
	March 31, 2022		December 31, 2021
Real Estate Loans:
Construction	$	101,702,355	$	100,162,260
Residential Mortgage	84,799,618		84,965,542
Commercial	241,048,027		227,751,664
Commercial and Agricultural Loans	33,854,099		44,689,391
Consumer Loans:
HELOC	29,409,219		28,611,516
Other Consumer	21,936,673		21,449,809
Total Loans Held For Investment, Gross	512,749,991		507,630,182
Less:
Allowance For Loan Losses	11,128,963		11,087,164
Deferred Loan Fees	846,995		1,084,623
	11,975,958		12,171,787
Total Loans Receivable, Net	$	500,774,033	$	495,458,395

During the first quarter of 2022, the Bank continued its participation in the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”), by processing applications for PPP loan forgiveness. PPP loans are included in Commercial and Agricultural loans in the tables above and below and had a total balance of $3.5 million at March 31, 2022 compared to $9.8 million at December 31, 2021. The balance of unamortized net deferred fees on PPP loans was $179,000 at March 31, 2022 compared to $441,000 at December 31, 2021.

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, 2022	Pass		Caution		Special Mention		Substandard		Total Loans
Construction Real Estate	$	76,989,251	$	20,082,910	$	4,265,573	$	364,621	$	101,702,355
Residential Real Estate	65,002,986		15,907,480		1,240,739		2,648,413		84,799,618
Commercial Real Estate	191,571,418		43,636,618		3,077,070		2,762,921		241,048,027
Commercial and Agricultural	28,733,158		4,796,087		37,254		287,600		33,854,099
Consumer HELOC	23,884,209		4,447,603		570,673		506,734		29,409,219
Other Consumer	15,372,103		6,352,561		77,086		134,923		21,936,673
Total	$	401,553,125	$	95,223,259	$	9,268,395	$	6,705,212	$	512,749,991



December 31, 2021	Pass		Caution		Special Mention		Substandard		Total Loans
Construction Real Estate	$	67,205,984	$	25,867,339	$	6,566,302	$	522,635	$	100,162,260
Residential Real Estate	65,650,970		14,506,787		2,061,598		2,746,187		84,965,542
Commercial Real Estate	185,117,439		34,263,196		5,669,666		2,701,363		227,751,664
Commercial and Agricultural	40,017,641		4,296,962		54,380		320,408		44,689,391
Consumer HELOC	23,416,585		3,987,734		624,055		583,142		28,611,516
Other Consumer	15,059,609		6,244,382		85,673		60,145		21,449,809
Total	$	396,468,228	$	89,166,400	$	15,061,674	$	6,933,880	$	507,630,182


	March 31, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable
Construction Real Estate	$	317,228	$	—	$	—	$	317,228	$	101,385,127	$	101,702,355
Residential Real Estate	1,296,880		115,013		239,896		1,651,789		83,147,829		84,799,618
Commercial Real Estate	1,607,614		—		367,906		1,975,520		239,072,507		241,048,027
Commercial and Agricultural	171,271		—		39,883		211,154		33,642,945		33,854,099
Consumer HELOC	96,370		54,283		19,912		170,565		29,238,654		29,409,219
Other Consumer	166,499		53,778		15,486		235,763		21,700,910		21,936,673
Total	$	3,655,862	$	223,074	$	683,083	$	4,562,019	$	508,187,972	$	512,749,991


	December 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
Construction Real Estate	$	4,291	$	114,516	$	—	$	118,807	$	100,043,453	$	100,162,260
Residential Real Estate	296,556		543,716		205,713		1,045,985		83,919,557		84,965,542
Commercial Real Estate	195,271		—		372,405		567,676		227,183,988		227,751,664
Commercial and Agricultural	79,381		133,610		—		212,991		44,476,400		44,689,391
Consumer HELOC	51,430		—		44,382		95,812		28,515,704		28,611,516
Other Consumer	93,560		3,648		8,797		106,005		21,343,804		21,449,809
Total	$	720,489	$	795,490	$	631,297	$	2,147,276	$	505,482,906	$	507,630,182

At March 31, 2022 and December 31, 2021, 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.


Non-accrual Loans:	March 31, 2022		December 31, 2021
Construction Real Estate	$	19,799	$	21,434
Residential Real Estate	1,560,113		1,389,498
Commercial Real Estate	1,036,496		1,057,496
Commercial and Agricultural	75,095		64,479
Consumer HELOC	115,766		141,683
Other Consumer	14,265		8,797
Total Non-accrual Loans	$	2,821,534	$	2,683,387


	Three Months Ended March 31, 2022
	Real Estate								Consumer
	Construction		Residential		Commercial		Commercial and Agricultural		HELOC		Other		Total
Beginning Balance	$	2,401,196	$	1,663,423	$	4,832,440	$	1,241,828	$	517,512	$	430,765	$	11,087,164
Provision for Loan Losses	(73,215)		(44,818)		81,527		(22,242)		35,182		23,566		—
Charge-Offs	—		—		—		—		—		(31,871)		(31,871)
Recoveries	8,602		9,711		18,981		23,333		2,709		10,334		73,670
Ending Balance	$	2,336,583	$	1,628,316	$	4,932,948	$	1,242,919	$	555,403	$	432,794	$	11,128,963

