
	September 30, 2020		December 31, 2019
Residential Real Estate Loans	$	83,063,007	$	86,404,304
Consumer Loans	56,643,692		56,331,013
Commercial Business Loans	19,224,734		22,234,189
Commercial Real Estate Loans	312,925,293		303,550,905
Paycheck Protection Program ("PPP") Loans	75,263,782		—
Total Loans Held For Investment	547,120,508		468,520,411
Loans Held For Sale	7,495,183		3,990,606
Total Loans Receivable, Gross	$	554,615,691	$	472,511,017
Less:
Allowance For Loan Losses	12,845,662		9,225,574
Loans in Process	11,154,145		9,957,140
Deferred Loan Fees	2,745,727		469,568
	26,745,534		19,652,282
Total Loans Receivable, Net	$	527,870,157	$	452,858,735

The Company uses a risk based approach based on the following credit quality measures when analyzing the loan portfolio: pass, caution, special mention, and substandard. These indicators are used to rate the credit quality of loans for the purposes of determining the Company’s allowance for loan losses. Pass loans are loans that are performing and are deemed adequately protected by the net worth of the borrower or the underlying collateral value. These loans are considered to have the least amount of risk in terms of determining the allowance for loan losses. Loans that are graded as substandard are considered to have the most risk. These loans typically have an identified weakness or weaknesses and are inadequately protected by the net worth of the borrower or collateral value. All loans 90 days or more past due are automatically classified in this category. The caution and special mention categories fall in between the pass and substandard grades and consist of loans that do not currently expose the Company to sufficient risk to warrant adverse classification but possess weaknesses.



September 30, 2020	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	70,974,201	$	6,473,741	$	1,242,997	$	4,372,068	$	83,063,007
Consumer	43,729,381		10,388,104		950,275		1,575,932		56,643,692
Commercial Business	14,353,081		4,329,614		303,905		238,134		19,224,734
Commercial Real Estate	233,982,602		60,331,923		14,727,563		3,883,205		312,925,293
PPP	75,263,782		—		—		—		75,263,782
Total	$	438,303,047	$	81,523,382	$	17,224,740	$	10,069,339	$	547,120,508



December 31, 2019	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	76,674,539	$	4,612,182	$	1,155,802	$	3,961,781	$	86,404,304
Consumer	44,294,400		9,617,301		624,248		1,795,064		56,331,013
Commercial Business	16,140,592		5,486,393		301,462		305,742		22,234,189
Commercial Real Estate	230,810,756		56,025,352		14,285,015		2,429,782		303,550,905
Total	$	367,920,287	$	75,741,228	$	16,366,527	$	8,492,369	$	468,520,411


	September 30, 2020
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable
Residential Real Estate	$	—	$	689,387	$	798,363	$	1,487,750	$	81,575,257	$	83,063,007
Consumer	238,056		36,562		79,228		353,846		56,289,846		56,643,692
Commercial Business	3,937,747		—		8,686		3,946,433		15,278,301		19,224,734
Commercial Real Estate	7,216,908		1,535,166		882,596		9,634,670		303,290,623		312,925,293
PPP	—		—		—		—		75,263,782		75,263,782
Total	$	11,392,711	$	2,261,115	$	1,768,873	$	15,422,699	$	531,697,809	$	547,120,508


	December 31, 2019
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable
Residential Real Estate	$	—	$	355,290	$	144,209	$	499,499	$	85,904,805	$	86,404,304
Consumer	422,443		217,542		81,736		721,721		55,609,292		56,331,013
Commercial Business	147,959		76,515		20,316		244,790		21,989,399		22,234,189
Commercial Real Estate	3,849,424		—		1,352,716		5,202,140		298,348,765		303,550,905
Total	$	4,419,826	$	649,347	$	1,598,977	$	6,668,150	$	461,852,261	$	468,520,411

At September 30, 2020 and December 31, 2019, the Company did not have any loans that were 90 days or more past due and still accruing interest. The Company's strategy is to work with its borrowers to reach acceptable payment plans while protecting its interests in the existing collateral. In the event an acceptable arrangement cannot be reached, the Company may have to acquire these properties through foreclosure or other means and subsequently sell, develop, or liquidate them.


