10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

Form 10-Q

______________________

(Mark one)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

BANK OF THE JAMES FINANCIAL GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________

Virginia	001-35402	20-0500300
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No.)
828 Main Street, Lynchburg, VA		24504
(Address of principal executive offices)		(Zip Code)

(434) 846-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

______________________

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, 2.14 per share par value	BOTJ	The NASDAQ Stock Market LLC

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 4,740,657 shares of Common Stock, par value $2.14 per share, were outstanding at November 12, 2021.
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Table of Contents

PART I – FINANCIAL INFORMATION		1
Item 1.	Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4.	Controls and Procedures	53
PART II – OTHER INFORMATION		54
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
SIGNATURES		56

PART I – FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

Bank of the James Financial Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollar amounts in thousands, except per share amounts) (2021 unaudited)

	September 30,		December 31,
Assets	2021		2020
Cash and due from banks	$	30,340	$	31,683
Federal funds sold		116,956		69,203
Total cash and cash equivalents		147,296		100,886
Securities held-to-maturity (fair value of $4,028 in 2021 and $4,192 in 2020)		3,659		3,671
Securities available-for-sale, at fair value		152,298		90,185
Restricted stock, at cost		1,324		1,551
Loans, net of allowance for loan losses of $7,276 in 2021 and $7,156 in 2020		583,572		601,934
Loans held for sale		6,462		7,102
Premises and equipment, net		17,238		16,982
Interest receivable		2,106		2,350
Cash value - bank owned life insurance		18,670		16,355
Other real estate owned		806		1,105
Other assets		9,200		9,265
Total assets	$	942,631	$	851,386
Liabilities and Stockholders' Equity
Deposits
Noninterest bearing demand	$	163,510	$	143,345
NOW, money market and savings		549,989		463,506
Time		140,330		158,116
Total deposits		853,829		764,967
Capital notes		10,031		10,027
Interest payable		49		85
Other liabilities		9,820		9,575
Total liabilities	$	873,729	$	784,654
Commitments and Contingencies
Stockholders' equity
Preferred stock; authorized 1,000,000 shares; none issued and outstanding	$	—	$	—
Common stock $2.14 par value; authorized 10,000,000 shares; issued and outstanding 4,740,657 and 4,339,436 as of September 30, 2021 and December 31, 2020		10,147		9,286
Additional paid-in-capital		37,244		30,989
Retained earnings		21,897		24,665
Accumulated other comprehensive (loss) income		(386)		1,792
Total stockholders' equity	$	68,902	$	66,732
Total liabilities and stockholders' equity	$	942,631	$	851,386

‎

1

See accompanying notes to these consolidated financial statements

Bank of the James Financial Group, Inc. and Subsidiaries

Consolidated Statements of Income

(dollar amounts in thousands, except per share amounts) (unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
Interest Income	2021		2020		2021		2020
Loans	$	6,605	$	6,958	$	20,089	$	20,695
Securities
US Government and agency obligations		230		168		640		506
Mortgage backed securities		138		50		299		164
Municipals - taxable		234		93		572		248
Municipals - tax exempt		9		1		27		1
Dividends		4		15		39		48
Other (Corporates)		55		25		155		71
Interest bearing deposits		7		15		26		85
Federal Funds sold		33		13		67		89
Total interest income		7,315		7,338		21,914		21,907
Interest Expense
Deposits
NOW, money market savings		146		177		419		669
Time Deposits		239		844		890		2,702
Finance leases		26		29		80		87
Capital notes		82		85		245		192
Total interest expense		493		1,135		1,634		3,650
Net interest income		6,822		6,203		20,280		18,257
Provision for loan losses		—		700		—		2,348
Net interest income after provision for loan losses		6,822		5,503		20,280		15,909
Noninterest income
Gain on sales of loans held for sale		2,091		2,459		6,175		5,586
Service charges, fees and commissions		612		498		1,803		1,500
Life insurance income		117		102		315		290
Other		2		5		12		19
Gain on sales and calls of securities, net		—		—		—		644
Total noninterest income		2,822		3,064		8,305		8,039
Noninterest expenses
Salaries and employee benefits		4,093		3,713		11,901		11,040
Occupancy		437		419		1,270		1,237
Equipment		626		560		1,883		1,738
Supplies		120		120		354		353
Professional, data processing, and other outside expense		1,029		990		2,978		2,884
Marketing		209		185		720		500
Credit expense		309		359		869		831
Other real estate expenses		1		15		74		135
FDIC insurance expense		137		76		425		220
Other		337		307		950		938
Total noninterest expenses		7,298		6,744		21,424		19,876
Income before income taxes		2,346		1,823		7,161		4,072
Income tax expense		465		369		1,431		802
Net Income	$	1,881	$	1,454	$	5,730	$	3,270
Weighted average shares outstanding - basic and diluted		4,740,657		4,773,380		4,750,235		4,776,523
Earnings per common share - basic and diluted	$	0.40	$	0.30	$	1.21	$	0.68

2

See accompanying notes to these consolidated financial statements

Bank of the James Financial Group, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(dollar amounts in thousands) (unaudited)

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2021		2020		2021		2020
Net Income	$	1,881	$	1,454	$	5,730	$	3,270
Other comprehensive income (loss):
Unrealized gains (losses) on securities available-for-sale		(914)		213		(2,757)		3,498
Tax effect		192		(45)		579		(735)
Reclassification adjustment for gains included in net income (1)		—		—		—		(644)
Tax effect (2)		—		—		—		135
Other comprehensive (loss) income, net of tax		(722)		168		(2,178)		2,254
Comprehensive income	$	1,159	$	1,622	$	3,552	$	5,524

(1)Gains are included in “gain on sales and calls of securities, net” on the consolidated statements of income.

(2)The tax effect on these reclassifications is reflected in “income tax expense” on the consolidated statements of income.

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3

See accompanying notes to these consolidated financial statements

Bank of the James Financial Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2021 and 2020 (dollar amounts in thousands) (unaudited)

	For the Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net Income	$	5,730	$	3,270
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1,423		1,511
Stock based compensation expense		80		88
Net amortization and accretion of premiums and discounts on securities		284		299
Amortization of debt issuance costs		4		—
(Gain) on sales of available-for-sale securities		—		(644)
(Gain) on sales of loans held for sale		(6,175)		(5,586)
Proceeds from sales of loans held for sale		254,369		208,405
Origination of loans held for sale		(247,554)		(208,830)
Provision for loan losses		—		2,348
Loss (gain) on sale of other real estate owned		66		(29)
Impairment of other real estate owned		—		137
Bank owned life insurance income		(315)		(290)
Decrease (increase) in interest receivable		244		(692)
Decrease (increase) in other assets		388		(518)
(Decrease) in interest payable		(36)		(33)
Increase (decrease) in other liabilities		424		(309)
Net cash provided by (used in) operating activities	$	8,932	$	(873)
Cash flows from investing activities
Purchases of securities available-for-sale	$	(71,319)	$	(34,702)
Proceeds from maturities, calls and paydowns of securities available-for-sale		6,177		8,629
Proceeds from sale of securities available-for-sale		—		13,312
Purchases of bank owned life insurance		(2,000)		(2,750)
Life insurance proceeds		—		588
Sale of Federal Home Loan Bank stock		227		(45)
Proceeds from sale of other real estate owned		344		844
Origination of loans, net of principal collected		18,251		(45,673)
Purchases of premises and equipment		(1,423)		(1,466)
Net cash (used in) investing activities	$	(49,743)	$	(61,263)
Cash flows from financing activities
Net increase in deposits	$	88,862	$	114,474
Principal payments on finance lease obligations		(259)		(244)
Repurchase of common stock		(427)		(275)
Dividends paid to common stockholders		(939)		(912)
Proceeds from sale of capital notes, net of issuance costs		—		10,026
Retirement of capital notes		—		(5,000)
Cash in lieu of fractional shares		(16)		—
Net cash provided by financing activities	$	87,221	$	118,069
Increase in cash and cash equivalents		46,410		55,933
Cash and cash equivalents at beginning of period	$	100,886	$	39,111
Cash and cash equivalents at end of period	$	147,296	$	95,044
Non cash transactions
Transfer of loans to other real estate owned	$	111	$	18
Fair value adjustment for securities available-for-sale		(2,757)		2,854
Cash transactions
Cash paid for interest	$	1,670	$	3,683
Cash paid for income taxes		2,050		985

4

See accompanying notes to these consolidated financial statements

Bank of the James Financial Group, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

For the Three and Nine Months Ended September 30, 2021 and 2020

(dollars in thousands, except per share amounts) (unaudited)

								Accumulated
				Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive
	Outstanding	Stock		Capital		Earnings		Income (Loss)		Total
Balance at December 31, 2019	4,357,436	$	9,325	$	31,225	$	20,900	$	(5)	$	61,445
Net Income	—		—		—		995		—		995
Dividends paid on common stock ($0.07 per share)	—		—		—		(304)		—		(304)
Repurchase of common stock	(18,000)		(39)		(236)		—		—		(275)
Stock-based compensation expense	—		—		—		—		—		—
Other comprehensive income	—		—		—		—		1,467		1,467
Balance at March 31, 2020	4,339,436	$	9,286	$	30,989	$	21,591	$	1,462	$	63,328
Net Income	—		—		—		821		—		821
Dividends paid on common stock ($0.07 per share)	—		—		—		(303)		—		(303)
Other comprehensive income	—		—		—		—		619		619
Balance at June 30, 2020	4,339,436	$	9,286	$	30,989	$	22,109	$	2,081	$	64,465
Net Income	—		—		—		1,454		—		1,454
Dividends paid on common stock ($0.07 per share)	—		—		—		(305)		—		(305)
Other comprehensive income	—		—		—		—		168		168
Balance at September 30, 2020	4,339,436	$	9,286	$	30,989	$	23,258	$	2,249	$	65,782
								Accumulated
				Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive
	Outstanding	Stock		Capital		Earnings		Income (Loss)		Total
Balance at December 31, 2020	4,339,436	$	9,286	$	30,989	$	24,665	$	1,792	$	66,732
Net Income	—		—		—		1,835		—		1,835
Dividends paid on common stock ($0.07 per share)	—		—		—		(304)		—		(304)
Repurchase of common stock	(14,600)		(31)		(181)		—		—		(212)
Other comprehensive (loss)	—		—		—		—		(2,717)		(2,717)
Balance at March 31, 2021	4,324,836	$	9,255	$	30,808	$	26,196	$	(925)	$	65,334
Net Income	—		—		—		2,014		—		2,014
Dividends paid on common stock ($0.07 per share)	—		—		—		(303)		—		(303)
Repurchase of common stock	(14,300)		(31)		(184)		—		—		(215)
10% Stock dividend	430,121		923		6,620		(7,543)		—		—
Other comprehensive income	—		—		—		—		1,261		1,261
Balance at June 30, 2021	4,740,657	$	10,147	$	37,244	$	20,364	$	336	$	68,091
Net Income	—		—		—		1,881		—		1,881
Dividends paid on common stock ($0.07 per share)	—		—		—		(332)		—		(332)
Cash in lieu of fractional shares	—		—		—		(16)		—		(16)
Other comprehensive income	—		—		—		—		(722)		(722)
Balance at September 30, 2021	4,740,657	$	10,147	$	37,244	$	21,897	$	(386)	$	68,902

5

Notes to Consolidated Financial Statements

Note 1 – Basis of Presentation

The unaudited consolidated financial statements have been prepared by Bank of the James Financial Group, Inc. (“Financial” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. In management’s opinion the accompanying financial statements, which unless otherwise noted are unaudited, reflect all adjustments, consisting solely of normal recurring accruals, necessary for a fair presentation of the financial information as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 in conformity with accounting principles generally accepted in the United States of America. Additional information concerning the organization and business of Financial, accounting policies followed, and other related information is contained in Financial’s Annual Report on Form 10-K for the year ended December 31, 2020. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 2020 included in Financial’s Annual Report on Form 10-K. Results for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Certain immaterial reclassifications have been made to prior period balances to conform to the current period presentation.

The Company’s primary market area consists of the area commonly referred to as Region 2000 which encompasses the seven jurisdictions of the Town of Altavista, Amherst County, Appomattox County, the Town of Bedford, Bedford County, Campbell County, and the City of Lynchburg. Recently, the Company has expanded into Charlottesville, Roanoke, Blacksburg, Harrisonburg, Lexington, and Rustburg.

Financial’s critical accounting policies include the evaluation of the allowance for loan losses which is based on management’s estimate of an amount that is adequate to absorb probable losses inherent in the loan portfolio of Bank of the James (the “Bank”), Financial’s wholly-owned subsidiary. The allowance for loan losses is established through a provision for loan losses based on available information including the composition of the loan portfolio, historical loan losses, specific impaired loans, availability and quality of collateral, age of the various portfolios, changes in local economic conditions, and loan performance and quality of the portfolio. Different assumptions used in evaluating the adequacy of the Bank’s allowance for loan losses could result in material changes in Financial’s financial condition and results of operations. The Bank’s policy with respect to the methodology for determining the allowance for loan losses involves a higher degree of complexity and requires management to make subjective judgments that often require assumptions or estimates about uncertain matters. This critical policy and its assumptions are periodically reviewed with the Board of Directors.

Financial also considers valuation of other real estate owned (OREO) a critical accounting policy. OREO consists of properties acquired through foreclosure or deed in lieu of foreclosure. These properties are carried at fair value less estimated costs to sell at the date of foreclosure. Losses from the acquisition of property in full or partial satisfaction of loans are charged against the allowance for loan losses. Subsequent write-downs, if any, are charged against expense. Gains and losses on the sales of foreclosed properties are included in determining net income in the year of the sale. Operating costs after acquisition are expensed.

Note 2 – Use of Estimates

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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6

Note 3 – Earnings Per Common Share (EPS)

The following is a summary of the earnings per share calculation for the three and nine months ended September 30, 2021 and 2020.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net income	$	1,881,000	$	1,454,000	$	5,730,000	$	3,270,000
Weighted average number of shares - basic and diluted		4,740,657		4,773,380		4,750,235		4,776,523
Basic and diluted EPS	$	0.40	$	0.30	$	1.21	$	0.68

In 2021 and 2020, all restricted stock units (RSUs) were excluded from calculating diluted earnings per share as the Company elected to settle units vesting in 2021 and 2020 wholly in cash. Going forward, management anticipates a cash settlement policy for all currently outstanding RSUs. There were no potentially dilutive shares outstanding in 2021 and 2020. Weighted average and per share amounts for all periods have been adjusted to reflect a 10% stock dividend declared on May 18, 2021.

Note 4 – Stock Based Compensation

Accounting standards require companies to recognize the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards.

At the annual meeting of shareholders held on May 15, 2018, the shareholders approved the Bank of the James Financial Group, Inc. 2018 Equity Incentive Plan (the “2018 Incentive Plan”). The 2018 Incentive Plan permits the issuance of up to 250,000 shares of common stock for awards to key employees of the Company and its subsidiaries in the form of stock options, restricted stock, restricted stock units, stock awards and performance units.

On January 2, 2019, the Company granted its first block of equity compensation under the 2018 Incentive Plan consisting of 24,500 restricted stock units. The recipients of restricted stock units do not receive shares of the Company’s stock immediately, but instead may receive shares, cash in lieu of shares, or a combination thereof upon satisfying the requisite service period specified by the terms and conditions of the grant. Additionally, the recipients of restricted stock units do not enjoy the rights of holder of the Company’s common stock until the units have vested and as such, they do not have voting rights or rights to nonforfeitable dividends. The related compensation expense is based on the fair value of the Company’s stock. RSUs vest over 3 years in thirds. The first one-third vested on January 2, 2020 and the second one-third vested on January 2, 2021. The value of the first two-thirds vested portions of the grant were settled with cash payments and no shares were issued.

The total expense recognized for the nine months ended September 30, 2021 and 2020, in connection with the restricted stock unit awards was approximately $80,000 and $88,000 in each of the periods respectively. There were no forfeitures during the nine-month period ending September 30, 2021.

At September 30, 2021, the unrecognized stock-based compensation expense related to unvested restricted stock units amounted to approximately $26,000. The unrecognized expense will be recognized ratably over the remaining vesting period of 0.25 years. The Company accounts for forfeitures as they occur.

Note 5 – Fair Value Measurements

Determination of Fair Value

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic of FASB ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market and in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future

‎

7

Note 5 – Fair Value Measurements (continued)

cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market and in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

Fair Value Hierarchy

In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Fair Value on a Recurring Basis

Securities Available-for-Sale

Fair values of securities available-for sale are based on quoted prices available in an active market. If quoted prices are available, these securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow.

Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. Currently, all of the Company’s securities are considered to be Level 2 securities.

The following table summarizes the Company’s financial assets that were measured at fair value on a recurring basis during the period.

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8

Note 5 – Fair Value Measurements (continued)

Derivatives Assets/Liabilities – Interest Rate Lock Commitments (IRLCs)

The Company recognizes IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 3.

			Carrying Value at September 30, 2021 (in thousands)
			Quoted Prices		Significant		Significant
			in Active		Other		Unobservable
		Balance as of	Markets for		Observable		Inputs
		September 30,	Identical Assets		Inputs		(Level 3)
Description		2021	(Level 1)		(Level 2)
US Treasuries	$	2,009	$	—	$	2,009	$	—
US agency obligations		58,029		—		58,029		—
Mortgage-backed securities		34,446		—		34,446		—
Municipals		45,956		—		45,956		—
Corporates		11,858		—		11,858		—
Total available-for-sale securities	$	152,298	$	—	$	152,298	$	—
IRLCs - asset		175		—		—		175
Total assets at fair value	$	152,473	$	—	$	152,298	$	175

			Carrying Value at December 31, 2020 (in thousands)
			Quoted Prices		Significant		Significant
			in Active		Other		Unobservable
	Balance as of		Markets for		Observable		Inputs
	December 31,		Identical Assets		Inputs		(Level 3)
Description	2020		(Level 1)		(Level 2)
US Treasuries	$	2,027	$	—	$	2,027	$	—
US agency obligations		41,320		—		41,320		—
Mortgage-backed securities		15,696		—		15,696		—
Municipals		24,773		—		24,773		—
Corporates		6,369		—		6,369		—
Total available-for-sale securities	$	90,185	$	—	$	90,185	$	—
IRLCs – asset		425		—		—		425
Total assets at fair value	$	90,610	$	—	$	90,185	$	425

The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value:

‎

9

Note 5 – Fair Value Measurements (continued)

	Quantitative information about Level 3 Fair Value Measurements for September 30, 2021
	(dollars in thousands)
	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) (1)
Assets
IRLCs - asset	$	175	Market approach	Range of pull through rate	70% - 100% (85%)

(1)    Weighted based on the relative value of the instruments

	Quantitative information about Level 3 Fair Value Measurements for December 31, 2020
	(dollars in thousands)
	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) (1)
Assets
IRLCs - asset	$	425	Market approach	Range of pull through rate	70% - 100% (85%)

(1)    Weighted based on the relative value of the instruments

Fair Value on a Non-recurring Basis

Impaired loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected when due. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Fair value is measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Bank using observable market data (Level 2). However, in situations where the collateral is a house or building in the process of construction, the appraisal is more than 12 months old, management has determined the fair value of the collateral is further impaired below the appraised value, or the appraisal is not based solely on market comparables adjusted for observable inputs, the value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income.

‎

10

Note 5 – Fair Value Measurements (continued)

Loans held for sale

Loans held for sale are carried at cost which approximates estimated fair value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during the period ended September 30, 2021. Gains and losses on the sale of loans are recorded within gains on sales of loans held for sale on the Consolidated Statements of Income.

Other real estate owned

Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. We believe that the fair value component in its valuation follows the provisions of ASC 820.

Real estate acquired through foreclosure is transferred to OREO. The measurement of loss associated with OREO is based on the fair value of the collateral compared to the unpaid loan balance and anticipated costs to sell the property. The value of OREO property is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Bank using observable market data (Level 2).

Any fair value adjustments are recorded in the period incurred and expensed against current earnings. However, in situations where the collateral is a house or building in the process of construction, the appraisal is more than 12 months old, management has determined the fair value of the collateral is further impaired below the appraised value, or the appraisal is not based solely on market comparables adjusted for observable inputs, the value is considered Level 3.

‎

11

Note 5 – Fair Value Measurements (continued)

The following table summarizes the Company’s impaired loans and OREO measured at fair value on a nonrecurring basis during the period (in thousands):

			Carrying Value at September 30, 2021
Description	Balance as of September 30, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans*	$	1,970	$	—	$	—	$	1,970
Other real estate owned		806		—		—		806

* Includes loans charged down to the net realizable value of the collateral.

			Carrying Value at December 31, 2020
Description	Balance as of December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans*	$	1,829	$	—	$	—	$	1,829
Other real estate owned		1,105		—		—		1,105

* Includes loans charged down to the net realizable value of the collateral.

The following table sets forth information regarding the quantitative inputs used to value assets classified as Level 3:

	Quantitative information about Level 3 Fair Value Measurements for September 30, 2021
	(dollars in thousands)
	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) (1)
Assets
Impaired loans	$	1,970	Discounted appraised value	Selling cost	0% - 10% (8%)
				Discount for lack of marketability and age of appraisal	0% - 20% (6%)
OREO		806	Discounted appraised value	Selling cost	10%
				Discount for lack of marketability and age of appraisal	0% - 25% (15%)

(1)Weighted based on the relative value of the instruments.

	Quantitative information about Level 3 Fair Value Measurements for December 31, 2020
	(dollars in thousands)
	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) (1)
Assets
Impaired loans	$	1,829	Discounted appraised value	Selling cost	0% - 10% (8%)
				Discount for lack of marketability and age of appraisal	0% - 20% (6%)
OREO		1,105	Discounted appraised value	Selling cost	10%
				Discount for lack of marketability and age of appraisal	0% - 25% (15%)

(1)Weighted based on the relative value of the instruments.

12

Note 5 – Fair Value Measurements (continued)

Financial Instruments

FASB ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The carrying amounts and estimated fair values of the Company’s financial instruments are presented in the following tables whether or not recognized on the Consolidated Balance Sheets at fair value.

‎

13

Note 5 – Fair Value Measurements (continued)

The estimated fair values, and related carrying or notional amounts, of Financial’s financial instruments and their placement in the fair value hierarchy at September 30, 2021 and December 31, 2020 was as follows (in thousands):

			Fair Value Measurements at September 30, 2021 using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
Assets	Amounts		(Level 1)		(Level 2)		(Level 3)		Balance
Cash and due from banks	$	30,340	$	30,340	$	—	$	—	$	30,340
Fed funds sold		116,956		116,956		—		—		116,956
Securities
Available-for-sale		152,298		—		152,298		—		152,298
Held-to-maturity		3,659		—		4,028		—		4,028
Restricted stock		1,324				1,324		—		1,324
Loans, net (1)		583,572		—		—		576,060		576,060
Loans held for sale		6,462		—		6,462		—		6,462
Interest receivable		2,106		—		2,106		—		2,106
BOLI		18,670		—		18,670		—		18,670
Derivatives - IRLCs		175		—		—		175		175
Liabilities
Deposits	$	853,829	$	—	$	854,458	$	—	$	854,458
Capital notes		10,031		—		9,480		—		9,480
Interest payable		49		—		49		—		49

			Fair Value Measurements at December 31, 2020 using
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
Assets	Amounts		(Level 1)		(Level 2)		(Level 3)		Balance
Cash and due from banks	$	31,683	$	31,683	$	—	$	—	$	31,683
Fed funds sold		69,203		69,203		—		—		69,203
Securities
Available-for-sale		90,185		—		90,185		—		90,185
Held-to-maturity		3,671		—		4,192		—		4,192
Restricted stock		1,551		—		1,551		—		1,551
Loans, net (1)		601,934		—		—		598,745		598,745
Loans held for sale		7,102		—		7,102		—		7,102
Interest receivable		2,350		—		2,350		—		2,350
BOLI		16,355		—		16,355		—		16,355
Derivatives - IRLCs		425		—		—		425		425
Liabilities
Deposits	$	764,967	$	—	$	766,212	$	—	$	766,212
Capital notes		10,027		—		9,003		—		9,003
Interest payable		85		—		85		—		85

(1)     Carrying amount is net of unearned income and the Allowance.

