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Note 4 - Loans Receivable

6 Months Ended

Jun. 30, 2021

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4 - Loans Receivable

The Bancorp’s current lending programs are described below:

Residential Real Estate. The primary lending activity of the Bancorp has been the granting of conventional mortgage loans to enable borrowers to purchase existing homes, refinance existing homes, or construct new homes. Conventional loans are made up to a maximum of 97% of the purchase price or appraised value, whichever is less. For loans made in excess of 80% of value, private mortgage insurance is generally required in an amount sufficient to reduce the Bancorp’s exposure to 80% or less of the appraised value of the property. Loans insured by private mortgage insurance companies can be made for up to 97% of value. Loans closed with over 20% of equity do not require private mortgage insurance because of the borrower’s level of equity investment.

Fixed rate loans currently originated generally conform to Freddie Mac guidelines for loans purchased under the one‑to‑four family program. Loan interest rates are determined based on secondary market yield requirements and local market conditions. Fixed rate mortgage loans with contractual maturities generally exceeding fifteen years and greater may be sold and/or classified as held for sale to control exposure to interest rate risk.

The 15 year mortgage loan program has gained wide acceptance in the Bancorp’s primary market area. As a result of the shortened maturity of these loans, this product has been priced below the comparable 20 and 30 year loan offerings. Mortgage applicants for 15 year loans tend to have a larger than normal down payment; this, coupled with the larger principal and interest payment amount, has caused the 15 year mortgage loan portfolio to consist, to a significant extent, of second time home buyers whose underwriting qualifications tend to be above average.

The Bancorp’s Adjustable Rate Mortgage Loans (“ARMs”) include offerings that reprice annually or are “Mini-Fixed.” The “Mini‑Fixed” mortgage reprices annually after a one, three, five, seven or ten year period. The ability of the Bancorp to successfully market ARM’s depends upon loan demand, prevailing interest rates, volatility of interest rates, public acceptance of such loans and terms offered by competitors.

Home Equity Line of Credit. The Bancorp offers a fixed and variable rate revolving line of credit secured by the equity in the borrower’s home. Both products offer an interest only option where the borrower pays interest only on the outstanding balance each month. Equity lines will typically require a second mortgage appraisal and a second mortgage lender’s title insurance policy. Loans are generally made up to a maximum of 89% of the appraised value of the property less any outstanding liens.

Fixed term home improvement and equity loans are made up to a maximum of 85% of the appraised value of the improved property, less any outstanding liens. These loans are offered on both a fixed and variable rate basis with a maximum term of 240 months. All home equity loans are made on a direct basis to borrowers.

Commercial Real Estate and Multifamily Loans. Commercial real estate loans are typically made to a maximum of 80% of the appraised value. Such loans are generally made on an adjustable rate basis. These loans are typically made for terms of 15 to 20 years. Loans with an amortizing term exceeding 15 years normally have a balloon feature calling for a full repayment within seven to ten years from the date of the loan. The balloon feature affords the Bancorp the opportunity to restructure the loan if economic conditions so warrant. Commercial real estate loans include loans secured by commercial rental units, apartments, condominium developments, small shopping centers, owner occupied commercial/industrial properties, hospitality units and other retail and commercial developments.

While commercial real estate lending is generally considered to involve a higher degree of risk than single‑family residential lending due to the concentration of principal in a limited number of loans and the effects of general economic conditions on real estate developers and managers, the Bancorp has endeavored to reduce this risk in several ways. In originating commercial real estate loans, the Bancorp considers the feasibility of the project, the financial strength of the borrowers and lessees, the managerial ability of the borrowers, the location of the project and the economic environment. Management evaluates the debt coverage ratio and analyzes the reliability of cash flows, as well as the quality of earnings. All such loans are made in accordance with well-defined underwriting standards and are generally supported by personal guarantees, which represent a secondary source of repayment.

Loans for the construction of commercial properties are generally located within an area permitting physical inspection and regular review of business records. Projects financed outside of the Bancorp’s primary lending area generally involve borrowers and guarantors who are or were previous customers of the Bancorp or projects that are underwritten according to the Bank’s underwriting standards.

