Loans (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Summary of Loans

The composition of net loans receivable as of March 31, 2023 and December 31, 2022:

(Dollars in thousands)	March 31, 2023
Commercial and industrial	$	137,369
Commercial real estate		167,878
Commercial lessors of buildings		81,917
Construction		43,498
Consumer mortgage		157,316
Home equity line of credit		43,323
Consumer installment		9,951
Consumer indirect		6,374
Total loans		647,626
Allowance for credit losses		(6,307	)
Deferred loan costs, net		147
Net Loans	$	641,466

(Dollars in thousands)	December 31, 2022
Commercial	$	129,343
Commercial real estate		231,785
Residential real estate		194,125
Construction & land development		55,318
Consumer		16,387
Total loans		626,958
Allowance for loan losses		(6,838	)
Deferred loan costs, net		213
Total Loans	$	620,333

Summary of Allowance for Loan Losses

Allowance for Credit Losses

The following table details activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

(Dollars in thousands)	Beginning Balance		Impact of Adopting ASC 326			Charge-offs			Recoveries		Provisions (Reductions)			Ending Balance
March 31, 2023
Commercial and industrial	$	1,110	$	658		$	—		$	10	$	43		$	1,821
Commercial real estate		2,760		(541	)		—			1		16			2,236
Commercial lessors of buildings		—		974			—			—		(9	)		965
Construction		803		(515	)		—			—		(17	)		271
Consumer mortgage		1,268		(580	)		—			—		5			693
Home equity line of credit		—		201			—			—		(15	)		186
Consumer installment		233		(183	)		(8	)		—		5			47
Consumer indirect		—		91			(31	)		24		4			88
Unallocated		664		(664	)		—			—		—			—
	$	6,838	$	(559	)	$	(39	)	$	35	$	32		$	6,307

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2022.

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate		Construction & Land Development		Consumer			Unallocated			Total
Three Months Ended March 31, 2022
Beginning balance	$	1,240		$	2,838		$	992	$	1,380	$	421		$	747		$	7,618
(Recovery of) provision for loan    losses		(65	)		(288	)		46		154		(31	)		(116	)		(300	)
Charge-offs		(10	)		—			—		—		(21	)					(31	)
Recoveries		4			—			1		—		13						18
Net (charge-offs) recoveries		(6	)		—			1		—		(8	)					(13	)
Ending balance	$	1,169		$	2,550		$	1,039	$	1,534	$	382		$	631		$	7,305

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the classes of the loan portfolio summarized by the past-due status.

(Dollars in thousands)	Current		30-60 Days Past Due		61-89 Days Past Due		90 Days + Past Due		Total Past Due		Total Loans
March 31, 2023
Commercial and industrial	$	137,318	$	51	$	—	$	—	$	51	$	137,369
Commercial real estate		167,878		—		—		—		—		167,878
Commercial lessors of buildings		81,917		—		—		—		—		81,917
Construction		43,467		31		—		—		31		43,498
Consumer mortgage		157,079		237		—		—		237		157,316
Home equity line of credit		43,074		162		87		—		249		43,323
Consumer installment		9,868		83		—		—		83		9,951
Consumer indirect		6,374		—		—		—		—		6,374
Total Loans	$	646,975	$	564	$	87	$	—	$	651	$	647,626

The following table presents the aging of past due loans and nonaccrual loans as of December 31, 2022:

			Accruing Loans
(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
December 31, 2022
Commercial	$	129,270	$	70	$	3	$	—	$	—	$	73	$	129,343
Commercial real estate		231,693		—		—		—		92		92		231,785
Residential real estate		193,794		95		137		—		99		331		194,125
Construction & land development		55,286		32		—		—		—		32		55,318
Consumer		16,091		103		128		—		65		296		16,387
Total Loans	$	626,134	$	300	$	268	$	—	$	256	$	824	$	626,958

Schedule of Amortized Cost Basis Of Loans On Nonaccrual Status And Loans Past Due Over 90 Days Still Accruing Interest

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of March 31, 2023:

(Dollars in thousands)	Nonaccrual with no ACL		Nonaccrual with ACL		Total Nonaccrual		Loans Past Due Over 90 Days Still Accruing		Total Nonperforming
March 31, 2023
Commercial and industrial	$	2	$	—	$	2	$	—	$	2
Commercial real estate		87		—		87		—		87
Commercial lessors of buildings		—		—		—		—		—
Construction		—		—		—		—		—
Consumer mortgage		73		—		73		—		73
Home equity line of credit		—		—		—		—		—
Consumer installment		56		—		56		—		56
Consumer indirect		—		—		—		—		—
Total Loans	$	218	$	—	$	218	$	—	$	218

