Loans Receivable

12 Months Ended

Dec. 31, 2023

Note 4 – Loans Receivable

Portfolio loans, net of deferred costs and fees, are summarized by type as follows at December 31, 2023 and December 31, 2022:


	Period Ended
	December 31, 2023						December 31, 2022
(dollars in thousands)	Amount			Percent			Amount			Percent
Real estate
One to four family - owner occupied	$	130,026			18.45	%	$	137,742			20.73	%
One to four family - non owner occupied		108,090			15.34	%		125,065			18.82	%
Commercial owner occupied		102,512			14.54	%		91,853			13.82	%
Commercial investor		287,194			40.76	%		226,854			34.14	%
Construction and land		21,865			3.10	%		17,937			2.70	%
Farm loans		14,877			2.11	%		13,823			2.08	%
Total real estate loans		664,564			94.30	%		613,274			92.29	%

Marine loans		16,386			2.32	%		15,791			2.38	%
Other consumer		1,893			0.27	%		2,361			0.36	%
Guaranteed by U.S. Government		3,715			0.53	%		4,933			0.74	%
Commercial		18,244			2.58	%		28,052			4.23	%
Total consumer and commercial		40,238			5.70	%		51,137			7.71	%

Total loans		704,802			100.0	%		664,411			100.0	%
Less:
Deferred origination fees, net		—						(1,467	)
Allowance for credit losses		(8,554	)					(3,813	)
Total loans, net of deferred costs and fees	$	696,248					$	659,131

Net deferred loan origination fees and costs at December 31, 2023 totaled $640,000.

Residential lending repayment is generally dependent on economic and market conditions in the Company's lending area. Commercial real estate, commercial and construction loan repayments are generally dependent on the operations of the related properties or the financial condition of its borrower or guarantor. Accordingly, repayment of such loans can be more susceptible to adverse conditions in the real estate market and the regional economy.

In the normal course of banking business, risks related to specific loan categories are as follows:

Real Estate Loans – Real estate loans are typically made to consumers and businesses and are secured by real estate. Credit risk arises from the borrower’s continuing financial stability, which can be adversely impacted by the economy as well as borrower-specific occurrences. Also impacting credit risk would be a shortfall in the value of the real estate in relation to the outstanding loan balance in the event of a default or subsequent liquidation of the collateral.

Marine Loans – Marine loans are typically made to consumers and are secured by marine-based collateral. Credit risk is similar to real estate loans above as it is subject to the borrower’s continuing financial stability and the value of the collateral securing the loan. Marine loans may entail greater risk than residential mortgage loans, as they are collateralized by assets that depreciate rapidly. Repossessed collateral for a defaulted loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower.

Note 4 – Loans Receivable (Continued)

Other Consumer – Other consumer loans include installment loans and personal lines of credit which may be secured or unsecured. Credit risk is similar to real estate loans above as it is subject to the borrower’s continuing financial stability and the value of the collateral securing the loan, if any. Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower.

Guaranteed by the U.S. Government – Loans guaranteed by the U.S. government do not present similar risks as reflected in the other categories mentioned herein. The primary differentiating factor is that an explicit guarantee is provided by the government therefore substantially mitigating any risk of loss given default in the event of credit deterioration. Guaranteed by the U.S. Government loans in the table above include $25 thousand and $488 thousand of Paycheck Protection Program (PPP) loans at December 31, 2023 and 2022, respectively. The PPP loans are 100% guaranteed by the Small Business Administration (SBA). Due to the guarantee from the Federal government and nature of the PPP initiative, there is no allowance for credit losses recorded for PPP loans.

Commercial – Commercial loans are secured or unsecured loans for business purposes. Loans are typically secured by accounts receivable, inventory, equipment and/or other assets of the business. Credit risk arises from the successful operation of the business which may be affected by competition, rising interest rates, regulatory changes and adverse conditions in the local and regional economy.

