LOANS

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

LOANS

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:

(Dollars are in thousands)	June 30, 2017		December 31, 2016
Real estate secured:
Commercial	$	109,467	$	103,331
Construction and land development		29,081		25,755
Residential 1-4 family		253,068		249,700
Multifamily		14,587		12,582
Farmland		24,303		24,948
Total real estate loans		430,506		416,316
Commercial		31,698		26,955
Agriculture		3,683		3,164
Consumer installment loans		22,173		22,188
All other loans		704		6
Total loans	$	488,764	$	468,629

Loans receivable on nonaccrual status are summarized as follows:

(Dollars are in thousands)	June 30, 2017		December 31, 2016
Real estate secured:
Commercial	$	2,084	$	3,403
Construction and land development		289		319
Residential 1-4 family		7,200		8,355
Multifamily		158		166
Farmland		838		1,003
Total real estate loans		10,569		13,246
Agriculture		3		83
Consumer installment loans		36		76
Total loans receivable on nonaccrual status	$	10,608	$	13,405

Total interest income not recognized on nonaccrual loans for the six months ended June 30, 2017 and 2016 was $280 thousand and $158 thousand, respectively.

The following table presents information concerning the Company’s investment in loans considered impaired as of June 30, 2017 and December 31, 2016:

As of June 30, 2017 (Dollars are in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	3,017	$	3,108	$	—
Construction and land development		—		—		—
Residential 1-4 family		3,852		4,152		—
Multifamily		289		330		—
Farmland		884		1,261		—
Commercial		—		—		—
Agriculture		18		18		—
Consumer installment loans		9		9		—
All other loans		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		709		800		99
Construction and land development		215		454		81
Residential 1-4 family		569		596		108
Multifamily		1,331		1,399		216
Farmland		902		918		328
Commercial		497		497		182
Agriculture		—		—		—
Consumer installment loans		—		—		—
All other loans		—		—		—
Total	$	12,292	$	13,542	$	1,014

As of December 31, 2016 (Dollars are in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	3,636	$	4,055	$	—
Construction and land development		5		5		—
Residential 1-4 family		3,861		4,182		—
Multifamily		301		342		—
Farmland		3,895		4,601		—
Commercial		—		—		—
Agriculture		19		19		—
Consumer installment loans		26		43		—
All other loans		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,191		1,270		65
Construction and land development		240		469		106
Residential 1-4 family		555		565		56
Multifamily		—		—		—
Farmland		591		602		299
Commercial		67		67		18
Agriculture		5		5		5
Consumer installment loans		9		9		3
All other loans		—		—		—
Total	$	14,401	$	16,234	$	552

The following table presents information concerning the Company’s average impaired loans and interest recognized on those impaired loans, for the periods indicated:

	Six Months Ended
	June 30, 2017				June 30, 2016
(Dollars are in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Real estate secured:
Commercial	$	3,136	$	64	$	4,451	$	73
Construction and land development		3		—		116		—
Residential 1-4 family		3,831		102		3,758		103
Multifamily		440		11		282		11
Farmland		2,884		26		4,162		102
Commercial		—		—		—		—
Agriculture		19		1		33		2
Consumer installment loans		15		—		32		2
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		837		6		1,522		—
Construction and land development		228		—		277		—
Residential 1-4 family		657		9		1,037		11
Multifamily		444		32		133		4
Farmland		694		16		595		12
Commercial		210		16		72		2
Agriculture		2		—		139		(2	)
Consumer installment loans		3		—		22		—
All other loans		—		—		—		—
Total	$	13,403	$	283	$	16,631	$	320

	Three Months Ended
	June 30, 2017					June 30, 2016
(Dollars are in thousands)	Average  Recorded  Investment		Interest  Income  Recognized			Average  Recorded  Investment		Interest  Income  Recognized
With no related allowance recorded:
Real estate secured:
Commercial	$	2,886	$	39		$	4,571	$	38
Construction and land development		2		—			169		1
Residential 1-4 family		3,817		53			4,118		52
Multifamily		510		(1	)		208		9
Farmland		2,378		141			4,252		51
Commercial		—		—			—		—
Agriculture		19		1			31		1
Consumer installment loans		9		—			43		1
All other loans		—		—			—		—
With an allowance recorded:
Real estate secured:
Commercial		660		4			1,031		—
Construction and land development		222		—			271		—
Residential 1-4 family		708		—			595		6
Multifamily		666		32			199		2
Farmland		746		11			512		6
Commercial		282		16			73		1
Agriculture		1		—			200		—
Consumer installment loans		—		—			11		—
All other loans		—		—			—		—
Total	$	12,906	$	296		$	16,284	$	168