Summary of Loans by Credit Quality Indicator

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of March 31, 2023 and December 31, 2022:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
March 31, 2023
Commercial and industrial:
Pass	$	6,532	$	33,855	$	17,116	$	7,745	$	5,613	$	11,097	$	45,792	$	—	$	127,750
Special mention		—		21		—		—		22		—		244		—		287
Substandard		—		498		507		805		4		614		6,904		—		9,332
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	6,532	$	34,374	$	17,623	$	8,550	$	5,639	$	11,711	$	52,940	$	—	$	137,369
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	8,059	$	27,184	$	48,057	$	13,725	$	20,714	$	36,117	$	444	$	—	$	154,300
Special Mention		—		—		—		409		6,630		—		—		—		7,039
Substandard		—		—		933		642		479		4,485		—		—		6,539
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	8,059	$	27,184	$	48,990	$	14,776	$	27,823	$	40,602	$	444	$	—	$	167,878
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial lessors of buildings:
Pass	$	483	$	26,745	$	26,775	$	8,383	$	8,117	$	10,856	$	183	$	—	$	81,542
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		375		—		—		—		—		375
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	483	$	26,745	$	26,775	$	8,758	$	8,117	$	10,856	$	183	$	—	$	81,917
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction:
Pass	$	2,106	$	27,238	$	4,250	$	961	$	403	$	325	$	481	$	—	$	35,764
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	2,106	$	27,238	$	4,250	$	961	$	403	$	325	$	481	$	—	$	35,764
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total
Pass	$	17,180	$	115,022	$	96,198	$	30,814	$	34,847	$	58,395	$	46,900	$	—	$	399,356
Special Mention		—		21		—		409		6,652		—		244		—		7,326
Substandard		—		498		1,440		1,822		483		5,099		6,904		—		16,246
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	17,180	$	115,541	$	97,638	$	33,045	$	41,982	$	63,494	$	54,048	$	—	$	422,928

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
December 31, 2022
Commercial	$	119,353	$	282	$	7,927	$	—	$	1,781	$	129,343
Commercial real estate		220,414		485		8,352		—		2,534		231,785
Construction & land development		40,640		6,655		—		—		8,023		55,318
Total	$	380,407	$	7,422	$	16,279	$	—	$	12,338	$	416,446

NOTE 3 – LOANS (CONTINUED)

The following table presents the amortized cost in residential consumer loans based on payment activity:

	Term Loans Amortized Costs Basis by Origination Year												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior						Total
March 31, 2023
Consumer mortgage:
Performing	$	6,702	$	31,912	$	39,547	$	35,326	$	9,748	$	34,008	$	—	$	—	$	157,243
Nonperforming		—		—		—		—		—		73		—		—		73
Total	$	6,702	$	31,912	$	39,547	$	35,326	$	9,748	$	34,081	$	—	$	—	$	157,316
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction
Performing	$	614	$	5,257	$	282	$	1,320	$	126	$	135	$	—	$	—	$	7,734
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	614	$	5,257	$	282	$	1,320	$	126	$	135	$	—	$	—	$	7,734
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity line of credit:
Performing	$	—	$	—	$	—	$	—	$	—	$	—	$	43,269	$	54	$	43,323
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	43,269	$	54	$	43,323
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer installment:
Performing	$	1,632	$	4,859	$	1,812	$	929	$	353	$	303	$	63	$	—	$	9,951
Nonperforming		—		—		—		—		—		—		—		—		—
Total	$	1,632	$	4,859	$	1,812	$	929	$	353	$	303	$	63	$	—	$	9,951
Current period gross charge-offs	$	—	$	3	$	1	$	2	$	33	$	—	$	—	$	—	$	39
Consumer indirect:
Performing	$	177	$	1,322	$	766	$	647	$	759	$	2,647	$	—	$	—	$	6,318
Nonperforming		—		—		7		—		—		49		—		—		56
Total	$	177	$	1,322	$	773	$	647	$	759	$	2,696	$	—	$	—	$	6,374
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	31	$	—	$	—	$	31
Total
Performing	$	8,511	$	38,093	$	42,125	$	36,902	$	10,860	$	36,958	$	43,332	$	54	$	216,835
Nonperforming		—		—		7		—		—		122		—		—		129
Total	$	8,511	$	38,093	$	42,132	$	36,902	$	10,860	$	37,080	$	43,332	$	54	$	216,964

Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of December 31, 2022:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
December 31, 2022
Allowance for loan losses:
Individually evaluated for    impairment	$	—	$	—	$	—	$	—	$	4	$	—	$	4
Collectively evaluated for    impairment		1,110		2,760		1,268		803		229		664		6,834
Total ending allowance balance	$	1,110	$	2,760	$	1,268	$	803	$	233	$	664	$	6,838
Loans:
Loans individually    evaluated for    impairment	$	123	$	113	$	677	$	—	$	123			$	1,036
Loans collectively    evaluated for    impairment		129,220		231,672		193,448		55,318		16,264				625,922
Total ending loans balance	$	129,343	$	231,785	$	194,125	$	55,318	$	16,387			$	626,958

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2022:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment1		Related Allowance
December 31, 2022
Commercial	$	123	$	124	$	—	$	124	$	—
Commercial real estate		117		92		20		112		—
Residential real estate		733		166		518		683		—
Construction & land development		—		—		—		—		—
Consumer		127		6		121		127		4
Total impaired loans	$	1,101	$	387	$	659	$	1,046	$	4

1Includes principal, accrued interest, unearned fees, and origination costs

Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three Months Ended March 31,
(Dollars in thousands)	2022
Average recorded investment:
Commercial	$	264
Commercial real estate		222
Residential real estate		849
Construction & land development		329
Consumer		135
Average recorded investment in impaired loans	$	1,799
Interest income recognized:
Commercial	$	1
Commercial real estate		2
Residential real estate		8
Construction & land development		—
Consumer		2
Interest income recognized on a cash basis on impaired loans	$	13