XML 102 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Allowance for Loan Losses
 6 Months Ended
Jun. 30, 2013
Text Block [Abstract]  
Allowance for Loan Losses
Note 6: Allowance for Loan Losses

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 six months ended June 30, 2013 (unaudited) are as follows:

 

    Construction,
Land and
Land
Development		     Farmland     Commercial
Mortgages
(Non Owner
Occupied)		     Commercial
Mortgages
(Owner
Occupied)		     Residential
First
Mortgages		     Residential
Revolving
and Junior
Mortgages		     Commercial
and
Industrial		     Consumer
Loans		     Unallocated     Total  

ALLOWANCE
FOR LOAN
LOSSES:

                                                            

Beginning Balance

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

(Charge-offs)

     —          —          —          —          (365,012 )      —          (16,897 )      (54,888 )        (436,797 ) 

Recoveries

     16,852        —          18,889        —          24,360        —          35        4,185          64,321   

Provision

     19,015        —          (40,889 )      (116,276 )      180,687        152,170        4,862        64,703        (2,272 )      262,000   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending Balance

   $ 227,749      $ 2,000      $ 84,000      $ 428,808      $ 1,049,489      $ 669,423      $ 250,000      $ 266,210      $ 5,468      $ 2,983,147   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Individually evaluated for impairment

   $ 25,749      $ —        $ —        $ 114,808      $ 312,489      $ 306,423      $ —        $ 72,210      $ —        $ 831,679   

Collectively evaluated for impairment

   $ 202,000      $ 2,000      $ 84,000      $ 314,000      $ 737,000      $ 363,000      $ 250,000      $ 194,000      $ 5,468      $ 2,151,468   

LOAN
RECEIVABLES:

                                                            

Ending Balance:

                    

Individually evaluated for impairment

   $ 213,070      $ —        $ —        $ 1,287,682      $ 3,811,380      $ 1,451,118      $ —        $ 72,210        $ 6,835,460   

Collectively evaluated for impairment

     27,272,677        1,348,947        13,536,438        32,881,104        103,635,654        25,778,144        17,072,727        6,489,542          228,015,233   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

  

Total Gross Loans

   $ 27,485,747      $ 1,348,947      $ 13,536,438      $ 34,168,786      $ 107,447,034      $ 27,229,262      $ 17,072,727      $ 6,561,752        $ 234,850,693   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

  

Provision is negative for the Commercial Mortgages segments due mainly to a reduction in the total level of allowance required for these segments.

 

Allowance for Loan Losses by Portfolio Segment for the six months ended June 30, 2012 (unaudited) are as follows:

 

    Construction,
Land and
Land
Development		     Farmland     Commercial
Mortgages
(Non Owner
Occupied)		     Commercial
Mortgages
(Owner
Occupied)		     Residential
First
Mortgages		     Residential
Revolving
and 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)

     (57,660 )      —          (283,569 )      —          (203,544 )      (32,674 )      (185,427 )      (75,381 )        (838,255 ) 

Recoveries

     —          —          285,084        —          —          —          10,869        52,034          347,987   

Provision

     41,031        1,000        (515 )      (179,522 )      277,334        (76,007 )      180,740        99,557        299,067        642,685   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending Balance

   $ 173,871      $ 1,000      $ 89,000      $ 374,796      $ 1,235,341      $ 610,440      $ 287,832      $ 261,210      $ 307,468      $ 3,340,958   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Individually evaluated for impairment

   $ 117,871      $ —        $ —        $ 140,796      $ 843,341      $ 431,440      $ 176,832      $ 94,210      $ —        $ 1,804,490   

Collectively evaluated for impairment

   $ 56,000      $ 1,000      $ 89,000      $ 234,000      $ 392,000      $ 179,000      $ 111,000      $ 167,000      $ 307,468      $ 1,536,468   

LOAN
RECEIVABLES:

                                                            

Ending Balance:

                    

Individually evaluated for impairment

   $ 406,378      $ —        $ —        $ 1,603,830      $ 4,025,871      $ 1,760,201      $ 513,008      $ 94,210        $ 8,403,498   