Construction and Land Development. Construction loans on residential properties are made primarily to individuals and contractors who are under contract with individual purchasers. These loans are personally guaranteed by the borrower. The maximum loan-to-value ratio is 89% of either the current appraised value or the cost of construction, whichever is less. Residential construction loans are typically made for periods of six months to one year.

Loans are also made for the construction of commercial properties. All such loans are made in accordance with well-defined underwriting standards. Generally if the loans are not owner occupied, these types of loans require proof of intent to lease and a confirmed end-loan takeout. In general, loans made do not exceed 80% of the appraised value of the property. Commercial construction loans are typically made for periods not to exceed two years or date of occupancy, whichever is less.

Commercial Business and Farmland Loans. Although the Bancorp’s priority in extending various types of commercial business loans changes from time to time, the basic considerations in determining the makeup of the commercial business loan portfolio are economic factors, regulatory requirements and money market conditions. The Bancorp seeks commercial loan relationships from the local business community and from its present customers. Conservative lending policies based upon sound credit analysis governs the extension of commercial credit. The following loans, although not inclusive, are considered preferable for the Bancorp’s commercial loan portfolio: loans collateralized by liquid assets; loans secured by general use machinery and equipment; secured short‑term working capital loans to established businesses secured by business assets; short‑term loans with established sources of repayment and secured by sufficient equity and real estate; and unsecured loans to customers whose character and capacity to repay are firmly established.

Consumer Loans. The Bancorp offers consumer loans to individuals for personal, household or family purposes. Consumer loans are either secured by adequate collateral, or unsecured. Unsecured loans are based on the strength of the applicant’s financial condition. All borrowers must meet current underwriting standards. The consumer loan program includes both fixed and variable rate products.

Manufactured Homes. The Bancorp purchases fixed rate closed loans from a third party that are subject to Bancorp’s underwriting requirements and secured by manufactured homes. The maturity date on these loans can range up to 25 years. In addition, these loans have partial recourse secured by a reserve account held at the Bancorp.

Government Loans. The Bancorp is permitted to purchase non-rated municipal securities, tax anticipation notes and warrants within the local market area.

(Dollars in thousands)
	June 30, 2021		December 31, 2020
Loans secured by real estate:
Residential real estate	$	268,649	$	286,048
Home equity		36,684		39,233
Commercial real estate		315,087		298,257
Construction and land development		104,154		93,562
Multifamily		53,639		50,571
Farmland		309		215
Total loans secured by real estate		778,522		767,886
Commercial business		149,414		158,140
Consumer		544		1,025
Manufactured homes		28,135		24,232
Government		8,462		10,142
Subtotal		965,077		961,425
Add (less):
Net deferred loan origination fees and purchase premiums..		4,235		3,871
Undisbursed loan funds and clearings		179		(150	)
Loans receivable	$	969,491	$	965,146

(Dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended June 30, 2021:

Allowance for loan losses:
Residential real estate	$	2,176	$	-		$	15	$	103		$	2,294
Home equity		309		-			-		62			371
Commercial real estate		5,726		-			-		213			5,939
Construction and land development		1,587		-			-		211			1,798
Multifamily		680		-			-		60			740
Farmland		-		-			-		-			-
Commercial business		2,552		-			11		(89	)		2,474
Consumer		17		(11	)		1		16			23
Manufactured homes		-		-			-		-			-
Government		-		-			-		-			-
Total	$	13,047	$	(11	)	$	27	$	576		$	13,639

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended June 30, 2020:

Allowance for loan losses:
Residential real estate	$	1,828	$	(2	)	$	4	$	(122	)	$	1,708
Home equity		246		-			-		(15	)		231
Commercial real estate		3,693		(80	)		-		99			3,712
Construction and land development		1,223		(17	)		-		(5	)		1,201
Multifamily		562		-			-		47			609
Farmland		-		-			-		-			-
Commercial business		1,901		(78	)		16		536			2,375
Consumer		42		(1	)		5		(16	)		30
Manufactured homes		-		-			-		-			-
Government		16		-			-		(16	)		-
Total	$	9,511	$	(178	)	$	25	$	508		$	9,866

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the six months ended June 30, 2021:

