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Loans
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Loans LOANS
Loans consist of the following:
December 31, 2021December 31, 2020
(dollars in thousands)Total% of Gross LoansTotal% of Gross Loans
Portfolio Loans:
Commercial real estate$1,115,485 70.66 %$1,049,147 69.75 %
Residential first mortgages91,120 5.77 %133,779 8.89 %
Residential rentals195,035 12.35 %139,059 9.24 %
Construction and land development35,590 2.25 %37,520 2.49 %
Home equity and second mortgages25,638 1.62 %29,129 1.94 %
Commercial loans50,574 3.20 %52,921 3.52 %
Consumer loans3,002 0.19 %1,027 0.07 %
Commercial equipment62,499 3.96 %61,693 4.10 %
Gross portfolio loans1,578,943 100.00 %1,504,275 100.00 %
Adjustments:
Net deferred (fees) costs(133)(0.01)%1,264 0.08 %
Allowance for loan losses(18,417)(1.17)%(19,424)(1.29)%
(18,550)(18,160)
Net portfolio loans1,560,393 1,486,115 
Gross U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans27,276 110,320 
Net deferred fees(878)(2,360)
Net U.S. SBA PPP loans26,398 107,960 
Total net loans$1,586,791 $1,594,075 
Total gross loans$1,606,219 $1,614,595 
The Company has segregated its loans into portfolio loans and U.S. SBA PPP loans.
Deferred Costs/Fees
Net deferred costs consist of fees paid by customers offset by the estimated costs to produce the loans. U.S. SBA PPP deferred fees consist of fees paid by the SBA offset by estimated costs. Deferred fees and costs are amortized into interest income as loans are repaid or forgiven.
Risk Characteristics of Portfolio Segments
Concentrations of Credit - Loans are made primarily within the Company’s operating footprint of Southern Maryland and the greater Fredericksburg area of Virginia. Real estate loans can be affected by the condition of the local real estate market. Commercial and industrial loans can be affected by the local economic conditions. The commercial loan portfolio has concentrations in business loans secured by real estate and real estate development loans. At December 31, 2021 and 2020, the Company had no loans outstanding with foreign entities.
The Company manages its credit products and exposure to credit losses (credit risk) by the following specific portfolio segments (classes), which are levels at which the Company develops and documents its allowance for loan loss methodology. These segments are:
Commercial Real Estate (“CRE”)
Commercial and other real estate projects include office, medical and professional buildings, retail locations, churches, other special purpose buildings and commercial construction. Commercial construction balances were 6.5% and 6.9% of the CRE portfolio at December 31, 2021 and 2020, respectively. The primary security on a commercial real estate loan is the real property and the leases that produce income for the real property. Loans secured by commercial real estate are generally limited to 80% of the lower of the appraised value or sales price at origination and have an initial contractual loan payment period ranging from three to 20 years.
Because payments on loans secured by such properties are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to adverse conditions in the real estate market or the economy.
Residential First Mortgages
Residential first mortgage loans are generally long-term (10 to 30 years) amortizing loans. The Bank’s residential portfolio has both fixed-rate and adjustable-rate residential first mortgages.
The annual and lifetime limitations on interest rate adjustments may constrain interest rate increases on these loans. There are also credit risks resulting from potential increased costs to the borrower as a result of repricing of adjustable-rate mortgage loans. During periods of rising interest rates, the risk of default on adjustable-rate mortgage loans may increase due to the upward adjustment of interest cost to the borrower. The Bank’s adjustable rate residential first mortgage portfolio was $18.9 million or 1.2% of total gross portfolio loans of $1.58 billion at December 31, 2021 compared to $33.6 million or 2.2% of total gross portfolio loans of $1.61 billion at December 31, 2020.

As of December 31, 2021, and 2020, the Bank serviced $20.9 million and $23.9 million, respectively, in residential mortgage loans for others.
Residential Rentals
Residential rental mortgage loans are amortizing long-term loans. The loans are secured by income-producing 1-4 family units and apartments. Loans secured by residential rental properties are generally limited to 80% of the lower of the appraised value or sales price at origination and have initial contractual loan payment periods ranging from three to 20 years.
