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Loans and the Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2021
Loans and the Allowance for Loan Losses [Abstract]  
Outstanding Loans By Segment Type
The following is a summary of the balances in each class of the Company’s portfolio of loans held for investment as of the dates indicated:

(dollars in thousands)
  
September 30, 2021
    
December 31, 2020
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
116,466
    
$
122,800
  
Commercial - owner occupied
    
185,466
      
153,955
  
Commercial - non-owner occupied
    
178,372
      
162,896
  
Multifamily
    
20,563
      
22,812
  
Construction
    
62,739
      
43,732
  
Second mortgages
    
8,710
      
11,178
  
Equity lines of credit
    
49,894
      
50,746
  
Total mortgage loans on real estate
    
622,210
      
568,119
  
Commercial and industrial loans
    
91,424
      
141,746
  
Consumer automobile loans
    
84,597
      
80,390
  
Other consumer loans
    
34,786
      
37,978
  
Other (1)
    
7,134
      
8,067
  
Total loans, net of deferred fees
    
840,151
      
836,300
  
Less:  Allowance for loan losses
    
9,684
      
9,541
  
Loans, net of allowance and deferred fees (2)
  
$
830,467
    
$
826,759
  

(1)
Overdrawn accounts are reclassified as loans and included in the Other category in the table above.  Overdrawn deposit accounts, excluding internal use accounts, totaled $297 thousand and $271 thousand at September 30, 2021 and December 31, 2020, respectively.
(2)
Net deferred loan fees totaled $1.8 million and $2.1 million at September 30, 2021 and December 31, 2020, respectively.
Acquired Loans
The outstanding principal balance and the carrying amount of total acquired loans included in the consolidated balance sheets as of September 30, 2021 and December 31, 2020 are as follows:

(dollars in thousands)
  
September 30, 2021
    
December 31, 2020
  
Outstanding principal balance
  
$
5,145
    
$
8,671
  
Carrying amount
    
5,114
      
8,602
  



The Company did not have any outstanding principal balance or related carrying amount of purchased credit-impaired loans as of September 30, 2021 and December 31, 2020. The following table presents changes in the accretable yield on purchased credit-impaired loans, for which the Company applies FASB ASC 310-30, at September 30, 2021 and 2020:
(dollars in thousands)
  
September 30, 2021
    
September 30, 2020
  
Balance at January 1
  
$
-
    
$
72
  
Accretion
     -      
(29
)
Balance at end of period
  
$
-
    
$
43
  
Credit Quality Information

The following tables present credit quality exposures by internally assigned risk ratings as of the dates indicated:
Credit Quality Information
  
As of September 30, 2021
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
Doubtful
    
Total
  
Mortgage loans on real estate:
                              
Residential 1-4 family
  
$
116,296
    
$
-
    
$
170
    
$
-
    
$
116,466
  
Commercial - owner occupied
    
182,515
      
832
      
2,119
      
-
      
185,466
  
Commercial - non-owner occupied
    
177,119
      
521
      
732
      
-
      
178,372
  
Multifamily
    
20,563
      
-
      
-
      
-
      
20,563
  
Construction
    
61,613
      
127
      
999
      
-
      
62,739
  
Second mortgages
    
8,710
      
-
      
-
      
-
      
8,710
  
Equity lines of credit
    
49,894
      
-
      
-
      
-
      
49,894
  
Total mortgage loans on real estate
  
$
616,710
    
$
1,480
    
$
4,020
    
$
-
    
$
622,210
  
Commercial and industrial loans
    
91,156
      
13
      
255
      
-
      
91,424
  
Consumer automobile loans
    
84,360
      
-
      
237
      
-
      
84,597
  
Other consumer loans
    
34,786
      
-
      
-
      
-
      
34,786
  
Other
    
7,134
      
-
      
-
      
-
      
7,134
  
Total
  
$
834,146
    
$
1,493
    
$
4,512
    
$
-
    
$
840,151
  


Credit Quality Information
  
As of December 31, 2020
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
Doubtful
    
Total
  
Mortgage loans on real estate:
                              
