| Schdule of allowance for loan losses |
A summary of changes in the allowance for loan
losses (in thousands) for the years ended December 31, 2016 and 2015 is as follows:
| December 31, 2016 |
|
Beginning Balance |
|
|
Charge-offs |
|
|
Recoveries |
|
|
Provision for Loan Losses |
|
|
Ending Balance |
|
|
Individually Evaluated for Impairment |
|
|
Collectively Evaluated for Impairment |
|
| Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Construction/Land Development |
|
$ |
4,442 |
|
|
$ |
356 |
|
|
$ |
7 |
|
|
$ |
(712 |
) |
|
$ |
3,381 |
|
|
$ |
1,853 |
|
|
$ |
1,528 |
|
| Farmland |
|
|
95 |
|
|
|
- |
|
|
|
- |
|
|
|
(61 |
) |
|
|
34 |
|
|
|
- |
|
|
|
34 |
|
| Real Estate |
|
|
806 |
|
|
|
23 |
|
|
|
4 |
|
|
|
56 |
|
|
|
843 |
|
|
|
221 |
|
|
|
622 |
|
| Multi-Family |
|
|
71 |
|
|
|
- |
|
|
|
- |
|
|
|
(48 |
) |
|
|
23 |
|
|
|
- |
|
|
|
23 |
|
| Commercial Real Estate |
|
|
445 |
|
|
|
19 |
|
|
|
135 |
|
|
|
144 |
|
|
|
705 |
|
|
|
- |
|
|
|
705 |
|
| Home Equity – closed end |
|
|
174 |
|
|
|
8 |
|
|
|
- |
|
|
|
(91 |
) |
|
|
75 |
|
|
|
- |
|
|
|
75 |
|
| Home Equity – open end |
|
|
634 |
|
|
|
370 |
|
|
|
120 |
|
|
|
86 |
|
|
|
470 |
|
|
|
60 |
|
|
|
410 |
|
| Commercial & Industrial – Non-Real Estate |
|
|
1,055 |
|
|
|
293 |
|
|
|
267 |
|
|
|
(443 |
) |
|
|
586 |
|
|
|
- |
|
|
|
586 |
|
| Consumer |
|
|
108 |
|
|
|
37 |
|
|
|
19 |
|
|
|
(12 |
) |
|
|
78 |
|
|
|
- |
|
|
|
78 |
|
| Dealer Finance |
|
|
836 |
|
|
|
1,081 |
|
|
|
417 |
|
|
|
1,117 |
|
|
|
1,289 |
|
|
|
20 |
|
|
|
1,269 |
|
| Credit Cards |
|
|
115 |
|
|
|
74 |
|
|
|
54 |
|
|
|
(36 |
) |
|
|
59 |
|
|
|
- |
|
|
|
59 |
|
| Total |
|
$ |
8,781 |
|
|
$ |
2,261 |
|
|
$ |
1,023 |
|
|
$ |
- |
|
|
$ |
7,543 |
|
|
$ |
2,154 |
|
|
$ |
5,389 |
|
| December 31, 2015 |
|
Beginning Balance |
|
|
Charge-offs |
|
|
Recoveries |
|
|
Provision for Loan Losses |
|
|
Ending Balance |
|
|
Individually Evaluated for Impairment |
|
|
Collectively Evaluated for Impairment |
|
| Allowance for loan losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Construction/Land Development |
|
$ |
4,738 |
|
|
$ |
156 |
|
|
$ |
85 |
|
|
$ |
(225 |
) |
|
$ |
4,442 |
|
|
$ |
2,373 |
|
|
$ |
2,069 |
|
| Farmland |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
95 |
|
|
|
95 |
|
|
|
- |
|
|
|
95 |
|
| Real Estate |
|
|
623 |
|
|
|
25 |
|
|
|
37 |
|
|
|
171 |
|
|
|
806 |
|
|
|
238 |
|
|
|
