LOANS

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

LOANS

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:

(Dollars are in thousands)	March 31, 2018		December 31, 2017
Real estate secured:
Commercial	$	132,772	$	127,688
Construction and land development		23,358		29,763
Residential 1-4 family		249,966		249,159
Multifamily		14,143		15,481
Farmland		24,803		22,998
Total real estate loans		445,042		445,089
Commercial		44,760		41,345
Agriculture		3,957		3,494
Consumer installment loans		21,952		22,411
All other loans		652		669
Total loans	$	516,363	$	513,008

Loans receivable on nonaccrual status are summarized as follows:

(Dollars are in thousands)	March 31, 2018		December 31, 2017
Real estate secured:
Commercial	$	3,469	$	2,035
Construction and land development		210		470
Residential 1-4 family		3,202		2,991
Multifamily		85		152
Farmland		827		800
Total real estate loans		7,793		6,448
Commercial		411		1,065
Agriculture		3		3
Consumer installment loans		20		48
Total loans receivable on nonaccrual status	$	8,227	$	7,564

Total interest income not recognized on nonaccrual loans for the three months ended March 31, 2018 and 2017 was $180 thousand and $363 thousand, respectively.

The following table presents information concerning the Company’s investment in loans considered impaired as of March 31, 2018 and December 31, 2017:

As of March 31, 2018 (Dollars are in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,828	$	2,882	$	-
Construction and land development		165		362		-
Residential 1-4 family		3,144		3,206		-
Multifamily		212		253		-
Farmland		1,165		1,191		-
Commercial		13		13		-
Agriculture		3		3		-
Consumer installment loans		-		-		-
All other loans		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		2,047		2,047		365
Construction and land development		-		-		-
Residential 1-4 family		358		358		89
Multifamily		-		-		-
Farmland		368		368		232
Commercial		461		461		147
Agriculture		-		-		-
Consumer installment loans		8		8		2
All other loans		-		-		19
Total	$	10,772	$	11,152	$	854

As of December 31, 2017 (Dollars are in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,646	$	2,719	$	-
Construction and land development		424		680		-
Residential 1-4 family		3,586		3,885		-
Multifamily		281		321		-
Farmland		1,264		1,664		-
Commercial		628		628		-
Agriculture		12		12		-
Consumer installment loans		8		8		-
All other loans		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		2,503		2,622		499
Construction and land development		-		-		-
Residential 1-4 family		421		437		91
Multifamily		-		-		-
Farmland		378		378		243
Commercial		489		572		413
Agriculture		-		-		-
Consumer installment loans		-		-		-
All other loans		-		-		-
Total	$	12,640	$	13,926	$	1,246

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

	Three Months Ended
	March 31, 2018				March 31, 2017
(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	$	2,737	$	28	$	3,196	$	25
Construction and land development		295		—		5		—
Residential 1-4 family		3,365		42		3,821		49
Multifamily		247		4		516		12
Farmland		1,215		12		3,884		(115	)
Commercial		321		—		—		—
Agriculture		8		—		19		—
Consumer installment loans		4		—		18		—
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		2,275		16		901		2
Construction and land development		—		—		235		—
Residential 1-4 family		390		4		701		9
Multifamily		—		—		—		—
Farmland		373				590		5
Commercial		475		—		67		—
Agriculture				—		3		—
Consumer installment loans		4		—		5		—
All other loans		—		—		—		—
Total	$	11,709	$	106	$	13,961	$	(13	)

An age analysis of past due loans receivable is below. At March 31, 2018 and December 31, 2017, there were no loans over 90 days past due that were accruing.

As of March 31, 2018 (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	$	1,596	$	25	$	318	$	1,939	$	130,833	$	132,772
Construction and land  development		561		-		42		603		22,755		23,358
Residential 1-4 family		1,832		508		815		3,155		246,811		249,966
Multifamily		-		-		-		-		14,143		14,143
Farmland		1,547		245		-		1,792		23,011		24,803
Total real estate loans		5,536		778		1,175		7,489		437,553		445,042
Commercial		-		-		-		-		44,760		44,760
Agriculture		3		13		-		16		3,941		3,957
Consumer installment  Loans		26		9		-		35		21,917		21,952
All other loans		-		-		-		-		652		652
Total loans	$	5,565	$	800	$	1,175	$	7,540	$	508,823	$	516,363

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

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 March 31, 2018 (Dollars are in thousands)		Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	124,316	$	4,489	$	3,967	$	132,772
Construction and land development		22,353		781		224		23,358
Residential 1-4 family		242,363		3,096		4,507		249,966
Multifamily		13,792		81		270		14,143
Farmland		21,814		1,818		1,171		24,803
Total real estate loans		424,638		10,265		10,139		445,042
Commercial		39,741		4,608		411		44,760
Agriculture		3,925		16		16		3,957
Consumer installment loans		21,930		1		21		21,952
All other loans		652		-		-		652
Total	$	490,886	$	14,890	$	10,587	$	516,363
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