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Note 15 - Concentrations of Credit Risk
12 Months Ended
Dec. 31, 2015
Risks and Uncertainties [Abstract]  
Concentration Risk Disclosure [Text Block]

Note 15: Concentrations of Credit Risk


The Company does a general banking business, serving the commercial and personal banking needs of its customers. NBB’s market area in southwest Virginia is made up of the counties of Montgomery, Giles, Pulaski, Tazewell, Wythe, Smyth and Washington. It also includes the independent cities of Radford and Galax, and the portions of Carroll and Grayson Counties that are adjacent to Galax. In addition, it serves those portions of Mercer County and McDowell County, West Virginia that are contiguous with Tazewell County. Substantially all of NBB’s loans are made in its market area. The ultimate collectability of the bank’s loan portfolio and the ability to realize the value of any underlying collateral, if needed, is influenced by the economic conditions of the market area. The Company’s operating results are therefore closely correlated with the economic trends within this area.


Commercial real estate as of December 31, 2015 and 2014 represented approximately 50% and 52% of the loan portfolio, at $309,378 and $310,762, respectively. Included in commercial real estate are loans for college housing and professional office buildings that comprised $200,521 and $190,055 as of December 31, 2015 and 2014 respectively, corresponding to approximately 32% of the loan portfolio at December 31, 2015 and 31% of the loan portfolio at December 31, 2014. Loans secured by residential real estate were $143,504, or approximately 23% of the portfolio, and $147,039, or 24% of the portfolio at December 31, 2015 and 2014, respectively. Loans secured by automobiles represented approximately 2% of the portfolio for both dates, at $12,409 and $11,554 at December 31, 2015 and 2014, respectively.


The Company has established operating policies relating to the credit process and collateral in loan originations. Loans to purchase real and personal property are generally collateralized by the related property and with loan amounts established based on certain percentage limitations of the property’s total stated or appraised value. Credit approval is primarily a function of collateral and the evaluation of the creditworthiness of the individual borrower or project based on available financial information. Management considers the concentration of credit risk to be minimal.