A summary of transactions in the allowance for credit losses-loans during the year ended December 31, 2023 follows:


Year Ended	December 31, 2023
(dollars in thousands)	Beginning Balance		Impact of ASC 326 Adoption		Charge-offs			Recoveries		Provisions (recovery)			Ending Balance
Real estate
One to four family - owner occupied	$	344	$	1,117	$	(2	)	$	64	$	205		$	1,728
One to four family - non owner occupied		562		356		—			305		(193	)		1,030
Commercial owner occupied		366		78		(3	)		—		122			563
Commercial investor		2,272		1,506		—			—		(53	)		3,725
Construction and land		93		496		—			154		29			772
Farm loans		17		135		—			—		27			179
Total real estate loans		3,654		3,688		(5	)		523		137			7,997

Marine and other consumer loans		68		336		(80	)		26		53			403
Guaranteed by U.S. Government		—		—		—			—		—			—
Commercial		91		208		—			3		(148	)		154
Total consumer and commercial		159		544		(80	)		29		(95	)		557

Total loans	$	3,813	$	4,232	$	(85	)	$	552	$	42		$	8,554

Note 4 – Loans Receivable (Continued)

The following table summarized the ACL activity for the year ended December 31, 2023.


(dollars in thousands)
Provision for credit losses - loans	$	42
Reduction in allowance for securities - HTM		(4	)
Reduction in allowance for credit losses - unfunded commitments		(83	)
Provision for (recovery of) credit losses per the Consolidated Statement of Income	$	(45	)

A summary of transactions in the allowance for loan losses during the year ended December 31, 2022 follows:


Year Ended	December 31, 2022
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions (recovery)			Ending Balance
Real estate
One to four family - owner occupied	$	258	$	(7	)	$	43	$	50		$	344
One to four family - non owner occupied		695		—			87		(220	)		562
Commercial owner occupied		280		—			—		86			366
Commercial investor		1,225		(10	)		—		1,057			2,272
Construction and land		93		—			19		(19	)		93
Farm loans		2		—			—		15			17
Total real estate loans		2,553		(17	)		149		969			3,654

Marine loans		48		—			—		15			63
Other consumer		20		(39	)		15		9			5
Commercial		45		—			1		45			91
Total consumer and commercial		113		(39	)		16		69			159

Total loans	$	2,666	$	(56	)	$	165	$	1,038		$	3,813

For the year ended December 31, 2022, no allowance for credit losses was recorded for PCI loans.

The following table presents the credit risk profile by risk grade by origination year as of December 31, 2023.


(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year
Balance at December 31, 2023	2023		2022		2021		2020		2019		Prior			Revolving		Total
One to four family - owner occupied
Pass	$	6,387	$	7,906	$	13,727	$	9,974	$	9,707	$	71,463		$	10,492	$	129,656
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		331			39		370
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total One to four family - owner occupied	$	6,387	$	7,906	$	13,727	$	9,974	$	9,707	$	71,794		$	10,531	$	130,026
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	(2	)	$	—	$	(2	)

One to four family - non owner occupied
Pass	$	13,810	$	30,603	$	20,582	$	10,742	$	7,611	$	22,795		$	—	$	106,143
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		1,947			—		1,947
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total One to four family - non owner occupied	$	13,810	$	30,603	$	20,582	$	10,742	$	7,611	$	24,742		$	—	$	108,090
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Commercial owner occupied
Pass	$	20,967	$	16,071	$	16,642	$	5,998	$	5,071	$	31,536		$	—	$	96,285
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		943		1,502		3,782			—		6,227
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Commercial owner occupied	$	20,967	$	16,071	$	16,642	$	6,941	$	6,573	$	35,318		$	—	$	102,512
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	(3	)	$	—	$	(3	)

