Troubled Debt Restructurings

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Troubled Debt Restructurings

NOTE 6. Troubled Debt Restructurings

All loans deemed a troubled debt restructuring (“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 Company 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) which causes more than an insignificant change in cash flow.

• The borrower receives a reduction of the accrued interest.

There were 17 TDR loans totaling $2.6 million at March 31, 2022. At December 31, 2021, there were 17 TDR loans totaling $2.7 million. Two TDR loans, totaling $145 thousand, were in nonaccrual status at March 31, 2022. Two TDR 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 March 31, 2022 or December 31, 2021.

During the first quarter of 2021, the Company approved two deferrals of interest and/or principal related to COVID-19 with loan balances totaling $41 thousand. No additional COVID-19 related deferrals have been made since the first quarter of 2021. These deferrals were no more than six months in duration and were for loans not more than 30 days past due as of December 31, 2019. As such, they were not considered troubled debt restructurings based on the relief provisions of the Coronavirus Aid, Relief and Economic Security ("CARES") Act (extended by the Consolidated Appropriations Act) and recent interagency regulatory guidance. As of March 31, 2022, all of the loans for which the Company had approved deferrals had begun making payments on their loans after the deferral date had passed.   

The following table sets forth information on the Company’s troubled debt restructurings by class of loans occurring during the three months ended March 31, 2021. During the three months ended March 31, 2022, the Company classified no additional loans as troubled debt restructurings.

	Three Months Ended
	March 31, 2021
	(in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer:
Installment		1	$	11	$	11
Residential:
Single family		1		98		98
Total		2	$	109	$	109

 During the three months ended March 31, 2021, the Company restructured two loans and by granting a concession to borrowers experiencing financial difficulty. Both of these loans were restructured by reducing the loan payments and extending the term.

There were no payment defaults during the three months ended March 31, 2022 for TDRs that were restructured within the preceding twelve-month period.  There were also no payment defaults during the three months ended March 31, 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 during the twelve-month period subsequent to the modification.