Allowance for loan losses:
Residential real estate	$	2,211	$	(4	)	$	25	$	62		$	2,294
Home equity		276		(1	)		-		96			371
Commercial real estate		5,406		-			-		533			5,939
Construction and land development		1,405		-			-		393			1,798
Multifamily		626		-			-		114			740
Farmland		-		-			-		-			-
Commercial business		2,508		-			19		(53	)		2,474
Consumer		26		(17	)		5		9			23
Manufactured homes		-		-			-		-			-
Government		-		-			-		-			-
Total	$	12,458	$	(22	)	$	49	$	1,154		$	13,639

The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the six months ended June 30, 2020:

Allowance for loan losses:
Residential real estate	$	1,812	$	(2	)	$	10	$	(112	)	$	1,708
Home equity		223		-			-		8			231
Commercial real estate		3,773		(80	)		-		19			3,712
Construction and land development		1,098		(17	)		-		120			1,201
Multifamily		529		-			-		80			609
Farmland		-		-			-		-			-
Commercial business		1,504		(78	)		17		932			2,375
Consumer		43		(13	)		8		(8	)		30
Manufactured homes		-		-			-		-			-
Government		17		-			-		(17	)		-
Total	$	8,999	$	(190	)	$	35	$	1,022		$	9,866

A deferred cost reserve is maintained for the portfolio of manufactured home loans that have been purchased. This reserve is available for use for manufactured home loan nonperformance and costs associated with nonperformance. If the segment performs in line with expectation, the deferred cost reserve is paid as a premium to the third party originator of the loan. The unamortized balance of the deferred cost reserve totaled $4.4 million and $3.8 million as of June 30, 2021 and December 31, 2020, respectively, and is included in net deferred loan origination costs and purchase premiums.

The Bancorp's impairment analysis is summarized below:
	Ending Balances

(Dollars in thousands)	Individually evaluated for impairment reserves		Collectively evaluated for impairment reserves		Loan receivables		Individually evaluated for impairment		Purchased credit impaired individually evaluated for impairment		Collectively evaluated for impairment

The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at June 30, 2021:

Residential real estate	$	85	$	2,209	$	268,649	$	730	$	1,002	$	266,917
Home equity		5		366		36,684		164		129		36,391
Commercial real estate		1,204		4,735		315,087		7,260		146		307,681
Construction and land development		-		1,798		104,154		-		-		104,154
Multifamily		-		740		53,639		-		596		53,043
Farmland		-		-		309		-		-		309
Commercial business		476		1,998		149,414		944		1,147		147,323
Consumer		-		23		544		-		-		544
Manufactured homes		-		-		28,135		-		-		28,135
Government		-		-		8,462		-		-		8,462
Total	$	1,770	$	11,869	$	965,077	$	9,098	$	3,020	$	952,959

The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2020:

Residential real estate	$	173	$	2,038	$	286,048	$	868	$	1,297	$	283,883
Home equity		1		275		39,233		216		137		38,880
Commercial real estate		1,089		4,317		298,257		6,190		151		291,916
Construction and land development		-		1,405		93,562		-		-		93,562
Multifamily		-		626		50,571		95		621		49,855
Farmland		-		-		215		-		-		215
Commercial business		512		1,996		158,140		1,086		1,160		155,894
Consumer		-		26		1,025		-		-		1,025
Manufactured homes		-		-		24,232		-		-		24,232
Government		-		-		10,142		-		-		10,142
Total	$	1,775	$	10,683	$	961,425	$	8,455	$	3,366	$	949,604

The Bancorp's credit quality indicators are summarized below at June 30, 2021 and December 31, 2020:

	Credit Exposure - Credit Risk Portfolio By Creditworthiness Category
	June 30, 2021
(Dollars in thousands)	1-5		6		7		8

Loan Segment	Pass		Pass/monitor		Special mention		Substandard		Total
Residential real estate	$	224,121	$	36,446	$	3,969	$	4,113	$	268,649
Home equity		34,900		712		560		512		36,684
Commercial real estate		233,022		59,866		13,801		8,398		315,087
Construction and land development		80,521		19,971		3,662		-		104,154
Multifamily		46,911		4,951		1,377		400		53,639
Farmland		101		208		-		-		309
Commercial business		127,244		20,092		1,162		916		149,414
Consumer		544		-		-		-		544
Manufactured homes		27,335		740		60		-		28,135
Government		8,462		-		-		-		8,462
Total	$	783,161	$	142,986	$	24,591	$	14,339	$	965,077

