XML 31 R11.htm IDEA: XBRL DOCUMENT v3.23.1
Loans Allowance for Loan Losses and Credit Quality
12 Months Ended
Dec. 31, 2022
Loans Allowance for Loan Losses and Credit Quality  
Loans, Allowance for Loan Losses and Credit Quality

Note 4.  Loans, Allowance for Loan Losses and Credit Quality

 

The composition of net loans as of the balance sheet dates was as follows:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

$112,951,873

 

 

 

15.09%

 

$111,125,622

 

 

 

16.10%

Purchased loans

 

 

7,530,458

 

 

 

1.00%

 

 

9,807,848

 

 

 

1.42%

Commercial real estate

 

 

356,892,986

 

 

 

47.68%

 

 

300,958,931

 

 

 

43.62%

Municipal

 

 

34,633,055

 

 

 

4.63%

 

 

47,955,231

 

 

 

6.95%

Residential real estate - 1st lien

 

 

198,743,375

 

 

 

26.55%

 

 

181,316,345

 

 

 

26.28%

Residential real estate - Jr lien

 

 

33,756,872

 

 

 

4.51%

 

 

34,359,864

 

 

 

4.98%

Consumer

 

 

4,039,989

 

 

 

0.54%

 

 

4,464,692

 

 

 

0.65%

Total loans

 

 

748,548,608

 

 

 

100.00%

 

 

689,988,533

 

 

 

100.00%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL

 

 

(8,709,225)

 

 

 

 

 

 

(7,710,256)

 

 

 

 

Deferred net loan costs (fees)

 

 

493,275

 

 

 

 

 

 

 

(37,972)

 

 

 

 

Net loans

 

$740,332,658

 

 

 

 

 

 

$682,240,305

 

 

 

 

 

The following is an age analysis of loans (including non-accrual), as of the balance sheet dates, by portfolio segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

90 Days or

 

 

 

 

 

 

90 Days

 

 

Total

 

 

 

 

 

 

 

 

Accrual

 

 

More and

 

December 31, 2022

 

30-89 Days

 

 

or More

 

 

Past Due

 

 

Current

 

 

Total Loans

 

 

Loans

 

 

Accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

$2,377,668

 

 

$879,802

 

 

$3,257,470

 

 

$109,694,403

 

 

$112,951,873

 

 

$3,442,124

 

 

$0

 

Purchased loans

 

 

0

 

 

 

0

 

 

 

0

 

 

 

7,530,458

 

 

 

7,530,458

 

 

 

0

 

 

 

0

 

Commercial real estate

 

 

1,395,444

 

 

 

353,842

 

 

 

1,749,286

 

 

 

355,143,700

 

 

 

356,892,986

 

 

 

3,180,478

 

 

 

324,927

 

Municipal

 

 

0

 

 

 

0

 

 

 

0

 

 

 

34,633,055

 

 

 

34,633,055

 

 

 

0

 

 

 

0

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st lien

 

 

1,517,653

 

 

 

641,141

 

 

 

2,158,794

 

 

 

196,584,581

 

 

 

198,743,375

 

 

 

1,136,330

 

 

 

248,157

 

Jr lien

 

 

321,579

 

 

 

25,007

 

 

 

346,586

 

 

 

33,410,286

 

 

 

33,756,872

 

 

 

131,088

 

 

 

0

 

Consumer

 

 

18,745

 

 

 

0

 

 

 

18,745

 

 

 

4,021,244

 

 

 

4,039,989

 

 

 

0

 

 

 

0

 

Totals

 

$5,631,089

 

 

$1,899,792

 

 

$7,530,881

 

 

$741,017,727

 

 

$748,548,608

 

 

$7,890,020

 

 

$573,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-

 

 

90 Days or

 

 

 

 

 

 

 

90 Days

 

 

Total

 

 

 

 

 

 

 

 

 

 

Accrual

 

 

More and

 

