Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2022

Receivables [Abstract]

Summary of Major Classifications of Loans

Major classifications of loans, by collateral code, at March 31, 2022 and December 31, 2021 are summarized as follows: (in thousands)

	March 31, 2022			December 31, 2021
Commercial (secured by real estate - owner occupied)	$	156,332		$	158,662
Commercial (secured by real estate - non-owner occupied)		119,461			104,042
Commercial and industrial		155,374			152,834
Paycheck Protection Program loans		7,078			17,883
Construction, land and acquisition & development		27,138			16,317
Residential mortgage 1-4 family		56,448			63,065
Consumer installment		79,862			71,580
Total		601,693			584,384
Less allowance for loan losses		(8,806	)		(8,559	)
Total loans, net	$	592,887		$	575,825

Summary of Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of and for the three months ended March 31, 2022 and as of December 31, 2021: (in thousands)

March 31, 2022	Commercial (Secured by Real Estate - Owner Occupied)			Commercial (Secured by Real Estate - Non-Owner Occupied)		Commercial and Industrial			Paycheck Protection Program (1)		Construction, Land and Acquisition & Development			Residential  Mortgage			Consumer Installment			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	2,701		$	1,980	$	2,242		$	—	$	162		$	502		$	969		$	3		$	8,559
Provision		(266	)		240		33			—		174			(89	)		147			11			250
Charge-offs		—			—		(26	)		—		—			—			(25	)		—			(51	)
Recoveries		—			—		3			—		—			38			7			—			48
Ending balance	$	2,435		$	2,220	$	2,252		$	—	$	336		$	451		$	1,098		$	14		$	8,806
Ending allowance attributable to    loans:
Individually evaluated    for impairment	$	—		$	1	$	—		$	—	$	—		$	5		$	—		$	—		$	6
Collectively evaluated    for impairment		2,435			2,219		2,252			—		336			446			1,098			14			8,800
Total ending allowance	$	2,435		$	2,220		2,252		$	—	$	336		$	451		$	1,098		$	14		$	8,806
Loans:
Individually evaluated    for impairment	$	93		$	3,374	$	388		$	—	$	—		$	2,705		$	—		$	—		$	6,560
Collectively evaluated    for impairment		156,239			116,087		154,986			7,078		27,138			53,743			79,862			—			595,133
Total loans	$	156,332		$	119,461	$	155,374		$	7,078	$	27,138		$	56,448		$	79,862		$	—		$	601,693
December 31, 2021
Allowance for loan losses:
Beginning balance	$	1,913		$	1,171	$	1,320		$	—	$	224		$	970		$	719		$	44		$	6,361
Provision		(519	)		809		1,119			—		(62	)		(541	)		310			(41	)		1,075
Charge-offs		-			-		(234	)		—		—			—			(76	)		—			(310	)
Recoveries		1,307			-		37			—		—			73			16			—			1,433
Ending balance	$	2,701		$	1,980	$	2,242		$		$	162		$	502		$	969		$	3		$	8,559
Ending allowance attributable to    loans:
Individually evaluated    for impairment	$	—		$	1	$	1		$	—	$	—		$	5		$	—		$	—		$	7
Collectively evaluated    for impairment		2,701			1,979		2,241			—		162			497			969			3			8,552
Total ending allowance	$	2,701		$	1,980	$	2,242		$	—	$	162		$	502		$	969		$	3		$	8,559
Loans:
Individually evaluated    for impairment	$	95		$	3,387	$	753		$	—	$	—		$	2,992		$	1		$	—		$	7,228
Collectively evaluated    for impairment		158,567			100,655		152,082			17,883		16,317			60,073			71,579			—			577,156
Total loans	$	158,662		$	104,042	$	152,835		$	17,883	$	16,317		$	63,065		$	71,580		$	—		$	584,384

(1)Includes PPP loans that are fully guaranteed by the SBA; thus no allowance for loan losses has been allocated to these loans.

Summary of Impaired Loans

Impaired loans at March 31, 2022 and December 31, 2021 were as follows: (in thousands)

