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3. Loans
 9 Months Ended
Sep. 30, 2018
Loans Held For Investment Abstract  
3. Loans

Loans held for investment outstanding at September 30, 2018 and December 31, 2017 are summarized as follows:

 

    2018     2017  
Construction/Land Development   $ 68,806     $ 71,620  
Farmland     16,735       13,606  
Real Estate     188,460       184,546  
Multi-Family     9,823       10,298  
Commercial Real Estate     155,651       148,906  
Home Equity – closed end     10,765       11,606  
Home Equity – open end     55,136       54,739  
Commercial & Industrial – Non-Real Estate     35,715       36,912  
Consumer     10,660       6,633  
Dealer Finance     92,084       75,169  
Credit Cards     2,949       2,939  
Total   $ 646,784     $ 616,974  

 

 

The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $187,927 and $218,323 as of September 30, 2018 and December 31, 2017, respectively. The Company maintains a blanket lien on its entire residential real estate portfolio and certain commercial and home equity loans.

  

Loans held for sale consists of loans originated by F&M 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 September 30, 2018 and December 31, 2017 were $38,595 and $39,775, respectively.

 

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

 

    September 30, 2018     December 31, 2017  
          Unpaid                 Unpaid        
    Recorded     Principal     Related     Recorded     Principal     Related  
    Investment     Balance     Allowance     Investment     Balance     Allowance  
Impaired loans without a valuation allowance:                                    
     Construction/Land Development   $ 2,972     $ 2,972     $ -     $ 4,352     $ 5,269     $ -  
     Farmland     1,941       1,941       -       1,984       1,984       -  
     Real Estate     1,366       1,366       -       1,273       1,273       -  
     Multi-Family     -       -       -       -       -       -  
     Commercial Real Estate     1,444       1,444       -       6,229       6,229       -  
     Home Equity – closed end     -       -       -       -       -       -  
     Home Equity – open end     -       -       -       -       347       -  
     Commercial & Industrial – Non-Real Estate     -       -       -       -       -       -  
     Consumer     -       -       -       8       8       -  
     Credit cards     -       -       -       -       -       -  
     Dealer Finance     16       16       -       31       31       -  
      7,739       7,739       -       13,877       15,141       -  
Impaired loans with a valuation allowance                                                
     Construction/Land Development     6,826       7,386       2,182       4,998       4,998       1,661  
     Farmland     -       -               -       -       -  
     Real Estate     426       426       7       1,188       1,188       209  
     Multi-Family     -       -               -       -       -  
     Commercial Real Estate     5,851       5,851       1,539       -       -       -  
     Home Equity – closed end     -       -               -       -       -  
     Home Equity – open end     -       -               -       -       -  
     Commercial & Industrial – Non-Real Estate     -       -               -       -       -  
     Consumer     9       9       2       -       -       -  
     Credit cards     -       -               -       -       -  
     Dealer Finance     234       234       15       47       47       12  
      13,346       13,906       3,745       6,233       6,233       1,882  
Total impaired loans   $ 21,085     $ 21,645     $ 3,745     $ 20,110     $ 21,374     $ 1,882  

 

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

 

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

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2018     2017     2018     2017  
    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   $ 3,725     $ 47     $ 5,414     $ 14     $ 4,440     $ 126     $ 4,870     $ 64  
     Farmland     1,962       80       1,921       -       1,973       142       1,900       -  
     Real Estate     930       17       743       8       1,078       28       746       25  
     Multi-Family     -       -       -       -       -       -       -       -  
     Commercial Real Estate     868       44       200       9       2,317       53       167       12  
     Home Equity – closed end     -       -       -       -       -       -       -       -  
     Home Equity – open end     -       -       347       -       87       -       347       -  
     Commercial & Industrial – Non-Real Estate     -       (8 )     164       2       -       (8 )     165       8  
     Consumer and credit cards     -       (1 )     10       -       2       (1 )     10       -  
     Dealer Finance     25       -       23       1       28       1       22       2  
      7,510       179       8,822       34       9,925       341       8,227       111  
Impaired loans with a valuation allowance:                                                                
     Construction/Land Development   $ 7,425     $ (125 )   $ 5,640     $ 75     $ 6,664     $ (27 )   $ 6,215     $ 215  
     Farmland     -       -       -       -       -       -       -       -  
     Real Estate     866       (17 )     1,194       10       1,045       10       1,196       41  
     Multi-Family     -       -       -       -       -       -       -       -  
     Commercial Real Estate     5,874       179       -       -       4,166       320       -       -  
     Home Equity – closed end     -       -       -       -       -       -       -       -  
     Home Equity – open end     -       -       -       -       -       -       -       -  
     Commercial & Industrial – Non-Real Estate     -       -       -       -       -       -       -       -  
     Consumer and credit card     10       1       -       -       8       2       -       -  
     Dealer Finance     232       11       59       1       169       19       59       2  
      14,407       49       6,893       86       12,052       324       7,470       258  
Total Impaired Loans   $ 21,917     $ 228     $ 15,715     $ 120     $ 21,977     $ 665     $ 15,697     $ 369  