	September 30, 2020				December 31, 2019				Increase (Decrease)
	Amount		Percent (1)		Amount		Percent (1)		$		%
Non-accrual Loans:
Residential Real Estate	$	2,302,066	0.4	%	$	1,520,485	0.3	%	$	781,581	51.4%
Consumer	437,025		0.1		319,280		0.1		117,745		36.9
Commercial Business	102,885		—		122,605		—		(19,720)		(16.1)
Commercial Real Estate	988,660		0.2		1,474,036		0.3		(485,376)		(32.9)
Total Non-accrual Loans	$	3,830,636	0.7	%	$	3,436,406	0.7	%	$	394,230	11.5%


	Three Months Ended September 30, 2020
	Residential Real Estate		Consumer		Commercial Business		Commercial Real Estate		Total
Beginning Balance	$	1,532,804	$	1,317,734	$	639,731	$	7,186,002	$	10,676,271
Provision for Loan Losses	55,487		(223)		442,730		1,702,006		2,200,000
Charge-Offs	—		(45,851)		—		(19,453)		(65,304)
Recoveries	600		13,430		—		20,665		34,695
Ending Balance	$	1,588,891	$	1,285,090	$	1,082,461	$	8,889,220	$	12,845,662



	Nine Months Ended September 30, 2020
	Residential Real Estate		Consumer		Commercial Business		Commercial Real Estate		Total
Beginning Balance	$	1,390,594	$	1,210,849	$	544,764	$	6,079,367	$	9,225,574
Provision for Loan Losses	196,497		168,447		572,745		2,662,311		3,600,000
Charge-Offs	—		(148,844)		(35,048)		(19,453)		(203,345)
Recoveries	1,800		54,638		—		166,995		223,433
Ending Balance	$	1,588,891	$	1,285,090	$	1,082,461	$	8,889,220	$	12,845,662


	Three Months Ended September 30, 2019
	Residential Real Estate		Consumer		Commercial Business		Commercial Real Estate		Total
Beginning Balance	$	1,125,812	$	1,092,327	$	896,843	$	5,638,557	$	8,753,539
Provision for Loan Losses	15,059		8,207		(136,254)		187,988		75,000
Charge-Offs	—		(102,273)		—		—		(102,273)
Recoveries	600		25,289		549		5,934		32,372
Ending Balance	$	1,141,471	$	1,023,550	$	761,138	$	5,832,479	$	8,758,638


	Nine Months Ended September 30, 2019
	Residential Real Estate		Consumer		Commercial Business		Commercial Real Estate		Total
Beginning Balance	$	1,191,443	$	1,203,593	$	923,600	$	5,853,081	$	9,171,717
Provision for Loan Losses	(20,899)		82,715		(176,443)		289,627		175,000
Charge-Offs	(34,599)		(367,753)		(1,132)		(428,164)		(831,648)
Recoveries	5,526		104,995		15,113		117,935		243,569
Ending Balance	$	1,141,471	$	1,023,550	$	761,138	$	5,832,479	$	8,758,638


	Allowance For Loan Losses
September 30, 2020	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,588,891	$	1,588,891
Consumer	—		1,285,090		1,285,090
Commercial Business	—		1,082,461		1,082,461
Commercial Real Estate	—		8,889,220		8,889,220
Total	$	—	$	12,845,662	$	12,845,662


	Allowance For Loan Losses
December 31, 2019	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,390,594	$	1,390,594
Consumer	—		1,210,849		1,210,849
Commercial Business	—		544,764		544,764
Commercial Real Estate	—		6,079,367		6,079,367
Total	$	—	$	9,225,574	$	9,225,574


	Loans Receivable
September 30, 2020	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,772,454	$	81,290,553	$	83,063,007
Consumer	171,845		56,471,847		56,643,692
Commercial Business	53,046		19,171,688		19,224,734
Commercial Real Estate	1,220,120		311,705,173		312,925,293
PPP	—		75,263,782		75,263,782
Total	$	3,217,465	$	543,903,043	$	547,120,508


	Loans Receivable
December 31, 2019	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,086,433	$	85,317,871	$	86,404,304
Consumer	184,402		56,146,611		56,331,013
Commercial Business	64,406		22,169,783		22,234,189
Commercial Real Estate	1,894,642		301,656,263		303,550,905
Total	$	3,229,883	$	465,290,528	$	468,520,411

Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired management measures the impairment and records the loan at fair value. Fair value is estimated using one of the following methods: fair value of the collateral less estimated costs to sell, discounted cash flows, or market value of the loan based on similar debt. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, the Company reviews the most recent appraisal and, if it is over 24 months old, will request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, management may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. The average balance of impaired loans was $3.3 million for the three months ended September 30, 2020 compared to $4.7 million for the three months ended September 30, 2019.


	September 30, 2020						December 31, 2019
Impaired Loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With No Related Allowance Recorded:
Residential Real Estate	$	1,772,454	$	1,772,454	$	—	$	1,086,433	$	1,086,433	$	—
Consumer	171,845		180,145		—		184,402		192,702		—
Commercial Business	53,046		948,046		—		64,406		959,406		—
Commercial Real Estate	1,220,120		1,385,540		—		1,894,642		2,066,862		—










Total	$	3,217,465	$	4,286,185	$	—	$	3,229,883	$	4,305,403	$	—


	Three Months Ended September 30,
	2020				2019
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With No Related Allowance Recorded:
Residential Real Estate	$	1,792,912	$	—	$	1,133,768	$	—
Consumer	174,276		—		204,782		—
Commercial Business	54,846		—		70,406		—
Commercial Real Estate	1,294,957		7,788		2,320,973		14,377
With an Allowance Recorded:



