
	September 30, 2022		December 31, 2021
Real Estate Loans:
Construction	$	104,250,955	$	100,162,260
Residential Mortgage	97,404,583		84,965,542
Commercial	246,797,162		227,751,664
Commercial and Agricultural Loans	31,501,202		44,689,391
Consumer Loans:
Home Equity Lines of Credit (HELOC)	29,954,251		28,611,516
Other Consumer	23,095,584		21,449,809
Total Loans Held For Investment, Gross	533,003,737		507,630,182
Less:
Allowance For Loan Losses	11,298,845		11,087,164
Deferred Loan Fees	751,630		1,084,623
	12,050,475		12,171,787
Total Loans Receivable, Net	$	520,953,262	$	495,458,395

During the first nine months of 2022, the Company 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 $55,000 at September 30, 2022 compared to $9.8 million at December 31, 2021. The balance of unamortized net deferred fees on PPP loans was $8,000 at September 30, 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.



September 30, 2022	Pass		Caution		Special Mention		Substandard		Total Loans
Construction Real Estate	$	85,290,332	$	17,068,984	$	1,541,750	$	349,889	$	104,250,955
Residential Real Estate	76,008,204		18,055,116		735,332		2,605,931		97,404,583
Commercial Real Estate	193,971,553		46,929,938		3,606,034		2,289,637		246,797,162
Commercial and Agricultural	26,859,082		4,094,485		331,731		215,904		31,501,202
Consumer HELOC	23,960,565		4,997,785		402,060		593,841		29,954,251
Other Consumer	16,163,946		6,649,604		171,910		110,124		23,095,584
Total	$	422,253,682	$	97,795,912	$	6,788,817	$	6,165,326	$	533,003,737



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


	September 30, 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	$	108,112	$	547,795	$	100,472	$	756,379	$	103,494,576	$	104,250,955
Residential Real Estate	128,333		319,082		449,007		896,422		96,508,161		97,404,583
Commercial Real Estate	713,162		64,531		358,906		1,136,599		245,660,563		246,797,162
Commercial and Agricultural	131,687		33,835		16,775		182,297		31,318,905		31,501,202
Consumer HELOC	350,385		17,439		19,420		387,244		29,567,007		29,954,251
Other Consumer	215,030		50,427		17,456		282,913		22,812,671		23,095,584
Total	$	1,646,709	$	1,033,109	$	962,036	$	3,641,854	$	529,361,883	$	533,003,737


	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 September 30, 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:	September 30, 2022		December 31, 2021
Construction Real Estate	$	115,874	$	21,434
Residential Real Estate	1,529,370		1,389,498
Commercial Real Estate	741,081		1,057,496
Commercial and Agricultural	75,740		64,479
Consumer HELOC	112,784		141,683
Other Consumer	24,049		8,797
Total Non-accrual Loans	$	2,598,898	$	2,683,387


	Three Months Ended September 30, 2022
	Real Estate								Consumer
	Construction		Residential		Commercial		Commercial and Agricultural		HELOC		Other		Total
Beginning Balance	$	2,104,386	$	1,870,696	$	4,736,314	$	1,403,818	$	606,847	$	475,893	$	11,197,954
(Reversal of) Provision for Loan Losses	99,612		(17,503)		44,664		(117,519)		(37,681)		28,427		—
Charge-Offs	—		—		—		—		—		(54,192)		(54,192)
Recoveries	15,460		9,678		77,479		1,281		38,190		12,995		155,083
Ending Balance	$	2,219,458	$	1,862,871	$	4,858,457	$	1,287,580	$	607,356	$	463,123	$	11,298,845

	Three Months Ended September 30, 2021
	Real Estate								Consumer
	Construction		Residential		Commercial		Commercial and Agricultural		HELOC		Other		Total
Beginning Balance	$	2,129,101	$	1,768,461	$	4,956,531	$	1,528,501	$	566,579	$	474,587	$	11,423,760
(Reversal of) Provision for Loan Losses	33,090		(21,578)		(196,852)		(403,030)		(58,843)		(17,787)		(665,000)
Charge-Offs	(21,460)		—		—		(800)		—		(23,702)		(45,962)
Recoveries	192,459		15,749		240,585		323		10,323		—		459,439
Ending Balance	$	2,333,190	$	1,762,632	$	5,000,264	$	1,124,994	$	518,059	$	433,098	$	11,172,237


	Allowance For Loan Losses						Loans Receivable
September 30, 2022	Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total		Individually Evaluated For Impairment		Collectively Evaluated For Impairment		Total
Construction Real Estate	$	—	$	2,219,458	$	2,219,458	$	115,874	$	104,135,081	$	104,250,955
Residential Real Estate	—		1,862,871		1,862,871		1,112,281		96,292,302		97,404,583
Commercial Real Estate	—		4,858,457		4,858,457		737,672		246,059,490		246,797,162
Commercial and Agricultural	—		1,287,580		1,287,580		31,446		31,469,756		31,501,202
Consumer HELOC	—		607,356		607,356		49,905		29,904,346		29,954,251
Other Consumer	—		463,123		463,123		—		23,095,584		23,095,584
Total	$	—	$	11,298,845	$	11,298,845	$	2,047,178	$	530,956,559	$	533,003,737

	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.


	September 30, 2022						December 31, 2021
Impaired Loans	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance















Construction Real Estate	$	115,874	$	115,874	$	—	$	19,133	$	19,133	$	—
Residential Real Estate	1,112,281		1,649,281		—		1,128,452		1,646,952		—
Commercial Real Estate	737,672		737,672		—		1,046,974		1,046,974		—
Commercial and Agricultural	31,446		926,446		—		31,446		926,446		—
Consumer HELOC	49,905		49,905		—		97,302		97,302		—
Other Consumer	—		—		—		—		—		—
Total	$	2,047,178	$	3,479,178	$	—	$	2,323,307	$	3,736,807	$	—


	Three Months Ended September 30,
	2022				2021
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized















Construction Real Estate	$	116,495	$	—	$	27,396	$	—
Residential Real Estate	1,121,686		—		1,224,991		496
Commercial Real Estate	743,998		—		1,068,681		6,887
Commercial and Agricultural	31,446		—		46,246		—
Consumer HELOC	50,725		—		152,775		—

Total	$	2,064,350	$	—	$	2,520,089	$	7,383



	Nine Months Ended September 30,
	2022				2021
Impaired Loans	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized















Construction Real Estate	$	117,881	$	—	$	33,530	$	—
Residential Real Estate	1,144,363		—		1,317,557		3,149
Commercial Real Estate	756,394		—		1,086,104		11,914
Commercial and Agricultural	31,446		—		50,326		—
Consumer HELOC	52,643		—		156,049		—

Total	$	2,102,727	$	—	$	2,643,566	$	15,063

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 (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. 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 Company had three TDRs with a combined balance of $394,000 included in impaired loans at September 30, 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 nine months ended September 30, 2022 or the nine months ended September 30, 2021 and no TDRs were in default at those dates. The Company considers any loan 30 days or more past due to be in default. At September 30, 2022 and December 31, 2021, the Company 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 Company 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