December 31, 2021

 

30-89 Days

 

 

or More

 

 

Past Due

 

 

Current

 

 

Total Loans

 

 

Loans

 

 

Accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

$833,875

 

 

$0

 

 

$833,875

 

 

$110,291,747

 

 

$111,125,622

 

 

$98,661

 

 

$0

 

Purchased loans

 

 

0

 

 

 

0

 

 

 

0

 

 

 

9,807,848

 

 

 

9,807,848

 

 

 

0

 

 

 

0

 

Commercial real estate

 

 

49,450

 

 

 

2,400,514

 

 

 

2,449,964

 

 

 

298,508,967

 

 

 

300,958,931

 

 

 

4,517,839

 

 

 

0

 

Municipal

 

 

0

 

 

 

0

 

 

 

0

 

 

 

47,955,231

 

 

 

47,955,231

 

 

 

0

 

 

 

0

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st lien

 

 

1,190,300

 

 

 

608,775

 

 

 

1,799,075

 

 

 

179,517,270

 

 

 

181,316,345

 

 

 

1,180,563

 

 

 

506,827

 

Jr lien

 

 

51,837

 

 

 

86,476

 

 

 

138,313

 

 

 

34,221,551

 

 

 

34,359,864

 

 

 

143,566

 

 

 

86,476

 

Consumer

 

 

9,741

 

 

 

0

 

 

 

9,741

 

 

 

4,454,951

 

 

 

4,464,692

 

 

 

0

 

 

 

0

 

Totals

 

$2,135,203

 

 

$3,095,765

 

 

$5,230,968

 

 

$684,757,565

 

 

$689,988,533

 

 

$5,940,629

 

 

$593,303

 

 

For all loan segments, loans over 30 days past due are considered delinquent.

 

As of the balance sheet dates presented, residential mortgage loans in process of foreclosure consisted of the following:

 

 

 

Number of loans

 

 

Balance

 

 

 

 

 

 

 

 

December 31, 2022

 

 

1

 

 

$19,746

 

December 31, 2021

 

 

5

 

 

 

195,082

 

The following summarizes changes in the ALL and select loan information, by portfolio segment:

 

As of or for the year ended December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

Purchased

 

 

Commercial

 

 

 

 

 

Real Estate

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

& Industrial

 

 

Loans

 

 

Real Estate

 

 

Municipal

 

 

1st Lien

 

 

Jr Lien

 

 

Consumer

 

 

Unallocated

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL beginning balance

 

$870,392

 

 

$68,655

 

 

$4,151,760

 

 

$76,728

 

 

$1,765,892

 

 

$182,014

 

 

$55,698

 

 

$539,117

 

 

$7,710,256

 

Charge-offs

 

 

(76,875)

 

 

0

 

 

 

(667,474)

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(63,625)

 

 

0

 

 

 

(807,974)

Recoveries

 

 

14,112

 

 

 

0

 

 

 

667,474

 

 

 

0

 

 

 

111,763

 

 

 

5,089

 

 

 

30,505

 

 

 

0

 

 

 

828,943

 

Provision (credit)

 

 

308,693

 

 

 

(15,565)

 

 

910,053

 

 

 

(14,389)

 

 

124,181

 

 

 

54,847

 

 

 

47,108

 

 

 

(436,928)

 

 

978,000

 

ALL ending balance

 

$1,116,322

 

 

$53,090

 

 

$5,061,813

 

 

$62,339

 

 

$2,001,836

 

 

$241,950

 

 

$69,686

 

 

$102,189

 

 

$8,709,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL evaluated for impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$2,322

 

 

$0

 

 

$0

 

 

$0

 

 

$106,280

 

 

$0

 

 

$0

 

 

$0

 

 

$108,602

 

Collectively

 

 

1,114,000

 

 

 

53,090

 

 

 

5,061,813

 

 

 

62,339

 

 

 

1,895,556

 

