XML 27 R13.htm IDEA: XBRL DOCUMENT v3.21.1
Allowance for Loan Losses
12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
Allowance for Loan Losses

NOTE 4. Allowance for Loan Losses

Changes in the allowance for loan losses for the years December 31, 2020 and 2019 were as follows:

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

(in thousands)

 

Balance, beginning

 

$

4,973

 

 

$

5,456

 

Provision charged to operating expense

 

 

1,457

 

 

 

629

 

Recoveries added to the allowance

 

 

1,131

 

 

 

201

 

Loan losses charged to the allowance

 

 

(465

)

 

 

(1,313

)

Balance, ending

 

$

7,096

 

 

$

4,973

 

 

 

Nonaccrual and past due loans by class at December 31, 2020 and December 31, 2019 were as follows:

 

 

 

December 31, 2020

 

 

 

(in thousands)

 

 

 

30 - 59

Days

Past Due

 

 

60 - 89

Days

Past Due

 

 

90 or More

Days Past

Due

 

 

Total Past

Due

 

 

Current

 

 

Total Loans

 

 

90 or More

Days Past Due

Still Accruing

 

 

Nonaccrual

Loans

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

43

 

 

$

 

 

$

 

 

$

43

 

 

$

140,719

 

 

$

140,762

 

 

$

 

 

$

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

 

 

 

 

 

 

157

 

 

 

157

 

 

 

165,764

 

 

 

165,921

 

 

 

 

 

 

1,227

 

Non-owner occupied

 

 

500

 

 

 

 

 

 

122

 

 

 

622

 

 

 

168,118

 

 

 

168,740

 

 

 

 

 

 

2,405

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,644

 

 

 

10,644

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

69

 

 

 

69

 

 

 

47,677

 

 

 

47,746

 

 

 

 

 

 

69

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

5

 

 

 

 

 

 

 

 

 

5

 

 

 

21,316

 

 

 

21,321

 

 

 

 

 

 

5

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Lines

 

 

13

 

 

 

 

 

 

 

 

 

13

 

 

 

31,239

 

 

 

31,252

 

 

 

 

 

 

42

 

Single family

 

 

249

 

 

 

123

 

 

 

581

 

 

 

953

 

 

 

216,041

 

 

 

216,994

 

 

 

 

 

 

1,006

 

Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,496

 

 

 

21,496

 

 

 

 

 

 

 

All Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,773

 

 

 

10,773

 

 

 

 

 

 

 

Total

 

$

810

 

 

$

123

 

 

$

929

 

 

$

1,862

 

 

$

833,787

 

 

$

835,649

 

 

$

 

 

$

4,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

(in thousands)

 

 

 

30 - 59

Days

Past Due

 

 

60 - 89

Days

Past Due

 

 

90 or More

Days Past

Due

 

 

Total Past

Due

 

 

Current

 

 

Total Loans

 

 

90 or More

Past Due Still

Accruing

 

 

Nonaccrual

Loans

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

47

 

 

$

 

 

$

32

 

 

$

79

 

 

$

46,464

 

 

$

46,543

 

 

$

 

 

$

32

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

1,078

 

 

 

 

 

 

 

 

 

1,078

 

 

 

147,879

 

 

 

148,957

 

 

 

 

 

 

320

 

Non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137,643

 

 

 

137,643

 

 

 

 

 

 

329

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,867

 

 

 

7,867

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

187

 

 

 

187

 

 

 

48,424

 

 

 

48,611

 

 

 

 

 

 

187

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

55

 

 

 

6

 

 

 

 

 

 

61

 

 

 

9,480

 

 

 

9,541

 

 

 

 

 

 

8

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Lines

 

 

121

 

 

 

 

 

 

 

 

 

121

 

 

 

33,127

 

 

 

33,248

 

 

 

 

 

 

65

 

Single family

 

 

471

 

 

 

541

 

 

 

1,251

 

 

 

2,263

 

 

 

184,069

 

 

 

186,332

 

 

 

 

 

 

1,244

 

Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,415

 

 

 

14,415

 

 

 

 

 

 

 

All Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,050

 

 

 

12,050

 

 

 

 

 

 

 

Total

 

$

1,772

 

 

$

547

 

