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Loans and the Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2022
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, 2022
    
December 31, 2021
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
169,247
    
$
130,776
  
Commercial - owner occupied
    
207,131
      
198,413
  
Commercial - non-owner occupied
    
202,702
      
184,190
  
Multifamily
    
25,192
      
19,050
  
Construction
    
68,005
      
58,440
  
Second mortgages
    
8,718
      
7,877
  
Equity lines of credit
    
53,228
      
48,665
  
Total mortgage loans on real estate
    
734,223
      
647,411
  
Commercial and industrial loans
    
66,724
      
68,690
  
Consumer automobile loans
    
127,961
      
85,023
  
Other consumer loans
    
23,216
      
33,418
  
Other (1)
    
2,941
      
8,984
  
Total loans, net of deferred fees
    
955,065
      
843,526
  
Less:  Allowance for loan losses
    
9,933
      
9,865
  
Loans, net of allowance and deferred fees (2)
  
$
945,132
    
$
833,661
  

(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 $323 thousand and $304 thousand at September 30, 2022 and December 31, 2021, respectively.
(2)
Net deferred loan fees totaled $936 thousand and $1.3 million at September 30, 2022 and December 31, 2021, respectively.
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, 2022
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
Doubtful
    
Total
  
Mortgage loans on real estate:
                              
Residential 1-4 family
  
$
169,090
    
$
-
    
$
157
    
$
-
    
$
169,247
  
Commercial - owner occupied
    
204,730
      
290
      
2,111
      
-
      
207,131
  
Commercial - non-owner occupied
    
202,153
      
-
      
549
      
-
      
202,702
  
Multifamily
    
25,192
      
-
      
-
      
-
      
25,192
  
Construction
    
66,847
      
-
      
1,158
      
-
      
68,005
  
Second mortgages
    
8,718
      
-
      
-
      
-
      
8,718
  
Equity lines of credit
    
53,228
      
-
      
-
      
-
      
53,228
  
Total mortgage loans on real estate
  
$
729,958
    
$
290
    
$
3,975
    
$
-
    
$
734,223
  
Commercial and industrial loans
    
66,324
      
-
      
400
      
-
      
66,724
  
Consumer automobile loans
    
127,944
      
-
      
17
      
-
      
127,961
  
Other consumer loans
    
23,216
      
-
      
-
      
-
      
23,216
  
Other
    
2,941
      
-
      
-
      
-
      
2,941
  
Total
  
$
950,383
    
$
290
    
$
4,392
    
$
-
    
$
955,065
  

Credit Quality Information
  
As of December 31, 2021
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
Doubtful
    
Total
  
Mortgage loans on real estate:
                              
Residential 1-4 family
  
$
130,584
    
$
-
    
$
192
    
$
-
    
$
130,776
  
Commercial - owner occupied
    
195,512
      
788
      
2,113
      
-
      
198,413
  
Commercial - non-owner occupied
    
183,093
      
434
      
663
      
-
      
184,190
  
Multifamily
    
19,050
      
-
      
-
      
-
      
19,050
  
Construction
    
57,224
      
218
      
998
      
-
      
58,440
  
Second mortgages
    
7,877
      
-
      
-
      
-
      
7,877
  
Equity lines of credit
    
48,665
      
-
      
-
      
-
      
48,665
  
Total mortgage loans on real estate
  
$
642,005
    
$
1,440
    
$
3,966
    
$
-
    
$
647,411
  
Commercial and industrial loans
    
68,261
      
-
      
429
      
-
      
68,690
  
Consumer automobile loans
    
85,002
      
-
      
21
      
-
      
85,023
  
Other consumer loans
    
33,418
      
-
      
-
      
-
      
33,418
  
Other
    
8,984
      
-
      
-
      
-
      
8,984
  
Total
  
$
837,670
    
$
1,440
    
$
4,416
    
$
-
    
$
843,526
  
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, 2022
  
(dollars in thousands)
  
30 - 59
Days Past
Due
    
60 - 89
Days Past
Due
    
90 or More
Days Past
Due and
still
Accruing
    
Nonaccrual
(2)
    
Total
Current
Loans (1)
    
Total
Loans
  
Mortgage loans on real estate:
                                    
