Note 5 - Loans

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note

5

Loans

Major classifications of loans are as follows:

	June 30,			December 31,
	2018			2017
Commercial
Development	$	7,275		$	1,498
Real estate		59,961			53,202
Commercial and industrial		11,008			10,135
Residential real estate and consumer
1-4 family owner-occupied		50,604			47,448
1-4 family investor-owned		32,971			33,658
Multifamily		37,953			31,677
Consumer		1,957			1,613
Subtotal	$	201,729			179,231
Deferred loan fees		(67	)		(74	)
Loans in process		(6,697	)		(6,002	)
Allowance for loan losses		(1,908	)		(1,800	)
Net loans	$	193,057		$	171,355

Analysis of the allowance for loan losses for the

three

and

six

months ended

June 30, 2018

and

2017

follows:

Three Months Ended	Commercial			Residential real estate and consumer			Total
Balance at March 31, 2018	$	738		$	1,071		$	1,809
Provision for loan losses		92			97			189
Loans charged off		(24	)		(66	)		(90	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908
Balance at March 31, 2017	$	468		$	1,010		$	1,478
Provision for loan losses		37			15			52
Loans charged off		-			(11	)		(11	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2017	$	505		$	1,014		$	1,519

Six Months Ended	Commercial			Residential real estate and consumer			Total
Balance at December 31, 2017	$	660		$	1,140		$	1,800
Provision for loan losses		170			134			304
Loans charged off		(24	)		(172	)		(196	)
Recoveries of loans previously charged off		-			-			-
Balance at June 30, 2018	$	806		$	1,102		$	1,908
Balance at December 31, 2016	$	348		$	1,130		$	1,478
Provision for loan losses		157			(54	)		103
Loans charged off		-			(97	)		(97	)
Recoveries of loans previously charged off		-			35			35
Balance at June 30, 2017	$	505		$	1,014		$	1,519

Allowance for loan losses at June 30, 2018:	Commercial		Residential real estate and consumer		Total
Individually evaluated for impairment	$	-	$	34	$	34
Collectively evaluated for impairment		806		1,068		1,874
Total allowance for loan losses	$	806	$	1,102	$	1,908
Allowance for loan losses at December 31, 2017:
Individually evaluated for impairment	$	-	$	179	$	179
Collectively evaluated for impairment		660		961		1,621
Total allowance for loan losses	$	660	$	1,140	$	1,800

June 30, 2018	Commercial		Residential real estate and consumer
Loans:
Individually evaluated for impairment	$	73	$	1,499	$	1,572
Collectively evaluated for impairment		78,171		121,986		200,157
Total loans	$	78,244	$	123,485	$	201,729
December 31, 2017
Loans:
Individually evaluated for impairment	$	192	$	2,112	$	2,304
Collectively evaluated for impairment		64,643		112,284		176,927
Total loans	$	64,835	$	114,396	$	179,231

Analysis for loans evaluated for impairment as of

June 30, 2018

and

December 31, 2017,

follows:

As of June 30, 2018	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loan with related allowance for loan losses:
Residential real estate and consumer
1-4 family investor-owned	$	102	$	99	$	34	$	101	$	-
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial		75		73		-		76		2
Residential real estate and consumer
1-4 family owner-occupied		1,205		1,132		-		1,182		12
1-4 family investor-owned		250		250		-		250		-
Consumer		18		18		-		19		-
Total loans with no related allowance		1,548		1,473		-		1,527		14
Total impaired loans	$	1,650	$	1,572	$	34	$	1,628	$	14

As of December 31, 2017	Principal Balance		Recorded Investment		Related Allowance		Average Investment		Interest Recognized
Loan with related allowance for loan losses:
Residential real estate and consumer
1-4 family investor-owned	$	375	$	330	$	179	$	312	$	8
Loans with no related allowance for loan losses:
Commercial
Commercial and industrial		198		192		-		204		-
Residential real estate and consumer
1-4 family owner-occupied		1,158		1,099		-		1,443		1
1-4 family investor-owned		716		683		-		1,289		24
Consumer		-		-		-		-		-
Total loans with no related allowance		2,072		1,974		-		2,936		25
Total impaired loans	$	2,447	$	2,304	$	179	$	3,248	$	33

As of

December 31, 2017,

approximately

$50

is committed to

one

impaired loan relationship to finance costs relating to the disposal of several properties. At

June 30, 2018,

no

additional funds are committed to be advanced in connection with impaired loans.

The Company regularly evaluates various attributes of loans to determine the appropriateness of the allowance for loan losses. The credit quality indicators monitored differ depending on the class of loan. 

