LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2023

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio by Class

The following table presents the loan portfolio by class at December 31, 2023 and 2022.

(Dollars in thousands)
	December 31, 2023		December 31, 2022
Commercial, financial and agricultural	$	65,821	$	61,458
Real estate - commercial		223,077		199,206
Real estate - construction:
1-4 family residential construction		5,085		7,995
Other construction loans		47,504		42,753
Real estate - mortgage		162,385		150,290
Obligations of states and political subdivisions		17,232		18,770
Personal		4,290		4,040
Total	$	525,394	$	484,512

Activity in the Allowance for Loan Losses by Loan Class

The following table presents the activity in the allowance for credit losses by portfolio class for the year ended December 31, 2023:

					Real estate-				Obligations
	Commercial,				construction		Real estate-		of states
(Dollars in thousands)	financial and		Real estate-		1-4 family		construction		and political		Real estate-
	agricultural		commercial		residential		other		subdivisions		mortgage		Personal		Total
Year Ended
December 31, 2023
Allowance for credit losses:
Beginning balance, prior to ASC 326 adoption	$	297	$	1,110	$	69	$	1,077	$	54	$	1,385	$	35	$	4,027
Impact of adopting ASC 326		337		1,204		114		(407)		(9)		(497)		15		757
Initial allowance on loans purchased with credit deterioration		—		106		—		—		—		248		—		354
Provision for credit losses (1)		106		379		(79)		108		(6)		(26)		18		500
Loans charged off		—		—		—		—		—		(19)		(28)		(47)
Recoveries collected		—		—		—		—		—		66		20		86
Total ending allowance balance (1)	$	740	$	2,799	$	104	$	778	$	39	$	1,157	$	60	$	5,677

(1) Allowance/provision for credit losses in 2023 are not comparable to prior periods due to the adoptions of ASC 326.

The following table presents the activity in the allowance for loan losses by portfolio class for the year ended December 31, 2022, prior to the adoption of ASC 326:

							Obligations
	Commercial,						of states
(Dollars in thousands)	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
Year Ended
December 31, 2022
Allowance for loan losses:
Beginning balance	$	251	$	1,020	$	884	$	45	$	1,269	$	39	$	3,508
Provision for loan losses		44		90		262		9		45		5		455
Loans charged off		—		—		—		—		(23)		(13)		(36)
Recoveries collected		2		—		—		—		94		4		100
Total ending allowance balance	$	297	$	1,110	$	1,146	$	54	$	1,385	$	35	$	4,027

The following table summarizes loans by portfolio class, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2022, prior to the adoption of ASC 326.

							Obligations
	Commercial,						of states
(Dollars in thousands)	financial and		Real estate-		Real estate-		and political		Real estate-
	agricultural		commercial		construction		subdivisions		mortgage		Personal		Total
December 31, 2022
Loans allocated by:
Individually evaluated for impairment	$	—	$	2,025	$	—	$	—	$	377	$	—	$	2,402
Acquired with credit deterioration		—		334		—		—		419		—		753
Collectively evaluated for impairment		61,458		196,847		50,748		18,770		149,494		4,040		481,357
	$	61,458	$	199,206	$	50,748	$	18,770	$	150,290	$	4,040	$	484,512
Allowance for loan losses allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Acquired with credit deterioration		—		—		—		—		—		—		—
Collectively evaluated for impairment		297		1,110		1,146		54		1,385		35		4,027
	$	297	$	1,110	$	1,146	$	54	$	1,385	$	35	$	4,027

Schedule of collateral dependent loans

The following table presents the amortized cost basis of collateral-dependent loans by class of loans and collateral type as of December 31, 2023.

(Dollars in thousands)
	Real Estate
Real estate - commercial	$	4,877
Real estate - mortgage		57
Total	$	4,934

Impaired Loans by Loan Portfolio Class

The following tables summarize information regarding impaired loans by portfolio class as of December 31, 2022, prior to the adoption of ASC 326:

(Dollars in thousands)	As of December 31, 2022
	Recorded		Unpaid Principal		Related
	Investment		Balance		Allowance
Impaired loans
With no related allowance recorded:
Real estate - commercial	$	2,025	$	2,471	$	—
Acquired with credit deterioration		334		344		—
Real estate - mortgage		377		993		—
Acquired with credit deterioration		419		634		—
Total:
Real estate - commercial	$	2,025	$	2,471	$	—
Acquired with credit deterioration		334		344		—
Real estate – mortgage		377		993		—
Acquired with credit deterioration		419		634		—
	$	3,155	$	4,442	$	—

Average recorded investment of impaired loans and related interest income recognized for the year ended December 31, 2022 are summarized in the table below, prior to the adoption of ASC 326.