Commercial Real Estate	—		—		996,990		—
Total
Residential Real Estate	1,792,912		—		1,133,768		—
Consumer	174,276		—		204,782		—
Commercial Business	54,846		—		70,406		—
Commercial Real Estate	1,294,957		7,788		3,317,963		14,377
Total	$	3,316,991	$	7,788	$	4,726,919	$	14,377


	Nine Months Ended September 30,
	2020				2019
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With No Related Allowance Recorded:
Residential Real Estate	$	1,817,715	$	13,030	$	1,336,122	$	—
Consumer	178,296		—		1,052,347		—
Commercial Business	60,262		—		73,526		—
Commercial Real Estate	1,656,438		41,580		2,830,359		42,709
With an Allowance Recorded:



Commercial Real Estate	—		—		1,125,904		—
Total
Residential Real Estate	1,817,715		13,030		1,336,122		—
Consumer	178,296		—		1,052,347		—
Commercial Business	60,262		—		73,526		—
Commercial Real Estate	1,656,438		41,580		3,956,263		42,709
Total	$	3,712,711	$	54,610	$	6,418,258	$	42,709

In the course of resolving delinquent loans, the Company may choose to restructure the contractual terms of certain loans. A troubled debt restructuring ("TDR") is a restructuring in which the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to a borrower that it would not otherwise consider (Financial Accounting Standards Board ("FASB") ASC Topic 310-40). The concessions granted on TDRs generally include terms to reduce the interest rate, extend the term of the debt obligation, or modify the payment structure on the debt obligation. The Company grants such concessions to reassess the borrower’s financial status and develop a plan for repayment.

At the date of modification, TDRs are initially classified as nonaccrual TDRs. TDR loans are returned to accruing status when there is economic substance to the restructuring, there is documented credit evaluation of the borrower's financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum of six months).

TDRs included in impaired loans at September 30, 2020 and December 31, 2019 had a combined balance of $499,000 and $825,000, respectively, and the Company had no commitments at these dates to lend additional funds on these loans. There were no new TDRs modified during the nine months ended September 30, 2020 or 2019 and there were no TDRs in default at those dates. The Bank considers any loan 30 days or more past due to be in default.

The Company's policy with respect to accrual of interest on loans restructured as a TDR follows relevant supervisory guidance. That is, if a borrower has demonstrated performance under the previous loan terms and shows capacity to perform under the restructured loan terms, continued accrual of interest at the restructured interest rate is probable. If a borrower was materially delinquent on payments prior to the restructuring but shows capacity to meet the restructured loan terms, the loan will likely continue as nonaccrual going forward. Lastly, if the borrower does not perform under the restructured terms, the loan is placed on nonaccrual status.

The Company closely monitors these loans and will cease accruing interest on them if management believes that the borrowers may not continue performing based on the restructured note terms. If, after previously being classified as a TDR, a loan is restructured a second time, then that loan is automatically placed on nonaccrual status. The Company's policy with respect to nonperforming loans requires the borrower to make a minimum of six consecutive payments in accordance with the modified loan terms before that loan can be placed back on accrual status. Further, the borrower must demonstrate the capacity to continue making payments on the loan prior to restoration of accrual status.

The Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act") signed into law on March 27, 2020, amended GAAP with respect to the modification of loans to borrowers affected by the COVID-19 pandemic. Among other criteria, this guidance provided that short-term loan modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. To qualify as an eligible loan under the CARES Act, a loan modification must be 1) related to COVID-19; 2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and 3) executed between March 1, 2020, and the earlier of a) 60 days after the date of termination of the national emergency by the President or b) December 31, 2020. On April 7, 2020, the federal banking regulators issued a revised interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic ("Interagency Statement"). The Interagency Statement confirmed that COVID-19 related short-term loan modifications (e.g., payment deferrals of six months or less) provided to borrowers that were current (less than 30 days past due) at the time the relief was granted are not TDR loans. Borrowers that do not meet the criteria in the CARES Act or the Interagency Statement are assessed for TDR loan classification in accordance with the Company’s accounting policies.

Since March 31, 2020 the Bank has approved over 300 loan modifications related to the COVID-19 pandemic with a combined loan balance, net of deferred fees, totaling $115.0 million. These modifications consisted of deferral of regularly scheduled principal and interest payments for three to six months. Most of these deferrals have resumed regular principal and interest payments. As of September 30, 2020, the total outstanding balance of deferred loans related to the COVID-19 pandemic was $4.3 million, including $4.0 million for commercial real estate loans. Loan modifications in accordance with the CARES Act and related banking agency regulatory guidance are still subject to an evaluation in regards to determining whether or not a loan is deemed to be impaired.