14

Note 6 – Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of September 30, 2021 and December 31, 2020 (amounts in thousands):

	September 30, 2021
	Amortized		Gross Unrealized
	Costs		Gains		(Losses)		Fair Value
Held-to-Maturity
US agency obligations	$	3,659	$	369	$	—	$	4,028
Available-for-Sale
US Treasuries		2,000		9		—		2,009
US agency obligations		58,242		793		(1,006)		58,029
Mortgage-backed securities		34,659		120		(333)		34,446
Municipals		46,229		399		(672)		45,956
Corporates		11,657		233		(32)		11,858
	$	152,787	$	1,554	$	(2,043)	$	152,298

	December 31, 2020
	Amortized		Gross Unrealized
	Costs		Gains		(Losses)		Fair Value
Held-to-Maturity
US agency obligations	$	3,671	$	521	$	—	$	4,192
Available-for-Sale
US Treasuries		2,000		27		—		2,027
US agency obligations		40,111		1,544		(335)		41,320
Mortgage-backed securities		15,461		241		(6)		15,696
Municipals		24,275		594		(96)		24,773
Corporates		6,070		299		—		6,369
	$	87,917	$	2,705	$	(437)	$	90,185

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15

Note 6 – Securities (continued)

The following tables show the gross unrealized losses and fair value of the Bank’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020 (amounts in thousands):

	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2021	Value		Losses		Value		Losses		Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$	—	$	—	$	—	$	—	$	—	$	—
Available-for-sale
US Treasuries		—		—		—		—		—		—
US agency obligations		29,945		675		6,467		331		36,412		1,006
Mortgage-backed securities		30,340		333		—		—		30,340		333
Municipals		30,338		548		3,436		124		33,774		672
Corporates		1,968		32		—		—		1,968		32
Total	$	92,591	$	1,588	$	9,903	$	455	$	102,494	$	2,043

	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2020	Value		Losses		Value		Losses		Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$	—	$	—	$	—	$	—	$	—	$	—
Available-for-sale
US Treasuries		—		—		—		—		—		—
US agency obligations		15,808		335		—		—		15,808		335
Mortgage-backed securities		8,201		6		—		—		8,201		6
Municipals		8,202		96		—		—		8,202		96
Corporates		—		—		—		—		—		—
Total	$	32,211	$	437	$	—	$	—	$	32,211	$	437

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and may do so more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) the intent of Financial, if any, to sell the security; (4) whether Financial more likely than not will be

‎

16

Note 6 – Securities (continued)

required to sell the security before recovering its cost; and (5) whether Financial does not expect to recover the security’s entire amortized cost basis (even if Financial does not intend to sell the security).

At September 30, 2021, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of September 30, 2021, the Bank owned 59 securities in an unrealized loss position that were being evaluated for other than temporary impairment. Of the securities, 23 were S&P rated AAA, 33 were rated AA, and three were rated A. As of September 30, 2021, 34 of these securities were municipal issues, 22 were backed by the US government, and three were issues of publicly traded domestic corporations.

Based on the analysis performed by management as mandated by the Bank’s investment policy, management believes the default risk to be minimal. Because management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to change in interest rates and other market conditions, no declines currently are deemed to be other-than-temporary.

There were no sales of available-for-sale securities during the nine months ended September 30, 2021 as compared to $13,312 in sales during the same period in 2020. In 2020, there were gross gains on sales of available-for-sale securities of $644 during the nine month period ended September 30, 2020. There were no sales of held-to-maturity securities during the nine month periods ended September 30, 2021 and 2020.

Note 7 – Business Segments

The Company has two reportable business segments: (i) a traditional full-service community banking segment and, (ii) a mortgage loan origination business. The community banking business segment includes Bank of the James which provides loans, deposits, investments and insurance to retail and commercial customers throughout Region 2000 and other areas within Central Virginia. The mortgage segment provides a variety of mortgage loan products principally within Region 2000. Mortgage loans are originated and sold in the secondary market through purchase commitments from investors with servicing released. Because of the pre-arranged purchase commitments, there is minimal risk to the Company.

Both of the Company’s reportable segments are service based. The mortgage business is a gain on sale business while the Bank’s primary source of revenue is net interest income. The Bank also provides a referral network for the mortgage origination business. The mortgage business may also be in a position to refer its customers to the Bank for banking services when appropriate.

17

Information about reportable business segments and reconciliation of such information to the consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 was as follows (dollars in thousands):

Note 7 – Business Segments (continued)

Business Segments
	Community
	Banking		Mortgage		Total
For the three months ended September 30, 2021
Net interest income	$	6,822	$	—	$	6,822
Provision for loan losses		—		—		—
Net interest income after provision for loan losses		6,822		—		6,822
Noninterest income		731		2,091		2,822
Noninterest expenses		5,776		1,522		7,298
Income before income taxes		1,777		569		2,346
Income tax expense		345		120		465
Net income	$	1,432	$	449	$	1,881
Total assets	$	935,482	$	7,149	$	942,631
For the three months ended September 30, 2020
Net interest income	$	6,203	$	—	$	6,203
Provision for loan losses		700		—		700
Net interest income after provision for loan losses		5,503		—		5,503
Noninterest income		605		2,459		3,064
Noninterest expenses		5,322		1,422		6,744
Income before income taxes		786		1,037		1,823
Income tax expense		151		218		369
Net income	$	635	$	819	$	1,454
Total assets	$	838,425	$	10,704	$	849,129
	Community
	Banking		Mortgage		Total
Nine months ended September 30, 2021
Net interest income	$	20,280	$	—	$	20,280
Provision for loan losses		—		—		—
Net interest income after provision for loan losses		20,280		—		20,280
Noninterest income		2,130		6,175		8,305
Noninterest expenses		16,985		4,439		21,424
Income before income taxes		5,425		1,736		7,161
Income tax expense		1,066		365		1,431
Net income	$	4,359	$	1,371	$	5,730
Total assets	$	935,482	$	7,149	$	942,631
Nine months ended September 30, 2020
Net interest income	$	18,257	$	—	$	18,257
Provision for loan losses		2,348		—		2,348
Net interest income after provision for loan losses		15,909		—		15,909
Noninterest income		2,453		5,586		8,039
Noninterest expenses		16,271		3,605		19,876
Income before income taxes		2,091		1,981		4,072
Income tax expense		386		416		802
Net income	$	1,705	$	1,565	$	3,270
Total assets	$	838,425	$	10,704	$	849,129

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18

Note 8 – Loans, allowance for loan losses and OREO

Management has an established methodology used to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Bank has segmented certain loans in the portfolio by product type. Within these segments, the Bank has sub-segmented its portfolio into classes, based on the associated risks. The classifications set forth below do not correspond directly to the classifications set forth in the call report (Form FFIEC 041). Management has determined that the classifications set forth below are more appropriate for use in identifying and managing risk in the loan portfolio.

Loan Segments:	Loan Classes:
Commercial	Commercial and industrial loans
Commercial real estate	Commercial mortgages – owner occupied
	Commercial mortgages – non-owner occupied
	Commercial construction
Consumer	Consumer unsecured
	Consumer secured
Residential	Residential mortgages
	Residential consumer construction

A summary of loans, net is as follows (dollars in thousands):

	As of:
	September 30,		December 31,
	2021		2020
Commercial	$	116,923	$	145,145
Commercial real estate		327,665		309,563
Consumer		92,633		92,344
Residential		53,627		62,038
Total loans (1)		590,848		609,090
Less allowance for loan losses		7,276		7,156
Net loans	$	583,572	$	601,934

(1)Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.

The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis.
‎

19

Note 8 – Loans, allowance for loan losses and OREO (continued)

Below is a summary and definition of the Bank’s risk rating categories:

RATING 1	Excellent
RATING 2	Above Average
RATING 3	Satisfactory
RATING 4	Acceptable / Low Satisfactory
RATING 5	Monitor
RATING 6	Special Mention
RATING 7	Substandard
RATING 8	Doubtful
RATING 9	Loss

We segregate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:

“Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.

“Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.

“Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.

“Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.

“Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high.

“Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.

‎

20

Note 8 – Loans, allowance for loan losses and OREO (continued)

Loans on Non-Accrual Status

(dollars in thousands)

	As of
	September 30, 2021		December 31, 2020
Commercial	$	293	$	121
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		650		940
Commercial Mortgages-Non-Owner Occupied		529		552
Commercial Construction		—		—
Consumer
Consumer Unsecured		—		—
Consumer Secured		267		240
Residential:
Residential Mortgages		165		210
Residential Consumer Construction		—		—
Totals	$	1,904	$	2,063

We also classify other real estate owned (OREO) as a nonperforming asset. OREO represents real property owned by the Bank which was acquired through purchase at foreclosure or from the borrower through a deed in lieu of foreclosure. OREO decreased to $806 on September 30, 2021 from $1,105 on December 31, 2020. The following table represents the changes in

OREO balance during the nine months ended September 30, 2021 and year ended December 31, 2020.

OREO Changes

(dollars in thousands)

	Nine Months Ended Year Ended
	September 30, 2021		December 31, 2020
Balance at the beginning of the year (net)	$	1,105	$	2,339
Transfers from loans		111		18
Capitalized costs		—		—
Valuation adjustments		—		(437)
Sales proceeds		(344)		(844)
Gain (loss) on disposition		(66)		29
Balance at the end of the period (net)	$	806	$	1,105

At September 30, 2021 and December 31, 2020, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. The Company held one residential real estate property in other real estate owned as of September 30, 2021 and no residential properties in OREO as of December 31, 2020.

‎

21

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Impaired Loans
	(dollars in thousands)
	As of and For the Nine Months Ended September 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
2021	Investment		Balance		Allowance		Investment		Recognized
With No Related Allowance Recorded:
Commercial	$	250	$	305	$	—	$	296	$	14
Commercial Real Estate
Commercial Mortgages-Owner Occupied		1,931		2,294		—		2,037		91
Commercial Mortgage Non-Owner Occupied		494		501		—		567		19
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		60		60		—		202		2
Residential
Residential Mortgages		1,321		1,394		—		1,334		36
Residential Consumer Construction		—		—		—		—		—
With an Allowance Recorded:
Commercial	$	—	$	—	$	—	$	2	$	—
Commercial Real Estate
Commercial Mortgages-Owner Occupied		—		—		—		—		—
Commercial Mortgage Non-Owner Occupied		—		—		—		—		—
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		173		180		15		87		1
Residential
Residential Mortgages		—		—		—		—		—
Residential Consumer Construction		—		—		—		—		—
Totals:
Commercial	$	250	$	305	$	—	$	298	$	14
Commercial Real Estate
Commercial Mortgages-Owner Occupied		1,931		2,294		—		2,037		91
Commercial Mortgage Non-Owner Occupied		494		501		—		567		19
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		233		240		15		289		3
Residential
Residential Mortgages		1,321		1,394		—		1,334		36
Residential Consumer Construction		—		—		—		—		—
	$	4,229	$	4,734	$	15	$	4,525	$	163

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22

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Impaired Loans
	(dollars in thousands)
	As of and For the Year Ended December 31, 2020
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
2020	Investment		Balance		Allowance		Investment		Recognized
With No Related Allowance Recorded:
Commercial	$	341	$	341	$	—	$	405	$	30
Commercial Real Estate
Commercial Mortgages-Owner Occupied		2,143		2,496		—		2,305		135
Commercial Mortgage Non-Owner Occupied		639		677		—		601		43
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		343		346		—		225		16
Residential
Residential Mortgages		1,347		1,415		—		1,319		62
Residential Consumer Construction		—		—		—		—		—
With an Allowance Recorded:
Commercial	$	4	$	4	$	4	$	6	$	—
Commercial Real Estate
Commercial Mortgages-Owner Occupied		—		—		—		6		—
Commercial Mortgage Non-Owner Occupied		—		—		—		7		—
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		—		—		—		—		—
Residential
Residential Mortgages		—		—		—		70		—
Residential Consumer Construction		—		—		—		—		—
Totals:
Commercial	$	345	$	345	$	4	$	411	$	30
Commercial Real Estate
Commercial Mortgages-Owner Occupied		2,143		2,496		—		2,311		135
Commercial Mortgage Non-Owner Occupied		639		677		—		608		43
Commercial Construction		—		—		—		—		—
Consumer
Consumer Unsecured		—		—		—		—		—
Consumer Secured		343		346		—		225		16
Residential
Residential Mortgages		1,347		1,415		—		1,389		62
Residential Consumer Construction		—		—		—		—		—
	$	4,817	$	5,279	$	4	$	4,944	$	286

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23

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Allowance for Loan Losses and Recorded Investment in Loans
	(dollars in thousands)
	As of and For the Nine Months Ended September 30, 2021
			Commercial
2021	Commercial		Real Estate		Consumer		Residential		Total
Allowance for Credit Losses:
Beginning Balance	$	2,001	$	3,550	$	868	$	737	$	7,156
Charge-Offs		(53)		—		(27)		—		(80)
Recoveries		107		70		22		1		200
Provision		(124)		87		(4)		41		—
Ending Balance		1,931		3,707		859		779		7,276
Ending Balance: Individually evaluated for impairment		—		—		15		—		15
Ending Balance: Collectively evaluated for impairment		1,931		3,707		844		779		7,261
Totals:	$	1,931	$	3,707	$	859	$	779	$	7,276
Financing Receivables:
Ending Balance: Individually evaluated for impairment		250		2,425		233		1,321		4,229
Ending Balance: Collectively evaluated for impairment		116,673		325,240		92,400		52,306		586,619
Totals:	$	116,923	$	327,665	$	92,633	$	53,627	$	590,848

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24

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Allowance for Loan Losses and Recorded Investment in Loans
	(dollars in thousands)
	As of and For the Year Ended December 31, 2020
			Commercial
2020	Commercial		Real Estate		Consumer		Residential		Total
Allowance for Credit Losses:
Beginning Balance	$	1,330	$	1,932	$	865	$	702	$	4,829
Charge-Offs		(96)		(224)		(75)		(53)		(448)
Recoveries		20		139		53		15		227
Provision		747		1,703		25		73		2,548
Ending Balance		2,001		3,550		868		737		7,156
Ending Balance: Individually evaluated for impairment		4		—		—		—		4
Ending Balance: Collectively evaluated for impairment		1,997		3,550		868		737		7,152
Totals:	$	2,001	$	3,550	$	868	$	737	$	7,156
Financing Receivables:
Ending Balance: Individually evaluated for impairment		345		2,782		343		1,347		4,817
Ending Balance: Collectively evaluated for impairment		144,800		306,781		92,001		60,691		604,273
Totals:	$	145,145	$	309,563	$	92,344	$	62,038	$	609,090

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25

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Age Analysis of Past Due Loans as of
	September 30, 2021
	(dollars in thousands)
					Greater								Recorded Investment
	30-59 Days		60-89 Days		than		Total Past				Total		> 90 Days &
2021	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	179	$	—	$	103	$	282	$	116,641	$	116,923	$	—
Commercial Real Estate:
Commercial Mortgages- Owner Occupied		68		—		502		570		122,460		123,030		—
Commercial Mortgages-Non-Owner Occupied		98		106		384		588		177,505		178,093		—
Commercial Construction		—		—		—		—		26,542		26,542		—
Consumer:
Consumer Unsecured		12		—		—		12		4,759		4,771		—
Consumer Secured		172		53		258		483		87,379		87,862		—
Residential:
Residential Mortgages		238		—		165		403		34,291		34,694		—
Residential Consumer Construction		—		—		—		—		18,933		18,933		—
Total	$	767	$	159	$	1,412	$	2,338	$	588,510	$	590,848	$	—

		Age Analysis of Past Due Loans as of
		December 31, 2020
	(dollars in thousands)
					Greater								Recorded Investment
	30-59 Days		60-89 Days		than		Total Past				Total		> 90 Days &
2020	Past Due		Past Due		90 Days		Due		Current		Loans		Accruing
Commercial	$	157	$	—	$	—	$	157	$	144,988	$	145,145	$	—
Commercial Real Estate:
Commercial Mortgages- Owner Occupied		38		—		842		880		107,342		108,222		—
Commercial Mortgages-Non-Owner Occupied		252		116		394		762		170,307		171,069		—
Commercial Construction		—		—		—		—		30,272		30,272		—
Consumer:
Consumer Unsecured		7		—		—		7		3,764		3,771		—
Consumer Secured		309		27		229		565		88,008		88,573		—
Residential:
Residential Mortgages		575		243		210		1,028		45,868		46,896		—
Residential Consumer Construction		—		—		—		—		15,142		15,142		—
Total	$	1,338	$	386	$	1,675	$	3,399	$	605,691	$	609,090	$	—

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26

Note 8 – Loans, allowance for loan losses and OREO (continued)

	Credit Quality Information - by Class
	September 30, 2021
	(dollars in thousands)
2021		Pass		Monitor		Special ‎Mention		Substandard		Doubtful		Totals
Commercial	$	104,909	$	4,430	$	7,294	$	290	$	—	$	116,923
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		113,498		3,309		4,265		1,958		—		123,030
Commercial Mortgages-Non-Owner Occupied		174,834		2,547		59		653		—		178,093
Commercial Construction		26,542		—		—		—		—		26,542
Consumer
Consumer Unsecured		4,746		—		24		1		—		4,771
Consumer Secured		87,474		—		—		388		—		87,862
Residential:
Residential Mortgages		33,248		—		—		1,446		—		34,694
Residential Consumer Construction		18,933		—		—		—		—		18,933
Totals	$	564,184	$	10,286	$	11,642	$	4,736	$	—	$	590,848

	Credit Quality Information - by Class
	December 31, 2020
	(dollars in thousands)
2020	Pass		Monitor		Special ‎Mention		Substandard		Doubtful		Totals
Commercial	$	133,075	$	4,332	$	7,386	$	352	$	—	$	145,145
Commercial Real Estate:
Commercial Mortgages-Owner Occupied		98,623		3,028		4,428		2,143		—		108,222
Commercial Mortgages-Non -Owner Occupied		161,300		7,277		1,682		810		—		171,069
Commercial Construction		30,272		—		—		—		—		30,272
Consumer
Consumer Unsecured		3,740		—		30		1		—		3,771
Consumer Secured		88,044		—		—		529		—		88,573
Residential:
Residential Mortgages		45,441		—		—		1,455		—		46,896
Residential Consumer Construction		15,142		—		—		—		—		15,142
Totals	$	575,637	$	14,637	$	13,526	$	5,290	$	—	$	609,090

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27

Note 8 – Loans, allowance for loan losses and OREO (continued)

Troubled Debt Restructurings (TDR)

There were no loan modifications that would have been classified as TDRs during the three and nine months ended September 30, 2021 and 2020.

There were no loan modifications classified as TDRs within the last twelve months that defaulted during the three and nine months ended September 30, 2021 and 2020.

At September 30, 2021 and December 31, 2020, the Bank had no outstanding commitments to disburse additional funds on loans classified as TDRs.

We have developed relief programs to assist borrowers in financial need due to the effects of the COVID-19 pandemic. Accordingly, we offered short-term modifications made in response to COVID-19 to certain borrowers who were current and otherwise not past due. These include short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, deferral of principal only (interest only payments), or other delays in payment that are insignificant.

Since the beginning of the pandemic in the spring of 2020, the Bank has modified a total of 191 loans. The principal balances of these loans on September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remain in deferment and all such previously deferred loans are current.

We are not currently evaluating any relationships for additional deferrals.

In accordance with provisions of Section 4013 of the CARES Act (March 2020) and the Joint Interagency Regulatory Guidance (March 2020, revised April 2020), the above modifications were not considered to be TDRs. The CARES Act addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. The Interagency Guidance encouraged financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19 and explained that in consultation with the Financial Accounting Standards Board (FASB) staff, the federal banking agencies concluded that short-term modifications (e.g. six months or less) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not TDRs. In December 2020, the Consolidated Appropriations Act extended the period established by Section 4013 of the CARES Act for providing temporary relief from TDR classification to the earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.

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28

Note 9 – Revenue Recognition

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. Noninterest revenue streams in-scope of Topic 606 are discussed below.

Service Charges on Deposit Accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or at the end of the month through a direct charge to customers’ accounts.

Fees, Exchange, and Other Service Charges

Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, treasury services income and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Treasury services income primarily represents fees charged to customers for sweep, positive pay and lockbox services. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or at the end of the month.

Other

Other noninterest income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, safety deposit box rental fees, and other miscellaneous revenue streams. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

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29

Note 10 – Recent accounting pronouncements and other authoritative guidance

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (CECL). The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU’s have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company is currently assessing the impact that ASU 2016-13 will have on its consolidated financial statements. The Company has contracted with an additional vendor in addition to its core processer and the implementation process has begun. It is anticipated that the Company will run the CECL methodology side by side with the current allowance methodology for approximately 12 months before full implementation.

Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB ASC 326, “Financial Instruments – Credit Losses.” It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology.

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2021-01 “Reference Rate Reform (Topic 848): Scope.” This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU No. 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU No. 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company has identified a small number of affected loans and is evaluating other benchmarks to substitute for LIBOR such as SOFR. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loans.

In August 2021, the FASB issued ASU 2021-06, “'Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants”. The ASU is effective upon addition to the FASB Codification. The Company does not expect the adoption of ASU 2021-06 to have a material impact on its consolidated financial statements.

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30

Note 11 - COVID-19 and Current Economic Conditions

On March 11, 2020, the World Health Organization announced that the COVID-19 outbreak was deemed a pandemic, and on March 13, 2020, the President declared the ongoing COVID-19 pandemic of sufficient magnitude to warrant an emergency declaration. The extent of COVID-19's effect on the Company's operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, and when state and local economies will return to operational norms, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. In addition, we rely upon our third-party vendors to conduct business and to process, record and monitor transactions. If any of these vendors are unable to continue to provide us with these services, it could negatively impact our ability to serve our customers. Furthermore, the outbreak could negatively impact our employees and customers' ability to engage in banking and other financial transactions. We also could be adversely affected if key personnel or a significant number of employees were to become unavailable due to the effects and restrictions of a COVID-19 outbreak in our market areas.

Management will continue to evaluate current economic conditions to determine the impact of the pandemic on the ability of our customers to fulfill their financial obligations to the Company, as well as the values of our financial and nonfinancial assets resulting from the market disruption. Accordingly, significant estimates used in the preparation of our financial statements including those associated with the evaluation of the allowance for loan losses as well as other valuation-based estimates may be subject to significant adjustments in future periods. As the full effects are not yet known, it is not currently possible to ascertain the overall impact of COVID-19 on the Company's business. However, as the pandemic continues to evolve into a prolonged worldwide health crisis, the pandemic could have a material adverse effect on the Company's business, results of operations, financial condition and cash flows.

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31

Note 12 – Capital Notes

On April 13, 2020, the Company commenced a private placement of unregistered debt securities (the “2020 Offering”). In the 2020 Offering, the Company sold and closed $10,050,000 in principal of notes (the “2020 Notes”) during the 2^nd and 3^rd quarters of 2020. The 2020 Offering officially ended on July 8, 2020. The 2020 Notes bear interest at the rate of 3.25% per year with interest payable quarterly in arrears. The 2020 Notes will mature on September 30, 2025 and are subject to full or partial repayment on or after September 30, 2021. The balance of the 2020 Notes on the September 30, 2021 consolidated balance sheet is presented net of unamortized issuance costs.

On September 24, 2020 the Bank used $5,000,000 of the proceeds for the payment of principal of the Company’s previously outstanding 4.00% notes that were issued in 2017. The Company intends to use the balance of the proceeds from the 2020 Offering for general corporate purposes at the discretion of Company’s management such as payment of interest on the 2020 Notes and as a contribution of additional capital to the Bank.

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32

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Statements made in this document and in any documents that are incorporated by reference which are not purely historical are forward-looking statements, including any statements regarding descriptions of management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements generally may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” or similar expressions. Shareholders should note that many factors, some of which are discussed elsewhere in this document, could affect the future financial results of Financial and could cause those results to differ materially from those expressed in forward-looking statements contained in this document. These factors, many of which are beyond Financial's control, include, but are not necessarily limited to the following:

the effects of the COVID-19 pandemic on the business, customers, employees and third-party service providers of Financial or any of its acquisition targets;

operating, legal and regulatory risks, including the effects of legislative or regulatory developments affecting the financial industry generally or Financial specifically;

government legislation and policies (including the impact of the Dodd-Frank Wall Street Reform and the Consumer Protection Act and its related regulations), including changes to address the impact of COVID-19;

economic, market, political and competitive forces affecting Financial's banking and other businesses;

competition for our customers from other providers of financial services; government legislation and regulation relating to the banking industry (which changes from time to time and over which we have no control) including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act;

changes in interest rates, monetary policy and general economic conditions, which may impact Financial's net interest income;

changes in the value of real estate securing loans made by the Bank;

diversion of management time on pandemic-related issues;

adoption of new accounting standards or changes in existing standards;

changes to statutes, regulations, or regulatory policies or practices resulting from the COVID-19 pandemic;

compliance or operational risks related to new products, services, ventures, or lines of business, if any, that Financial may pursue or implement; and

the risk that Financial's analysis of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make.

These factors should be considered in evaluating the forward-looking statements, and you should not place undue reliance on such statements. Financial specifically disclaims any obligation to update factors or to publicly announce the results of revisions to any of the forward-looking statements or comments included herein to reflect future events or developments.

33

IMPACT OF COVID-19

Effects on Market Areas

The COVID-19 pandemic and certain provisions of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and other recent legislative and regulatory relief efforts have had and are expected to continue to have a material impact on the Company's operations, as further discussed below.

Policy and Regulatory Developments

Federal, state and local governments and regulatory authorities have enacted and issued a range of policy responses to the COVID-19 pandemic, including the following:

The Federal Reserve decreased the range for the Federal Funds Target Rate by 0.50% on March 3, 2020, and by another 1.0% on March 16, 2020, reaching a current range of 0.0 - 0.25%.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which established a $2.0 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the U.S. Small Business Administration (SBA), referred to as the Paycheck Protection Program, or PPP Program, which was subsequently increased by $320 billion on April 24, 2020. Under the PPP program, small businesses, sole proprietorships, independent contractors and self-employed individuals could apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. The Bank participated as a lender in the PPP program. Effective August 8, 2020, banks ceased taking applications under the PPP program. In addition, the CARES Act provided financial institutions the option to temporarily suspend certain requirements under GAAP related to loan modifications and classification as troubled debt restructurings (“TDRs”) for a limited period of time to account for the effects of COVID-19.

