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3. Loans
 6 Months Ended
Jun. 30, 2017
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Asset Types  
3. Loans

 

Loans held for investment outstanding at June 30, 2017 and December 31, 2016 are summarized as follows:

 

(dollars in thousands)   2017     2016  
Construction/Land Development   $ 73,184     $ 76,172  
Farmland     15,024       12,901  
Real Estate     174,179       172,758  
Multi-Family     8,607       7,605  
Commercial Real Estate     149,635       150,061  
Home Equity – closed end     11,392       11,453  
Home Equity – open end     54,345       54,420  
Commercial & Industrial – Non-Real Estate     35,708       31,306  
Consumer     7,387       6,643  
Dealer Finance     71,221       65,495  
Credit Cards     2,753       2,822  
Total   $ 603,435     $ 591,636  

 

The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $204,135,000 and $199,401,000 as of June 30, 2017 and December 31, 2016, respectively.  The Company maintains a blanket lien on its entire residential real estate portfolio and certain commercial and home equity loans.

 

The following is a summary of information pertaining to impaired loans (dollars in thousand):

 

    June 30, 2017     December 31, 2016  
          Unpaid                 Unpaid        
    Recorded     Principal     Related     Recorded     Principal     Related  
    Investment     Balance     Allowance     Investment     Balance     Allowance  
Impaired loans without a valuation allowance:                                    
     Construction/Land Development   $ 5,331     $ 5,688     $ -     $ 3,296     $ 3,652     $ -  
     Farmland     1,858       1,858       -       -       -       -  
     Real Estate     747       747       -       768       768       -  
     Multi-Family     -       -       -       -       -       -  
     Commercial Real Estate     100       100       -       1,958       1,958       -  
     Home Equity – closed end     -       -       -       -       -       -  
     Home Equity – open end     -       346       -       -       347       -  
     Commercial & Industrial – Non-Real Estate     165       165       -       170       170       -  
     Consumer     11       11       -       13       13       -  
     Credit cards     -       -       -       -       -       -  
     Dealer Finance     21       21       -       -       -       -  
      8,233       8,936               6,205       6,908          
Impaired loans with a valuation allowance                                                
     Construction/Land Development     5,662       5,662       1,981       6,592       6,592       1,853  
     Farmland     -       -       -       -       -       -  
     Real Estate     1,196       1,196       218       1,206       1,206       221  
     Multi-Family     -       -       -       -       -       -  
     Commercial Real Estate     -       -       -       952       952       60  
     Home Equity – closed end     -       -       -       -       -       -  
     Home Equity – open end     -       -       -       -       -       -  
     Commercial & Industrial – Non-Real Estate     -       -       -       -       -       -  
     Consumer     -       -       -       -       -       -  
     Credit cards     -       -       -       -       -       -  
     Dealer Finance     69       69       18       87       87       20  
      6,927       6,927       2,217       8,837       8,837       2,154  
Total impaired loans   $ 15,160     $ 15,863     $ 2,217     $ 15,042     $ 15,745     $ 2,154  

 

The Recorded Investment is defined as the original principal balance less principal payments, charge-offs and nonaccrual payments applied to principal.

 

Loans held for sale consists of loans originated by VBS Mortgage for sale in the secondary market, and the Bank’s commitment to purchase residential mortgage loan participations from Northpointe Bank.  The volume of loans purchased from Northpointe fluctuates due to a number of factors including changes in secondary market rates, which affects demand for mortgage loans; the number of participating banks involved in the program; the number of mortgage loan originators selling loans to the lead bank and the funding capabilities of the lead bank.  Loans held for sale as of June 30, 2017 and December 31, 2016 were $51,766,953 and $62,734,803, respectively.

 

The following is a summary of the average investment and interest income recognized for impaired loans (dollars in thousands):

 