Collectively evaluated for impairment

     28,175,959        1,484,981        20,884,287        24,459,675        106,094,232        27,040,397        17,803,774        7,143,776          233,087,081   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

  

Total Gross Loans

   $ 28,582,337      $ 1,484,981      $ 20,884,287      $ 26,063,505      $ 110,120,103      $ 28,800,598      $ 18,316,782      $ 7,237,986        $ 241,490,579   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

  

Provision is negative for the Commercial Mortgages (Non Owner Occupied) segment due mainly to net recoveries received. Provision is negative for the Commercial Mortgages (Owner Occupied) and Residential Junior Mortgages segments due to a reduction in the total level of allowance required for these segments.

 

Internal risk rating grades are generally 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. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Risk grades (refer to Note 2) are evaluated as new information becomes available for each borrowing relationship or at least quarterly.

 

As of June 30, 2013 (unaudited)

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

    $ 19,972,838       $ 1,348,947       $ 7,431,155       $ 24,558,663       $ 13,816,470       $ 67,128,073   

Watch

      4,707,724         —           3,463,685         6,673,758         2,279,990         17,125,157   

Special mention

      1,330,659         —           2,301,952         335,292         800,293         4,768,196   

Substandard

      1,274,526         —           339,646         2,601,073         175,974         4,391,219   

Doubtful

      200,000         —           —           —           —           200,000   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 27,485,747       $ 1,348,947       $ 13,536,438       $ 34,168,786       $ 17,072,727       $ 93,612,645   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

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   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Loans not assigned internal risk rating grades are comprised of smaller residential mortgages and smaller consumer loans. Payment activity of these loans is reviewed monthly by management. Some of these loans are graded when the borrower’s total exposure to the Bank exceeds the limits noted above. 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 June 30, 2013 (unaudited)

PAYMENT ACTIVITY STATUS

    Residential
First
Mortgages (1)		      Residential
Revolving
and Junior
Mortgages (2)		      Consumer
Loans (3)		      Total  

Performing

    $ 106,964,478       $ 26,265,465       $ 6,533,222       $ 139,763,165   

Nonperforming

      482,556         963,797         28,530         1,474,883   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 107,447,034       $ 27,229,262       $ 6,561,752       $ 141,238,048   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

As of December 31, 2012

PAYMENT ACTIVITY STATUS

    Residential
First
Mortgages (4)		      Residential
Revolving
and Junior
Mortgages (5)		      Consumer
Loans (6)		      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   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $3,492,695 as of June 30, 2013.
(2) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $398,902 and Doubtful totaled $836,759 as of June 30, 2013.
(3) Consumer Loans which have been assigned a risk rating grade of Substandard totaled $93,387 as of June 30, 2013.
(4) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $4,676,938 as of December 31, 2012.
(5) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $536,019 and Doubtful totaled $847,581 as of December 31, 2012.
(6) Consumer Loans which have been assigned a risk rating grade of Substandard totaled $75,409 as of December 31, 2012.

 

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.

 

      As of June 30, 2013      For the six months ended June 30, 2013  

IMPAIRED LOANS

    Recorded
Investment		      Customers’
Unpaid
Principal
Balance		      Related
Allowance		      Average
Recorded
Investment		      Interest
Income
Recognized		      Interest
Income
Collected		  
(unaudited)                  

With no related allowance:

                  

Construction, land & land development

    $ 13,070       $ 13,705       $ —         $ 13,419       $ —         $ —     

Farmland

      —           —           —           —           —           —     

Residential First Mortgages

      1,968,483         1,968,483         —           1,887,449         32,818         27,206   

Residential Revolving and Junior Mortgages (1)

      331,386         331,386         —           331,268         10,697         4,474   

Commercial Mortgages (Non-owner occupied)

      —           —           —           —           —           —     

Commercial Mortgages (Owner occupied)

      750,910         755,856         —           753,824         14,835         14,745   

Commercial & industrial

      —           —           —           —           —           —     

Consumer (2)

      —           —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3,063,849       $ 3,069,430       $ —         $ 2,985,960       $ 58,350       $ 46,425   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

With an allowance recorded:

                                          

Construction, land & land development

    $ 200,000       $ 200,000       $ 25,749       $ 200,000       $ —         $ —     

Farmland

      —           —           —           —           —           —     

Residential First Mortgages

      1,842,897         1,842,897         312,489         1,847,289         50,385         50,320   

Residential Revolving and Junior Mortgages (1)

      1,119,732         1,942,054         306,423         1,067,665         3,771         4,154   

Commercial Mortgages (Non-owner occupied)

      —           —           —           —           —           —     

Commercial Mortgages (Owner occupied)

      536,772         536,772         114,808         535,706         2,722         —     

Commercial & industrial

      —           —           —           —           —           —     

Consumer (2)

      72,210         72,210         72,210         73,106         3,077         3,090   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3,771,611       $ 4,593,933       $ 831,679       $ 3,723,766       $ 59,955       $ 57,564   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Impaired Loans:

                                          

Construction, land & land development

    $ 213,070       $ 213,705       $ 25,749       $ 213,419       $ —         $ —     

Farmland

      —           —           —           —           —           —     

Residential First Mortgages

      3,811,380         3,811,380         312,489         3,734,738         83,203         77,526   

Residential Revolving and Junior Mortgages (1)

      1,451,118         2,273,440         306,423         1,398,933         14,468         8,628   

Commercial Mortgages (Non-owner occupied)

      —           —           —           —           —           —     

Commercial Mortgages (Owner occupied)

      1,287,682         1,292,628         114,808         1,289,530         17,557         14,745   

Commercial & industrial

      —           —           —           —           —           —     

Consumer (2)

      72,210         72,210         72,210         73,106         3,077         3,090   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 6,835,460       $ 7,663,363       $ 831,679       $ 6,709,726       $ 118,305       $ 103,989   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Junior mortgages include equity lines
(2) Includes credit cards

 

      As of December 31, 2012      For the twelve months ended December 31, 2012  

IMPAIRED LOANS

    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

    $ 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 (1)

      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 (2)

      —           —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 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 (1)

      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 (2)

      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)

      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 (2)

      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   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Junior mortgages include equity lines
(2) Includes credit cards

Smaller nonaccruing loans and nonaccruing loans that are not graded because they are included in homogenous pools generally do not meet the criteria for impairment testing, and are therefore excluded from impaired loan disclosures. At June 30, 2013 and December 31, 2012, nonaccruing loans excluded from impaired loan disclosure totaled $1,121,268 and $721,951, respectively. If interest on these nonaccruing loans had been accrued, such income would have approximated $19,680 during the six months ended June 30, 2013 and $16,139 for the twelve months ended December 31, 2012.

Loans modified as TDR’s are considered impaired and are individually evaluated for the amount of impairment in the ALL. The following table presents, by segments of loans, information related to loans modified as TDRs during the six months ended June 30, 2013 and 2012. There were no loans modified as TDR’s within 12 months prior to a default that subsequently defaulted (i.e. 90 days or more past due following a modification) during the six months ended June 30, 2013. There were 12 loans, with balances totaling $3.8 million, modified as TDRs within 12 months prior to a default that subsequently defaulted during the six months ended June 30, 2012.

 

TROUBLED DEBT RESTRUCTURINGS

    For the six months ended June 30, 2013 (unaudited)  
     Number of
Loans		      Pre-Modification
Outstanding
Recorded
Investment		      Post-Modification
Outstanding
Recorded
Investment		  

Residential First Mortgages (1)

      2       $ 314,889       $ 314,665   

 

     For the six months ended June 30, 2012 (unaudited)  
     Number of
Loans		      Pre-Modification
Outstanding
Recorded
Investment		      Post-Modification
Outstanding
Recorded
Investment		  

Commercial Mortgage (Owner Occupied) (2)

      1       $ 479,115       $ 479,115   

Residential First Mortgage (3)

      1         650,113         650,113   

Consumer Loan (3)

      1         94,210         94,210   

 

(1) These two loans were modified in the first quarter of 2013.
(2) This loan was modified in the second quarter of 2012.
(3) These two loans were modified in the first quarter of 2012.