Loans (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Summary of Loans

Loans consisted of the following on December 31:

(Dollars in thousands)	2023
Commercial and industrial	$	152,125
Commercial real estate		190,702
Commercial lessors of buildings		82,687
Construction		49,214
Consumer mortgage		166,891
Home equity line of credit		43,269
Consumer installment		10,636
Consumer indirect		5,957
Total loans		701,481
Allowance for credit losses		(6,607	)
Deferred loan fees, net		(77	)
Net Loans	$	694,797

(Dollars in thousands)	2022
Commercial	$	129,343
Commercial real estate		231,785
Residential real estate		194,125
Construction & land development		55,318
Consumer		16,387
Total loans		626,958
Allowance for loan losses		(6,838	)
Deferred loan costs, net		213
Net loans *	$	620,333

* See Note 1 for reclassification of balances due to the adoption of ASC 326.

Summary of Allowance for Loan Losses

The following table details activity in the allowance for credit losses on loans during the year ended December 31 2023:

(Dollars in thousands)	Beginning ALL Balance		Impact of Adopting ASC 326			Charge-offs			Recoveries		Provisions (Recovery)			Ending ACL Balance
December 31, 2023
Commercial and industrial	$	1,110	$	658		$	—		$	181	$	(212	)	$	1,737
Commercial real estate		2,760		(541	)		—			9		(591	)		1,637
Commercial lessors of buildings		—		974			—			—		226			1,200
Construction		803		(515	)		—			—		45			333
Consumer mortgage		1,268		(580	)		—			1		418			1,107
Home equity line of credit		—		201			—			—		87			288
Consumer installment		233		(183	)		(46	)		20		52			76
Consumer indirect		—		91			(66	)		31		173			229
Unallocated		664		(664	)		—			—		—			—
Total	$	6,838	$	(559	)	$	(112	)	$	242	$	198		$	6,607

Summary of Allowance for Loan Losses

The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2022:

(Dollars in thousands)	Beginning ALL Balance		(Recovery) Provision for Loan Losses			Charge-offs			Recoveries		Net (Charge-offs) Recoveries			Ending ALL Balance
December 31, 2022
Commercial	$	1,240	$	47		$	(227	)	$	50	$	(177	)	$	1,110
Commercial real estate		2,838		(68	)		(13	)		3		(10	)		2,760
Residential real estate		992		273			—			3		3			1,268
Construction & land development		1,380		(889	)		—			312		312			803
Consumer		421		(175	)		(48	)		35		(13	)		233
Unallocated		747		(83	)										664
Total	$	7,618	$	(895	)	$	(288	)	$	403	$	115		$	6,838

Schedule of Aging of Accruing Past Due and Nonaccrual Loans

The following table presents the classes of the loan portfolio summarized by the past-due status.

(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Total Past Due		Total Loans
December 31, 2023
Commercial and industrial	$	151,964	$	111	$	50	$	—	$	161	$	152,125
Commercial real estate		190,702		—		—		—		—		190,702
Commercial lessors of buildings		82,687		—		—		—		—		82,687
Construction		49,214		—		—		—		—		49,214
Consumer mortgage		166,411		307		173		—		480		166,891
Home equity line of credit		42,955		33		281		—		314		43,269
Consumer installment		10,602		25		9		—		34		10,636
Consumer indirect		5,821		52		84		—		136		5,957
Total Loans	$	700,356	$	528	$	597	$	—	$	1,125	$	701,481

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of December 31, 2023:

(Dollars in thousands)	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Total Nonperforming
December 31, 2023
Commercial and industrial	$	59	$	—	$	59	$	—	$	59
Commercial real estate		62		—		62		—		62
Commercial lessors of buildings		15		—		15		—		15
Construction		—		—		—		—		—
Consumer mortgage		172		—		172		—		172
Home equity line of credit		—		—		—		—		—
Consumer installment		49		—		49		—		49
Consumer indirect		39		—		39		—		39
Total Loans	$	396	$	—	$	396	$	—	$	396

The following table presents the aging of accruing past due and nonaccrual loans by class of loans as of December 31, 2022:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Nonaccrual		Total Past Due and Nonaccrual		Total Loans
December 31, 2022
Commercial	$	129,270	$	70	$	3	$	—	$	—	$	73	$	129,343
Commercial real estate		231,693		—		—		—		92		92		231,785
Residential real estate		193,794		95		137		—		99		331		194,125
Construction & land development		55,286		32		—		—		—		32		55,318
Consumer		16,091		103		128		—		65		296		16,387
Total loans	$	626,134	$	300	$	268	$	—	$	256	$	824	$	626,958