Residential 1-4 family
  
$
109
    
$
425
    
$
-
    
$
157
    
$
168,556
    
$
169,247
  
Commercial - owner occupied
    
-
      
536
      
-
      
2,111
      
204,484
      
207,131
  
Commercial - non-owner occupied
    
-
      
-
      
-
      
549
      
202,153
      
202,702
  
Multifamily
    
-
      
-
      
-
      
-
      
25,192
      
25,192
  
Construction
    
-
      
87
      
-
      
1,158
      
66,760
      
68,005
  
Second mortgages
    
-
      
-
      
-
      
-
      
8,718
      
8,718
  
Equity lines of credit
    
60
      
-
      
-
      
-
      
53,168
      
53,228
  
Total mortgage loans on real estate
  
$
169
    
$
1,048
    
$
-
    
$
3,975
    
$
729,031
    
$
734,223
  
Commercial and industrial loans
    
7
      
-
      
35
      
400
      
66,282
      
66,724
  
Consumer automobile loans
    
1,174
      
152
      
250
      
-
      
126,385
      
127,961
  
Other consumer loans
    
309
      
173
      
45
      
-
      
22,689
      
23,216
  
Other
    
18
      
15
      
-
      
-
      
2,908
      
2,941
  
Total
  
$
1,677
    
$
1,388
    
$
330
    
$
4,375
    
$
947,295
    
$
955,065
  


(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.


There were no past due loans guaranteed by the federal government as of September 30, 2022.

Age Analysis of Past Due Loans as of December 31, 2021
  
(dollars in thousands)
  
30 - 59
Days Past
Due
    
60 - 89
Days Past
Due
    
90 or More
Days Past
Due and
still
Accruing
    
Nonaccrual
(2)
    
Total
Current
Loans (1)
    
Total
Loans
  
Mortgage loans on real estate:
                                    
Residential 1-4 family
  
$
120
    
$
-
    
$
-
    
$
191
    
$
130,465
    
$
130,776
  
Commercial - owner occupied
    
-
      
-
      
-
      
-
      
198,413
      
198,413
  
Commercial - non-owner occupied
    
-
      
-
      
-
      
113
      
184,077
      
184,190
  
Multifamily
    
-
      
-
      
-
      
-
      
19,050
      
19,050
  
Construction
    
-
      
-
      
-
      
-
      
58,440
      
58,440
  
Second mortgages
    
24
      
-
      
-
      
-
      
7,853
      
7,877
  
Equity lines of credit
    
51
      
-
      
-
      
-
      
48,614
      
48,665
  
Total mortgage loans on real estate
  
$
195
    
$
-
    
$
-
    
$
304
    
$
646,912
    
$
647,411
  
Commercial and industrial loans
    
37
      
-
      
169
      
174
      
68,310
      
68,690
  
Consumer automobile loans
    
814
      
118
      
296
      
-
      
83,795
      
85,023
  
Other consumer loans
    
1,284
      
439
      
550
      
-
      
31,145
      
33,418
  
Other
    
31
      
3
      
10
      
-
      
8,940
      
8,984
  
Total
  
$
2,361
    
$
560
    
$
1,025
    
$
478
    
$
839,102
    
$
843,526
  

(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, 2022
    
December 31, 2021
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
157
    
$
191
  
Commercial - owner occupied
    
2,111
      
-
  
Commercial - non-owner occupied
    
549
      
113
  
Construction and land development
     1,158       -  
Total mortgage loans on real estate
  
3,975
    
304
  
Commercial and industrial loans
  
400
    
174
  
Total
  
$
4,375
    
$
478
  
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 thousands)
2022
  
2021
  
Interest income that would have been recorded under original loan terms
  
$
92
    
$
8
  
Actual interest income recorded for the period
    
11
      
2
  
Reduction in interest income on nonaccrual loans
  
$
81
    
$
6
  
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 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
  
