Troubled Debt Restructurings

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

Troubled Debt Restructurings

NOTE 5. Troubled Debt Restructurings

All loans deemed a troubled debt restructuring, or “TDR”, are considered impaired, and are evaluated for collateral and cash-flow sufficiency. A loan is considered a TDR when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. All of the following factors are indicators that the Bank has granted a concession (one or multiple items may be present):

•The borrower receives a reduction of the stated interest rate to a rate less than the institution is willing to accept at the time of the restructure for a new loan with comparable risk.

•The borrower receives an extension of the maturity date or dates at a stated interest rate lower than the current market interest rate for new debt with similar risk characteristics.

•The borrower receives a reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement.

•The borrower receives a deferral of required payments (principal and/or interest).

•The borrower receives a reduction of the accrued interest.

There were twenty eight (28) troubled debt restructured loans totaling $4.6 million at December 31, 2022. At December 31, 2021, there were seventeen (17) troubled debt restructured loans totaling $2.7 million. Two loans, totaling $133 thousand, were in nonaccrual status at December 31, 2022. Two loans, totaling $149 thousand, were in nonaccrual status at December 31, 2021. There were no outstanding commitments to lend additional amounts to troubled debt restructured borrowers at December 31, 2022 or December 31, 2021.

The following tables set forth information on the Company’s troubled debt restructurings by class of loans occurring during the years ended December 31, 2022 and 2021:

			Twelve Months Ended
			December 31, 2022
			(in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial Real Estate:
Owner occupied	1		$	185	$	185
Non-owner occupied		1		161		161
Construction and Farmland:
Commercial		1		639		639
Consumer:
Installment		1		20		21
Residential
Single family		9		1,676		1,704
Total		13	$	2,681	$	2,710

			Twelve Months Ended
			December 31, 2021
			(in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer:
Installment		2	$	15	$	15
Residential
Single family		1		98		98
Total		3	$	113	$	113

During the twelve months ended December 31, 2022, the Company restructured thirteen loans by granting a concession to the borrowers experiencing financial difficulty. The Company restructured one commercial real estate owner occupied loan by granting a refinance with new terms. The Company restructured one commercial real estate non-owner occupied loan with a twelve month renewal and rate change. The Company restructured one installment loan by granting a refinance with extended terms. The Company restructured one construction and farmland commercial loan by granting a refinance with new terms. The Company restructured nine residential single family loans by granting twelve month renewals and a rate change.

During the twelve months ended December 31, 2021, the Company restructured three loans by granting a concession to the borrower experiencing financial difficulty. The Company restructured two consumer installment loans and one residential single-family loan. The Company restructured one single-family residential loan by granting a lower interest rate and extending the loan term. The Company restructured two consumer installment loans by granting a refinance to extended the term of the loans, where one consumer installment loan was granted a lower interest rate.

There were no TDRs occurring within the previous 12 months for which there was a payment default during the twelve months ended December 31, 2022 and 2021.

Management defines default as over 30 days contractually past due under the modified terms, the foreclosure and/or repossession of the collateral, or the charge-off of the loan.