Residential 1-4 family
  
$
122,621
    
$
-
    
$
179
    
$
-
    
$
122,800
  
Commercial - owner occupied
    
148,738
      
2,462
      
2,755
      
-
      
153,955
  
Commercial - non-owner occupied
    
162,148
      
748
      
-
      
-
      
162,896
  
Multifamily
    
22,812
      
-
      
-
      
-
      
22,812
  
Construction
    
42,734
      
998
      
-
      
-
      
43,732
  
Second mortgages
    
11,178
      
-
      
-
      
-
      
11,178
  
Equity lines of credit
    
50,746
      
-
      
-
      
-
      
50,746
  
Total mortgage loans on real estate
  
$
560,977
    
$
4,208
    
$
2,934
    
$
-
    
$
568,119
  
Commercial and industrial loans
    
141,391
      
355
      
-
      
-
      
141,746
  
Consumer automobile loans
    
79,997
      
-
      
393
      
-
      
80,390
  
Other consumer loans
    
37,978
      
-
      
-
      
-
      
37,978
  
Other
    
8,067
      
-
      
-
      
-
      
8,067
  
Total
  
$
828,410
    
$
4,563
    
$
3,327
    
$
-
    
$
836,300
  
Past Due Loans The following table includes an aging analysis of the recorded investment in past due loans as of the dates indicated. Also included in the table below are loans that are 90 days or more past due as to interest and principal and still accruing interest, because they are well-secured and in the process of collection.



Age Analysis of Past Due Loans as of September 30, 2021
  
(dollars in thousands)
  
30 - 59
Days Past
Due
    
60 - 89
Days
Past Due
    
90 or More
Days Past
Due and
still
Accruing
    
PCI
    
Nonaccrual
(2)
    
Total
Current
Loans (1)
    
Total
Loans
  
Mortgage loans on real estate:
                                          
Residential 1-4 family
  
$
74
    
$
29
    
$
-
    
$
-
    
$
238
    
$
116,125
    
$
116,466
  
Commercial - owner occupied
    
-
      
-
      
-
      
-
      
-
      
185,466
      
185,466
  
Commercial - non-owner occupied
    
354
      
-
      
-
      
-
      
183
      
177,835
      
178,372
  
Multifamily
    
-
      
-
      
-
      
-
      
-
      
20,563
      
20,563
  
Construction
    
-
      
-
      
-
      
-
      
-
      
62,739
      
62,739
  
Second mortgages
    
1
      
-
      
-
      
-
      
-
      
8,709
      
8,710
  
Equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
49,894
      
49,894
  
Total mortgage loans on real estate
  
$
429
    
$
29
    
$
-
    
$
-
    
$
421
    
$
621,331
    
$
622,210
  
Commercial and industrial loans
    
141
      
-
      
-
      
-
      
-
      
91,283
      
91,424
  
Consumer automobile loans
    
771
      
126
      
264
      
-
      
3
      
83,433
      
84,597
  
Other consumer loans
    
399
      
331
      
667
      
-
      
-
      
33,389
      
34,786
  
Other
    
27
      
1
      
6
      
-
      
-
      
7,100
      
7,134
  
Total
  
$
1,767
    
$
487
    
$
937
    
$
-
    
$
424
    
$
836,536
    
$
840,151
  


(1)
For purposes of this table, Total Current Loans includes loans that are 1 - 29 days past due.
(2)
For purposes of this table, if a loan is past due and on nonaccrual, it is included in the nonaccural column and not also in its respective past due column.


In the table above, the past due totals include student loans with principal and interest amounts that are 97 - 98% guaranteed by the federal government. The past due principal portion of these guaranteed loans totaled $1.1 milion at September 30, 2021. 

Age Analysis of Past Due Loans as of December 31, 2020
  
(dollars in thousands)
  
30 - 59
Days Past
Due
    
60 - 89
Days Past
Due
    
90 or More
Days Past
Due and
still
Accruing
    
PCI
    
Nonaccrual
(2)
    
Total
Current
Loans (1)
    
Total
Loans
  
Mortgage loans on real estate:
                                          
