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Note 3 - Loans
 6 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
(3)
Loans
 
The following table presents the composition of loans segregated by class of loans, as of June 30, 2016 and December 31, 2015.
 
   
June 30, 2016
     December 31, 2015  
Commercial and Agricultural
 
 
 
 
 
 
 
 
Commercial
 
$
47,934
 
   $ 47,782  
Agricultural
 
 
24,307
 
     19,193  
                 
Real Estate
 
 
 
 
 
 
 
 
Commercial Construction
 
 
32,292
 
     40,107  
Residential Construction
 
 
9,141
 
     9,413  
Commercial
 
 
345,181
 
     346,262  
Residential
 
 
196,140
 
     197,002  
Farmland
 
 
70,137
 
     61,780  
                 
Consumer and Other
 
 
 
 
 
 
 
 
Consumer
 
 
19,936
 
     20,605  
Other
 
 
19,141
 
     16,492  
                 
Total Loans
 
$
764,209
 
   $ 758,636  
 
Commercial and industrial loans are extended to a diverse group of businesses within the Company’s market area. These loans are often underwritten based on the borrower’s ability to service the debt from income from the business. Real estate construction loans often require loan funds to be advanced prior to completion of the project. Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans. Consumer loans are originated at the bank level. These loans are generally smaller loan amounts spread across many individual borrowers to help minimize risk.
 
Credit Quality Indicators
. As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade assigned to commercial and consumer loans, (ii) the level of classified commercial loans, (iii) net charge-offs, (iv) nonperforming loans, and (v) the general economic conditions in the Company’s geographic markets.
 
The Company uses a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. A description of the general characteristics of the grades is as follows:
 
 
●
Grades 1 and 2 – Borrowers with these assigned grades range in risk from virtual absence of risk to minimal risk. Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds. Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans. Loans in this category fall into the “pass” classification.
 
 
●
Grades 3 and 4 – Loans assigned these “pass” risk grades are made to borrowers with acceptable credit quality and risk. The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average.
 
 
●
Grade 5 – This grade includes “special mention” loans on management’s watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term.
 
 
●
Grade 6 – This grade includes “substandard” loans in accordance with regulatory guidelines. This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms. Loans considered to be impaired are assigned this grade, and these loans often have assigned loss allocations as part of the allowance for loan and lease losses. Generally, loans on which interest accrual has been stopped would be included in this grade.
 
 
●
Grades 7 and 8 – These grades correspond to regulatory classification definitions of “doubtful” and “loss,” respectively. In practice, any loan with these grades would be for a very short period of time, and generally the Company has no loans with these assigned grades. Management manages the Company’s problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 6.
 
The following table presents the loan portfolio by credit quality indicator (risk grade) as of June 30, 2016 and December 31, 2015. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes. For the period ending June 30, 2016, the Company did not have any loans classified as “doubtful” or a “loss”.
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
 
Special Mention
 
 
Substandard
 
 
Total Loans
 
Commercial and Agricultural
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
$
45,696
 
 
$
871
 
 
$
1,367
 
 
$
47,934
 
Agricultural
 
 
23,872
 
 
 
62
 
 
 
373
 
 
 
24,307
 
                                 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Construction
 
 
29,979
 
 
 
1,011
 
 
 
1,302
 
 
 
32,292
 
Residential Construction
 
 
9,141
 
 
 
-
 
 
 
-
 
 
 
9,141
 
Commercial
 
 
321,052
 
 
 
7,434
 
 
 
16,695
 
 
 
345,181
 
Residential
 
 
176,773
 
 
 
8,132
 
 
 
11,235
 
 
 
196,140
 
Farmland
 
 
68,056
 
 
 
1,119
 
 
 
962
 
 
 
70,137
 
                                 
Consumer and Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
19,386
 
 
 
124
 
 
 
426
 
 
 
19,936
 
Other
 
 
19,121
 
 
 
-
 
 
 
20
 
 
 
19,141
 
                                 
Total Loans
 
$
713,076
 
 
$
18,753
 
 
$
32,380
 
 
$
764,209
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
 
Special Mention
 
 
Substandard
 
 
Total Loans
 
Commercial and Agricultural
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
   $ 44,274     $ 1,927     $ 1,581     $ 47,782  
Agricultural
     18,970       18       205       19,193  
                                 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Construction
     36,516       913       2,678       40,107  
Residential Construction
     9,413       -       -       9,413  
Commercial
     320,566       13,653       12,043       346,262  
Residential
     177,054       8,546       11,402       197,002  
Farmland
     56,798       930       4,052       61,780  
                                 
Consumer and Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
     20,038       156       411       20,605  
Other
     16,467       -       25       16,492  
                                 
Total Loans
   $ 700,096     $ 26,143     $ 32,397     $ 758,636  
 
A loan’s risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral. Loan risk grades are subject to reassessment at various times throughout the year as part of the Company’s ongoing loan review process. Loans with an assigned risk grade of 6 or below and an outstanding balance of $250,000 or more are reassessed on a quarterly basis. During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired.
 
