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Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2013
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.

 

     Mortgage
Loans on
Real Estate		     Commercial
and
Industrial		     Consumer
and Other
Loans		     Total  

For the Twelve Months Ended December 31, 2013

         

ALLOWANCE FOR LOAN LOSSES:

         

Beginning Balance

    $ 2,571,673      $ 262,000      $ 259,950      $ 3,093,623   

(Charge-offs)

      (878,781 )      (16,897 )      (132,599 )      (1,028,277 ) 

Recoveries

      68,257        1,535        14,126        83,918   

Provision

      704,370        9,362        62,268        776,000   
  

 

 

    

 

 

    

 

 

    

 

 

  

Ending Balance

    $ 2,465,519      $ 256,000      $ 203,745      $ 2,925,264   
  

 

 

    

 

 

    

 

 

    

 

 

  

Individually evaluated for impairment

    $ 633,519      $ —        $ 33,032      $ 666,551   

Collectively evaluated for impairment

      1,832,000        256,000        170,713        2,258,713   
     Mortgage
Loans on
Real Estate		     Commercial
and
Industrial		     Consumer
and other
Loans		     Total  

For the Twelve Months Ended December 31, 2012

         

ALLOWANCE FOR LOAN LOSSES:

         

Beginning Balance

    $ 2,713,490      $ 281,650      $ 193,401      $ 3,188,541   

(Charge-offs)

      (1,798,812 )      (388,026 )      (188,724 )      (2,375,562 ) 

Recoveries

      289,385        18,369        78,205        385,959   

Provision

      1,367,610        350,007        177,068        1,894,685   
  

 

 

    

 

 

    

 

 

    

 

 

  

Ending Balance

    $ 2,571,673      $ 262,000      $ 259,950      $ 3,093,623   
  

 

 

    

 

 

    

 

 

    

 

 

  

Individually evaluated for impairment

    $ 759,673      $ —        $ 74,210      $ 833,883   

Collectively evaluated for impairment

      1,812,000        262,000        185,740        2,259,740   
Loan Receivables Evaluated for Impairment Individually and Collectively by Segment

Loan receivables evaluated for impairment individually and collectively by segment as of December 31, 2013 and 2012 are as follows:

 

     Mortgage
Loans
on Real Estate		      Commercial
and
Industrial		      Consumer
Loans		      Total  

As of December 31, 2013

            

Ending Balance:

            

Individually evaluated for impairment

    $ 6,305,880       $ 310,929       $ 38,904       $ 6,655,713   

Collectively evaluated for impairment

      214,101,237         23,627,672         5,946,754         243,675,663   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Gross Loans

    $ 220,407,117       $ 23,938,601       $ 5,985,658       $ 250,331,376   
  

 

 

     

 

 

     

 

 

     

 

 

  

As of December 31, 2012

            

Ending Balance:

            

Individually evaluated for impairment

    $ 7,507,702       $ —         $ 73,978       $ 7,581,680   

Collectively evaluated for impairment

      203,451,836         20,524,547         6,579,432         230,555,815   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Gross Loans

    $ 210,959,538       $ 20,524,547       $ 6,653,410       $ 238,137,495   
  

 

 

     

 

 

     

 

 

     

 

 

  
Internal Risk Rating Grades

Internal risk rating grades are shown in the following table.

 

As of December 31, 2013

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

    $ 25,615,970       $ 1,261,825       $ 9,082,983       $ 23,983,720       $ 20,310,349       $ 80,254,847   

Watch

      3,493,341         —           5,204,100         7,429,025         2,742,550         18,869,016   

Special mention

      1,415,741         —           —           1,001,243         487,089         2,904,073   

Substandard

      1,313,831         —           339,056         1,763,326         398,613         3,814,826   

Doubtful

      —           —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 31,838,883       $ 1,261,825       $ 14,626,139       $ 34,177,314       $ 23,938,601       $ 105,842,762   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

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   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Performing and Non Performing Loans

Loans are considered to be nonperforming when they are delinquent by 90 days or more or non-accruing and credit risk is primarily evaluated by delinquency status, as shown in the table below.

