2020 Annual Report

The following table presents time to contractual maturity and sensitivity to interest rate changes for the loan portfolio at December 31, 2020:

As of December 31, 2020

Due in One Year More Than One

(dollars in thousands)

or Less

Year to Five Years After Five Years

Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 135,237 $

119,798 $

49,185

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

138,454 44,637

—

100,060

25,520

66,928 70,262 14,930 151,439 303,559

184,038 235,447 16,701 268,640 704,826

43,513 320,756 43,973 289,221 697,463

2,889

4,040

760

Total Loans, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 541,745 $ 1,011,755 $

772,928

Interest Rate Sensitivity: Fixed Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 219,464 $

777,201 $

336,008 436,920 772,928

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

322,281

234,554

Total Loans, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 541,745 $ 1,011,755 $

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.”

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