Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses by Portfolio Segment

A disaggregation of and an analysis of the change in the allowance for loan losses by segment is shown below.

Allowance for Loan Losses by Portfolio Segment

For the nine months ended September 30, 2012 (unaudited)

	Construction, Land and Land Development			Farmland		Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated			Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	190,500		$	—	$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401		$	3,188,541
(Charge-offs)		(200,278	)		—		(283,569	)		—			(654,622	)		(39,388	)		(250,427	)		(114,971	)					(1,543,255	)
Recoveries		—			—		285,326			—			1,934			—			10,869			71,564						369,693
Provision		171,919			1,000		(757	)		(13,728	)		661,495			(16,851	)		403,606			123,617			(7,617	)		1,322,685
Ending Balance	$	162,141		$	1,000	$	89,000		$	540,590		$	1,170,358		$	662,882		$	445,698		$	265,210		$	784		$	3,337,664
Individually evaluated for impairment	$	91,141		$	—	$	—		$	194,590		$	404,358		$	487,882		$	186,698		$	74,210		$	—		$	1,438,879
Collectively evaluated for impairment	$	71,000		$	1,000	$	89,000		$	346,000		$	766,000		$	175,000		$	259,000		$	191,000		$	784		$	1,898,784
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	262,245		$	—	$	—		$	1,592,314		$	4,137,071		$	1,793,810		$	581,090		$	74,210					$	8,440,740
Collectively evaluated for impairment		28,126,887			1,464,100		13,445,019			31,933,418			106,205,862			26,837,757			19,855,379			6,516,989						234,385,411
Total Gross Loans	$	28,389,132		$	1,464,100	$	13,445,019		$	33,525,732		$	110,342,933		$	28,631,567		$	20,436,469		$	6,591,199					$	242,826,151

For the Year Ended December 31, 2011

	Construction, Land and Land Development			Farmland			Commercial Mortgages (Non Owner Occupied)			Commercial Mortgages (Owner Occupied)			Residential First Mortgages			Residential Junior Mortgages			Commercial and Industrial			Consumer Loans			Unallocated			Total
ALLOWANCE FOR LOAN LOSSES:
Beginning Balance	$	192,518		$	3,000		$	108,000		$	1,270,451		$	206,171		$	460,648		$	69,869		$	210,662		$	709,358		$	3,230,677
(Charge-offs)		(35,428	)		—			(52,117	)		—			(232,904	)		(29,162	)		(16,553	)		(211,117	)		—			(577,281	)
Recoveries		175			—			—			—			1,393			—			—			38,577			—			40,145
Provision		33,235			(3,000	)		32,117			(716,133	)		1,186,891			287,635			228,334			146,878			(700,957	)		495,000
Ending Balance	$	190,500		$	—		$	88,000		$	554,318		$	1,161,551		$	719,121		$	281,650		$	185,000		$	8,401		$	3,188,541
Individually evaluated for impairment	$	119,500		$	—		$	—		$	244,318		$	726,552		$	465,121		$	236,650		$	—		$	—		$	1,792,141
Collectively evaluated for impairment	$	71,000		$	—		$	88,000		$	310,000		$	435,000		$	254,000		$	45,000		$	185,000		$	8,401		$	1,396,401
LOAN RECEIVABLES:
Ending Balance:
Individually evaluated for impairment	$	408,640		$	—		$	—		$	1,447,278		$	3,187,147		$	1,790,858		$	560,197		$	—					$	7,394,120
Collectively evaluated for impairment		27,233,640			1,526,050			16,198,584			26,398,318			104,451,588			26,735,150			18,423,135			8,329,237						229,295,702
Total Gross Loans	$	27,642,280		$	1,526,050		$	16,198,584		$	27,845,596		$	107,638,735		$	28,526,008		$	18,983,332		$	8,329,237					$	236,689,822