	December 31, 2020
(Dollars in thousands)	1-5		6		7		8

Loan Segment	Pass		Pass/monitor		Special mention		Substandard		Total
Residential real estate	$	234,317	$	41,805	$	3,539	$	6,387	$	286,048
Home equity		37,044		933		761		495		39,233
Commercial real estate		222,892		55,202		11,983		8,180		298,257
Construction and land development		77,855		12,055		3,652		-		93,562
Multifamily		43,594		5,065		1,408		504		50,571
Farmland		-		215		-		-		215
Commercial business		135,671		20,067		1,341		1,061		158,140
Consumer		1,025		-		-		-		1,025
Manufactured homes		23,501		731		-		-		24,232
Government		10,142		-		-		-		10,142
Total	$	786,041	$	136,073	$	22,684	$	16,627	$	961,425

The Bancorp has established a standard loan grading system to assist management, lenders and review personnel in their analysis and supervision of the loan portfolio. The use and application of these grades by the Bancorp is uniform and conforms to regulatory definitions. The loan grading system is as follows:

1 – Superior Quality

Loans in this category are substantially risk free. Loans fully collateralized by a Bank certificate of deposit or Bank deposits with a hold are substantially risk free.

2 – Excellent Quality

The borrower generates excellent and consistent cash flow for debt coverage, excellent average credit scores, excellent liquidity and net worth and are reputable operators with over 15 years experience. Current and debt to tangible net worth ratios are excellent. Loan to value is substantially below policy and collateral condition is excellent.

3 – Great Quality

The borrower generates more than sufficient cash flow to fund debt service and cash flow is improving. Average credit scores are very strong. Operators are reputable with significant years of experience. Liquidity, net worth, current and debt to tangible net worth ratios are very strong. Loan to value is significantly below policy and collateral condition is significantly above average.

4 – Above Average Quality

The borrower generates more than sufficient cash flow to fund debt service but cash flow trends may be stable or slightly declining. Average credit scores are strong. The borrower is a reputable operator with many years of experience. Liquidity, net worth, current and debt to tangible net worth ratios are strong. Loan to value is below policy and collateral condition is above average.

5 – Average Quality

Borrowers are considered creditworthy and can repay the debt in the normal course of business, however, cash flow trends may be inconsistent or fluctuating. Average credit scores are satisfactory and years of experience is acceptable. Liquidity and net worth are satisfactory. Current and debt to tangible net worth ratios are average. Loan to value is slightly below policy and the collateral condition is slightly above average.

6 – Pass

Borrowers are considered credit worthy but financial condition may show signs of weakness due to internal or external factors. Cash flow trends may be declining annually. Average credit scores may be low but remain acceptable. Borrower has limited years of experience. Liquidity, net worth, current and debt to tangible net worth ratios are below average. Loan to value is nearing policy limits and collateral condition is average.

7 – Special Mention

A special mention asset has identified weaknesses that deserve Management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. There is still adequate protection by the current sound worth and paying capacity of the obligor or of the collateral pledged. The Special Mention rating is viewed as transitional and will be monitored closely.

Loans in this category may exhibit some of the following risk factors. Cash flow trends may be consistently declining or may be questionable. Debt coverage ratios may be at or near 1:1. Average credit scores may be very weak or the borrower may have minimal years of experience. Liquidity, net worth, current and debt to tangible net worth ratios may be very weak. Loan to value may be at policy limits or may exceed policy limits. Collateral condition may be below average.

8 – Substandard

This classification consists of loans which are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Financial statements normally reveal some or all of the following: poor trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Loans are still considered collectible, but due to increased risks and defined weaknesses of the credit, some loss could be incurred in collection if the deficiencies are not corrected.

Performing loans are loans that are paying as agreed and are approximately less than ninety days past due on payments of interest and principal.