Residential 1-4 family
  
$
478
    
$
164
    
$
-
    
$
-
    
$
311
    
$
121,847
    
$
122,800
  
Commercial - owner occupied
    
-
      
-
      
-
      
-
      
903
      
153,052
      
153,955
  
Commercial - non-owner occupied
    
-
      
-
      
-
      
-
      
-
      
162,896
      
162,896
  
Multifamily
    
-
      
-
      
-
      
-
      
-
      
22,812
      
22,812
  
Construction
    
-
      
88
      
-
      
-
      
-
      
43,644
      
43,732
  
Second mortgages
    
41
      
-
      
-
      
-
      
-
      
11,137
      
11,178
  
Equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
50,746
      
50,746
  
Total mortgage loans on real estate
  
$
519
    
$
252
    
$
-
    
$
-
    
$
1,214
    
$
566,134
    
$
568,119
  
Commercial and industrial loans
    
753
      
-
      
-
      
-
      
-
      
140,993
      
141,746
  
Consumer automobile loans
    
1,159
      
190
      
196
      
-
      
-
      
78,845
      
80,390
  
Other consumer loans
    
1,120
      
555
      
548
      
-
      
-
      
35,755
      
37,978
  
Other
    
24
      
3
      
-
      
-
      
-
      
8,040
      
8,067
  
Total
  
$
3,575
    
$
1,000
    
$
744
    
$
-
    
$
1,214
    
$
829,767
    
$
836,300
  

(1)
For purposes of this table, Total Current Loans includes loans that are 1 - 29 days past due.
(2)
For purposes of this table, if a loan is past due and on nonaccrual, it is included in the nonaccural column and not also in its respective past due column.
Nonaccrual Loans
The following table presents loans in nonaccrual status by class of loan as of the dates indicated:
Nonaccrual Loans by Class
(dollars in thousands)
  
September 30, 2021
    
December 31, 2020
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
238
    
$
311
  
Commercial - owner occupied
    
-
      
903
  
Commercial - non-owner occupied
    
183
      
-
  
Total mortgage loans on real estate
   $
421
     $
1,214
  
Consumer loans
  

3
    

-
  
Total
  
$
424
    
$
1,214
  
Interest Income to be Earned Under Original Terms
The following table presents the interest income that the Company would have earned under the original terms of its nonaccrual loans and the actual interest recorded by the Company on nonaccrual loans for the periods presented:
 
Nine Months Ended September 30,
  
(dollars in thousand)
2021
  
2020
  
Interest income that would have been recorded under original loan terms
  
$
8
    
$
145
  
Actual interest income recorded for the period
    
2
      
34
  
Reduction in interest income on nonaccrual loans
  
$
6
    
$
111
  
Impaired Loans by Class
The following table includes the recorded investment and unpaid principal balances (a portion of which may have been charged off) for impaired loans, exclusive of purchased credit-impaired loans, with the associated allowance amount, if applicable, as of the dates presented. Also presented are the average recorded investments in the impaired loans and the related amount of interest recognized for the periods presented. The average balances are calculated based on daily average balances.
Impaired Loans by Class
    
As of September 30, 2021
    
For the Nine Months Ended
September 30, 2021
  
(Dollars in thousands)
  
Unpaid Principal
Balance
    
Without
Valuation
Allowance
    
With Valuation
Allowance
    
Associated
Allowance
    
Average
Recorded
Investment
    
Interest Income
Recognized
  
Mortgage loans on real estate:
                                    
Residential 1-4 family
  
$
403
    
$
67
    
$
306
    
$
33
    
$
382
    
$
6
  
Commercial
    
504
      
250
      
425
      
13
      
636
      
1
  
Construction
    
81
      
-
      
80
      
-
      
82
      
3
  
Second mortgages
    
129
      
-
      
127
      
3
      
129
      
4
  
Total mortgage loans on real estate
    
1,117
      
317
      
938
      
49
      
1,229
      
14
  
Commercial and industrial loans
    
3
      
1
      
1
      
-
      
2
      
-
  
Other consumer loans
    
11
      
12
      
-
      
-
      
10
      
-
  
Total
  
$
1,131
    
$
330
    
$
939
    
$
49
    
$
1,241
    
$
14
  



   Impaired Loans by Class        
    
As of December 31, 2020
    
For the Year Ended
December 31, 2020
  
(Dollars in thousands)
  
Unpaid Principal
Balance
    
Without
Valuation
Allowance
    
With Valuation
Allowance
    
Associated
Allowance
    
Average
Recorded
Investment
    
Interest Income
Recognized
  
Mortgage loans on real estate:
                                    
Residential 1-4 family
  
$
474
    
$
366
    
$
87
    
$
1
    
$
458
    
$
10
  
Commercial
    
3,490
      
1,306
      
121
      
1
      
2,559
      
46
  
Construction
    
83
      
-
      
83
      
-
      
84
      
5
  
Second mortgages
    
133
      
-
      
133
      
9
      
134
      
5
  
Total mortgage loans on real estate
    
4,180
      
1,672
      
424
      
11
      
3,235
      
66
  
Commercial and industrial loans
    
6
      
6
      
-
      
-
      
7
      
-
  
Other consumer loans
    
14
      
14
      
-
      
-
      
15
      
1
  
Total
  
$
4,200
    
$
1,692
    
$
424
    
$
11
    
$
3,257
    
$
67
  
Allowance for Loan Losses by Segment
The following tables present, by portfolio segment, the changes in the allowance for loan losses and the recorded investment in loans for the periods presented. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
ALLOWANCE FOR LOAN LOSSES AND RECORDED INVESTMENT IN LOANS
For the Nine Months ended September 30, 2021
  