 

$

1,470

 

 

$

3,789

 

 

$

641,418

 

 

$

645,207

 

 

$

 

 

$

2,185

 

 

 

Allowance for loan losses by segment at December 31, 2020 and December 31, 2019 were as follows:

 

 

 

Twelve Months Ended

 

 

 

December 31, 2020

 

 

 

(in thousands)

 

 

 

Construction

and Farmland

 

 

Residential

Real Estate

 

 

Commercial

Real Estate

 

 

Commercial

 

 

Consumer

 

 

All Other

Loans

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

446

 

 

$

1,601

 

 

$

1,991

 

 

$

565

 

 

$

54

 

 

$

120

 

 

$

196

 

 

$

4,973

 

Charge-Offs

 

 

(119

)

 

 

(20

)

 

 

(155

)

 

 

(49

)

 

 

(83

)

 

 

(39

)

 

 

 

 

 

(465

)

Recoveries

 

 

7

 

 

 

275

 

 

 

302

 

 

 

498

 

 

 

41

 

 

 

8

 

 

 

 

 

 

1,131

 

Provision

 

 

1,270

 

 

 

73

 

 

 

(493

)

 

 

360

 

 

 

186

 

 

 

257

 

 

 

(196

)

 

 

1,457

 

Ending balance

 

$

1,604

 

 

$

1,929

 

 

$

1,645

 

 

$

1,374

 

 

$

198

 

 

$

346

 

 

$

 

 

$

7,096

 

Ending balance: Individually evaluated for impairment

 

$

 

 

$

72

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

72

 

Ending balance: collectively evaluated for impairment

 

$

1,604

 

 

$

1,857

 

 

$

1,645

 

 

$

1,374

 

 

$

198

 

 

$

346

 

 

$

 

 

$

7,024

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

58,390

 

 

$

269,742

 

 

$

334,661

 

 

$

140,762

 

 

$

21,321

 

 

$

10,773

 

 

$

 

 

$

835,649

 

Ending balance individually evaluated for impairment

 

$

105

 

 

$

3,869

 

 

$

3,632

 

 

$

147

 

 

$

15

 

 

$

 

 

$

 

 

$

7,768

 

Ending balance collectively evaluated for impairment

 

$

58,285

 

 

$

265,873

 

 

$

331,029

 

 

$

140,615

 

 

$

21,306

 

 

$

10,773

 

 

$

 

 

$

827,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

(in thousands)

 

 

 

Construction

and Farmland

 

 

Residential

Real Estate

 

 

Commercial

Real Estate

 

 

Commercial

 

 

Consumer

 

 

All Other

Loans

 

 

Unallocated

 

 

Total

 

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

583

 

 

$

1,788

 

 

$

1,988

 

 

$

919

 

 

$

53

 

 

$

97

 

 

$

28

 

 

$

5,456

 

Charge-Offs

 

 

 

 

 

(406

)

 

 

 

 

 

(850

)

 

 

(5

)

 

 

(52

)

 

 

 

 

 

(1,313

)

Recoveries

 

 

8

 

 

 

72

 

 

 

20

 

 

 

52

 

 

 

26

 

 

 

23

 

 

 

 

 

 

201

 

Provision

 

 

(145

)

 

 

147

 

 

 

(17

)

 

 

444

 

 

 

(20

)

 

 

52

 

 

 

168

 

 

 

629

 

Ending balance

 

$

446

 

 

$

1,601

 

 

$

1,991

 

 

$

565

 

 

$

54

 

 

$

120

 

 

$

196

 

 

$

4,973

 

Ending balance: Individually evaluated for impairment

 

$

100

 

 

$

51

 

 

$

149

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

300

 

Ending balance: collectively evaluated for impairment

 

$

346

 

 

$

1,550

 

 

$

1,842

 

 

$

565

 

 

$

54

 

 

$

120

 

 

$

196

 

 

$

4,673

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

56,478

 

 

$

233,995

 

 

$

286,600

 

 

$

46,543

 

 

$

9,541

 

 

$

12,050

 

 

$

 

 

$

645,207

 

Ending balance individually evaluated for impairment

 

$

433

 

 

$

3,681

 

 

$

3,053

 

 