    Three Months Ended June 30,     Six Months Ended June 30,  
    2017     2016     2017     2016  
    Average Recorded     Interest Income     Average Recorded     Interest Income     Average Recorded     Interest Income     Average Recorded     Interest Income  
    Investment     Recognized     Investment     Recognized     Investment     Recognized     Investment     Recognized  
Impaired loans without a valuation allowance:                                                
     Construction/Land Development   $ 4,734     $ 47     $ 1,164     $ (7 )   $ 4,374     $ 50     $ 1,295     $ 17  
     Farmland     1,858       -       -       -       1,239       -       -       -  
     Real Estate     750       14       784       9       756       17       939       20  
     Multi-Family     -       -       -       -       -       -       -       -  
     Commercial Real Estate     100       2       203       -       719       3       153       2  
     Home Equity – closed end     -       -       -       -       -       -       -       -  
     Home Equity – open end     347       6       1,582       -       347       -       1,370       35  
     Commercial & Industrial – Non-Real Estate     166       -       177       3       167       6       178       6  
     Consumer and credit cards     11       -       9       -       12       -       9       -  
     Dealer Finance     20       1       16       1       13       1       15       2  
      7,986       70       3,935       6       7,627       77       3,959       82  
Impaired loans with a valuation allowance:                                                                
     Construction/Land Development     6,512       97       10,337       47     $ 6,539     $ 140     $ 10,778     $ 100  
     Farmland     -       -       -       -       -       -       -       -  
     Real Estate     1,199       31       1,221       10       1,201       31       771       26  
     Multi-Family     -       -       -       -       -       -       -       -  
     Commercial Real Estate     -       -       965       14       317       -       926       28  
     Home Equity – closed end     -       -       -       -       -       -       -       -  
     Home Equity – open end     -       -       1,407       9       -       -       1,411       19  
     Commercial & Industrial – Non-Real Estate     -       -       27       1       -       -       13       1  
     Consumer and credit card     -       -       -       -       -       -       -       -  
     Dealer Finance     65       -       82       1       72       1       77       3  
      7,776       128       14,039       82       8,129       172       13,976       177  
Total Impaired Loans   $ 15,762     $ 198     $ 17,974     $ 88     $ 15,756     $ 249     $ 17,935     $ 259  

 

The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of June 30, 2017 and December 31, 2016:

 

    30-59 Days Past due     60-89 Days Past Due     Greater than 90 Days (excluding non-accrual)     Non-Accrual Loans     Total Past Due     Current     Total Loan Receivable  
June 30, 2017                                          
Construction/Land Development   $ 632     $ 88     $ -     $ 3,162     $ 3,882     $ 69,302     $ 73,184  
Farmland     1,912       -       -       -       1,912       13,112       15,024  
Real Estate     2,159       621       159       1,386       4,325       169,854       174,179  
Multi-Family     -       -       -       -       -       8,607       8,607  
Commercial Real Estate     2,609       135       -       350       3,094       146,541       149,635  
Home Equity – closed end     -       -       -       -       -       11,392       11,392  
Home Equity – open end     105       25       -       382       512       53,833       54,345  
Commercial & Industrial – Non- Real Estate     31       18       -       -       49       35,659       35,708  
Consumer     50       12       -       -       62       7,325       7,387  
Dealer Finance     485       187               237       909       70,312       71,221  
Credit Cards     46       5       1       -       52       2,701       2,753  
Total   $ 8,029     $ 1,091     $ 160     $ 5,517     $ 14,797     $ 588,638     $ 603,435  

 

    30-59 Days Past due     60-89 Days Past Due     Greater than 90 Days (excluding non-accrual)     Non-Accrual Loans     Total Past Due     Current     Total Loan Receivable  
December 31, 2016                                          
Construction/Land Development   $ 73     $ 101     $ -     $ 2,805     $ 2,979     $ 73,193     $ 76,172  
Farmland     -       -       -       -       -       12,901       12,901  
Real Estate     2,114       340       81       1,399       3,934       168,824       172,758  
Multi-Family     -       -       -       -       -       7,605       7,605  
Commercial Real Estate     139       -       -       -       139       149,922       150,061  
Home Equity – closed end     101       -       -       32       133       11,320       11,453  
Home Equity – open end     309       -       -       279       588       53,832       54,420  
Commercial & Industrial – Non- Real Estate     313       5       -       70       388       30,918       31,306  
Consumer     35       4       -       -       39       6,604       6,643  
Dealer Finance     790       187       26       178       1,181       64,314       65,495  
Credit Cards     18       4       -       -       22       2,800       2,822  
Total   $ 3,892     $ 641     $ 107     $ 4,763     $ 9,403     $ 582,233     $ 591,636  

 

At June 30, 2017 and December 31, 2016, other real estate owned included $571,000 and $565,000 of foreclosed residential real estate.  The Company has $256,000 of consumer mortgages for which foreclosure is in process at June 30, 2017 and $40,000 at December 31, 2016.

 

Nonaccrual loans at June 30, 2017 and June 30, 2016, would have earned approximately $60,000 and $28,000, respectively, in interest income had they been accruing loans.