On April 7, 2020, federal banking regulators issued a revised Interagency Statement on Loan Modifications and Reporting for Financial Institutions, which, among other things, encouraged financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations because of the effects of COVID-19, and stated that institutions generally do not need to categorize COVID-19-related modifications as TDRs, and that the agencies will not direct supervised institutions to automatically categorize all COVID-19 related loan modifications as TDRs. In addition, upon expiration of the initial loan modification period, the Bank, pursuant to the “Joint Statement on Additional Loan Accommodations Related to COVID-19” published August 3, 2020, is encouraged to continue to work with effected borrowers on additional loan modifications. Since the beginning of the pandemic in the spring of 2020, the Bank has modified a total of 191 loans. The principal balances of these loans on September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remain in deferment and all such previously deferred loans are current.

On December 27, 2020, President Trump signed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) into law to provide continued assistance to individuals and businesses that have been financially impacted by the ongoing coronavirus pandemic. Section 311 of the Economic Aid Act added a new temporary provision that authorizes the SBA to guarantee Paycheck Protection Program Second Draw Loans (the “PPP Second Draw Program”), under generally the same terms and conditions available under the PPP Under section 311, SBA was authorized to guarantee loans under the PPP Second Draw Program through May 31, 2021 (‘‘Second Draw PPP Loans’’) to borrowers that previously received an initial PPP loan and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan. In addition, the Economic Aid Act permitted individuals and business that did not receive an initial PPP loan to apply under the PPP Program.

In accordance with the relief provisions of the CARES Act and the March 22, 2020 (revised April 2020) Joint Interagency Regulatory Guidance, the above modifications were not considered to be troubled debt restructurings and were excluded from TDR classification. The TDR relief provisions provided for by the CARES Act were extended in December 2020 by the Consolidated Appropriations Act through the earlier of January 1, 2022 or 60 days after the national COVID-19 emergency terminates.

Effects on Our Business

The COVID-19 pandemic and the specific developments referred to above may have a significant impact on our business. As a result, we anticipate that our financial condition, capital levels and results of operations could be significantly adversely affected, as described in further detail below.

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COVID-19 Crisis Management

As an essential service provider, Bank of the James has continued to provide uninterrupted service to its clients throughout the COVID-19 crisis. On March 2, 2020 the Company's Management Committee initiated plans in response to the emerging risk related to the pandemic.

From the beginning, our management of the crisis has focused on protecting the health and well-being of our employees and clients while continuing to provide our clients with full access to banking services. As the operational risk related to the COVID-19 crisis evolved, the Company took proactive measures to manage operational risk, including the following:

The Company has implemented its Business Continuity Plan.

All branches remain open, with routine banking services offered through online banking, drive-thru, ATMs, and full lobby access. We currently require masks for unvaccinated individuals.

Implemented a number of actions to support a healthy workforce, including:

-Flexible work practices such as work-from-home options, working in shifts and placing greater distances between employees;

-Limitation of business travel and in-person meetings; and

-Use of online meeting platforms, including successfully conducting the 2021 Annual Meeting of Shareholders in a virtual format.

GENERAL

Critical Accounting Policies

Bank of the James Financial Group, Inc.’s (“Financial”) financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The financial information contained within our statements is, to a significant extent, based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained either when earning income, recognizing an expense, recovering an asset or relieving a liability. We use historical loss ratios as one factor in determining the inherent loss that may be present in our loan portfolio. Actual losses could differ significantly from the historical factors that we use in estimating risk. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of our transactions would be the same, the timing of events that would impact our transactions could change.

Financial’s critical accounting policies include the evaluation of the allowance for loan losses which is based on management’s estimate of an amount that is adequate to absorb probable losses inherent in the loan portfolio of the Bank. The allowance for loan losses is established through a provision for loan loss based on available information including the composition of the loan portfolio, historical loan losses, specific impaired loans, availability and quality of collateral, age of the various portfolios, changes in local economic conditions, and loan performance and quality of the portfolio. Different assumptions used in evaluating the adequacy of the Bank’s allowance for loan losses could result in material changes in Financial’s financial condition and results of operations.

The allowance is based on two basic principles of accounting: (i) ASC 450 “Contingencies”, which requires that losses be accrued when they are probable of occurring and are reasonably estimable and (ii) ASC 310 “Receivables”, which requires that losses on impaired loans be accrued based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the loan balance. Guidelines for determining allowances for loan losses are also provided in the SEC Staff Accounting Bulletin No. 102 – “Selected Loan Loss Allowance Methodology and Documentation Issues” and the Federal Financial Institutions Examination Council’s interagency guidance, “Interagency Policy Statement on the Allowance for Loan and Lease Losses” (the “FFIEC Policy Statement”).

The Bank’s policy with respect to the methodology for determining the allowance for loan losses involves a higher degree of complexity and requires management to make subjective judgments that often require assumptions or estimates about uncertain matters. This critical policy and its assumptions are periodically reviewed with the Board of Directors.

See “Management Discussion and Analysis Results of Operations – Allowance and Provision for Loan Losses” below for further discussion of the allowance for loan losses.

Financial also considers valuation of other real estate owned (OREO) a critical accounting policy. OREO consists of properties acquired through foreclosure or deed in lieu of foreclosure. These properties are carried at fair value less estimated costs to sell at the date of foreclosure. Losses from the acquisition of property in full or partial satisfaction of loans are charged against the

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allowance for loan losses. Subsequent write-downs, if any, are charged against expense. Gains and losses on the sales of foreclosed properties are included in determining net income in the year of the sale. Operating costs after acquisition are expensed.

Overview

Financial is a bank holding company headquartered in Lynchburg, Virginia. Our primary business is retail banking which we conduct through our wholly-owned subsidiary, Bank of the James (which we refer to as the “Bank”). We conduct three other business activities: mortgage banking through the Bank’s Mortgage division (which we refer to as “Mortgage division”), investment services through the Bank’s Investment division (which we refer to as “Investment division”), and insurance activities through BOTJ Insurance, Inc., a subsidiary of the Bank, (which we refer to as “Insurance business”). Of these three other business activities, only the Mortgage division is material to the Bank’s results and operations.

The Bank is a Virginia banking corporation headquartered in Lynchburg, Virginia. The Bank was incorporated under the laws of the Commonwealth of Virginia as a state-chartered bank in 1998 and began banking operations in July 1999. The Bank was organized to engage in general retail and commercial banking business. The Bank is a community-oriented financial institution that provides varied banking services to individuals, small and medium-sized businesses, and professional concerns. Historically, our primary market area has been the Central Virginia, Region 2000 area, which encompasses the seven jurisdictions of the Town of Altavista, Amherst County, Appomattox County, the Town of Bedford, Bedford County, Campbell County, and the City of Lynchburg. Recently the Bank has begun to expand to other areas in Virginia, specifically Roanoke, Charlottesville, Harrisonburg, Blacksburg, Lexington and Rustburg. The Bank strives to provide its customers with products comparable to statewide regional banks located in its market area, while maintaining the prompt response time and level of service of a community bank. Management believes this operating strategy has particular appeal in the Bank’s market areas.

The Bank’s principal office is located at 828 Main Street, Lynchburg, Virginia 24504 and its telephone number is (434) 846-2000. The Bank also maintains a website at www.bankofthejames.bank.

Our operating results depend primarily upon the Bank’s net interest income, which is determined by the difference between (i) interest and dividend income on earning assets, which consist primarily of loans, investment securities and other investments, and (ii) interest expense on interest-bearing liabilities, which consist principally of deposits and other borrowings. The Bank’s net income also is affected by its provision for loan losses, as well as the level of its non-interest income, including gains on sales of loans held for sale and service charges, and its non-interest expenses, including salaries and employee benefits, occupancy expense, data processing expenses, Federal Deposit Insurance Corporation premiums, expense in complying with the Sarbanes-Oxley Act of 2002, miscellaneous other expenses, franchise taxes, and income taxes.

The Bank intends to enhance its profitability by increasing its market share in our service areas, providing additional services to its customers, and controlling costs.

The Bank services its banking customers through the following locations in Virginia:

Full-Service Branches

The main office located at 828 Main Street in Lynchburg (the “Main Street Office”),

A branch located at 5204 Fort Avenue in Lynchburg (the “Fort Avenue Branch”),

A branch located at 4698 South Amherst Highway in Amherst County (the “Madison Heights Branch”),

A branch located at 17000 Forest Road in Forest (the “Forest Branch”),

A branch located at 4935 Boonsboro Road, Suites C and D in Lynchburg (the “Boonsboro Branch”),

A branch located at 164 South Main Street, Amherst, Virginia (the “Amherst Branch”),

A branch located at 1405 Ole Dominion Boulevard in the Town of Bedford, Virginia, located off of Independence Boulevard (the “Bedford Branch”),

A branch located at 1110 Main Street, Altavista, Virginia (the “Altavista Branch”),

A branch located at 1391 South High Street, Harrisonburg, VA (the “Harrisonburg Branch”),

A branch located at 1745 Confederate Blvd, Appomattox, VA (the “Appomattox Branch”),

A branch located at 225 Merchant Walk Avenue, Charlottesville, VA (the “5th Street Station Branch”),

A branch located at 3562 Electric Road, Roanoke, VA (the “Roanoke Branch”),

A branch located at 45 South Main St., Lexington, VA (the “Lexington Branch”),

A branch located at 550 Water St., Charlottesville, VA (the “Water Street Branch”),

A branch located at 2101 Electric Rd, Roanoke, VA (the “Oak Grove Branch”), and

A branch located at 13 Village Highway, Rustburg, VA (the “Rustburg Branch”).

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Limited Service Branches

Westminster-Canterbury facilities located at 501 VES Road, Lynchburg, Virginia, and

Westminster-Canterbury facilities located at 250 Pantops Mountain Road, Charlottesville, Virginia.

Loan Production Offices

Residential mortgage loan production office located at the Forest Branch,

Residential mortgage loan production office located at 2001 South Main Street, Blacksburg, Virginia, and

Commercial, consumer and residential mortgage loan production office located at the Water Street Branch.

The Investment division and the Insurance business operate primarily out of offices located at the Main Street Office.

The Bank continuously evaluates areas located within our service areas to identify additional viable branch locations. Based on this ongoing evaluation, the Bank may acquire one or more additional suitable sites.

Subject to regulatory approval, the Bank may open additional branches during the next two fiscal years. Although numerous factors could influence the Bank’s expansion plans, the following discussion provides a general overview of the additional branch locations that the Bank currently is considering, including the following properties that we own and are holding for expansion:

Real property located in the Timberlake Road area of Campbell County (Lynchburg), Virginia. The Timberlake property is not suitable for its intended use as a branch bank. Management anticipates that it will be necessary to raze the current structures and replace it with appropriate new construction. The Bank estimates that the cost of improvements, furniture, fixtures, and equipment necessary to upfit and construct a branch at this location could be between $900,000 and $1,500,000.

Real property located at 4105 Boonsboro Road, Lynchburg, Virginia. This property is a former bank branch and with minor cosmetic improvements is suitable as is to be used as a bank branch. The Bank does not anticipate utilizing this location as a bank branch until mid 2022 at the earliest.

Although the Bank cannot predict with certainty the financial impact of each new branch, management generally anticipates that each new branch will become profitable within 12 to 18 months of operation.

Except as set forth herein, the Bank does not expect to purchase any significant property or equipment in the upcoming 12 months. Future branch openings are subject to regulatory approval.

OFF-BALANCE SHEET ARRANGEMENTS

The Bank is a party to various financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the balance sheets and could impact the overall liquidity and capital resources to the extent customers accept and/or use these commitments.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. A summary of the Bank’s commitments is as follows:

	September 30, 2021
	(in thousands)
Commitments to extend credit	$	170,567
Letters of Credit		4,336
Total	$	174,903

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Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on the Bank’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on the Bank’s credit evaluation of the customer.

The Bank has rate lock commitments to originate mortgage loans through its Mortgage Division. The Bank has entered into corresponding commitments with third party investors to sell each of these loans that close. No other obligation exists. As a result of these contractual relationships with these investors, the Bank is not exposed to losses nor will it ultimately realize gains related to its rate lock commitments due to changes in interest rates.

SUMMARY OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion represents management’s discussion and analysis of the financial condition of Financial as of September 30, 2021 and December 31, 2020 and the results of operations of Financial for the three and nine month periods ended September 30, 2021 and 2020. This discussion should be read in conjunction with the financial statements included elsewhere herein.

All financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

Financial Condition Summary

September 30, 2021 as Compared to December 31, 2020

Total assets were $942,631,000 on September 30, 2021 compared with $851,386,000 at December 31, 2020, an increase of 10.72%. The increase in total assets was primarily funded from the growth in deposits.

Total deposits increased from $764,967,000 as of December 31, 2020 to $853,829,000 on September 30, 2021, an increase of 11.62%. The increase resulted in large part from increases in the following deposit categories: non-interest-bearing demand deposits, NOW, money market, and savings accounts and was partially offset by a decrease in time deposits. The increase was attributable in part to stimulus funds and PPP loans received by our customers and an increased market share in the majority of our markets.

Total loans, excluding loans held for sale, decreased to $590,848,000 on September 30, 2021 from $609,090,000 on December 31, 2020, resulting from the forgiveness and payoff of PPP loans in addition to normal amortization, and was offset by a decrease in demand for commercial loans. Loans, excluding loans held for sale and net of deferred fees and costs and the allowance for loan losses, decreased to $583,572,000 on September 30, 2021 from $601,934,000 on December 31, 2020, a decrease of 3.05%. The following summarizes the position of the Bank’s loan portfolio as of the dates indicated by dollar amount and percentages (dollar amounts in thousands):

	September 30, 2021				December 31, 2020
	Amount		Percentage		Amount		Percentage
Commercial	$	116,923		19.79%	$	145,145		23.83%
Commercial Real Estate		327,665		55.45%		309,563		50.82%
Consumer		92,633		15.68%		92,344		15.16%
Residential		53,627		9.08%		62,038		10.19%
Total loans	$	590,848		100.00%	$	609,090		100.00%

Total nonperforming assets, which consist of non-accrual loans, loans past due 90 days or more and still accruing, and OREO decreased to $2,710,000 on September 30, 2021 from $3,168,000 on December 31, 2020. OREO decreased to $806,000 on September 30, 2021 from $1,105,000 on December 31, 2020. The decrease in OREO was due in large part to the sale of one large OREO property during the first quarter. Non-performing loans decreased slightly from $2,063,000 at December 31, 2020 to $1,904,000 at September 30, 2021.

As discussed in more detail below under “Results of Operations—Allowance and Provision for Loan Losses,” management has provided for the anticipated losses on these loans in the allowance for loan losses. Loan payments received on non-accrual loans are first applied to principal. When a loan is placed on non-accrual status there are several negative implications. First, all interest

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accrued but unpaid at the time of the classification is reversed and deducted from the interest income totals for the Bank. Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Third, there may be actual losses that necessitate additional provisions for loan losses charged against earnings.

As a result of the COVID-19 pandemic, we anticipate that our commercial, commercial real estate, residential and consumer borrowers may encounter economic difficulties, which could lead to increases in our levels of nonperforming assets, impaired loans and troubled debt restructurings. Any potential financial impacts are unknown at this time.

OREO represents real property acquired by the Bank for debts previously contracted, including through foreclosure or deeds in lieu of foreclosure. On December 31, 2020, the Bank was carrying three OREO properties on its books at a value of $1,105,000. During the nine months ended September 30, 2021, the Bank acquired two additional OREO property and disposed of two OREO properties, and as of September 30, 2021 the Bank is carrying three OREO properties at a value of $806,000. The OREO properties are available for sale and are being actively marketed.

The Bank had loans in the amount of $376,000 at September 30, 2021 classified as performing TDRs as compared to $392,000 at December 31, 2020. None of these TDRs were included in non-accrual loans. These loans have had their original terms modified to facilitate payment by the borrower. The loans have been classified as TDRs primarily due to a change to interest only payments and the maturity of these modified loans is primarily less than one year.

At the beginning of the COVID-19 pandemic, we developed relief programs to assist borrowers in financial need. Accordingly, we offered short-term modifications made in response to COVID-19 to certain borrowers who were current and otherwise not past due. These included short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, deferral of principal only (interest only payments), or other delays in payment that are insignificant.

The Bank modified a total of 191 loans. The principal balances of these loans on September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remain in deferment and all such previously deferred loans are current.

In accordance with the relief provisions of the CARES Act and the March 22, 2020 (revised April 2020) Joint Interagency Regulatory Guidance, the above modifications were not considered to be troubled debt restructurings and were excluded from the TDR discussion above. The TDR relief provisions provided for by the CARES Act were extended in December 2020 by the Consolidated Appropriations Act through the earlier of January 1, 2022 or 60 days after the national COVID-19 emergency terminates.

Management has reviewed loan segments that it believes could be adversely impacted by the COVID-19 pandemic, and identified the following segments: assisted living, education/childcare, entertainment, hospitality, oil & gas (gas stations), religious/charitable, restaurants, retail & services. At September 30, 2021, the loan balances in those segments were as follows:

Industry	Principal Balance ‎(in thousands)		Number ‎of Loans		Percent of ‎Total Loan ‎Portfolio
Assisted Living	$	7,455		11		1.26%
Education/Childcare		9,313		15		1.58%
Entertainment		5,586		19		0.95%
Hospitality		15,158		8		2.57%
Oil & Gas (Gas Stations)		716		10		0.12%
Religious/Charitable		17,674		35		2.99%
Restaurants		17,522		46		2.97%
Retail & Services		11,006		44		1.86%
Total	$	84,430		188		14.29%

Management continues to closely monitor loans in these categories.

Cash and cash equivalents increased to $147,296,000 on September 30, 2021 from $100,886,000 on December 31, 2020. Cash and cash equivalents consist of cash due from correspondents, cash in vault, and overnight investments (including federal funds sold). This increase was due in large part to an increase in deposits related to PPP loan funds, management’s decision to carry additional liquidity in order to accommodate the potential withdrawal of PPP loan proceeds, and cash from increased deposits. Cash and cash equivalents are subject to routine fluctuations in deposits, including fluctuations in transactional accounts and professional settlement accounts.

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Securities held-to-maturity were flat, decreasing slightly to $3,659,000 on September 30, 2021 from $3,671,000 on December 31, 2020. This decrease is a result of normal amortization of premiums within the held-to-maturity portfolio.

Securities available-for-sale, which are carried on the balance sheet at fair market value, increased to $152,598,000 on September 30, 2021, from $90,185,000 on December 31, 2020. During the nine months ended September 30, 2021, the Bank purchased $71,319,000 in available-for-sale securities, which was responsible for the increase in securities available-for sale. During the nine months ended September 30, 2021 the Bank did not sell any securities available-for-sale and received $6,177,000 in proceeds from calls, maturities, and paydowns of securities available-for-sale, which partially offset the increase.

Financial’s investment in Federal Home Loan Bank of Atlanta (FHLBA) stock totaled $426,000 at September 30, 2021, which decreased from $653,000 on December 31, 2020. FHLBA stock is generally viewed as a long-term investment and because there is no market for the stock other than other Federal Home Loan Banks or member institutions, FHLBA stock is viewed as a restricted security. Therefore, when evaluating FHLBA stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value.

Liquidity and Capital

At September 30, 2021, Financial, on a consolidated basis, had liquid assets of $299,594,000 in the form of cash, interest-bearing and noninterest-bearing deposits with banks, and available-for-sale investments. Of this amount, approximately $31,382,000 (representing current market value) of the available-for-sale securities are pledged as collateral with $23,165,000 pledged as security for public deposits, and $8,217,000 pledged as security on a line of credit the Bank may draw on from time to time to meet liquidity needs. This line of credit currently has a zero balance. Management believes that liquid assets were adequate at September 30, 2021. Management anticipates that additional liquidity will be provided by the growth in deposit accounts and loan repayments at the Bank. In addition, if additional liquidity is needed, the Bank has the ability to purchase federal funds on the open market, borrow from the FHLBA using loans or investments within the Bank’s portfolio as collateral, and to borrow from the Federal Reserve Bank’s discount window.

The COVID-19 pandemic could have a material negative impact on Financial’s short-term or long-term liquidity. For example, if customers unexpectedly draw down on existing lines of credit, our liquidity could be impacted. While we have not experienced any unusual pressure on our deposit balances or our liquidity position as a result of the COVID-19 pandemic, management is closely monitoring our sources and uses of funds in order to meet our cash flow requirements while maximizing profits. Based in part on recent loan activity including loans made pursuant to the PPP as discussed below under “Allowance and Provision for Loan Losses,” the Bank is monitoring liquidity to ensure it is able to fund future loans and withdrawals related to the use of PPP funds.

At September 30, 2021, the Bank had a leverage ratio of approximately 8.27%, a Tier 1 risk-based capital ratio and a CET1 ratio of approximately 11.28% and a total risk-based capital ratio of approximately 12.34%. As of September 30, 2021 and December 31, 2020, the Bank’s regulatory capital levels exceeded those established for well-capitalized institutions. The following table sets forth the minimum capital requirements and the Bank’s capital position as of September 30, 2021 and December 31, 2020:

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Bank Level Only Capital Ratios

Analysis of Capital for Bank of the James (Bank only)
(dollars in thousands)
	September 30,		December 31,
Analysis of Capital (in 000's)	2021		2020
Tier 1 capital
Common Stock	$	3,742	$	3,742
Surplus		22,325		22,325
Retained earnings		50,710		44,621
Total Tier 1 capital	$	76,777	$	70,688
Common Equity Tier 1 Capital (CET1)	$	76,777	$	70,688
Tier 2 capital
Allowance for loan losses	$	7,276	$	7,156
Total Tier 2 capital:	$	7,276	$	7,156
Total risk-based capital	$	84,053	$	77,844
Risk weighted assets	$	680,933	$	635,445
Average total assets	$	928,859	$	853,558

	Actual		Regulatory Benchmarks
			For Capital	For Well
	September 30,	December 31,	Adequacy	Capitalized
	2021	2020	Purposes (1)	Purposes
Capital Ratios:
Tier 1 capital to average total assets	8.27%	8.28%	4.000%	5.000%
Common Equity Tier 1 capital	11.28%	11.12%	7.000%	6.500%
Tier 1 risk-based capital ratio	11.28%	11.12%	8.500%	8.000%
Total risk-based capital ratio	12.34%	12.25%	10.500%	10.000%

(1)Includes the capital conservation buffer of 2.50% for all ratios, excluding the Tier 1 capital to average total assets ratio.

The above tables set forth the capital position and analysis for the Bank only. Because total assets on a consolidated basis are less than $3,000,000,000, Financial is not subject to the consolidated capital requirements imposed by the Bank Holding Company Act. Consequently, Financial does not calculate its financial ratios on a consolidated basis. If calculated, the capital ratios for the Company on a consolidated basis at September 30, 2021 would be slightly lower than those of the Bank because a portion of proceeds from the sale of notes previously issued by the holding company were contributed to the Bank as equity.

In July 2013, the Federal Reserve Board approved a final rule establishing a regulatory capital framework for smaller, less complex financial institutions. The rule was fully implemented on January 1, 2019 and implemented a capital conservation buffer of 2.5%. As a result, the Bank is required to have a minimum ratio of common equity Tier 1 capital to risk-weighted assets of 7.0% (inclusive of the capital conservation buffer) and a Tier 1 risk-based capital ratio of 8.5% (inclusive of the capital conservation buffer). Failure to maintain the capital conservation buffer will limit the ability of the Bank and Financial to pay dividends, repurchase shares or pay discretionary bonuses. The rule also raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and includes a minimum leverage ratio of 4% for all banking organizations.

On September 17, 2019 the Federal Deposit Insurance Corporation finalized a rule that introduced an optional simplified measure of capital adequacy for qualifying community banking organizations (i.e., the community bank leverage ratio (CBLR) framework), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework.

In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 9 percent, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets

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and liabilities. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital.

While the CBLR framework is currently available for banks to use in their September 30, 2021 Call Report, the Bank has elected not to opt into the CBLR framework at this time.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2021 and 2020

Earnings Summary

Financial had net income including all operating segments of $1,881,000 and $5,730,000 for the three and nine months ended September 30, 2021, compared to $1,454,000 and $3,270,000 for the comparable periods in 2020. Basic and diluted earnings per common share for the three and nine months ended September 30, 2021 were $0.40 and $1.21, compared to basic and diluted earnings per share of $0.30 and $0.68 for the three and nine months ended September 30, 2020.

The increase in net income for the three and nine months ended September 30, 2021, as compared to the prior year period was due primarily to a decrease in the loan loss provision, as discussed in more detail below, and, for the nine months ended September 30, 2021, was bolstered in part by an increase in non-interest income. In the three and nine month periods ended September 30, 2020, the Bank increased the provision for loan losses due to economic uncertainty caused by the onset of the COVID-19 pandemic. We anticipate that our net income through December 31, 2021 will continue to be positively impacted by the winding down of the PPP loan program. We further expect that net interest margins will remain compressed which will have a further negative impact on our earnings.

These operating results represent an annualized return on average stockholders’ equity of 11.03% and 11.58% for the three and nine months ended September 30, 2021, compared with 9.26% and 7.05% for the three and nine months ended September 30, 2020. This increase for the three and nine months ended September 30, 2021 was due to an increase in our net income. The Company had an annualized return on average assets of 0.80% and 0.85% for the three and nine months ended September 30, 2021 compared with 0.68% and 0.55% for the same periods in 2020. The increase for the three and nine months ended September 30, 2021 largely resulted from an increase in the Bank’s net income and was partially offset by an increase in assets.

