Loans by Type

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Loans by Type

Note 6 – Loans by Type

A summary of loan categories is as follows:

	June 30,		December 31,
(In thousands)	2016		2015
Commercial and industrial	$	225,657	$	193,430
Real estate
Commercial:
Mortgage		104,355		108,836
Construction		13,997		1,182
Church, church-related:
Mortgage		311,012		306,728
Construction		24,842		28,957
Industrial Revenue Bonds		18,204		19,831
Other		67		91
Total loans	$	698,134	$	659,055

The following table presents the aging of loans by loan categories at June 30, 2016 and December 31, 2015:

	Performing						Nonperforming
							90 Days
			30-59		60-89		and		Non-		Total
(In thousands)	Current		Days		Days		Over		accrual		Loans
June 30, 2016
Commercial and industrial	$	225,657	$	—	$	—	$	—	$	—	$	225,657
Real estate
Commercial:
Mortgage		104,080		—		—		—		275		104,355
Construction		13,997		—		—		—		—		13,997
Church, church-related:
Mortgage		309,936		989		—		—		87		311,012
Construction		24,842		—		—		—		—		24,842
Industrial Revenue Bonds		18,204		—		—		—		—		18,204
Other		67		—		—		—		—		67
Total	$	696,783	$	989	$	—	$	—	$	362	$	698,134
December 31, 2015
Commercial and industrial	$	193,430	$	—	$	—	$	—	$	—	$	193,430
Real estate
Commercial:
Mortgage		105,804		—		—		—		3,032		108,836
Construction		1,182		—		—		—		—		1,182
Church, church-related:
Mortgage		306,625		—		—		—		103		306,728
Construction		28,957		—		—		—		—		28,957
Industrial Revenue Bonds		19,831		—		—		—		—		19,831
Other		91		—		—		—		—		91
Total	$	655,920	$	—	$	—	$	—	$	3,135	$	659,055

The following table presents the credit exposure of the loan portfolio by internally credit grade as of June 30, 2016 and December 31, 2015:

	Loans		Performing		Nonperforming
	Subject to		Loans Subject to		Loans Subject
	Normal		Special		to Special
(In thousands)	Monitoring1		Monitoring2		Monitoring2		Total Loans
June 30, 2016
Commercial and industrial	$	223,288	$	2,369	$	—	$	225,657
Real estate
Commercial:
Mortgage		102,978		1,102		275		104,355
Construction		13,997		—		—		13,997
Church, church-related:
Mortgage		303,534		7,391		87		311,012
Construction		24,842		—		—		24,842
Industrial Revenue Bonds		18,204		—		—		18,204
Other		67		—		—		67
Total	$	686,910	$	10,862	$	362	$	698,134
December 31, 2015
Commercial and industrial	$	190,303	$	3,127	$	—	$	193,430
Real estate
Commercial:
Mortgage		104,642		1,162		3,032		108,836
Construction		1,182		—		—		1,182
Church, church-related:
Mortgage		299,135		7,490		103		306,728
Construction		28,957		—		—		28,957
Industrial Revenue Bonds		19,831		—		—		19,831
Other		91		—		—		91
Total	$	644,141	$	11,779	$	3,135	$	659,055

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

²Loans 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 June 30, 2016, impaired loans were evaluated using the expected cash flow method. At December 31, 2015, all impaired loans were evaluated based on the fair value of the collateral and the expected cash flow method. 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 June 30, 2016 and December 31, 2015. There were no loans classified as troubled debt restructuring at June 30, 2016 and December 31, 2015.

There were no foreclosed loans recorded as other real estate owned as of June 30, 2016, and December 31, 2015.

The following table presents the recorded investment and unpaid principal balance for impaired loans at June 30, 2016 and December 31, 2015:

			Unpaid		Related
	Recorded		Principal		Allowance for
(In thousands)	Investment		Balance		Loan Losses
June 30, 2016
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		275		275		—
Church – Mortgage:
Nonaccrual		87		87		87
Total impaired loans	$	362	$	362	$	87
December 31, 2015
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		3,032		3,032		1,039
Church – Mortgage:
Nonaccrual		103		103		103
Total impaired loans	$	3,135	$	3,135	$	1,142

A summary of the activity in the allowance for loan losses from December 31, 2015 to June 30, 2016 is as follows:

	December 31,		Charge-							June 30,
(In thousands)	2015		Offs		Recoveries		Provision			2016
Commercial and industrial	$	3,083	$	—	$	37	$	497		$	3,617
Real estate
Commercial:
Mortgage		2,803		—		—		(1,113	)		1,690
Construction		9		—		—		96			105
Church, church-related:
Mortgage		4,082		—		—		34			4,116
Construction		217		—		—		(30	)		187
Industrial Revenue Bonds		320		—		—		(34	)		286
Other		1,121		—		—		(450	)		671
Total	$	11,635	$	—	$	37	$	(1,000	)	$	10,672

A summary of the activity in the allowance for loan losses from December 31, 2014 to June 30, 2015 is as follows:

	December 31,		Charge-							June 30,
(In thousands)	2014		Offs		Recoveries		Provision			2015
Commercial and industrial	$	3,515	$	—	$	7	$	78		$	3,600
Real estate
Commercial:
Mortgage		3,060		—		—		(57	)		3,003
Construction		—		—		—		—			—
Church, church-related:
Mortgage		4,016		—		1		52			4,069
Construction		140		—		—		20			160
Industrial Revenue Bonds		394		—		—		(27	)		367
Other		769		—		—		(66	)		703
Total	$	11,894	$	—	$	8	$	—		$	11,902