Loans (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Summary of Loans

Loans consist of the following:

(Dollars in thousands)	September 30, 2021			December 31, 2020
Commercial 1	$	128,653		$	191,540
Commercial real estate		190,553			187,221
Residential real estate		168,563			177,155
Construction & land development		42,319			36,038
Consumer		16,356			17,916
Total loans before deferred costs		546,444			609,870
Deferred loan (fees) costs, net		(349	)		(711	)
Total Loans	$	546,095		$	609,159

¹ Includes $17.0 million and $70.1 million of Paycheck Protection Program loans on September 30, 2021, and December 31, 2020, respectively.

Summary of Allowance for Loan Losses

Summary of Allowance for Loan Losses

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development		Consumer			Unallocated			Total
Three Months Ended September 30, 2021
Beginning balance	$	1,335		$	3,404		$	1,060		$	767	$	278		$	1,031		$	7,875
(Recovery of) provision for loan losses		9			(280	)		(32	)		508		(9	)		(406	)		(210	)
Charge-offs		—			—			—			—		(39	)					(39	)
Recoveries		5			—			2			—		12						19
Net (charge-offs) recoveries		5			—			2			—		(27	)					(20	)
Ending balance	$	1,349		$	3,124		$	1,030		$	1,275	$	242		$	625		$	7,645
Nine Months Ended September 30, 2021
Beginning balance	$	1,739		$	3,469		$	1,156		$	756	$	352		$	802		$	8,274
(Recovery of) provision for loan losses		(393	)		(346	)		(130	)		519		(128	)		(177	)		(655	)
Charge-offs		(25	)		—			—			—		(39	)					(64	)
Recoveries		28			1			4			—		57						90
Net (charge-offs) recoveries		3			1			4			—		18						26
Ending balance	$	1,349		$	3,124		$	1,030		$	1,275	$	242		$	625		$	7,645
Three Months Ended September 30, 2020
Beginning balance	$	2,266		$	2,781		$	1,585		$	337	$	516		$	350		$	7,835
Provision for loan losses		(512	)		500			(390	)		229		(112	)		662			377
Charge-offs		(26	)		—			—			—		(2	)					(28	)
Recoveries		118			40			1			—		12						171
Net (charge-offs) recoveries		92			40			1			—		10						143
Ending balance	$	1,846		$	3,321		$	1,196		$	566	$	414		$	1,012		$	8,355
Nine Months Ended September 30, 2020
Beginning balance	$	2,408		$	2,153		$	1,152		$	203	$	481		$	620		$	7,017
Provision for loan losses		(643	)		1,127			56			363		(23	)		392			1,272
Charge-offs		(45	)		—			(15	)		—		(71	)					(131	)
Recoveries		126			41			3			—		27						197
Net (charge-offs) recoveries		81			41			(12	)		—		(44	)					66
Ending balance	$	1,846		$	3,321		$	1,196		$	566	$	414		$	1,012		$	8,355

Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
September 30, 2021
Allowance for loan losses:
Individually evaluated for impairment	$	211	$	20	$	2	$	—	$	3	$	—	$	236
Collectively evaluated for impairment		1,138		3,104		1,028		1,275		239		625		7,409
Total ending allowance balance	$	1,349	$	3,124	$	1,030	$	1,275	$	242	$	625	$	7,645
Loans:
Loans individually evaluated for    impairment	$	413	$	1,974	$	805	$	—	$	127			$	3,319
Loans collectively evaluated for    impairment		128,240		188,579		167,758		42,319		16,229				543,125
Total ending loans balance	$	128,653	$	190,553	$	168,563	$	42,319	$	16,356			$	546,444
December 31, 2020
Allowance for loan losses:
Individually evaluated for impairment	$	4	$	20	$	1	$	—	$	5	$	—	$	30
Collectively evaluated for impairment		1,735		3,449		1,155		756		347		802		8,244
Total ending allowance balance	$	1,739	$	3,469	$	1,156	$	756	$	352	$	802	$	8,274
Loans:
Loans individually evaluated for    impairment	$	2,560	$	2,875	$	756	$	—	$	141			$	6,332
Loans collectively evaluated for    impairment		188,980		184,346		176,399		36,038		17,775				603,538
Total ending loans balance	$	191,540	$	187,221	$	177,155	$	36,038	$	17,916			$	609,870