See “Non-Interest Income” below for mortgage business segment discussion.

Interest Income, Interest Expense, and Net Interest Income

For the three months ended September 30, 2021, interest income decreased slightly to $7,315,000 from $7,338,000 for the same period in 2020. Despite a slight increase in yield on loans due to the accretion of PPP fees as PPP loans were forgiven, the increase in yield was offset by decreased loan balances. For the nine months ended September 30, 2021, interest income increased slightly to $21,914,000 from $21,907,000 for the same period in 2020. This increase also resulted from the accretion of PPP fees as PPP loans were forgiven but was offset by a decrease in the yield on loans. The average rate received on loans was 4.38% and 4.40% for the three and nine months ended September 30, 2021 as compared to 4.37% and 4.51% for the same periods in 2020. The rate on total average earning assets decreased for the three and nine months ended September 30, 2021 as compared to the three and nine months ended September 30, 2020 primarily because a decrease in the rates paid by borrowers on loans, particularly the lower yielding PPP loans.

Interest expense decreased to $493,000 and $1,634,000 for the three and nine months ended September 30, 2021 from $1,135,000 and $3,650,000 for the same periods in 2020, decreases of 56.56% and 55.23%. The decrease for the three and nine months resulted primarily from a decrease in interest rates paid on deposits. The Bank’s average rate paid on interest bearing deposits was 0.22% and 0.27% during the three and nine months ended September 30, 2021 as compared to 0.65% and 0.75% for the same periods in 2020.

The fundamental source of the Bank’s net revenue is net interest income, which is determined by the difference between (i) interest and dividend income on interest earning assets, which consist primarily of loans, investment securities and other investments, and (ii) interest expense on interest-bearing liabilities, which consist principally of deposits and other borrowings. Net interest income for the three and nine months ended September 30, 2021 of $6,822,000 and $20,280,000 increased from $6,203,000 and $18,257,000 for the same periods in 2020. The net interest margin was 3.11% and 3.10% for the three months ended September 30, 2021 and 2020, respectively. The increase was primarily attributable to the higher level of accretion of loan fees related to the PPP program in 2021. The net interest margin was 3.20% and 3.27% for the nine months ended September 30, 2021 and 2020, respectively. The

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decrease was primarily caused by the impact of lower-yielding PPP loans. As a result of the spread of COVID-19, economic uncertainties have arisen that are likely to negatively impact net interest margin. Other financial impacts could occur, though such potential impacts are unknown at this time.

Financial’s net interest margin analysis and average balance sheets are shown in Schedule I below.

Non-Interest Income

Non-interest income is comprised primarily of fees and charges on transactional deposit accounts, gains on sales of mortgage loans held for sale, commissions on sales of investments, fees generated from treasury management services, and bank-owned life insurance income. Non-interest income decreased to $2,822,000 for the three months ended September 30, 2021 from $3,064,000 for the same period in 2020. This decrease was primarily related to a decrease in gains on sale of loans held-for-sale. Non-interest income increased to $8,305,000 for the nine months ended September 30, 2021 from $8,039,000 for the same period in 2020, primarily driven by increases in gains on loans held-for-sale and service charges, fees, and commissions.

The Bank, through its Mortgage division, originates both conforming and non-conforming consumer residential mortgage loans in the markets we serve. As part of the Bank’s overall risk management strategy, all of the loans originated and closed by the Mortgage division are presold to major national mortgage banking or financial institutions. The Mortgage division assumes, except in limited circumstances such as first payment default, no credit or interest rate risk on these mortgages.

Purchase mortgage originations totaled $54,645,000 and $139,599,000 or 62.73% and 56.39% of the total mortgage loans originated in the three and nine months ended September 30, 2021 as compared to $48,997,000 and $114,135,000 or 57,68% and 54.66% of the total mortgage loans originated in the same periods in 2020. Management anticipates that in the short term purchase mortgage originations will continue to represent a majority of mortgage originations as they have in the recent past. However, management also believes that further decreases in long term market interest rates could trigger increased refinancing activity. While uncertainty remains, management expects mortgage rates to stay near historic lows for the foreseeable future.

Although mortgage rates fluctuated dramatically in the first quarter of 2020, rates generally decreased to near historic lows near the end of the first three months of 2020 and have remained at or near those lows through September 30, 2021. Because of uncertainty surrounding current and near-term economic conditions arising from the COVID-19 pandemic, management cannot predict future mortgage rates. Nevertheless, management expects that the Mortgage division’s reputation in Region 2000, steady residential real estate inventory and the recent hiring of additional mortgage loan originators in Roanoke, Harrisonburg and Charlottesville, and Blacksburg, will result in strong mortgage originations through the remainder of 2021. Management also believes that in the event that interest rates rise, revenue from the mortgage segment could be under pressure.

Our Investment division provides brokerage services through an agreement with a third-party broker-dealer. Pursuant to this arrangement, the third-party broker-dealer operates a service center adjacent to one of the branches of the Bank. The center is staffed by two dual employees of the Bank and the broker-dealer. Investment receives commissions on transactions generated and in some cases ongoing management fees such as mutual fund 12b-1 fees. The Investment division’s financial impact on our consolidated revenue has been immaterial. Although management cannot predict the financial impact of Investment with certainty, management anticipates the Investment division’s impact on noninterest income will remain immaterial in 2021.

The Bank provides insurance and annuity products to Bank customers and others, through the Bank’s Insurance subsidiary. The Bank has three employees that are licensed to sell insurance products through Insurance. Insurance generates minimal revenue and its financial impact on our consolidated revenue has been immaterial. Management anticipates that Insurance’s impact on noninterest income will remain immaterial in 2021.

Non-Interest Expense

Non-interest expense for the three and nine months ended September 30, 2021 increased to $7,298,000 and $21,424,000 from $6,744,000 and $19,876,000 for the same periods in 2020, increases of 8.21% and 7.79%, respectively. This increase resulted from increases in personnel expenses from variable compensation, occupancy expense, equipment expense, professional fees, marketing expense, and FDIC insurance expense. Total personnel expense was $4,093,000 and $11,901,000 for the three and nine month periods ended September 30, 2021 as compared to $3,713,000 and $11,040,000 for the same periods in 2020.

Allowance and Provision for Loan Losses

The allowance for loan losses represents an amount that, in our judgment, will be adequate to absorb probable losses inherent in the loan portfolio. The provision for loan losses increases the allowance, and loans charged-off, net of recoveries, reduce the

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allowance. The provision for the allowance for loan losses is charged to earnings to bring the total allowance to a level deemed appropriate by management and is based upon two components – specific impairment and general reserves. As discussed below, loans having a risk rating of 7 or below that are significantly past due, and the borrower’s performance and financial condition provide evidence that it is probable that the Bank will be unable to collect all amounts when due as well as all TDRs, are evaluated for specific impairment. The general reserve component is based on an evaluation of general economic conditions, actual and expected credit losses, and loan performance measures. Based on the application of the loan loss calculation, the Bank provided $0 to the allowance for loan losses for the three and nine month periods ended September 30, 2021. This compares to a provision of $700,000 and $2,348,000 for the comparable periods in 2020.

At September 30, 2021, the allowance for loan losses was 1.23% of total loans outstanding, versus 1.17% of total loans outstanding at December 31, 2020. The allowance to total loans, excluding PPP loans, increased to approximately 1.27% at September 30, 2021 as compared to approximately 1.25% at December 31, 2020. PPP loans are guaranteed in full by the U.S. Small Business Administration, and therefore, are excluded from the Company's allowance for loan losses calculation. Subsequent to the onset of the pandemic and throughout 2020, qualitative factors in the allowance for loan losses calculation were adjusted to account for the significant economic disruption and uncertainty caused by the virus. These qualitative adjustments resulted in significant provisions in the 2020 periods. While in 2021 the economy has showed some signs of leveling and stabilization, management believes significant uncertainty could remain, largely due to the majority of our markets being classified at high or substantial levels of transmission by the Center for Disease Control (CDC) as it relates to the delta variant in its most recent November 5, 2021 report. As a result of these opposing considerations and relatively minor changes within the Company's portfolio segments, the allowance increased marginally from year end to September 30, 2021 due to recoveries exceeding charge-offs and no provision was recorded during the three and nine months ended September 30, 2021. At September 30, 2021, management believed the allowance for loan losses was at a level commensurate with the overall risk exposure of the loan portfolio. However, if economic conditions deteriorate further due to the COVID-19 pandemic, certain borrowers may experience difficulty and the level of nonperforming loans, charge-offs and delinquencies could rise and require increases in the allowance for loan losses. The process of identifying potential credit losses is a subjective process. Therefore, the Company maintains a general reserve to cover credit losses within the portfolio. The methodology management uses to determine the adequacy of the allowance for loan losses includes the considerations below.

At the beginning of the COVID-19 pandemic, we developed relief programs to assist borrowers in financial need The March 22, 2020 (revised April 2020) statement issued by our banking regulators and titled the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), passed on March 27, 2020 and extended by the Consolidated Appropriations Act, provides that a qualified loan modification is exempt by law from classification as a TDR as defined by GAAP, from the period beginning March 1, 2020 until the earlier of January 1, 2022 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 outbreak declared by the President of the United States under the National Emergencies Act (50 U.S.C. §§1601 et seq.) terminates. Accordingly, we offered short-term modifications in response to COVID-19 to certain borrowers who were current and otherwise not past due. These included short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, short-term interest only payments, or other delays in payment that are insignificant.

Since the beginning of the pandemic in the spring of 2020, the Bank modified a total of 191 loans. The principal balances of these loans on September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remained in deferment. All previously modified loans have returned to current status.

In accordance with the March 22, 2020 (revised April 2020) Joint Interagency Regulatory Guidance as well as the legislative relief provision, the above modifications were not considered to be troubled debt restructurings and were excluded from the TDR discussion above.

Section 1102 of the CARES Act created the Paycheck Protection Program (“PPP”), which appropriated $349 billion (which was subsequently increased by an additional $320 billion including $60 billion set aside for small, midsize, and community lenders) in loans designed to provide a direct incentive for sole proprietors, independent contractors, self-employed persons, non-profits and small businesses with less than 500 employees, allowing for narrow exceptions with businesses greater than 500 employees, to keep their workers on the payroll. These loans will be fully forgiven by the Small Business Administration if the funds are used for payroll costs, interest on mortgages, rent, or utilities as long as at least 75% of the forgiven amount was used for payroll. Additionally, loan payments will also be deferred for ten months. The initial Program started on April 3, 2020 and ended on August 8, 2020. No collateral or personal guarantees were required. Neither the government nor lenders were permitted to charge the recipients any fees.

On December 27, 2020, President Trump signed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) into law to provide continued assistance to individuals and businesses that have been financially

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impacted by the ongoing coronavirus pandemic. Section 311 of the Economic Aid Act added a new temporary provision that authorizes the SBA to guarantee Paycheck Protection Program Second Draw Loans (the "PPP Second Draw Program"), under generally the same terms and conditions available under the PPP Under section 311, the SBA may guarantee loans under the PPP Second Draw Program through September 30, 2021 (''Second Draw PPP Loans'') to borrowers that previously received an initial PPP loan and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan. In addition, the Economic Aid Act permits individuals and business that did not receive an initial PPP loan to apply under the PPP Program.

The Bank began accepting applications from qualified customers on April 3, 2020 and over the course of the program provided over $102,600,000 in funding to over 894 clients through the PPP. The Bank processed 345 applications in 2021 before it stopped processing applications for PPP loans on May 12, 2021.

Charged-off loans, which are loans that management deems uncollectible, are charged against the allowance for loan losses and constitute a realized loss. Charged-off loans were $16,000 and $80,000 for the three and nine months ended September 30, 2021 as compared to $79,000 and $339,000 for the comparable periods in 2020. While a charged-off loan may subsequently be collected, such recoveries generally are realized over an extended period of time. In the three and nine months ended September 30, 2021, the Bank had recoveries of charged-off loans of $80,000 and $200,000 as compared with $38,000 and $55,000 for the comparable periods in 2020.

In light of the current economic environment, management continues its ongoing assessment of specific impairment in the Bank’s loan portfolio. As set forth in the tables below, the Bank’s allowance arising from the specific impairment evaluation as of September 30, 2021 was relatively unchanged as compared to December 31, 2020.

As shown in the table below, the total balance in the allowance increased, from $7,156,000 as of December 31, 2020 to $7,276,000 on September 30, 2021. The increase was solely due to recoveries exceeding charge-offs during the first nine months of 2021. The allowance for loan losses as a percent of loans increased to 1.23% as of September 30, 2021 from 1.17% as of December 31, 2020. The general reserve as a percentage of unimpaired loan balances increased to 1.24% (or 1.28% excluding PPP loans) as of September 30, 2021 as compared to 1.17% (or 1.25% excluding PPP loans) as of December 31, 2020. Management will continue to evaluate the adequacy of the allowance for loan losses as more economic data becomes available and as changes within the Company's portfolio are known. The effects of the pandemic may require the Company to fund increases in the allowance for loan losses in future periods.

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The following tables summarize the allowance activity for the periods indicated:

	Allowance for Loan Losses and Recorded Investment in Loans
	(dollars in thousands)
	As of and For the Nine Months Ended September 30, 2021
			Commercial
2021	Commercial		Real Estate		Consumer		Residential		Total
Allowance for Credit Losses:
Beginning Balance	$	2,001	$	3,550	$	868	$	737	$	7,156
Charge-Offs		(53)		—		(27)		—		(80)
Recoveries		107		70		22		1		200
Provision		(124)		87		(4)		41		—
Ending Balance		1,931		3,707		859		779		7,276
Ending Balance: Individually evaluated for impairment		—		—		15		—		15
Ending Balance: Collectively evaluated for impairment		1,931		3,707		844		779		7,261
Totals:	$	1,931	$	3,707	$	859	$	779	$	7,276
Financing Receivables:
Ending Balance: Individually evaluated for impairment		250		2,425		233		1,321		4,229
Ending Balance: Collectively evaluated for impairment		116,673		325,240		92,400		52,306		586,619
Totals:	$	116,923	$	327,665	$	92,633	$	53,627	$	590,848

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	Allowance for Loan Losses and Recorded Investment in Loans
	(dollars in thousands)
	As of and For the Year Ended December 31, 2020
			Commercial
2020	Commercial		Real Estate		Consumer		Residential		Total
Allowance for Credit Losses:
Beginning Balance	$	1,330	$	1,932	$	865	$	702	$	4,829
Charge-Offs		(96)		(224)		(75)		(53)		(448)
Recoveries		20		139		53		15		227
Provision		747		1,703		25		73		2,548
Ending Balance		2,001		3,550		868		737		7,156
Ending Balance: Individually evaluated for impairment		4		—		—		—		4
Ending Balance: Collectively evaluated for impairment		1,997		3,550		868		737		7,152
Totals:	$	2,001	$	3,550	$	868	$	737	$	7,156
Financing Receivables:
Ending Balance: Individually evaluated for impairment		345		2,782		343		1,347		4,817
Ending Balance: Collectively evaluated for impairment		144,800		306,781		92,001		60,691		604,273
Totals:	$	145,145	$	309,563	$	92,344	$	62,038	$	609,090

The following sets forth the reconciliation of the allowance for loan loss:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	(in thousands)				(in thousands)
	2021		2020		2021		2020
Balance, beginning of period	$	7,212	$	5,474	$	7,156	$	4,829
Provision for loan losses		—		760		—		1,648
Loans charged-off		(16)		(79)		(80)		(339)
Recoveries of loans charged-off		80		38		200		55
Net recoveries (charge-offs)		64		(41)		120		(284)
Balance, end of period	$	7,276	$	6,193	$	7,276	$	6,193

No nonaccrual loans were excluded from the impaired loan disclosures at September 30, 2021 and December 31, 2020. If interest on these loans had been accrued, such income cumulatively would have approximated $176,000 and $158,000 on September 30, 2021 and December 31, 2020, respectively. Loan payments received on nonaccrual loans are applied to principal. When a loan is placed on nonaccrual status there are several negative implications. First, all interest accrued but unpaid at the time of the classification is deducted from the interest income totals for the Bank. Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Third, there may be actual losses that necessitate additional provisions for credit losses charged against earnings.

The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis.

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Below is a summary and definition of the Bank’s risk rating categories:

RATING 1	Excellent
RATING 2	Above Average
RATING 3	Satisfactory
RATING 4	Acceptable / Low Satisfactory
RATING 5	Monitor
RATING 6	Special Mention
RATING 7	Substandard
RATING 8	Doubtful
RATING 9	Loss

We segregate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows:

“Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.

“Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.

“Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.

“Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.

“Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high.

“Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.

Income Taxes

For the three and nine months ended September 30, 2021, Financial had an income tax expense of $465,000 and $1,431,000 as compared to $369,000 and $802,000 for the three and nine months ended September 30, 2020. This represents an effective tax rate of 19.82% and 19.98% for the three and nine months ended September 30, 2021 as compared with 20.24% and 19.70% for the three and nine months ended September 30, 2020. Our effective rate was lower than the statutory corporate tax rate in all periods primarily because of federal income tax benefits resulting from the tax treatment of earnings on bank owned life insurance.

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Schedule I

Net Interest Margin Analysis

Average Balance Sheets

For the Quarter Ended September 30, 2021 and 2020

(dollars in thousands)

	2021					2020
	Average		Interest		Average	Average		Interest		Average
	Balance		Income/		Rates Earned/	Balance		Income/		Rates Earned/
	Sheet		Expense		Paid	Sheet		Expense		Paid
ASSETS
Loans, including fees (1) (2)	$	594,371	$	6,564	4.38%	$	625,847	$	6,889	4.37%
Loans held for sale		5,638		41	2.89%		8,881		69	3.08%
Fed funds sold		107,001		33	0.12%		75,044		13	0.07%
Interest-bearing bank balances		18,895		7	0.15%		18,643		15	0.32%
Securities (3)		142,670		668	1.86%		63,743		337	2.10%
Federal agency equities		1,208		4	1.31%		1,435		15	4.15%
CBB equity		116		—	—%		116		—	—%
Total earning assets		869,899		7,317	3.34%		793,709		7,338	3.67%
Allowance for loan losses		(7,242)					(6,273)
Non-earning assets		68,189					62,384
Total assets	$	930,846				$	849,820
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand interest-bearing	$	422,840	$	116	0.11%	$	346,963	$	141	0.16%
Savings		114,612		30	0.10%		95,666		36	0.15%
Time deposits		141,550		239	0.67%		181,270		844	1.85%
Total interest-bearing deposits		679,002		385	0.22%		623,899		1,021	0.65%
Other borrowed funds
Financing leases		3,677		26	2.81%		4,248		29	2.71%
Capital Notes		10,030		82	3.24%		10,019		85	3.37%
Total interest-bearing liabilities		692,709		493	0.28%		638,166		1,135	0.71%
Non-interest-bearing deposits		164,450					144,719
Other liabilities		6,030					4,626
Total liabilities		863,189					787,511
Stockholders’ equity		67,657					62,309
Total liabilities and Stockholders’ equity	$	930,846				$	849,820
Net interest income			$	6,824				$	6,203
Net interest margin					3.11%					3.10%
Interest spread					3.06%					2.96%

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(1)Net accretion or amortization of deferred loan fees and costs are included in interest income.

(2)Nonperforming loans are included in the average balances. However, interest income and yields calculated do not reflect any accrued interest associated with non-accrual loans.

(3)The interest income and yields calculated on securities have been tax affected to reflect any tax-exempt interest on municipal securities. Assumed income tax rates of 21% were used for the periods presented.

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Net Interest Margin Analysis

Average Balance Sheets

For the Nine Months Ended September 30, 2021 and 2020

(dollars in thousands)

	2021					2020
	Average		Interest		Average	Average		Interest		Average
	Balance		Income/		Rates Earned/	Balance		Income/		Rates Earned/
	Sheet		Expense		Paid	Sheet		Expense		Paid
ASSETS
Loans, including fees (1) (2)	$	605,314	$	19,943	4.40%	$	606,937	$	20,558	4.51%
Loans held for sale		5,777		146	3.38%		6,072		137	3.01%
Federal funds sold		97,762		67	0.09%		51,913		89	0.23%
Interest-bearing bank balances		18,793		26	0.18%		18,439		85	0.61%
Securities (3)		118,662		1,700	1.92%		59,358		990	2.22%
Federal agency equities		1,306		39	3.99%		1,411		48	4.53%
CBB equity		116		—	—%		116		—	—%
Total earning assets		847,730		21,921	3.46%		744,246		21,907	3.92%
Allowance for loan losses		(7,179)					(5,555)
Non-earning assets		65,838					59,415
Total assets	$	906,389				$	798,106
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand interest-bearing	$	391,298	$	332	0.11%	$	318,929	$	546	0.23%
Savings		106,009		87	0.11%		90,872		123	0.18%
Time deposits		146,580		890	0.81%		188,167		2,702	1.91%
Total interest-bearing deposits		643,887		1,309	0.27%		597,968		3,371	0.75%
Other borrowed funds
Financing leases		3,841		80	2.78%		4,334		87	2.67%
Capital Notes		10,028		245	3.27%		6,666		192	3.84%
Total interest-bearing liabilities		657,756		1,634	0.33%		608,968		3,650	0.80%
Non-interest-bearing deposits		164,974					122,041
Other liabilities		9,753					5,319
Total liabilities		832,483					736,328
Stockholders’ equity		65,434					61,778
Total liabilities and Stockholders’ equity	$	897,917				$	798,106
Net interest income			$	20,287				$	18,257
Net interest margin					3.20%					3.27%
Interest spread					3.13%					3.12%

 
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(1)    Net deferred loan fees and costs are included in interest income.

(2)    Nonperforming loans are included in the average balances. However, interest income and yields calculated do not reflect any accrued interest associated with non-accrual loans.

(3)    The interest income and yields calculated on securities have been tax affected to reflect any tax-exempt interest on municipal securities. Assumed income tax rate of 21% was used for the periods presented.

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52

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4.    Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Financial’s management, including Financial’s principal executive officer and principal financial officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, Financial’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that Financial files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There have been no significant changes during the quarter ended September 30, 2021, in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) or in other factors that could have significantly affected those controls subsequent to the date of our most recent evaluation of internal controls over financial reporting.

‎

53

PART II – OTHER INFORMATION

Item 1.    Legal Proceedings

The Company is not involved in any pending legal proceedings at this time, other than routine litigation incidental to its business.

Item 1A.    Risk Factors

For information regarding the Company’s risk factors, see Part I, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 29, 2021. There have been no material changes from risk factors as previously disclosed in Part 1 Item 1A of the Company’s Form 10-K for the year ended December 31, 2020.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

(a)    Not applicable.

(b)    On January 19, 2021, the Company’s board of directors approved a share repurchase program under which the Company is authorized to repurchase, from time to time as the Company deems appropriate, up to a total of 47,000 shares of the Company’s common stock. Repurchases may be made in the open market, through block trades, or otherwise, and in privately negotiated transactions.

The Company did not repurchase any shares during the quarter ended September 30, 2021.

‎

54

The following table provides information as of September 30, 2021 with respects to shares of common stock repurchased by the Company for the quarter then ended:

Beginning Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2021 through July 31, 2021	—		N/A	—	18,100
August 1, 2021 through August 31, 2021	—		N/A	—	18,100
September 1, 2021 through September 30, 2021	—		N/A	—	18,100
Total	—		N/A	—	18,100

Item 3.    Defaults Upon Senior Securities

Not applicable

Item 4.    Mine Safety Disclosures

Not applicable

Item 5.    Other Information

Not applicable

‎

55

Item 6.    Exhibits

Exhibit No.	Description of Exhibit
31.1	Certification of Robert R. Chapman III Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 12, 2021
31.2	Certification of J. Todd Scruggs Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 12, 2021
32.1	Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002, dated November 12, 2021
101	The following materials from Bank of the James Financial Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets (unaudited) as of September 30, 2021 and December 31, 2020; (ii) Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2021 and 2020; (iii) Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2021 and 2020 (iv) Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and 2020 (v) Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2021 and 2020; (vi) Notes to Unaudited Consolidated Financial Statements.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BANK OF THE JAMES FINANCIAL GROUP, INC.
Date: November 12, 2021	By /S/ Robert R. Chapman III Robert R. Chapman III, President (Principal Executive Officer)
Date: November 12, 2021	By /S/ J. Todd Scruggs J. Todd Scruggs, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer)

56

EX-31.1

Exhibit 31.1

Certification—Principal Executive Officer

I, Robert R. Chapman III, President of Bank of the James Financial Group, Inc. certify that:

(1) I have reviewed this Form 10-Q of Bank of the James Financial Group, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

(4) The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and;

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date:  November 12, 2021	By /S/  Robert R. Chapman III
	Robert R. Chapman III, President
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification—Principal Financial Officer and Principal Accounting Officer

I, J. Todd Scruggs, Secretary and Treasurer of Bank of the James Financial Group, Inc., certify that: 

(1) I have reviewed this Form 10-Q of Bank of the James Financial Group, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

(4) The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and;

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: November 12, 2021	By /S/  J. Todd Scruggs
	J. Todd Scruggs, Secretary and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies that this Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Bank of the James Financial Group, Inc.