An age analysis of past due loans receivable is below. At June 30, 2017 and December 31, 2016, there were no loans over 90 days past due that were accruing.

As of June 30, 2017 (Dollars are in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Loans
Real estate secured:
Commercial	$	3,251	$	245	$	—	$	3,496	$	105,971	$	109,467
Construction and land development		367		—		43		410		28,671		29,081
Residential 1-4 family		2,335		1,151		1,483		4,969		248,099		253,068
Multifamily		98		—		—		98		14,489		14,587
Farmland		288		256		308		852		23,451		24,303
Total real estate loans		6,339		1,652		1,834		9,825		420,681		430,506
Commercial		4		—		—		4		31,694		31,698
Agriculture		—		—		—		—		3,683		3,683
Consumer installment Loans		116		10		7		133		22,040		22,173
All other loans		—		—		—		—		704		704
Total loans	$	6,459	$	1,662	$	1,841	$	9,962	$	478,802	$	488,764

As of December 31, 2016  (Dollars are in thousands)	Loans  30-59  Days  Past  Due		Loans  60-89  Days  Past  Due		Loans  90 or  More  Days  Past  Due		Total  Past  Due  Loans		Current  Loans		Total  Loans
Real estate secured:
Commercial	$	1,676	$	307	$	1,083	$	3,066	$	100,265	$	103,331
Construction and land development		103		17		44		164		25,591		25,755
Residential 1-4 family		4,237		1,547		2,233		8,017		241,683		249,700
Multifamily		1,367		—		—		1,367		11,215		12,582
Farmland		2,987		—		—		2,987		21,961		24,948
Total real estate loans		10,370		1,871		3,360		15,601		400,715		416,316
Commercial		20		—		—		20		26,935		26,955
Agriculture		19		—		78		97		3,067		3,164
Consumer installment Loans		110		15		36		161		22,027		22,188
All other loans		—		—		—		—		6		6
Total loans	$	10,519	$	1,886	$	3,474	$	15,879	$	452,750	$	468,629

The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans receivable as to credit risk. The Company uses the following definitions for risk ratings:

Pass - Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

Special Mention - Loans in this category are currently protected but are potentially weak, including adverse trends in borrower’s operations, credit quality or financial strength. Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances.  Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company’s credit position at some future date.

Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified Doubtful have all the weaknesses inherent in loans classified as Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

Based on the most recent analysis performed, the risk category of loans receivable was as follows:

As of June 30, 2017 (Dollars are in thousands)	Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	100,308	$	6,444	$	2,715	$	109,467
Construction and land development		27,813		980		288		29,081
Residential 1-4 family		242,884		1,994		8,190		253,068
Multifamily		12,902		—		1,685		14,587
Farmland		20,282		2,256		1,765		24,303
Total real estate loans		404,189		11,674		14,643		430,506
Commercial		30,942		260		496		31,698
Agriculture		3,652		28		3		3,683
Consumer installment loans		22,125		3		45		22,173
All other loans		704		—		—		704
Total	$	461,612	$	11,965	$	15,187	$	488,764
As of December 31, 2016 (Dollars are in thousands)		Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	92,562	$	6,922	$	3,847	$	103,331
Construction and land development		23,905		1,531		319		25,755
Residential 1-4 family		238,400		2,117		9,183		249,700
Multifamily		10,848		1,367		367		12,582
Farmland		19,070		1,545		4,333		24,948
Total real estate loans		384,785		13,482		18,049		416,316
Commercial		26,197		691		67		26,955
Agriculture		3,076		—		88		3,164
Consumer installment loans		22,086		—		102		22,188
All other loans		6		—		—		6
Total	$	436,150	$	14,173		18,306	$	468,629