Loans (Tables)

6 Months Ended

Jun. 30, 2018

The composition of net loans (in thousands) at June 30, 2018 and December 31, 2017 was as follows:


	June 30, 2018			December 31, 2017
Real Estate:
Land Development and Construction	$	37,360		$	25,923
Farmland		15,889			16,905
1-4 Family Mortgages		88,627			95,925
Commercial Real Estate		196,715			191,736

Total Real Estate Loans		338,591			330,489
Business Loans:
Commercial and Industrial Loans		66,382			58,204
Farm Production and Other Farm Loans		999			922

Total Business Loans		67,381			59,126
Consumer Loans:
Credit Cards		1,342			1,310
Other Consumer Loans		13,408			14,680

Total Consumer Loans		14,750			15,990

Total Gross Loans		420,722			405,605
Unearned Income		(105	)		(195	)
Allowance for Loan Losses		(3,028	)		(3,019	)

Loans, net	$	417,589		$	402,391

Period-End, Non-Accrual Loans, Segregated by Class

Period-end, non-accrual loans (in thousands), segregated by class, were as follows:


	June 30, 2018		December 31, 2017
Real Estate:
Land Development and Construction	$	420	$	—
Farmland		272		366
1-4 Family Mortgages		1,927		2,131
Commercial Real Estate		4,279		4,891

Total Real Estate Loans		6,898		7,388
Business Loans:
Commercial and Industrial Loans		83		78
Farm Production and Other Farm Loans		31		32

Total Business Loans		114		110
Consumer Loans:
Other Consumer Loans		71		84

Total Consumer Loans		71		84

Total Nonaccrual Loans	$	7,083	$	7,582

Aging Analysis of Past Due Loans, Segregated by Class

An aging analysis of past due loans (in thousands), segregated by class, as of June 30, 2018, was as follows:


	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	16	$	420	$	436	$	36,924	$	37,360	$	—
Farmland		294		32		326		15,563		15,889		—
1-4 Family Mortgages		1,978		255		2,233		86,394		88,627		—
Commercial Real Estate		2,635		1,150		3,785		192,930		196,715		—

Total Real Estate Loans		4,923		1,857		6,780		331,811		338,591		—
Business Loans:
Commercial and Industrial Loans		154		—		154		66,228		66,382		—
Farm Production and Other Farm Loans		—		—		—		999		999		—

Total Business Loans		154		—		154		67,227		67,381		—
Consumer Loans:
Credit Cards		40		10		50		1,292		1,342		10
Other Consumer Loans		311		58		369		13,039		13,408		8

Total Consumer Loans		351		68		419		14,331		14,750		18

Total Loans	$	5,428	$	1,925	$	7,353	$	413,369	$	420,722	$	18

An aging analysis of past due loans (in thousands), segregated by class, as of December 31, 2017 was as follows:


	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	281	$	—	$	281	$	25,642	$	25,923	$	—
Farmland		93		—		93		16,812		16,905		—
1-4 Family Mortgages		2,657		—		2,657		93,268		95,925		—
Commercial Real Estate		2,585		862		3,447		188,289		191,736		807

Total Real Estate Loans		5,616		862		6,478		324,011		330,489		807
Business Loans:
Commercial and Industrial Loans		32		—		32		58,172		58,204		—
Farm Production and Other Farm Loans		19		—		19		903		922		—

Total Business Loans		51		—		51		59,075		59,126		—
Consumer Loans:
Credit Cards		25		6		31		1,279		1,310		6
Other Consumer Loans		422		—		422		14,258		14,680		—

Total Consumer Loans		447		6		453		15,537		15,990		6

Total Loans	$	6,114	$	868	$	6,982	$	398,623	$	405,605	$	813

Impaired Loans, Segregated by Class of Loans

Impaired loans (in thousands) as of June 30, 2018, segregated by class, were as follows:


	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	420	$	—	$	420	$	420	$	112	$	321
Farmland		272		272		—		272		—		262
1-4 Family Mortgages		1,232		1,034		198		1,232		33		1,288
Commercial Real Estate		5,686		1,739		3,947		5,686		384		5,744

Total Real Estate Loans		7,610		3,045		4,565		7,610		529		7,615
Business Loans:
Farm Production and Other Farm Loans		—		—		—		—		—		25

Total Business Loans		—		—		—		—		—		25

Total Loans	$	7,610	$	3,045	$	4,565	$	7,610	$	529	$	7,640

Impaired loans (in thousands) as of December 31, 2017, segregated by class, were as follows:


	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	222	$	—	$	222	$	222	$	—	$	111
Farmland		252		252		—		252		—		126
1-4 Family Mortgages		1,344		1,141		203		1,344		46		906
Commercial Real Estate		5,801		1,763		4,038		5,801		397		4,994

Total Real Estate Loans		7,619		3,156		4,463		7,619		443		6,137
Business Loans:
Farm Production and Other Farm Loans		50		50		—		50		—		25

Total Business Loans		50		50		—		50		—		25

Total Loans	$	7,669	$	3,206	$	4,463	$	7,669	$	443	$	6,162

Troubled Debt Restructurings Segregated by Class

The following table presents troubled debt restructurings (in thousands, except for number of loans), segregated by class:


June 30, 2018	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		3	$	4,871	$	2,998

Total		3	$	4,871	$	2,998


December 31, 2017	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		3	$	4,871	$	3,047

Total		3	$	4,871	$	3,047

Changes in Troubled Debt Restructurings

Changes in the Corporation’s troubled debt restructurings (in thousands, except for number of loans) are set forth in the table below:


	Number of Loans		Recorded Investment
Totals at January 1, 2018		3	$	3,047
Reductions due to:
Principal paydowns				(49	)

Total at June 30, 2018		3	$	2,998

Detailed Amount of Gross Loans Segregated by Loan Grade and Class

The following table details the amount of gross loans (in thousands), segregated by loan grade and class, as of June 30, 2018:


	Satisfactory 1,2,3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	35,479	$	881	$	1,000	$	—	$	—	$	37,360
Farmland		14,488		367		1,034		—		—		15,889
1-4 Family Mortgages		78,362		2,482		7,783		—		—		88,627
Commercial Real Estate		157,962		28,584		10,169		—		—		196,715

Total Real Estate Loans		286,291		32,314		19,986		—		—		338,591
Business Loans:
Commercial and Industrial Loans		63,280		995		2,107		—		—		66,382
Farm Production and Other Farm Loans		958		5		36		—		—		999

Total Business Loans		64,238		1,000		2,143		—		—		67,381
Consumer Loans:
Credit Cards		1,332		—		10		—		—		1,342
Other Consumer Loans		13,167		84		99		58		—		13,408

Total Consumer Loans		14,499		84		109		58		—		14,750

Total Loans	$	365,028	$	33,398	$	22,238	$	58	$	—	$	420,722

The following table details the amount of gross loans (in thousands) segregated by loan grade and class, as of December 31, 2017:


	Satisfactory 1,2,3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	23,720	$	2,116	$	87	$	—	$	—	$	25,923
Farmland		15,496		377		1,032		—		—		16,905
1-4 Family Mortgages		82,227		5,615		8,083		—		—		95,925
Commercial Real Estate		143,271		41,833		6,632		—		—		191,736

Total Real Estate Loans		264,714		49,941		15,834		—		—		330,489
Business Loans:
Commercial and Industrial Loans		55,081		2,990		133		—		—		58,204
Farm Production and Other Farm Loans		853		9		60		—		—		922

Total Business Loans		55,934		2,999		193		—		—		59,126
Consumer Loans:
Credit Cards		1,304		—		6		—		—		1,310
Other Consumer Loans		14,414		71		137		58		—		14,680

Total Consumer Loans		15,718		71		143		58		—		15,990

Total Loans	$	336,366	$	53,011	$	16,170	$	58	$	—	$	405,605

Detailed Activity in Allowance for Possible Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2018:


June 30, 2018	Real Estate		Business Loans			Consumer			Total
Beginning Balance, January 1, 2018	$	2,151,715	$	346,781		$	520,732		$	3,019,228
Provision for (reversal of) loan losses		481,714		(410,727	)		(218,798	)		(147,811	)
Chargeoffs		98,644		15,347			59,355			173,346
Recoveries		82,114		197,321			50,444			329,879

Net chargeoffs (recoveries)		16,530		(181,974	)		8,911			(156,533	)

Ending Balance	$	2,616,899	$	118,028		$	293,023		$	3,027,950

Period end allowance allocated to:
Loans individually evaluated for impairment	$	528,937	$	—		$	—		$	528,937
Loans collectively evaluated for impairment		2,087,962		118,028			293,023			2,499,013

Ending Balance, June 30, 2018	$	2,616,899	$	118,028		$	293,023		$	3,027,950

The following table details activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2017:


June 30, 2017	Real Estate			Business Loans		Consumer			Total
Beginning Balance, January 1, 2017	$	3,117,134		$	257,554	$	528,108		$	3,902,796
(Reversal of) provision for loan losses		(271,448	)		153,428		(62,786	)		(180,806	)
Chargeoffs		117,157			128,207		21,536			266,900
Recoveries		19,397			273		31,246			50,916

Net chargeoffs (recoveries)		97,760			127,934		(9,710	)		215,984

Ending Balance	$	2,747,926		$	283,048	$	475,032		$	3,506,006

Period end allowance allocated to:
Loans individually evaluated for impairment	$	547,621		$	—	$	—		$	547,621
Loans collectively evaluated for impairment		2,200,305			283,048		475,032			2,958,385

Ending Balance, June 30, 2017	$	2,747,926		$	283,048	$	475,032		$	3,506,006

Recorded Investment in Loans Related to Balance in Allowance for Possible Loan Losses by Portfolio Segment

The Corporation’s recorded investment in loans as of June 30, 2018 and December 31, 2017 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Corporation’s impairment methodology was as follows (in thousands):


June 30, 2018	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	7,610	$	—	$	—	$	7,610
Loans collectively evaluated for general impairment		330,981		67,381		14,750		413,112

	$	338,591	$	67,381	$	14,750	$	420,722


December 31, 2017	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	4,396	$	—	$	—	$	4,396
Loans collectively evaluated for general impairment		326,093		59,126		15,990		401,209

	$	330,489	$	59,126	$	15,990	$	405,605