	BANK OF THE JAMES FINANCIAL GROUP, INC.
Date: November 12, 2021	By /S/  Robert R. Chapman III
	Robert R. Chapman III, President
	(Principal Executive Officer)

Date: November 12, 2021	By /S/  J. Todd Scruggs
	J. Todd Scruggs, Secretary and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Nov. 12, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2021
Document Fiscal Period Focus	Q3
Entity Registrant Name	BANK OF THE JAMES FINANCIAL GROUP, INC.
Entity Incorporation, State or Country Code	VA
Entity File Number	001-35402
Entity Tax Identification Number	20-0500300
Entity Address, Address Line One	828 Main Street,
Entity Address, City or Town	Lynchburg
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24504
City Area Code	434
Local Phone Number	846-2000
Document Fiscal Year Focus	2021
Entity Central Index Key	0001275101
Title of 12(b) Security	Common Stock, 2.14 per share par value
Trading Symbol	BOTJ
Security Exchange Name	NASDAQ
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		4,740,657
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets
Cash and due from banks	$ 30,340	$ 31,683
Federal funds sold	116,956	69,203
Total cash and cash equivalents	147,296	100,886
Securities held-to-maturity (fair value of $4,028 in 2021 and $4,192 in 2020)	3,659	3,671
Securities available-for-sale, at fair value	152,298	90,185
Restricted stock, at cost	1,324	1,551
Loans, net of allowance for loan losses of $7,276 in 2021 and $7,156 in 2020	583,572	601,934
Loans held for sale	6,462	7,102
Premises and equipment, net	17,238	16,982
Interest receivable	2,106	2,350
Cash value - bank owned life insurance	18,670	16,355
Other real estate owned	806	1,105
Other assets	9,200	9,265
Total assets	942,631	851,386
Deposits
Noninterest bearing demand	163,510	143,345
NOW, money market and savings	549,989	463,506
Time	140,330	158,116
Total deposits	853,829	764,967
Capital notes	10,031	10,027
Interest payable	49	85
Other liabilities	9,820	9,575
Total liabilities	873,729	784,654
Commitments and Contingencies
Stockholders’ equity
Preferred stock; authorized 1,000,000 shares; none issued and outstanding
Common stock $2.14 par value; authorized 10,000,000 shares; issued and outstanding 4,740,657 and 4,339,436 as of September 30, 2021 and December 31, 2020	10,147	9,286
Additional paid-in-capital	37,244	30,989
Retained earnings	21,897	24,665
Accumulated other comprehensive (loss) income	(386)	1,792
Total stockholders’ equity	68,902	66,732
Total liabilities and stockholders’ equity	$ 942,631	$ 851,386

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Consolidated Balance Sheets [Abstract]
Securities held-to-maturity, fair value	$ 4,028	$ 4,192
Loans, allowance for loan losses	$ 7,276	$ 7,156
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 2.14	$ 2.14
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,740,657	4,339,436
Common stock, shares outstanding	4,740,657	4,339,436

XML

Consolidated Statements Of Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest Income
Loans	$ 6,605,000	$ 6,958,000	$ 20,089,000	$ 20,695,000
Securities
US Government and agency obligations	230,000	168,000	640,000	506,000
Mortgage backed securities	138,000	50,000	299,000	164,000
Municipals - taxable	234,000	93,000	572,000	248,000
Municipals - tax exempt	9,000	1,000	27,000	1,000
Dividends	4,000	15,000	39,000	48,000
Other (Corporates)	55,000	25,000	155,000	71,000
Interest bearing deposits	7,000	15,000	26,000	85,000
Federal Funds sold	33,000	13,000	67,000	89,000
Total interest income	7,315,000	7,338,000	21,914,000	21,907,000
Deposits
NOW, money market savings	146,000	177,000	419,000	669,000
Time Deposits	239,000	844,000	890,000	2,702,000
Finance leases	26,000	29,000	80,000	87,000
Capital notes	82,000	85,000	245,000	192,000
Total interest expense	493,000	1,135,000	1,634,000	3,650,000
Net interest income	6,822,000	6,203,000	20,280,000	18,257,000
Provision for loan losses		700,000		2,348,000
Net interest income after provision for loan losses	6,822,000	5,503,000	20,280,000	15,909,000
Noninterest income
Gain on sales of loans held for sale	2,091,000	2,459,000	6,175,000	5,586,000
Service charges, fees and commissions	612,000	498,000	1,803,000	1,500,000
Life insurance income	117,000	102,000	315,000	290,000
Other	2,000	5,000	12,000	19,000
Gain on sales and calls of securities, net				644,000
Total noninterest income	2,822,000	3,064,000	8,305,000	8,039,000
Noninterest expenses
Salaries and employee benefits	4,093,000	3,713,000	11,901,000	11,040,000
Occupancy	437,000	419,000	1,270,000	1,237,000
Equipment	626,000	560,000	1,883,000	1,738,000
Supplies	120,000	120,000	354,000	353,000
Professional, data processing, and other outside expense	1,029,000	990,000	2,978,000	2,884,000
Marketing	209,000	185,000	720,000	500,000
Credit expense	309,000	359,000	869,000	831,000
Other real estate expenses	1,000	15,000	74,000	135,000
FDIC insurance expense	137,000	76,000	425,000	220,000
Other	337,000	307,000	950,000	938,000
Total noninterest expenses	7,298,000	6,744,000	21,424,000	19,876,000
Income before income taxes	2,346,000	1,823,000	7,161,000	4,072,000
Income tax expense	465,000	369,000	1,431,000	802,000
Net Income	$ 1,881,000	$ 1,454,000	$ 5,730,000	$ 3,270,000
Weighted average shares outstanding - basic and diluted	4,740,657	4,773,380	4,750,235	4,776,523
Earnings per common share - basic and diluted	$ 0.40	$ 0.30	$ 1.21	$ 0.68

XML

Consolidated Statements Of Comprehensive Income - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net Income		$ 1,881,000	$ 1,454,000	$ 5,730,000	$ 3,270,000
Other comprehensive income (loss):
Unrealized gains (losses) on securities available-for-sale		(914,000)	213,000	(2,757,000)	3,498,000
Tax effect		192,000	(45,000)	579,000	(735,000)
Reclassification adjustment for gains included in net income	[1]				(644,000)
Tax effect	[2]				135,000
Other comprehensive (loss) income, net of tax		(722,000)	168,000	(2,178,000)	2,254,000
Comprehensive (loss) income		$ 1,159,000	$ 1,622,000	$ 3,552,000	$ 5,524,000

[1] Gains are included in “gain on sales and calls of securities, net” on the consolidated statements of income.

[2] The tax effect on these reclassifications is reflected in “income tax expense” on the consolidated statements of income.

XML

Consolidated Statements Of Cash Flows - USD ($)	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Cash flows from operating activities
Net Income	$ 1,881,000	$ 1,835,000	$ 1,454,000	$ 995,000	$ 5,730,000	$ 3,270,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					1,423,000	1,511,000
Stock based compensation expense					80,000	88,000
Net amortization and accretion of premiums and discounts on securities					284,000	299,000
Amortization of debt issuance costs					4,000
(Gain) on sales of available-for-sale securities						(644,000)
(Gain) on sales of loans held for sale	(2,091,000)		(2,459,000)		(6,175,000)	(5,586,000)
Proceeds from sales of loans held for sale					254,369,000	208,405,000
Origination of loans held for sale					(247,554,000)	(208,830,000)
Provision for loan losses			700,000			2,348,000	$ 2,548,000
Loss (gain) on sale of other real estate owned					66,000	(29,000)	(29,000)
Impairment of other real estate owned						137,000
Bank owned life insurance income	(117,000)		(102,000)		(315,000)	(290,000)
Decrease (increase) in interest receivable					244,000	(692,000)
Decrease (increase) in other assets					388,000	(518,000)
(Decrease) in interest payable					(36,000)	(33,000)
Increase (decrease) in other liabilities					424,000	(309,000)
Net cash provided by operating activities					8,932,000	(873,000)
Cash flows from investing activities
Purchases of securities available-for-sale					(71,319,000)	(34,702,000)
Proceeds from maturities, calls and paydowns of securities available-for-sale					6,177,000	8,629,000
Proceeds from sale of securities available-for-sale					0	13,312,000
Purchases of bank owned life insurance					(2,000,000)	(2,750,000)
Life insurance proceeds						588,000
Sale of Federal Home Loan Bank stock					227,000	(45,000)
Proceeds from sale of other real estate owned					344,000	844,000
Origination of loans, net of principal collected					18,251,000
Origination of loans, net of principal collected						(45,673,000)
Purchases of premises and equipment					(1,423,000)	(1,466,000)
Net cash (used in) investing activities					(49,743,000)	(61,263,000)
Cash flows from financing activities
Net increase in deposits					88,862,000	114,474,000
Principal payments on finance lease obligations					(259,000)	(244,000)
Repurchase of common stock					(427,000)	(275,000)
Dividends paid to common stockholders					(939,000)	(912,000)
Proceeds from sale of capital notes, net of issuance costs						10,026,000
Retirement of capital notes						(5,000,000)
Cash in lieu of fractional shares					(16,000)
Net cash provided by financing activities					87,221,000	118,069,000
Increase in cash and cash equivalents					46,410,000	55,933,000
Cash and cash equivalents at beginning of period		$ 100,886,000		$ 39,111,000	100,886,000	39,111,000	39,111,000
Cash and cash equivalents at end of period	$ 147,296,000		$ 95,044,000		147,296,000	95,044,000	100,886,000
Non cash transactions
Transfer of loans to other real estate owned					111,000	18,000	$ 18,000
Fair value adjustment for securities available-for-sale					(2,757,000)	2,854,000
Cash transactions
Cash paid for interest					1,670,000	3,683,000
Cash paid for income taxes					$ 2,050,000	$ 985,000

XML

Consolidated Statements Of Changes In Stockholders’ Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2019	$ 9,325,000	$ 31,225,000	$ 20,900,000	$ (5,000)	$ 61,445,000
Balance, shares at Dec. 31, 2019	4,357,436
Net Income			995,000		995,000
Dividends paid on common stock ($0.07 per share)			(304,000)		(304,000)
Repurchase of common stock	$ (39,000)	(236,000)			(275,000)
Repurchase of common stock, shares	(18,000)
Other comprehensive (loss) income				1,467,000	1,467,000
Balance at Mar. 31, 2020	$ 9,286,000	30,989,000	21,591,000	1,462,000	63,328,000
Balance, shares at Mar. 31, 2020	4,339,436
Balance at Dec. 31, 2019	$ 9,325,000	31,225,000	20,900,000	(5,000)	61,445,000
Balance, shares at Dec. 31, 2019	4,357,436
Net Income					3,270,000
Other comprehensive (loss) income					2,254,000
Balance at Sep. 30, 2020	$ 9,286,000	30,989,000	23,258,000	2,249,000	65,782,000
Balance, shares at Sep. 30, 2020	4,339,436
Balance at Mar. 31, 2020	$ 9,286,000	30,989,000	21,591,000	1,462,000	63,328,000
Balance, shares at Mar. 31, 2020	4,339,436
Net Income			821,000		821,000
Dividends paid on common stock ($0.07 per share)			(303,000)		(303,000)
Other comprehensive (loss) income				619,000	619,000
Balance at Jun. 30, 2020	$ 9,286,000	30,989,000	22,109,000	2,081,000	64,465,000
Balance, shares at Jun. 30, 2020	4,339,436
Net Income			1,454,000		1,454,000
Dividends paid on common stock ($0.07 per share)			(305,000)		(305,000)
Other comprehensive (loss) income				168,000	168,000
Balance at Sep. 30, 2020	$ 9,286,000	30,989,000	23,258,000	2,249,000	65,782,000
Balance, shares at Sep. 30, 2020	4,339,436
Balance at Dec. 31, 2020	$ 9,286,000	30,989,000	24,665,000	1,792,000	66,732,000
Balance, shares at Dec. 31, 2020	4,339,436
Net Income			1,835,000		1,835,000
Dividends paid on common stock ($0.07 per share)			(304,000)		(304,000)
Repurchase of common stock	$ (31,000)	(181,000)			(212,000)
Repurchase of common stock, shares	(14,600)
Other comprehensive (loss) income				(2,717,000)	(2,717,000)
Balance at Mar. 31, 2021	$ 9,255,000	30,808,000	26,196,000	(925,000)	65,334,000
Balance, shares at Mar. 31, 2021	4,324,836
Balance at Dec. 31, 2020	$ 9,286,000	30,989,000	24,665,000	1,792,000	66,732,000
Balance, shares at Dec. 31, 2020	4,339,436
Net Income					5,730,000
Other comprehensive (loss) income					(2,178,000)
Balance at Sep. 30, 2021	$ 10,147,000	37,244,000	21,897,000	(386,000)	68,902,000
Balance, shares at Sep. 30, 2021	4,740,657
Balance at Mar. 31, 2021	$ 9,255,000	30,808,000	26,196,000	(925,000)	65,334,000
Balance, shares at Mar. 31, 2021	4,324,836
Net Income			2,014,000		2,014,000
Dividends paid on common stock ($0.07 per share)			(303,000)		(303,000)
Repurchase of common stock	$ (31,000)	(184,000)			(215,000)
Repurchase of common stock, shares	(14,300)
10% Stock dividend	$ 923,000	6,620,000	(7,543,000)
10% Stock dividend, shares	430,121
Other comprehensive (loss) income				1,261,000	1,261,000
Balance at Jun. 30, 2021	$ 10,147,000	37,244,000	20,364,000	336,000	68,091,000
Balance, shares at Jun. 30, 2021	4,740,657
Net Income			1,881,000		1,881,000
Dividends paid on common stock ($0.07 per share)			(332,000)		(332,000)
Cash in lieu of fractional shares			(16,000)		(16,000)
Other comprehensive (loss) income				(722,000)	(722,000)
Balance at Sep. 30, 2021	$ 10,147,000	$ 37,244,000	$ 21,897,000	$ (386,000)	$ 68,902,000
Balance, shares at Sep. 30, 2021	4,740,657

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Consolidated Statements Of Changes In Stockholders’ Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Consolidated Statements Of Changes In Stockholders’ Equity [Abstract]
Dividend on common stock, per share	$ 0.07	$ 0.07	$ 0.07	$ 0.07	$ 0.07	$ 0.07
10% Stock dividend	10.00%

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Basis Of Presentation	9 Months Ended
	Sep. 30, 2021
Basis Of Presentation [Abstract]
Basis Of Presentation	Note 1 – Basis of Presentation The unaudited consolidated financial statements have been prepared by Bank of the James Financial Group, Inc. (“Financial” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. In management’s opinion the accompanying financial statements, which unless otherwise noted are unaudited, reflect all adjustments, consisting solely of normal recurring accruals, necessary for a fair presentation of the financial information as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 in conformity with accounting principles generally accepted in the United States of America. Additional information concerning the organization and business of Financial, accounting policies followed, and other related information is contained in Financial’s Annual Report on Form 10-K for the year ended December 31, 2020. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended December 31, 2020 included in Financial’s Annual Report on Form 10-K. Results for the three and nine month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Certain immaterial reclassifications have been made to prior period balances to conform to the current period presentation. The Company’s primary market area consists of the area commonly referred to as Region 2000 which encompasses the seven jurisdictions of the Town of Altavista, Amherst County, Appomattox County, the Town of Bedford, Bedford County, Campbell County, and the City of Lynchburg. Recently, the Company has expanded into Charlottesville, Roanoke, Blacksburg, Harrisonburg, Lexington, and Rustburg. Financial’s critical accounting policies include the evaluation of the allowance for loan losses which is based on management’s estimate of an amount that is adequate to absorb probable losses inherent in the loan portfolio of Bank of the James (the “Bank”), Financial’s wholly-owned subsidiary. The allowance for loan losses is established through a provision for loan losses based on available information including the composition of the loan portfolio, historical loan losses, specific impaired loans, availability and quality of collateral, age of the various portfolios, changes in local economic conditions, and loan performance and quality of the portfolio. Different assumptions used in evaluating the adequacy of the Bank’s allowance for loan losses could result in material changes in Financial’s financial condition and results of operations. The Bank’s policy with respect to the methodology for determining the allowance for loan losses involves a higher degree of complexity and requires management to make subjective judgments that often require assumptions or estimates about uncertain matters. This critical policy and its assumptions are periodically reviewed with the Board of Directors. Financial also considers valuation of other real estate owned (OREO) a critical accounting policy. OREO consists of properties acquired through foreclosure or deed in lieu of foreclosure. These properties are carried at fair value less estimated costs to sell at the date of foreclosure. Losses from the acquisition of property in full or partial satisfaction of loans are charged against the allowance for loan losses. Subsequent write-downs, if any, are charged against expense. Gains and losses on the sales of foreclosed properties are included in determining net income in the year of the sale. Operating costs after acquisition are expensed.

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Use Of Estimates	9 Months Ended
	Sep. 30, 2021
Use Of Estimates [Abstract]
Use Of Estimates	Note 2 – Use of Estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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Earnings Per Common Share (EPS)	9 Months Ended
	Sep. 30, 2021
Earnings Per Common Share (EPS) [Abstract]
Earnings Per Common Share (EPS)	‎ Note 3 – Earnings Per Common Share (EPS) The following is a summary of the earnings per share calculation for the three and nine months ended September 30, 2021 and 2020. Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Net income$ 1,881,000 $ 1,454,000 $ 5,730,000 $ 3,270,000Weighted average number of shares - basic and diluted 4,740,657 4,773,380 4,750,235 4,776,523Basic and diluted EPS$ 0.40 $ 0.30 $ 1.21 $ 0.68 In 2021 and 2020, all restricted stock units (RSUs) were excluded from calculating diluted earnings per share as the Company elected to settle units vesting in 2021 and 2020 wholly in cash. Going forward, management anticipates a cash settlement policy for all currently outstanding RSUs. There were no potentially dilutive shares outstanding in 2021 and 2020. Weighted average and per share amounts for all periods have been adjusted to reflect a 10% stock dividend declared on May 18, 2021.

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Stock Based Compensation	9 Months Ended
	Sep. 30, 2021
Stock Based Compensation [Abstract]
Stock Based Compensation	Note 4 – Stock Based Compensation Accounting standards require companies to recognize the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards. At the annual meeting of shareholders held on May 15, 2018, the shareholders approved the Bank of the James Financial Group, Inc. 2018 Equity Incentive Plan (the “2018 Incentive Plan”). The 2018 Incentive Plan permits the issuance of up to 250,000 shares of common stock for awards to key employees of the Company and its subsidiaries in the form of stock options, restricted stock, restricted stock units, stock awards and performance units. On January 2, 2019, the Company granted its first block of equity compensation under the 2018 Incentive Plan consisting of 24,500 restricted stock units. The recipients of restricted stock units do not receive shares of the Company’s stock immediately, but instead may receive shares, cash in lieu of shares, or a combination thereof upon satisfying the requisite service period specified by the terms and conditions of the grant. Additionally, the recipients of restricted stock units do not enjoy the rights of holder of the Company’s common stock until the units have vested and as such, they do not have voting rights or rights to nonforfeitable dividends. The related compensation expense is based on the fair value of the Company’s stock. RSUs vest over 3 years in thirds. The first one-third vested on January 2, 2020 and the second one-third vested on January 2, 2021. The value of the first two-thirds vested portions of the grant were settled with cash payments and no shares were issued. The total expense recognized for the nine months ended September 30, 2021 and 2020, in connection with the restricted stock unit awards was approximately $80,000 and $88,000 in each of the periods respectively. There were no forfeitures during the nine-month period ending September 30, 2021. At September 30, 2021, the unrecognized stock-based compensation expense related to unvested restricted stock units amounted to approximately $26,000. The unrecognized expense will be recognized ratably over the remaining vesting period of 0.25 years. The Company accounts for forfeitures as they occur.

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Fair Value Measurements	9 Months Ended
	Sep. 30, 2021
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 5 – Fair Value Measurements Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic of FASB ASC, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market and in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future ‎ Note 5 – Fair Value Measurements (continued) cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market and in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Fair Value on a Recurring Basis Securities Available-for-Sale Fair values of securities available-for sale are based on quoted prices available in an active market. If quoted prices are available, these securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. Currently, all of the Company’s securities are considered to be Level 2 securities. The following table summarizes the Company’s financial assets that were measured at fair value on a recurring basis during the period.‎ Note 5 – Fair Value Measurements (continued) Derivatives Assets/Liabilities – Interest Rate Lock Commitments (IRLCs) The Company recognizes IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 3. Carrying Value at September 30, 2021 (in thousands) Quoted Prices Significant Significant in Active Other Unobservable Balance as of Markets for Observable Inputs September 30, Identical Assets Inputs (Level 3)Description 2021 (Level 1) (Level 2) US Treasuries$ 2,009 $ — $ 2,009 $ —US agency obligations 58,029 — 58,029 —Mortgage-backed securities 34,446 — 34,446 —Municipals 45,956 — 45,956 —Corporates 11,858 — 11,858 — Total available-for-sale securities$ 152,298 $ — $ 152,298 $ —IRLCs - asset 175 — — 175Total assets at fair value$ 152,473 $ — $ 152,298 $ 175 Carrying Value at December 31, 2020 (in thousands) Quoted Prices Significant Significant in Active Other Unobservable Balance as of Markets for Observable Inputs December 31, Identical Assets Inputs (Level 3)Description2020 (Level 1) (Level 2) US Treasuries$ 2,027 $ — $ 2,027 $ —US agency obligations 41,320 — 41,320 —Mortgage-backed securities 15,696 — 15,696 —Municipals 24,773 — 24,773 —Corporates 6,369 — 6,369 — Total available-for-sale securities$ 90,185 $ — $ 90,185 $ —IRLCs – asset 425 — — 425Total assets at fair value$ 90,610 $ — $ 90,185 $ 425 The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value: ‎ Note 5 – Fair Value Measurements (continued) Quantitative information about Level 3 Fair Value Measurements for September 30, 2021 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets IRLCs - asset$ 175 Market approach Range of pull through rate 70% - 100% (85%) (1)    Weighted based on the relative value of the instruments Quantitative information about Level 3 Fair Value Measurements for December 31, 2020 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets IRLCs - asset$ 425 Market approach Range of pull through rate 70% - 100% (85%) (1)    Weighted based on the relative value of the instruments Fair Value on a Non-recurring Basis Impaired loans Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected when due. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Fair value is measured based on the value of the collateral securing the loans. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Bank using observable market data (Level 2). However, in situations where the collateral is a house or building in the process of construction, the appraisal is more than 12 months old, management has determined the fair value of the collateral is further impaired below the appraised value, or the appraisal is not based solely on market comparables adjusted for observable inputs, the value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income. ‎ Note 5 – Fair Value Measurements (continued) Loans held for sale Loans held for sale are carried at cost which approximates estimated fair value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during the period ended September 30, 2021. Gains and losses on the sale of loans are recorded within gains on sales of loans held for sale on the Consolidated Statements of Income. Other real estate owned Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. We believe that the fair value component in its valuation follows the provisions of ASC 820. Real estate acquired through foreclosure is transferred to OREO. The measurement of loss associated with OREO is based on the fair value of the collateral compared to the unpaid loan balance and anticipated costs to sell the property. The value of OREO property is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Bank using observable market data (Level 2). Any fair value adjustments are recorded in the period incurred and expensed against current earnings. However, in situations where the collateral is a house or building in the process of construction, the appraisal is more than 12 months old, management has determined the fair value of the collateral is further impaired below the appraised value, or the appraisal is not based solely on market comparables adjusted for observable inputs, the value is considered Level 3.‎ Note 5 – Fair Value Measurements (continued) The following table summarizes the Company’s impaired loans and OREO measured at fair value on a nonrecurring basis during the period (in thousands): Carrying Value at September 30, 2021DescriptionBalance as of September 30, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)Impaired loans*$ 1,970 $ — $ — $ 1,970Other real estate owned 806 — — 806 * Includes loans charged down to the net realizable value of the collateral. Carrying Value at December 31, 2020DescriptionBalance as of December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)Impaired loans*$ 1,829 $ — $ — $ 1,829Other real estate owned 1,105 — — 1,105 * Includes loans charged down to the net realizable value of the collateral. The following table sets forth information regarding the quantitative inputs used to value assets classified as Level 3: Quantitative information about Level 3 Fair Value Measurements for September 30, 2021 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets Impaired loans$ 1,970 Discounted appraised value Selling cost 0% - 10% (8%) Discount for lack of marketability and age of appraisal 0% - 20% (6%) OREO 806 Discounted appraised value Selling cost 10% Discount for lack of marketability and age of appraisal 0% - 25% (15%) (1)Weighted based on the relative value of the instruments. Quantitative information about Level 3 Fair Value Measurements for December 31, 2020 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets Impaired loans$ 1,829 Discounted appraised value Selling cost 0% - 10% (8%) Discount for lack of marketability and age of appraisal 0% - 20% (6%) OREO 1,105 Discounted appraised value Selling cost 10% Discount for lack of marketability and age of appraisal 0% - 25% (15%) (1)Weighted based on the relative value of the instruments. Note 5 – Fair Value Measurements (continued) Financial Instruments FASB ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The carrying amounts and estimated fair values of the Company’s financial instruments are presented in the following tables whether or not recognized on the Consolidated Balance Sheets at fair value.‎ Note 5 – Fair Value Measurements (continued) The estimated fair values, and related carrying or notional amounts, of Financial’s financial instruments and their placement in the fair value hierarchy at September 30, 2021 and December 31, 2020 was as follows (in thousands): Fair Value Measurements at September 30, 2021 using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs AssetsAmounts (Level 1) (Level 2) (Level 3) Balance Cash and due from banks$ 30,340 $ 30,340 $ — $ — $ 30,340 Fed funds sold 116,956 116,956 — — 116,956 Securities Available-for-sale 152,298 — 152,298 — 152,298 Held-to-maturity 3,659 — 4,028 — 4,028 Restricted stock 1,324 1,324 — 1,324 Loans, net (1) 583,572 — — 576,060 576,060 Loans held for sale 6,462 — 6,462 — 6,462 Interest receivable 2,106 — 2,106 — 2,106 BOLI 18,670 — 18,670 — 18,670 Derivatives - IRLCs 175 — — 175 175 Liabilities Deposits$ 853,829 $ — $ 854,458 $ — $ 854,458 Capital notes 10,031 — 9,480 — 9,480 Interest payable 49 — 49 — 49 Fair Value Measurements at December 31, 2020 using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs AssetsAmounts (Level 1) (Level 2) (Level 3) Balance Cash and due from banks$ 31,683 $ 31,683 $ — $ — $ 31,683 Fed funds sold 69,203 69,203 — — 69,203 Securities Available-for-sale 90,185 — 90,185 — 90,185 Held-to-maturity 3,671 — 4,192 — 4,192 Restricted stock 1,551 — 1,551 — 1,551 Loans, net (1) 601,934 — — 598,745 598,745 Loans held for sale 7,102 — 7,102 — 7,102 Interest receivable 2,350 — 2,350 — 2,350 BOLI 16,355 — 16,355 — 16,355 Derivatives - IRLCs 425 — — 425 425 Liabilities Deposits$ 764,967 $ — $ 766,212 $ — $ 766,212 Capital notes 10,027 — 9,003 — 9,003 Interest payable 85 — 85 — 85 (1)     Carrying amount is net of unearned income and the Allowance.