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment1		Related Allowance
September 30, 2021
Commercial	$	424	$	202	$	211	$	413	$	211
Commercial real estate		2,434		1,864		111		1,975		20
Residential real estate		872		430		380		810		2
Consumer		130		11		120		131		3
Total impaired loans	$	3,860	$	2,507	$	822	$	3,329	$	236
December 31, 2020
Commercial	$	2,604	$	1,965	$	597	$	2,562	$	4
Commercial real estate		3,755		2,673		211		2,884		20
Residential real estate		923		513		247		760		1
Consumer		143		—		146		146		5
Total impaired loans	$	7,425	$	5,151	$	1,201	$	6,352	$	30

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

Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		2021		2020
Average recorded investment:
Commercial	$	1,237	$	2,220	$	1,745	$	2,398
Commercial real estate		2,199		2,553		2,557		2,553
Residential real estate		822		759		822		808
Consumer		128		192		134		99
Average recorded investment in impaired loans	$	4,386	$	5,724	$	5,258	$	5,858
Interest income recognized:
Commercial	$	3	$	14	$	22	$	51
Commercial real estate		20		3		71		9
Residential real estate		7		7		23		26
Consumer		2		4		6		5
Interest income recognized on a cash basis on impaired loans	$	32	$	28	$	122	$	91

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the aging of past due loans and nonaccrual loans as of September 30, 2021 and December 31, 2020 by class of loans:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
September 30, 2021
Commercial	$	128,351	$	20	$	6	$	—	$	276	$	302	$	128,653
Commercial real estate		190,416		—		—		—		137		137		190,553
Residential real estate		167,798		205		—		—		560		765		168,563
Construction & land development		41,990		—		—		—		329		329		42,319
Consumer		16,261		46		31		—		18		95		16,356
Total Loans	$	544,816	$	271	$	37	$	—	$	1,320	$	1,628	$	546,444
December 31, 2020
Commercial	$	190,264	$	51	$	—	$	—	$	1,225	$	1,276	$	191,540
Commercial real estate		185,005		11		—		—		2,205		2,216		187,221
Residential real estate		175,812		606		—		49		688		1,343		177,155
Construction & land development		35,721		—		—		—		317		317		36,038
Consumer		17,713		168		22		—		13		203		17,916
Total Loans	$	604,515	$	836	$	22	$	49	$	4,448	$	5,355	$	609,870

Summary of Troubled Debt Restructurings

Loan modifications considered TDRs completed during the three and nine-months ended September 30 were as follows:  

(Dollars in thousands)	Number of loans restructured	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Three Months Ended September 30, 2021
Commercial	1	$	66	$	66
Total Restructured Loans	1	$	66	$	66
Nine Months Ended September 30, 2021
Commercial	4	$	960	$	960
Commercial real estate	2		1,686		1,686
Residential real estate	1		88		88
Total Restructured Loans	7	$	2,734	$	2,734
Nine Months Ended September 30, 2020
Commercial	5	$	181	$	181
Commercial real estate	1		80		80
Residential real estate	1		66		66
Consumer	6		146		146
	13	$	473	$	473

Summary of Loans by Credit Quality Indicator

Based on the most recent analysis performed, the risk category of loans by class is as follows as of September 30, 2021 and December 31, 2020:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
September 30, 2021
Commercial	$	123,092	$	543	$	3,543	$	—	$	1,475	$	128,653
Commercial real estate		170,065		5,119		13,957		—		1,412		190,553
Residential real estate		164		—		119		—		168,280		168,563
Construction & land development		34,508		210		329		—		7,272		42,319
Consumer		—		—		10		—		16,346		16,356
Total	$	327,829	$	5,872	$	17,958	$	—	$	194,785	$	546,444
December 31, 2020
Commercial	$	177,620	$	2,352	$	9,644	$	—	$	1,924	$	191,540
Commercial real estate		161,091		2,545		21,812		—		1,773		187,221
Residential real estate		174		—		114		—		176,867		177,155
Construction & land development		29,182		—		—		317		6,539		36,038
Consumer		—		—		105		—		17,811		17,916
Total	$	368,067	$	4,897	$	31,675	$	317	$	204,914	$	609,870

Schedule of Loans Not Rated by Class of Loans

The following table presents loans that are not rated by class of loans as of September 30, 2021 and December 31, 2020.  Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

(Dollars in thousands)	Performing		Non- Performing		Total
September 30, 2021
Commercial	$	1,475	$	—	$	1,475
Commercial real estate		1,412		—		1,412
Residential real estate		167,738		542		168,280
Construction & land development		7,272		—		7,272
Consumer		16,328		18		16,346
Total	$	194,225	$	560	$	194,785
December 31, 2020
Commercial	$	1,924	$	—	$	1,924
Commercial real estate		1,773		—		1,773
Residential real estate		176,278		589		176,867
Construction & land development		6,539		—		6,539
Consumer		17,798		13		17,811
Total	$	204,312	$	602	$	204,914