LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2022

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio by Class

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

(Dollars in thousands)
	September 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	58,585	$	62,639
Real estate - commercial		189,860		159,806
Real estate - construction		48,108		43,281
Real estate - mortgage		142,149		131,754
Obligations of states and political subdivisions		19,761		16,323
Personal		3,967		4,500
Total	$	462,430	$	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 nine months ended September 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
September 30, 2022
Balance, beginning of period	$	286	$	934	$	1,208	$	56	$	1,294	$	35	$	3,813
Provision for loan losses		(4)		129		(123)		—		94		4		100
Charge-offs		—		—		—		—		(22)		(4)		(26)
Recoveries		—		—		—		—		18		—		18
Balance, end of period	$	282	$	1,063	$	1,085	$	56	$	1,384	$	35	$	3,905
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
Nine Months Ended
September 30, 2022
Balance, beginning of period	$	251	$	1,020	$	884	$	45	$	1,269	$	39	$	3,508
Provision for loan losses		31		43		201		11		61		3		350
Charge-offs		—		—		—		—		(23)		(9)		(32)
Recoveries		—		—		—		—		77		2		79
Balance, end of period	$	282	$	1,063	$	1,085	$	56	$	1,384	$	35	$	3,905
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

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, 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
September 30, 2022
Loans allocated by:
Individually evaluated for impairment	$	—	$	2,048	$	—	$	—	$	387	$	—	$	2,435
Acquired with credit deterioration		—		299		—		—		424		—		723
Collectively evaluated for impairment		58,585		187,513		48,108		19,761		141,338		3,967		459,272
	$	58,585	$	189,860	$	48,108	$	19,761	$	142,149	$	3,967	$	462,430
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		282		1,063		1,085		56		1,384		35		3,905
	$	282	$	1,063	$	1,085	$	56	$	1,384	$	35	$	3,905
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 September 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 September 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	$	2,048	$	2,499	$	—	$	5,262	$	5,720	$	—
Acquired with credit deterioration		299		350		—		357		366		—
Real estate – construction		—		—		—		—		649		—
Real estate - mortgage		387		1,010		—		368		1,054		—
Acquired with credit deterioration		424		640		—		481		660		—
With an allowance recorded:
Real estate - mortgage	$	—	$	—	$	—	$	69	$	68	$	2
Total:
Real estate - commercial	$	2,048	$	2,499	$	—	$	5,262	$	5,720	$	—
Acquired with credit deterioration		299		350		—		357		366		—
Real estate - construction		—		—		—		—		649		—
Real estate – mortgage		387		1,010		—		437		1,122		2
Acquired with credit deterioration		424		640		—		481		660		—
	$	3,158	$	4,499	$	—	$	6,537	$	8,517	$	2

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

(Dollars in thousands)	Three Months Ended September 30, 2022						Three Months Ended September 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	$	2,058	$	98	$	—	$	5,291	$	55	$	—
Acquired with credit deterioration		341		—		—		364		—		—
Real estate - mortgage		348		4		19		483		3		10
Acquired with credit deterioration		440		—		—		595		—		—
Total:
Real estate - commercial	$	2,058	$	98	$	—	$	5,291	$	55	$	—
Acquired with credit deterioration		341		—		—		364		—		—
Real estate - mortgage		348		4		19		483		3		10
Acquired with credit deterioration		440		—		—		595		—		—
	$	3,187	$	102	$	19	$	6,733	$	58	$	10

(Dollars in thousands)	Nine Months Ended September 30, 2022						Nine Months Ended September 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	$	4,187	$	161	$	—	$	4,346	$	166	$	—
Acquired with credit deterioration		347		—		—		345		—		—
Real estate - mortgage		397		7		29		579		10		30
Acquired with credit deterioration		455		—		—		602		—		—
Total:
Real estate - commercial	$	4,187	$	161	$	—	$	4,346	$	166	$	—
Acquired with credit deterioration		347		—		—		345		—		—
Real estate - mortgage		397		7		29		579		10		30
Acquired with credit deterioration		455		—		—		602		—		—
	$	5,386	$	168	$	29	$	5,872	$	176	$	30

Nonaccrual Loans by Classes of the Loan Portfolio

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

(Dollars in thousands)
	September 30, 2022		December 31, 2021
Non-accrual loans:
Real estate - mortgage	$	142	$	141
Total	$	142	$	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 September 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 September 30, 2022
Commercial, financial and agricultural	$	58,560	$	—	$	25	$	—	$	25	$	58,585	$	—
Real estate - commercial		188,870		683		—		8		691		189,561		8
Real estate - construction		48,108		—		—		—		—		48,108		—
Real estate - mortgage		141,019		148		445		113		706		141,725		—
Obligations of states and political subdivisions		19,761		—		—		—		—		19,761		—
Personal		3,959		8		—		—		8		3,967		—
Subtotal		460,277		839		470		121		1,430		461,707		8
Loans acquired with credit deterioration
Real estate - commercial		299		—		—		—		—		299		—
Real estate - mortgage		424		—		—		—		—		424		—
Subtotal		723		—		—		—		—		723		—
	$	461,000	$	839	$	470	$	121	$	1,430	$	462,430	$	8

													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 nine months ended September 30, 2021. There were no loan terms modified resulting in troubled debt restructuring during the three and nine months ended September 30, 2022, or the three months ended September 30, 2021.

(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, 2022 and December 31, 2021, respectively.

(Dollars in thousands)			Special
As of September 30, 2022	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	57,812	$	773	$	—	$	—	$	58,585
Real estate - commercial		176,300		11,102		2,458		—		189,860
Real estate - construction		46,668		1,440		—		—		48,108
Real estate - mortgage		140,901		427		821		—		142,149
Obligations of states and political subdivisions		19,761		—		—		—		19,761
Personal		3,967		—		—		—		3,967
Total	$	445,409	$	13,742	$	3,279	$	—	$	462,430

(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