Note 4 - Loans Leases Receivable

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Financing Receivables [Text Block]

Note

4.

Loans/Leases Receivable

The composition of the loan/lease portfolio as of

December 31,

2017

and

2016

is presented as follows:

	2017			2016
C&I loans	$	1,134,516,315		$	827,637,263
CRE loans
Owner-occupied CRE		332,742,477			332,387,621
Commercial construction, land development, and other land		186,402,404			165,149,491
Other non owner-occupied CRE		784,347,000			595,921,748
		1,303,491,882			1,093,458,860
Direct financing leases *		141,448,232			165,419,360
Residential real estate loans **		258,646,265			229,233,104
Installment and other consumer loans		118,610,799			81,665,695
		2,956,713,493			2,397,414,282
Plus deferred loan/lease origination costs, net of fees		7,771,907			8,072,703
		2,964,485,400			2,405,486,985
Less allowance		(34,355,728	)		(30,757,448	)
	$	2,930,129,672		$	2,374,729,537
* Direct financing leases:
Net minimum lease payments to be received	$	156,583,887		$	184,274,802
Estimated unguaranteed residual values of leased assets		929,932			1,085,154
Unearned lease/residual income		(16,065,587	)		(19,940,596	)
		141,448,232			165,419,360
Plus deferred lease origination costs, net of fees		4,624,027			5,881,778
		146,072,259			171,301,138
Less allowance		(2,382,098	)		(3,111,898	)
	$	143,690,161		$	168,189,240

Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors and management

’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The large majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal.

At

December 31,

2017,

the Company had

10

leases remaining with residual values totaling

$929,932

that were

not

protected with a lease end options rider. At

December 31, 2016,

the Company had

13

leases remaining with residual values totaling

$1,085,164

that were

not

protected with a lease end options rider. Management has performed specific evaluations of these unguaranteed residual values and determined that the valuations are appropriate. There were

no

losses related to unguaranteed residual values during the years ended

December 31, 2017,

2016,

and

2015.

*

*Includes residential real estate loans held for sale totaling

$645,001

and

$1,135,500

as of

December 31, 2017

and

2016,

respectively.

Changes in accretable yield for the loans acquired in the

CSB and Guaranty Bank acquisitions are as follows:

	For the year ended December 31, 2017
	PCI			Performing
	Loans			Loans			Total
Balance at the beginning of the period	$	(194,306	)	$	(9,115,614	)	$	(9,309,920	)
Discount added at acquisition		(219,902	)		(2,223,989	)		(2,443,891	)
Accretion recognized		223,076			5,059,528			5,282,604
Balance at the end of the period	$	(191,132	)	$	(6,280,075	)	$	(6,471,207	)

	For the year ended December 31, 2016
	PCI			Performing
	Loans			Loans			Total
Balance at the beginning of the period	$	-		$	-		$	-
Discount added at acquisition		(277,579	)		(11,916,009	)		(12,193,588	)
Accretion recognized		83,273			2,800,395			2,883,668
Balance at the end of the period	$	(194,306	)	$	(9,115,614	)	$	(9,309,920	)

The aging of the loan/lease portfolio by classes of loan

s/leases as of

December 31, 2017

and

2016

is presented as follows:

	2017
Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
C&I	$	1,124,734,486		$	8,306,829		$	243,647		$	-		$	1,231,353		$	1,134,516,315
CRE
Owner-Occupied CRE		331,868,142			540,435			-			-			333,900			332,742,477
Commercial Construction, Land Development, and Other Land		181,558,092			-			-			-			4,844,312			186,402,404
Other Non Owner-Occupied CRE		782,526,249			572,877			4,146			-			1,243,728			784,347,000
Direct Financing Leases		137,708,397			1,305,191			259,600			-			2,175,044			141,448,232
Residential Real Estate		253,261,821			3,552,709			393,410			74,519			1,363,806			258,646,265
Installment and Other Consumer		117,773,259			517,537			56,760			14,152			249,091			118,610,799
	$	2,929,430,446		$	14,795,578		$	957,563		$	88,671		$	11,441,234		$	2,956,713,493
As a percentage of total loan/lease portfolio		99.08	%		0.50	%		0.03	%		0.00	%		0.39	%		100.00	%