In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas. The unemployment rates are reviewed on a quarterly basis as part of the allowance for loan loss determination.
 
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due.
 
The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of June 30, 2016 and December 31, 2015:
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 Days
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-89 Days
 
 
or More
 
 
Total Accruing
 
 
Nonaccrual
 
 
 
 
 
 
 
 
 
 
 
Past Due
 
 
Past Due
 
 
Loans Past Due
 
 
Loans
 
 
Current Loans
 
 
Total Loans
 
Commercial and Agricultural
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
$
320
 
 
$
-
 
 
$
320
 
 
$
461
 
 
$
47,153
 
 
$
47,934
 
Agricultural
 
 
104
 
 
 
-
 
 
 
104
 
 
 
192
 
 
 
24,011
 
 
 
24,307
 
                                                 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Construction
 
 
148
 
 
 
-
 
 
 
148
 
 
 
190
 
 
 
31,954
 
 
 
32,292
 
Residential Construction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
9,141
 
 
 
9,141
 
Commercial
 
 
1,452
 
 
 
-
 
 
 
1,452
 
 
 
7,678
 
 
 
336,051
 
 
 
345,181
 
Residential
 
 
3,123
 
 
 
-
 
 
 
3,123
 
 
 
3,455
 
 
 
189,562
 
 
 
196,140
 
Farmland
 
 
220
 
 
 
-
 
 
 
220
 
 
 
933
 
 
 
68,984
 
 
 
70,137
 
                                                 
Consumer and Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
244
 
 
 
-
 
 
 
244
 
 
 
240
 
 
 
19,452
 
 
 
19,936
 
Other
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
19,141
 
 
 
19,141
 
                                                 
Total Loans
 
$
5,611
 
 
$
-
 
 
$
5,611
 
 
$
13,149
 
 
$
745,449
 
 
$
764,209
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accruing Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 Days
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30-89 Days
 
 
or More
 
 
Total Accruing
 
 
Nonaccrual
 
 
 
 
 
 
 
 
 
 
 
Past Due
 
 
Past Due
 
 
Loans Past Due
 
 
Loans
 
 
Current Loans
 
 
Total Loans
 
Commercial and Agricultural
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
   $ 491     $ -     $ 491     $ 577     $ 46,714     $ 47,782  
Agricultural
     71       -       71       178       18,944       19,193  
                                                 
Real Estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Construction
     90       -       90       1,643       38,374       40,107  
Residential Construction
     -       -       -       -       9,413       9,413  
Commercial
     6,031       -       6,031       7,565       332,666       346,262  
Residential
     3,683       -       3,683       3,164       190,155       197,002  
Farmland
     123       -       123       1,103       60,554       61,780  
                                                 
Consumer and Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
     470       8       478       178       19,949       20,605  
Other
     -       -       -       -       16,492       16,492  
                                                 
Total Loans
   $ 10,959     $ 8     $ 10,967     $ 14,408     $ 733,261     $ 758,636  
 
The following table details impaired loan data as of June 30, 2016:
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual
 
 
 
 
 
 
 
 
 
 
Average
 
 
Interest
 
 
Interest
 
 
 
Principal
 
 
Impaired
 
 
Related
 
 
Recorded
 
 
Income
 
 
Income
 
 
 
Balance
 
 
Balance
 
 
Allowance
 
 
Investment
 
 
Recognized
 
 
Collected
 
                                                 
With No Related
Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
$
460
 
 
$
460
 
 
$
-
 
 
$
472
 
 
$
4
 
 
$
5
 
Agricultural
 
 
213
 
 
 
192
 
 
 
-
 
 
 
188
 
 
 
9
 
 
 
13
 
Commercial Construction
 
 
453
 
 
 
428
 
 
 
-
 
 
 
930
 
 
 
8
 
 
 
7
 
Residential Construction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial Real Estate
 
 
16,383
 
 
 
15,615
 
 
 
-
 
 
 
13,577
 
 
 
271
 
 
 
270
 
Residential Real Estate
 
 
5,227
 
 
 
4,956
 
 
 
-
 
 
 
4,606
 
 
 
(7
)
 
 
119
 
Farmland
 
 
935
 
 
 
933
 
 
 
-
 
 
 
1,121
 
 
 
(3
)
 
 
1
 
Consumer
 
 
248
 
 
 
240
 
 
 
-
 
 
 
205
 
 
 
4
 
 
 
6
 
Other
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
                                                 
 
 
 
23,919
 
 
 