Commercial investor
Pass	$	68,682	$	89,812	$	65,624	$	16,205	$	9,991	$	28,823		$	—	$	279,137
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		6,907		—		1,150			—		8,057
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Commercial investor	$	68,682	$	89,812	$	65,624	$	23,112	$	9,991	$	29,973		$	—	$	287,194
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Construction and land
Pass	$	6,901	$	9,650	$	2,271	$	650	$	—	$	704		$	—	$	20,176
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		1,400		—		289			—		1,689
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Construction and land	$	6,901	$	9,650	$	2,271	$	2,050	$	—	$	993		$	—	$	21,865
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Farm loans
Pass	$	—	$	4,141	$	2,281	$	261	$	2,641	$	5,553		$	—	$	14,877
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		—			—		—
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Farm loans	$	—	$	4,141	$	2,281	$	261	$	2,641	$	5,553		$	—	$	14,877
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Marine loans
Pass	$	3,227	$	2,044	$	6,293	$	1,751	$	207	$	2,864		$	—	$	16,386
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		—			—		—
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Marine loans	$	3,227	$	2,044	$	6,293	$	1,751	$	207	$	2,864		$	—	$	16,386
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	(58	)	$	—	$	(58	)

Other consumer
Pass	$	315	$	143	$	124	$	37	$	189	$	1,081		$	—	$	1,889
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		4			—		4
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Other consumer	$	315	$	143	$	124	$	37	$	189	$	1,085		$	—	$	1,893
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	(22	)	$	—	$	(22	)

Guaranteed by U.S. Government
Pass	$	—	$	-	$	—	$	26	$	417	$	3,272		$	—	$	3,715
Special Mention		—		—		—		—		—		—			—		—
Substandard		—		—		—		—		—		—			—		—
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Guaranteed by U.S. Government	$	—	$	—	$	—	$	26	$	417	$	3,272		$	—	$	3,715
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Commercial
Pass	$	501	$	4,299	$	6,236	$	2,000	$	628	$	3,483		$	—	$	17,147
Special Mention		—		400		—		—		—		—			—		400
Substandard		—		—		—		—		—		697			—		697
Doubtful		—		—		—		—		—		—			—		—
Loss		—		—		—		—		—		—			—		—
Total Commercial	$	501	$	4,699	$	6,236	$	2,000	$	628	$	4,180		$	—	$	18,244
Current Period Gross Write-off	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—


(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year
Balance at December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving		Total
Total Loans
Pass	$	120,790	$	164,669	$	133,780	$	47,644	$	36,462	$	171,574	$	10,492	$	685,411
Special Mention		—		400		—		—		—		—		—		400
Substandard		—		—		—		9,250		1,502		8,200		39		18,991
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total loans	$	120,790	$	165,069	$	133,780	$	56,894	$	37,964	$	179,774	$	10,531	$	704,802


(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year
Balance at December 31, 2022	2022		2021		2020			2019			2018		Prior			Revolving		Total
One to four family - owner occupied
Pass	$	7,009	$	14,907	$	10,742		$	10,708		$	8,285	$	73,585		$	11,674	$	136,910
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		783			49		832
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total One to four family - owner occupied	$	7,009	$	14,907	$	10,742		$	10,708		$	8,285	$	74,368		$	11,723	$	137,742
Current Period Gross Write-Off													$	(7	)			$	(7	)

One to four family - non owner occupied
Pass	$	45,369	$	27,088	$	12,325		$	7,337		$	5,224	$	23,369		$	—	$	120,712
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			1,598			853		1,902			—		4,353
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total One to four family - non owner occupied	$	45,369	$	27,088	$	12,325		$	8,935		$	6,077	$	25,271		$	—	$	125,065
Current Period Gross Write-Off

Commercial owner occupied
Pass	$	17,678	$	17,244	$	6,299		$	5,590		$	11,502	$	25,610		$	—	$	83,923
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		979			1,534			936		4,481			—		7,930
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Commercial owner occupied	$	17,678	$	17,244	$	7,278		$	7,124		$	12,438	$	30,091		$	—	$	91,853
Current Period Gross Write-Off