568 |
|
| Multi-Family |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
71 |
|
|
|
71 |
|
|
|
- |
|
|
|
71 |
|
| Commercial Real Estate |
|
|
126 |
|
|
|
- |
|
|
|
65 |
|
|
|
254 |
|
|
|
445 |
|
|
|
18 |
|
|
|
427 |
|
| Home Equity – closed end |
|
|
188 |
|
|
|
26 |
|
|
|
6 |
|
|
|
6 |
|
|
|
174 |
|
|
|
- |
|
|
|
174 |
|
| Home Equity – open end |
|
|
154 |
|
|
|
51 |
|
|
|
- |
|
|
|
531 |
|
|
|
634 |
|
|
|
269 |
|
|
|
365 |
|
| Commercial & Industrial – Non-Real Estate |
|
|
1,211 |
|
|
|
- |
|
|
|
62 |
|
|
|
(218 |
) |
|
|
1,055 |
|
|
|
- |
|
|
|
1,055 |
|
| Consumer |
|
|
214 |
|
|
|
32 |
|
|
|
32 |
|
|
|
(106 |
) |
|
|
108 |
|
|
|
- |
|
|
|
108 |
|
| Dealer Finance |
|
|
1,336 |
|
|
|
251 |
|
|
|
24 |
|
|
|
(273 |
) |
|
|
836 |
|
|
|
17 |
|
|
|
819 |
|
| Credit Cards |
|
|
135 |
|
|
|
60 |
|
|
|
46 |
|
|
|
(6 |
) |
|
|
115 |
|
|
|
- |
|
|
|
115 |
|
| Total |
|
$ |
8,725 |
|
|
$ |
601 |
|
|
$ |
357 |
|
|
$ |
300 |
|
|
$ |
8,781 |
|
|
$ |
2,915 |
|
|
$ |
5,866 |
|
|
| Investment in loans based on impairment method |
The following table presents the recorded investment
in loans (in thousands) based on impairment method as of December 31, 2016 and 2015:
| December 31, 2016 |
|
Loan Receivable |
|
|
Individually Evaluated for Impairment |
|
|
Collectively Evaluated for Impairment |
|
| |
|
|
|
|
|
|
|
|
|
| Construction/Land Development |
|
$ |
76,172 |
|
|
$ |
9,888 |
|
|
$ |
66,284 |
|
| Farmland |
|
|
12,901 |
|
|
|
- |
|
|
|
12,901 |
|
| Real Estate |
|
|
172,758 |
|
|
|
1,974 |
|
|
|
170,784 |
|
| Multi-Family |
|
|
7,605 |
|
|
|
- |
|
|
|
7,605 |
|
| Commercial Real Estate |
|
|
150,061 |
|
|
|
2,910 |
|
|
|
147,151 |
|
| Home Equity – closed end |
|
|
11,453 |
|
|
|
- |
|
|
|
11,453 |
|
| Home Equity –open end |
|
|
54,420 |
|
|
|
- |
|
|
|
54,420 |
|
| Commercial & Industrial – Non-Real Estate |
|
|
31,306 |
|
|
|
170 |
|
|
|
31,136 |
|
| Consumer |
|
|
6,643 |
|
|
|
13 |
|
|
|
6,630 |
|
| Dealer Finance |
|
|
65,495 |
|
|
|
87 |
|
|
|
65,408 |
|
| Credit Cards |
|
|
2,822 |
|
|
|
- |
|
|
|
2,822 |
|
| |
|
$ |
591,636 |
|
|
$ |
15,042 |
|
|
$ |
576,594 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2015 |
|
Loan Receivable |
|
|
Individually Evaluated for Impairment |
|
|
Collectively Evaluated for Impairment |
|
| |
|
|
|
|
|
|
|
|
|
| Construction/Land Development |
|
$ |
69,759 |
|
|
$ |
12,895 |
|
|
$ |
56,864 |
|