22,824
 
 
 
-
 
 
 
21,099
 
 
 
286
 
 
 
421
 
                                                 
With An Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
-
 
 
 
-
 
 
 
-
 
 
 
50
 
 
 
-
 
 
 
-
 
Agricultural
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial Construction
 
 
74
 
 
 
74
 
 
 
22
 
 
 
75
 
 
 
-
 
 
 
-
 
Residential Construction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial Real Estate
 
 
8,709
 
 
 
8,695
 
 
 
2,886
 
 
 
8,305
 
 
 
127
 
 
 
124
 
Residential Real Estate
 
 
864
 
 
 
856
 
 
 
440
 
 
 
965
 
 
 
3
 
 
 
3
 
Farmland
 
 
384
 
 
 
384
 
 
 
33
 
 
 
386
 
 
 
10
 
 
 
11
 
Consumer
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Other
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
                                                 
 
 
 
10,031
 
 
 
10,009
 
 
 
3,381
 
 
 
9,781
 
 
 
140
 
 
 
138
 
                                                 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
460
 
 
 
460
 
 
 
-
 
 
 
522
 
 
 
4
 
 
 
5
 
Agricultural
 
 
213
 
 
 
192
 
 
 
-
 
 
 
188
 
 
 
9
 
 
 
13
 
Commercial Construction
 
 
527
 
 
 
502
 
 
 
22
 
 
 
1,005
 
 
 
8
 
 
 
7
 
Residential Construction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial Real Estate
 
 
25,092
 
 
 
24,310
 
 
 
2,886
 
 
 
21,882
 
 
 
398
 
 
 
394
 
Residential Real Estate
 
 
6,091
 
 
 
5,812
 
 
 
440
 
 
 
5,571
 
 
 
(4
)
 
 
122
 
Farmland
 
 
1,319
 
 
 
1,317
 
 
 
33
 
 
 
1,507
 
 
 
7
 
 
 
12
 
Consumer
 
 
248
 
 
 
240
 
 
 
-
 
 
 
205
 
 
 
4
 
 
 
6
 
Other
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
                                                 
 
 
$
33,950
 
 
$
32,833
 
 
$
3,381
 
 
$
30,880
 
 
$
426
 
 
$
559
 
 
The following table details impaired loan data as of December 31, 2015:
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual
 
 
 
 
 
 
 
 
 
 
Average
 
 
Interest
 
 
Interest
 
 
 
Principal
 
 
Impaired
 
 
Related
 
 
Recorded
 
 
Income
 
 
Income
 
 
 
Balance
 
 
Balance
 
 
Allowance
 
 
Investment
 
 
Recognized
 
 
Collected
 
                                                 
With No Related
Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
   $ 454     $ 454     $ -     $ 535     $ 17     $ 21  
Agricultural
     196       178       -       163       (10 )     10  
Commercial Construction
     6,888       1,898       -       2,867       26       27  
Commercial Real Estate
     15,569       15,122       -       15,430       529       531  
Residential Real Estate
     5,429       4,576       -       4,715       176       159  
Farmland
     1,105       1,103       -       1,340       1       2  
Consumer
     180       178       -       191       14       15  
Other
     -       -       -       48       -       -  
                                                 
      29,821       23,509       -       25,289       753       765  
                                                 
With An Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
    123       123       95       100       2       3  
Agricultural
     -       -       -       -       -       -  
Commercial Construction
     77       76       25       92       -       -  
Commercial Real Estate
     8,969       8,956       1,608       6,673       214       209  
Residential Real Estate
     1,083       1,075       308       1,089       16       16  
Farmland
     388       388       37       391       21       21  
Consumer
     -       -       -       -       -       -  
Other
     -       -       -       -       -       -  
                                                 
      10,640       10,618       2,073       8,345       253       249  
                                                 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
     577       577       95       635       19       24  
Agricultural
     196       178       -       163       (10 )     10  
Commercial Construction
     6,965       1,974       25       2,959       26       27  
Commercial Real Estate
     24,538       24,078       1,608       22,103       743       740  
Residential Real Estate
     6,512       5,651       308       5,804       192       175  
Farmland
     1,493       1,491       37       1,731       22       23  
Consumer
     180       178       -       191       14       15  
Other
     -       -       -       48       -       -  
                                                 
    $ 40,461     $ 34,127     $ 2,073     $ 33,634     $ 1,006     $ 1,014  
 
The following table details impaired loan data as of June 30, 2015:
 
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual
 
 
 
 
 
 
 
 
 
 
Average
 
 
Interest
 
 
Interest
 
 
 
Principal
 
 
Impaired
 
 
Related
 
 
Recorded
 
 
Income
 
 
Income
 
 
 