Commercial investor
Pass	$	83,975	$	74,933	$	24,133		$	11,369		$	3,500	$	22,186		$	—	$	220,096
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			4,836		1,922			—		6,758
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Commercial investor	$	83,975	$	74,933	$	24,133		$	11,369		$	8,336	$	24,108		$	—	$	226,854
Current Period Gross Write-Off

Construction and land
Pass	$	10,135	$	3,338	$	1,376		$	77		$	—	$	986		$	—	$	15,912
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		1,598			160			—		267			—		2,025
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Construction and land	$	10,135	$	3,338	$	2,974		$	237		$	—	$	1,253		$	—	$	17,937
Current Period Gross Write-Off

Farm loans
Pass	$	4,165	$	657	$	266		$	2,752		$	455	$	5,528		$	—	$	13,823
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		—			—		—
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Farm loans	$	4,165	$	657	$	266		$	2,752		$	455	$	5,528		$	—	$	13,823
Current Period Gross Write-Off

Marine loans
Pass	$	2,486	$	7,413	$	2,028		$	223		$	1,145	$	2,437		$	—	$	15,732
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		59			—		59
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Marine loans	$	2,486	$	7,413	$	2,028		$	223		$	1,145	$	2,496		$	—	$	15,791
Current Period Gross Write-Off

Other consumer
Pass	$	495	$	212	$	78		$	216		$	9	$	1,329		$	—	$	2,339
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		22			—		22
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Other consumer	$	495	$	212	$	78		$	216		$	9	$	1,351		$	—	$	2,361
Current Period Gross Write-Off													$	(38	)			$	(38	)

Guaranteed by U.S. Government
Pass	$	—	$	304	$	175		$	525		$	840	$	3,089		$	—	$	4,933
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		—			—		—
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Guaranteed by U.S. Government	$	—	$	304	$	175		$	525		$	840	$	3,089		$	—	$	4,933
Current Period Gross Write-Off

Commercial
Pass	$	10,301	$	6,885	$	5,116		$	1,225		$	1,798	$	2,282		$	—	$	27,607
Special Mention		—		—		—			—			—		—			—		—
Substandard		—		—		—			—			—		445			—		445
Doubtful		—		—		—			—			—		—			—		—
Loss		—		—		—			—			—		—			—		—
Total Commercial	$	10,301	$	6,885	$	5,116		$	1,225		$	1,798	$	2,727		$	—	$	28,052
Current Period Gross Write-Off					$	(2	)	$	(8	)								$	(10	)


(dollars in thousands)	Term Loans Amortized Cost Basis by Origination Year
Balance at December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving		Total
Total Loans
Pass	$	181,613	$	152,981	$	62,538	$	40,022	$	32,758	$	160,401	$	11,674	$	641,987
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		2,577		3,292		6,625		9,881		49		22,424
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
Total loans	$	181,613	$	152,981	$	65,115	$	43,314	$	39,383	$	170,282	$	11,723	$	664,411

The following table presents the amortized cost basis of collateral dependent loans by class of loans at December 31, 2023:


			Estimated Collateral Values				Estimated Collateral Values
(dollars in thousands)	Real Estate		Real Estate		Business\Other Assets		Business\Other Assets
One to four family - owner occupied	$	1,160	$	4,321	$	—	$	—
One to four family - non-owner occupied		273		648		—		—
Commercial owner occupied real estate		739		1,825		—		—
Commercial investor real estate		8,057		10,070		—		—
Construction and land		321		826		—		—
Other consumer		—		—		4		25
Total	$	10,550	$	17,690	$	4	$	25

Management identifies loans as modifications to borrowers experiencing financial difficulty ("BEFD") when a borrower is experiencing financial difficulties and the Company has altered the cash flow of the loan as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of the borrower's debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy.