(Dollars in thousands)	Year Ended December 31, 2022
	Average		Interest		Cash Basis
	Recorded		Income		Interest
	Investment		Recognized		Income
Impaired Loans
With no related allowance recorded:
Real estate - commercial	$	3,650	$	190	$	—
Acquired with credit deterioration		344		—		—
Real estate - mortgage		400		10		39
Acquired with credit deterioration		447		—		—
Total:
Real estate - commercial	$	3,650	$	190	$	—
Acquired with credit deterioration		344		—		—
Real estate - mortgage		400		10		39
Acquired with credit deterioration		447		—		—
	$	4,841	$	200	$	39

Nonaccrual Loans by Classes of the Loan Portfolio

The following tables present the amortized cost basis of loans on nonaccrual status, including nonaccrual status loans with no allowance, and loans past due over 89 days still accruing as of December 31, 2023 and December 31, 2022, respectively.

(Dollars in thousands)	Nonaccrual with				Loans Past Due
	No Allowance				Over 89 Days
As of December 31, 2023	for Credit Loss		Nonaccrual		Still Accruing(1)
Commercial, financial and agricultural	$	—	$	18	$	—
Real estate - commercial		4,877		—		—
Real estate - mortgage		57		—		—
Total	$	4,934	$	18	$	—

(Dollars in thousands)					Loans Past Due
	Nonaccrual with				Over 89 Days
As of December 31, 2022	No Allowance		Nonaccrual		Still Accruing(1)
Commercial, financial and agricultural	$	—	$	—	$	24
Real estate - commercial		—		—		7
Real estate - mortgage		—		139		4
Personal		—		—		4
Total	$	—	$	139	$	39

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

Loan Portfolio Summarized by the Past Due Status

The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2023 and December 31, 2022:

(Dollars in thousands)					Greater
	30‑59 Days		60‑89 Days		Than 89 Days		Total Past
As of December 31, 2023	Past Due(1)		Past Due		Past Due		Due
Commercial, financial and agricultural	$	73	$	—	$	—	$	73
Real estate - commercial		117		—		—		117
Real estate - mortgage		332		90		4		426
Personal		9		—		—		9
Total	$	531	$	90	$	4	$	625

(Dollars in thousands)					Greater
	30‑59 Days		60‑89 Days		Than 89 Days		Total Past
As of December 31, 2022	Past Due(1)		Past Due		Past Due		Due
Commercial, financial and agricultural	$	75	$	—	$	24	$	99
Real estate - commercial		—		104		7		111
Real estate - mortgage		205		36		142		383
Personal		27		1		4		32
Total	$	307	$	141	$	177	$	625

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

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following table presents 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 December 31, 2023 and December 31, 2022. The increase in special mention loans as of December 31, 2023 compared to December 31, 2022 was largely due to the downgrade of a $7.2 million relationship with loans in both the commercial, financial and agricultural and the real estate – commercial categories, as well as the downgrade of a $4.7 million real estate – construction loan relationship in 2023. The increase in substandard loans as of December 31, 2023 compared to December 31, 2022 was primarily due to the downgrade of a participated real estate – commercial loan relationship.

