5		87
Charge-offs		—		—		—		—		(3)		(10)		(13)
Recoveries		—		—		267		—		24		1		292
Balance, end of period	$	271	$	868	$	1,549	$	21	$	1,158	$	57	$	3,924

Nine Months Ended
September 30, 2021
Balance, beginning of period	$	302	$	908	$	1,586	$	28	$	1,200	$	70	$	4,094
Provision for loan losses		(29)		423		(799)		—		(119)		(12)		(536)
Charge-offs		—		—		—		—		—		(10)		(10)
Recoveries		7		36		83		—		41		10		177
Balance, end of period	$	280	$	1,367	$	870	$	28	$	1,122	$	58	$	3,725
September 30, 2020
Balance, beginning of period	$	321	$	754	$	718	$	17	$	1,081	$	70	$	2,961
Provision for loan losses		(50)		114		502		4		57		12		639
Charge-offs		—		—		—		—		(7)		(34)		(41)
Recoveries		—		—		329		—		27		9		365
Balance, end of period	$	271	$	868	$	1,549	$	21	$	1,158	$	57	$	3,924

The following table summarizes loans by loan class, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of September 30, 2021 and December 31, 2020.


(Dollars in thousands)							Obligations
	Commercial,						of states
	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
September 30, 2021
Loans allocated by:
Individually evaluated for impairment	$	—	$	5,283	$	—	$	—	$	466	$	—	$	5,749
Acquired with credit deterioration		—		369		—		—		604		—		973
Collectively evaluated for impairment		59,847		149,546		40,612		18,728		131,595		4,714		405,042
	$	59,847	$	155,198	$	40,612	$	18,728	$	132,665	$	4,714	$	411,764
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		280		1,367		870		28		1,122		58		3,725
	$	280	$	1,367	$	870	$	28	$	1,122	$	58	$	3,725

December 31, 2020
Loans allocated by:
Individually evaluated for impairment	$	—	$	3,483	$	—	$	—	$	744	$	—	$	4,227
Acquired with credit deterioration		—		339		—		—		623		—		962
Collectively evaluated for impairment		73,057		118,876		61,051		18,550		140,071		5,867		417,472
	$	73,057	$	122,698	$	61,051	$	18,550	$	141,438	$	5,867	$	422,661
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	2	$	—	$	2
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		302		908		1,586		28		1,198		70		4,092
	$	302	$	908	$	1,586	$	28	$	1,200	$	70	$	4,094

Impaired Loans by Loan Portfolio Class

The following table summarizes information regarding impaired loans by portfolio class as of September 30, 2021 and December 31, 2020.


(Dollars in thousands)	As of September 30, 2021						As of December 31, 2020
	Recorded		Unpaid Principal		Related		Recorded		Unpaid Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans
With no related allowance recorded:
Real estate - commercial	$	5,283	$	5,744	$	—	$	3,483	$	3,580	$	—
Acquired with credit deterioration		369		376		—		339		386		—
Real estate – construction		—		859		—		—		894		—
Real estate - mortgage		466		1,168		—		666		1,396		—
Acquired with credit deterioration		604		786		—		623		801		—
With an allowance recorded:
Real estate - mortgage	$	—	$	—	$	—	$	78	$	77	$	2
Total:
Real estate - commercial	$	5,283	$	5,744	$	—	$	3,483	$	3,580	$	—
Acquired with credit deterioration		369		376		—		339		386		—
Real estate - construction		—		859		—		—		894		—
Real estate – mortgage		466		1,168		—		744		1,473		2
Acquired with credit deterioration		604		786		—		623		801		—
	$	6,722	$	8,933	$	—	$	5,189	$	7,134	$	2

Average recorded investment of impaired loans and related interest income recognized for the three and nine months ended September 30, 2021 and 2020 are summarized in the tables below.


(Dollars in thousands)	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Income		Investment		Recognized		Income
Impaired loans
With no related allowance recorded:
Commercial, financial and agricultural	$	—	$	—	$	—	$	581	$	—	$	—
Real estate - commercial		5,291		55		—		3,412		5		8
Acquired with credit deterioration		364		—		—		354		—		—
Real estate - mortgage		483		3		10		877		4		11
Acquired with credit deterioration		595		—		—		668		—		—
With an allowance recorded:
Real estate - mortgage	$	—	$	—	$	—	$	121	$	—	$	—
Total:
Commercial, financial and agricultural	$	—	$	—	$	—	$	581	$	—	$	—
Real estate - commercial		5,291		55		—		3,412		5		8
Acquired with credit deterioration		364		—		—		354		—		—
Real estate - mortgage		483		3		10		998		4		11
Acquired with credit deterioration		595		—		—		668		—		—
	$	6,733	$	58	$	10	$	6,013	$	9	$	19


(Dollars in thousands)	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Average		Interest		Cash Basis		Average		Interest		Cash Basis
	Recorded		Income		Interest		Recorded		Income		Interest
	Investment		Recognized		Income		Investment		Recognized		Income
Impaired Loans
With no related allowance recorded:
Commercial, financial and agricultural	$	—	$	—	$	—	$	384	$	—	$	—
Real estate - commercial		4,346		166		—		2,746		10		20
Acquired with credit deterioration		345		—		—		357		—		—
Real estate - mortgage		579		10		30		1,010		8		22
Acquired with credit deterioration		602		—		—		678		—		—
Personal		—		—		—		5		—		—
With an allowance recorded:
Real estate - mortgage	$	—	$	—	$	—	$	121	$	—	$	—
Total:
Commercial, financial and agricultural	$	—	$	—	$	—	$	384	$	—	$	—
Real estate - commercial		4,346		166		—		2,746		10		20
Acquired with credit deterioration		345		—		—		357		—		—
Real estate - mortgage		579		10		30		1,131		8		22
Acquired with credit deterioration		602		—		—		678		—		—
Personal		—		—		—		5		—		—
	$	5,872	$	176	$	30	$	5,301	$	18	$	42

Nonaccrual Loans by Classes of the Loan Portfolio

The following table presents nonaccrual loans by classes of the loan portfolio as of September 30, 2021 and December 31, 2020.


