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Note 6 - Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Allowance for Credit Losses [Text Block]
(
6
)
Allowance
for
Loan
Losses
 
Changes in the allowance for loan losses for the years ended
December 31
are as follows:
 
   
201
8
    
2017
    
2016
  
                         
Balance,
Beginning
of
Year
  
$
7,507,508
     $
8,923,293
     $
8,603,905
  
                         
Provision for Loan Losses
  
 
200,500
      
390,000
      
1,062,000
  
Loans Charged Off
  
 
(965,447
)
    
(2,915,753
 )    
(2,087,850
 )
Recoveries of Loans Previously Charged Off
  
 
534,245
      
1,109,968
      
1,345,238
  
                         
Balance,
End
of
Year
  
$
7,276,806
     $
7,507,508
     $
8,923,293
  
 
The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the years ended
December 31.
Allocation of a portion of the allowance to
one
category of loans does
not
preclude its availability to absorb losses in other loan categories and periodically
may
result in reallocation within the provision categories.
 
 
201
8
  
Beginning
Balance
    
 
Charge-
O
ffs
    
 
Recoveries
    
 
Provision
    
Ending
Balance
  
                                         
Commercial
and
Agricultur
al
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
  
$
446,675
    
$
(123,528
)
  
$
139,466
    
$
(93,049
)
  
$
369,564
  
Agricultural
  
 
185,904
    
 
(122,873
)
  
 
22,031
    
 
163,188
    
 
248,250
  
                                         
Real
Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
  
 
1,216,015
    
 
-
   
 
155,272
    
 
(1,256,413
)
  
 
114,874
  
Residential Construction
  
 
-
   
 
-
   
 
-
   
 
16,530
    
 
16,530
  
Commercial
  
 
3,873,959
    
 
(257,424
)
  
 
40,052
    
 
892,523
    
 
4,549,110
  
Residential
  
 
968,101
    
 
(162,235
)
  
 
90,703
    
 
284,483
    
 
1,181,052
  
Farmland
  
 
779,531
    
 
-
   
 
12,228
    
 
(90,210
)
  
 
701,549
  
                                         
Consumer
and
Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
  
 
33,993
    
 
(299,387
)
  
 
72,386
    
 
279,121
    
 
86,113
  
Other
  
 
3,330
    
 
-
   
 
2,107
    
 
4,327
    
 
9,764
  
                                         
   
$
7,507,508
    
$
(965,447
)
  
$
534,245
    
$
200,500
    
$
7,276,806
  
                                         
2017
                                        
                                         
Commercial
and
Agricultur
al
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
   $
456,197
     $
(299,079
 )   $
136,499
     $
153,058
     $
446,675
  
Agricultural
    
167,692
      
(159,500
 )    
3,963
      
173,749
      
185,904
  
                                         
Real
Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
    
322,725
      
(51,977
 )    
266,459
      
678,808
      
1,216,015
  
Residential Construction
    
13,491
      
-
      
-
      
(13,491
 )    
-
  
Commercial
    
5,750,998
      
(966,014
 )    
527,150
      
(1,438,175
 )    
3,873,959
  
Residential
    
1,396,099
      
(1,048,337
 )    
82,079
      
538,260
      
968,101
  
Farmland
    
722,331
      
(60,902
 )    
16,750
      
101,352
      
779,531
  
                                         
Consumer
and
Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
    
80,265
      
(329,944
 )    
74,933
      
208,739
      
33,993
  
Other
    
13,495
      
-
      
2,135
      
(12,300
 )    
3,330
  
                                         
    $
8,923,293
     $
(2,915,753
 )   $
1,109,968
     $
390,000
     $
7,507,508
  
 
 
 
2016
  
Beginning
Balance
    
 
Charge
-O
ffs
    
 
Recoveries
    
 
Provision
    
Ending
Balance
  
                                         
Commercial
and
Agricultur
al
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
   $
855,364
     $
(304,918
 )   $
66,738
     $
(160,987
 )   $
456,197
  
Agricultural
    
203,091
      
(19,258
 )    
4,150
      
(20,291
 )    
167,692
  
                                         
Real
Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
    
690,766
      
(25,318
 )    
814,586
      
(1,157,309
 )    
322,725
  
Residential Construction
    
19,890
      
-
      
-
      
(6,399
 )    
13,491
  
Commercial
    
3,850,527
      
(992,067
 )    
206,154
      
2,686,384
      
5,750,998
  
Residential
    
1,990,355
      
(361,630
 )    
49,660
      
(282,286
 )    
1,396,099
  
Farmland
    
911,692
      
(119,576
 )    
145,000
      
(214,785
 )    
722,331
  
                                         
Consumer
and
Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
    
63,377
      
(265,083
 )    
52,629
      
229,342
      
80,265
  
Other
    
18,843
      
-
      
6,321
      
(11,669
 )    
13,495
  
                                         
    $
8,603,905
     $
(2,087,850
 )   $
1,345,238
     $
1,062,000
     $
8,923,293
  
 
The Company’s allowance for loan losses consists of specific valuation allowances established for probable losses on specific loans and historical valuation allowances for other loans with similar risk characteristics.
 
The Company determines its individual reserves during its quarterly review of substandard loans. This process involves reviewing all loans with a risk grade of
6
or greater and an outstanding balance of
$250,000
or more, regardless of the loans impairment classification.
 
Since
not
all loans in the substandard category are considered impaired, this quarterly review process
may
result in the identification of specific reserves on nonimpaired loans. Management considers those loans graded substandard, but
not
classified as impaired, to be higher risk loans and, therefore, makes specific allocations to the allowance for those loans if warranted. The total of such loans is
$8,875,310
and
$9,470,621
as of
December 31, 2018
and
2017,
respectively. Specific allowance allocations were made for these loans totaling
$1,312,154
and
$1,510,868
as of
December 31, 2018
and
2017,
respectively. Since these loans are
not
considered impaired, both the loan balance and related specific allocation are included in the “Collectively Evaluated for Impairment” column of the following tables.
 