(Dollars in thousands)
  
Commercial
and Industrial
    
Real Estate Construction
    
Real Estate -
Mortgage (1)
    
Real Estate -
Commercial
    
Consumer (2)
    
Other
    
Unallocated
    
Total
  
Allowance for loan losses:
                                                
Balance, beginning
  
$
650
    
$
339
    
$
2,560
    
$
4,434
    
$
1,302
    
$
123
    
$
133
    
$
9,541
  
Charge-offs
    
(24
)
    
-
      
(1
)
    
-
      
(664
)
    
(216
)
    
-
      
(905
)
Recoveries
    
33
      
-
      
66
      
44
      
310
      
85
      
-
      
538
  
Provision for loan losses
    
47
      
152
      
(341
)
    
239
   
373
      
173
      
(133
)
    
510
  
Ending Balance
  
$
706
    
$
491
    
$
2,284
    
$
4,717
    
$
1,321
    
$
165
    
$
-
    
$
9,684
  
                                                                 
Individually evaluated for impairment
  
$
-
    
$
-
    
$
36
    
$
13
    
$
-
    
$
-
    
$
-
    
$
49
  
Collectively evaluated for impairment
    
706
      
491
      
2,248
      
4,704
      
1,321
      
165
      
-
      
9,635
  
                                                                 
Ending Balance
  
$
706
    
$
491
    
$
2,284
    
$
4,717
    
$
1,321
    
$
165
    
$
-
    
$
9,684
  
                                                                 
Loans Balances:
                                                                
Individually evaluated for impairment
    
2
      
80
      
500
      
675
      
12
      
-
      
-
      
1,269
  
Collectively evaluated for impairment
    
91,422
      
62,659
      
195,133
      
363,163
      
119,371
      
7,134
      
-
      
838,882
  
Ending Balance
  
$
91,424
    
$
62,739
    
$
195,633
    
$
363,838
    
$
119,383
    
$
7,134
    
$
-
    
$
840,151
  

(1)
 The real estate-mortgage segment includes residential 1 – 4 family, multi-family, second mortgages and equity lines of credit.
(2)
The consumer segment includes consumer automobile loans.

For the Year ended December 31, 2020
  
(Dollars in thousands)
  
Commercial
and Industrial
    
Real Estate Construction
    
Real Estate -
Mortgage (1)
    
Real Estate -
Commercial
    
Consumer (2)
    
Other
    
Unallocated
    
Total
  
Allowance for loan losses:
                                                
Balance, beginning
  
$
1,244
    
$
258
    
$
2,505
    
$
3,663
    
$
1,694
    
$
296
    
$
-
    
$
9,660
  
Charge-offs
    
(25
)
    
-
      
(149
)
    
(654
)
    
(822
)
    
(355
)
    
-
      
(2,005
)
Recoveries
    
47
      
10
      
69
      
317
      
377
      
66
      
-
      
886
  
Provision for loan losses
    
(616
)
    
71
      
135
      
1,108
      
53
      
116
      
133
      
1,000
  
Ending Balance
  
$
650
    
$
339
    
$
2,560
    
$
4,434
    
$
1,302
    
$
123
    
$
133
    
$
9,541
  
                                                                 
Individually evaluated for impairment
  
$
-
    
$
-
    
$
10
    
$
1
    
$
-
    
$
-
    
$
-
    
$
11
  
Collectively evaluated for impairment
    
650
      
339
      
2,550
      
4,433
      
1,302
      
123
      
133
      
9,530
  
                                                                 
Ending Balance
  
$
650
    
$
339
    
$
2,560
    
$
4,434
    
$
1,302
    
$
123
    
$
133
    
$
9,541
  
                                                                 
Loans Balances:
                                                                
Individually evaluated for impairment
    
6
      
83
      
586
      
1,427
      
14
      
-
      
-
      
2,116
  
Collectively evaluated for impairment
    
141,740
      
43,649
      
206,950
      
315,424
      
118,354
      
8,067
      
-
      
834,184
  
Ending Balance
  
$
141,746
    
$
43,732
    
$
207,536
    
$
316,851
    
$
118,368
    
$
8,067
    
$
-
    
$
836,300
  

(1)
The real estate-mortgage segment includes residential 1 – 4 family, multi-family, second mortgages and equity lines of credit.
(2)
The consumer segment includes consumer automobile loans.