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Securities	9 Months Ended
	Sep. 30, 2021
Securities [Abstract]
Securities	Note 6 – Securities The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 Amortized Gross Unrealized Costs Gains (Losses) Fair ValueHeld-to-Maturity US agency obligations$ 3,659 $ 369 $ — $ 4,028 Available-for-Sale US Treasuries 2,000 9 — 2,009US agency obligations 58,242 793 (1,006) 58,029Mortgage-backed securities 34,659 120 (333) 34,446Municipals 46,229 399 (672) 45,956 Corporates 11,657 233 (32) 11,858 $ 152,787 $ 1,554 $ (2,043) $ 152,298 December 31, 2020 Amortized Gross Unrealized Costs Gains (Losses) Fair ValueHeld-to-Maturity US agency obligations$ 3,671 $ 521 $ — $ 4,192 Available-for-Sale US Treasuries 2,000 27 — 2,027US agency obligations 40,111 1,544 (335) 41,320Mortgage-backed securities 15,461 241 (6) 15,696Municipals 24,275 594 (96) 24,773Corporates 6,070 299 — 6,369 $ 87,917 $ 2,705 $ (437) $ 90,185 ‎ Note 6 – Securities (continued) The following tables show the gross unrealized losses and fair value of the Bank’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2021 and December 31, 2020 (amounts in thousands): Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair UnrealizedSeptember 30, 2021Value Losses Value Losses Value LossesDescription of securities Held-to-maturity US agency obligations$ — $ — $ — $ — $ — $ — Available-for-sale US Treasuries — — — — — — US agency obligations 29,945 675 6,467 331 36,412 1,006 Mortgage-backed securities 30,340 333 — — 30,340 333 Municipals 30,338 548 3,436 124 33,774 672 Corporates 1,968 32 — — 1,968 32Total $ 92,591 $ 1,588 $ 9,903 $ 455 $ 102,494 $ 2,043 Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair UnrealizedDecember 31, 2020Value Losses Value Losses Value LossesDescription of securities Held-to-maturity US agency obligations$ — $ — $ — $ — $ — $ — Available-for-sale US Treasuries — — — — — — US agency obligations 15,808 335 — — 15,808 335 Mortgage-backed securities 8,201 6 — — 8,201 6 Municipals 8,202 96 — — 8,202 96 Corporates — — — — — —Total $ 32,211 $ 437 $ — $ — $ 32,211 $ 437 Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and may do so more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) the intent of Financial, if any, to sell the security; (4) whether Financial more likely than not will be ‎ Note 6 – Securities (continued) required to sell the security before recovering its cost; and (5) whether Financial does not expect to recover the security’s entire amortized cost basis (even if Financial does not intend to sell the security). At September 30, 2021, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of September 30, 2021, the Bank owned 59 securities in an unrealized loss position that were being evaluated for other than temporary impairment. Of the securities, 23 were S&P rated AAA, 33 were rated AA, and three were rated A. As of September 30, 2021, 34 of these securities were municipal issues, 22 were backed by the US government, and three were issues of publicly traded domestic corporations. Based on the analysis performed by management as mandated by the Bank’s investment policy, management believes the default risk to be minimal. Because management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to change in interest rates and other market conditions, no declines currently are deemed to be other-than-temporary. There were no sales of available-for-sale securities during the nine months ended September 30, 2021 as compared to $13,312 in sales during the same period in 2020. In 2020, there were gross gains on sales of available-for-sale securities of $644 during the nine month period ended September 30, 2020. There were no sales of held-to-maturity securities during the nine month periods ended September 30, 2021 and 2020.

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Business Segments	9 Months Ended
	Sep. 30, 2021
Business Segments [Abstract]
Business Segments	Note 7 – Business Segments The Company has two reportable business segments: (i) a traditional full-service community banking segment and, (ii) a mortgage loan origination business. The community banking business segment includes Bank of the James which provides loans, deposits, investments and insurance to retail and commercial customers throughout Region 2000 and other areas within Central Virginia. The mortgage segment provides a variety of mortgage loan products principally within Region 2000. Mortgage loans are originated and sold in the secondary market through purchase commitments from investors with servicing released. Because of the pre-arranged purchase commitments, there is minimal risk to the Company. Both of the Company’s reportable segments are service based. The mortgage business is a gain on sale business while the Bank’s primary source of revenue is net interest income. The Bank also provides a referral network for the mortgage origination business. The mortgage business may also be in a position to refer its customers to the Bank for banking services when appropriate. Information about reportable business segments and reconciliation of such information to the consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 was as follows (dollars in thousands): Note 7 – Business Segments (continued) Business Segments Community Banking Mortgage TotalFor the three months ended September 30, 2021 Net interest income$ 6,822 $ — $ 6,822 Provision for loan losses — — — Net interest income after provision for loan losses 6,822 — 6,822 Noninterest income 731 2,091 2,822 Noninterest expenses 5,776 1,522 7,298 Income before income taxes 1,777 569 2,346 Income tax expense 345 120 465 Net income$ 1,432 $ 449 $ 1,881 Total assets$ 935,482 $ 7,149 $ 942,631 For the three months ended September 30, 2020 Net interest income$ 6,203 $ — $ 6,203 Provision for loan losses 700 — 700 Net interest income after provision for loan losses 5,503 — 5,503 Noninterest income 605 2,459 3,064 Noninterest expenses 5,322 1,422 6,744 Income before income taxes 786 1,037 1,823 Income tax expense 151 218 369 Net income$ 635 $ 819 $ 1,454 Total assets$ 838,425 $ 10,704 $ 849,129 Community Banking Mortgage TotalNine months ended September 30, 2021 Net interest income$ 20,280 $ — $ 20,280 Provision for loan losses — — — Net interest income after provision for loan losses 20,280 — 20,280 Noninterest income 2,130 6,175 8,305 Noninterest expenses 16,985 4,439 21,424 Income before income taxes 5,425 1,736 7,161 Income tax expense 1,066 365 1,431 Net income$ 4,359 $ 1,371 $ 5,730 Total assets$ 935,482 $ 7,149 $ 942,631 Nine months ended September 30, 2020 Net interest income$ 18,257 $ — $ 18,257 Provision for loan losses 2,348 — 2,348 Net interest income after provision for loan losses 15,909 — 15,909 Noninterest income 2,453 5,586 8,039 Noninterest expenses 16,271 3,605 19,876 Income before income taxes 2,091 1,981 4,072 Income tax expense 386 416 802 Net income$ 1,705 $ 1,565 $ 3,270 Total assets$ 838,425 $ 10,704 $ 849,129

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Loans, Allowance For Loan Losses And OREO	9 Months Ended
	Sep. 30, 2021
Loans, Allowance For Loan Losses And OREO [Abstract]
Loans, Allowance For Loan Losses And OREO	‎ Note 8 – Loans, allowance for loan losses and OREO Management has an established methodology used to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Bank has segmented certain loans in the portfolio by product type. Within these segments, the Bank has sub-segmented its portfolio into classes, based on the associated risks. The classifications set forth below do not correspond directly to the classifications set forth in the call report (Form FFIEC 041). Management has determined that the classifications set forth below are more appropriate for use in identifying and managing risk in the loan portfolio. Loan Segments: Loan Classes:Commercial Commercial and industrial loansCommercial real estate Commercial mortgages – owner occupied Commercial mortgages – non-owner occupied Commercial constructionConsumer Consumer unsecured Consumer securedResidential Residential mortgages Residential consumer construction A summary of loans, net is as follows (dollars in thousands): As of: September 30, December 31, 2021 2020Commercial$ 116,923 $ 145,145Commercial real estate 327,665 309,563Consumer 92,633 92,344Residential 53,627 62,038 Total loans (1) 590,848 609,090 Less allowance for loan losses 7,276 7,156 Net loans$ 583,572 $ 601,934 (1)Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively. The Bank’s internal risk rating system is in place to grade commercial and commercial real estate loans. Category ratings are reviewed periodically by lenders and the credit review area of the Bank based on the borrower’s individual situation. Additionally, internal and external monitoring and review of credits are conducted on an annual basis. ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Below is a summary and definition of the Bank’s risk rating categories: RATING 1 ExcellentRATING 2 Above AverageRATING 3 SatisfactoryRATING 4 Acceptable / Low SatisfactoryRATING 5 MonitorRATING 6 Special MentionRATING 7 SubstandardRATING 8 DoubtfulRATING 9 Loss We segregate loans into the above categories based on the following criteria and we review the characteristics of each rating at least annually, generally during the first quarter. The characteristics of these ratings are as follows: “Pass.” These are loans having risk ratings of 1 through 4. Pass loans are to persons or business entities with an acceptable financial condition, appropriate collateral margins, appropriate cash flow to service the existing loan, and an appropriate leverage ratio. The borrower has paid all obligations as agreed and it is expected that this type of payment history will continue. When necessary, acceptable personal guarantors support the loan.“Monitor.” These are loans having a risk rating of 5. Monitor loans have currently acceptable risk but may have the potential for a specific defined weakness in the borrower’s operations and the borrower’s ability to generate positive cash flow on a sustained basis. The borrower’s recent payment history may currently or in the future be characterized by late payments. The Bank’s risk exposure is mitigated by collateral supporting the loan. The collateral is considered to be well-margined, well maintained, accessible and readily marketable.“Special Mention.” These are loans having a risk rating of 6. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. These loans do warrant more than routine monitoring due to a weakness caused by adverse events.“Substandard.” These are loans having a risk rating of 7. Substandard loans are considered to have specific and well-defined weaknesses that jeopardize the viability of the Bank’s credit extension. The payment history for the loan has been inconsistent and the expected or projected primary repayment source may be inadequate to service the loan. The estimated net liquidation value of the collateral pledged and/or ability of the personal guarantor(s) to pay the loan may not adequately protect the Bank. There is a distinct possibility that the Bank will sustain some loss if the deficiencies associated with the loan are not corrected in the near term. A substandard loan would not automatically meet our definition of impaired unless the loan is significantly past due and the borrower’s performance and financial condition provides evidence that it is probable that the Bank will be unable to collect all amounts due.“Doubtful.” These are loans having a risk rating of 8. Doubtful rated loans have all the weaknesses inherent in a loan that is classified substandard but with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high.“Loss.” These are loans having a risk rating of 9. Loss rated loans are not considered collectible under normal circumstances and there is no realistic expectation for any future payment on the loan. Loss rated loans are fully charged off.‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Loans on Non-Accrual Status(dollars in thousands) As of September 30, 2021 December 31, 2020Commercial$ 293 $ 121Commercial Real Estate: Commercial Mortgages-Owner Occupied 650 940 Commercial Mortgages-Non-Owner Occupied 529 552 Commercial Construction — —Consumer Consumer Unsecured — — Consumer Secured 267 240Residential: Residential Mortgages 165 210 Residential Consumer Construction — — Totals$ 1,904 $ 2,063 We also classify other real estate owned (OREO) as a nonperforming asset. OREO represents real property owned by the Bank which was acquired through purchase at foreclosure or from the borrower through a deed in lieu of foreclosure. OREO decreased to $806 on September 30, 2021 from $1,105 on December 31, 2020. The following table represents the changes in OREO balance during the nine months ended September 30, 2021 and year ended December 31, 2020. OREO Changes(dollars in thousands) Nine Months Ended Year Ended September 30, 2021 December 31, 2020Balance at the beginning of the year (net)$ 1,105 $ 2,339Transfers from loans 111 18Capitalized costs — —Valuation adjustments — (437)Sales proceeds (344) (844)Gain (loss) on disposition (66) 29Balance at the end of the period (net)$ 806 $ 1,105 At September 30, 2021 and December 31, 2020, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. The Company held one residential real estate property in other real estate owned as of September 30, 2021 and no residential properties in OREO as of December 31, 2020.‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Impaired Loans (dollars in thousands) As of and For the Nine Months Ended September 30, 2021 Unpaid Average Interest Recorded Principal Related Recorded Income 2021Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 250 $ 305 $ — $ 296 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 60 60 — 202 2Residential Residential Mortgages 1,321 1,394 — 1,334 36 Residential Consumer Construction — — — — — With an Allowance Recorded: Commercial$ — $ — $ — $ 2 $ —Commercial Real Estate Commercial Mortgages-Owner Occupied — — — — — Commercial Mortgage Non-Owner Occupied — — — — — Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 173 180 15 87 1Residential Residential Mortgages — — — — — Residential Consumer Construction — — — — — Totals: Commercial$ 250 $ 305 $ — $ 298 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 233 240 15 289 3Residential Residential Mortgages 1,321 1,394 — 1,334 36 Residential Consumer Construction — — — — — $ 4,229 $ 4,734 $ 15 $ 4,525 $ 163 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income 2020Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 341 $ 341 $ — $ 405 $ 30Commercial Real Estate Commercial Mortgages-Owner Occupied 2,143 2,496 — 2,305 135 Commercial Mortgage Non-Owner Occupied 639 677 — 601 43 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 343 346 — 225 16Residential Residential Mortgages 1,347 1,415 — 1,319 62 Residential Consumer Construction — — — — — With an Allowance Recorded: Commercial$ 4 $ 4 $ 4 $ 6 $ —Commercial Real Estate Commercial Mortgages-Owner Occupied — — — 6 — Commercial Mortgage Non-Owner Occupied — — — 7 — Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured — — — — —Residential Residential Mortgages — — — 70 — Residential Consumer Construction — — — — — Totals: Commercial$ 345 $ 345 $ 4 $ 411 $ 30Commercial Real Estate Commercial Mortgages-Owner Occupied 2,143 2,496 — 2,311 135 Commercial Mortgage Non-Owner Occupied 639 677 — 608 43 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 343 346 — 225 16Residential Residential Mortgages 1,347 1,415 — 1,389 62 Residential Consumer Construction — — — — — $ 4,817 $ 5,279 $ 4 $ 4,944 $ 286 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Nine Months Ended September 30, 2021 Commercial 2021Commercial Real Estate Consumer Residential TotalAllowance for Credit Losses: Beginning Balance$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156 Charge-Offs (53) — (27) — (80) Recoveries 107 70 22 1 200 Provision (124) 87 (4) 41 —Ending Balance 1,931 3,707 859 779 7,276 Ending Balance: Individually evaluated for impairment — — 15 — 15 Ending Balance: Collectively evaluated for impairment 1,931 3,707 844 779 7,261 Totals:$ 1,931 $ 3,707 $ 859 $ 779 $ 7,276 Financing Receivables: Ending Balance: Individually evaluated for impairment 250 2,425 233 1,321 4,229 Ending Balance: Collectively evaluated for impairment 116,673 325,240 92,400 52,306 586,619 Totals:$ 116,923 $ 327,665 $ 92,633 $ 53,627 $ 590,848 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Commercial 2020Commercial Real Estate Consumer Residential TotalAllowance for Credit Losses: Beginning Balance$ 1,330 $ 1,932 $ 865 $ 702 $ 4,829 Charge-Offs (96) (224) (75) (53) (448) Recoveries 20 139 53 15 227 Provision 747 1,703 25 73 2,548Ending Balance 2,001 3,550 868 737 7,156 Ending Balance: Individually evaluated for impairment 4 — — — 4 Ending Balance: Collectively evaluated for impairment 1,997 3,550 868 737 7,152 Totals:$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156 Financing Receivables: Ending Balance: Individually evaluated for impairment 345 2,782 343 1,347 4,817 Ending Balance: Collectively evaluated for impairment 144,800 306,781 92,001 60,691 604,273 Totals:$ 145,145 $ 309,563 $ 92,344 $ 62,038 $ 609,090 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Age Analysis of Past Due Loans as of September 30, 2021 (dollars in thousands) Greater Recorded Investment 30-59 Days 60-89 Days than Total Past Total > 90 Days &2021Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 179 $ — $ 103 $ 282 $ 116,641 $ 116,923 $ —Commercial Real Estate: Commercial Mortgages- Owner Occupied 68 — 502 570 122,460 123,030 —Commercial Mortgages-Non-Owner Occupied 98 106 384 588 177,505 178,093 — Commercial Construction — — — — 26,542 26,542 —Consumer: Consumer Unsecured 12 — — 12 4,759 4,771 — Consumer Secured 172 53 258 483 87,379 87,862 —Residential: Residential Mortgages 238 — 165 403 34,291 34,694 — Residential Consumer Construction — — — — 18,933 18,933 —Total$ 767 $ 159 $ 1,412 $ 2,338 $ 588,510 $ 590,848 $ — Age Analysis of Past Due Loans as of December 31, 2020 (dollars in thousands) Greater Recorded Investment 30-59 Days 60-89 Days than Total Past Total > 90 Days &2020Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 157 $ — $ — $ 157 $ 144,988 $ 145,145 $ —Commercial Real Estate: Commercial Mortgages- Owner Occupied 38 — 842 880 107,342 108,222 —Commercial Mortgages-Non-Owner Occupied 252 116 394 762 170,307 171,069 — Commercial Construction — — — — 30,272 30,272 —Consumer: Consumer Unsecured 7 — — 7 3,764 3,771 — Consumer Secured 309 27 229 565 88,008 88,573 —Residential: Residential Mortgages 575 243 210 1,028 45,868 46,896 — Residential Consumer Construction — — — — 15,142 15,142 —Total$ 1,338 $ 386 $ 1,675 $ 3,399 $ 605,691 $ 609,090 $ — ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Credit Quality Information - by Class September 30, 2021 (dollars in thousands)2021 Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 104,909 $ 4,430 $ 7,294 $ 290 $ — $ 116,923Commercial Real Estate: Commercial Mortgages-Owner Occupied 113,498 3,309 4,265 1,958 — 123,030Commercial Mortgages-Non-Owner Occupied 174,834 2,547 59 653 — 178,093Commercial Construction 26,542 — — — — 26,542Consumer Consumer Unsecured 4,746 — 24 1 — 4,771Consumer Secured 87,474 — — 388 — 87,862Residential: Residential Mortgages 33,248 — — 1,446 — 34,694Residential Consumer Construction 18,933 — — — — 18,933 Totals$ 564,184 $ 10,286 $ 11,642 $ 4,736 $ — $ 590,848 Credit Quality Information - by Class December 31, 2020 (dollars in thousands) 2020Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 133,075 $ 4,332 $ 7,386 $ 352 $ — $ 145,145Commercial Real Estate: Commercial Mortgages-Owner Occupied 98,623 3,028 4,428 2,143 — 108,222Commercial Mortgages-Non -Owner Occupied 161,300 7,277 1,682 810 — 171,069Commercial Construction 30,272 — — — — 30,272Consumer Consumer Unsecured 3,740 — 30 1 — 3,771Consumer Secured 88,044 — — 529 — 88,573Residential: Residential Mortgages 45,441 — — 1,455 — 46,896Residential Consumer Construction 15,142 — — — — 15,142 Totals$ 575,637 $ 14,637 $ 13,526 $ 5,290 $ — $ 609,090 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Troubled Debt Restructurings (TDR) There were no loan modifications that would have been classified as TDRs during the three and nine months ended September 30, 2021 and 2020. There were no loan modifications classified as TDRs within the last twelve months that defaulted during the three and nine months ended September 30, 2021 and 2020. At September 30, 2021 and December 31, 2020, the Bank had no outstanding commitments to disburse additional funds on loans classified as TDRs. We have developed relief programs to assist borrowers in financial need due to the effects of the COVID-19 pandemic. Accordingly, we offered short-term modifications made in response to COVID-19 to certain borrowers who were current and otherwise not past due. These include short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, deferral of principal only (interest only payments), or other delays in payment that are insignificant. Since the beginning of the pandemic in the spring of 2020, the Bank has modified a total of 191 loans. The principal balances of these loans on September 30, 2021 (adjusted for payoffs) totaled approximately $76 million. As of September 30, 2021, none of the 191 previously modified loans remain in deferment and all such previously deferred loans are current. We are not currently evaluating any relationships for additional deferrals. In accordance with provisions of Section 4013 of the CARES Act (March 2020) and the Joint Interagency Regulatory Guidance (March 2020, revised April 2020), the above modifications were not considered to be TDRs. The CARES Act addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. The Interagency Guidance encouraged financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19 and explained that in consultation with the Financial Accounting Standards Board (FASB) staff, the federal banking agencies concluded that short-term modifications (e.g. six months or less) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not TDRs. In December 2020, the Consolidated Appropriations Act extended the period established by Section 4013 of the CARES Act for providing temporary relief from TDR classification to the earlier of January 1, 2022 or 60 days after the date when the national emergency concerning COVID-19 terminates.

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Revenue Recognition	9 Months Ended
	Sep. 30, 2021
Revenue Recognition [Abstract]
Revenue Recognition	‎ Note 9 – Revenue Recognition Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges on Deposit Accounts Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or at the end of the month through a direct charge to customers’ accounts. Fees, Exchange, and Other Service Charges Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, treasury services income and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Treasury services income primarily represents fees charged to customers for sweep, positive pay and lockbox services. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or at the end of the month. Other Other noninterest income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, safety deposit box rental fees, and other miscellaneous revenue streams. Commissions from the sale of mutual funds and other investments are recognized on trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value. Trailer revenue is recorded over time, usually monthly or quarterly, as net asset value is determined. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

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Recent Accounting Pronouncements And Other Authoritative Guidance	9 Months Ended
	Sep. 30, 2021
Recent Accounting Pronouncements And Other Authoritative Guidance [Abstract]
Recent Accounting Pronouncements	‎ Note 10 – Recent accounting pronouncements and other authoritative guidance In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (CECL). The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The FASB has issued multiple updates to ASU 2016-13 as codified in Topic 326, including ASU’s 2019-04, 2019-05, 2019-10, 2019-11, 2020-02, and 2020-03. These ASU’s have provided for various minor technical corrections and improvements to the codification as well as other transition matters. Smaller reporting companies who file with the U.S. Securities and Exchange Commission (SEC) and all other entities who do not file with the SEC are required to apply the guidance for fiscal years, and interim periods within those years, beginning after December 15, 2022. The Company is currently assessing the impact that ASU 2016-13 will have on its consolidated financial statements. The Company has contracted with an additional vendor in addition to its core processer and the implementation process has begun. It is anticipated that the Company will run the CECL methodology side by side with the current allowance methodology for approximately 12 months before full implementation. Effective November 25, 2019, the SEC adopted Staff Accounting Bulletin (SAB) 119. SAB 119 updated portions of SEC interpretative guidance to align with FASB ASC 326, “Financial Instruments – Credit Losses.” It covers topics including (1) measuring current expected credit losses; (2) development, governance, and documentation of a systematic methodology; (3) documenting the results of a systematic methodology; and (4) validating a systematic methodology. In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Subsequently, in January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2021-01 “Reference Rate Reform (Topic 848): Scope.” This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. An entity may elect to apply ASU No. 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued. An entity may elect to apply ASU No. 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company has identified a small number of affected loans and is evaluating other benchmarks to substitute for LIBOR such as SOFR. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loans. In August 2021, the FASB issued ASU 2021-06, “'Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants”. The ASU is effective upon addition to the FASB Codification. The Company does not expect the adoption of ASU 2021-06 to have a material impact on its consolidated financial statements.

