Allowance for Loan Losses and Impaired Loans (Tables)

3 Months Ended

Mar. 31, 2018

Allowance for Loan Losses and Recorded Investment in Loans

The following table presents activity in the allowance by loan category and information on the loans evaluated individually for impairment and collectively evaluated for impairment as of March 31, 2018 and December 31, 2017:

Allowance for Loan Losses and Recorded Investment in Loans


(dollars in thousands)	Construction & Development			Farmland			Residential			Commercial Mortgage			Commercial & Agricultural			Consumer & Other			Total
For the Three Months Ended March 31, 2018
Allowance for loan losses:
Balance, December 31, 2017	$	239		$	358		$	1,875		$	619		$	282		$	80		$	3,453
Charge-offs		(12	)		—			(117	)		—			—			(19	)		(148	)
Recoveries		—			34			10			—			2			10			56
Provision		20			(70	)		128			(10	)		(17	)		3			54

Balance, March 31, 2018	$	247		$	322		$	1,896		$	609		$	267		$	74		$	3,415

For the Three Months Ended March 31, 2017
Allowance for loan losses:
Balance, December 31, 2016	$	319		$	342		$	1,841		$	600		$	210		$	108		$	3,420
Charge-offs		—			—			—			(42	)		—			(15	)		(57	)
Recoveries		56			—			15			—			27			7			105
Provision		(26	)		59			24			86			(7	)		(28	)		108

Balance, March 31, 2017	$	349		$	401		$	1,880		$	644		$	230		$	72		$	3,576

March 31, 2018
Allowance for loan losses:
Ending Balance	$	247		$	322		$	1,896		$	609		$	267		$	74		$	3,415

Ending balance: individually evaluated for impairment	$	—		$	39		$	33		$	—		$	—		$	—		$	72

Ending balance: collectively evaluated for impairment	$	247		$	283		$	1,863		$	609		$	267		$	74		$	3,343

Loans outstanding:
Ending Balance	$	26,338		$	33,770		$	194,141		$	130,299		$	26,731		$	14,824		$	426,103

Ending balance: individually evaluated for impairment	$	—		$	4,751		$	1,455		$	—		$	—		$	—		$	6,206

Ending balance: collectively
evaluated for impairment	$	26,338		$	29,019		$	192,686		$	130,299		$	26,731		$	14,824		$	419,897

December 31, 2017
Allowance for loan losses:
Ending Balance	$	239		$	358		$	1,875		$	619		$	282		$	80		$	3,453

Ending balance: individually evaluated for impairment	$	—		$	49		$	42		$	—		$	—		$	—		$	91

Ending balance: collectively evaluated for impairment	$	239		$	309		$	1,833		$	619		$	282		$	80		$	3,362

Loans outstanding:
Ending Balance	$	25,475		$	33,353		$	199,120		$	125,661		$	25,672		$	15,590		$	424,871

Ending balance: individually evaluated for impairment	$	—		$	5,069		$	1,556		$	—		$	—		$	—		$	6,625

Ending balance: collectively evaluated for impairment	$	25,475		$	28,284		$	197,564		$	125,661		$	25,672		$	15,590		$	418,246

Credit Risk Profile by Internally Assigned Grades

The following table lists the loan grades utilized by the Bank and the corresponding total of outstanding loans in each category as of March 31, 2018 and December 31, 2017:

Credit Risk Profile by Internally Assigned Grades


	Loan Grades
(dollars in thousands)	Pass		Watch		Special Mention		Substandard		Total
March 31, 2018
Real Estate Secured:
Construction & development	$	25,279	$	861	$	—	$	198	$	26,338
Farmland		24,548		5,523		74		3,625		33,770
Residential		178,153		12,931		509		2,548		194,141
Commercial mortgage		111,115		15,911		683		2,590		130,299
Non-Real Estate Secured:
Commercial & agricultural		23,781		2,304		142		504		26,731
Consumer & other		14,418		323		—		83		14,824

Total	$	377,294	$	37,853	$	1,408	$	9,548	$	426,103

December 31, 2017
Real Estate Secured:
Construction & development	$	24,612	$	652	$	—	$	211	$	25,475
Farmland		23,935		4,895		74		4,449		33,353
Residential		183,543		12,464		200		2,913		199,120
Commercial mortgage		106,102		15,291		1,611		2,657		125,661
Non-Real Estate Secured:
Commercial & agricultural		22,446		2,057		649		520		25,672
Consumer & other		15,262		328		—		—		15,590

Total	$	375,900	$	35,687	$	2,534	$	10,750	$	424,871

Analysis of Nonaccrual and Past Due Loans

The following table presents an age analysis of nonaccrual and past due loans by category as of March 31, 2018 and December 31, 2017:

Analysis of Past Due and Nonaccrual Loans


(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90+ Days Past Due and Still Accruing		Nonaccrual Loans
March 31, 2018
Real Estate Secured:
Construction & development	$	—	$	—	$	214	$	214	$	26,124	$	26,338	$	—	$	214
Farmland		—		592		—		592		33,178		33,770		—		3,170
Residential		479		248		459		1,186		192,955		194,141		—		955
Commercial mortgage		41		—		194		235		130,064		130,299		—		194
Non-Real Estate Secured:
Commercial & agricultural		2		6		23		31		26,700		26,731		—		89
Consumer & other		22		2		—		24		14,800		14,824		—		—