(Dollars in thousands)			Special
As of December 31, 2023	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	62,952	$	2,851	$	18	$	—	$	65,821
Real estate - commercial		203,590		13,682		5,805		—		223,077
Real estate - construction:
1-4 family residential construction		5,085		—		—		—		5,085
Other construction loans		42,845		4,659		—		—		47,504
Real estate - mortgage		162,111		218		56		—		162,385
Obligations of states and political subdivisions		17,232		—		—		—		17,232
Personal		4,290		—		—		—		4,290
Total	$	498,105	$	21,410	$	5,879	$	—	$	525,394

(Dollars in thousands)			Special
As of December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	60,990	$	468	$	—	$	—	$	61,458
Real estate - commercial		186,977		9,802		2,427		—		199,206
Real estate - construction		50,008		740						50,748
Real estate - mortgage		149,272		222		796		—		150,290
Obligations of states and political subdivisions		18,770		—		—		—		18,770
Personal		4,040		—		—		—		4,040
Total	$	470,057	$	11,232	$	3,223	$	—	$	484,512

Based on the most recent analysis performed, the amortized cost basis by risk category of loans by class of loan and by origination year is as follows:

													Revolving		Revolving
(Dollars in thousands)													Loans		Loans
													Amortized		Converted
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Commercial, financial and agricultural:
Risk Rating
Pass	$	10,750	$	5,123	$	11,793	$	4,971	$	3,903	$	830	$	25,582	$	—	$	62,952
Special Mention		70		414		—		—		72		—		2,295		—		2,851
Substandard		—		—		—		—		—		18		—		—		18
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial, financial and agricultural loans	$	10,820	$	5,537	$	11,793	$	4,971	$	3,975	$	848	$	27,877	$	—	$	65,821
Commercial, financial and agricultural loans:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - commercial:
Risk Rating
Pass	$	36,375	$	53,927	$	23,561	$	15,952	$	17,606	$	53,465	$	2,688	$	16	$	203,590
Special Mention		—		4,469		—		3,894		211		4,909		199		—		13,682
Substandard		—		—		—		4,877		—		928		—		—		5,805
Doubtful		—		—		—		—		—		—		—		—		—
Total real estate - commercial loans	$	36,375	$	58,396	$	23,561	$	24,723	$	17,817	$	59,302	$	2,887	$	16	$	223,077
Real estate - commercial:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - construction - 1-4 family residential:
Risk Rating
Pass	$	1,674	$	3,411	$	—	$	—	$	—	$	—	$	—	$	—	$	5,085
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total real estate - construction - 1-4 family residential loans	$	1,674	$	3,411	$	—	$	—	$	—	$	—	$	—	$	—	$	5,085
Real estate - construction - 1-4 family residential:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - construction - other:
Risk Rating
Pass	$	5,254	$	7,405	$	17,928	$	2,354	$	276	$	3,088	$	6,390	$	150	$	42,845
Special Mention		—		—		2		4,657		—		—		—		—		4,659
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total real estate - construction - other loans	$	5,254	$	7,405	$	17,930	$	7,011	$	276	$	3,088	$	6,390	$	150	$	47,504
Real estate - construction - other:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

													Revolving		Revolving
(Dollars in thousands)													Loans		Loans
													Amortized		Converted
As of December 31, 2023 (cont.)	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Real estate - mortgage:
Risk Rating
Pass	$	27,062	$	43,005	$	19,173	$	14,577	$	5,524	$	44,359	$	8,084	$	327	$	162,111
Special Mention		—		—		—		—		—		218		—		—		218
Substandard		—		—		—		—		—		56		—		—		56
Doubtful		—		—		—		—		—		—		—		—		—
Total real estate - mortgage loans	$	27,062	$	43,005	$	19,173	$	14,577	$	5,524	$	44,633	$	8,084	$	327	$	162,385
Real estate - mortgage:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	(19)	$	—	$	—	$	(19)
Obligations of states and political subdivisions:
Risk Rating
Pass	$	350	$	3,876	$	2,413	$	5,094	$	12	$	5,486	$	1	$	—	$	17,232
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Obligations of states and political subdivisions	$	350	$	3,876	$	2,413	$	5,094	$	12	$	5,486	$	1	$	—	$	17,232
Obligations of states and political subdivisions:
Current period gross write offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Personal:
Risk Rating
Pass	$	2,385	$	1,093	$	362	$	87	$	63	$	187	$	91	$	22	$	4,290
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total personal loans	$	2,385	$	1,093	$	362	$	87	$	63	$	187	$	91	$	22	$	4,290
Personal:
Current period gross write offs	$	(4)	$	(2)	$	—	$	(4)	$	—	$	(18)	$	—	$	—	$	(28)