(Dollars in thousands)
	September 30, 2021		December 31, 2020
Non-accrual loans:
Real estate - commercial	$	—	$	41
Real estate - mortgage		162		381
Total	$	162	$	422

Loan Portfolio Summarized by the Past Due Status

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. Past due status is determined by the contractual terms of the loan. The following tables present the classes of the loan portfolio summarized by the past due status as of September 30, 2021 and December 31, 2020.


													Loans
													Past Due
													Greater
(Dollars in thousands)							Greater						than 89
			30‑59 Days		60‑89 Days		than 89		Total Past				Days and
	Current		Past Due(2)		Past Due		Days		Due		Total Loans		Accruing(1)
As of September 30, 2021
Commercial, financial and agricultural	$	59,847	$	—	$	—	$	—	$	—	$	59,847	$	—
Real estate - commercial		154,632		197		—		—		197		154,829		—
Real estate - construction		40,612		—		—		—		—		40,612		—
Real estate - mortgage		131,759		70		97		135		302		132,061		87
Obligations of states and political subdivisions		18,728		—		—		—		—		18,728		—
Personal		4,714		—		—		—		—		4,714		—
Subtotal		410,292		267		97		135		499		410,791		87
Loans acquired with credit deterioration
Real estate - commercial		369		—		—		—		—		369		—
Real estate - mortgage		468		—		44		92		136		604		92
Subtotal		837		—		44		92		136		973		92
	$	411,129	$	267	$	141	$	227	$	635	$	411,764	$	179


													Loans
													Past Due
													Greater
(Dollars in thousands)							Greater						than 89
			30‑59 Days		60‑89 Days		than 89		Total Past				Days and
	Current		Past Due(2)		Past Due		Days		Due		Total Loans		Accruing(1)
As of December 31, 2020
Commercial, financial and agricultural	$	73,028	$	7	$	—	$	22	$	29	$	73,057	$	22
Real estate - commercial		122,318		—		—		41		41		122,359		—
Real estate - construction		61,051		—		—		—		—		61,051		—
Real estate - mortgage		139,842		351		453		169		973		140,815		—
Obligations of states and political subdivisions		18,550		—		—		—		—		18,550		—
Personal		5,853		—		14		—		14		5,867		—
Subtotal		420,642		358		467		232		1,057		421,699		22
Loans acquired with credit deterioration
Real estate - commercial		293		—		46		—		46		339		—
Real estate - mortgage		481		50		—		92		142		623		92
Subtotal		774		50		46		92		188		962		92
	$	421,416	$	408	$	513	$	324	$	1,245	$	422,661	$	114

(1)	These loans are guaranteed, or well-secured, and there is an effective means of collection in process.

(2)	Loans are considered past due when the borrower is in arrears on two or more monthly payments.

Troubled Debt Restructurings on Financing Receivables

The following table presents the loan whose terms were modified resulting in troubled debt restructuring during the nine months ended September 30, 2021. There were no loan terms modified resulting in troubled debt restructuring during the three months ended September 30, 2021, nor during the three and nine months ended September 30, 2020.


(Dollars in thousands)		Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding
	Contracts	Recorded Investment		Recorded Investment		Recorded Investment
Nine months ended September 30, 2021
Accruing troubled debt restructurings:
Real estate - commercial	1	$	2,254	$	2,254	$	1,854
	1	$	2,254	$	2,254	$	1,854

Summary of Loans Whose Terms Have Been Modified


(Dollars in thousands)		Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding
	Contracts	Recorded Investment		Recorded Investment		Recorded Investment
Nine months ended September 30, 2021
Accruing troubled debt restructurings:
Real estate - commercial	1	$	2,254	$	2,254	$	1,854
	1	$	2,254	$	2,254	$	1,854

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of September 30, 2021 and December 31, 2020.


(Dollars in thousands)			Special
As of September 30, 2021	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	58,572	$	775	$	500	$	—	$	59,847
Real estate - commercial		108,484		40,993		5,721		—		155,198
Real estate - construction		40,054		—		558		—		40,612
Real estate - mortgage		131,349		261		1,055		—		132,665
Obligations of states and political subdivisions		18,728		—		—		—		18,728
Personal		4,714		—		—		—		4,714
Total	$	361,901	$	42,029	$	7,834	$	—	$	411,764


(Dollars in thousands)			Special
As of December 31, 2020	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	71,983	$	495	$	579	$	—	$	73,057
Real estate - commercial		99,828		15,198		7,631		41		122,698
Real estate - construction		36,332		24,644		75		—		61,051
Real estate - mortgage		139,787		289		1,317		45		141,438
Obligations of states and political subdivisions		18,550		—		—		—		18,550
Personal		5,867		—		—		—		5,867
Total	$	372,347	$	40,626	$	9,602	$	86	$	422,661