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Loans and Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2022
Loans and 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:

        December 31,  
(dollars in thousands)
  
 2022
    
 2021
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
169,248
    
$
130,776
  
Commercial - owner occupied
    
184,586
      
198,413
  
Commercial - non-owner occupied
    
245,277
      
184,190
  
Multifamily
    
26,675
      
19,050
  
Construction
    
77,944
      
58,440
  
Second mortgages
    
8,828
      
7,877
  
Equity lines of credit
    
54,340
      
48,665
  
Total mortgage loans on real estate
    
766,898
      
647,411
  
Commercial and industrial loans
    
72,578
      
68,690
  
Consumer automobile loans
    
163,018
      
85,023
  
Other consumer loans
    
22,251
      
33,418
  
Other  (1)
    
2,340
      
8,984
  
Total loans, net of deferred fees
    
1,027,085
      
843,526
  
Less:  Allowance for loan losses
    
10,526
      
9,865
  
Loans, net of allowance and deferred fees (2)
  
$
1,016,559
    
$
833,661
  

(1)
Overdrawn accounts are reclassified as loans and included in the Other catergory in the table above. Overdrawn deposit accounts, excluding internal use accounts, totaled $269 thousand and $304 thousand at December 31, 2022 and 2021, respectively.
(2)
Net deferred loan costs totaled $1.0 million and $1.3 million at December 31, 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 December 31, 2022
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
Total
  
Mortgage loans on real estate:
                        
Residential 1-4 family
  
$
169,094
    
$
-
    
$
154
    
$
169,248
  
Commercial - owner occupied
    
184,301
      
285
      
-
      
184,586
  
Commercial - non-owner occupied
    
245,277
      
-
      
-
      
245,277
  
Multifamily
    
26,675
      
-
      
-
      
26,675
  
Construction
    
76,999
      
-
      
945
      
77,944
  
Second mortgages
    
8,828
      
-
      
-
      
8,828
  
Equity lines of credit
    
54,340
      
-
      
-
      
54,340
  
Total mortgage loans on real estate
  
$
765,514
    
$
285
    
$
1,099
    
$
766,898
  
Commercial and industrial loans
    
72,434
      
-
      
144
      
72,578
  
Consumer automobile loans
    
162,738
      
-
      
280
      
163,018
  
Other consumer loans
    
22,251
      
-
      
-
      
22,251
  
Other
    
2,340
      
-
      
-
      
2,340
  
Total
  
$
1,025,277
    
$
285
    
$
1,523
    
$
1,027,085
  

Credit Quality Information
  
As of December 31, 2021
  
(dollars in thousands)
  
Pass
    
OAEM
    
Substandard
    
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 December 31, 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
  
$
290
    
$
-
    
$
525
    
$
154
    
$
168,279
    
$
169,248
  
Commercial - owner occupied
    
20
      
-
      
-
      
-
      
184,566
      
184,586
  
Commercial - non-owner occupied
    
206
      
-
      
-
      
-
      
245,071
      
245,277
  
Multifamily
    
-
      
-
      
-
      
-
      
26,675
      
26,675
  
Construction
    
-
      
-
      
-
      
945
      
76,999
      
77,944
  
Second mortgages
    
19
      
-
      
-
      
-
      
8,809
      
8,828
  
Equity lines of credit
    
56
      
288
      
-
      
-
      
53,996
      
54,340
  
Total mortgage loans on real estate
  
$
591
    
$
288
    
$
525
    
$
1,099
    
$
764,395
    
$
766,898
  
Commercial and industrial loans
    
221
      
284
      
23
      
144
      
71,906
      
72,578
  
Consumer automobile loans
    
1,538
      
221
      
212
      
-
      
161,047
      
163,018
  
Other consumer loans
    
445
      
372
      
80
      
-
      
21,354
      
22,251
  
Other
    
47
      
-
      
-
      
-
      
2,293
      
2,340
  
Total
  
$
2,842
    
$
1,165
    
$
840
    
$
1,243
    
$
1,020,995
    
$
1,027,085
  

(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 nonaccrual 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 $38 thousand million at December 31, 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 nonaccrual 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:

(dollars in thousands)
  
December 31, 2022
    
December 31, 2021
  
Mortgage loans on real estate:
            
Residential 1-4 family
  
$
154
    
$
191
  
Commercial - non-owner occupied
    
-
      
113
  
Construction and land development
     945       -  
Total mortgage loans on real estate
    
1,099
      
304
  
Commercial and industrial loans
    
144
      
174
  
Total
  
$
1,243
    
$
478
  
Interest Income to be Earned under the 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:

   
Years Ended December 31,
  
(dollars in thousands)
  
2022
    
2021
  
Interest income that would have been recorded under original loan terms
  
$
111
    
$
11
  
Actual interest income recorded for the period
    
15
      
2
  
Reduction in interest income on nonaccrual loans
  
$
96
    
$
9
  
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.
 
                           
For the Year Ended
  
   
As of December 31, 2022
    
December 31, 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
  
$
285
    
$
44
    
$
235
    
$
21
    
$
282
    
$
7
  
Commercial
    
430
      
55
      
358
      
3
      
420
      
-
  
Construction
    
1,321
      
829
      
191
      
6
      
1,208
      
3
  
Total mortgage loans on real estate
    
2,036
      
928
      
784
      
30
      
1,910
      
10
  
Commercial and industrial loans
    
144
      
144
      
-
      
-
      
144
      
5
  
Total
  
$
2,180
    
$
1,072
    
$
784
    
$
30
    
$
2,054
    
$
15
  

                           
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 table presents, 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.

For the Year ended December 31, 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
)
    
-
      
(1,368
)
    
(332
)
    
-
      
(2,022
)
Recoveries
    
134
      
-
      
61
      
22
      
648
      
112
      
-
      
977
  
Provision for loan losses
    
153
      
93
      
149
      
(310
)
    
1,423
      
192
      
6
      
1,706
  
Ending Balance
  
$
673
    
$
552
    
$
2,575
    
$
4,499
    
$
2,065
    
$
156
    
$
6
    
$
10,526
  
Individually evaluated for impairment
  
$
-
    
$
6
    
$
21
    
$
3
    
$
-
    
$
-
    
$
-
    
$
30
  
Collectively evaluated for impairment
    
673
      
546
      
2,554
      
4,496
      
2,065
      
156
      
6
      
10,496
  
Ending Balance
  
$
673
    
$
552
    
$
2,575
    
$
4,499
    
$
2,065
    
$
156
    
$
6
    
$
10,526
  
Loans Balances:
                                                                
Individually evaluated for impairment
    
144
      
1,020
      
279
      
413
      
-
      
-
      
-
      
1,856
  
Collectively evaluated for impairment
    
72,434
      
76,924
      
258,812
      
429,450
      
185,269
      
2,340
      
-
      
1,025,229
  
Ending Balance
  
$
72,578
    
$
77,944
    
$
259,091
    
$
429,863
    
$
185,269
    
$
2,340
    
$
-
    
$
1,027,085
  

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 included residential 1-4 family, second mortgages and equity lines of credit.
(2)
The consumer segment includes consumer automobile loans.