Total	$	544	$	848	$	890	$	2,282	$	423,821	$	426,103	$	—	$	4,622

December 31, 2017
Real Estate Secured:
Construction & development	$	—	$	—	$	227	$	227	$	25,248	$	25,475	$	—	$	226
Farmland		188		—		308		496		32,857		33,353		—		3,610
Residential		395		334		710		1,439		197,681		199,120		—		1,211
Commercial mortgage		—		—		194		194		125,467		125,661		—		194
Non-Real Estate Secured:
Commercial & agricultural		70		—		23		93		25,579		25,672		—		94
Consumer & other		2		24		—		26		15,564		15,590		—		—

Total	$	655	$	358	$	1,462	$	2,475	$	422,396	$	424,871	$	—	$	5,335

Impaired Loans

The following table is a summary of information related to impaired loans as of March 31, 2018 and December 31, 2017:

Impaired Loans


							Three months ended
(dollars in thousands)	Recorded Investment¹		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2018
With no related allowance recorded:
Construction & development	$	—	$	—	$	—	$	—	$	—
Farmland		3,119		3,119		—		3,271		1
Residential		213		299		—		256		2
Commercial mortgage		—		—		—		—		—
Commercial & agricultural		—		26		—		—		8
Consumer & other		—		—		—		—		—

Subtotal		3,332		3,444		—		3,527		11

With an allowance recorded:
Construction & development		357		357		16		359		3
Farmland		1,917		1,917		48		1,926		26
Residential		5,381		5,573		261		5,612		72
Commercial mortgage		596		680		33		599		5
Commercial & agricultural		51		51		3		53		1
Consumer & other		—		—		—		—		—

Subtotal		8,302		8,578		361		8,549		107

Totals:
Construction & development		357		357		16		359		3
Farmland		5,036		5,036		48		5,197		27
Residential		5,594		5,872		261		5,868		74
Commercial mortgage		596		680		33		599		5
Commercial & agricultural		51		77		3		53		9
Consumer & other		—		—		—		—		—

Total	$	11,634	$	12,022	$	361	$	12,076	$	118

¹	Recorded investment is the loan balance, net of any charge-offs


(dollars in thousands)	Recorded Investment¹		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2017
With no related allowance recorded:
Construction & development	$	—	$	—	$	—	$	—	$	—
Farmland		3,422		3,456		—		3,774		10
Residential		300		300		—		300		8
Commercial mortgage		—		—		—		—		—
Commercial & agricultural		—		26		—		27		—
Consumer & other		—		—		—		—		2

Subtotal		3,722		3,782		—		4,101		20

With an allowance recorded:
Construction & development		361		361		16		718		111
Farmland		1,936		1,936		58		2,224		135
Residential		5,647		5,832		284		6,209		290
Commercial mortgage		602		737		33		1,020		54
Commercial & agricultural		55		55		3		89		13
Consumer & other		—		—		—		2		—

Subtotal		8,601		8,921		394		10,262		603

Totals:
Construction & development		361		361		16		718		111
Farmland		5,358		5,392		58		5,998		145
Residential		5,947		6,132		284		6,509		298
Commercial mortgage		602		737		33		1,020		54
Commercial & agricultural		55		81		3		116		13
Consumer & other		—		—		—		2		2

Total	$	12,323	$	12,703	$	394	$	14,363	$	623

¹	Recorded investment is the loan balance, net of any charge-offs

Troubled Debt Restructurings

The following table sets forth information with respect to the Bank’s troubled debt restructurings as of March 31, 2018 and March 31, 2017:

TDRs identified during the period

TDRs identified in the last twelve
months that subsequently defaulted⁽¹⁾

(dollars in thousands)

Number
of
contracts

Pre-
modification
outstanding
recorded
investment

Post-
modification
outstanding
recorded
investment

Number
of
contracts

Pre-
modification
outstanding
recorded
investment

Post-
modification
outstanding
recorded
investment

March 31, 2018

Construction & development

—

Farmland

—

Residential

—

Commercial mortgage

—

Commercial & agricultural

—

Consumer & other

—

Total

—

⁽¹⁾

Loans past due 30 days or more are considered to be in default.

During the three months ended March 31, 2018, no loans were modified that were considered to be TDRs. No TDRs identified in the last twelve months subsequently defaulted in the quarter ended March 31, 2018.


	TDRs identified during the period						TDRs identified in the last twelve months that subsequently defaulted⁽¹⁾
(dollars in thousands)	Number of contracts		Pre- modification outstanding recorded investment		Post- modification outstanding recorded investment		Number of contracts		Pre- modification outstanding recorded investment		Post- modification outstanding recorded investment
March 31, 2017
Construction & development		—	$	—	$	—		—	$	—	$	—
Farmland		1		150		150		—		—		—
Residential		—		—		—		—		—		—
Commercial mortgage		—		—		—		—		—		—
Commercial & agricultural		—		—		—		—		—		—
Consumer & other		—		—		—		—		—		—

Total		1	$	150	$	150		—	$	—	$	—

⁽¹⁾

Loans past due 30 days or more are considered to be in default.