Note 6 – Loans by Type

A summary of loan categories is as follows:

	March 31,		December 31,
*(In thousands)*	2015		2014
Commercial and industrial	$	221,645	$	203,350
Real estate
Commercial:
Mortgage		111,709		117,754
Construction		—		—
Church, church-related:
Mortgage		311,100		305,887
Construction		16,424		18,612
Industrial Revenue Bonds		22,582		23,348
Other		77		395
Total loans	$	683,537	$	669,346

The following table presents the aging of loans by loan categories at March 31, 2015 and December 31, 2014:

	Performing						Nonperforming
								90 Days
				30-59		60-89		and		Non-	Total
*(In thousands)*	Current		Days		Days		Over		accrual		Loans
March 31, 2015
Commercial and industrial	$	221,557	$	—	$	—	$	—	$	88	$	221,645
Real estate
Commercial:
Mortgage		108,632		—		—		—		3,077		111,709
Construction		—		—		—		—		—		—
Church, church-related:
Mortgage		310,979		—		—		—		121		311,100
Construction		16,424		—		—		—		—		16,424
Industrial Revenue Bonds		22,582		—		—		—		—		22,582
Other		77		—		—		—		—		77
Total	$	680,251	$	—	$	—	$	—	$	3,286	$	683,537
December 31, 2014
Commercial and industrial	$	203,350	$	—	$	—	$	—	$	—	$	203,350
Real estate
Commercial:
Mortgage		117,393		—		—		—		361		117,754
Construction		—		—		—		—		—		—
Church, church-related:
Mortgage		305,760		—		—		—		127		305,887
Construction		18,612		—		—		—		—		18,612
Industrial Revenue Bonds		23,348		—		—		—		—		23,348
Other		395		—		—		—		—		395
Total	$	668,858	$	—	$	—	$	—	$	488	$	669,346

The following table presents the credit exposure of the loan portfolio as of March 31, 2015 and December 31, 2014:

	Loans		Performing		Nonperforming
	Subject to		Loans Subject to		Loans Subject
	Normal		Special		to Special
*(In thousands)*	Monitoring¹		Monitoring²		Monitoring²		Total Loans
March 31, 2015
Commercial and industrial	$	217,740	$	3,817	$	88	$	221,645
Real estate
Commercial:
Mortgage		97,709		10,923		3,077		111,709
Construction		—		—		—		—
Church, church-related:
Mortgage		309,527		1,452		121		311,100
Construction		16,424		—		—		16,424
Industrial Revenue Bonds		22,582		—		—		22,582
Other		77		—		—		77
Total	$	664,059	$	16,192	$	3,286	$	683,537
December 31, 2014
Commercial and industrial	$	199,837	$	3,513	$	—	$	203,350
Real estate
Commercial:
Mortgage		103,097		14,296		361		117,754
Construction		—		—		—		—
Church, church-related:
Mortgage		304,219		1,541		127		305,887
Construction		18,612		—		—		18,612
Industrial Revenue Bonds		23,348		—		—		23,348
Other		395		—		—		395
Total	$	649,508	$	19,350	$	488	$	669,346

¹	Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.

²	Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

Impaired loans consist primarily of nonaccrual loans, loans greater than 90 days past due and still accruing interest and troubled debt restructurings, both performing and nonperforming. Troubled debt restructuring involves the granting of a concession to a borrower experiencing financial difficulty resulting in the modification of terms of the loan, such as changes in payment schedule or interest rate. Management measures impairment in accordance with FASB ASC 310, “Allowance for Credit Losses.” At March 31, 2015 and December 31, 2014, all impaired loans were evaluated based on the fair value of the collateral. The fair value of the collateral is based upon an observable market price or current appraised value and therefore, the Company classifies these assets as nonrecurring Level 3. There were no loans delinquent 90 days or more and still accruing interest at March 31, 2015 and December 31, 2014. There were no loans classified as troubled debt restructuring at March 31, 2015 and December 31, 2014.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of March 31, 2015, and December 31, 2014.

The following table presents the recorded investment and unpaid principal balance for impaired loans at March 31, 2015 and December 31, 2014:

			Unpaid		Related
	Recorded		Principal		Allowance for
*(In thousands)*	Investment		Balance		Loan Losses
March 31, 2015
Commercial and industrial:
Nonaccrual	$	88	$	88	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		3,077		3,077		1,127
Church – Mortgage:
Nonaccrual		121		121		121
Total impaired loans	$	3,286	$	3,286	$	1,248
December 31, 2014
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		361		361		—
Church – Mortgage:
Nonaccrual		127		127		127
Total impaired loans	$	488	$	488	$	127

A summary of the activity in the allowance for loan losses from December 31, 2014 to March 31, 2015 is as follows:

	December 31,		Charge-							March 31,
*(In thousands)*	2014		Offs		Recoveries		Provision			2015
Commercial and industrial	$	3,515	$	—	$	3	$	323		$	3,841
Real estate
Commercial:
Mortgage		3,060		—		—		(152	)		2,908
Construction		—		—		—		—			—
Church, church-related:
Mortgage		4,016		—		1		56			4,073
Construction		140		—		—		(17	)		123
Industrial Revenue Bond		394		—		—		(13	)		381
Other		769		—		—		(197	)		572
Total	$	11,894	$	—	$	4	$	—		$	11,898