	Three Months Ended March 31, 2021
	Real Estate								Consumer
	Construction		Residential		Commercial		Commercial and Agricultural		HELOC		Other		Total
Beginning Balance	$	2,486,910	$	2,264,414	$	5,753,641	$	1,112,952	$	657,356	$	567,623	$	12,842,896
Recovery of Loan Losses	(161,817)		(320,905)		(272,740)		(28,303)		(55,793)		(30,442)		(870,000)
Charge-Offs	—		—		—		(6,699)		—		(38,277)		(44,976)
Recoveries	—		70		8,640		948		—		9,295		18,953
Ending Balance	$	2,325,093	$	1,943,579	$	5,489,541	$	1,078,898	$	601,563	$	508,199	$	11,946,873


	Allowance For Loan Losses						Loans Receivable
March 31, 2022	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total		Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Construction Real Estate	$	—	$	2,336,583	$	2,336,583	$	17,889	$	101,684,466	$	101,702,355
Residential Real Estate	—		1,628,316		1,628,316		1,225,909		83,573,709		84,799,618
Commercial Real Estate	—		4,932,948		4,932,948		1,029,627		240,018,400		241,048,027
Commercial and Agricultural	—		1,242,919		1,242,919		31,446		33,822,653		33,854,099
Consumer HELOC	—		555,403		555,403		95,854		29,313,365		29,409,219
Other Consumer	—		432,794		432,794		—		21,936,673		21,936,673
Total	$	—	$	11,128,963	$	11,128,963	$	2,400,725	$	510,349,266	$	512,749,991

	Allowance For Loan Losses						Loans Receivable
December 31, 2021	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total		Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Construction Real Estate	$	—	$	2,401,196	$	2,401,196	$	19,133	$	100,143,127	$	100,162,260
Residential Real Estate	—		1,663,423		1,663,423		1,128,452		83,837,090		84,965,542
Commercial Real Estate	—		4,832,440		4,832,440		1,046,974		226,704,690		227,751,664
Commercial and Agricultural	—		1,241,828		1,241,828		31,446		44,657,945		44,689,391
Consumer HELOC	—		517,512		517,512		97,302		28,514,214		28,611,516
Other Consumer	—		430,765		430,765		—		21,449,809		21,449,809
Total	$	—	$	11,087,164	$	11,087,164	$	2,323,307	$	505,306,875	$	507,630,182

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.


	March 31, 2022						December 31, 2021
Impaired Loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance















Construction Real Estate	$	17,889	$	17,889	$	—	$	19,133	$	19,133	$	—
Residential Real Estate	1,225,909		1,762,909		—		1,128,452		1,646,952		—
Commercial Real Estate	1,029,627		1,029,627		—		1,046,974		1,046,974		—
Commercial and Agricultural	31,446		926,446		—		31,446		926,446		—
Consumer HELOC	95,854		95,854		—		97,302		97,302		—
Other Consumer	—		—		—		—		—		—
Total	$	2,400,725	$	3,832,725	$	—	$	2,323,307	$	3,736,807	$	—


	Three Months Ended March 31,
	2022				2021
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized















Construction Real Estate	$	18,511	$	—	$	39,303	$	—
Residential Real Estate	1,239,308		—		1,272,179		—
Commercial Real Estate	1,038,300		—		1,084,620		1,856
Commercial and Agricultural	31,446		—		53,046		—
Consumer HELOC	96,578		—		157,813		—
Other Consumer	—		—		1,787		—
Total	$	2,424,143	$	—	$	2,608,748	$	1,856

In the course of resolving delinquent loans, the Bank may choose to restructure the contractual terms of certain loans. A troubled debt restructuring ("TDR") is a restructuring in which the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to a borrower that it would not otherwise consider (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 Bank 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. They 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).

The Bank had three TDRs with a combined balance of $680,000 included in impaired loans at March 31, 2022 compared to three TDRs with a combined balance of $694,000 at December 31, 2021. There were no loans restructured as TDRs during the three months ended March 31, 2022 or the three months ended March 31, 2021 and no TDRs in default at that dates. The Bank considers any loan 30 days or more past due to be in default. At March 31, 2022 and December 31, 2021, the Bank had no commitments to extend additional credit to borrowers whose loan terms have been modified in a TDR. All TDRs are also classified as impaired loans and are included in the loans individually evaluated for impairment.

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.

The Bank 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 Bank's policy with respect to nonperforming loans requires the borrower to become current and then make a minimum of six consecutive payments in accordance with the loan terms before that loan can be placed back on accrual status. Further, the borrower must show capacity to continue performing into the future prior to restoration of accrual status.