
	March 31, 2021		December 31, 2020
Residential Real Estate Loans	$	80,301,404	$	78,907,159
Consumer Loans	53,972,954		55,335,425
Commercial Business Loans	21,746,585		19,704,862
Commercial Real Estate Loans	315,672,639		299,299,647
Paycheck Protection Program ("PPP") Loans	60,191,764		47,105,618
Total Loans Held For Investment	531,885,346		500,352,711
Loans Held For Sale	6,472,399		5,693,400
Total Loans Receivable, Gross	538,357,745		506,046,111
Less:
Allowance For Loan Losses	11,946,873		12,842,896
Loans in Process	16,717,998		12,197,417
Deferred Loan Fees	3,441,355		1,838,426
	32,106,226		26,878,739
Total Loans Receivable, Net	$	506,251,519	$	479,167,372

During the year ended December 31, 2020, the Bank participated in the initial SBA Paycheck Protection Program (“PPP”), a guaranteed unsecured loan program enacted under the Coronavirus Aid, Relief and Economic Security Act of 2020 (“CARES Act”) signed into law on March 27, 2020 to provide near-term relief to help small businesses impacted by COVID-19 sustain operations. PPP loans are fully guaranteed by the SBA. Loan originations under the initial PPP ended in August 2020, The Consolidated Appropriations Act, 2021 (“CAA 2021”) enacted on December 27, 2020, renewed and extended the PPP until May 31, 2021. As a result, in January 2021, the Bank began accepting and processing loan applications under this second PPP. The Bank earns 1% interest on PPP loans as well as a fee from the SBA to cover processing costs, which is amortized over the life of the loan. The maturity date of a PPP loan is either two or five years from the date of loan origination. The balance of unamortized net deferred fees on PPP loans was $3.0 million at March 31, 2021 compared to $1.4 million at December 31, 2020. The Bank expects that the great majority of PPP borrowers will seek full or partial forgiveness of their loan obligations in accordance with the CARES Act. Because the SBA guarantees 100% of the PPP loans made to eligible borrowers, and the entire principal amount of these loans, including any accrued interest, is eligible to be forgiven and repaid by the SBA, PPP loans are excluded from our allowance for loan losses calculation.

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.



March 31, 2021	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	67,140,978	$	9,783,087	$	570,198	$	2,807,141	$	80,301,404
Consumer	41,120,979		10,937,340		933,701		980,934		53,972,954
Commercial Business	17,579,914		3,845,473		76,569		244,629		21,746,585
Commercial Real Estate	236,849,707		56,633,113		17,071,512		5,118,307		315,672,639
PPP	60,191,764		—		—		—		60,191,764
Total	$	422,883,342	$	81,199,013	$	18,651,980	$	9,151,011	$	531,885,346



December 31, 2020	Pass		Caution		Special Mention		Substandard		Total Loans
Residential Real Estate	$	65,437,564	$	9,675,300	$	799,446	$	2,994,849	$	78,907,159
Consumer	42,926,887		10,525,814		891,107		991,617		55,335,425
Commercial Business	15,315,677		3,851,517		309,100		228,568		19,704,862
Commercial Real Estate	221,696,863		56,642,660		16,349,302		4,610,822		299,299,647
PPP	47,105,618		—		—		—		47,105,618
Total	$	392,482,609	$	80,695,291	$	18,348,955	$	8,825,856	$	500,352,711


	March 31, 2021
	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	$	102,060	$	—	$	261,681	$	363,741	$	79,937,663	$	80,301,404
Consumer	325,375		64,841		65,060		455,276		53,517,678		53,972,954
Commercial Business	35,506		28,955		169		64,630		21,681,955		21,746,585
Commercial Real Estate	1,330,976		205,702		874,887		2,411,565		313,261,074		315,672,639
PPP	—		—		—		—		60,191,764		60,191,764
Total	$	1,793,917	$	299,498	$	1,201,797	$	3,295,212	$	528,590,134	$	531,885,346


	December 31, 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	$	—	$	152,634	$	160,152	$	312,786	$	78,594,373	$	78,907,159
Consumer	292,498		30,610		91,870		414,978		54,920,447		55,335,425
Commercial Business	49,554		—		7,152		56,706		19,648,156		19,704,862
Commercial Real Estate	735,456		346,850		550,409		1,632,715		297,666,932		299,299,647
PPP	—		—		—		—		47,105,618		47,105,618
Total	$	1,077,508	$	530,094	$	809,583	$	2,417,185	$	497,935,526	$	500,352,711

At March 31, 2021 and December 31, 2020, 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.


