LOANS

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

LOANS

NOTE 6 LOANS

Loans receivable outstanding at December 31, are summarized as follows:

(Dollars are in thousands)		2017		2016
Real estate secured:
Commercial	$	127,688	$	103,331
Construction and land development		29,763		25,755
Residential 1-4 family		249,159		249,700
Multifamily		15,481		12,582
Farmland		22,998		24,948
Total real estate loans		445,089		416,316
Commercial		41,345		26,955
Agriculture		3,494		3,164
Consumer installment loans		22,411		22,188
All other loans	669		6
Total loans	$	513,008	$	468,629

Loans receivable on nonaccrual status at December 31, are summarized as follows:

(Dollars are in thousands)		2017		2016
Real estate secured:
Commercial	$	2,035	$	3,403
Construction and land development		470		319
Residential 1-4 family		2,991		8,355
Multifamily		152		166
Farmland		800		1,003
Total real estate loans		6,448		13,246
Commercial		1,065		-
Agriculture		3		83
Consumer installment loans	48		76
Total loans receivable on nonaccrual status	$	7,564	$	13,405

Total interest income not recognized on nonaccrual loans for 2017 and 2016 was $591 thousand and $639 thousand, respectively. In 2017, 65 nonperforming loans totaling $3.9 million were sold to further reduce the level of nonaccrual loans with proceeds of $3.6 million received. Charge offs of $256 thousand associated with the sold nonperforming loans were realized and fully absorbed by the allowance for loan losses during 2017. There were no nonperforming loans sold in 2016.

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

As of December 31, 2017 (Dollars are in thousands)		Average Recorded Investment		Interest Income Recognized		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,910	$	122	$	2,646	$	2,719	$	-
Construction and land development		87		6		424		680		-
Residential 1-4 family		3,779		198		3,586		3,885		-
Multifamily		377		20		281		321		-
Farmland		2,283		59		1,264		1,664		-
Commercial		126		12		628		628		-
Agriculture		17		1		12		12		-
Consumer installment loans		12		1		8		8		-
All other loans		-		-		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		1,467		102		2,503		2,622		499
Construction and land development		177		-		-		-		-
Residential 1-4 family		591		19		421		437		91
Multifamily		528		-		-		-		-
Farmland		614		22		378		378		243
Commercial		323		26		489		572		413
Agriculture		1		-		-		-		-
Consumer installment loans		2		-		-		-		-
All other loans		-		-		-		-		-
Total	$	13,294	$	588	$	12,640	$	13,926	$	1,246

As of December 31, 2016 (Dollars are in thousands)		Average Recorded Investment		Interest Income Recognized		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	4,104	$	147	$	3,636	$	4,055	$	-
Construction and land development		72		1		5		5		-
Residential 1-4 family		3,745		192		3,861		4,182		-
Multifamily		290		21		301		342		-
Farmland		4,148		184		3,895		4,601		-
Commercial		-		-		-		-		-
Agriculture		27		2		19		19		-
Consumer installment loans		25		1		26		43		-
All other loans		-		-		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		1,469		8		1,191		1,270		65
Construction and land development		265		-		240		469		106
Residential 1-4 family		862		22		555		565		56
Multifamily		80		-		-		-		-
Farmland		575		27		591		602		299
Commercial		70		3		67		67		18
Agriculture		86		1		5		5		5
Consumer installment loans		26		1		9		9		3
All other loans		-		-		-		-		-
Total	$	15,844	$	610	$	14,401	$	16,234	$	552

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

As of December 31, 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	$	190	$	2,396	$	453	$	3,039	$	124,649	$	127,688
Construction and land development		69		246		42		357		29,406		29,763
Residential 1-4 family		3,789		378		969		5,136		244,023		249,159
Multifamily		125		89		-		214		15,267		15,481
Farmland		309		-		-		309		22,689		22,998
Total real estate loans		4,482		3,109		1,464		9,055		436,034		445,089
Commercial		103		25		603		731		40,614		41,345
Agriculture		38		-		-		38		3,456		3,494
Consumer installment Loans		102		15		28		145		22,266		22,411
All other loans		-		-		-		-		669		669
Total loans	$	4,725	$	3,149	$	2,095	$	9,969	$	503,039	$	513,008

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 and leases 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 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. There were no loans categorized as doubtful at December 31, 2017 or 2016.

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

As of December 31, 2017 (Dollars are in thousands)		Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	120,104	$	3,228	$	4,356	$	127,688
Construction and land development		28,462		816		485		29,763
Residential 1-4 family		243,048		1,810		4,301		249,159
Multifamily		13,695		1,445		341		15,481
Farmland		19,273		2,445		1,280		22,998
Total real estate loans		424,582		9,744		10,763		445,089
Commercial		37,973		2,307		1,065		41,345
Agriculture		3,468		23		3		3,494
Consumer installment loans		22,357		2		52		22,411
All other loans		669		-		-		669
Total	$	489,049	$	12,076		11,883	$	513,008

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