LOANS

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

LOANS

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:

(Dollars are in thousands)	September 30, 2018		December 31, 2017
Real estate secured:
Commercial	$	139,384	$	127,688
Construction and land development		29,403		29,763
Residential 1-4 family		249,138		249,159
Multifamily		13,461		15,481
Farmland		21,656		22,998
Total real estate loans		453,042		445,089
Commercial		49,945		41,345
Agriculture		4,895		3,494
Consumer installment loans		23,471		22,411
All other loans		616		669
Total loans	$	531,969	$	513,008

Loans receivable on nonaccrual status are summarized as follows:

(Dollars are in thousands)	September 30, 2018		December 31, 2017
Real estate secured:
Commercial	$	970	$	2,035
Construction and land development		186		470
Residential 1-4 family		3,604		2,991
Multifamily		79		152
Farmland		1,665		800
Total real estate loans		6,504		6,448
Commercial		61		1,065
Agriculture		—		3
Consumer installment loans		34		48
Total loans receivable on nonaccrual status	$	6,599	$	7,564

Total interest income not recognized on nonaccrual loans for the nine months ended September 30, 2018 and 2017 was $358 thousand and $456 thousand, respectively.

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

As of September 30, 2018 (Dollars are in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	2,656	$	2,762	$	—
Construction and land development		140		409		—
Residential 1-4 family		3,043		3,327		—
Multifamily		79		120		—
Farmland		1,770		1,954		—
Commercial		14		14		—
Agriculture		—		—		—
Consumer installment loans		—		—		—
All other loans		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		542		661		46
Construction and land development		—		—		—
Residential 1-4 family		431		453		114
Multifamily		—		—		—
Farmland		346		358		131
Commercial		109		109		15
Agriculture		—		—		—
Consumer installment loans		7		7		1
All other loans		—		—		—
Total	$	9,137	$	10,174	$	307
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:

Nine Months Ended
	September 30, 2018				September 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	$	2,724	$	95	$	2,976	$	73
Construction and land development		220		1		2		—
Residential 1-4 family		3,229		137		3,827		152
Multifamily		163		5		402		15
Farmland		1,515		51		2,538		52
Commercial		166		1		—		—
Agriculture		4		—		19		1
Consumer installment loans		2		—		13		—
All other loans		—		—		—		—
With an allowance recorded:
Real estate secured:
Commercial		1,409		16		1,208		80
Construction and land development		—		—		222		—
Residential 1-4 family		391		13		634		14
Multifamily		—		—		660		48
Farmland		365		—		673		26
Commercial		293		2		282		24
Agriculture		—		—		2		—
Consumer installment loans		6		1		2		—
All other loans		—		—		—		—
Total	$	10,487	$	322	$	13,460	$	485

		Three Months Ended
		September 30, 2018				September 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	$	2,710		41	$	2,757	$	9
Construction and land development		145		1		-		-
Residential 1-4 family		3,093		50		3,833		50
Multifamily		80		1		287		4
Farmland		1,816		9		1,193		26
Commercial		10		1		-		-
Agriculture		1		-		18		-
Consumer installment loans		-		-		9		-
All other loans		-		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		544		-		1,516		74
Construction and land development		-		-		209		-
Residential 1-4 family		393		6		567		5
Multifamily		-		-		1,321		16
Farmland		357		-		756		10
Commercial		110		-		497		8
Agriculture		-		-		-		-
Consumer installment loans		7		-		-		-
All other loans		-		-		-		-
Total	$	9,266	$	109	$	12,963	$	202

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

As of September 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	$	—	$	176	$	578	$	754	$	138,630	$	139,384
Construction and land development		14		—		42		56		29,347		29,403
Residential 1-4 family		2,201		461		711		3,373		245,765		249,138
Multifamily		—		—		—		—		13,461		13,461
Farmland		40		809		281		1,130		20,526		21,656
Total real estate loans		2,255		1,446		1,612		5,313		447,729		453,402
Commercial		65		—		61		126		49,819		49,945
Agriculture		—		—		7		7		4,888		4,895
Consumer installment Loans		20		2		8		30		23,441		23,471
All other loans		—		—		—		—		616		616
Total loans	$	2,340	$	1,448	$	1,688	$	5,476	$	526,493	$	531,969

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 September 30, 2018 (Dollars are in thousands)	Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	135,856	$	1,918	$	1,610	$	139,384
Construction and land development		28,455		743		205		29,403
Residential 1-4 family		242,853		1,603		4,682		249,138
Multifamily		13,261		67		133		13,461
Farmland		17,626		2,300		1,730		21,656
Total real estate loans		438,051		6,631		8,360		453,042
Commercial		47,179		2,705		61		49,945
Agriculture		4,875		6		14		4,895
Consumer installment loans		23,403		—		68		23,471
All other loans		616		—		—		616
Total	$	514,124	$	9,342	$	8,503	$	531,969
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