 

 

241,950

 

 

 

69,686

 

 

 

102,189

 

 

 

8,600,623

 

Total

 

$1,116,322

 

 

$53,090

 

 

$5,061,813

 

 

$62,339

 

 

$2,001,836

 

 

$241,950

 

 

$69,686

 

 

$102,189

 

 

$8,709,225

 

 

Loans evaluated for impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$3,442,124

 

 

$0

 

 

$3,176,835

 

 

$0

 

 

$3,816,012

 

 

$77,416

 

 

$0

 

 

 

 

 

 

$10,512,387

 

Collectively

 

 

109,509,749

 

 

 

7,530,458

 

 

 

353,716,151

 

 

 

34,633,055

 

 

 

194,927,363

 

 

 

33,679,456

 

 

 

4,039,989

 

 

 

 

 

 

 

738,036,221

 

Total

 

$112,951,873

 

 

$7,530,458

 

 

$356,892,986

 

 

$34,633,055

 

 

$198,743,375

 

 

$33,756,872

 

 

$4,039,989

 

 

 

 

 

 

$748,548,608

 

 

As of or for the year ended December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

Purchased

 

 

Commercial

 

 

 

 

 

Real Estate

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

& Industrial

 

 

Loans

 

 

Real Estate

 

 

Municipal

 

 

1st Lien

 

 

Jr Lien

 

 

Consumer

 

 

Unallocated

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL beginning balance

 

$778,287

 

 

$64,260

 

 

$3,854,153

 

 

$82,211

 

 

$1,735,304

 

 

$234,896

 

 

$60,461

 

 

$398,913

 

 

$7,208,485

 

Charge-offs

 

 

(18,847)

 

 

0

 

 

 

(22,000)

 

 

0

 

 

 

(98,704)

 

 

0

 

 

 

(87,651)

 

 

0

 

 

 

(227,202)

Recoveries

 

 

4,761

 

 

 

0

 

 

 

27,160

 

 

 

0

 

 

 

7,636

 

 

 

10,821

 

 

 

54,430

 

 

 

0

 

 

 

104,808

 

Provision (credit)

 

 

106,191

 

 

 

4,395

 

 

 

292,447

 

 

 

(5,483)

 

 

121,656

 

 

 

(63,703)

 

 

28,458

 

 

 

140,204

 

 

 

624,165

 

ALL ending balance

 

$870,392

 

 

$68,655

 

 

$4,151,760

 

 

$76,728

 

 

$1,765,892

 

 

$182,014

 

 

$55,698

 

 

$539,117

 

 

$7,710,256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL evaluated for impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$0

 

 

$0

 

 

$0

 

 

$0

 

 

$79,978

 

 

$0

 

 

$0

 

 

$0

 

 

$79,978

 

Collectively

 

 

870,392

 

 

 

68,655

 

 

 

4,151,760

 

 

 

76,728

 

 

 

1,685,914

 

 

 

182,014

 

 

 

55,698

 

 

 

539,117

 

 

 

7,630,278

 

Total

 

$870,392

 

 

$68,655

 

 

$4,151,760

 

 

$76,728

 

 

$1,765,892

 

 

$182,014

 

 

$55,698

 

 

$539,117

 

 

$7,710,256

 

 

Loans evaluated for impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$93,362

 

 

$0

 

 

$4,553,734

 

 

$0

 

 

$3,720,503

 

 

$88,563

 

 

$0

 

 

 

 

 

 

$8,456,162

 

Collectively

 

 

111,032,260

 

 

 

9,807,848

 

 

 

296,405,197

 

 

 

47,955,231

 

 

 

177,595,842

 

 

 

34,271,301

 

 

 

4,464,692

 

 

 

 

 

 

 

681,532,371

 

Total

 

$111,125,622

 

 

$9,807,848

 

 

$300,958,931

 

 

$47,955,231

 

 

$181,316,345

 