Loans secured by residential rental properties involve greater risks than 1-4 family residential mortgage loans. Although, there are similar risk characteristics shared with commercial real estate loans, the balances for the loans secured by residential rental properties are generally smaller. Payments on loans secured by residential rental properties are dependent on the successful operation of the properties and repayment of these loans may be subject to adverse conditions in the rental real estate market or the economy to a greater extent than similar owner-occupied properties.
Construction and Land Development
The Bank offers loans for the construction of residential dwellings. These loans are secured by the real estate under construction as well as by guarantees of the principals involved. In addition, the Bank offers loans to acquire and develop land. Construction and Land Development loans are dependent on the successful completion of the underlying project, or the borrowers guarantee to repay the loan. As such, they are subject to the risks of the project including changing prices and interest rates. The repayment of these loans is also dependent on the borrower’s ability to successfully manage the construction and development activities.
Home Equity and Second Mortgage Loans
The Bank maintains a portfolio of home equity and second mortgage loans. These products contain a higher risk of default than residential first mortgages as in the event of foreclosure, the first mortgage would need to be paid off prior to collection of the second mortgage.
Commercial Loans
Commercial loans including lines of credit are short-term loans (5 years or less) that are secured by the equipment financed, the guarantees of the borrower, and other collateral. These loans are dependent on the success of the underlying business or the strength of the guarantor.
Consumer Loans
Consumer loans consist of loans secured by automobiles, boats, recreational vehicles and trucks. The Bank also makes home improvement loans and offers both secured and unsecured personal lines of credit and credit cards. The repayment of these loans is dependent on the continued financial stability of the customer.
Commercial Equipment Loans
These loans consist primarily of fixed-rate, short-term loans collateralized by a commercial customer’s equipment or secured by real property, accounts receivable, or other security. Commercial loans are of higher risk and these loans are dependent on the success of the underlying business or the strength of the guarantor.
U.S. SBA PPP Loans
U.S. SBA PPP loans are fully guaranteed by the Small Business Administration and the Bank's ALLL does not include an allowance for U.S. SBA PPP loans. Management believes all U.S. SBA PPP loans were underwritten in accordance with the program's guidelines.
Non-accrual and Aging Analysis of Current and Past Due Loans
Non-accrual loans as of December 31, 2021 and 2020 were as follows:
(dollars in thousands)
December 31, 2021
Non- accrual Delinquent Loans
Non-accrual Current Loans
Total Non-accrual Loans
Commercial real estate
$— $4,890 $4,890 
Residential first mortgages
450 — 450 
Residential rentals
252 690 942 
Home equity and second mortgages
202 399 601 
Commercial equipment
— 691 691 
$904 $6,670 $7,574 
U.S. SBA PPP loans$57 $— $57 
(dollars in thousands)
December 31, 2020
Non- accrual Delinquent Loans
Non-accrual Current Loans
Total Non-accrual Loans
Commercial real estate
$11,428 $5,184 $16,612 
Residential first mortgages
335 459 794 
Residential rentals
— 275 275 
Home equity and second mortgages
202 293 495 
Commercial equipment
— 46 46 
$11,965 $6,257 $18,222 
Non-accrual loans at December 31, 2020 included three TDRs totaling $1.5 million. There were no non-accrual TDR loans at December 31, 2021.
Non-accrual loans which did not have a specific allowance for impairment, amounted to $7.4 million and $12.4 million at December 31, 2021 and 2020, respectively. Interest due but not recognized on these balances at December 31, 2021 and 2020 was $0.1 million and $0.4 million, respectively. Non-accrual loans with a specific allowance for impairment on which the recognition of interest has been discontinued amounted to $0.3 million and $5.8 million at December 31, 2021 and 2020, respectively. Interest due but not recognized on these balances at December 31, 2021 and 2020 was $0.0 million and $0.4 million, respectively.
The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. Purchase Credit Impaired ("PCI") loans are included as a single category in the table below as management believes, there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. Regardless of payment status, as long as cash flows can be reasonably estimated, the associated discount on these loan pools results in income recognition.