BEFD modifications included in the individually assessed loan schedules above, as of December 31, 2023 are as follows:


(dollars in thousands)	Number of Loans	Amortized Cost
One to four family - owner occupied	3	$	251
One to four family - non owner occupied	1		130
Commercial investor real estate	1		1,150
Total accrual BEFD modification loans	5	$	1,531

Modifications on non-accrual	1	$	1,150

All BEFD modifications were loan term extensions. There were no BEFD modifications past due as of December 31, 2023. There was one loan, on non-accrual, that had payment defaults in the past 12 months.

The following table details the amortized cost basis at the end of the reporting period for loans made to borrowers experiencing financial difficulty as of December 31, 2023.


	Year Ended December 31, 2023
(dollars in thousands)	Term Extensions		Payment Deferral and Term Extensions		Total		Percentage of Total Loans
One to four family - owner occupied	$	251	$	—	$	251		0.04	%
One to four family - non-owner occupied		130		—		130		0.02	%
Commercial investor real estate		1,150		—		1,150		0.16	%
Total	$	1,531	$	—	$	1,531		0.22	%

The Company's policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality as substandard, doubtful, or loss assets. A loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans include those loans characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loans classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans (or portions of loans) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Loans that do not expose the Company to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve close attention, are required to be designated as special mention.

The following table summarizes the classification of the loan portfolio at December 31, 2023:


	December 31, 2023

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate
One to four family - owner occupied	$	129,656	$	—	$	370	$	—	$	130,026
One to four family - non-owner occupied		106,143		—		1,947		—		108,090
Commercial owner occupied		96,285		—		6,227		—		102,512
Commercial investor		279,137		—		8,057		—		287,194
Construction and land		20,176		—		1,689		—		21,865
Farm loans		14,877		—		—		—		14,877
Total real estate loans		646,274		—		18,290		—		664,564

Marine loans		16,386		—		—		—		16,386
Other consumer		1,889		—		4		—		1,893
Guaranteed by the U.S. government		3,715		—		—		—		3,715
Commercial		17,147		400		697		—		18,244
Total consumer and commercial		39,137		400		701		—		40,238
Total loans	$	685,411	$	400	$	18,991	$	—	$	704,802

Note 4 – Loans Receivable (Continued)

The following table summarizes classification of the gross loan portfolio at December 31, 2022:


	December 31, 2022

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Real estate
One to four family - owner occupied	$	136,910	$	—	$	832	$	—	$	137,742
One to four family - non-owner occupied		120,712		—		4,353		—		125,065
Commercial owner occupied		83,923		—		7,930		—		91,853
Commercial investor		220,096		—		6,758		—		226,854
Construction and land		15,912		—		2,025		—		17,937
Farm loans		13,823		—		—		—		13,823
Total real estate loans		591,376		—		21,898		—		613,274

Marine loans		15,732		—		59		—		15,791
Other consumer		2,339		—		22		—		2,361
Guaranteed by the U.S. government		4,933		—		—		—		4,933
Commercial		27,607		—		445		—		28,052
Total consumer and commercial		50,611		—		526		—		51,137
Total loans	$	641,987	$	—	$	22,424	$	—	$	664,411

The following tables set forth certain information with respect to our loan portfolio delinquencies by loan class:


	December 31, 2023
	30 - 59		60 - 89		90+
	Days		Days		Days		Total		Current		Total
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Loans		Loans
Real estate
One to four family - owner occupied	$	2,043	$	645	$	619	$	3,307	$	126,719	$	130,026
One to four family - non owner occupied		322		—		219		541		107,549		108,090
Commercial owner occupied		901		—		468		1,369		101,143		102,512
Commercial investor		371		—		6,907		7,278		279,916		287,194
Construction and land		826		—		258		1,084		20,781		21,865
Farm loans		—		—		—		—		14,877		14,877
Total real estate loans		4,463		645		8,471		13,579		650,985		664,564

Marine loans		—		—		—		—		16,386		16,386
Other consumer		39		—		—		39		1,854		1,893
Guaranteed by U.S. Government		—		—		—		—		3,715		3,715
Commercial		—		401		—		401		17,843		18,244
Total consumer and commercial loans		39		401		—		440		39,798		40,238

Total loans	$	4,502	$	1,046	$	8,471	$	14,019	$	690,783	$	704,802

All loans past due 90 or more days have been placed on non-accrual.