March 31, 2022	Recorded Investment		Unpaid Principal Balance		Allocated Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial (secured by real estate - owner occupied)	$	93	$	93	$	—	$	96	$	1
Commercial (secured by real estate - non-owner occupied)		3,188		3,188		—		3,172		11
Commercial and industrial		388		388		—		418		—
Paycheck Protection Program		—		—		—		—		—
Construction, land and acquisition & development		—		—		—		—		—
Residential mortgage		1,776		1,776		—		1,836		3
Consumer installment		—		—		—		2		—
		5,445		5,445		—		5,524		15
With an allowance recorded:
Commercial (secured by real estate - owner occupied)	$	—	$	—	$	—	$	—	$	—
Commercial (secured by real estate - non-owner occupied)		186		186		1		190		3
Commercial and industrial		—		—		—		—		—
Construction, land and acquisition & development		—		—		—		—		—
Residential mortgage		929		929		5		951		13
Consumer installment		—		—		—		—		—
		1,115		1,115		6		1,141		16
Total impaired loans	$	6,560	$	6,560	$	6	$	6,665	$	31
December 31, 2021
With no related allowance recorded:
Commercial (secured by real estate - owner occupied)	$	95	$	95	$	—	$	100	$	6
Commercial (secured by real estate - non-owner occupied)		3,199		3,199		—		3,177		45
Commercial and industrial		388		421		—		458		—
Paycheck Protection Program		—		—		—		—		—
Construction, land and acquisition & development		—		—		—		—		—
Residential mortgage		2,052		2,052		—		2,110		31
Consumer installment		1		1		—		3		—
		5,735		5,768		—		5,848		82
With an allowance recorded:
Commercial (secured by real estate - owner occupied)	$	—	$	—	$	—	$	—	$	—
Commercial (secured by real estate - non-owner occupied)		188		189		1		192		12
Commercial and industrial		365		365		1		379		—
Construction, land and acquisition & development		—		—		—		—		—
Residential mortgage		940		941		5		960		60
Consumer installment		—		—		—		—		—
		1,493		1,495		7		1,531		72
Total impaired loans	$	7,228	$	7,263	$	7	$	7,379	$	154

Summary of Recorded Investment in Past Due Loans, as Well as Nonaccrual Loans

The following table presents the aging of the recorded investment in past due loans, as well as the recorded investment in nonaccrual loans, as of March 31, 2022 and December 31, 2021 by class of loans: (in thousands)

March 31, 2022	30 -59 Days  Past Due		60- 89 Days  Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total		Nonaccrual
Commercial (secured by real estate - owner occupied)	$	44	$	—	$	—	$	44	$	156,288	$	156,332	$	—
Commercial (secured by real estate - non-owner occupied)		18		5		—		23		119,438		119,461		3,189
Commercial and industrial		—		—		388		388		154,986		155,374		388
Paycheck Protection Program		—		—		—		—		7,078		7,078		—
Construction, land and acquisition &    development		—		—		—		—		27,138		27,138		—
Residential mortgage		2,871		97		213		3,181		53,267		56,448		2,683
Consumer installment		355		—		—		355		79,507		79,862		78
Total	$	3,288	$	102	$	601	$	3,991	$	597,702	$	601,693	$	6,338
December 31, 2021
Commercial (secured by real estate - owner occupied)	$	—	$	—	$	—	$	—	$	158,662	$	158,662	$	—
Commercial (secured by real estate - non-owner occupied)		—		—		3,200		3,200		100,842		104,042		3,200
Commercial and industrial		338		—		813		1,151		151,684		152,835		813
Paycheck Protection Program		—		—		—		—		17,883		17,883		—
Construction, land and acquisition &    development		—		—		-		-		16,317		16,317		-
Residential mortgage		4,094		1,711		321		6,126		56,939		63,065		2,873
Consumer installment		289		45		—		334		71,246		71,580		125
Total	$	4,721	$	1,756	$	4,334	$	10,811	$	573,573	$	584,384	$	7,011

Summary of Risk Category of Loans by Class of Loans

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans. As of March 31, 2022 and December 31, 2021, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: (in thousands)

March 31, 2022	Pass		Special Mention		Substandard		Doubtful/ Loss		Total
Commercial (secured by real estate - owner occupied)	$	155,949	$	383	$	—	$	—	$	156,332
Commercial (secured by real estate - non-owner occupied)		113,719		2,336		3,406		—		119,461
Commercial and industrial		154,949		—		425		—		155,374
Paycheck Protection Program		7,078		—		—		—		7,078
Construction, land and acquisition & development		27,138		—		—		—		27,138
Residential mortgage		52,728		—		3,720		—		56,448
Consumer installment		79,784		—		78		—		79,862
Total	$	591,345	$	2,719	$	7,629	$	—	$	601,693

December 31, 2021	Pass		Special Mention		Substandard		Doubtful/ Loss		Total
Commercial (secured by real estate - owner occupied)	$	158,272	$	390	$	—	$	—	$	158,662
Commercial (secured by real estate - non-owner occupied)		98,269		2,352		3,421		—		104,042
Commercial and industrial		151,983		—		852		—		152,835
Paycheck Protection Program		17,883		—		—		—		17,883
Construction, land and acquisition & development		16,005		312		—		—		16,317
Residential mortgage		59,080		—		3,985		—		63,065
Consumer installment		71,440		—		140		—		71,580
Total	$	572,932	$	3,054	$	8,398	$	—	$	584,384