 

As of December 31, 2013

PAYMENT ACTIVITY STATUS

   

Residential

First
Mortgages (1)

     

Residential
Revolving
and Junior
Mortgages (2)

     

Consumer
Loans (3)

     

Total

  

Performing

    $ 113,374,260       $ 23,969,285       $ 5,963,705       $ 143,307,250   

Nonperforming

      1,083,302         76,110         21,953         1,181,365   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 114,457,562       $ 24,045,395       $ 5,985,658       $ 144,488,615   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

As of December 31, 2012

PAYMENT ACTIVITY STATUS

   

Residential

First
Mortgages (4)

     

Residential
Revolving
and Junior
Mortgages (5)

     

Consumer
Loans (6)

     

Total

  

Performing

    $ 103,776,750       $ 25,724,597       $ 6,648,243       $ 136,149,590   

Nonperforming

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

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 106,455,040       $ 26,982,512       $ 6,653,410       $ 140,090,962   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Residential First Mortgages which have been assigned a risk rating grade of Substandard totaled $2,645,313 as of December 31, 2013.
(2) Residential Revolving and Junior Mortgages which have been assigned a risk rating grade of Substandard totaled $216,202 as of December 31, 2013.
(3) Consumer Loans which have been assigned a risk rating grade of Substandard totaled $9,094 as of December 31, 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.
Company's Recorded Investment and Customers Unpaid Principal Balances for Impaired Loans, with Associated Allowance Amount

The following tables show the Company’s recorded investment and the customers’ unpaid principal balances for impaired loans, with the associated allowance amount, if applicable, as of December 31, 2013 and 2012 along with the average recorded investment and interest income recognized for the years ended December 31, 2013 and 2012.

 

     As of December 31, 2013  

IMPAIRED LOANS

    Recorded
Investment		      Customers’ Unpaid
Principal Balance		      Related
Allowance		  

With no related allowance:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

    $ 452,429       $ 453,350       $ —     

Residential First Mortgages

      1,053,222         1,056,696         —     

Residential Revolving and Junior Mortgages (1)

      —           —           —     

Commercial Mortgages (Non-owner occupied)

      264,056         264,056         —     

Commercial Mortgages (Owner occupied)

      1,830,746         1,839,801         —     

Commercial and Industrial

      310,929         310,929         —     

Consumer (2)

      —           —           —     
  

 

 

     

 

 

     

 

 

  
     3,911,382         3,924,832         —     
  

 

 

     

 

 

     

 

 

  

With an allowance recorded:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

      151,147         155,791         51,447   

Residential First Mortgages

      2,198,253         2,198,253         408,652   

Residential Revolving and Junior Mortgages (1)

      250,676         878,429         172,453   

Commercial Mortgages (Non-owner occupied)

      —           —           —     

Commercial Mortgages (Owner occupied)

      105,351         105,351         967   

Commercial and Industrial

      —           —           —     

Consumer (2)

      38,904         38,904         33,032   
  

 

 

     

 

 

     

 

 

  
     2,744,331         3,376,728         666,551   
  

 

 

     

 

 

     

 

 

  

Total Impaired Loans:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

      603,576         609,141         51,447   

Residential First Mortgages

      3,251,475         3,254,949         408,652   

Residential Revolving and Junior Mortgages (1)

      250,676         878,429         172,453   

Commercial Mortgages (Non-owner occupied)

      264,056         264,056         —     

Commercial Mortgages (Owner occupied)

      1,936,097         1,945,152         967   

Commercial and Industrial

      310,929         310,929         —     

Consumer (2)

      38,904         38,904         33,032   
  

 

 

     

 

 

     

 

 

  
   $ 6,655,713       $ 7,301,560       $ 666,551   
  

 

 

     

 

 

     

 

 

  

 

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

 

     As of December 31, 2012  

IMPAIRED LOANS

    Recorded
Investment		      Customers’ Unpaid
Principal Balance		      Related
Allowance		  

With no related allowance:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

    $ 213,768       $ 213,914       $ —     

Residential First Mortgages

      1,495,910         1,495,910         —     

Residential Revolving and Junior Mortgages (1)

      971,654         1,785,259         —     

Commercial Mortgages (Owner occupied)

      758,391         758,391         —     

Consumer (2)

      —           —           —     
  

 

 

     

 

 

     

 

 

  
   $ 3,439,723       $ 4,253,474       $ —     
  

 

 

     

 

 

     

 

 

  

With an allowance recorded:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

    $ 61,882       $ 65,566       $ 25,882   

Residential First Mortgages

      2,782,380         2,807,875         467,454   

Residential Revolving and Junior Mortgages (1)

      365,107         381,452         101,253   

Commercial Mortgages (Owner occupied)

      858,610         858,610         165,084   

Consumer (2)

      73,978         73,978         74,210   
  

 

 

     

 

 

     

 

 

  
   $ 4,141,957       $ 4,187,481       $ 833,883   
  

 

 

     

 

 

     

 

 

  

Total Impaired Loans:

         

Mortgage Loans on Real Estate:

         