| Farmland |
|
|
13,378 |
|
|
|
- |
|
|
|
13,378 |
|
| Real Estate |
|
|
166,587 |
|
|
|
1,421 |
|
|
|
165,167 |
|
| Multi-Family |
|
|
7,559 |
|
|
|
- |
|
|
|
7,559 |
|
| Commercial Real Estate |
|
|
128,032 |
|
|
|
1,197 |
|
|
|
126,835 |
|
| Home Equity – closed end |
|
|
9,135 |
|
|
|
- |
|
|
|
9,135 |
|
| Home Equity –open end |
|
|
56,599 |
|
|
|
2,573 |
|
|
|
54,026 |
|
| Commercial & Industrial – Non-Real Estate |
|
|
27,954 |
|
|
|
181 |
|
|
|
27,773 |
|
| Consumer |
|
|
8,219 |
|
|
|
18 |
|
|
|
8,201 |
|
| Dealer Finance |
|
|
54,086 |
|
|
|
72 |
|
|
|
54,013 |
|
| Credit Cards |
|
|
2,745 |
|
|
|
- |
|
|
|
2,745 |
|
| |
|
$ |
544,053 |
|
|
$ |
18,357 |
|
|
$ |
525,696 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Schedule of Loan Portfolio by internal loan grade |
The following table shows the Company’s
loan portfolio broken down by internal loan grade (in thousands) as of December 31, 2016, and 2015:
| December 31, 2016 |
|
Grade 1 Minimal Risk |
|
|
Grade 2 Modest Risk |
|
|
Grade 3 Average Risk |
|
|
Grade 4 Acceptable Risk |
|
|
Grade 5 Marginally Acceptable |
|
|
Grade 6 Watch |
|
|
Grade 7 Substandard |
|
|
Grade 8 Doubtful |
|
|
Total |
|
| Construction/Land Development |
|
$ |
- |
|
|
$ |
1,478 |
|
|
$ |
10,870 |
|
|
$ |
43,863 |
|
|
$ |
8,399 |
|
|
$ |
2,473 |
|
|
$ |
9,089 |
|
|
$ |
- |
|
|
$ |
76,172 |
|
| Farmland |
|
|
65 |
|
|
|
- |
|
|
|
3,073 |
|
|
|
3,456 |
|
|
|
4,446 |
|
|
|
1,861 |
|
|
|
- |
|
|
|
- |
|
|
|
12,901 |
|
| Real Estate |
|
|
- |
|
|
|
1,149 |
|
|
|
62,168 |
|
|
|
74,242 |
|
|
|
28,266 |
|
|
|
4,680 |
|
|
|
2,253 |
|
|
|
- |
|
|
|
172,758 |
|
| Multi-Family |
|
|
- |
|
|
|
311 |
|
|
|
3,009 |
|
|
|
4,099 |
|
|
|
186 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,605 |
|
| Commercial Real Estate |
|
|
- |
|
|
|
2,793 |
|
|
|
32,986 |
|
|
|
91,157 |
|
|
|
19,181 |
|
|
|
1,840 |
|
|
|
2,104 |
|
|
|
- |
|
|
|
150,061 |
|
| Home Equity – closed end |
|
|
- |
|
|
|
150 |
|
|
|
3,966 |
|
|
|
4,139 |
|
|
|
1,746 |
|
|
|
1,414 |
|
|
|
38 |
|
|
|
- |
|
|
|
11,453 |
|
| Home Equity – open end |
|
|
124 |
|
|
|
1,724 |
|
|
|
16,415 |
|
|
|
30,974 |
|
|
|
4,547 |
|
|
|
125 |
|
|
|
511 |
|
|
|
- |
|
|
|
54,420 |
|
| Commercial & Industrial (Non-Real Estate) |
|
|
1,375 |
|
|
|
1,267 |
|
|
|
6,827 |
|
|
|
19,530 |
|
|
|
2,198 |
|
|
|
39 |
|
|
|
70 |
|
|
|
- |
|
|
|
31,306 |
|
| Consumer (excluding dealer) |