During the six months ending June 30, 2021, two residential real estate loans to one customer totaling $150 thousand were modified to included deferral of principal resulting in troubled debt restructuring classification. One commercial real estate loan totaling $835 thousand was restructured with a reduced interest rate and extended amortization resulting in troubled debt restructuring classification. Two residential real estate trouble debt restructuring loans totaling $73 thousand had subsequently defaulted during the six months ending June 30, 2021. During the six months ending June, 2020, one commercial real estate loan totaling $148 thousand, one residential loan totaling $52 thousand and one home equity loan totaling $24 thousand were renewed as a troubled debt restructuring. One commercial business trouble debt restructuring loan totaling $294 thousand has subsequently defaulted during the six months ending June 30, 2020. All of the loans classified as troubled debt restructurings are also considered impaired. The valuation basis for the Bancorp’s troubled debt restructurings is based on the present value of cash flows, unless consistent cash flows are not present, then the fair value of the collateral securing the loan is the basis for valuation.

The Bancorp's individually evaluated impaired loans are summarized below:

							For the six months ended				For the three months ended
	As of June 30, 2021						June 30, 2021				June 30, 2021
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	1,571	$	2,904	$	-	$	1,735	$	42	$	1,655	$	20
Home equity		271		283		-		317		5		300		1
Commercial real estate		1,538		2,121		-		1,295		26		1,354		14
Construction and land development		-		-		-		-		-		-		-
Multifamily		596		678		-		670		11		648		6
Farmland		-		-		-		-		-		-		-
Commercial business		1,408		1,408		-		1,447		36		1,422		18
Consumer		-		-		-		-		-		-		-
Manufactured homes		-		-		-		-		-		-		-
Government		-		-		-		-		-		-		-

With an allowance recorded:
Residential real estate	$	161	$	161	$	85	$	198	$	5	$	162	$	-
Home equity		22		22		5		15		-		23		-
Commercial real estate		5,868		5,868		1,204		5,655		113		5,901		63
Construction and land development		-		-		-		-		-		-		-
Multifamily		-		-		-		-		-		-		-
Farmland		-		-		-		-		-		-		-
Commercial business		683		683		476		719		22		704		11
Consumer		-		-		-		-		-		-		-
Manufactured homes		-		-		-		-		-		-		-
Government		-		-		-		-		-		-		-

Total:
Residential real estate	$	1,732	$	3,065	$	85	$	1,933	$	47	$	1,817	$	20
Home equity	$	293	$	305	$	5	$	332	$	5	$	323	$	1
Commercial real estate	$	7,406	$	7,989	$	1,204	$	6,950	$	139	$	7,255	$	77
Construction & land development	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Multifamily	$	596	$	678	$	-	$	670	$	11	$	648	$	6
Farmland	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial business	$	2,091	$	2,091	$	476	$	2,166	$	58	$	2,126	$	29
Consumer	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Manufactured homes	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Government	$	-	$	-	$	-	$	-	$	-	$	-	$	-

							For the six months ended				For the three months ended
	As of December 31, 2020						June 30, 2020				June 30, 2020
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	1,895	$	3,228	$	-	$	2,107	$	49	$	2,090	$	25
Home equity		352		363		-		384		9		362		4
Commercial real estate		1,177		1,761		-		1,379		47		1,295		34
Construction & land development		-		-		-		-		-		-		-
Multifamily		716		798		-		784		14		775		7
Farmland		-		-		-		-		-		-		-
Commercial business		1,497		1,514		-		1,588		40		1,475		23
Consumer		-		-		-		-		-		-		-
Manufactured homes		-		-		-		-		-		-		-
Government		-		-		-		-		-		-		-

With an allowance recorded:
Residential real estate	$	270	$	314	$	173	$	107	$	1	$	120	$	-
Home equity		1		9		1		5		-		-		-
Commercial real estate		5,164		5,164		1,089		67		1		92		1
Construction & land development		-		-		-		-		-		-		-
Multifamily		-		-		-		-		-		-		-
Farmland		-		-		-		-		-		-		-
Commercial business		749		749		512		676		19		826		16
Consumer		-		-		-		-		-		-		-
Manufactured homes		-		-		-		-		-		-		-
Government		-		-		-		-		-		-		-

