Loans by Type

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Loans by Type

Note 6 – Loans by Type

A summary of loan categories is as follows:

	September 30,		December 31,
(In thousands)	2016		2015
Commercial and industrial	$	213,060	$	193,430
Real estate
Commercial:
Mortgage		102,569		108,836
Construction		13,704		1,182
Church, church-related:
Mortgage		322,800		306,728
Construction		15,094		28,957
Industrial Revenue Bonds		17,390		19,831
Other		257		91
Total loans	$	684,874	$	659,055

The following table presents the aging of loans by loan categories at September 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
September 30, 2016
Commercial and industrial	$	213,060	$	—	$	—	$	—	$	—	$	213,060
Real estate
Commercial:
Mortgage		102,309		—		—		—		260		102,569
Construction		13,704		—		—		—		—		13,704
Church, church-related:
Mortgage		321,631		105		—		984		80		322,800
Construction		15,094		—		—		—		—		15,094
Industrial Revenue Bonds		17,390		—		—		—		—		17,390
Other		257		—		—		—		—		257
Total	$	683,445	$	105	$	—	$	984	$	340	$	684,874
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 as of September 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
September 30, 2016
Commercial and industrial	$	210,824	$	2,236	$	—	$	213,060
Real estate
Commercial:
Mortgage		101,238		1,071		260		102,569
Construction		13,704		—		—		13,704
Church, church-related:
Mortgage		315,516		7,204		80		322,800
Construction		15,094		—		—		15,094
Industrial Revenue Bonds		17,390		—		—		17,390
Other		257		—		—		257
Total	$	674,023	$	10,511	$	340	$	684,874
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 September 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. One loan was delinquent 90 days and still accruing interest at September 30, 2016, which was brought current on October 4, 2016 and has a sale contract that will pay the loan in full upon closing. Therefore, it is not considered impaired. There were no loans delinquent 90 days or more and still accruing interest at December 31, 2015. There were no loans classified as troubled debt restructuring at September 30, 2016 and December 31, 2015.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of September 30, 2016 and December 31, 2015.

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

			Unpaid		Related
	Recorded		Principal		Allowance for
(In thousands)	Investment		Balance		Loan Losses
September 30, 2016
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		260		260		—
Church – Mortgage:
Nonaccrual		80		80		80
Total impaired loans	$	340	$	340	$	80
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 September 30, 2016 is as follows:

	December 31,		Charge-							September 30,
(In thousands)	2015		Offs		Recoveries		Provision			2016
Commercial and industrial	$	3,083	$	—	$	38	$	217		$	3,338
Real estate
Commercial:
Mortgage		2,803		—		—		(1,179	)		1,624
Construction		9		—		—		93			102
Church, church-related:
Mortgage		4,082		—		—		48			4,130
Construction		217		—		—		(102	)		115
Industrial Revenue Bonds		320		—		—		(47	)		273
Other		1,121		—		—		(30	)		1,091
Total	$	11,635	$	—	$	38	$	(1,000	)	$	10,673

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

	December 31,		Charge-							September 30,
(In thousands)	2014		Offs		Recoveries		Provision			2015
Commercial and industrial	$	3,515	$	30	$	10	$	(133	)	$	3,362
Real estate
Commercial:
Mortgage		3,060		—		5		(3	)		3,062
Construction		—		—		—		1			1
Church, church-related:
Mortgage		4,016		—		2		127			4,145
Construction		140		—		—		10			150
Industrial Revenue Bonds		394		—		—		(50	)		344
Other		769		—		1		48			818
Total	$	11,894	$	30	$	18	$	0		$	11,882