LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES (Tables)

6 Months Ended

Jun. 30, 2022

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio by Class

The following table presents the loan portfolio by class at June 30, 2022 and December 31, 2021.

(Dollars in thousands)
	June 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	60,043	$	62,639
Real estate - commercial		170,385		159,806
Real estate - construction		53,221		43,281
Real estate - mortgage		133,197		131,754
Obligations of states and political subdivisions		20,285		16,323
Personal		3,948		4,500
Total	$	441,079	$	418,303

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 six months ended June 30, 2022 and 2021.

(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
June 30, 2022
Balance, beginning of period	$	259	$	836	$	1,170	$	47	$	1,228	$	36	$	3,576
Provision for loan losses		27		98		38		9		49		1		222
Charge-offs		—		—		—		—		—		(3)		(3)
Recoveries		—		—		—		—		17		1		18
Balance, end of period	$	286	$	934	$	1,208	$	56	$	1,294	$	35	$	3,813
June 30, 2021
Balance, beginning of period	$	296	$	1,520	$	946	$	30	$	1,183	$	81	$	4,056
Provision for loan losses		(14)		(85)		(50)		3		(32)		(22)		(200)
Charge-offs		—		—		—		—		—		(3)		(3)
Recoveries		7		—		28		—		13		5		53
Balance, end of period	$	289	$	1,435	$	924	$	33	$	1,164	$	61	$	3,906
Six Months Ended
June 30, 2022
Balance, beginning of period	$	251	$	1,020	$	884	$	45	$	1,269	$	39	$	3,508
Provision for loan losses		35		(86)		324		11		(33)		(1)		250
Charge-offs		—		—		—		—		(1)		(5)		(6)
Recoveries		—		—		—		—		59		2		61
Balance, end of period	$	286	$	934	$	1,208	$	56	$	1,294	$	35	$	3,813
June 30, 2021
Balance, beginning of period	$	302	$	908	$	1,586	$	28	$	1,200	$	70	$	4,094
Provision for loan losses		(20)		527		(718)		5		(65)		(8)		(279)
Charge-offs		—		—		—		—		—		(8)		(8)
Recoveries		7		—		56		—		29		7		99
Balance, end of period	$	289	$	1,435	$	924	$	33	$	1,164	$	61	$	3,906

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 June 30, 2022 and December 31, 2021.

(Dollars in thousands)							Obligations
	Commercial,						of states
	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
June 30, 2022
Loans allocated by:
Individually evaluated for impairment	$	—	$	5,220	$	—	$	—	$	372	$	—	$	5,592
Acquired with credit deterioration		—		303		—		—		439		—		742
Collectively evaluated for impairment		60,043		164,862		53,221		20,285		132,386		3,948		434,745
	$	60,043	$	170,385	$	53,221	$	20,285	$	133,197	$	3,948	$	441,079
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		286		934		1,208		56		1,294		35		3,813
	$	286	$	934	$	1,208	$	56	$	1,294	$	35	$	3,813
December 31, 2021
Loans allocated by:
Individually evaluated for impairment	$	—	$	5,262	$	—	$	—	$	437	$	—	$	5,699
Acquired with credit deterioration		—		357		—		—		481		—		838
Collectively evaluated for impairment		62,639		154,187		43,281		16,323		130,836		4,500		411,766
	$	62,639	$	159,806	$	43,281	$	16,323	$	131,754	$	4,500	$	418,303
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	2	$	—	$	2
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		251		1,020		884		45		1,267		39		3,506
	$	251	$	1,020	$	884	$	45	$	1,269	$	39	$	3,508

Impaired Loans by Loan Portfolio Class

The following table summarizes information regarding impaired loans by portfolio class as of June 30, 2022 and December 31, 2021. One loan was determined to have insufficient collateral as of December 31, 2021, requiring the establishment of a specific reserve of $2,000.

(Dollars in thousands)	As of June 30, 2022						As of December 31, 2021
	Recorded		Unpaid Principal		Related		Recorded		Unpaid Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
Impaired loans
With no related allowance recorded:
Real estate - commercial	$	5,220	$	5,672	$	—	$	5,262	$	5,720	$	—
Acquired with credit deterioration		303		355		—		357		366		—
Real estate – construction		—		—		—		—		649		—
Real estate - mortgage		372		1,041		—		368		1,054		—
Acquired with credit deterioration		439		646		—		481		660		—
With an allowance recorded:
Real estate - mortgage	$	—	$	—	$	—	$	69	$	68	$	2
Total:
Real estate - commercial	$	5,220	$	5,672	$	—	$	5,262	$	5,720	$	—
Acquired with credit deterioration		303		355		—		357		366		—
Real estate - construction		—		—		—		—		649		—
Real estate – mortgage		372		1,041		—		437		1,122		2
Acquired with credit deterioration		439		646		—		481		660		—
	$	6,334	$	7,714	$	—	$	6,537	$	8,517	$	2

Average recorded investment of impaired loans and related interest income recognized for the three and six months ended June 30, 2022 and 2021 are summarized in the table below.