Commercial loans are generally evaluated using the following internally prepared ratings:

“Pass” ratings are assigned to loans with adequate collateral and debt service ability such that collectability of the contractual loan payments is highly probable.

“Special mention” ratings are assigned to loans where management has some concern that the collateral or debt service ability

may

not

be adequate, though the collectability of the contractual loan payments is still probable.

“Substandard” ratings are assigned to loans that do

not

have adequate collateral and/or debt service ability such that collectability of the contractual loan payments is

no

longer probable.

“Doubtful” ratings are assigned to loans that do

not

have adequate collateral and/or debt service ability, and collectability of the contractual loan payments is unlikely.

Residential real estate and consumer loans are generally evaluated based on whether or

not

the loan is performing according to the contractual terms of the loan.

Information regarding the credit quality indicators most closely monitored for commercial loans by class as of

June 30, 2018

and

December 31, 2017,

follows:

	Pass		Special Mention		Substandard		Doubtful		Totals
June 30, 2018
Development	$	7,275	$	-	$	-	$	-	$	7,275
Real estate		58,848		1,113		-		-		59,961
Commercial and industrial		10,985		23		-		-		11,008
1-4 family investor-owned		31,931		790		250		-		32,971
Multifamily		37,953		-		-		-		37,953
Totals	$	146,992	$	1,926	$	250	$	-	$	149,168
December 31, 2017
Development	$	1,498	$	-	$	-	$	-	$	1,498
Real estate		51,939		1,263		-		-		53,202
Commercial and industrial		9,435		586		114		-		10,135
1-4 family investor-owned		31,964		1,449		149		96		33,658
Multifamily		31,677		-		-		-		31,677
Totals	$	126,513	$	3,298	$	263	$	96	$	130,170

Information regarding the credit quality indicators most closely monitored for residential real estate and consumer loans by class as of

June 30, 2018

and

December 31, 2017,

follows:

	Performing		Non-performing		Total
June 30, 2018
1-4 family owner-occupied		49,985		619		50,604
Consumer		1,858		99		1,957
	$	51,843	$	718	$	52,561
December 31, 2017
1-4 family owner-occupied		46,349		1,099		47,448
Consumer		1,613		-		1,613
	$	47,962	$	1,099	$	49,061

Loan aging information as of

June 30, 2018,

follows:

			Loans Past Due		Loans Past Due				Nonaccrual
June 30, 2018	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	7,275	$	-	$	-	$	7,275	$	-
Real estate		59,846		115		-		59,961		-
Commercial and industrial		11,008		-		-		11,008		-
Residential real estate and consumer
1-4 family owner-occupied		50,276		211		117		50,604		619
1-4 family investor-owned		32,893		78		-		32,971		349
Multifamily		37,953		-		-		37,953		-
Consumer		1,957		-		-		1,957		-
Total	$	201,208	$	404	$	117	$	201,729	$	968

Loan aging information as of

December 31, 2017,

follows:

			Loans Past Due		Loans Past Due				Nonaccrual
December 31, 2017	Current Loans		30-89 Days		90+ Days		Total Loans		Loans
Commercial
Development	$	1,498	$	-	$	-	$	1,498	$	-
Real estate		53,202		-		-		53,202		-
Commercial and industrial		9,946		75		114		10,135		114
Residential real estate and consumer
1-4 family owner-occupied		46,943		436		69		47,448		580
1-4 family investor-owned		33,209		205		244		33,658		549
Multifamily		31,677		-		-		31,677		-
Consumer		1,607		6		-		1,613		-
Total	$	178,082	$	722	$	427	$	179,231	$	1,243

There were

no

loans past due

ninety

days or more and still accruing interest as of

June 30, 2018

and

December 31, 2017.

When, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that the Company would

not

otherwise consider, the modified loan is classified as a troubled debt restructuring. Loan modifications

may

consist of forgiveness of interest and/or principal, a reduction of the interest rate, interest-only payments for a period of time, and/or extending amortization terms. During the

six

months ended and as of

June 30, 2018,

there was a

1

-

4

family investor-owned property totaling

$250

and a commercial and industrial totaling

$20

that were new troubled debt restructurings.

$24

was charged to the allowance for losses related to these loans.

No

troubled debt restructurings defaulted within

12

months of their modification date during the

six

months ended

June 30, 2018.

During the year ended

December 31, 2017,

the Company had

two

1

–

4

family investor-owned properties totaling

$331

default that were restructured within

twelve

months.

$82

was charged to the allowance for loan losses relating to these properties.  There were

no

other troubled debt restructurings during the year ended

December 31, 2017.

Management regularly monitors impaired loan relationships. In the event facts and circumstances change, an additional provision for loan losses

may

be necessary.