Loan and Allowance for Credit Losses	9 Months Ended
Loan and Allowance for Credit Losses	Sep. 30, 2024
Loans And Leases Receivable Disclosure [Abstract]
Loans and leases receivable disclosure [Text Block]	NOTE 5: LOANS AND ALLOWANCE FOR CREDIT LOSSES September 30, December 31, (Dollars in thousands) 2024 2023 Commercial and industrial $ 61,510 $ 73,374 Construction and land development 77,956 68,329 Commercial real estate: Owner occupied 62,029 66,783 Hotel/motel 37,913 39,131 Multi-family 43,789 45,841 Other 154,042 135,552 Total commercial real estate 297,773 287,307 Residential real estate: Consumer mortgage 59,265 60,545 Investment property 59,317 56,912 Total residential real estate 118,582 117,457 Consumer installment 9,878 10,827 Total Loans $ 565,699 $ 557,294 Loans secured by real estate were approximately 87.4% of the Company’s total loan portfolio at September 30, 2024. At September 30, 2024, the Company’s geographic loan distribution was concentrated primarily in Lee County, Alabama, and surrounding areas. The loan portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. As part of the Company’s quarterly assessment of the allowance, the loan portfolio included the following portfolio segments: commercial and industrial, construction and land development, commercial real estate, residential real estate, and consumer installment. Where appropriate, the Company’s loan portfolio segments are further disaggregated into classes. A class is generally determined based on the initial measurement attribute, risk characteristics of the loan, and an entity’s method for monitoring and determining credit risk. The following describes the risk characteristics relevant to each of the portfolio segments and classes. Commercial and industrial (“C&I”) — includes loans to finance business operations, equipment purchases, or other needs for small and medium-sized commercial customers. Also included in this category are loans to finance agricultural production. Generally, the primary source of repayment is the cash flow from business operations and activities of the borrower. Construction and land development (“C&D”) — includes both loans and credit lines for the purpose of purchasing, carrying, and developing land into commercial developments or residential subdivisions. Also included are loans and credit lines for construction of residential, multi-family, and commercial buildings. Generally, the primary source of repayment is dependent upon the sale or refinance of the real estate collateral. Commercial real estate (“CRE”) — includes loans in these classes: ● Owner occupied – includes loans secured by business facilities to finance business operations, equipment and owner-occupied facilities primarily for small and medium-sized commercial customers. Generally, the primary source of repayment is the cash flow from business operations and activities of the borrower, who owns the property. ● Hotel/motel – includes loans for hotels and motels. Generally, the primary source of repayment is dependent upon income generated from the hotel/motel securing the loan. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the borrower. ● Multi-family – primarily includes loans to finance income-producing multi-family properties. These include loans for 5 or more unit residential properties and apartments leased to residents. Generally, the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the respective borrowers. ● Other – primarily includes loans to finance income-producing commercial properties other than hotels/motels and multi-family properties, and which are not owner occupied. Loans in this class include loans for neighborhood retail centers, medical and professional offices, single retail stores, industrial buildings, and warehouses leased to local and other businesses. Generally, the primary source of repayment is dependent upon income generated from the real estate collateral. The underwriting of these loans takes into consideration the occupancy and rental rates, as well as the financial health of the borrower. Residential real estate (“RRE”) — includes loans in these two classes: ● Consumer mortgage – primarily includes first or second lien mortgages and home equity lines of credit to consumers that are secured by a primary residence or second home. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history, and property value. ● Investment property – primarily includes loans to finance income-producing 1-4 family residential properties. Generally, the primary source of repayment is dependent upon income generated from leasing the property securing the loan. The underwriting of these loans takes into consideration the rental rates and property values, as well as the financial health of the borrowers. Consumer installment — includes loans to individuals, which may be secured by personal property or are unsecured. Loans include personal lines of credit, automobile loans, and other retail loans. These loans are underwritten in accordance with the Bank’s general loan policies and procedures which require, among other things, proper documentation of each borrower’s financial condition, satisfactory credit history, and, if applicable, property values. The following is a summary of current, accruing past due, and nonaccrual loans by portfolio segment and class as of September 30, 2024 and December 31, 2023. Accruing Accruing Total 30-89 Days Greater than Accruing Non- Total (Dollars in thousands) Current Past Due 90 days Loans Accrual Loans September 30, 2024: Commercial and industrial $ 61,508 2 — 61,510 — $ 61,510 Construction and land development 77,956 — — 77,956 — 77,956 Commercial real estate: Owner occupied 61,294 — — 61,294 735 62,029 Hotel/motel 37,913 — — 37,913 — 37,913 Multi-family 43,789 — — 43,789 — 43,789 Other 154,042 — — 154,042 — 154,042 Total commercial real estate 297,038 — — 297,038 735 297,773 Residential real estate: Consumer mortgage 59,225 — — 59,225 40 59,265 Investment property 59,267 50 — 59,317 — 59,317 Total residential real estate 118,492 50 — 118,542 40 118,582 Consumer installment 9,822 56 — 9,878 — 9,878 Total $ 564,816 108 — 564,924 775 $ 565,699 December 31, 2023: Commercial and industrial $ 73,108 266 — 73,374 — $ 73,374 Construction and land development 68,329 — — 68,329 — 68,329 Commercial real estate: Owner occupied 66,000 — — 66,000 783 66,783 Hotel/motel 39,131 — — 39,131 — 39,131 Multi-family 45,841 — — 45,841 — 45,841 Other 135,552 — — 135,552 — 135,552 Total commercial real estate 286,524 — — 286,524 783 287,307 Residential real estate: Consumer mortgage 60,442 — — 60,442 103 60,545 Investment property 56,597 290 — 56,887 25 56,912 Total residential real estate 117,039 290 — 117,329 128 117,457 Consumer installment 10,781 46 — 10,827 — 10,827 Total $ 555,781 602 — 556,383 911 $ 557,294 Credit Quality Indicators The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. These categories are utilized to develop the associated allowance for credit losses using historical losses adjusted for qualitative and environmental factors and are defined as follows: ● Pass – loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral. ● Special Mention – loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification. ● Substandard Accruing – loans that exhibit a well-defined weakness which presently jeopardizes debt repayment, even though they are currently performing. These loans are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected. ● Nonaccrual – includes loans where management has determined that full payment of principal and interest is not expected. Substandard accrual and nonaccrual loans are often collectively referred to as “classified.” The following tables presents credit quality indicators for the loan portfolio segments and classes by year of origination as of September 30, 2024 and December 31, 2023. The December 31, 2023 table has been revised to correct revolving loans and properly allocate loans by year of origination. See Note 1: Summary of Significant Accounting Policies – Correction of Error. Year of Origination 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) September 30, 2024: Commercial and industrial Pass $ 7,681 8,962 9,107 12,860 5,011 16,779 691 $ 61,091 Special mention — 74 — — — — — 74 Substandard 52 105 180 8 — — — 345 Nonaccrual — — — — — — — — Total commercial and industrial 7,733 9,141 9,287 12,868 5,011 16,779 691 61,510 Current period gross charge-offs — — 9 — — — — 9 Construction and land development Pass 24,407 27,562 16,378 1,430 1,282 105 5,983 77,147 Special mention 340 — — — — — — 340 Substandard 469 — — — — — — 469 Nonaccrual — — — — — — — — Total construction and land development 25,216 27,562 