An analysis of past due loans as of December 31, 2021 and 2020 was as follows:
(dollars in thousands)December 31, 2021
31-60 Days61-89 Days90 or Greater DaysTotal Past DuePCI LoansCurrentTotal Loan Receivables
Commercial real estate$— $— $— $— $1,116 $1,114,369 $1,115,485 
Residential first mortgages— 277 450 727 — 90,393 91,120 
Residential rentals— 42 252 294 — 194,741 195,035 
Construction and land dev.— — — — — 35,590 35,590 
Home equity and second mtg.200 — 202 402 — 25,236 25,638 
Commercial loans— — — — — 50,574 50,574 
Consumer loans— — — — — 3,002 3,002 
Commercial equipment— — — — — 62,499 62,499 
Total portfolio loans$200 $319 $904 $1,423 $1,116 $1,576,404 $1,578,943 
U.S. SBA PPP loans $9 $40 $57 $106 $— $27,170 $27,276 
(dollars in thousands)December 31, 2020
31-60 Days61-89 Days90 or Greater DaysTotal Past DuePCI LoansCurrentTotal Loan Receivables
Commercial real estate$— $— $11,428 $11,428 $1,572 $1,036,147 $1,049,147 
Residential first mortgages— — 335 335 — 133,444 133,779 
Residential rentals— — — — — 139,059 139,059 
Construction and land dev.— — — — — 37,520 37,520 
Home equity and second mtg.167 — 202 369 406 28,354 29,129 
Commercial loans— — — — — 52,921 52,921 
Consumer loans8 — — 8 — 1,019 1,027 
Commercial equipment— 4 — 4 — 61,689 61,693 
Total portfolio loans$175 $4 $11,965 $12,144 $1,978 $1,490,153 $1,504,275 
U.S. SBA PPP loans$— $— $— $— $— $110,320 $110,320 
There were no loans that were past due 90 days or greater accruing interest at December 31, 2021 and 2020.
Impaired Loans and Troubled Debt Restructures (“TDRs”)
Impaired loans, including TDRs, at December 31, 2021 and 2020 were as follows:
(dollars in thousands)December 31, 2021
Unpaid Contractual Principal BalanceRecorded Investment with No AllowanceRecorded Investment with AllowanceTotal Recorded InvestmentRelated AllowanceYTD Average Recorded InvestmentYTD Interest Income Recognized
Commercial real estate$4,994 $4,797 $93 $4,890 $93 $4,866 $254 
Residential first mortgages879 866 — 866 — 874 32 
Residential rentals982 942 — 942 — 959 48 
Home equity and second mtg.626 601 — 601 — 604 14 
Commercial equipment1,200 1,022 173 1,195 173 2,184 99 
Total$8,681 $8,228 $266 $8,494 $266 $9,487 $447 
(dollars in thousands)December 31, 2020
Unpaid Contractual Principal BalanceRecorded Investment with No AllowanceRecorded Investment with AllowanceTotal Recorded InvestmentRelated AllowanceYTD Average Recorded InvestmentYTD Interest Income Recognized
Commercial real estate$17,952 $11,915 $5,799 $17,714 $1,316 $17,729 $361 
Residential first mortgages2,001 1,989 — 1,989 — 2,043 70 
Residential rentals626 625 — 625 — 643 32 
Home equity and second mtg.568 555 — 555 — 559 15 
Commercial equipment527 472 40 512 40 531 30 
Total$21,674 $15,556 $5,839 $21,395 $1,356 $21,505 $508 
TDRs, included in the impaired loan schedules above, as of December 31, 2021 and 2020 were as follows:
(dollars in thousands)
December 31, 2021December 31, 2020
Dollars
Number of Loans
Dollars
Number of Loans
Commercial real estate
$— — $1,376 2 
Residential first mortgages
— — 247 2 
Commercial equipment
447 1 471 2 
Total TDRs
447 1 2,094 6 
Less: TDRs included in non-accrual loans
— — (1,522)(3)
Total accrual TDR loans$447 1 $572 3 
TDRs decreased from $2.1 million at December 31, 2020 to $0.4 million at December 31, 2021. TDRs that are included in non-accrual are classified as non-accrual loans solely for the calculation of financial ratios. There were no specific reserves for the one TDR of $0.4 million at December 31, 2021. The Company had specific reserve $0.4 million on one TDRs totaling $1.3 million at December 31, 2020.
During the year ended December 31, 2021, TDR disposals, which included payoffs and refinancing consisted of five loans totaling $1.6 million. TDR loan principal curtailment was $19,000 for the year ended December 31, 2021. There were no TDRs added during the year ended December 31, 2021. During the year ended December 31, 2020, TDR disposals, which included payoffs and refinancing decreased by three loans totaling $0.1 million. TDR loan principal curtailment was $0.1 million for the year ended December 31, 2020. There were $0.2 million TDRs added during the year ended December 31, 2020.