 

$34,359,864

 

 

$4,464,692

 

 

 

 

 

 

$689,988,533

 

Impaired loans as of the balance sheet dates, by portfolio segment were as follows:

 

 

 

As of December 31, 2022

 

 

 

 

 

 

Unpaid

 

 

 

 

 

 

Recorded

 

 

Principal

 

 

Related

 

 

 

Investment(1)

 

 

Balance

 

 

Allowance

 

 

 

 

 

 

 

 

 

 

 

Related allowance recorded

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

$452,963

 

 

$462,745

 

 

$2,322

 

Residential real estate – 1st lien

 

 

1,041,730

 

 

 

1,073,350

 

 

 

106,280

 

Total with related allowance

 

 

1,494,693

 

 

 

1,536,095

 

 

 

108,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

2,989,161

 

 

 

3,078,769

 

 

 

 

 

Commercial real estate

 

 

3,176,962

 

 

 

3,671,196

 

 

 

 

 

Residential real estate - 1st lien

 

 

2,785,669

 

 

 

3,805,682

 

 

 

 

 

Residential real estate - Jr lien

 

 

77,419

 

 

 

126,250

 

 

 

 

 

Total with no related allowance

 

 

9,029,211

 

 

 

10,681,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total impaired loans

 

$10,523,904

 

 

$12,217,992

 

 

$108,602

 

 

(1)

Recorded investment in impaired loans in the table above includes accrued interest receivable and deferred net loan costs of $11,517.

 

 

 

As of December 31, 2022

 

 

 

Year Ended

 

 

 

Average

 

 

Interest

 

 

 

Recorded

 

 

Income

 

 

 

Investment

 

 

Recognized

 

 

 

 

 

 

 

 

Related allowance recorded

 

 

 

 

 

 

Commercial & industrial

 

$281,412

 

 

$0

 

Commercial real estate

 

 

49,942

 

 

 

0

 

Residential real estate - 1st lien

 

 

983,944

 

 

 

64,479

 

Residential real estate - Jr lien

 

 

506

 

 

 

0

 

Total with related allowance

 

 

1,315,804

 

 

 

64,479

 

 

 

 

 

 

 

 

 

 

No related allowance recorded

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

1,180,935

 

 

 

204

 

Commercial real estate

 

 

3,680,783

 

 

 

115,651

 

Residential real estate - 1st lien

 

 

2,808,989

 

 

 

177,892

 

Residential real estate - Jr lien

 

 

82,261

 

 

 

314

 

Total with no related allowance

 

 

7,752,968

 

 

 

294,061

 

 

 

 

 

 

 

 

 

 

Total impaired loans

 

$9,068,772

 

 

$358,540

 

 

 

As of December 31, 2021

 

 

 

 

 

 

Unpaid

 

 

 

 

 

 

Recorded

 

 

Principal

 

 

Related

 

 

 

Investment(1)

 

 

Balance

 

 

Allowance

 

 

 

 

 

 

 

 

 

 

 

Related allowance recorded

 

 

 

 

 

 

 

 

 

Residential real estate - 1st lien

 

$702,586

 

 

$716,118

 

 

$79,978

 

Total with related allowance

 

 

702,586

 

 

 

716,118

 

 

 

79,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

93,362

 

 

 

115,414

 

 

 

 

 

Commercial real estate

 

 

4,554,074

 

 

 

5,108,557

 

 

 

 

 

Residential real estate - 1st lien

 

 

3,050,647

 

 

 

4,076,352

 

 

 

 

 

Residential real estate - Jr lien

 

 

88,570

 

 

 

132,802

 

 

 

 

 

Total with no related allowance

 

 

7,786,653

 

 

 

9,433,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total impaired loans

 

$8,489,239

 

 

$10,149,243

 

 

$79,978

 

 

(1)

Recorded investment in impaired loans in the table above includes accrued interest receivable and deferred net loan costs of $33,077.