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COVID-19 And Current Economic Conditions	9 Months Ended
	Sep. 30, 2021
COVID-19 And Current Economic Conditions [Abstract]
COVID-19 And Current Economic Conditions	‎ Note 11 - COVID-19 and Current Economic Conditions On March 11, 2020, the World Health Organization announced that the COVID-19 outbreak was deemed a pandemic, and on March 13, 2020, the President declared the ongoing COVID-19 pandemic of sufficient magnitude to warrant an emergency declaration. The extent of COVID-19's effect on the Company's operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, and when state and local economies will return to operational norms, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. In addition, we rely upon our third-party vendors to conduct business and to process, record and monitor transactions. If any of these vendors are unable to continue to provide us with these services, it could negatively impact our ability to serve our customers. Furthermore, the outbreak could negatively impact our employees and customers' ability to engage in banking and other financial transactions. We also could be adversely affected if key personnel or a significant number of employees were to become unavailable due to the effects and restrictions of a COVID-19 outbreak in our market areas. Management will continue to evaluate current economic conditions to determine the impact of the pandemic on the ability of our customers to fulfill their financial obligations to the Company, as well as the values of our financial and nonfinancial assets resulting from the market disruption. Accordingly, significant estimates used in the preparation of our financial statements including those associated with the evaluation of the allowance for loan losses as well as other valuation-based estimates may be subject to significant adjustments in future periods. As the full effects are not yet known, it is not currently possible to ascertain the overall impact of COVID-19 on the Company's business. However, as the pandemic continues to evolve into a prolonged worldwide health crisis, the pandemic could have a material adverse effect on the Company's business, results of operations, financial condition and cash flows.

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Capital Notes	9 Months Ended
	Sep. 30, 2021
Capital Notes [Abstract]
Capital Notes	‎ Note 12 – Capital Notes On April 13, 2020, the Company commenced a private placement of unregistered debt securities (the “2020 Offering”). In the 2020 Offering, the Company sold and closed $10,050,000 in principal of notes (the “2020 Notes”) during the 2nd and 3rd quarters of 2020. The 2020 Offering officially ended on July 8, 2020. The 2020 Notes bear interest at the rate of 3.25% per year with interest payable quarterly in arrears. The 2020 Notes will mature on September 30, 2025 and are subject to full or partial repayment on or after September 30, 2021. The balance of the 2020 Notes on the September 30, 2021 consolidated balance sheet is presented net of unamortized issuance costs. On September 24, 2020 the Bank used $5,000,000 of the proceeds for the payment of principal of the Company’s previously outstanding 4.00% notes that were issued in 2017. The Company intends to use the balance of the proceeds from the 2020 Offering for general corporate purposes at the discretion of Company’s management such as payment of interest on the 2020 Notes and as a contribution of additional capital to the Bank.

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Earnings Per Common Share (EPS) (Tables)	9 Months Ended
	Sep. 30, 2021
Earnings Per Common Share (EPS) [Abstract]
Earnings Per Share	Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Net income$ 1,881,000 $ 1,454,000 $ 5,730,000 $ 3,270,000Weighted average number of shares - basic and diluted 4,740,657 4,773,380 4,750,235 4,776,523Basic and diluted EPS$ 0.40 $ 0.30 $ 1.21 $ 0.68

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Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2021
Fair Value Assets Measured On Recurring Basis	Carrying Value at September 30, 2021 (in thousands) Quoted Prices Significant Significant in Active Other Unobservable Balance as of Markets for Observable Inputs September 30, Identical Assets Inputs (Level 3)Description 2021 (Level 1) (Level 2) US Treasuries$ 2,009 $ — $ 2,009 $ —US agency obligations 58,029 — 58,029 —Mortgage-backed securities 34,446 — 34,446 —Municipals 45,956 — 45,956 —Corporates 11,858 — 11,858 — Total available-for-sale securities$ 152,298 $ — $ 152,298 $ —IRLCs - asset 175 — — 175Total assets at fair value$ 152,473 $ — $ 152,298 $ 175 Carrying Value at December 31, 2020 (in thousands) Quoted Prices Significant Significant in Active Other Unobservable Balance as of Markets for Observable Inputs December 31, Identical Assets Inputs (Level 3)Description2020 (Level 1) (Level 2) US Treasuries$ 2,027 $ — $ 2,027 $ —US agency obligations 41,320 — 41,320 —Mortgage-backed securities 15,696 — 15,696 —Municipals 24,773 — 24,773 —Corporates 6,369 — 6,369 — Total available-for-sale securities$ 90,185 $ — $ 90,185 $ —IRLCs – asset 425 — — 425Total assets at fair value$ 90,610 $ — $ 90,185 $ 425
Impaired Loans And Other Real Estate Owned Measured At Fair Value On A Nonrecurring Basis	Carrying Value at September 30, 2021DescriptionBalance as of September 30, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)Impaired loans*$ 1,970 $ — $ — $ 1,970Other real estate owned 806 — — 806 * Includes loans charged down to the net realizable value of the collateral. Carrying Value at December 31, 2020DescriptionBalance as of December 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)Impaired loans*$ 1,829 $ — $ — $ 1,829Other real estate owned 1,105 — — 1,105 * Includes loans charged down to the net realizable value of the collateral.
Fair Value Carrying And Notional Amounts	Fair Value Measurements at September 30, 2021 using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs AssetsAmounts (Level 1) (Level 2) (Level 3) Balance Cash and due from banks$ 30,340 $ 30,340 $ — $ — $ 30,340 Fed funds sold 116,956 116,956 — — 116,956 Securities Available-for-sale 152,298 — 152,298 — 152,298 Held-to-maturity 3,659 — 4,028 — 4,028 Restricted stock 1,324 1,324 — 1,324 Loans, net (1) 583,572 — — 576,060 576,060 Loans held for sale 6,462 — 6,462 — 6,462 Interest receivable 2,106 — 2,106 — 2,106 BOLI 18,670 — 18,670 — 18,670 Derivatives - IRLCs 175 — — 175 175 Liabilities Deposits$ 853,829 $ — $ 854,458 $ — $ 854,458 Capital notes 10,031 — 9,480 — 9,480 Interest payable 49 — 49 — 49 Fair Value Measurements at December 31, 2020 using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs AssetsAmounts (Level 1) (Level 2) (Level 3) Balance Cash and due from banks$ 31,683 $ 31,683 $ — $ — $ 31,683 Fed funds sold 69,203 69,203 — — 69,203 Securities Available-for-sale 90,185 — 90,185 — 90,185 Held-to-maturity 3,671 — 4,192 — 4,192 Restricted stock 1,551 — 1,551 — 1,551 Loans, net (1) 601,934 — — 598,745 598,745 Loans held for sale 7,102 — 7,102 — 7,102 Interest receivable 2,350 — 2,350 — 2,350 BOLI 16,355 — 16,355 — 16,355 Derivatives - IRLCs 425 — — 425 425 Liabilities Deposits$ 764,967 $ — $ 766,212 $ — $ 766,212 Capital notes 10,027 — 9,003 — 9,003 Interest payable 85 — 85 — 85 (1)     Carrying amount is net of unearned income and the Allowance.
Fair Value, Recurring [Member]
Information Regarding Quantitative Inputs Used To Value Assets Classified As Level 3	Quantitative information about Level 3 Fair Value Measurements for September 30, 2021 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets IRLCs - asset$ 175 Market approach Range of pull through rate 70% - 100% (85%) (1)    Weighted based on the relative value of the instruments Quantitative information about Level 3 Fair Value Measurements for December 31, 2020 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets IRLCs - asset$ 425 Market approach Range of pull through rate 70% - 100% (85%) (1)    Weighted based on the relative value of the instruments
Fair Value, Nonrecurring [Member]
Information Regarding Quantitative Inputs Used To Value Assets Classified As Level 3	Quantitative information about Level 3 Fair Value Measurements for September 30, 2021 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets Impaired loans$ 1,970 Discounted appraised value Selling cost 0% - 10% (8%) Discount for lack of marketability and age of appraisal 0% - 20% (6%) OREO 806 Discounted appraised value Selling cost 10% Discount for lack of marketability and age of appraisal 0% - 25% (15%) (1)Weighted based on the relative value of the instruments. Quantitative information about Level 3 Fair Value Measurements for December 31, 2020 (dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) (1)Assets Impaired loans$ 1,829 Discounted appraised value Selling cost 0% - 10% (8%) Discount for lack of marketability and age of appraisal 0% - 20% (6%) OREO 1,105 Discounted appraised value Selling cost 10% Discount for lack of marketability and age of appraisal 0% - 25% (15%) (1)Weighted based on the relative value of the instruments.

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Securities (Tables)	9 Months Ended
	Sep. 30, 2021
Securities [Abstract]
Summary Of Securities Held-To-Maturity And Securities Available-For-Sale	September 30, 2021 Amortized Gross Unrealized Costs Gains (Losses) Fair ValueHeld-to-Maturity US agency obligations$ 3,659 $ 369 $ — $ 4,028 Available-for-Sale US Treasuries 2,000 9 — 2,009US agency obligations 58,242 793 (1,006) 58,029Mortgage-backed securities 34,659 120 (333) 34,446Municipals 46,229 399 (672) 45,956 Corporates 11,657 233 (32) 11,858 $ 152,787 $ 1,554 $ (2,043) $ 152,298 December 31, 2020 Amortized Gross Unrealized Costs Gains (Losses) Fair ValueHeld-to-Maturity US agency obligations$ 3,671 $ 521 $ — $ 4,192 Available-for-Sale US Treasuries 2,000 27 — 2,027US agency obligations 40,111 1,544 (335) 41,320Mortgage-backed securities 15,461 241 (6) 15,696Municipals 24,275 594 (96) 24,773Corporates 6,070 299 — 6,369 $ 87,917 $ 2,705 $ (437) $ 90,185
Gross Unrealized Losses And Fair Value Of The Bank’s Investments	Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair UnrealizedSeptember 30, 2021Value Losses Value Losses Value LossesDescription of securities Held-to-maturity US agency obligations$ — $ — $ — $ — $ — $ — Available-for-sale US Treasuries — — — — — — US agency obligations 29,945 675 6,467 331 36,412 1,006 Mortgage-backed securities 30,340 333 — — 30,340 333 Municipals 30,338 548 3,436 124 33,774 672 Corporates 1,968 32 — — 1,968 32Total $ 92,591 $ 1,588 $ 9,903 $ 455 $ 102,494 $ 2,043 Less than 12 months More than 12 months Total Fair Unrealized Fair Unrealized Fair UnrealizedDecember 31, 2020Value Losses Value Losses Value LossesDescription of securities Held-to-maturity US agency obligations$ — $ — $ — $ — $ — $ — Available-for-sale US Treasuries — — — — — — US agency obligations 15,808 335 — — 15,808 335 Mortgage-backed securities 8,201 6 — — 8,201 6 Municipals 8,202 96 — — 8,202 96 Corporates — — — — — —Total $ 32,211 $ 437 $ — $ — $ 32,211 $ 437

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Business Segments (Tables)	3 Months Ended
	Sep. 30, 2021
Business Segments [Abstract]
Schedule Of Segment Reporting Information, By Segment	Business Segments Community Banking Mortgage TotalFor the three months ended September 30, 2021 Net interest income$ 6,822 $ — $ 6,822 Provision for loan losses — — — Net interest income after provision for loan losses 6,822 — 6,822 Noninterest income 731 2,091 2,822 Noninterest expenses 5,776 1,522 7,298 Income before income taxes 1,777 569 2,346 Income tax expense 345 120 465 Net income$ 1,432 $ 449 $ 1,881 Total assets$ 935,482 $ 7,149 $ 942,631 For the three months ended September 30, 2020 Net interest income$ 6,203 $ — $ 6,203 Provision for loan losses 700 — 700 Net interest income after provision for loan losses 5,503 — 5,503 Noninterest income 605 2,459 3,064 Noninterest expenses 5,322 1,422 6,744 Income before income taxes 786 1,037 1,823 Income tax expense 151 218 369 Net income$ 635 $ 819 $ 1,454 Total assets$ 838,425 $ 10,704 $ 849,129 Community Banking Mortgage TotalNine months ended September 30, 2021 Net interest income$ 20,280 $ — $ 20,280 Provision for loan losses — — — Net interest income after provision for loan losses 20,280 — 20,280 Noninterest income 2,130 6,175 8,305 Noninterest expenses 16,985 4,439 21,424 Income before income taxes 5,425 1,736 7,161 Income tax expense 1,066 365 1,431 Net income$ 4,359 $ 1,371 $ 5,730 Total assets$ 935,482 $ 7,149 $ 942,631 Nine months ended September 30, 2020 Net interest income$ 18,257 $ — $ 18,257 Provision for loan losses 2,348 — 2,348 Net interest income after provision for loan losses 15,909 — 15,909 Noninterest income 2,453 5,586 8,039 Noninterest expenses 16,271 3,605 19,876 Income before income taxes 2,091 1,981 4,072 Income tax expense 386 416 802 Net income$ 1,705 $ 1,565 $ 3,270 Total assets$ 838,425 $ 10,704 $ 849,129

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Loans And Allowance For Loan Losses (Tables)	9 Months Ended
	Sep. 30, 2021
Loans, Allowance For Loan Losses And OREO [Abstract]
Summary Of Loans, Net	As of: September 30, December 31, 2021 2020Commercial$ 116,923 $ 145,145Commercial real estate 327,665 309,563Consumer 92,633 92,344Residential 53,627 62,038 Total loans (1) 590,848 609,090 Less allowance for loan losses 7,276 7,156 Net loans$ 583,572 $ 601,934 (1)Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.
Loans On Non-Accrual Status	As of September 30, 2021 December 31, 2020Commercial$ 293 $ 121Commercial Real Estate: Commercial Mortgages-Owner Occupied 650 940 Commercial Mortgages-Non-Owner Occupied 529 552 Commercial Construction — —Consumer Consumer Unsecured — — Consumer Secured 267 240Residential: Residential Mortgages 165 210 Residential Consumer Construction — — Totals$ 1,904 $ 2,063
Changes In OREO Balance	Nine Months Ended Year Ended September 30, 2021 December 31, 2020Balance at the beginning of the year (net)$ 1,105 $ 2,339Transfers from loans 111 18Capitalized costs — —Valuation adjustments — (437)Sales proceeds (344) (844)Gain (loss) on disposition (66) 29Balance at the end of the period (net)$ 806 $ 1,105
Impaired Loans	Impaired Loans (dollars in thousands) As of and For the Nine Months Ended September 30, 2021 Unpaid Average Interest Recorded Principal Related Recorded Income 2021Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 250 $ 305 $ — $ 296 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 60 60 — 202 2Residential Residential Mortgages 1,321 1,394 — 1,334 36 Residential Consumer Construction — — — — — With an Allowance Recorded: Commercial$ — $ — $ — $ 2 $ —Commercial Real Estate Commercial Mortgages-Owner Occupied — — — — — Commercial Mortgage Non-Owner Occupied — — — — — Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 173 180 15 87 1Residential Residential Mortgages — — — — — Residential Consumer Construction — — — — — Totals: Commercial$ 250 $ 305 $ — $ 298 $ 14Commercial Real Estate Commercial Mortgages-Owner Occupied 1,931 2,294 — 2,037 91 Commercial Mortgage Non-Owner Occupied 494 501 — 567 19 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 233 240 15 289 3Residential Residential Mortgages 1,321 1,394 — 1,334 36 Residential Consumer Construction — — — — — $ 4,229 $ 4,734 $ 15 $ 4,525 $ 163 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Impaired Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income 2020Investment Balance Allowance Investment RecognizedWith No Related Allowance Recorded: Commercial$ 341 $ 341 $ — $ 405 $ 30Commercial Real Estate Commercial Mortgages-Owner Occupied 2,143 2,496 — 2,305 135 Commercial Mortgage Non-Owner Occupied 639 677 — 601 43 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 343 346 — 225 16Residential Residential Mortgages 1,347 1,415 — 1,319 62 Residential Consumer Construction — — — — — With an Allowance Recorded: Commercial$ 4 $ 4 $ 4 $ 6 $ —Commercial Real Estate Commercial Mortgages-Owner Occupied — — — 6 — Commercial Mortgage Non-Owner Occupied — — — 7 — Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured — — — — —Residential Residential Mortgages — — — 70 — Residential Consumer Construction — — — — — Totals: Commercial$ 345 $ 345 $ 4 $ 411 $ 30Commercial Real Estate Commercial Mortgages-Owner Occupied 2,143 2,496 — 2,311 135 Commercial Mortgage Non-Owner Occupied 639 677 — 608 43 Commercial Construction — — — — —Consumer Consumer Unsecured — — — — — Consumer Secured 343 346 — 225 16Residential Residential Mortgages 1,347 1,415 — 1,389 62 Residential Consumer Construction — — — — — $ 4,817 $ 5,279 $ 4 $ 4,944 $ 286
Allowance For Loan Losses And Recorded Investment In Loans	Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Nine Months Ended September 30, 2021 Commercial 2021Commercial Real Estate Consumer Residential TotalAllowance for Credit Losses: Beginning Balance$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156 Charge-Offs (53) — (27) — (80) Recoveries 107 70 22 1 200 Provision (124) 87 (4) 41 —Ending Balance 1,931 3,707 859 779 7,276 Ending Balance: Individually evaluated for impairment — — 15 — 15 Ending Balance: Collectively evaluated for impairment 1,931 3,707 844 779 7,261 Totals:$ 1,931 $ 3,707 $ 859 $ 779 $ 7,276 Financing Receivables: Ending Balance: Individually evaluated for impairment 250 2,425 233 1,321 4,229 Ending Balance: Collectively evaluated for impairment 116,673 325,240 92,400 52,306 586,619 Totals:$ 116,923 $ 327,665 $ 92,633 $ 53,627 $ 590,848 ‎ Note 8 – Loans, allowance for loan losses and OREO (continued) Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) As of and For the Year Ended December 31, 2020 Commercial 2020Commercial Real Estate Consumer Residential TotalAllowance for Credit Losses: Beginning Balance$ 1,330 $ 1,932 $ 865 $ 702 $ 4,829 Charge-Offs (96) (224) (75) (53) (448) Recoveries 20 139 53 15 227 Provision 747 1,703 25 73 2,548Ending Balance 2,001 3,550 868 737 7,156 Ending Balance: Individually evaluated for impairment 4 — — — 4 Ending Balance: Collectively evaluated for impairment 1,997 3,550 868 737 7,152 Totals:$ 2,001 $ 3,550 $ 868 $ 737 $ 7,156 Financing Receivables: Ending Balance: Individually evaluated for impairment 345 2,782 343 1,347 4,817 Ending Balance: Collectively evaluated for impairment 144,800 306,781 92,001 60,691 604,273 Totals:$ 145,145 $ 309,563 $ 92,344 $ 62,038 $ 609,090
Age Analysis Of Past Due Financing Receivables	Age Analysis of Past Due Loans as of September 30, 2021 (dollars in thousands) Greater Recorded Investment 30-59 Days 60-89 Days than Total Past Total > 90 Days &2021Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 179 $ — $ 103 $ 282 $ 116,641 $ 116,923 $ —Commercial Real Estate: Commercial Mortgages- Owner Occupied 68 — 502 570 122,460 123,030 —Commercial Mortgages-Non-Owner Occupied 98 106 384 588 177,505 178,093 — Commercial Construction — — — — 26,542 26,542 —Consumer: Consumer Unsecured 12 — — 12 4,759 4,771 — Consumer Secured 172 53 258 483 87,379 87,862 —Residential: Residential Mortgages 238 — 165 403 34,291 34,694 — Residential Consumer Construction — — — — 18,933 18,933 —Total$ 767 $ 159 $ 1,412 $ 2,338 $ 588,510 $ 590,848 $ — Age Analysis of Past Due Loans as of December 31, 2020 (dollars in thousands) Greater Recorded Investment 30-59 Days 60-89 Days than Total Past Total > 90 Days &2020Past Due Past Due 90 Days Due Current Loans AccruingCommercial$ 157 $ — $ — $ 157 $ 144,988 $ 145,145 $ —Commercial Real Estate: Commercial Mortgages- Owner Occupied 38 — 842 880 107,342 108,222 —Commercial Mortgages-Non-Owner Occupied 252 116 394 762 170,307 171,069 — Commercial Construction — — — — 30,272 30,272 —Consumer: Consumer Unsecured 7 — — 7 3,764 3,771 — Consumer Secured 309 27 229 565 88,008 88,573 —Residential: Residential Mortgages 575 243 210 1,028 45,868 46,896 — Residential Consumer Construction — — — — 15,142 15,142 —Total$ 1,338 $ 386 $ 1,675 $ 3,399 $ 605,691 $ 609,090 $ —
Credit Quality Information-By Class	Credit Quality Information - by Class September 30, 2021 (dollars in thousands)2021 Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 104,909 $ 4,430 $ 7,294 $ 290 $ — $ 116,923Commercial Real Estate: Commercial Mortgages-Owner Occupied 113,498 3,309 4,265 1,958 — 123,030Commercial Mortgages-Non-Owner Occupied 174,834 2,547 59 653 — 178,093Commercial Construction 26,542 — — — — 26,542Consumer Consumer Unsecured 4,746 — 24 1 — 4,771Consumer Secured 87,474 — — 388 — 87,862Residential: Residential Mortgages 33,248 — — 1,446 — 34,694Residential Consumer Construction 18,933 — — — — 18,933 Totals$ 564,184 $ 10,286 $ 11,642 $ 4,736 $ — $ 590,848 Credit Quality Information - by Class December 31, 2020 (dollars in thousands) 2020Pass Monitor Special‎Mention Substandard Doubtful TotalsCommercial$ 133,075 $ 4,332 $ 7,386 $ 352 $ — $ 145,145Commercial Real Estate: Commercial Mortgages-Owner Occupied 98,623 3,028 4,428 2,143 — 108,222Commercial Mortgages-Non -Owner Occupied 161,300 7,277 1,682 810 — 171,069Commercial Construction 30,272 — — — — 30,272Consumer Consumer Unsecured 3,740 — 30 1 — 3,771Consumer Secured 88,044 — — 529 — 88,573Residential: Residential Mortgages 45,441 — — 1,455 — 46,896Residential Consumer Construction 15,142 — — — — 15,142 Totals$ 575,637 $ 14,637 $ 13,526 $ 5,290 $ — $ 609,090

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Basis Of Presentation (Narrative) (Details)	9 Months Ended
	Sep. 30, 2021 item
Basis Of Presentation [Abstract]
Number of jurisdictions	7

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Earnings Per Common Share (EPS) (Narrative) (Details)		3 Months Ended
	May 18, 2021	Sep. 30, 2021
Earnings Per Common Share (EPS) [Abstract]
Percentage of Stock Divided Issued	10.00%	10.00%

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Earnings Per Common Share (EPS) (Earnings Per Share) (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Earnings Per Common Share (EPS) [Abstract]
Net income	$ 1,881,000	$ 2,014,000	$ 1,835,000	$ 1,454,000	$ 821,000	$ 995,000	$ 5,730,000	$ 3,270,000
Weighted average number of shares - basic and diluted	4,740,657			4,773,380			4,750,235	4,776,523
Basic and diluted EPS	$ 0.40			$ 0.30			$ 1.21	$ 0.68

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Stock-Based Compensation (Narrative) (Details) - USD ($)			9 Months Ended
	Jan. 02, 2020	Jan. 02, 2019	Sep. 30, 2021	Sep. 30, 2020	May 15, 2018
The 2018 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized					250,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		24,500
Shares forfeited			0
Vested period			3 years
Shares issued			0
Stock based compensation expense			$ 80,000	$ 88,000
Unrecognized stock based compensation expense			$ 26,000
Unrecognized expense period			3 months
Year One [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares vested	33.30%		66.60%

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Fair Value Measurements (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Fair Value, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale, fair value adjustment	$ 0

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Fair Value Measurements (Fair Value Assets Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	$ 152,298	$ 90,185
IRLCs - asset	175	425
Total assets at fair value	152,473	90,610
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	152,298	90,185
Total assets at fair value	152,298	90,185
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
IRLCs - asset	175	425
Total assets at fair value	175	425
US Treasuries [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	2,009	2,027
US Treasuries [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	2,009	2,027
US Agency Obligations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	58,029	41,320
US Agency Obligations [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	58,029	41,320
Mortgage-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	34,446	15,696
Mortgage-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	34,446	15,696
Municipals [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	45,956	24,773
Municipals [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	45,956	24,773
Corporates [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	11,858	6,369
Corporates [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available-for-sale, at fair value	$ 11,858	$ 6,369

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Fair Value Measurements (Quantitative information about Level 3 Fair Value Measurements - Recurring) (Details) $ in Thousands	Sep. 30, 2021 USD ($) item	Dec. 31, 2020 USD ($) item
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	$ 152,473	$ 90,610
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	175	425
IRLCs - Asset [Member] | Fair Value, Recurring [Member] | Valuation, Market Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | Measurement Input, Range Of Pull Through Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	$ 175	$ 425
IRLCs - Asset [Member] | Fair Value, Recurring [Member] | Minimum [Member] | Valuation, Market Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | Measurement Input, Range Of Pull Through Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Range (Weighted Average) | item	70	70
IRLCs - Asset [Member] | Fair Value, Recurring [Member] | Maximum [Member] | Valuation, Market Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | Measurement Input, Range Of Pull Through Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Range (Weighted Average) | item	100	100
IRLCs - Asset [Member] | Fair Value, Recurring [Member] | Weighted Average [Member] | Valuation, Market Approach [Member] | Significant Unobservable Inputs (Level 3) [Member] | Measurement Input, Range Of Pull Through Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Range (Weighted Average) | item	85	85

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Fair Value Measurements (Impaired Loans And Other Real Estate Owned Measured At Fair Value On A Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other real estate owned	$ 806	$ 1,105	$ 2,339
Fair Value, Nonrecurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	1,970	1,829
Other real estate owned	806	1,105
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Nonrecurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans	1,970	1,829
Other real estate owned	$ 806	$ 1,105

