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Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2012
Allowance for Loan Losses [Abstract]  
Allowance for Loan Losses by Portfolio Segment

A disaggregation of the allowance for loan losses by segment is shown below.

 

                                                                                 
    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  

As of December 31, 2012

                                                                               

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 )    $ —         (787,108 )      (527,857 )      (388,026 )      (188,724 )            $ (2,375,562 ) 
                     

Recoveries

     —       $ —         285,326     $ —         4,059       —          18,369       78,205             $ 385,959  
                     

Provision

     201,660       2,000-       16,243       (9,234 )      830,952       325,989       350,007       177,729       (661 )    $ 1,894,685  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending Balance

   $ 191,882     $ 2,000     $ 106,000     $ 545,084     $ 1,209,454     $ 517,253     $ 262,000     $ 252,210     $ 7,740     $ 3,093,623  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                     

Individually evaluated for impairment

   $ 25,882     $ —       $ —       $ 165,084     $ 467,454     $ 101,253     $ —       $ 74,210     $ —       $ 833,883  
                     

Collectively evaluated for impairment

   $ 166,000     $ 2,000     $ 106,000     $ 380,000     $ 742,000     $ 461,000     $ 262,000     $ 178,000     $ 7,740     $ 2,259,740  
                     

LOAN RECEIVABLES:

                                                                                

Ending Balance:

                                                                                
                     

Individually evaluated for impairment

   $ 275,650     $ —       $ —       $ 1,617,001     $ 4,278,290     $ 1,336,761     $ —       $ 73,978             $ 7,581,680  
                     

Collectively evaluated for impairment

     28,748,644       1,442,757       13,420,551       32,017,383       103,277,404       25,645,751       20,524,547       6,579,432               231,656,469  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

            

 

 

  
                     

Total Gross Loans

   $ 29,024,294     $ 1,442,757     $ 13,420,551     $ 33,634,384     $ 107,555,694     $ 26,982,512     $ 20,524,547     $ 6,653,410             $ 239,238,149  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

            

 

 

  

 

                                                                                 
    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  

As of December 31, 2011

                                                                               

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 )      1,186,890       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  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

            

 

 

  
Summary of effect on current period provision of changes in methodology

The following table represents the effect on the current period provision of the changes in methodology from that used in prior periods.

 

                         

December 31, 2012

   Provision Based
on New
Methodology		     Provision Based
on Prior
Methodology		     Difference  

Construction, Land and Land Development

   $ 201,660     $ 285,660     $ (84,000 ) 

Farmland

     2,000       2,000       —    

Commercial Mortgages (Non-Owner Occupied)

     16,243       77,243       (61,000 ) 

Commercial Mortgages (Owner Occupied)

     (9,234 )      (255,234 )      246,000  

Residential First Mortgages

     830,952       1,104,952       (274,000 ) 

Residential Junior Mortgages

     325,989       118,989       207,000  

Commercial and Industrial

     350,007       460,007       (110,000 ) 

Consumer Loans

     177,729       141,729       36,000  

Unallocated

     (661 )      —         (661 ) 
   

 

 

    

 

 

    

 

 

  

Total Provision for Loan Losses

   $ 1,894,685     $ 1,935,346     $ (40,661 ) 
   

 

 

    

 

 

    

 

 

  
Internal risk rating grades are assigned to commercial loans not secured

Internal risk rating grades are assigned to commercial loans not secured by real estate, commercial mortgages, residential mortgages greater than $1 million, loans to real estate developers and contractors, and consumer loans greater than $250,000 with chronic delinquency, as shown in the following table.

As of December 31, 2012:

 

                                                 

INTERNAL RISK RATING GRADES

   Construction,
Land and
Land
Development		     Farmland     Commercial
Mortgages
(Non-Owner
Occupied)		     Commercial
Mortgages
(Owner
Occupied)		     Commercial
and
Industrial		     Total  

Grade:

                                                

Pass

   $ 21,877,355     $ 1,442,757     $ 7,362,289     $ 23,974,131     $ 16,418,910     $ 71,075,442  

Watch

     4,746,266       —         2,824,575       6,680,142       2,866,739       17,117,722  

Special mention

     1,162,388       —         2,574,371       338,902       759,554       4,835,215  

Substandard

     1,038,285       —         659,316       2,641,209       479,344       4,818,154  

Doubtful

     200,000       —         —         —         —         200,000  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 29,024,294     $ 1,442,757     $ 13,420,551     $ 33,634,384     $ 20,524,547     $ 98,046,533  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

As of December 31, 2011:

 

                                                 

INTERNAL RISK RATING GRADES

   Construction,
Land and
Land
Development		     Farmland     Commercial
Mortgages
(Non-Owner
Occupied)		     Commercial
Mortgages
(Owner
Occupied)		     Commercial
and
Industrial		     Total  

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 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 December 31, 2012

 

                                 
PAYMENT ACTIVITY STATUS  

Residential

First

Mortgages

     Residential
Junior
Mortgages		     Consumer
Loans		     Total  

Performing

   $ 104,877,404     $ 25,724,597     $ 6,648,243     $ 137,250,244  

Nonperforming

     2,678,290       1,257,915       5,167       3,941,372  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 107,555,694     $ 26,982,512     $ 6,653,410     $ 141,191,616  
   