 

 

 

As of December 31, 2021

 

 

 

Year Ended

 

 

 

Average

 

 

Interest

 

 

 

Recorded

 

 

Income

 

 

 

Investment

 

 

Recognized

 

 

 

 

 

 

 

 

Related allowance recorded

 

 

 

 

 

 

Residential real estate - 1st lien

 

$858,124

 

 

$60,769

 

Residential real estate - Jr lien

 

 

3,452

 

 

 

243

 

Total with related allowance

 

 

861,576

 

 

 

61,012

 

 

 

 

 

 

 

 

 

 

No related allowance recorded

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

290,181

 

 

 

204

 

Commercial real estate

 

 

2,747,193

 

 

 

120,996

 

Residential real estate - 1st lien

 

 

3,331,971

 

 

 

205,514

 

Residential real estate - Jr lien

 

 

124,803

 

 

 

186

 

Total with no related allowance

 

 

6,494,148

 

 

 

326,900

 

 

 

 

 

 

 

 

 

 

Total impaired loans

 

$7,355,724

 

 

$387,912

 

 

Credit Quality Grouping

 

In developing the ALL, management uses credit quality groupings to help evaluate trends in credit quality. The Company groups credit risk into Groups A, B and C. The manner the Company utilizes to assign risk grouping is driven by loan purpose. Commercial purpose loans are individually risk graded while the retail portion of the portfolio is generally grouped by delinquency pool.

 

Group A loans - Acceptable Risk – are loans that are expected to perform as agreed under their respective terms.  Such loans carry a normal level of risk that does not require management attention beyond that warranted by the loan or loan relationship characteristics, such as loan size or relationship size. Group A loans include commercial purpose loans that are individually risk rated and retail loans that are rated by pool. Group A retail loans include performing consumer and residential real estate loans. Residential real estate loans are loans to individuals secured by 1-4 family homes, including first mortgages, home equity and home improvement loans. Loan balances fully secured by deposit accounts or that are fully guaranteed by the federal government are considered acceptable risk.

Group B loans – Management Involved - are loans that require greater attention than the acceptable risk loans in Group A. Characteristics of such loans may include, but are not limited to, borrowers that are experiencing negative operating trends such as reduced sales or margins, borrowers that have exposure to adverse market conditions such as increased competition or regulatory burden, or borrowers that have had unexpected or adverse changes in management. These loans have a greater likelihood of migrating to an unacceptable risk level if these characteristics are left unchecked. Group B is limited to commercial purpose loans that are individually risk rated.

 

Group C loans – Unacceptable Risk – are loans that have distinct shortcomings that require a greater degree of management attention.  Examples of these shortcomings include a borrower's inadequate capacity to service debt, poor operating performance, or insolvency.  These loans are more likely to result in repayment through collateral liquidation. Group C loans range from those that are likely to sustain some loss if the shortcomings are not corrected, to those for which loss is imminent and non-accrual treatment is warranted. Group C loans include individually rated commercial purpose loans and retail loans adversely rated in accordance with the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification Policy. Group C retail loans include 1-4 family residential real estate loans and home equity loans past due 90 days or more with loan-to-value ratios greater than 60%, home equity loans 90 days or more past due where the Bank does not hold first mortgage, irrespective of loan-to-value, loans in bankruptcy where repayment is likely but not yet established, and lastly consumer loans that are 90 days or more past due.

 

Commercial purpose loan ratings are assigned by the commercial account officer; for larger and more complex commercial loans, the credit rating is a collaborative assignment by the lender and the credit analyst. The credit risk rating is based on the borrower's expected performance, i.e., the likelihood that the borrower will be able to service its obligations in accordance with the loan terms. Credit risk ratings are meant to measure risk versus simply record history.  Assessment of expected future payment performance requires consideration of numerous factors.  While past performance is part of the overall evaluation, expected performance is based on an analysis of the borrower's financial strength, and historical and projected factors such as size and financing alternatives, capacity and cash flow, balance sheet and income statement trends, the quality and timeliness of financial reporting, and the quality of the borrower’s management.  Other factors influencing the credit risk rating to a lesser degree include collateral coverage and control, guarantor strength and commitment, documentation, structure and covenants and industry conditions.  There are uncertainties inherent in this process.