Construction, Land and Land Development

    $ 275,650       $ 279,480       $ 25,882   

Residential First Mortgages

      4,278,290         4,303,785         467,454   

Residential Revolving and Junior Mortgages (1)

      1,336,761         2,166,711         101,253   

Commercial Mortgages (Owner occupied)

      1,617,001         1,617,001         165,084   

Consumer (2)

      73,978         73,978         74,210   
  

 

 

     

 

 

     

 

 

  
   $ 7,581,680       $ 8,440,955       $ 833,883   
  

 

 

     

 

 

     

 

 

  

 

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

 

     For the Twelve Months Ended
December 31, 2013		      For the Twelve Months Ended
December 31, 2012		  

IMPAIRED LOANS

    Average
Recorded
Investment		      Interest
Income
Recognized		      Average
Recorded
Investment		      Interest
Income
Recognized		  

With no related allowance:

            

Mortgage Loans on Real Estate:

            

Construction, Land and Land Development

    $ 189,058       $ 1,493       $ 202,754       $ 292   

Residential First Mortgages

      678,171         47,960         1,372,196         87,917   

Residential Revolving and Junior Mortgages (1)

      —           —           1,380,596         6,238   

Commercial Mortgages (Non-owner occupied)

      105,622         7,945         —           —     

Commercial Mortgages (Owner occupied)

      1,091,822         56,417         429,600         31,116   

Commercial and Industrial

      62,186         —           —           —     

Consumer (2)

      —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

  
     2,126,859         113,815         3,385,146         125,563   
  

 

 

     

 

 

     

 

 

     

 

 

  

With an allowance recorded:

            

Mortgage Loans on Real Estate:

            

Construction, Land and Land Development

      30,229         —           63,761         —     

Residential First Mortgages

      1,916,379         107,608         1,803,730         76,058   

Residential Revolving and Junior Mortgages (1)

      254,149         8,236         310,725         1,953   

Commercial Mortgages (Non-owner occupied)

      —           —           —           —     

Commercial Mortgages (Owner occupied)

      21,070         1,733         863,479         27,861   

Commercial and Industrial

      —           —           —           —     

Consumer (2)

      59,524         5,047         67,322         8,385   
  

 

 

     

 

 

     

 

 

     

 

 

  
     2,281,351         122,624         3,109,017         114,257   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

            

Mortgage Loans on Real Estate:

            

Construction, Land and Land Development

      219,287         1,493         266,515         292   

Residential First Mortgages

      2,594,550         155,568         3,175,926         163,975   

Residential Revolving and Junior Mortgages (1)

      254,149         8,236         1,691,321         8,191   

Commercial Mortgages (Non-owner occupied)

      105,622         7,945         —           —     

Commercial Mortgages (Owner occupied)

      1,112,892         58,150         1,293,079         58,977   

Commercial and Industrial

      62,186         —           —           —     

Consumer (2)

      59,524         5,047         67,322         8,385   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 4,408,210       $ 236,439       $ 6,494,163       $ 239,820   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Junior mortgages include equity lines.
(2) Includes credit cards.
Summary of Troubled Debt Restructurings

The following table presents, by segments of loans, information related to loans modified as TDRs during the years ended December 31, 2013 and 2012.

 

     For the year ended
December 31, 2013		      For the year ended
December 31, 2012		  

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 (1)

      3       $ 196,257       $ 196,257         —         $ —         $ —     

Residential first mortgages (2)

      1         206,505         204,366         2         987,861         981,297   

Residential revolving and junior mortgages (3)

      —           —           —           2         107,943         107,434   

Commercial mortgages (Owner occupied) (4)

      2         262,834         262,834         2         652,041         652,041   

Consumer (2)

      1         7,953         7,457         1         114,210         73,978   

 

(1) Modifications were an extention of the loan terms.
(2) Modifications were capitalization of the interest for 2013 and extentions of loan terms for 2012.
(3) Modifications were capitalization of the interest and extension of loan terms for 2012.
(4) Modifications were an extension of loan terms for 2013 and extension of loan terms and capitalization of the interest for 2012.

 

     For the year ended
December 31, 2013		      For the year ended
December 31, 2012		  

TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED

    Number of
Loans		      Recorded
Investment		      Number of
Loans		      Recorded
Investment		  

Residential revolving and junior mortgages (1)

      1       $ 105,797         1       $ 47,749   

Commercial mortgages (Owner occupied)(2)

      —           —           1         172,926   

 

(1) Modifications were a capitalization of the interest for the 2013 default and extention of the loan terms for the 2012 default.
(2) Modification was an extention of the loan terms.