	March 31, 2021				December 31, 2020				(Decrease) Increase
	Amount		Percent (1)		Amount		Percent (1)		$		%
Non-accrual Loans:
Residential Real Estate	$	1,586,738	0.3	%	$	1,682,240	0.4	%	$	(95,502)	(5.7)%
Consumer	367,628		0.1		402,878		0.1		(35,250)		(8.7)
Commercial Business	90,811		—		100,408		—		(9,597)		(9.6)
Commercial Real Estate	1,666,481		0.3		939,946		0.2		726,535		77.3
Total Non-accrual Loans	$	3,711,658	0.7	%	$	3,125,472	0.7	%	$	586,186	18.8%


	Three Months Ended March 31, 2021
	Residential Real Estate		Consumer		Commercial Business		Commercial Real Estate		Total
Beginning Balance	$	1,528,948	$	1,298,655	$	1,165,033	$	8,850,260	$	12,842,896
Provision for Loan Losses	(300,408)		(68,519)		(27,997)		(473,076)		(870,000)
Charge-Offs	—		(38,277)		(6,699)		—		(44,976)
Recoveries	70		9,295		948		8,640		18,953
Ending Balance	$	1,228,610	$	1,201,154	$	1,131,285	$	8,385,824	$	11,946,873


	Three Months Ended March 31, 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	79,144		141,944		103,002		375,910		700,000
Charge-Offs	—		(47,107)		(35,048)		—		(82,155)
Recoveries	600		22,599		—		5,220		28,419
Ending Balance	$	1,470,338	$	1,328,285	$	612,718	$	6,460,497	$	9,871,838


	Allowance For Loan Losses
March 31, 2021	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,228,610	$	1,228,610
Consumer	—		1,201,154		1,201,154
Commercial Business	—		1,131,285		1,131,285
Commercial Real Estate	—		8,385,824		8,385,824
Total	$	—	$	11,946,873	$	11,946,873


	Allowance For Loan Losses
December 31, 2020	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	—	$	1,528,948	$	1,528,948
Consumer	—		1,298,655		1,298,655
Commercial Business	—		1,165,033		1,165,033
Commercial Real Estate	—		8,850,260		8,850,260
Total	$	—	$	12,842,896	$	12,842,896


	Loans Receivable
March 31, 2021	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,260,731	$	79,040,673	$	80,301,404
Consumer	158,165		53,814,789		53,972,954
Commercial Business	53,046		21,693,539		21,746,585
Commercial Real Estate	1,117,146		314,555,493		315,672,639
PPP	—		60,191,764		60,191,764
Total	$	2,589,088	$	529,296,258	$	531,885,346


	Loans Receivable
December 31, 2020	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Residential Real Estate	$	1,284,303	$	77,622,856	$	78,907,159
Consumer	161,869		55,173,556		55,335,425
Commercial Business	53,047		19,651,815		19,704,862
Commercial Real Estate	720,111		298,579,536		299,299,647
PPP	—		47,105,618		47,105,618
Total	$	2,219,330	$	498,133,381	$	500,352,711

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. Non-accrual commercial loans under $200,000 and non-accrual consumer loans under $100,000 are considered immaterial and are excluded from the impairment review. 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 $2.6 million for the three months ended March 31, 2021 compared to $3.3 million for the three months ended March 31, 2020.


	March 31, 2021						December 31, 2020
Impaired Loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

Residential Real Estate	$	1,260,731	$	1,260,731	$	—	$	1,284,303	$	1,284,303	$	—
Consumer	158,165		166,465		—		161,869		170,169		—
Commercial Business	53,046		948,046		—		53,047		948,046		—
Commercial Real Estate	1,117,146		1,262,566		—		720,111		865,531		—










Total	$	2,589,088	$	3,637,808	$	—	$	2,219,330	$	3,268,049	$	—


	Three Months Ended March 31,
	2021				2020
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With No Related Allowance Recorded:
Residential Real Estate	$	1,272,179	$	—	$	1,185,056	$	1,195
Consumer	159,600		—		182,282		—
Commercial Business	53,046		—		64,406		—
Commercial Real Estate	1,123,923		1,856		1,874,528		15,560










Total	$	2,608,748	$	1,856	$	3,306,272	$	16,755

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") Accounting Standards Codification (“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 March 31, 2021 and December 31, 2020 had a combined balance of $720,000 and $315,000, respectively, and the Company had no commitments at these dates to lend additional funds on these loans. There was one new TDR modified during the three months ended March 31, 2021 and no TDRs in default at that date. The Bank considers any loan 30 days or more past due to be in default.

Our 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.

We will continue to closely monitor 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 CARES Act 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. The CAA, 2021 provides additional COVID-19 emergency response and relief, including extending relief offered under the CARES Act related to TDRs as a result of COVID-19 through January 1, 2022 or 60 days after the end of the national emergency declared by the President, whichever is earlier.

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. As of March 31, 2021, there were three loans still on deferral with a combined balance of $281,000. All loans modified due to COVID-19 are separately monitored and any request for continuation of relief beyond the initial modification will be reassessed at that time to determine if a further modification should be granted and if a downgrade in risk rating is appropriate. 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.