 

 

    

 

 

    

 

 

    

 

 

  

As of December 31, 2011

 

                                 
PAYMENT ACTIVITY STATUS  

Residential

First

Mortgages

     Residential
Junior
Mortgages		     Consumer
Loans		     Total  

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 December 31, 2012

 

                                                 
    Recorded
Investment		     Unpaid
Principal
Balance		     Related
Allowance		     Average
Recorded
Investment		     Interest
Income
Recognized		     Interest
Income
Collected		  

With no related allowance:

                                                

Construction, land & land development

   $ 213,768     $ 213,914     $ —       $ 202,754     $ 162     $ 130  

Farmland

     —         —         —         —         —         —    

Residential First Mortgages

     1,495,910       1,495,910       —         1,372,196       44,756       59,727  

Residential Junior Mortgages

     971,654       1,785,259       —         1,380,596       3,750       2,488  

Commercial Mortgages (Non-owner occupied)

     —         —         —         —         —         —    

Commercial Mortgages (Owner occupied)

     758,391       758,391       —         429,600       30,518       34,754  

Commercial & industrial

     —         —         —         —         —         —    

Consumer

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 3,439,723     $ 4,253,474     $ —       $ 3,385,145     $ 79,186     $ 97,099  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
             

With an allowance recorded:

                                                

Construction, land & land development

   $ 61,882     $ 65,566     $ 25,882     $ 63,761     $ —       $ —    

Farmland

     —         —         —         —         —         —    

Residential First Mortgages

     2,782,380       2,807,875       467,454       1,803,730       90,030       82,370  

Residential Junior Mortgages

     365,107       381,452       101,253       310,726       1,953       1,205  

Commercial Mortgages (Non-owner occupied)

     —         —         —         —         —         —    

Commercial Mortgages (Owner occupied)

     858,610       858,610       165,084       863,479       15,900       11,961  

Commercial & industrial

     —         —         —         —         —         —    

Consumer

     73,978       73,978       74,210       67,322       8,385       8,678  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 4,141,957     $ 4,187,481     $ 833,883     $ 3,109,017     $ 116,268     $ 104,214  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
             

Total Impaired Loans:

                                                

Construction, land & land development

   $ 275,650     $ 279,480     $ 25,882     $ 266,515     $ 162     $ 130  

Farmland

     —         —         —         —         —         —    

Residential First Mortgages

     4,278,290       4,303,785       467,454       3,175,925       134,786       142,097  

Residential Junior Mortgages

     1,336,761       2,166,711       101,253       1,691,321       5,703       3,693  

Commercial Mortgages (Non-owner occupied)

     —         —         —         —         —         —    

Commercial Mortgages (Owner occupied)

     1,617,001       1,617,001       165,084       1,293,079       46,418       46,715  

Commercial & industrial

     —         —         —         —          —         —    

Consumer

     73,978       73,978       74,210       67,322       8,385       8,678  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 7,581,680     $ 8,440,955     $ 833,883     $ 6,494,162     $ 195,454     $ 201,313  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 

IMPAIRED LOANS

as of December 31, 2011:

   Recorded
Investment		     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
The following table presents, by segments of loans, information related to loans modified as TDRs during the year ended December 31, 2012 and 2011.  
     
    For the twelve months ended
December 31, 2012		     For the twelve months ended
December 31, 2011		  

TROUBLED DEBT RESTRUCTURINGS

   Number
of
Loans		     Pre-Modification
Outstanding
Recorded
Investment		     Post-Modification
Outstanding
Recorded
Investment		     Number
of
Loans		     Pre-Modification
Outstanding
Recorded
Investment		     Post-Modification
Outstanding
Recorded
Investment		  

Construction, land & land development

     —       $ —       $ —         2     $ 342,618     $ 342,618  

Farmland

     —         —         —         —         —         —    

Residential First Mortgages

     2       987,861       981,297       2       903,549       905,631  
             

Residential Junior Mortgages (1)

     2       107,943       107,434       3       1,388,630       1,370,630  

Commercial Mortgages (Non-owner occupied)

     —         —         —         —         —         —    

Commercial Mortgages (Owner occupied)

     2       652,041       652,041       —         —         —    

Commercial & industrial

     —         —         —         2       65,000       65,000  

Consumer

     1       114,210       73,978       —         —         —    
 
The following table presents, by segments of loans, information related to loans modified as TDRs that subsequently defaulted (i.e., 90 days or more past due following a modification) during the year ended December 31, 2012 and 2011.  
             

TROUBLED DEBT RESTRUCTURINGS THAT
SUBSEQUENTLY DEFAULTED

   Number
of
Loans		     Recorded
Investment		           Number
of
Loans		     Recorded
Investment		        
             

Construction, land & land development

     —       $ —                 2     $ 342,618          
             

Farmland

     —         —                 —         —            
             

Residential First Mortgages

     —         —                 1       453,876       —    
             

Residential Junior Mortgages (1)

     1       47,749               3       1,370,630          

Commercial Mortgages (Non-owner occupied)

     —         —                 —         —            

Commercial Mortgages (Owner occupied)

     1       172,926               —         —            
             

Commercial & industrial

     —         —                 2       65,000       —    
             

Consumer

     —         —                 —         —            

 

(1) Junior mortgages include equity lines