Summary of Loans by Credit Quality Indicator

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
December 31, 2023
Commercial and industrial:
Pass	$	32,037	$	25,996	$	12,196	$	5,207	$	3,388	$	7,112	$	45,423	$	—	$	131,359
Special mention		76		225		522		33		33		65		3,872		—		4,826
Substandard		782		2,968		1,021		1,017		106		1,416		8,630		—		15,940
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	32,895	$	29,189	$	13,739	$	6,257	$	3,527	$	8,593	$	57,925	$	—	$	152,125
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	22,206	$	38,696	$	54,830	$	12,233	$	19,543	$	21,938	$	647	$	—	$	170,093
Special Mention		241		1,380		2,292		2,496		—		322		—		—		6,731
Substandard		1,150		—		888		—		466		11,374		—		—		13,878
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	23,597	$	40,076	$	58,010	$	14,729	$	20,009	$	33,634	$	647	$	—	$	190,702
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial lessors of buildings:
Pass	$	18,353	$	22,762	$	15,455	$	6,429	$	3,543	$	8,934	$	360	$	—	$	75,836
Special Mention		—		436		1,687		—		3,578		—		—		—		5,701
Substandard		—		—		—		989		—		161		—		—		1,150
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	18,353	$	23,198	$	17,142	$	7,418	$	7,121	$	9,095	$	360	$	—	$	82,687
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial construction:
Pass	$	24,119	$	14,855	$	576	$	272	$	281	$	256	$	—	$	—	$	40,359
Special Mention		—		258		43		635		—		—		—		—		936
Substandard		—		—		—		30		80		—		—		—		110
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	24,119	$	15,113	$	619	$	937	$	361	$	256	$	—	$	—	$	41,405
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	96,715	$	102,309	$	83,057	$	24,141	$	26,755	$	38,240	$	46,430	$	—	$	417,647
Special Mention		317		2,299		4,544		3,164		3,611		387		3,872		—		18,194
Substandard		1,932		2,968		1,909		2,036		652		12,951		8,630		—		31,078
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	98,964	$	107,576	$	89,510	$	29,341	$	31,018	$	51,578	$	58,932	$	—	$	466,919
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
December 31, 2022
Commercial	$	119,353	$	282	$	7,927	$	—	$	1,781	$	129,343
Commercial real estate		220,414		485		8,352		—		2,534		231,785
Construction & land development		40,640		6,655		—		—		8,023		55,318
Total	$	380,407	$	7,422	$	16,279	$	—	$	12,338	$	416,446

The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in residential consumer loans based on payment activity:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
December 31, 2023
Consumer mortgage:
Performing	$	24,521	$	34,798	$	35,802	$	32,259	$	8,931	$	30,408	$	—	$	—	$	166,719
Nonperforming		—		—		—		—		—		172		—		—		172
Total	$	24,521	$	34,798	$	35,802	$	32,259	$	8,931	$	30,580	$	—	$	—	$	166,891
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer construction:
Performing	$	5,463	$	1,477	$	264	$	483	$	81	$	41	$	—	$	—	$	7,809
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	5,463	$	1,477	$	264	$	483	$	81	$	41	$	—	$	—	$	7,809
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity line of credit:
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	43,223	$	46	$	43,269
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	43,223	$	46	$	43,269
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer installment:
Performing	$	5,705	$	3,067	$	981	$	513	$	118	$	184	$	68	$	—	$	10,636
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	5,705	$	3,067	$	981	$	513	$	118	$	184	$	68	$	—	$	10,636
YTD gross charge-offs	$	2	$	12	$	19	$	5	$	2	$	6	$	—	$	—	$	46
Consumer indirect:
Performing	$	858	$	1,086	$	622	$	568	$	607	$	2,128	$	—	$	—	$	5,869
Nonperforming		—		3		—		—		81		4		—		—		88
Total	$	858	$	1,089	$	622	$	568	$	688	$	2,132	$	—	$	—	$	5,957
YTD gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	66	$	—	$	—	$	66
Total
Performing	$	36,547	$	40,428	$	37,669	$	33,823	$	9,737	$	32,761	$	43,291	$	46	$	234,302
Nonperforming		—		3		—		—		81		176		—		—		260
Total	$	36,547	$	40,431	$	37,669	$	33,823	$	9,818	$	32,937	$	43,291	$	46	$	234,562
Total YTD gross charge-offs	$	2	$	12	$	19	$	5	$	2	$	72	$	—	$	—	$	112

Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the fair value of the collateral less cost to sell, if that value is lower than the outstanding balance.

Allowances for Loan Losses and Ending Balances by Portfolio Segment and Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio segment and impairment method at December 31, 2022:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction & Land Development		Consumer		Unallocated		Total
December 31, 2022
Allowance for loan losses:
Ending allowance balances    attributable to loans:
Individually evaluated for    impairment	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Collectively evaluated for    impairment		1,110		2,760		1,268		803		229		664		6,834
Total ending allowance    balance	$	1,110	$	2,760	$	1,268	$	803	$	233	$	664	$	6,838
Loans:
Loans individually    evaluated for    impairment	$	123	$	113	$	677	$	—	$	123			$	1,036
Loans collectively    evaluated for    impairment		129,220		231,672		193,448		55,318		16,264				625,922
Total ending loans balance	$	129,343	$	231,785	$	194,125	$	55,318	$	16,387			$	626,958

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans at December 31, 2022:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment 1		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2022
Commercial	$	123	$	124	$	—	$	124	$	—	$	327	$	7
Commercial real estate		117		92		20		112		—		118		4
Residential real estate		733		166		518		683		—		758		31
Construction & land development		—		—		—		—		—		123		—
Consumer		127		6		121		127		4		130		8
Total impaired loans	$	1,101	$	387	$	659	$	1,046	$	4	$	1,456	$	50

1 Includes principal, accrued interest, unearned fees, and origination costs

Summary of Mortgage Servicing Rights Capitalized and Amortized

The following summarizes mortgage servicing rights capitalized and amortized during each year:

(Dollars in thousands)	2023			2022
Beginning of year	$	621		$	604
Capitalized additions		47			97
Amortization		(68	)		(80	)
Valuation allowance		—			—
End of year	$	600		$	621