 

Credit risk ratings are dynamic and require updating whenever relevant information is received.  Risk ratings are assessed on an ongoing basis and at various points, including at delinquency or at the time of other adverse events.  For larger, more complex or adversely rated loans, risk ratings are also assessed at the time of annual or periodic review.  Lenders are required to make immediate disclosure to the Senior Credit Officer of any known increase in loan risk, even if considered temporary in nature.

 

The risk ratings within the loan portfolio, by segment, as of the balance sheet dates were as follows:

 

As of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

Residential

 

 

 

 

 

 

 

 

 

Commercial

 

 

Purchased

 

 

Commercial

 

 

 

 

 

Real Estate

 

 

Real Estate

 

 

 

 

 

 

 

 

 

& Industrial

 

 

Loans

 

 

Real Estate

 

 

Municipal

 

 

1st Lien

 

 

Jr Lien

 

 

Consumer

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group A

 

$104,697,047

 

 

$7,530,458

 

 

$347,732,935

 

 

$34,633,055

 

 

$195,269,893

 

 

$33,538,767

 

 

$4,039,989

 

 

$727,442,144

 

Group B

 

 

6,296,411

 

 

 

0

 

 

 

2,754,649

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

9,051,060

 

Group C

 

 

1,958,415

 

 

 

0

 

 

 

6,405,402

 

 

 

0

 

 

 

3,473,482

 

 

 

218,105

 

 

 

0

 

 

 

12,055,404

 

   Total

 

$112,951,873

 

 

$7,530,458

 

 

$356,892,986

 

 

$34,633,055

 

 

$198,743,375

 

 

$33,756,872

 

 

$4,039,989

 

 

$748,548,608

 

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

Residential

 

 

 

 

 

 

 

 

 

Commercial

 

 

Purchased

 

 

Commercial

 

 

 

 

 

Real Estate

 

 

Real Estate

 

 

 

 

 

 

 

 

 

& Industrial

 

 

Loans

 

 

Real Estate

 

 

Municipal

 

 

1st Lien

 

 

Jr Lien

 

 

Consumer

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group A

 

$107,799,925

 

 

$9,807,848

 

 

$285,732,365

 

 

$47,955,231

 

 

$177,456,149

 

 

$34,166,076

 

 

$4,464,692

 

 

$667,382,286

 

Group B

 

 

693,084

 

 

 

0

 

 

 

6,550,335

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

7,243,419

 

Group C

 

 

2,632,613

 

 

 

0

 

 

 

8,676,231

 

 

 

0

 

 

 

3,860,196

 

 

 

193,788

 

 

 

0

 

 

 

15,362,828

 

   Total

 

$111,125,622

 

 

$9,807,848

 

 

$300,958,931

 

 

$47,955,231

 

 

$181,316,345

 

 

$34,359,864

 

 

$4,464,692

 

 

$689,988,533

 

 

Modifications of Loans and TDRs

 

A loan is classified as a TDR if, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. 

 

The Company is deemed to have granted such a concession if it has modified a troubled loan in any of the following ways:

 

 

·

Reduced accrued interest;

 

·

Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower;

 

·

Converted a variable-rate loan to a fixed-rate loan;

 

·

Extended the term of the loan beyond an insignificant delay;

 

·

Deferred or forgiven principal in an amount greater than three months of payments;

 

·

Performed a refinancing and deferred or forgiven principal on the original loan;

 

·

Capitalized protective advance to pay delinquent real estate taxes; or

 

·

Capitalized delinquent accrued interest.