$

228

 

 

$

8

 

 

$

 

 

$

 

 

$

7,403

 

Ending balance collectively evaluated for impairment

 

$

56,045

 

 

$

230,314

 

 

$

283,547

 

 

$

46,315

 

 

$

9,533

 

 

$

12,050

 

 

$

 

 

$

637,804

 

 

 


 

Beginning with the three months ended September 30, 2020, the Company changed its allowance methodology for the risk scale used in calculating the environmental factors portion of the general reserves assigned to unimpaired credits. During that quarter, management determined it necessary to adjust each of the risk scores assigned to all nine current qualitative factors due to changes that had occurred both internally and outside of the Company that have an impact on payment defaults, collateral values, risk ratings, etc. Management also determined it necessary to adjust the loss history period from 28 quarters to 12 quarters. The Company believes that the revised risk scale and loss history period is more indicative of the losses and risks inherent in the portfolio.

The following table represents the effect on the loan loss provision for year ended December 31, 2020 as a result of the change in allowance methodology from that used in prior periods.

 

 

(in thousands)

 

Calculated Provision (Recovery) Based on Current Methodology

 

 

Calculation Provision (Recovery) Based on Prior Methodology

 

 

Difference

 

Portfolio Segment:

 

 

 

 

 

 

 

 

 

 

 

 

Construction and Farmland

 

$

1,270

 

 

$

85

 

 

$

1,185

 

Residential Real Estate

 

 

73

 

 

 

275

 

 

 

(202

)

Commercial Real Estate

 

 

(493

)

 

 

444

 

 

 

(937

)

Commercial

 

 

360

 

 

 

(262

)

 

 

622

 

Consumer

 

 

186

 

 

 

140

 

 

 

46

 

All Other Loans

 

 

257

 

 

 

26

 

 

 

231

 

Total

 

$

1,653

 

 

$

708

 

 

$

945

 

 

Impaired loans by class at December 31, 2020 and December 31, 2019 were as follows:

 

 

 

As of

 

 

 

December 31, 2020

 

 

 

(in thousands)

 

 

 

Unpaid

Principal

Balance

 

 

Recorded

Investment

 

 

Related

Allowance

 

 

Average

Recorded

Investment

 

 

Interest

Income

Recognized

 

With no related allowance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

246

 

 

$

147

 

 

$

 

 

$

186

 

 

$

16

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

1,282

 

 

 

1,227

 

 

 

 

 

 

1,258

 

 

 

18

 

Non-owner occupied

 

 

2,682

 

 

 

2,405

 

 

 

 

 

 

2,444

 

 

 

34

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

233

 

 

 

105

 

 

 

 

 

 

109

 

 

 

3

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

16

 

 

 

15

 

 

 

 

 

 

22

 

 

 

1

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity lines

 

 

272

 

 

 

42

 

 

 

 

 

 

44

 

 

 

 

Single family

 

 

2,655

 

 

 

2,413

 

 

 

 

 

 

2,514

 

 

 

76

 

Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

7,386

 

 

$

6,354

 

 

$

 

 

$

6,577

 

 

$

148

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-owner occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family

 

 

1,449

 

 

 

1,431

 

 

 

72

 

 

 

1,448

 

 

 

38

 

Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1,449

 

 

$

1,431

 

 

$

72

 

 

$

1,448

 

 

$

38

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

246

 

 

$

147

 

 

$

 

 

$

186

 

 

$

16

 

Commercial Real Estate

 

 

3,964

 

 

 

3,632

 

 

 

 

 

 

3,702

 

 

 

52

 

Construction and Farmland

 

 

233

 

 

 

105

 

 

 

 

 

 

109

 

 

 

3

 

Consumer

 

 

16

 

 

 

15

 

 

 

 

 

 

22

 

 

 

1

 

Residential

 

 

4,376

 

 

 

3,886

 

 

 

72

 

 

 

4,006

 

 

 

114

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,835

 

 

$

7,785

 

 

$

72

 

 

$

8,025

 

 

$

186

 

 

(1)

Recorded investment is defined as the summation of the outstanding principal balance, accrued interest, and any partial charge-offs.