16,378 1,430 1,282 105 5,983 77,956 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 767 12,556 6,618 13,764 9,855 12,928 4,040 60,528 Special mention 515 251 — — — — — 766 Substandard — — — — — — — — Nonaccrual — — — — — 735 — 735 Total owner occupied 1,282 12,807 6,618 13,764 9,855 13,663 4,040 62,029 Current period gross charge-offs — — — — — — — — Hotel/motel Pass 494 8,718 9,547 3,111 1,348 14,695 — 37,913 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 494 8,718 9,547 3,111 1,348 14,695 — 37,913 Current period gross charge-offs — — — — — — — — Year of Origination 2024 2023 2022 2021 2020 Prior to 2020 Revolving Loans Total Loans (Dollars in thousands) September 30, 2024: Multi-family Pass 126 12,087 17,148 1,897 5,914 6,056 561 43,789 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total multi-family 126 12,087 17,148 1,897 5,914 6,056 561 43,789 Current period gross charge-offs — — — — — — — — Other Pass 36,654 23,388 31,866 30,040 11,507 14,062 5,507 153,024 Special mention 894 — — — — — — 894 Substandard — — — — 124 — — 124 Nonaccrual — — — — — — — — Total other 37,548 23,388 31,866 30,040 11,631 14,062 5,507 154,042 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 3,620 17,511 17,178 2,419 2,589 11,313 3,514 58,144 Special mention — — — — — 488 — 488 Substandard — — — — — 593 — 593 Nonaccrual — — — — — 40 — 40 Total consumer mortgage 3,620 17,511 17,178 2,419 2,589 12,434 3,514 59,265 Current period gross charge-offs — — — — 54 — — 54 Investment property Pass 9,911 11,805 10,989 8,739 11,797 5,128 369 58,738 Special mention — — — 10 — — — 10 Substandard 174 80 94 — 221 — — 569 Nonaccrual — — — — — — — — Total investment property 10,085 11,885 11,083 8,749 12,018 5,128 369 59,317 Current period gross charge-offs — — — — — — — — Consumer installment Pass 4,287 2,765 2,195 330 96 151 22 9,846 Special mention — 9 — 10 — — — 19 Substandard 9 — 4 — — — — 13 Nonaccrual — — — — — — — — Total consumer installment 4,296 2,774 2,199 340 96 151 22 9,878 Current period gross charge-offs — 39 39 1 — 4 — 83 Total loans Pass 87,947 125,354 121,026 74,590 49,399 81,217 20,687 560,220 Special mention 1,749 334 — 20 — 488 — 2,591 Substandard 704 185 278 8 345 593 — 2,113 Nonaccrual — — — — — 775 — 775 Total loans $ 90,400 125,873 121,304 74,618 49,744 83,073 20,687 $ 565,699 Total current period gross charge-offs $ — 39 48 1 54 4 — 146 Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Total Loans (Dollars in thousands) December 31, 2023: Commercial and industrial Pass $ 11,571 18,074 13,746 5,602 7,298 7,819 9,003 $ 73,113 Special mention — — — — — — — — Substandard 55 203 — — 3 — — 261 Nonaccrual — — — — — — — — Total commercial and industrial 11,626 18,277 13,746 5,602 7,301 7,819 9,003 73,374 Current period gross charge-offs — — 13 — 151 — — 164 Construction and land development Pass 38,646 25,382 1,716 1,526 120 157 782 68,329 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total construction and land development 38,646 25,382 1,716 1,526 120 157 782 68,329 Current period gross charge-offs — — — — — — — — Commercial real estate: Owner occupied Pass 12,966 7,337 18,548 10,458 3,948 9,786 2,647 65,690 Special mention 260 — — — — — — 260 Substandard — — — — 50 — — 50 Nonaccrual — — — — 783 — — 783 Total owner occupied 13,226 7,337 18,548 10,458 4,781 9,786 2,647 66,783 Current period gross charge-offs — — — — — — — — Hotel/motel Pass 9,025 9,873 3,205 1,493 3,881 11,654 — 39,131 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total hotel/motel 9,025 9,873 3,205 1,493 3,881 11,654 — 39,131 Current period gross charge-offs — — — — — — — — Year of Origination 2023 2022 2021 2020 2019 Prior to 2019 Revolving Loans Total Loans (Dollars in thousands) December 31, 2023: Multi-family Pass 12,379 17,955 1,953 6,112 3,790 3,043 609 45,841 Special mention — — — — — — — — Substandard — — — — — — — — Nonaccrual — — — — — — — — Total multi-family 12,379 17,955 1,953 6,112 3,790 3,043 609 45,841 Current period gross charge-offs — — — — — — — — Other Pass 25,810 36,076 31,687 14,597 10,736 15,440 1,052 135,398 Special mention — — — — — — — — Substandard — — — 154 — — — 154 Nonaccrual — — — — — — — — Total other 25,810 36,076 31,687 14,751 10,736 15,440 1,052 135,552 Current period gross charge-offs — — — — — — — — Residential real estate: Consumer mortgage Pass 20,147 20,177 