           For the Nine Months Ended  
    
As of September 30, 2022
    
September 30, 2022
  
(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
  
$
290
    
$
45
    
$
239
    
$
35
    
$
288
    
$
5
  
Commercial
    
4,469
      
3,687
      
617
      
7
      
4,344
      
-
  
Construction
    
1,236
      
998
      
236
      
55
      
1,235
      
3
  
Second mortgages
    
-
      
-
      
-
      
-
      
-
      
-
  
Total mortgage loans on real estate
    
5,995
      
4,730
      
1,092
      
97
      
5,867
      
8
  
Commercial and industrial loans
    
399
      
400
      
-
      
-
      
399
      
5
  
Other consumer loans
    
3
      
2
      
-
      
-
      
2
      
-
  
Total
  
$
6,397
    
$
5,132
    
$
1,092
    
$
97
    
$
6,268
    
$
13
  

Impaired Loans by Class  
           For the Year Ended  
    
As of December 31, 2021
    
December 31, 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
  
$
353
    
$
25
    
$
300
    
$
30
    
$
328
    
$
7
  
Commercial
    
610
      
178
      
413
      
8
      
601
      
1
  
Construction
    
80
      
79
      
-
      
-
      
80
      
4
  
Second mortgages
    
127
      
-
      
125
      
3
      
126
      
5
  
Total mortgage loans on real estate
    
1,170
      
282
      
838
      
41
      
1,135
      
17
  
Commercial and industrial loans
    
188
      
-
      
174
      
87
      
181
      
17
  
Other consumer loans
    
9
      
7
      
-
      
-
      
8
      
-
  
Total
  
$
1,367
    
$
289
    
$
1,012
    
$
128
    
$
1,324
    
$
34
  
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, 2022
  
(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
  
$
683
    
$
459
    
$
2,390
    
$
4,787
    
$
1,362
    
$
184
    
$
-
    
$
9,865
  
Charge-offs
    
(297
)
    
-
      
(25
)
    
-
      
(1,095
)
    
(281
)
    
-
      
(1,698
)
Recoveries
    
131
      
-
      
52
      
22
      
389
      
99
      
-
      
693
  
Provision for loan losses
    
107
      
70
      
190
   
(464
)
    
982
      
188
      
-
   
1,073
  
Ending Balance
  
$
624
    
$
529
    
$
2,607
    
$
4,345
    
$
1,638
    
$
190
    
$
-
    
$
9,933
  
                                                                 
Individually evaluated for impairment
  
$
-
    
$
55
    
$
35
    
$
7
    
$
-
    
$
-
    
$
-
    
$
97
  
Collectively evaluated for impairment
    
624
      
474
      
2,572
      
4,338
      
1,638
      
190
      
-
      
9,836
  
                                                                 
Ending Balance
  
$
624
    
$
529
    
$
2,607
    
$
4,345
    
$
1,638
    
$
190
    
$
-
    
$
9,933
  
                                                                 
Loans Balances:
                                                                
Individually evaluated for impairment
    
400
      
1,234
      
284
      
4,304
      
2
      
-
      
-
      
6,224
  
Collectively evaluated for impairment
    
66,324
      
66,771
      
256,101
      
405,529
      
151,175
      
2,941
      
-
      
948,841
  
Ending Balance
  
$
66,724
    
$
68,005
    
$
256,385
    
$
409,833
    
$
151,177
    
$
2,941
    
$
-
    
$
955,065
  

(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, 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
    
(27
)
    
-
      
(14
)
    
-
      
(800
)
    
(278
)
    
-
      
(1,119
)
Recoveries
    
41
      
-
      
76
      
44
      
390
      
98
      
-
      
649
  
Provision for loan losses
    
19
      
120
      
(232
)
    
309
      
470
      
241
      
(133
)
    
794
  
Ending Balance
  
$
683
    
$
459
    
$
2,390
    
$
4,787
    
$
1,362
    
$
184
    
$
-
    
$
9,865
  
                                                                 
Individually evaluated for impairment
  
$
87
    
$
-
    
$
33
    
$
8
    
$
-
    
$
-
    
$
-
    
$
128
  
Collectively evaluated for impairment
    
596
      
459
      
2,357
      
4,779
      
1,362
      
184
      
-
      
9,737
  
                                                                 
Ending Balance
  
$
683
    
$
459
    
$
2,390
    
$
4,787
    
$
1,362
    
$
184
    
$
-
    
$
9,865
  
                                                                 
Loans Balances:
                                                                
Individually evaluated for impairment
    
174
      
79
      
450
      
591
      
7
      
-
      
-
      
1,301
  
Collectively evaluated for impairment
    
68,516
      
58,361
      
205,918
      
382,012
      
118,434
      
8,984
      
-
      
842,225
  
Ending Balance
  
$
68,690
    
$
58,440
    
$
206,368
    
$
382,603
    
$
118,441
    
$
8,984
    
$
-
    
$
843,526
  

(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.