 

 

 

As of

 

 

 

December 31, 2019

 

 

 

(in thousands)

 

 

 

Unpaid

Principal

Balance

 

 

Recorded

Investment

 

 

Related

Allowance

 

 

Average

Recorded

Investment

 

 

Interest

Income

Recognized

 

With no related allowance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

364

 

 

$

228

 

 

$

 

 

$

269

 

 

$

21

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

369

 

 

 

356

 

 

 

 

 

 

358

 

 

 

4

 

Non-owner occupied

 

 

407

 

 

 

329

 

 

 

 

 

 

335

 

 

 

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

301

 

 

 

246

 

 

 

 

 

 

263

 

 

 

25

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

9

 

 

 

8

 

 

 

 

 

 

9

 

 

 

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity lines

 

 

276

 

 

 

65

 

 

 

 

 

 

68

 

 

 

1

 

Single family

 

 

2,854

 

 

 

2,435

 

 

 

 

 

 

2,583

 

 

 

80

 

Multifamily

 

 

366

 

 

 

367

 

 

 

 

 

 

375

 

 

 

21

 

Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

4,946

 

 

$

4,034

 

 

$

 

 

$

4,260

 

 

$

152

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-owner occupied

 

 

2,369

 

 

 

2,377

 

 

 

149

 

 

 

2,405

 

 

 

103

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

187

 

 

 

187

 

 

 

100

 

 

 

187

 

 

 

8

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single family

 

 

879

 

 

 

822

 

 

 

51

 

 

 

833

 

 

 

38

 

Multifamily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

3,435

 

 

$

3,386

 

 

$

300

 

 

$

3,425

 

 

$

149

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

364

 

 

$

228

 

 

$

 

 

$

269

 

 

$

21

 

Commercial Real Estate

 

 

3,145

 

 

 

3,062

 

 

 

149

 

 

 

3,098

 

 

 

107

 

Construction and Farmland

 

 

488

 

 

 

433

 

 

 

100

 

 

 

450

 

 

 

33

 

Consumer

 

 

9

 

 

 

8

 

 

 

 

 

 

9

 

 

 

 

Residential

 

 

4,375

 

 

 

3,689

 

 

 

51

 

 

 

3,859

 

 

 

140

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

8,381

 

 

$

7,420

 

 

$

300

 

 

$

7,685

 

 

$

301

 

 

(1)

Recorded investment is defined as the summation of the outstanding principal balance, accrued interest, and any partial charge-offs.

 

 

When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is in nonaccrual status, all payments are applied to principal under the cost-recovery method. For financial statement purposes, the recorded investment in nonaccrual loans is the actual principal balance reduced by payments that would otherwise have been applied to interest. When reporting information on these loans to the applicable customers, the unpaid principal balance is reported as if payments were applied to principal and interest under the original terms of the loan agreements. Therefore, the unpaid principal balance reported to the customer would be higher than the recorded investment in the loan for financial statement purposes. When the ultimate collectability of the total principal of the impaired loan is not in doubt and the loan is in nonaccrual status, contractual interest is credited to interest income when received under the cash-basis method.

The Company uses a rating system for evaluating the risks associated with non-consumer loans. Consumer loans are not evaluated for risk unless the characteristics of the loan fall within classified categories. Descriptions of these ratings are as follows:

 

 

 

 

Pass

 

Pass loans exhibit acceptable history of profits, cash flow ability and liquidity. Sufficient cash flow exists to service the loan. All obligations have been paid by the borrower in an as agreed manner.

 

 

Pass Monitored

 

Pass monitored loans may be experiencing income and cash volatility, inconsistent operating trends, nominal liquidity and/or a leveraged balance sheet. A higher level of supervision is required for these loans as the potential for a negative event could impact the borrower’s ability to repay the loan.

 

 

Special mention

 

Special mention loans exhibit negative trends and potential weakness that, if left uncorrected, may negatively affect the borrower’s ability to repay its obligations. The risk of default is not imminent and the borrower still demonstrates sufficient financial strength to service debt.

 

 

Substandard

 

Substandard loans exhibit well defined weaknesses resulting in a higher probability of default. The borrowers exhibit adverse financial trends and a diminishing ability or willingness to service debt.