2,683 2,665 1,281 12,217 249 59,419 Special mention — — — — 190 305 — 495 Substandard — — — — — 528 — 528 Nonaccrual — — — — — 103 — 103 Total consumer mortgage 20,147 20,177 2,683 2,665 1,471 13,153 249 60,545 Current period gross charge-offs — — — — — — — — Investment property Pass 13,398 12,490 9,397 12,209 5,485 1,865 1,478 56,322 Special mention 41 — — — — — — 41 Substandard 43 248 — 233 — — — 524 Nonaccrual — — — — — 25 — 25 Total investment property 13,482 12,738 9,397 12,442 5,485 1,890 1,478 56,912 Current period gross charge-offs — — — — — — — — Consumer installment Pass 5,688 3,837 740 206 106 141 — 10,718 Special mention 9 25 9 2 — — — 45 Substandard 37 11 5 11 — — — 64 Nonaccrual — — — — — — — — Total consumer installment 5,734 3,873 754 219 106 141 — 10,827 Current period gross charge-offs 34 57 13 1 — — — 105 Total loans Pass 149,630 151,201 83,675 54,868 36,645 62,122 15,820 553,961 Special mention 310 25 9 2 190 305 — 841 Substandard 135 462 5 398 53 528 — 1,581 Nonaccrual — — — — 783 128 — 911 Total loans $ 150,075 151,688 83,689 55,268 37,671 63,083 15,820 $ 557,294 Total current period gross charge-offs $ 34 57 26 1 151 — — 269 Allowance for Credit Losses The Company adopted ASC 326 on January 1, 2023, which introduced the CECL methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology, the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics, and for loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. The composition of the provision for (reversal of) credit losses for the respective periods is presented below. Quarter ended September 30, Nine months ended September 30, (Dollars in thousands) 2024 2023 2024 2023 Provision for credit losses: Loans $ (206) $ 158 $ 15 $ (133) Reserve for unfunded commitments 79 (53) 69 (58) Total provision for (reversal of) credit losses $ (127) $ 105 $ 84 $ (191) The following table details the changes in the allowance for credit losses for loans, by portfolio segment, for the respective periods. (Dollars in thousands) Commercial and industrial Construction and land development Commercial real estate Residential real estate Consumer installment Total Quarter ended: September 30, 2024 Beginning balance $ 1,366 942 4,091 603 140 $ 7,142 Charge-offs — — — (54) (40) (94) Recoveries 25 — — 2 7 34 Net (charge-offs) recoveries 25 — — (52) (33) (60) Provision for (reversal of) credit losses (231) 43 (102) 44 40 (206) Ending balance $ 1,160 985 3,989 595 147 $ 6,876 Nine months ended: September 30, 2024 Beginning balance $ 1,288 960 3,921 546 148 $ 6,863 Charge-offs (9) — — (54) (83) (146) Recoveries 99 — — 7 38 144 Net recoveries (charge-offs) 90 — — (47) (45) (2) Provision for (reversal of) credit losses (218) 25 68 96 44 15 Ending balance $ 1,160 985 3,989 595 147 $ 6,876 (Dollars in thousands) Commercial and industrial Construction and land development Commercial real estate Residential real estate Consumer installment Total Quarter ended: September 30, 2023 Beginning balance $ 1,198 1,005 3,788 529 114 $ 6,634 Charge-offs — — — — (18) (18) Recoveries 1 — — 2 1 4 Net recoveries (charge-offs) 1 — — 2 (17) (14) Provision for (reversal of) credit losses 16 68 15 20 39 158 Ending balance $ 1,215 1,073 3,803 551 136 $ 6,778 Nine months ended: September 30, 2023 Beginning balance $ 747 949 3,109 828 132 $ 5,765 Impact of adopting ASC 326 532 (17) 873 (347) (22) 1,019 Charge-offs — — — — (85) (85) Recoveries 197 — — 12 3 212 Net recoveries (charge-offs) 197 — — 12 (82) 127 Provision for (reversal of) credit losses (261) 141 (179) 58 108 (133) Ending balance $ 1,215 1,073 3,803 551 136 $ 6,778 The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of September 30, 2024 and December 31, 2023: (Dollars in thousands) Real Estate Total Loans September 30, 2024: Commercial real estate $ 735 $ 735 Total $ 735 $ 735 December 31, 2023: Commercial real estate $ 783 $ 783 Total $ 783 $ 783 The following table summarizes the Company’s nonaccrual loans by major categories as of September 30, 2024 and December 31, 2023. CECL Nonaccrual loans Nonaccrual loans Total (Dollars in thousands) with no Allowance with an Allowance Nonaccrual Loans September 30, 2024 Commercial real estate $ 735 — 735 Residential real estate — 40 40 Total $ 735 40 775 December 31, 2023 Commercial real estate $ 783 — 783 Residential real estate — 128 128 Total $ 783 128 911