Interest income of $16,000 and $96,000 was recognized on outstanding TDR loans for the years ended December 31, 2021 and 2020, respectively. The Bank’s TDRs are performing according to the terms of their agreements at market interest rates appropriate for the level of credit risk of each TDR loan. The average contractual interest rate on performing TDRs at December 31, 2021 and 2020 was 3.62% and 4.60%, respectively.
Allowance for Loan Losses ("ALLL")
The following tables detail activity in the ALLL at and for the years ended December 31, 2021 and 2020, respectively. An allocation of the allowance to one category of loans does not prevent the Company from using that allowance to absorb losses in a different category.
Year EndedDecember 31, 2021
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$13,744 $(1,920)$6 $1,265 $13,095 
Residential first mortgages1,305 (142)— (161)1,002 
Residential rentals1,413 (46)— 808 2,175 
Construction and land development401 — — (141)260 
Home equity and second mortgages261 — 5 8 274 
Commercial loans1,222 (76)543 (1,107)582 
Consumer loans20 — — 38 58 
Commercial equipment1,058 (34)71 (124)971 
Total$19,424 $(2,218)$625 $586 $18,417 
** There is no allowance for loan loss on the PCI or the SBA PPP portfolios. A more detailed rollforward schedule will be presented if an allowance is required.
Year EndedDecember 31, 2020
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvisionsEnding Balance
Commercial real estate$7,398 $(944)$17 $7,273 $13,744 
Residential first mortgages464 — — 841 1,305 
Residential rentals397 — — 1,016 1,413 
Construction and land development273 — — 128 401 
Home equity and second mortgages149 (53)9 156 261 
Commercial loans1,086 (1,027)20 1,143 1,222 
Consumer loans10 (6)— 16 20 
Commercial equipment1,165 (328)94 127 1,058 
Total$10,942 $(2,358)$140 $10,700 $19,424 
** There is no allowance for loan loss on the PCI or the SBA PPP portfolios. A more detailed rollforward schedule will be presented if an allowance is required.
The following tables detail loan receivable and allowance balances at December 31, 2021 and 2020, respectively.
December 31, 2021December 31, 2020
(dollars in thousands)
Ending balance:
individually evaluated for impairment
Ending balance:
collectively evaluated for impairment
Purchase Credit Impaired
Total
Ending balance:
individually evaluated for impairment
Ending balance:
collectively evaluated for impairment
Purchase Credit Impaired
Total
Loan Receivables:
Commercial real estate
$4,890 $1,109,479 $1,116 $1,115,485 $17,714 $1,029,861 $1,572 $1,049,147 
Residential first mortgages
866 90,254 — 91,120 1,989 131,790 — 133,779 
Residential rentals
942 194,093 — 195,035 625 138,434 — 139,059 
Construction and land development
— 35,590 — 35,590 — 37,520 — 37,520 
Home equity and second mortgages
601 25,037 — 25,638 555 28,168 406 29,129 
Commercial loans
— 50,574 — 50,574 — 52,921 — 52,921 
Consumer loans
— 3,002 — 3,002 — 1,027 — 1,027 
Commercial equipment
1,195 61,304 — 62,499 512 61,181 — 61,693 
$8,494 $1,569,333 $1,116 $1,578,943 $21,395 $1,480,902 $1,978 $1,504,275 
Allowance for loan losses:
Commercial real estate
$93 $13,002 $— $13,095 $1,316 $12,428 $— $13,744 
Residential first mortgages
— 1,002 — 1,002 — 1,305 — 1,305 
Residential rentals
— 2,175 — 2,175 — 1,413 — 1,413 
Construction and land development
— 260 — 260 — 401 — 401 
Home equity and second mortgages
— 274 — 274 — 261 — 261 
Commercial loans
— 582 — 582 — 1,222 — 1,222 
Consumer loans
— 58 — 58 — 20 — 20 
Commercial equipment
173 798 — 971 40 1,018 — 1,058 
$266 $18,151 $— $18,417 $1,356 $18,068 $— $19,424 
Credit Quality Indicators
Credit quality indicators as of December 31, 2021 and 2020 were as follows:
Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)
Commercial Real Estate
Construction and Land Dev.
