8. TROUBLED DEBT RESTRUCTURINGS

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

8. TROUBLED DEBT RESTRUCTURINGS

NOTE 8 TROUBLED DEBT RESTRUCTURINGS:

At September 30, 2016 there were $9.4 million in loans that are classified as troubled debt restructurings compared to $9.5 million at December 31, 2015. The following table presents information related to loans modified as troubled debt restructurings during the nine and three months ended September 30, 2016 and 2015.

	For the nine months ended September 30, 2016						For the nine months ended September 30, 2015
Troubled Debt Restructurings (Dollars are in thousands)	# of Loans		Pre-Mod. Recorded Investment		Post-Mod. Recorded Investment		# of Loans		Pre-Mod. Recorded Investment		Post-Mod. Recorded Investment
Real estate secured:
Commercial		1	$	341	$	341		—	$	—	$	—
Construction and land Development		—		—		—		1		551		302
Residential 1-4 family		—		—		—		2		225		224
Multifamily		—		—		—		—		—		—
Farmland		1		291		280		—		—		—
Total real estate loans		2		632		621		3		776		526
Commercial		—		—		—		—		—		—
Agriculture		—		—		—		—		—		—
Consumer installment loans		—		—		—		—		—		—
All other loans		—		—		—		—		—		—
Total		2	$	632	$	621		3	$	776	$	526
		For the three months ended September 30, 2016						For the three months ended September 30, 2015
Troubled Debt Restructurings (Dollars are in thousands)		# of Loans		Pre-Mod. Recorded Investment		Post-Mod. Recorded Investment		# of Loans		Pre-Mod. Recorded Investment		Post-Mod. Recorded Investment
Real estate secured:
Commercial		—	$	—	$	—		—	$	—	$	—
Construction and land Development		—		—		—		—		—		—
Residential 1-4 family		—		—		—		2		225		224
Multifamily		—		—		—		—		—		—
Farmland		—		—		—		—		—		—
Total real estate loans		—		—		—		2		225		224
Commercial		—		—		—		—		—		—
Agriculture		—		—		—		—		—		—
Consumer installment loans		—		—		—		—		—		—
All other loans		—		—		—		—		—		—
Total		—	$	—	$	—		2	$	225	$	224

During the nine months ended September 30, 2016, the Company modified the terms of two loans for which the modification was considered to be a troubled debt restructuring. On one loan the interest rate and maturity date were not modified; however, the payment terms were changed. On one loan the interest rate was lowered and the payment terms and maturity date were changed. During the nine months ended September 30, 2015, the Company modified the terms of three loans for which the modification was considered to be a troubled debt restructuring. On two of the loans we modified the terms and lowered the interest rate. On one loan the interest rate was not modified; however, the maturity date was extended.

During the three months ended September 30, 2016, the Company modified no loans that were considered to be a troubled debt restructuring. During the three months ended September 30, 2015, the Company modified the terms of two loans for which the modification was considered to be a troubled debt restructuring. On the two loans we modified the terms and lowered the interest rate.

One commercial real estate loan with a recorded investment of $302 thousand that had been modified as a troubled debt restructuring defaulted during the nine months ended September 30, 2016, which was within twelve months of the loan’s modification date. No loans modified as troubled debt restructurings defaulted during the nine months ended September 30, 2015. No loans modified as troubled debt restructurings defaulted during the three months ended September 30, 2016 and 2015, which were within twelve months of their modification date. Generally, a troubled debt restructuring is considered to be in default once it becomes 90 days or more past due following a modification.

In determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings in its estimate. The Company evaluates all troubled debt restructurings for possible further impairment. As a result, the allowance may be increased, adjustments may be made in the allocation of the allowance, or charge-offs may be taken to further writedown the carrying value of the loan.