LOANS

9 Months Ended

Sep. 30, 2017

Receivables [Abstract]

LOANS

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:

(Dollars are in thousands)	September 30, 2017		December 31, 2016
Real estate secured:
Commercial	$	114,880	$	103,331
Construction and land development		30,878		25,755
Residential 1-4 family		254,234		249,700
Multifamily		14,790		12,582
Farmland		23,287		24,948
Total real estate loans		438,069		416,316
Commercial		36,382		26,955
Agriculture		3,733		3,164
Consumer installment loans		22,519		22,188
All other loans		687		6
Total loans	$	501,390	$	468,629

Loans receivable on nonaccrual status are summarized as follows:

(Dollars are in thousands)	September 30, 2017		December 31, 2016
Real estate secured:
Commercial	$	2,040	$	3,403
Construction and land development		274		319
Residential 1-4 family		6,640		8,355
Multifamily		155		166
Farmland		1,062		1,003
Total real estate loans		10,171		13,246
Agriculture		7		83
Consumer installment loans		45		76
Total loans receivable on nonaccrual status	$	10,223	$	13,405

Total interest income not recognized on nonaccrual loans for the nine months ended September 30, 2017 and 2016 was $456 thousand and $397 thousand, respectively. 

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

As of September 30, 2017 (Dollars are in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,497	$	2,581	$	—
Construction and land development		—		—		—
Residential 1-4 family		3,813		4,112		—
Multifamily		285		326		—
Farmland		1,501		1,884		—
Commercial		—		—		—
Agriculture		18		18		—
Consumer installment loans		8		8		—
All other loans		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		2,322		2,420		339
Construction and land development		202		447		69
Residential 1-4 family		564		593		104
Multifamily		1,310		1,377		194
Farmland		609		621		245
Commercial		496		496		181
Agriculture		—		—		—
Consumer installment loans		—		—		—
All other loans		—		—		—
Total	$	13,625	$	14,883	$	1,132
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:

	Nine Months Ended
	September 30, 2017				September 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	$	2,976	$	73	$	4,222	$	77
Construction and land development		2		—		89		—
Residential 1-4 family		3,827		152		3,716		140
Multifamily		402		15		288		14
Farmland		2,538		52		4,211		163
Commercial		—		—		—		—
Agriculture		19		1		29		2
Consumer installment loans		13		—		24		—
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,208		80		1,539		6
Construction and land development		222		—		271		—
Residential 1-4 family		634		14		939		18
Multifamily		660		48		100		—
Farmland		673		26		572		18
Commercial		282		24		71		2
Agriculture		2		—		107		1
Consumer installment loans		2		—		30		1
All other loans		—		—		—		—
Total	$	13,460	$	485	$	16,208	$	442

	Three Months Ended
	September 30, 2017				September 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	$	2,757	$	9	$	3,965	$	4
Construction and land development		—		—		7		—
Residential 1-4 family		3,833		50		3,833		37
Multifamily		287		4		307		3
Farmland		1,193		26		4,274		61
Commercial		—		—		—		—
Agriculture		18		—		23		—
Consumer installment loans		9		—		22		(2	)
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,516		74		1,309		6
Construction and land development		209		—		259		—
Residential 1-4 family		567		5		606		7
Multifamily		1,321		16		83		(4	)
Farmland		756		10		504		6
Commercial		497		8		68		—
Agriculture		—		—		97		3
Consumer installment loans		—		—		32		1
All other loans		—		—		—		—
Total	$	12,963	$	202	$	15,389	$	122

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

As of September 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	$	203	$	530	$	528	$	1,261	$	113,619	$	114,880
Construction and land development		19		—		43		62		30,816		30,878
Residential 1-4 family		3,523		1,076		1,121		5,720		248,514		254,234
Multifamily		—		—		—		—		14,790		14,790
Farmland		55		—		284		339		22,948		23,287
Total real estate loans		3,800		1,606		1,976		7,382		430,687		438,069
Commercial		127		—		—		127		36,255		36,382
Agriculture		1		—		4		5		3,728		3,733
Consumer installment Loans		66		1		20		87		22,432		22,519
All other loans		—		—		—		—		687		687
Total loans	$	3,994	$	1,607	$	2,000	$	7,601	$	493,789	$	501,390

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 September 30, 2017 (Dollars are in thousands)	Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	106,115	$	4,772	$	3,993	$	114,880
Construction and land development		29,757		847		274		30,878
Residential 1-4 family		244,924		1,971		7,339		254,234
Multifamily		12,977		157		1,656		14,790
Farmland		19,491		2,049		1,747		23,287
Total real estate loans		413,264		9,796		15,009		438,069
Commercial		33,665		2,221		496		36,382
Agriculture		3,700		26		7		3,733
Consumer installment loans		22,459		3		57		22,519
All other loans		687		—		—		687
Total	$	473,775	$	12,046	$	15,569	$	501,390
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