Residential Rentals
12/31/202112/31/202012/31/202112/31/202012/31/202112/31/2020
Unrated
$— $162,434 $— $1,036 $— $47,605 
Pass
1,111,857 866,648 35,590 36,484 194,093 90,633 
Special mention
— 2,417 — — — 821 
Substandard
3,628 17,648 — — 942 — 
Doubtful
— — — — — — 
Loss
— — — — — — 
Total
$1,115,485 $1,049,147 $35,590 $37,520 $195,035 $139,059 
(dollars in thousands)Commercial LoansCommercial EquipmentTotal Commercial Portfolios
12/31/202112/31/202012/31/202112/31/202012/31/202112/31/2020
Unrated$— $12,962 $— $26,585 $— $250,622 
Pass50,574 39,959 62,326 31,091 1,454,440 1,064,815 
Special mention— — — 3,977 — 7,215 
Substandard— — 173 40 4,743 17,688 
Doubtful— — — — — — 
Loss— — — — — — 
Total$50,574 $52,921 $62,499 $61,693 $1,459,183 $1,340,340 
(dollars in thousands)Non-Commercial Portfolios** U.S. SBA PPP LoansTotal All Portfolios
12/31/202112/31/202012/31/202112/31/202012/31/202112/31/2020
Unrated$100,403 $136,792 $27,276 $110,320 $127,679 $497,734 
Pass18,889 25,125 — — 1,473,329 1,089,940 
Special mention— 457 — — — 7,672 
Substandard468 1,561 — — 5,211 19,249 
Doubtful— — — — — — 
Loss— — — — — — 
Total$119,760 $163,935 $27,276 $110,320 $1,606,219 $1,614,595 
** Non-commercial portfolios are generally evaluated based on payment activity but may be risk graded if part of a larger commercial relationship or are credit impaired (e.g., non-accrual loans, TDRs).
Credit Risk Profile Based on Payment Activity
(dollars in thousands)Residential First MortgagesHome Equity and Second Mtg.Consumer Loans
12/31/202112/31/202012/31/202112/31/202012/31/202112/31/2020
Performing$90,670 $133,444 $25,436 $28,927 $3,002 $1,027 
Nonperforming450 335 202 202 — — 
Total$91,120 $133,779 $25,638 $29,129 $3,002 $1,027 
A risk scale is used to assign grades to commercial relationships, which include commercial real estate, residential rentals, construction and land development, commercial loans and commercial equipment loans. Commercial loan relationships are graded at inception and at a minimum annually. At December 31, 2020 and prior, only commercial loan relationships with an aggregate exposure to the Bank of $1,000,000 or greater are subject to being risk rated. During the quarter ended June 30, 2021, the Bank's policy was amended to risk rate all commercial loan relationships.
Home equity, second mortgages, consumer loans, and residential first mortgages are evaluated for creditworthiness in underwriting and are monitored based on borrower payment history. Residential first mortgages, home equity, second mortgages and consumer loans are classified as unrated unless they are part of a larger commercial relationship that requires grading or are loans with an Other Assets Especially Mentioned (“OAEM”) or higher risk rating.
Management regularly reviews credit quality indicators. Loans subject to risk ratings are graded on a scale of one to ten.
Ratings 1 thru 6 - Pass – Loans rated pass display none of the characteristics of classified loans.
Rating 7 - OAEM (Other Assets Especially Mentioned) – Special Mention loans have potential weaknesses that deserve management’s close attention. If uncorrected these weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified.
Rating 8 - Substandard – A substandard loan is inadequately protected by the current net worth and payment capacity of the borrower or of the collateral pledged. Loans classified as substandard have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Rating 9 - Doubtful – A loan classified as doubtful has all the weaknesses inherent in a loan classified as substandard with the added characteristics that the weaknesses make collection or liquidation in full improbable on the basis of currently existing facts, conditions, and values.
Rating 10 - Loss – Once an asset is identified as a definite loss to the Bank, it will receive the classification of “loss.” There may be some future potential recovery; however, it is more practical to write off the loan at the time of classification. Losses will be taken in the period in which they are determined to be non-collectable.