At
December 31, 2018,
there were
148
impaired loans totaling
$4,257,258
below the
$250,000
review threshold which were
not
individually reviewed for impairment. Those loans were subject to the Bank’s general loan loss reserve methodology and are included in the “Collectively Evaluated for Impairment” column of the following tables. Likewise, at
December 31, 2017
and
2016,
impaired loans totaling
$4,335,524
and
$4,204,156,
respectively, were below the
$250,000
review threshold and were subject to the Bank’s general loan loss reserve methodology and are included in the “Collectively Evaluated for Impairment” column of the following tables.
 
   
Ending Allowance Balance
    
Ending Loan Balance
  
2018
  
Individually
Evaluated for
Impairment
    
Collectively
Evaluated for
Impairment
    
Total
    
Individually
Evaluated for
Impairment
    
Collectively
Evaluated for
Impairment
    
Total
  
                                                 
Commercial and Agricultural
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
  
$
6,264
    
$
363,300
    
$
369,564
    
$
83,309
    
$
57,327,164
    
$
57,410,473
  
Agricultural
  
 
-
    
 
248,250
    
 
248,250
    
 
27,031
    
 
16,771,712
    
 
16,798,743
  
                                                 
Real Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
  
 
38,930
    
 
75,944
    
 
114,874
    
 
467,384
    
 
47,381,370
    
 
47,848,754
  
Residential Construction
  
 
-
    
 
16,530
    
 
16,530
    
 
-
    
 
12,499,744
    
 
12,499,744
  
Commercial
  
 
1,275,837
    
 
3,273,273
    
 
4,549,110
    
 
15,413,112
    
 
358,120,450
    
 
373,533,562
  
Residential
  
 
60,716
    
 
1,120,336
    
 
1,181,052
    
 
2,067,906
    
 
185,646,466
    
 
187,714,372
  
Farmland
  
 
35,984
    
 
665,565
    
 
701,549
    
 
2,157,281
    
 
60,551,717
    
 
62,708,998
  
                                                 
Consumer and Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
  
 
-
    
 
86,113
    
 
86,113
    
 
-
    
 
18,485,199
    
 
18,485,199
  
Other
  
 
-
    
 
9,764
    
 
9,764
    
 
-
    
 
5,027,523
    
 
5,027,523
  
                                                 
Total End of Year Balance
  
$
1,417,731
    
$
5,859,075
    
$
7,276,806
    
$
20,216,023
    
$
761,811,345
    
$
782,027,368
  
 
 
   
Ending Allowance Balance
    
Ending Loan Balance
  
2017
  
Individually
Evaluated for
Impairment
    
Collectively
Evaluated for
Impairment
    
Total
    
Individually
Evaluated for
Impairment
    
Collectively
Evaluated for
Impairment
    
Total
  
                                                 
Commercial and Agricultural
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
   $
-
     $
446,675
     $
446,675
     $
77,599
     $
48,044,664
     $
48,122,263
  
Agricultural
    
-
      
185,904
      
185,904
      
5,121
      
16,437,460
      
16,442,581
  
                                                 
Real Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
    
65,635
      
1,150,380
      
1,216,015
      
493,067
      
44,720,893
      
45,213,960
  
Residential Construction
    
-
      
-
      
-
      
-
      
8,583,446
      
8,583,446
  
Commercial
    
1,712,557
      
2,161,402
      
3,873,959
      
18,010,035
      
333,161,633
      
351,171,668
  
Residential
    
27,123
      
940,978
      
968,101
      
2,040,125
      
192,008,820
      
194,048,945
  
Farmland
    
21,369
      
758,162
      
779,531
      
1,035,572
      
66,732,083
      
67,767,655
  
                                                 
Consumer and Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
    
-
      
33,993
      
33,993
      
-
      
18,956,028
      
18,956,028
  
Other
    
-
      
3,330
      
3,330
      
-
      
14,977,309
      
14,977,309
  
                                                 
Total End of Year Balance
   $
1,826,684
     $
5,680,824
     $
7,507,508
     $
21,661,519
     $
743,622,336
     $
765,283,855
  
                                                 
2016
                                                
                                                 
Commercial and Agricultural
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial
   $
-
     $
456,197
     $
456,197
     $
6,671
     $
47,018,207
     $
47,024,878
  
Agricultural
    
-
      
167,692
      
167,692
      
-
      
17,079,579
      
17,079,579
  
                                                 
Real Estate
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Commercial Construction
    
21,135
      
301,590
      
322,725
      
72,296
      
30,286,066
      
30,358,362
  
Residential Construction
    
-
      
13,491
      
13,491
      
-
      
11,830,447
      
11,830,447
  
Commercial
    
3,021,943
      
2,729,055
      
5,750,998
      
22,422,451
      
326,667,580
      
349,090,031
  
Residential
    
362,522
      
1,033,577
      
1,396,099
      
2,911,874
      
192,668,093
      
195,579,967
  
Farmland
    
29,172
      
693,159
      
722,331
      
1,044,047
      
65,833,150
      
66,877,197
  
                                                 
Consumer and Other
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consumer
    
-
      
80,265
      
80,265
      
-
      
19,695,241
      
19,695,241
  
Other
    
-
      
13,495
      
13,495
      
-
      
16,747,861
      
16,747,861
  
                                                 
Total End of Year Balance
   $
3,434,772
     $
5,488,521
     $
8,923,293
     $
26,457,339
     $
727,826,224
     $
754,283,563