Note 4 – Loans Receivable (Continued)


	December 31, 2022
	30 - 59		60 - 89		90+
	Days		Days		Days		Total		Current		Total
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Loans		Loans
Real estate
One to four family - owner occupied	$	2,311	$	793	$	896	$	4,000	$	133,742	$	137,742
One to four family - non owner occupied		777		170		379		1,326		123,739		125,065
Commercial owner occupied		1,048		103		2,056		3,207		88,646		91,853
Commercial investor		310		—		1,433		1,743		225,111		226,854
Construction and land		—		43		160		203		17,734		17,937
Farm loans		—		—		—		—		13,823		13,823
Total real estate loans		4,446		1,109		4,924		10,479		602,795		613,274

Marine loans		—		—		59		59		15,732		15,791
Other consumer		65		—		—		65		2,296		2,361
Guaranteed by U.S. Government		—		—		—		—		4,933		4,933
Commercial		—		—		—		—		28,052		28,052
Total consumer and commercial loans		65		—		59		124		51,013		51,137

Total loans	$	4,511	$	1,109	$	4,983	$	10,603	$	653,808	$	664,411

The following is a summary of non-accrual loans by class as of the dates indicated:


	December 31, 2023						December 31, 2022
	No		With an				No		With an
(dollars in thousands)	Allowance		Allowance		Total		Allowance		Allowance		Total
Real estate
One to four family - owner occupied	$	1,160	$	—	$	1,160	$	1,371	$	—	$	1,371
One to four family - non owner occupied		273		—		273		585		—		585
Commercial owner occupied		739		—		739		2,167		—		2,167
Commercial investor		8,057		—		8,057		1,433		—		1,433
Construction and land		321		—		321		247		—		247
Farm loans		—		—		—		—		—		—
Total real estate loans		10,550		—		10,550		5,803		—		5,803

Marine loans		—		—		—		59		—		59
Other consumer		4		—		4		22		—		22
Total consumer and commercial loans		4		—		4		81		—		81

Total nonaccrual loans	$	10,554	$	—	$	10,554	$	5,884	$	—	$	5,884

Interest that would have been accrued under the terms of the non-accrual loans was approximately $315,000 for the year ended December 31, 2023 and $240,000 for the year ended December 31, 2022.

An impaired loan generally is one for which it is probable, based on current information, that the lender will not collect all the amounts due under the contractual terms of the loan. Loans are individually evaluated for impairment. When the Company classifies a problem loan as impaired, it records an impairment for that portion of the asset that is deemed uncollectible, based on the present value of the expected future cash flows discounted at the loan's original effective interest rate or based on the fair value of the collateral if the loan is collateral dependent.

Note 4 – Loans Receivable (Continued)

The following is a summary of impaired loans by class of loans as of December 31, 2022:


	Recorded Investment		Unpaid Principal		Related Allowance		Average Recorded Investment		Interest Income Recognized
With an allowance recorded
Real estate loans
One to four family - owner occupied	$	100	$	100	$	28	$	103	$	4
One to four family - non-owner occupied		70		70		2		71		4
Total		170		170		30		174		8

With no allowance recorded
Real estate loans
One to four family - owner occupied		1,956		1,956		—		2,789		93
One to four family - non-owner occupied		585		585		—		632		39
Commercial owner occupied		1,854		1,854		—		1,406		77
Commercial investor		1,432		1,432		—		1,889		99
Construction and land		248		248		—		203		26
Marine Loans		59		59		—		15		3
Other consumer		45		49		—		56		7
Guaranteed by the U.S. Government		—		—		—		15		—
Commercial		—		—		—		2		—
Total		6,179		6,183		—		7,006		344