PCI Loans and Acquired Loans
PCI loans had an unpaid principal balances of $1.5 million and $2.3 million and a carrying values of $1.1 million and $2.0 million at December 31, 2021 and December 31, 2020, respectively. PCI loans represented 0.05% and 0.10% of total assets at December 31, 2021 and December 31, 2020, respectively. Determining the fair value of the PCI loans at the time of acquisition required the Company to estimate cash flows expected to result from those loans and to discount expected cash flows at appropriate rates of interest considering prepayment assumptions. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called accretable yield. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and is called the nonaccretable difference.
A summary of changes in the accretable yield for PCI loans for the years ended December 31, 2021 and 2020 follows:
Years Ended December 31,
(dollars in thousands)
20212020
Accretable yield, beginning of period$342 $677 
Accretion(117)(225)
Reclassification from nonaccretable difference43 25 
Other changes, net55 (135)
Accretable yield, end of period$323 $342 
Accounting standards require a periodic recast of the expected cash flows on the PCI loan portfolio. The recast was performed during the second and fourth quarters of 2021 and the fourth quarter of 2020 and resulted in a reclassification of $43,000 and $25,000, respectively, from the credit (nonaccretable) portion of the discount to the liquidity (accretable) portion of the discount. Also, based on the recast, future expected cash flows, not related to the reclassification, decreased $0.1 million for the year ended December 31, 2021 and decreased $0.1 million for the year ended December 31, 2020.
The following is a summary of acquired and non-acquired loans as of December 31, 2021 and 2020:
BY ACQUIRED AND NON-ACQUIREDDecember 31, 2021%December 31, 2020%
Acquired loans - performing$41,066 2.56 %$58,999 3.66 %
Acquired loans - purchase credit impaired ("PCI")1,116 0.07 %1,978 0.12 %
Total acquired loans42,182 2.63 %60,977 3.78 %
U.S. SBA PPP loans27,276 1.70 %110,320 89.39 %
Non-acquired loans**1,536,761 95.67 %1,443,298 6.83 %
Gross loans1,606,219 1,614,595 
Net deferred costs (fees)(1,011)(0.06)%(1,096)(0.07)%
Total loans, net of deferred costs$1,605,208 $1,613,499 
** Non-acquired loans include loans transferred from acquired pools following release of acquisition accounting FMV adjustments.
At December 31, 2021 acquired performing loans, which totaled $41.1 million, included a $0.4 million net acquisition accounting fair market value adjustment, representing a 0.96% discount and PCI loans which totaled $1.1 million, included a $0.3 million adjustment, representing a 18.35% discount.
At December 31, 2020 acquired performing loans, which totaled $59.0 million, included a $0.8 million net acquisition accounting fair market value adjustment, representing a 1.25% discount and PCI loans which totaled $2.0 million, included a $0.3 million adjustment, representing a 14.95% discount.
Related Party Loans
Included in loans receivable were loans made to executive officers and directors and their affiliates. These loans were made in the ordinary course of business at substantially the same terms and conditions as those prevailing at the time for comparable transactions with persons not affiliated with the Bank and are not considered to involve more than the normal risk of collectability. For the years ended December 31, 2021 and 2020, all loans to directors and executive officers of the Bank performed according to original loan terms. Activity in loans outstanding to executive officers and directors and their related interests are summarized as follows:
(dollars in thousands)
At and For the Years Ended December 31,
20212020
Balance, beginning of period
$16,367 $19,373 
Loans and additions
2,218 1,569 
Change in Directors' status
23,752 (2,617)
Repayments
(16,070)(1,958)
Balance, end of period
$26,267 $16,367 
In addition, the Bank had outstanding loans of $3.1 million and $7.6 million, respectively, for the years ended December 31, 2021 and 2020 to charitable and community organizations in which the Bank's executive officers and directors volunteer.
Loan Participations
The Bank sells portions of commercial, commercial real estate and commercial construction loans to other lenders. The Bank's sold participated loans with other lenders at December 31, 2021 and 2020 were $11.8 million and $17.4 million, respectively. The Bank may also buy loans, portions of loans, or participation certificates from other lenders to limit overall exposure. The Bank only purchases loans or portions of loans after reviewing loan documents, underwriting support, and completing other procedures, as necessary.
The Bank's purchased participation loans from other lenders at December 31, 2021 and 2020 were $4.3 million and $8.7 million, respectively. Purchased participation loans are subject to the same regulatory and internal policy requirements as other loans in the Bank's portfolio.