Internal risk rating grades are assigned to commercial loans not secured

As of September 30, 2012 (unaudited)	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	21,376,425	$	1,464,100	$	7,517,601	$	23,641,673	$	16,311,893	$	70,311,693
Watch		4,618,187		—		2,692,507		6,898,497		2,568,029		16,777,219
Special mention		—		—		2,574,371		165,259		791,496		3,531,126
Substandard		2,194,520		—		660,540		2,820,303		319,665		5,995,028
Doubtful		200,000		—		—		—		445,386		645,386
Total	$	28,389,132	$	1,464,100	$	13,445,019	$	33,525,732	$	20,436,469	$	97,260,452
As of December 31, 2011	Construction, Land and Land Development		Farmland		Commercial Mortgages (Non-Owner Occupied)		Commercial Mortgages (Owner Occupied)		Commercial and Industrial		Total
INTERNAL RISK RATING GRADES
Grade:
Pass	$	20,365,500	$	1,526,050	$	11,209,765	$	17,875,112	$	13,790,715	$	64,767,142
Watch		2,807,742		—		1,847,911		7,079,654		3,952,068		15,687,375
Special mention		2,186,094		—		2,393,755		310,959		—		4,890,808
Substandard		1,940,326		—		681,403		2,323,122		457,698		5,402,549
Doubtful		342,618		—		65,750		256,749		782,851		1,447,968
Total	$	27,642,280	$	1,526,050	$	16,198,584	$	27,845,596	$	18,983,332	$	92,195,842

Performing and non performing loans

Loans not assigned internal risk rating grades are comprised of residential mortgages and smaller consumer loans. Payment activity of these loans is reviewed monthly by management. Loans are considered to be nonperforming when they are delinquent by 90 days or more or on nonaccrual, as shown in the table below.

As of September 30, 2012 (unaudited)	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	107,043,324	$	26,820,337	$	6,585,153	$	140,448,814
Nonperforming		3,299,609		1,811,230		6,046		5,116,885
Total	$	110,342,933	$	28,631,567	$	6,591,199	$	145,565,699
As of December 31, 2011	Residential First Mortgages		Residential Junior Mortgages		Consumer Loans		Total
PAYMENT ACTIVITY STATUS
Performing	$	105,971,956	$	26,784,722	$	8,178,214	$	140,934,892
Nonperforming		1,666,779		1,741,286		151,023		3,559,088
Total	$	107,638,735	$	28,526,008	$	8,329,237	$	144,493,980

Company's recorded investment and the customers unpaid principal balances for impaired loans, with the associated allowance amount

The following table shows the Company’s recorded investment and the customers’ unpaid principal balances for impaired loans, with the associated allowance amount, if applicable. Also shown are the average recorded investments in impaired loans and the related amount of interest recognized and collected during the time the loans were impaired.

IMPAIRED LOANS

As of September 30, 2012 (unaudited)

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		1,698,565		2,080,073		—		1,794,078		56,837		48,770
Residential Junior Mortgages (1)		182,044		184,952		—		142,643		4,416		2,310
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		583,626		585,091		—		347,402		22,548		24,169
Commercial & industrial		314,648		314,648		—		316,615		—		19,488
Consumer (2)		—		—		—		—		—		—
	$	2,778,883	$	3,164,764	$	—	$	2,600,738	$	83,801	$	94,737
With an allowance recorded:
Construction, land & land development	$	262,245	$	265,572	$	91,141	$	264,230	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,438,506		2,460,029		404,358		1,691,635		64,836		57,493
Residential Junior Mortgages (1)		1,611,766		1,951,805		487,882		1,637,318		—		—
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,008,688		1,013,241		194,590		1,014,007		19,458		11,382
Commercial & industrial		266,442		266,442		186,698		144,926		6,914		7,043
Consumer (2)		74,210		74,210		74,210		65,658		6,480		6,480
	$	5,661,857	$	6,031,299	$	1,438,879	$	4,817,774	$	97,688	$	82,398
Total Impaired Loans:
Construction, land & land development	$	262,245	$	265,572	$	91,141	$	264,230	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		4,137,071		4,540,102		404,358		3,485,713		121,673		106,263
Residential Junior Mortgages (1)		1,793,810		2,136,757		487,882		1,779,961		4,416		2,310
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,592,314		1,598,332		194,590		1,361,410		42,006		35,551
Commercial & industrial		581,090		581,090		186,698		461,540		6,914		26,531
Consumer (2)		74,210		74,210		74,210		65,658		6,480		6,480
	$	8,440,740	$	9,196,063	$	1,438,879	$	7,418,512	$	181,489	$	177,135

