Troubled Debt Restructuring

9 Months Ended

Sep. 30, 2021

Troubled Debt Restructuring

Note 8. Troubled Debt Restructuring

Note 8. Troubled Debt Restructuring

In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which are considered in the qualitative factors within the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance for loan loss methodology. Additionally, specific reserves may be established on restructured loans which are evaluated individually for impairment.

During the nine months ended September 30, 2021, there were two loan modifications that were considered to be troubled debt restructurings.  One of these loans was modified during the three months ended June 30, 2021 and one loan modification that would be considered a troubled debt restructuring was modified during the first quarter of 2021.  Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.

Nine months ended September 30, 2021 (dollars in thousands):
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Farmland		1	$	976	$	976
Real Estate		1		109		109
Total		2	$	1,085	$	1,085

On September 30, 2021, there were no loans restructured in the previous 12 months in default or on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.

During the nine months ended September 30, 2020, there were four loan modifications that were considered to be troubled debt restructurings. Two of these loans was modified during the three months ended September 30, 2020 and two loan modifications considered a troubled debt restructuring were modified during the second quarter of 2020.   Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.

Nine months ended September 30, 2020  (dollars in thousands):
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer		4	$	26	$	26

On September 30, 2020, there were no loans restructured in the previous 12 months in default or on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.