Balance
 
 
Balance
 
 
Allowance
 
 
Investment
 
 
Recognized
 
 
Collected
 
                                                 
With No Related
Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
   $ 710     $ 648     $ -     $ 555     $ (11 )   $ 16  
Agricultural
     179       161       -       159       (10 )     10  
Commercial Construction
     9,613       3,408       -       3,418       13       14  
Residential Construction
     -       -       -       -       -       -  
Commercial Real Estate
     15,149       15,149       -       16,093       281       261  
Residential Real Estate
     5,612       4,691       -       4,943       115       105  
Farmland
     1,444       1,442       -       1,430       3       4  
Consumer
     244       204       -       198       (4 )     8  
Other
     -       -       -       97       -       -  
                                                 
      32,951       25,703       -       26,893       387       418  
                                                 
With An Allowance Recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
    92       92       92       93       -       -  
Agricultural
     -       -       -       -       -       -  
Commercial Construction
     80       80       18       107       -       -  
Residential Construction
     -       -       -       -       -       -  
Commercial Real Estate
     6,639       5,992       278       5,728       56       47  
Residential Real Estate
     1,093       1,093       320       1,098       9       8  
Farmland
     392       392       59       393       11       11  
Consumer
     -       -       -       -       -       -  
Other
     -       -       -       -       -       -  
                                                 
      8,296       7,649       767       7,419       76       66  
                                                 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
     802       740       92       648       (11 )     16  
Agricultural
     179       161       -       159       (10 )     10  
Commercial Construction
     9,693       3,488       18       3,525       13       14  
Residential Construction
     -       -       -       -       -       -  
Commercial Real Estate
     21,788       21,141       278       21,821       337       308  
Residential Real Estate
     6,705       5,784       320       6,041       124       113  
Farmland
     1,836       1,834       59       1,823       14       15  
Consumer
     244       204       -       198       (4 )     8  
Other
     -       -       -       97       -       -  
                                                 
    $ 41,247     $ 33,352     $ 767     $ 34,312     $ 463     $ 484  
 
Troubled Debt Restructurings (TDRs) are troubled loans on which the original terms of the loan have been modified in favor of the borrower due to deterioration in the borrower’s financial condition. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet the borrower’s specific circumstances at a point in time. Not all loan modifications are TDRs. Loan modifications are reviewed and approved by the Company’s senior lending staff, who then determine whether the loan meets the criteria for a TDR. Generally, the types of concessions granted to borrowers that are evaluated in determining whether a loan is classified as a TDR include:
 
 
●
Interest rate reductions – Occur when the stated interest rate is reduced to a nonmarket rate or a rate the borrower would not be able to obtain elsewhere under similar circumstances.
 
 
●
Amortization or maturity date changes – Result when the amortization period of the loan is extended beyond what is considered a normal amortization period for loans of similar type with similar collateral.
 
 
●
Principal reductions – These are often the result of commercial real estate loan workouts where two new notes are created. The primary note is underwritten based upon our normal underwriting standards and is structured so that the projected cash flows are sufficient to repay the contractual principal and interest of the newly restructured note. The terms of the secondary note vary by situation and often involve that note being charged-off, or the principal and interest payments being deferred until after the primary note has been repaid. In situations where a portion of the note is charged-off during modification there is often no specific reserve allocated to those loans. This is due to the fact that the amount of the charge-off usually represents the excess of the original loan balance over the collateral value and the Company has determined there is no additional exposure on those loans.
 
As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of June 30, 2016. The following tables present the number of loan contracts restructured during the three month and six month period ended June 30, 2016 and 2015. It shows the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous twelve months which subsequently defaulted during the period. Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.
 
 
 
Three Months Ended June 30, 2016
 
 
Six Months Ended June 30, 2016
 
Troubled Debt Restructurings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
# of Contracts
    
Pre-Modification
    
Post-Modification
    
# of Contracts
    
Pre-Modification
    
Post-Modification
  
                                                 
Residential Real Estate
 
 
1
 
 
$
91
 
 
$
91
 
 
 
1
 
 
$
91
 
 
$
91
 
                                                 
Total Loans
 
 
1
 
 
$
91
 
 
$
91
 
 
 
1
 
 
$
91
 
 
$
91
 
 
 
 
 
Three Months Ended June 30, 2015
 
 
Six Months Ended June 30, 2015
 
Troubled Debt Restructurings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
# of Contracts
    
Pre-Modification
    
Post-Modification
    
# of Contracts
    
Pre-Modification
    
Post-Modification
  
                                                 
Residential Real Estate
     -     $ -     $ -       1     $ 881     $ 897  
                                                 
Total Loans
     -     $ -     $ -       1     $ 881     $ 897  
 
The company did not have any TDRs that subsequently defaulted for the three months and six months ended June 30, 2016.