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LOANS

3 Months Ended

Mar. 31, 2019

NOTE 6 LOANS:

Loans receivable outstanding are summarized as follows:


(Dollars are in thousands)		March 31, 2019		December 31, 2018
Real estate secured:
Commercial	$	153,461	$	140,862
Construction and land development		27,466		35,119
Residential 1-4 family		250,175		249,946
Multifamily		13,362		13,496
Farmland		22,394		22,114
Total real estate loans		466,858		461,537
Commercial		57,563		55,157
Agriculture		5,099		5,266
Consumer installment loans		23,485		24,538
All other loans		580		598
Total loans	$	553,585	$	547,096

Loans receivable on nonaccrual status are summarized as follows:



(Dollars are in thousands)		March 31, 2019		December 31, 2018
Real estate secured:
Commercial	$	1,121	$	784
Construction and land development		158		157
Residential 1-4 family		3,780		3,626
Multifamily		72		76
Farmland		2,101		1,637
Total real estate loans		7,232		6,300
Commercial		2,756		61
Agriculture		-		1
Consumer installment loans		3		7
Total loans receivable on nonaccrual status	$	9,991	$	6,369

Total interest income not recognized on nonaccrual loans for the three months ended March 31, 2019 and 2018 was $133 thousand and $180 thousand, respectively.

The following table presents information concerning the Company’s investment in loans considered impaired as of March 31, 2019 and December 31, 2018:


As of March 31, 2019 (Dollars are in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	1,830	$	1,884	$	-
Construction and land development		103		372		-
Residential 1-4 family		2,846		3,139		-
Multifamily		72		114		-
Farmland		1,671		1,858		-
Commercial		2,672		2,687		-
Agriculture		-		-		-
Consumer installment loans		-		-		-
All other loans		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		805		927		41
Construction and land development		-		-		-
Residential 1-4 family		345		362		89
Multifamily		-		-		-
Farmland		325		348		111
Commercial		70		77		13
Agriculture		-		-		-
Consumer installment loans		6		6		-
All other loans		-		-		-
Total	$	10,745	$	11,774	$	254
As of December 31, 2018 (Dollars are in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Real estate secured:
Commercial	$	1,887	$	1,941	$	-
Construction and land development		114		379		-
Residential 1-4 family		2,880		3,168		-
Multifamily		75		117		-
Farmland		1,693		1,880		-
Commercial		-		-		-
Agriculture		-		-		-
Consumer installment loans		-		-		-
All other loans		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		435		539		40
Construction and land development		-		-		-
Residential 1-4 family		431		454		132
Multifamily		-		-		-
Farmland		345		358		132
Commercial		109		109		13
Agriculture		-		-		-
Consumer installment loans		7		7		1
All other loans		-		-		-
Total	$	7,976	$	8,952	$	318

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, 2019				March 31, 2018
(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	$	1,858		22	$	2,737	$	28
Construction and land development		109		-		295		-
Residential 1-4 family		2,864		39		3,365		42
Multifamily		74		1		247		4
Farmland		1,682		7		1,215		12
Commercial		1,336		11		321		-
Agriculture		-		-		8		-
Consumer installment loans		-		-		4		-
All other loans		-		-		-		-
With an allowance recorded:
Real estate secured:
Commercial		620		-		2,275		16
Construction and land development		-		-		-		-
Residential 1-4 family		388		3		390		4
Multifamily		-		-		-		-
Farmland		335		-		373		-
Commercial		90		-		475		-
Agriculture		-		-		-		-
Consumer installment loans		7		-		4		-
All other loans		-		-		-		-
Total	$	9,363	$	83	$	11,709	$	106

An age analysis of past due loans receivable is below. At March 31, 2019 and December 31, 2018, there were no loans over 90 days past due that were accruing.


As of March 31, 2019 (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	$	1,231	$	-	$	92	$	1,323	$	152,138	$	153,461
Construction and land development		27		-		43		70		27,396		27,466
Residential 1-4 family		2,909		481		467		3,857		246,318		250,175
Multifamily		271		-		-		271		13,091		13,362
Farmland		106		-		1,526		1,632		20,762		22,394
Total real estate loans		4,544		481		2,218		7,513		459,705		466,858
Commercial		2,972		66		30		3,068		54,495		57,563
Agriculture		15		-		-		15		5,084		5,099
Consumer installment Loans		81		2		-		83		23,402		23,485
All other loans		-		-		-		-		580		580
Total loans	$	7,612	$	549	$	2,158	$	10,319	$	543,266	$	553,585


As of December 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	$	80	$	31	$	137	$	248	$	140,614	$	140,862
Construction and land development		70		-		27		97		35,022		35,119
Residential 1-4 family		3,468		564		525		4,557		245,389		249,946
Multifamily		-		273		-		273		13,223		13,496
Farmland		316		-		1090		1406		20,708		22,114
Total real estate loans		3,934		868		1,779		6,581		454,956		461,537
Commercial		68		-		61		129		55,028		55,157
Agriculture		22		-		-		22		5,244		5,266
Consumer installment Loans		74		15		-		89		24,449		24,538
All other loans		-		-		-		-		598		598
Total loans	$	4,098	$	883	$	1,840	$	6,821	$	540,275	$	547,096

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, 2019 (Dollars are in thousands)		Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	150,594	$	1,746	$	1,121	$	153,461
Construction and land development		26,991		316		159		27,466
Residential 1-4 family		244,666		1,202		4,307		250,175
Multifamily		13,290		-		72		13,362
Farmland		18,369		2,058		1,967		22,394
Total real estate loans		453,910		5,322		7,626		466,858
Commercial		51,819		2,988		2,756		57,563
Agriculture		5,094		5		-		5,099
Consumer installment loans		23,480		-		5		23,485
All other loans		580		-		-		580
Total	$	534,883	$	8,315	$	10,387	$	553,585
As of December 31, 2018 (Dollars are in thousands)		Pass		Special Mention		Substandard		Total
Real estate secured:
Commercial	$	137,146	$	2,890	$	826	$	140,862
Construction and land development		34,231		718		170		35,119
Residential 1-4 family		243,950		1,523		4,473		249,946
Multifamily		13,357		63		76		13,496
Farmland		18,126		2,331		1,657		22,114
Total real estate loans		446,810		7,525		7,202		461,537
Commercial		52,156		2,940		61		55,157
Agriculture		5,255		10		1		5,266
Consumer installment loans		24,493		35		10		24,538
All other loans		598		-		-		598
Total	$	529,312	$	10,510	$	7,274	$	547,096