 

An insignificant delay or insignificant shortfall in the amount of payments typically would not require the loan to be accounted for as a TDR.  However, pursuant to regulatory guidance, any payment delay longer than three months is generally not considered insignificant. Management’s assessment of whether a concession has been granted also takes into account payments expected to be received from third parties, including third-party guarantors, provided that the third party has the ability to perform on the guarantee. 

 

The Company’s TDRs are principally a result of extending loan repayment terms to relieve cash flow difficulties. The Company has only, on a limited basis, reduced interest rates for borrowers below the current market rate for the borrower.  The Company has not forgiven principal or reduced accrued interest within the terms of original restructurings, nor has it converted variable rate terms to fixed rate terms.  However, the Company evaluates each TDR situation on its own merits and does not foreclose the granting of any particular type of concession.

 

The Company adopted the TDR guidance issued by the federal banking agencies in March and April 2020 regarding the treatment of certain short-term loan modifications relating to the COVID-19 pandemic. Under this guidance, qualifying concessions and modifications are not considered TDRs.  In total, throughout the pandemic, the Company granted short term loan concessions and/or modifications within the terms of this guidance to 595 borrowers. Of those loans, 302 remained on the books with an aggregate principal balance of $84.5 million as of December 31, 2022.  None of these loans were in a deferral status as of December 31, 2022; however, these loans may bear a higher risk of default in future periods.

 

New TDRs, by portfolio segment, for the periods presented were as follows:

 

Year ended December 31, 2022

 

 

 

 

 

 

Pre-

 

 

Post-

 

 

 

 

 

 

Modification

 

 

Modification

 

 

 

 

 

 

Outstanding

 

 

Outstanding

 

 

 

Number of

 

 

Recorded

 

 

Recorded

 

 

 

Contracts

 

 

Investment

 

 

Investment

 

 

 

 

 

 

 

 

 

 

 

Residential real estate -1st lien

 

 

2

 

 

$562,592

 

 

$562,592

 

Year ended December 31, 2021

 

 

 

 

 

 

Pre-

 

 

Post-

 

 

 

 

 

 

Modification

 

 

Modification

 

 

 

 

 

 

Outstanding

 

 

Outstanding

 

 

 

Number of

 

 

Recorded

 

 

Recorded

 

 

 

Contracts

 

 

Investment

 

 

Investment

 

 

 

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

1

 

 

$41,751

 

 

$41,751

 

Commercial real estate

 

 

2

 

 

 

3,153,402

 

 

 

3,153,402

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 1st lien

 

 

1

 

 

 

67,007

 

 

 

67,007

 

 

 

 

4

 

 

$3,262,160

 

 

$3,262,160

 

 

There were no TDRs for which there was a payment default during the twelve month period ended December 31, 2022. The TDRs for which there was a payment default during the twelve month periods presented were as follows:

 

Year ended December 31, 2021

 

 

 

Number of

 

 

Recorded

 

 

 

Contracts

 

 

Investment

 

 

 

 

 

 

 

 

Commercial & industrial

 

 

1

 

 

$38,001

 

Commercial real estate

 

 

2

 

 

 

3,081,810

 

 

 

 

3

 

 

$3,119,811

 

 

TDRs are treated as other impaired loans and carry individual specific reserves with respect to the calculation of the ALL.  These loans are categorized as non-performing, may be past due, and are generally adversely risk rated. The TDRs that have defaulted under their restructured terms are generally in collection status and their reserve is typically calculated using the fair value of collateral method.

 

The specific allowances related to TDRs as of the balance sheet dates presented were as follows:

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Specific Allocation

 

$106,280

 

 

$79,978

 

 

As of the balance sheet dates, the Company evaluates whether it is contractually committed to lend additional funds to debtors with impaired, non-accrual or modified loans.  The Company is contractually committed to lend under one SBA guaranteed line of credit to a borrower whose lending relationship was previously restructured.