(Dollars in thousands)	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021
	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:
Real estate - commercial	$	5,241	$	68	$	—	$	4,082	$	98	$	—
Acquired with credit deterioration		348		—		—		339		—		—
Real estate - mortgage		399		2		10		576		4		10
Acquired with credit deterioration		454		—		—		600		—		—
Total:
Real estate - commercial	$	5,241	$	68	$	—	$	4,082	$	98	$	—
Acquired with credit deterioration		348		—		—		339		—		—
Real estate - mortgage		399		2		10		576		4		10
Acquired with credit deterioration		454		—		—		600		—		—
	$	6,442	$	70	$	10	$	5,597	$	102	$	10

(Dollars in thousands)	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
	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:
Real estate - commercial	$	5,252	$	131	$	—	$	2,957	$	111	$	—
Acquired with credit deterioration		350		—		—		336		—		—
Real estate - mortgage		412		5		20		628		7		20
Acquired with credit deterioration		462		—		—		606		—		—
Total:
Real estate - commercial	$	5,252	$	131	$	—	$	2,957	$	111	$	—
Acquired with credit deterioration		350		—		—		336		—		—
Real estate - mortgage		412		5		20		628		7		20
Acquired with credit deterioration		462		—		—		606		—		—
	$	6,476	$	136	$	20	$	4,527	$	118	$	20

Nonaccrual Loans by Classes of the Loan Portfolio

The following table presents nonaccrual loans by classes of the loan portfolio as of June 30, 2022 and December 31, 2021.

(Dollars in thousands)
	June 30, 2022		December 31, 2021
Non-accrual loans:
Real estate - mortgage	$	119	$	141
Total	$	119	$	141

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 June 30, 2022 and December 31, 2021, respectively.

													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 June 30, 2022
Commercial, financial and agricultural	$	60,017	$	26	$	—	$	—	$	26	$	60,043	$	—
Real estate - commercial		170,072		—		10		—		10		170,082		—
Real estate - construction		53,032		—		189		—		189		53,221		—
Real estate - mortgage		132,005		369		384		—		753		132,758		—
Obligations of states and political subdivisions		20,285		—		—		—		—		20,285		—
Personal		3,907		36		5		—		41		3,948		—
Subtotal		439,318		431		588		—		1,019		440,337		—
Loans acquired with credit deterioration
Real estate - commercial		303		—		—		—		—		303		—
Real estate - mortgage		439		—		—		—		—		439		—
Subtotal		742		—		—		—		—		742		—
	$	440,060	$	431	$	588	$	—	$	1,019	$	441,079	$	—

													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, 2021
Commercial, financial and agricultural	$	62,628	$	11	$	—	$	—	$	11	$	62,639	$	—
Real estate - commercial		159,396		53		—		—		53		159,449		—
Real estate - construction		43,281		—		—		—		—		43,281		—
Real estate - mortgage		130,242		440		488		103		1,031		131,273		85
Obligations of states and political subdivisions		16,323		—		—		—		—		16,323		—
Personal		4,492		8		—		—		8		4,500		—
Subtotal		416,362		512		488		103		1,103		417,465		85
Loans acquired with credit deterioration
Real estate - commercial		357		—		—		—		—		357		—
Real estate - mortgage		481		—		—		—		—		481		—
Subtotal		838		—		—		—		—		838		—
	$	417,200	$	512	$	488	$	103	$	1,103	$	418,303	$	85

(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 three and six months ended June 30, 2021. There were no loan terms modified resulting in troubled debt restructuring during the three and six months ended June 30, 2022.

(Dollars in thousands)		Pre-Modification		Post-Modification
	Number of	Outstanding		Outstanding
	Contracts	Recorded Investment		Recorded Investment		Recorded Investment
Three and Six months ended June 30, 2021
Accruing troubled debt restructurings:
Real estate - commercial	1	$	2,254	$	2,254	$	1,803
	1	$	2,254	$	2,254	$	1,803

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 June 30, 2022 and December 31, 2021, respectively.

(Dollars in thousands)			Special
As of June 30, 2022	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	59,345	$	—	$	698	$	—	$	60,043
Real estate - commercial		152,618		12,132		5,635		—		170,385
Real estate - construction		51,780		—		1,441		—		53,221
Real estate - mortgage		131,932		444		821		—		133,197
Obligations of states and political subdivisions		20,285		—		—		—		20,285
Personal		3,948		—		—		—		3,948
Total	$	419,908	$	12,576	$	8,595	$	—	$	441,079

(Dollars in thousands)			Special
As of December 31, 2021	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	61,372	$	577	$	690	$	—	$	62,639
Real estate - commercial		137,684		16,429		5,693		—		159,806
Real estate - construction		42,394		—		887		—		43,281
Real estate - mortgage		130,584		252		918		—		131,754
Obligations of states and political subdivisions		16,323		—		—		—		16,323
Personal		4,500		—		—		—		4,500
Total	$	392,857	$	17,258	$	8,188	$	—	$	418,303