LOANS

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

LOANS

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:

(Dollars are in thousands)	June 30, 2018		December 31, 2017
Real estate secured:
Commercial	$	138,849	$	127,688
Construction and land development		27,611		29,763
Residential 1-4 family		250,329		249,159
Multifamily		13,757		15,481
Farmland		22,203		22,998
Total real estate loans		452,749		445,089
Commercial		48,034		41,345
Agriculture		4,487		3,494
Consumer installment loans		21,475		22,411
All other loans		634		669
Total loans	$	527,379	$	513,008

Loans receivable on nonaccrual status are summarized as follows:

(Dollars are in thousands)	June 30, 2018		December 31, 2017
Real estate secured:
Commercial	$	1,832	$	2,035
Construction and land development		196		470
Residential 1-4 family		3,265		2,991
Multifamily		81		152
Farmland		1,052		800
Total real estate loans		6,426		6,448
Commercial		—		1,065
Agriculture		—		3
Consumer installment loans		16		48
Total loans receivable on nonaccrual status	$	6,442	$	7,564

Total interest income not recognized on nonaccrual loans for the six months ended June 30, 2018 and 2017 was $390 thousand and $280 thousand, respectively.

The following table presents information concerning the Company’s investment in loans considered impaired as of June 30, 2018 and December 31, 2017:

As of June 30, 2018 (Dollars are in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,764	$	2,817	$	—
Construction and land development		150		348		—
Residential 1-4 family		3,144		3,206		—
Multifamily		81		122		—
Farmland		1,861		1,887		—
Commercial		7		7		—
Agriculture		1		1		—
Consumer installment loans		—		—		—
All other loans		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		545		545		43
Construction and land development		—		—		—
Residential 1-4 family		355		355		86
Multifamily		—		—		—
Farmland		368		368		154
Commercial		111		111		12
Agriculture		—		—		—
Consumer installment loans		7		7		1
All other loans		—		—		—
Total	$	9,394	$	9,774	$	296

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:

	Six Months Ended
	June 30, 2018				June 30, 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	$	2,746	$	54	$	3,136	$	64
Construction and land development		246		—		3		—
Residential 1-4 family		3,291		87		3,831		102
Multifamily		191		4		440		11
Farmland		1,430		42		2,884		26
Commercial		216		—		—		—
Agriculture		5		—		19		1
Consumer installment loans		3		—		15		—
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,698		16		837		6
Construction and land development		—		—		228		—
Residential 1-4 family		378		7		657		9
Multifamily		—		—		444		32
Farmland		371		—		694		16
Commercial		354		2		210		16
Agriculture		—		—		2		—
Consumer installment loans		5		1		3		—
All other loans		—		—		—		—
Total	$	10,934	$	213	$	13,403	$	283

	Three Months Ended
	June 30, 2018				June 30, 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	$	2,796	$	26	$	2,886	$	39
Construction and land development		158		—		2		—
Residential 1-4 family		3,144		45		3,817		53
Multifamily		147		—		510		(1	)
Farmland		1,514		30		2,378		141
Commercial		10		—		—		—
Agriculture		2		—		19		1
Consumer installment loans		—		—		9		—
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,296		—		660		4
Construction and land development		—		—		222		—
Residential 1-4 family		357		3		708		—
Multifamily		—		—		666		32
Farmland		368		—		746		11
Commercial		286		2		282		16
Agriculture		—		—		1		—
Consumer installment loans		8		1		—		—
All other loans		—		—		—		—
Total	$	10,086	$	107	$	12,906	$	296

An age analysis of past due loans receivable is below. At June 30, 2018 and December 31, 2017, there were no loans over 90 days past due that were accruing.

As of June 30, 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	$	542	$	—	$	317	$	859	$	137,990	$	138,849
Construction and land development		32		18		42		92		27,519		27,611
Residential 1-4 family		2,251		514		618		3,383		246,946		250,329
Multifamily		276		—		—		276		13,481		13,757
Farmland		527		—		245		772		21,431		22,203
Total real estate loans		3,628		532		1,222		5,382		447,367		452,749
Commercial		—		110		—		110		47,924		48,034
Agriculture		—		—		—		—		4,487		4,487
Consumer installment loans		43		13		4		60		21,415		21,475
All other loans		—		—		—		—		634		634
Total loans	$	3,671	$	655	$	1,226	$	5,552	$	521,827	$	527,379

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 June 30, 2018 (Dollars are in thousands)	Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	134,536	$	2,023	$	2,290	$	138,849
Construction and land development		26,629		773		209		27,611
Residential 1-4 family		242,862		2,638		4,829		250,329
Multifamily		13,544		75		138		13,757
Farmland		18,709		1,632		1,862		22,203
Total real estate loans		436,280		7,141		9,328		452,749
Commercial		45,586		2,387		61		48,034
Agriculture		4,465		14		8		4,487
Consumer installment loans		21,440		—		35		21,475
All other loans		634		—		—		634
Total	$	508,405	$	9,542	$	9,432	$	527,379

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