XML 23 R13.htm IDEA: XBRL DOCUMENT v3.19.2
LOANS
 6 Months Ended
Jun. 30, 2019
Loans  
LOANS

NOTE 6 LOANS:

 

Loans held for sale includes $128 thousand of loans related to our secondary mortgage program, which are now being

 

originated in the Bank’s name. Previously, these loans were originated and funded in the name of the purchaser and were not included in loans receivable. The additional $4.4 million in loans held for sale is the fair value of classified and underperforming loans that were under a sales agreement and classified as loans held for sale at June 30, 2019. This loan sale settled July 3, 2019.

 

Loans receivable outstanding are summarized as follows:          
(Dollars are in thousands)   June 30, 2019     December 31, 2018
Real estate secured:          
         
Commercial $ 159,156 $   140,862
Construction and land development   29,285     35,119
Residential 1-4 family   244,433     249,946
Multifamily   13,110     13,496
Farmland   21,392     22,114
Total real estate loans   467,376     461,537
Commercial   54,902     55,157
Agriculture   5,185     5,266
Consumer installment loans   23,106     24,538
All other loans   562     598
Total loans $ 551,131 $   547,096

 

Loans receivable on nonaccrual status are summarized as follows:

 

(Dollars are in thousands)     June 30, 2019     December 31, 2018
Real estate secured:            
           
Commercial $   609 $   784
Construction and land development     167     157
Residential 1-4 family     2,333     3,626
Multifamily     -     76
Farmland     813     1,637
Total real estate loans     3,922     6,300
Commercial     1,601     61
Agriculture     -     1
Consumer installment loans     19     7
Total loans receivable on nonaccrual status $   5,542 $   6,369

 

Total interest income not recognized on nonaccrual loans for the six months ended June 30, 2019 and 2018 was $379 thousand and $390 thousand, respectively.

 

The following table presents information concerning the Company’s investment in loans considered impaired as of June 30, 2019 and December 31, 2018:

 

        Unpaid    
As of June 30, 2019   Recorded   Principal   Related
(Dollars are in thousands)   Investment   Balance   Allowance
With no related allowance recorded:            
           
Real estate secured:            
Commercial $ 1,783 $ 1,837 $ -
Construction and land development   89   362   -
Residential 1-4 family   1,221   1,292   -
Multifamily   -   -   -
Farmland   819   1,011   -
Commercial   -   -   -
Agriculture   -   -   -
Consumer installment loans   6   6   -
All other loans   -   -   -
With an allowance recorded:            
Real estate secured:            
Commercial   376   384   7
Construction and land development   -   -   -
Residential 1-4 family   623   641   116
Multifamily   -   -   -
Farmland   221   232   3
Commercial   1,610   1,633   681
Agriculture   -   -   -
Consumer installment loans   -   -   -
All other loans   -   -   -
             
Total $ 6,748 $ 7,398 $ 807
             

 

        Unpaid      
As of December 31, 2018   Recorded   Principal     Related
(Dollars are in thousands)   Investment   Balance     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:

 

          Six Months Ended    
               
      June 30, 2019   June 30, 2018
                   
      Average   Interest   Average   Interest
      Recorded   Income   Recorded   Income
(Dollars are in thousands)     Investment   Recognized   Investment   Recognized
With no related allowance recorded:                  
                 
Real estate secured:                  
Commercial $   1,833 $ 42 $ 2,746 $ 54
Construction and land                  
development     102   -   246   -
Residential 1-4 family     2,316   39   3,291   87
Multifamily     49   1   191   4
Farmland     1,394   13   1,430   42
Commercial     891   11   216   -
Agriculture     -   -   5   -
Consumer installment loans     2   -   3   -
All other loans     -   -   -   -
With an allowance recorded:                  
Real estate secured:                  
Commercial     539   1   1,698   16
Construction and land     -       -    
development         -       -
Residential 1-4 family     466   10   378   7
Multifamily     -   -   -   -
Farmland     297   6   371   -
Commercial     596   5   354   2
Agriculture     -   -   -   -
Consumer installment loans     4       5   1
All other loans     -   -   -   -
                   