|
|
67 |
|
|
|
174 |
|
|
|
1,837 |
|
|
|
607 |
|
|
|
1,242 |
|
|
|
2,252 |
|
|
|
466 |
|
|
|
- |
|
|
|
6,643 |
|
| Total |
|
$ |
1,631 |
|
|
$ |
9,046 |
|
|
$ |
141,151 |
|
|
$ |
272,065 |
|
|
$ |
70,211 |
|
|
$ |
14,684 |
|
|
$ |
14,531 |
|
|
$ |
- |
|
|
$ |
523,319 |
|
| |
|
Credit Cards |
|
|
Dealer Finance |
|
| Performing |
|
$ |
2,822 |
|
|
$ |
65,291 |
|
| Non performing |
|
|
- |
|
|
|
204 |
|
| Total |
|
$ |
2,822 |
|
|
$ |
65,495 |
|
| |
|
|
|
|
|
|
|
|
| December 31, 2015 |
|
Grade 1 Minimal Risk |
|
|
Grade 2 Modest Risk |
|
|
Grade 3 Average Risk |
|
|
Grade 4 Acceptable Risk |
|
|
Grade 5 Marginally Acceptable |
|
|
Grade 6 Watch |
|
|
Grade 7 Substandard |
|
|
Grade 8 Doubtful |
|
|
Total |
|
| Construction/Land Development |
|
$ |
- |
|
|
$ |
485 |
|
|
$ |
8,410 |
|
|
$ |
31,783 |
|
|
$ |
14,260 |
|
|
$ |
3,216 |
|
|
$ |
11,605 |
|
|
$ |
- |
|
|
$ |
69,759 |
|
| Farmland |
|
|
66 |
|
|
|
- |
|
|
|
2,615 |
|
|
|
3,768 |
|
|
|
4,952 |
|
|
|
1,977 |
|
|
|
- |
|
|
|
- |
|
|
|
13,378 |
|
| Real Estate |
|
|
- |
|
|
|
955 |
|
|
|
54,400 |
|
|
|
76,545 |
|
|
|
23,695 |
|
|
|
8,334 |
|
|
|
2,658 |
|
|
|
- |
|
|
|
166,587 |
|
| Multi-Family |
|
|
- |
|
|
|
391 |
|
|
|
3,925 |
|
|
|
3,046 |
|
|
|
197 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,559 |
|
| Commercial Real Estate |
|
|
- |
|
|
|
2,087 |
|
|
|
25,889 |
|
|
|
74,337 |
|
|
|
20,271 |
|
|
|
4,149 |
|
|
|
1,299 |
|
|
|
- |
|
|
|
128,032 |
|
| Home Equity – closed end |
|
|
- |
|
|
|
- |
|
|
|
3,549 |
|
|
|
3,792 |
|
|
|
1,661 |
|
|
|
114 |
|
|
|
19 |
|
|
|
- |
|
|
|
9,135 |
|
| Home Equity – open end |
|
|
- |
|
|
|
1,657 |
|
|
|
15,043 |
|
|
|
31,455 |
|
|
|
4,827 |
|
|
|
398 |
|
|
|
3,219 |
|
|
|
- |
|
|
|
56,599 |
|
| Commercial & Industrial (Non-Real Estate) |
|
|
896 |
|
|
|
646 |
|
|
|
6,423 |
|
|
|
17,053 |
|
|
|
2,281 |
|
|
|
517 |
|
|
|
138 |
|
|
|
- |
|
|
|
27,954 |
|
| Consumer (excluding dealer) |
|
|
83 |
|
|
|
215 |
|
|
|
2,273 |
|
|
|
750 |
|
|
|
1,536 |
|
|
|
2,786 |
|
|
|
576 |
|
|
|
- |
|
|
|
8,219 |
|
| Total |
|
$ |
1,045 |
|
|
$ |
6,436 |
|
|
$ |
122,527 |
|
|
$ |
242,529 |
|
|
$ |
73,680 |
|
|
$ |
21,491 |
|
|
$ |
19,514 |
|
|
$ |
- |
|
|
$ |
487,222 |
|
| |
|
Credit Cards |
|
|
Dealer Finance |
|
| Performing |
|
$ |
2,730 |
|
|
$ |
53,826 |
|
| Non performing |
|
|
15 |
|
|
|
260 |
|
| Total |
|
$ |
2,745 |
|
|
$ |
54,086 |
|
|