2021 Annual Report

The following table presents time to contractual maturity and sensitivity to interest rate changes for the loan portfolio at December 31, 2021:

As of December 31, 2021

Due in One Year More Than One

More Than Five

(dollars in thousands)

or Less

Year to Five Years Years to Fifteen Years After Fifteen Years

Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 143,878 $

149,541 $

63,588 $

3,162

Paycheck Protection Program. . . . . . . . . . . . . . Construction and Land Development . . . . . . . Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . . . . . Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . . . . . . CRE Nonowner Occupied . . . . . . . . . . . . . Total Real Estate Mortgage Loans . . . . . . . . . . Consumer and Other . . . . . . . . . . . . . . . . . . . . .

898

25,264 121,357 185,729 331,447 22,385 359,735 899,296

—

— —

88,814

71,303

55,794 78,875 4,679 146,508 285,856

63,117 470,353 84,032 312,326 929,828

677

29,568

— —

30,245

3,088

2,645

495

214

Total Loans, Gross . . . . . . . . . . . . . . . . . . . . . $ 522,534 $ 1,198,103 $

1,065,214 $

33,621

Interest Rate Sensitivity: Fixed Interest Rates . . . . . . . . . . . . . . . . . . . . . $ 226,008 $

919,024 $

591,560 $

7,477 26,144 33,621

Floating or Adjustable Rates . . . . . . . . . . . . . .

296,526

279,079

473,654

Total Loans, Gross . . . . . . . . . . . . . . . . . . . . . $ 522,534 $ 1,198,103 $

1,065,214 $

Asset Quality The Company emphasizes credit quality in the originating and monitoring of the loan portfolio, and success in underwriting is measured by the levels of classified and nonperforming assets and net charge-offs. Federal regulations and internal policies require the use of an asset classification system as a means of managing and reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, substantially consistent with federal banking regulations, as a part of the credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the financial institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “watch.” The following table presents information on loan classifications at December 31, 2021. The Company had no assets classified as doubtful or loss. Total Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,718 $ 14,512 $ 23,230 Construction and Land Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 130 130 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705 1,390 2,095 CRE Owner Occupied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,421 2,421 CRE Nonowner Occupied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,907 4,188 44,095 Total Real Estate Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,612 7,999 48,611 Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,330 $ 22,641 $ 71,971 Risk Category (dollars in thousands) Watch Substandard

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