Total $   8,489 $ 128 $ 10,934 $ 213

  

          Three Months Ended    
               
      June 30, 2019   June 30, 2018
                   
      Average   Interest   Average   Interest
      Recorded   Income   Recorded   Income
(Dollars are in thousands)     Investment   Recognized   Investment   Recognized
With no related allowance recorded:                  
                 
Real estate secured:                  
Commercial $   1,806 $ 20 $ 2,796 $ 26
Construction and land                  
development     96   -   158   -
Residential 1-4 family     2,034   -   3,144   45
Multifamily     36   -   147   -
Farmland     1,245   6   1,514   30
Commercial     1,336   -   10   -
Agriculture     -   -   2   -
Consumer installment loans     3   -   -   -
All other loans     -   -   -   -
With an allowance recorded:                  
Real estate secured:                  
Commercial     591   1   1,296   -
Construction and land                  
development     -   -   -   -
Residential 1-4 family     484   10   357   3
Multifamily     -   -   -   -
Farmland     273   6   368   -
Commercial     840   5   286   2
Agriculture     -   -   -   -
Consumer installment loans     3   -   8   1
All other loans     -   -   -   -
                   
Total $   8,747 $ 48 $ 10,086 $ 107
                   

 

An age analysis of past due loans receivable is below. At June 30, 2019 and December 31, 2018, there were no loans over 90 days past due that were accruing.

 

                  Loans                  
      Loans     Loans     90 or                  
      30-59     60-89     More     Total            
      Days     Days     Days     Past            
As of June 30, 2019     Past     Past     Past     Due     Current     Total
(Dollars are in thousands)     Due     Due     Due     Loans     Loans     Loans
Real estate secured:                                    
Commercial $   991 $   317 $   87 $   1,395 $   157,761 $   159,156
Construction and land                                   29,285
development     46     -     27     73     29,212    
Residential 1-4 family     1,959     1,027     672     3,658     240,775     244,433
Multifamily     123     -     -     123     12,987     13,110
Farmland     289     -     -     289     21,103     21,392
                                     
Total real estate loans     3,408     1,344     786     5,538     461,838     467,376
Commercial     2,342     435     1,202     3,979     50,923     54,902
Agriculture     92     -     -     92     5,093     5,185
Consumer installment                                   23,106
loans     51     -     -     51     23,055    
All other loans     -     2     18     20     542     562
                                     
Total loans $   5,893 $   1,781 $   2,006 $   9,680 $   541,451 $   551,131

 

                Loans                
      Loans     Loans   90 or                
      30-59     60-89   More   Total            
      Days     Days   Days   Past            
As of December 31, 2018     Past     Past   Past   Due     Current     Total
(Dollars are in thousands)     Due     Due   Due   Loans     Loans     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 categories of loans receivable was as follows:

 

As of June 30, 2019       Special            
(Dollars are in thousands)   Pass   Mention   Substandard   Doubtful   Total
Real estate secured:                    
Commercial $ 156,246 $ 2,301 $ 609 $ - $ 159,156
Construction and land development   28,802   316   167   -   29,285
Residential 1-4 family   241,071   1,126   2,236   -   244,433
Multifamily   13,110   -   -   -   13,110
Farmland   18,705   1,874   813   -   21,392
                     
Total real estate loans   457,934   5,617   3,825   -   467,376
Commercial   51,010   2,296   75   1,521   54,902
Agriculture   5,172   13   -   -   5,185
Consumer installment loans   23,084   3   19   -   23,106
All other loans   562   -   -   -   562
                     
Total $ 537,762 $ 7,929 $ 3,919 $ 1,521 $ 551,131

 

As of December 31, 2018           Special                    
(Dollars are in thousands)     Pass     Mention     Substandard     Doubtful       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