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Fair Value Measurements (Information Regarding Quantitative Inputs Used To Value Assets Classified As Level 3 - Nonrecurring) (Details) $ in Thousands	Sep. 30, 2021 USD ($) item	Dec. 31, 2020 USD ($) item
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	$ 152,473	$ 90,610
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	175	425
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	$ 1,970	$ 1,829
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Minimum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Selling Cost [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	0	0
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Minimum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	0	0
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Maximum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Selling Cost [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	10	10
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Maximum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	20	20
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Weighted Average [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Selling Cost [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	8	8
Fair Value, Nonrecurring [Member] | Impaired Loans [Member] | Weighted Average [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	6	6
Fair Value, Nonrecurring [Member] | OREO [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets, Fair Value | $	$ 806	$ 1,105
Fair Value, Nonrecurring [Member] | OREO [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Selling Cost [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	10	10
Fair Value, Nonrecurring [Member] | OREO [Member] | Minimum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	0	0
Fair Value, Nonrecurring [Member] | OREO [Member] | Maximum [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	25	25
Fair Value, Nonrecurring [Member] | OREO [Member] | Weighted Average [Member] | Discounted Appraised Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | Discount For Lack Of Marketability And Age Of Appraisal [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	15	15

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Fair Value Measurements (Fair Value Carrying And Notional Amounts) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	$ 30,340	$ 31,683
Fed funds sold	116,956	69,203
Available-for-sale Securities, Debt Securities	152,298	90,185
Held-to-maturity Securities	3,659	3,671
Restricted stock	1,324	1,551
Loans held for sale	6,462	7,102
Interest receivable	2,106	2,350
BOLI	18,670	16,355
Derivatives - IRLCs	175	425
Interest payable	49	85
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	30,340	31,683
Fed funds sold	116,956	69,203
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available-for-sale Securities, Debt Securities	152,298	90,185
Held-to-maturity Securities	4,028	4,192
Restricted stock	1,324	1,551
Loans held for sale	6,462	7,102
Interest receivable	2,106	2,350
BOLI	18,670	16,355
Deposits	854,458	766,212
Capital notes	9,480	9,003
Interest payable	49	85
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net	576,060	598,745
Derivatives - IRLCs	175	425
Carrying Amounts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	30,340	31,683
Fed funds sold	116,956	69,203
Available-for-sale Securities, Debt Securities	152,298	90,185
Held-to-maturity Securities	3,659	3,671
Restricted stock	1,324	1,551
Loans, net	583,572	601,934
Loans held for sale	6,462	7,102
Interest receivable	2,106	2,350
BOLI	18,670	16,355
Derivatives - IRLCs	175	425
Deposits	853,829	764,967
Capital notes	10,031	10,027
Interest payable	49	85
Fair Values [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and due from banks	30,340	31,683
Fed funds sold	116,956	69,203
Available-for-sale Securities, Debt Securities	152,298	90,185
Held-to-maturity Securities	4,028	4,192
Restricted stock	1,324	1,551
Loans, net	576,060	598,745
Loans held for sale	6,462	7,102
Interest receivable	2,106	2,350
BOLI	18,670	16,355
Derivatives - IRLCs	175	425
Deposits	854,458	766,212
Capital notes	9,480	9,003
Interest payable	$ 49	$ 85

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Securities (Narrative) (Details)	9 Months Ended		21 Months Ended
	Sep. 30, 2021 USD ($) security	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) security	Dec. 31, 2020 USD ($)
Number Of Securities Evaluated For Other Than Temporary Impairment [Line Items]
Securities evaluated for other than temporary impairment | security	59		59
Securities available-for-sale, at fair value	$ 152,298,000		$ 152,298,000	$ 90,185,000
Debt Securities, Held-to-maturity, Sale			$ 0
Sales of available for sale securities	$ 0	$ 13,312,000
Marketable Securities, Realized Gain (Loss)		$ 644,000
US Agency Obligations [Member]
Number Of Securities Evaluated For Other Than Temporary Impairment [Line Items]
Securities evaluated for other than temporary impairment | security	22		22
Securities available-for-sale, at fair value	$ 58,029,000		$ 58,029,000	41,320,000
Municipals [Member]
Number Of Securities Evaluated For Other Than Temporary Impairment [Line Items]
Securities available-for-sale, at fair value	$ 45,956,000		$ 45,956,000	$ 24,773,000
S&P Rated AAA [Member]
Number Of Securities Evaluated For Other Than Temporary Impairment [Line Items]
Securities evaluated for other than temporary impairment | security	23		23
S&P Rated AA [Member]
Number Of Securities Evaluated For Other Than Temporary Impairment [Line Items]
Securities evaluated for other than temporary impairment | security	33		33

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Securities (Summary Of Securities Held-To-Maturity And Securities Available-For-Sale) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Held-to-maturity	$ 3,659	$ 3,671
Held-to-Maturity, Fair Value	4,028	4,192
Available-for-Sale, Amortized Cost	152,787	87,917
Available-for-Sale, Gross Unrealized Gains	1,554	2,705
Available-for-Sale, Gross Unrealized Losses	(2,043)	(437)
Available-for-sale, Fair Value	152,298	90,185
US Treasuries [Member]
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Available-for-Sale, Amortized Cost	2,000	2,000
Available-for-Sale, Gross Unrealized Gains	9	27
Available-for-sale, Fair Value	2,009	2,027
US Agency Obligations [Member]
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Held-to-maturity	3,659	3,671
Held-to-maturity, Gross Unrealized Gains	369	521
Held-to-Maturity, Fair Value	4,028	4,192
Available-for-Sale, Amortized Cost	58,242	40,111
Available-for-Sale, Gross Unrealized Gains	793	1,544
Available-for-Sale, Gross Unrealized Losses	(1,006)	(335)
Available-for-sale, Fair Value	58,029	41,320
Mortgage-Backed Securities [Member]
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Available-for-Sale, Amortized Cost	34,659	15,461
Available-for-Sale, Gross Unrealized Gains	120	241
Available-for-Sale, Gross Unrealized Losses	(333)	(6)
Available-for-sale, Fair Value	34,446	15,696
Municipals [Member]
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Available-for-Sale, Amortized Cost	46,229	24,275
Available-for-Sale, Gross Unrealized Gains	399	594
Available-for-Sale, Gross Unrealized Losses	(672)	(96)
Available-for-sale, Fair Value	45,956	24,773
Corporates [Member]
Schedule Of Available-For-Sale Securities And Held-To-Maturity Securities [Line Items]
Available-for-Sale, Amortized Cost	11,657	6,070
Available-for-Sale, Gross Unrealized Gains	233	299
Available-for-Sale, Gross Unrealized Losses	(32)
Available-for-sale, Fair Value	$ 11,858	$ 6,369

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Securities (Gross Unrealized Losses And Fair Value Of The Bank’s Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 months	$ 92,591	$ 32,211
Fair Value, More than 12 months	9,903
Fair Value, Total	102,494	32,211
Unrealized Losses, Less than 12 months	1,588	437
Unrealized Losses, More than 12 months	455
Unrealized Losses, Total	2,043	437
US Agency Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 months	29,945	15,808
Fair Value, More than 12 months	6,467
Fair Value, Total	36,412	15,808
Unrealized Losses, Less than 12 months	675	335
Unrealized Losses, More than 12 months	331
Unrealized Losses, Total	1,006	335
Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 months	30,340	8,201
Fair Value, Total	30,340	8,201
Unrealized Losses, Less than 12 months	333	6
Unrealized Losses, Total	333	6
Municipals [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 months	30,338	8,202
Fair Value, More than 12 months	3,436
Fair Value, Total	33,774	8,202
Unrealized Losses, Less than 12 months	548	96
Unrealized Losses, More than 12 months	124
Unrealized Losses, Total	672	$ 96
Corporates [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 months	1,968
Fair Value, Total	1,968
Unrealized Losses, Less than 12 months	32
Unrealized Losses, Total	$ 32

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Business Segments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2021 segment
Business Segments [Abstract]
Number of reportable segments	2

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Business Segments (Schedule Of Segment Reporting Information, By Segment) (Details) - USD ($)	3 Months Ended						9 Months Ended		12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Net interest income	$ 6,822,000			$ 6,203,000			$ 20,280,000	$ 18,257,000
Provision for loan losses				700,000				2,348,000	$ 2,548,000
Net interest income after provision for loan losses	6,822,000			5,503,000			20,280,000	15,909,000
Noninterest income	2,822,000			3,064,000			8,305,000	8,039,000
Noninterest expenses	7,298,000			6,744,000			21,424,000	19,876,000
Income before income taxes	2,346,000			1,823,000			7,161,000	4,072,000
Income tax expense	465,000			369,000			1,431,000	802,000
Net income	1,881,000	$ 2,014,000	$ 1,835,000	1,454,000	$ 821,000	$ 995,000	5,730,000	3,270,000
Total assets	942,631,000			849,129,000			942,631,000	849,129,000	$ 851,386,000
Community Banking [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net interest income	6,822,000			6,203,000			20,280,000	18,257,000
Provision for loan losses				700,000				2,348,000
Net interest income after provision for loan losses	6,822,000			5,503,000			20,280,000	15,909,000
Noninterest income	731,000			605,000			2,130,000	2,453,000
Noninterest expenses	5,776,000			5,322,000			16,985,000	16,271,000
Income before income taxes	1,777,000			786,000			5,425,000	2,091,000
Income tax expense	345,000			151,000			1,066,000	386,000
Net income	1,432,000			635,000			4,359,000	1,705,000
Total assets	935,482,000			838,425,000			935,482,000	838,425,000
Mortgage [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Noninterest income	2,091,000			2,459,000			6,175,000	5,586,000
Noninterest expenses	1,522,000			1,422,000			4,439,000	3,605,000
Income before income taxes	569,000			1,037,000			1,736,000	1,981,000
Income tax expense	120,000			218,000			365,000	416,000
Net income	449,000			819,000			1,371,000	1,565,000
Total assets	$ 7,149,000			$ 10,704,000			$ 7,149,000	$ 10,704,000

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Loans, Allowance For Loan Losses And OREO (Narrative) (Details) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
		Sep. 30, 2021 USD ($) contract item	Sep. 30, 2020 loan contract	Sep. 30, 2021 USD ($) contract item	Sep. 30, 2020 loan contract	Dec. 31, 2020 USD ($) item contract
Financing Receivable, Modifications [Line Items]
Loan modifications that would have been classified as TDRs | contract		0	0	0	0
Loan modifications classified as TDRs | contract		0	0	0	0
Outstanding commitments to disburse additional funds on TDR's | contract				0		0
Consumer mortgage loan secured by residential real estate		$ 0		$ 0		$ 0
Principal balance	[1]	$ 590,848		$ 590,848		$ 609,090
Residential [Member]
Financing Receivable, Modifications [Line Items]
Number of real estate properties held | item		1		1		0
Principal balance		$ 53,627		$ 53,627		$ 62,038
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Principal balance		116,923		116,923		$ 145,145
Covid-19 [Member]
Financing Receivable, Modifications [Line Items]
Number of loans modified | loan			191		191
Covid-19 [Member] | Modified Loans [Member]
Financing Receivable, Modifications [Line Items]
Principal balance		$ 76,000		$ 76,000

[1] Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.

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Loans, Allowance For Loan Losses And OREO (Summary Of Loans, Net) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Loans and Leases Receivable Disclosure [Line Items]
Principal balance	[1]	$ 590,848	$ 609,090
Less allowance for loan losses		7,276	7,156
Net loans		583,572	601,934
Deferred loan costs		38	(18)
Commercial [Member]
Loans and Leases Receivable Disclosure [Line Items]
Principal balance		116,923	145,145
Less allowance for loan losses		1,931	2,001
Commercial Real Estate [Member]
Loans and Leases Receivable Disclosure [Line Items]
Principal balance		327,665	309,563
Less allowance for loan losses		3,707	3,550
Consumer [Member]
Loans and Leases Receivable Disclosure [Line Items]
Principal balance		92,633	92,344
Less allowance for loan losses		859	868
Residential [Member]
Loans and Leases Receivable Disclosure [Line Items]
Principal balance		53,627	62,038
Less allowance for loan losses		$ 779	$ 737

[1] Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.

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Loans, Allowance For Loan Losses And OREO (Loans On Non-Accrual Status) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	$ 1,904	$ 2,063
Commercial [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	293	121
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	650	940
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	529	552
Consumer [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	267	240
Residential [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing Receivables on Non-Accrual Status	$ 165	$ 210

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Loans, Allowance For Loan Losses And OREO (Changes In OREO Balance) (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Loans, Allowance For Loan Losses And OREO [Abstract]
Balance at the beginning of the year (net)	$ 1,105	$ 2,339	$ 2,339
Transfers from loans	111	18	18
Valuation adjustments			(437)
Sales proceeds	(344)		(844)
Gain (loss) on disposition	(66)	$ 29	29
Balance at the end of the period (net)	$ 806		$ 1,105

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Loans, Allowance For Loan Losses And OREO (Impaired Loans) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Impaired [Line Items]
Totals: Recorded Investment	$ 4,229	$ 4,817
Totals: Unpaid Principal Balance	4,734	5,279
Totals: Related Allowance	15	4
Totals: Average Recorded Investment	4,525	4,944
Totals: Interest Income Recognized	163	286
Commercial [Member]
Financing Receivable, Impaired [Line Items]
With No Related Allowance Recorded: Recorded Investment	250	341
With No Related Allowance Recorded: Unpaid Principal Balance	305	341
With No Related Allowance Recorded: Average Recorded Investment	296	405
With No Related Allowance Recorded: Interest Income Recognized	14	30
With An Allowance Recorded: Recorded Investment		4
With An Allowance Recorded: Unpaid Principal Balance		4
With An Allowance Recorded: Average Recorded Investment	2	6
Totals: Recorded Investment	250	345
Totals: Unpaid Principal Balance	305	345
Totals: Related Allowance		4
Totals: Average Recorded Investment	298	411
Totals: Interest Income Recognized	14	30
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
With No Related Allowance Recorded: Recorded Investment	1,931	2,143
With No Related Allowance Recorded: Unpaid Principal Balance	2,294	2,496
With No Related Allowance Recorded: Average Recorded Investment	2,037	2,305
With No Related Allowance Recorded: Interest Income Recognized	91	135
With An Allowance Recorded: Average Recorded Investment		6
Totals: Recorded Investment	1,931	2,143
Totals: Unpaid Principal Balance	2,294	2,496
Totals: Average Recorded Investment	2,037	2,311
Totals: Interest Income Recognized	91	135
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
With No Related Allowance Recorded: Recorded Investment	494	639
With No Related Allowance Recorded: Unpaid Principal Balance	501	677
With No Related Allowance Recorded: Average Recorded Investment	567	601
With No Related Allowance Recorded: Interest Income Recognized	19	43
With An Allowance Recorded: Average Recorded Investment		7
Totals: Recorded Investment	494	639
Totals: Unpaid Principal Balance	501	677
Totals: Average Recorded Investment	567	608
Totals: Interest Income Recognized	19	43
Consumer [Member] | Consumer Secured [Member]
Financing Receivable, Impaired [Line Items]
With No Related Allowance Recorded: Recorded Investment	60	343
With No Related Allowance Recorded: Unpaid Principal Balance	60	346
With No Related Allowance Recorded: Average Recorded Investment	202	225
With No Related Allowance Recorded: Interest Income Recognized	2	16
With An Allowance Recorded: Recorded Investment	173
With An Allowance Recorded: Unpaid Principal Balance	180
With An Allowance Recorded: Average Recorded Investment	87
With An Allowance Recorded: Interest Income Recognized	1
Totals: Recorded Investment	233	343
Totals: Unpaid Principal Balance	240	346
Totals: Related Allowance	15
Totals: Average Recorded Investment	289	225
Totals: Interest Income Recognized	3	16
Residential [Member] | Residential Mortgages [Member]
Financing Receivable, Impaired [Line Items]
With No Related Allowance Recorded: Recorded Investment	1,321	1,347
With No Related Allowance Recorded: Unpaid Principal Balance	1,394	1,415
With No Related Allowance Recorded: Average Recorded Investment	1,334	1,319
With No Related Allowance Recorded: Interest Income Recognized	36	62
With An Allowance Recorded: Average Recorded Investment		70
Totals: Recorded Investment	1,321	1,347
Totals: Unpaid Principal Balance	1,394	1,415
Totals: Average Recorded Investment	1,334	1,389
Totals: Interest Income Recognized	$ 36	$ 62

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Loans, Allowance For Loan Losses And OREO (Allowance For Loan Losses And Recorded Investment In Loans) (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended		12 Months Ended
		Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Credit Losses: Beginning Balance			$ 7,156	$ 4,829	$ 4,829
Allowance for Credit Losses: Charge-Offs			(80)		(448)
Allowance for Credit Losses: Recoveries			200		227
Allowance for credit losses: Provision		$ 700		2,348	2,548
Allowance for Credit Losses: Ending Balance			7,276		7,156
Allowance for Credit Losses: Ending Balance: Individually evaluated for impairment			15		4
Allowance for Credit Losses: Ending Balance: Collectively evaluated for impairment			7,261		7,152
Allowance for Credit Losses: Totals			7,276		7,156
Financing Receivables: Ending Balance: Individually evaluated for impairment			4,229		4,817
Financing Receivables: Ending Balance: Collectively evaluated for impairment			586,619		604,273
Financing Receivable, before Allowance for Credit Loss, Total	[1]		590,848		609,090
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Credit Losses: Beginning Balance			2,001	1,330	1,330
Allowance for Credit Losses: Charge-Offs			(53)		(96)
Allowance for Credit Losses: Recoveries			107		20
Allowance for credit losses: Provision			(124)		747
Allowance for Credit Losses: Ending Balance			1,931		2,001
Allowance for Credit Losses: Ending Balance: Individually evaluated for impairment					4
Allowance for Credit Losses: Ending Balance: Collectively evaluated for impairment			1,931		1,997
Allowance for Credit Losses: Totals			1,931		2,001
Financing Receivables: Ending Balance: Individually evaluated for impairment			250		345
Financing Receivables: Ending Balance: Collectively evaluated for impairment			116,673		144,800
Financing Receivable, before Allowance for Credit Loss, Total			116,923		145,145
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Credit Losses: Beginning Balance			3,550	1,932	1,932
Allowance for Credit Losses: Charge-Offs					(224)
Allowance for Credit Losses: Recoveries			70		139
Allowance for credit losses: Provision			87		1,703
Allowance for Credit Losses: Ending Balance			3,707		3,550
Allowance for Credit Losses: Ending Balance: Collectively evaluated for impairment			3,707		3,550
Allowance for Credit Losses: Totals			3,707		3,550
Financing Receivables: Ending Balance: Individually evaluated for impairment			2,425		2,782
Financing Receivables: Ending Balance: Collectively evaluated for impairment			325,240		306,781
Financing Receivable, before Allowance for Credit Loss, Total			327,665		309,563
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Credit Losses: Beginning Balance			868	865	865
Allowance for Credit Losses: Charge-Offs			(27)		(75)
Allowance for Credit Losses: Recoveries			22		53
Allowance for credit losses: Provision			(4)		25
Allowance for Credit Losses: Ending Balance			859		868
Allowance for Credit Losses: Ending Balance: Individually evaluated for impairment			15
Allowance for Credit Losses: Ending Balance: Collectively evaluated for impairment			844		868
Allowance for Credit Losses: Totals			859		868
Financing Receivables: Ending Balance: Individually evaluated for impairment			233		343
Financing Receivables: Ending Balance: Collectively evaluated for impairment			92,400		92,001
Financing Receivable, before Allowance for Credit Loss, Total			92,633		92,344
Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Credit Losses: Beginning Balance			737	$ 702	702
Allowance for Credit Losses: Charge-Offs					(53)
Allowance for Credit Losses: Recoveries			1		15
Allowance for credit losses: Provision			41		73
Allowance for Credit Losses: Ending Balance			779		737
Allowance for Credit Losses: Ending Balance: Collectively evaluated for impairment			779		737
Allowance for Credit Losses: Totals			779		737
Financing Receivables: Ending Balance: Individually evaluated for impairment			1,321		1,347
Financing Receivables: Ending Balance: Collectively evaluated for impairment			52,306		60,691
Financing Receivable, before Allowance for Credit Loss, Total			$ 53,627		$ 62,038

[1] Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.

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Loans, Allowance For Loan Losses And OREO (Age Analysis Of Past Due Financing Receivables) (Details) - USD ($) $ in Thousands		Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance	[1]	$ 590,848	$ 609,090
30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		767	1,338
60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		159	386
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		1,412	1,675
Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		2,338	3,399
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		588,510	605,691
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		116,923	145,145
Commercial [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		179	157
Commercial [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		103
Commercial [Member] | Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		282	157
Commercial [Member] | Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		116,641	144,988
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		327,665	309,563
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		123,030	108,222
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		178,093	171,069
Commercial Real Estate [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		26,542	30,272
Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		68	38
Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		98	252
Commercial Real Estate [Member] | 60 to 89 Days Past Due [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		106	116
Commercial Real Estate [Member] | Greater than 90 Days Past Due [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		502	842
Commercial Real Estate [Member] | Greater than 90 Days Past Due [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		384	394
Commercial Real Estate [Member] | Total Past Due [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		570	880
Commercial Real Estate [Member] | Total Past Due [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		588	762
Commercial Real Estate [Member] | Current [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		122,460	107,342
Commercial Real Estate [Member] | Current [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		177,505	170,307
Commercial Real Estate [Member] | Current [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		26,542	30,272
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		92,633	92,344
Consumer [Member] | Consumer Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		4,771	3,771
Consumer [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		87,862	88,573
Consumer [Member] | 30 to 59 Days Past Due [Member] | Consumer Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		12	7
Consumer [Member] | 30 to 59 Days Past Due [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		172	309
Consumer [Member] | 60 to 89 Days Past Due [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		53	27
Consumer [Member] | Greater than 90 Days Past Due [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		258	229
Consumer [Member] | Total Past Due [Member] | Consumer Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		12	7
Consumer [Member] | Total Past Due [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		483	565
Consumer [Member] | Current [Member] | Consumer Unsecured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		4,759	3,764
Consumer [Member] | Current [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		87,379	88,008
Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		53,627	62,038
Residential [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		34,694	46,896
Residential [Member] | Residential Consumer Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		18,933	15,142
Residential [Member] | 30 to 59 Days Past Due [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		238	575
Residential [Member] | 60 to 89 Days Past Due [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance			243
Residential [Member] | Greater than 90 Days Past Due [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		165	210
Residential [Member] | Total Past Due [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		403	1,028
Residential [Member] | Current [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		34,291	45,868
Residential [Member] | Current [Member] | Residential Consumer Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Principal balance		$ 18,933	$ 15,142

[1] Includes net deferred costs (fees) of $38 and ($18) as of September 30, 2021 and December 31, 2020, respectively.

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Loans, Allowance For Loan Losses And OREO (Credit Quality Information-By Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	$ 590,848	$ 609,090
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	564,184	575,637
Monitor [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	10,286	14,637
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	11,642	13,526
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	4,736	5,290
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	116,923	145,145
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	104,909	133,075
Commercial [Member] | Monitor [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	4,430	4,332
Commercial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	7,294	7,386
Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	290	352
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	123,030	108,222
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	113,498	98,623
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member] | Monitor [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	3,309	3,028
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	4,265	4,428
Commercial Real Estate [Member] | Commercial Mortgages-Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	1,958	2,143
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	178,093	171,069
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	174,834	161,300
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member] | Monitor [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	2,547	7,277
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	59	1,682
Commercial Real Estate [Member] | Commercial Mortgages-Non-Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	653	810
Commercial Real Estate [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	26,542	30,272
Commercial Real Estate [Member] | Commercial Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	26,542	30,272
Consumer [Member] | Consumer Unsecured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	4,771	3,771
Consumer [Member] | Consumer Unsecured [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	4,746	3,740
Consumer [Member] | Consumer Unsecured [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	24	30
Consumer [Member] | Consumer Unsecured [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	1	1
Consumer [Member] | Consumer Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	87,862	88,573
Consumer [Member] | Consumer Secured [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	87,474	88,044
Consumer [Member] | Consumer Secured [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	388	529
Residential [Member] | Residential Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	34,694	46,896
Residential [Member] | Residential Mortgages [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	33,248	45,441
Residential [Member] | Residential Mortgages [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	1,446	1,455
Residential [Member] | Residential Consumer Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	18,933	15,142
Residential [Member] | Residential Consumer Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	$ 18,933	$ 15,142

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Capital Notes (Narrative) (Details) - USD ($)		9 Months Ended
	Sep. 24, 2020	Sep. 30, 2021	Sep. 30, 2020	Apr. 13, 2020
Debt Instrument [Line Items]
Proceeds used to pay off debt			$ 5,000,000
Capital Notes 4% Due 1/24/2022 [Member]
Debt Instrument [Line Items]
Capital notes, interest rate		4.00%
Proceeds used to pay off debt	$ 5,000,000
Capital Notes 3.25% Due 09/30/2025 [Member] | 2020 Offering [Member]
Debt Instrument [Line Items]
Capital notes, interest rate		3.25%
Capital notes, maturity date		Sep. 30, 2025
Principal notes				$ 10,050,000
Full or partial payment date		Sep. 30, 2021