(1) Junior mortgages include equity lines.

(2) Includes credit cards.

IMPAIRED LOANS

As of December 31, 2011

	Recorded Investment		Customers’ Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With no related allowance:
Construction, land & land development	$	—	$	—	$	—	$	—	$	—	$	—
Farmland		—		—		—		—		—		—
Residential First Mortgages		901,132		901,132		—		726,266		52,293		52,378
Residential Junior Mortgages		131,226		131,226		—		66,245		7,325		6,208
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		258,875		258,875		—		208,153		14,311		14,309
Commercial & industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
	$	1,291,233	$	1,291,233	$	—	$	1,000,665	$	73,929	$	72,895
With an allowance recorded:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		2,286,015		2,303,167		726,552		1,254,593		100,550		95,208
Residential Junior Mortgages		1,659,632		1,961,728		465,121		1,451,332		14,483		9,846
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,188,403		1,191,301		244,318		891,128		48,600		44,593
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	6,102,887	$	6,475,658	$	1,792,141	$	4,309,779	$	183,480	$	167,455
Total Impaired Loans:
Construction, land & land development	$	408,640	$	408,640	$	119,500	$	355,822	$	3,865	$	3,260
Farmland		—		—		—		—		—		—
Residential First Mortgages		3,187,147		3,204,299		726,552		1,980,859		152,843		147,586
Residential Junior Mortgages		1,790,858		2,092,954		465,121		1,517,577		21,808		16,054
Commercial Mortgages (Non-owner occupied)		—		—		—		—		—		—
Commercial Mortgages (Owner occupied)		1,447,278		1,450,176		244,318		1,099,281		62,911		58,902
Commercial & industrial		560,197		610,822		236,650		356,905		15,982		14,548
Consumer		—		—		—		—		—		—
	$	7,394,120	$	7,766,891	$	1,792,141	$	5,310,444	$	257,409	$	240,350

Summary of Troubled Debt Restructurings

TROUBLED DEBT RESTRUCTURINGS	Recorded Investment		Related Allowance		Number of Loans		Number of Loans performing according to modified terms
As of September 30, 2012 (unaudited)
Construction, land & land development	$	200,000	$	64,131		1		—
Farmland		—		—		—		—
Residential First Mortgages		1,219,537		327,165		3		2
Residential Junior Mortgages (1)		1,401,877		430,337		4		1
Commercial Mortgages (Non-owner occupied)		—		—				—
Commercial Mortgages (Owner occupied)		479,115		—		1		1
Commercial & industrial		—		—		—		—
Consumer		74,210		74,210		1		—
	$	3,374,739	$	895,843		10		4
TROUBLED DEBT RESTRUCTURINGS	Recorded Investment		Related Allowance		Number of Loans		Number of Loans performing according to modified terms
As of December 31, 2011
Construction, land & land development	$	342,618	$	86,489		2		—
Farmland		—		—		—		—
Residential First Mortgages		1,506,946		508,712		3		—
Residential Junior Mortgages (1)		1,370,631		345,994		3		—
Commercial Mortgages (Non-owner occupied)		—		—		—		—
Commercial Mortgages (Owner occupied)		—		—		—		—
Commercial & industrial		65,000		16,408		2		—
Consumer		—		—		—		—
	$	3,285,195	$	957,603	$	10		—

(1) Junior mortgages include equity lines