Combined
Real estate loans
One to four family - owner occupied		2,056		2,056		28		2,892		97
One to four family - non-owner occupied		655		655		2		703		43
Commercial owner occupied		1,854		1,854		—		1,406		77
Commercial investor		1,432		1,432		—		1,889		99
Construction and land		248		248		—		203		26
Marine Loans		59		59		—		15		3
Other consumer		45		49		—		56		7
Guaranteed by the U.S. Government		—		—		—		15		—
Commercial		—		—		—		2		—
Total	$	6,349	$	6,353	$	30	$	7,180	$	352

Note 4 – Loans Receivable (Continued)

Prior to the adoption of ASU 2022-002 effective on January 1, 2023, loans that were modified to make concessions to help a borrower remain current and/or to avoid foreclosure were classified as troubled debt restructurings (“TDR”). Generally, we did not forgive principal or interest on a loan or modify the interest rate on loans to below market rates. When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans. If we determined that the value of the modified loan was less than the recorded investment in the loan, impairment is recognized. The Company had no commitments to lend additional funds to borrowers whose loans have been modified.

The status of TDRs as of December 31, 2022 follows:


			December 31, 2022
	Number of		recorded investment
	contracts		Performing		Nonperforming		Total
(amounts in thousands)
Real estate loans
One to four family - owner occupied		8	$	559	$	256	$	815
One to four family - non-owner occupied		1		70		—		70
Commercial owner occupied real estate		2		320		—		320
Commercial investor real estate		1		205		—		205
Other Consumer		1		23		—		23
		13	$	1,177	$	256	$	1,433

The following TDRs were modified during the year ended December 31, 2022:


			December 31, 2022
	Number of		recorded investment
	contracts		Performing		Nonperforming		Total
(amounts in thousands)
Real estate loans
'One to four family - owner occupied		1	$	29	$	—	$	29
		1	$	29	$	—	$	29

For purchased loans that are not deemed impaired at acquisition, credit marks representing losses expected over the life of the loans are a component of the initial fair value. Subsequent to the purchase date, the method utilized to estimate the required allowance for credit losses for these loans is similar to that for originated loans. The Company will only record a provision for credit losses when the required allowance exceeds any remaining credit mark. The differences between the initial fair value and the unpaid principal balance at the date of acquisition are recorded as interest income over the life of the loans. The following table presents changes in the non-accretable yield for PCI loans for the years ended December 31:


(dollars in thousands)	2022
Balance at January 1	$	1,440
From acquisitions		—
Accretion		(190	)
Balance at December 31,	$	1,250

The following table presents the outstanding balances and related carrying amounts for all purchased credit impaired loans at the end of the respective periods:


(dollars in thousands)	Contractually Required Payments Receivable		Carrying Amount
At December 31, 2022	$	6,354	$	5,104

At December 31, 2022, non-accretable discounts totaled $1.3 million PCI loans. Premiums on acquired loans related to the interest rate and maturities of the performing loans in the portfolios were also recognized. As of December 31, 2022, the remaining premium, which will be amortized into income over the lives of these loans, was $1.6 million.

The contractual and carrying balances of all acquired loans at December 31, 2022 was $234.9 million.

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are limited to commitments to originate loans and unused lines of credit and involve, to varying degrees, elements of credit risk in excess of the amount recognized on the balance sheet. The Company's exposure to credit loss from nonperformance by the other party to the above mentioned financial instruments is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Company generally requires collateral or other security to support financial instruments with off-balance sheet credit risk. At December 31, 2023, the Company's reserve balance for unfunded commitments was $289,000.

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. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Letters of credit are commitments issued to guarantee the performance of a customer to a third party.


Amounts representing credit risk	December 31, 2023		December 31, 2022
(dollars in thousands)
Available lines of credit	$	49,371	$	66,166
Letters of credit		935		978
Total	$	50,306	$	67,144