 

 

Doubtful

 

Doubtful loans exhibit all of the characteristics inherent in substandard loans; however given the severity of weaknesses, the collection of 100% of the principal is unlikely under current conditions.

 

 

Loss

 

Loss loans are considered uncollectible over a reasonable period of time and of such little value that its continuance as a bankable asset is not warranted.

 

 

Credit quality information by class at December 31, 2020 and December 31, 2019 was as follows:

 

 

 

As of

 

 

 

December 31, 2020

 

 

 

(in thousands)

 

INTERNAL RISK RATING GRADES

 

Pass

 

 

Pass

Monitored

 

 

Special

Mention

 

 

Substandard

 

 

Doubtful

 

 

Loss

 

 

Total

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

137,566

 

 

$

2,750

 

 

$

439

 

 

$

7

 

 

$

 

 

$

 

 

$

140,762

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

126,839

 

 

 

31,927

 

 

 

5,929

 

 

 

1,226

 

 

 

 

 

 

 

 

 

165,921

 

Non-owner occupied

 

 

101,026

 

 

 

42,338

 

 

 

22,555

 

 

 

2,821

 

 

 

 

 

 

 

 

 

168,740

 

Construction and Farmland:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

8,131

 

 

 

2,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,644

 

Commercial

 

 

19,599

 

 

 

24,982

 

 

 

3,004

 

 

 

161

 

 

 

 

 

 

 

 

 

47,746

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Lines

 

 

31,087

 

 

 

124

 

 

 

 

 

 

36

 

 

 

5

 

 

 

 

 

 

31,252

 

Single family

 

 

193,579

 

 

 

16,639

 

 

 

3,594

 

 

 

3,053

 

 

 

129

 

 

 

 

 

 

216,994

 

Multifamily

 

 

10,923

 

 

 

8,700

 

 

 

1,873

 

 

 

 

 

 

 

 

 

 

 

 

21,496

 

All other loans

 

 

8,438

 

 

 

 

 

 

2,335

 

 

 

 

 

 

 

 

 

 

 

 

10,773

 

Total

 

$

637,188

 

 

$

129,973

 

 

$

39,729

 

 

$

7,304

 

 

$

134

 

 

$

 

 

$

814,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

Nonperforming

 

Consumer Credit Exposure by Payment Activity

 

 

$

21,316

 

 

$

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

December 31, 2019

 

 

 

(in thousands)

 

INTERNAL RISK RATING GRADES

 

Pass

 

 

Pass

Monitored

 

 

Special

Mention

 

 

Substandard

 

 

Doubtful

 

 

Loss

 

 

Total

 

Commercial - Non Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial & Industrial

 

$

42,578

 

 

$

3,815

 

 

$

105

 

 

$

45

 

 

$

 

 

$

 

 

$

46,543

 

Commercial Real Estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner Occupied

 

 

103,958

 

 

 

38,989

 

 

 

5,654

 

 

 

356

 

 

 

 

 

 

 

 

 

148,957

 

Non-owner occupied

 

 

103,909

 

 

 

25,939

 

 

 

5,866

 

 

 

1,929

 

 

 

 

 

 

 

 

 

137,643

 

Construction and Farm land:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

 

5,094

 

 

 

2,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,867

 

Commercial

 

 

17,018

 

 

 

30,661

 

 

 

437

 

 

 

495

 

 

 

 

 

 

 

 

 

48,611

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Lines

 

 

32,295

 

 

 

889

 

 

 

 

 

 

42

 

 

 

22

 

 

 

 

 

 

33,248

 

Single family

 

 

162,195

 

 

 

19,427

 

 

 

2,347

 

 

 

2,225

 

 

 

138

 

 

 

 

 

 

186,332

 

Multifamily

 

 

11,714

 

 

 

1,337

 

 

 

998

 

 

 

366

 

 

 

 

 

 

 

 

 

14,415

 

All other loans

 

 

11,963

 

 

 

40

 

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

12,050

 

Total

 

$

490,724

 

 

$

123,870

 

 

$

15,454

 

 

$

5,458

 

 

$

160

 

 

$

 

 

$

635,666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

Nonperforming

 

Consumer Credit Exposure by Payment Activity

 

 

$

9,480

 

 

$

61