Total:
Residential real estate	$	2,165	$	3,542	$	173	$	2,214	$	50	$	2,210	$	25
Home equity	$	353	$	372	$	1	$	389	$	9	$	362	$	4
Commercial real estate	$	6,341	$	6,925	$	1,089	$	1,446	$	48	$	1,387	$	35
Construction & land development	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Multifamily	$	716	$	798	$	-	$	784	$	14	$	775	$	7
Farmland	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial business	$	2,246	$	2,263	$	512	$	2,264	$	59	$	2,301	$	39
Consumer	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Manufactured homes	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Government	$	-	$	-	$	-	$	-	$	-	$	-	$	-

The Bancorp's age analysis of past due loans is summarized below:
(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investments Greater than 90 Days Past Due and Accruing
June 30, 2021
Residential real estate	$	1,894	$	1,191	$	2,396	$	5,481	$	263,168	$	268,649	$	79
Home equity		398		47		413		858		35,826		36,684		-
Commercial real estate		619		488		1,421		2,528		312,559		315,087		95
Construction and land development		328		-		42		370		103,784		104,154		41
Multifamily		256		-		120		376		53,263		53,639		-
Farmland		-		-		-		-		309		309		-
Commercial business		1,316		-		215		1,531		147,883		149,414		33
Consumer		1		-		-		1		543		544		-
Manufactured homes		249		109		-		358		27,777		28,135		-
Government		-		-		-		-		8,462		8,462		-
Total	$	5,061	$	1,835	$	4,607	$	11,503	$	953,574	$	965,077	$	248

December 31, 2020
Residential real estate	$	2,797	$	1,119	$	4,875	$	8,791	$	277,257	$	286,048	$	80
Home equity		616		323		416		1,355		37,878		39,233		29
Commercial real estate		1,172		237		680		2,089		296,168		298,257		437
Construction and land development		471		-		20		491		93,071		93,562		20
Multifamily		94		266		150		510		50,061		50,571		-
Farmland		-		-		-		-		215		215		-
Commercial business		845		96		269		1,210		156,930		158,140		-
Consumer		2		-		-		2		1,023		1,025		-
Manufactured homes		303		173		-		476		23,756		24,232		-
Government		380		-		-		380		9,762		10,142		-
Total	$	6,680	$	2,214	$	6,410	$	15,304	$	946,121	$	961,425	$	566

The Bancorp's loans on nonaccrual status are summarized below:

(Dollars in thousands)
	June 30, 2021		December 31, 2020
Residential real estate	$	4,180	$	6,390
Home equity		495		476
Commercial real estate		6,521		5,390
Construction and land development.		-		-
Multifamily		400		504
Farmland		-		-
Commercial business		429		1,039
Consumer		-		-
Manufactured homes		-		-
Government		-		-
Total	$	12,025	$	13,799

As a result of acquisition activity, the Bancorp acquired loans for which there was evidence of credit quality deterioration since origination and it was determined that it was probable that the Bancorp would be unable to collect all contractually required principal and interest payments. At June 30, 2021, total purchased credit impaired loans with unpaid principal balances totaled $5.0 million with a recorded investment of $3.0 million. At December 31, 2020, purchased credit impaired loans with unpaid principal balances totaled $5.4 million with a recorded investment of $3.4 million.

Accretable interest taken from the purchase credit impaired portfolio, or income recorded for the six months ended June 30, is as follows:


(dollars in thousands)	Total
2020	$	57
2021		21

Accretable interest taken from the purchase credit impaired portfolio, or income recorded for the three months ended June 30, is as follows:


(dollars in thousands)	Total
2020	$	28
2021		-

The accretable interest portion of the purchase credit impaired portfolio has fully amortized at June 30, 2021.

Accretable yield, or income recorded for the six months ended June 30, is as follows:

(dollars in thousands)	Total
2020	$	975
2021		605

Accretable yield, or income recorded for the three months ended June 30, is as follows:

(dollars in thousands)	Total
2020	$	615
2021		300

Accretable yield, or income expected to be recorded in the future is as follows:

(dollars in thousands)	Total
2021	$	384
2022		758
2023		271
Total	$	1,413