 

The following table presents the aging of the recorded investment of past due loans (dollars in thousands) as of September 30, 2018 and December 31, 2017:

 

    30-59 Days Past due     60-89 Days Past Due     Greater than 90 Days     Total Past Due     Current     Total Loan Receivable     Non-Accrual Loans     Recorded Investment >90 days & accruing  
September 30, 2018                                                
Construction/Land Development   $ 19     $ 149     $ 4,536     $ 4,704     $ 64,102     $ 68,806     $ 5,097     $ -  
Farmland     -       -       -       -       16,735       16,735       -       -  
Real Estate     1,432       835       2,234       4,501       183,959       188,460       1,424       1,484  
Multi-Family     170       -       -       170       9,653       9,823       -       -  
Commercial Real Estate     1,699       1,373       6,195       9,267       146,384       155,651       6,195       -  
Home Equity – closed end     -       -       14       14       10,751       10,765       -       14  
Home Equity – open end     504       -       487       991       54,145       55,136       125       387  
Commercial & Industrial – Non- Real Estate     338       -       113       451       35,264       35,715       112       -  
Consumer     52       99       3       154       10,506       10,660       5       -  
Dealer Finance     1,619       457       289       2,365       89,719       92,084       385       -  
Credit Cards     51       -       12       63       2,886       2,949       -       12  
Total   $ 5,884     $ 2,913     $ 13,883     $ 22,680     $ 624,104     $ 646,784     $ 13,343     $ 1,897  

 

    30-59 Days Past due     60-89 Days Past Due     Greater than 90 Days     Total Past Due     Current     Total Loan Receivable     Non-Accrual Loans     Recorded Investment >90 days & accruing  
December 31, 2017                                                
Construction/Land Development   $ 167     $ 5,459     $ 3,908     $ 9,534     $ 62,086     $ 71,620     $ 3,908     $ -  
Farmland     -       -       -       -       13,606       13,606       -       -  
Real Estate     2,858       1,954       560       5,372       179,174       184,546       1,720       143  
Multi-Family     179       -       -       179       10,119       10,298       -       -  
Commercial Real Estate     544       -       -       544       148,362       148,906       -       -  
Home Equity – closed end     -       25       -       25       11,581       11,606       3       -  
Home Equity – open end     454       165       268       887       53,852       54,739       448       -  
Commercial & Industrial – Non- Real Estate     108       36       595       739       36,173       36,912       599       -  
Consumer     43       5       -       48       6,585       6,633       -       -  
Dealer Finance     1,300       252       189       1,741       73,428       75,169       226       54  
Credit Cards     30       8       1       39       2,900       2,939       -       1  
Total   $ 5,683     $ 7,904     $ 5,521     $ 19,108     $ 597,866     $ 616,974     $ 6,904     $ 198  

 

At September 30, 2018 and December 31, 2017, other real estate owned included $177 and $207 of foreclosed residential real estate. The Company has $900 of consumer mortgages for which foreclosure is in process at September 30, 2018 and $103 at December 31, 2017.

 

Nonaccrual loans at September 30, 2018 and September 30, 2017, would have earned approximately $371 and $109, respectively, in interest income had they been accruing loans.