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5. LOANS

12 Months Ended

Dec. 31, 2018

Loans held for investment as of December 31, 2018, and 2017 were as follows:

	2018		2017
Construction/Land Development	$	61,659	$	71,620
Farmland		17,030		13,606
Real Estate		192,278		184,546
Multi-Family		9,665		10,298
Commercial Real Estate		147,342		148,906
Home Equity – closed end		11,039		11,606
Home Equity – open end		53,197		54,739
Commercial & Industrial – Non-Real Estate		36,021		36,912
Consumer		9,861		6,633
Dealer Finance		97,523		75,169
Credit Cards		3,184		2,939
Total	$	638,799	$	616,974

The Company has pledged loans held for investment as collateral for borrowings with the Federal Home Loan Bank of Atlanta totaling $186,673 and $218,323 as of December 31, 2018, and 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 December 31, 2018, and 2017 were $55,910 and $39,775, respectively.

The following is a summary of information pertaining to impaired loans:

	December 31, 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	$	2,414	$	2,414	$	-	$	4,352	$	5,269	$	-
Farmland		1,941		1,941		-		1,984		1,984		-
Real Estate		1,932		1,932		-		1,273		1,273		-
Multi-Family		-		-		-		-		-		-
Commercial Real Estate		6,176		6,176		-		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		32		32		-		31		31		-
		12,495		12,495		-		13,877		15,141		-
Impaired loans with a valuation allowance
Construction/Land Development		4,311		4,871		1,627		4,998		4,998		1,661
Farmland		-		-		-		-		-		-
Real Estate		422		422		7		1,188		1,188		209
Multi-Family		-		-		-		-		-		-
Commercial Real Estate		-		1,500		-		-		-		-
Home Equity – closed end		-		-		-		-		-		-
Home Equity – open end		-		-		-		-		-		-
Commercial & Industrial – Non-Real Estate		-		-		-		-		-		-
Consumer		8		8		2		-		-		-
Credit cards		-		-		-		-		-		-
Dealer Finance		194		194		10		47		47		12
		4,935		6,995		1,646		6,233		6,233		1,882
Total impaired loans	$	17,430	$	19,490	$	1,646	$	20,110	$	21,374	$	1,882

The Recorded Investment is defined as the principal balance less principal payments and charge-offs.

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

	December 31, 2018				December 31, 2017
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans without a valuation allowance:
Construction/Land Development	$	3,586	$	89	$	4,969	$	382
Farmland		1,963		80		1,921		62
Real Estate		1,542		98		878		57
Multi-Family		-		-		-		-
Commercial Real Estate		2,304		286		1,682		44
Home Equity – closed end		-		-		-		-
Home Equity – open end		-		-		347		-
Commercial & Industrial – Non-Real Estate		-		-		124		-
Consumer		-		-		10		-
Credit cards		-		-		-		-
Dealer Finance		28		5		24		3
		9,423		558		9,955		548
Impaired loans with a valuation allowance
Construction/Land Development		6,352		91		5,911		258
Farmland		-		-		-		-
Real Estate		554		23		1,194		49
Multi-Family		-		-		-		-
Commercial Real Estate		4,167		-		-		-
Home Equity – closed end		-		-		-		-
Home Equity – open end		-		-		-		-
Commercial & Industrial – Non-Real Estate		-		-		-		-
Consumer		10		1		-		-
Credit cards		-		-		-		-
Dealer Finance		206		14		56		3
		11,289		129		7,161		310
Total impaired loans	$	20,712	$	687	$	17,116	$	858

The following table presents the aging of the recorded investment of past due loans:

	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, 2018
Construction/Land Development	$	290	$	-	$	1,767	$	2,057	$	59,602	$	61,659	$	2,327	$	-
Farmland		-		-		-		-		17,030		17,030		-		-
Real Estate		3,074		677		1,729		5,480		186,798		192,278		1,477		726
Multi-Family		-		-		-		-		9,665		9,665		-		-
Commercial Real Estate		479		189		5,073		5,741		141,601		147,342		5,074		-
Home Equity – closed end		-		-		12		12		11,027		11,039		-		12
Home Equity – open end		148		171		320		639		52,558		53,197		269		51
Commercial & Industrial – Non- Real Estate		40		22		80		142		35,879		36,021		98		-
Consumer		89		26		3		118		9,743		9,861		5		2
Dealer Finance		2,763		337		96		3,196		94,327		97,523		155		9
Credit Cards		50		11		9		70		3,114		3,184		-		-
Total	$	6,933	$	1,433	$	9,089	$	17,455	$	621,344	$	638,799	$	9,405	$	800

	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

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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