	2016
Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
C&I	$	821,637,507		$	1,455,185		$	10,551		$	346,234		$	4,187,786		$	827,637,263
CRE
Owner-Occupied CRE		331,812,571			-			242,902			-			332,148			332,387,621
Commercial Construction, Land Development, and Other Land		160,760,034			35,638			-			-			4,353,819			165,149,491
Other Non Owner-Occupied CRE		594,384,926			100,673			-			-			1,436,149			595,921,748
Direct Financing Leases		161,452,627			730,627			574,700			215,225			2,446,181			165,419,360
Residential Real Estate		227,023,552			473,478			365,581			294,854			1,075,639			229,233,104
Installment and Other Consumer		81,199,766			204,973			63,111			110,501			87,344			81,665,695
	$	2,378,270,983		$	3,000,574		$	1,256,845		$	966,814		$	13,919,066		$	2,397,414,282
As a percentage of total loan/lease portfolio		99.20	%		0.13	%		0.05	%		0.04	%		0.58	%		100.00	%

NPLs

by classes of loans/leases as of

December 31, 2017

and

2016

is presented as follows:

	2017
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	-	$	1,231,353	$	5,224,182	$	6,455,535		34.63	%
CRE
Owner-Occupied CRE		-		333,900		107,322		441,222		2.37	%
Commercial Construction, Land Development, and Other Land		-		4,844,312		-		4,844,312		25.99	%
Other Non Owner-Occupied CRE		-		1,243,728		-		1,243,728		6.67	%
Direct Financing Leases		-		2,175,044		1,494,448		3,669,492		19.68	%
Residential Real Estate		74,519		1,363,806		272,493		1,710,818		9.18	%
Installment and Other Consumer		14,152		249,091		14,027		277,270		1.49	%
	$	88,671	$	11,441,234	$	7,112,472	$	18,642,377		100.00	%

*

At

December 31, 2017,

nonaccrual loans/leases included

$2,282,495

of TDRs, including

$122,598

in C&I loans,

$1,336,871

in CRE loans,

$700,255

in direct financing leases,

$115,190

in residential real estate loans, and

$7,581

in installment loans.

	2016
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	346,234	$	4,187,786	$	4,733,997	$	9,268,017		43.65	%
CRE
Owner-Occupied CRE		-		332,148		-		332,148		1.56	%
Commercial Construction, Land Development, and Other Land		-		4,353,819		-		4,353,819		20.51	%
Other Non Owner-Occupied CRE		-		1,436,149		-		1,436,149		6.77	%
Direct Financing Leases		215,225		2,446,181		1,008,244		3,669,650		17.28	%
Residential Real Estate		294,854		1,075,639		585,541		1,956,034		9.21	%
Installment and Other Consumer		110,501		87,344		18,746		216,591		1.02	%
	$	966,814	$	13,919,066	$	6,346,528	$	21,232,408		100.00	%

*

*

At

December 31, 2016,

nonaccrual loans/leases included

$2,300,479

of TDRs, including

$48,501

in C&I loans,

$1,380,047

in CRE loans,

$816,149

in direct financing leases,

$43,579

in residential real estate loans, and

$12,203

in installment loans.

Changes in the allowance

by portfolio segment for the years ended

December 31, 2017,

2016,

and

2015

are presented as follows:

	Year Ended December 31, 2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Provisions charged to expense		2,736,296			4,044,460			1,369,624			197,034			122,505			8,469,919
Loans/leases charged off		(1,149,790	)		(1,795,229	)		(2,284,910	)		(102,088	)		(41,196	)		(5,373,213	)
Recoveries on loans/leases previously charged off		191,420			42,848			185,486			29,141			52,679			501,574
Balance, ending	$	14,323,036		$	13,962,688		$	2,382,098		$	2,466,431		$	1,221,475		$	34,355,728

	Year Ended December 31, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Provisions (credits) charged to expense		2,478,912			2,286,953			2,127,463			628,114			(43,276	)		7,478,166
Loans/leases charged off		(527,152	)		(24,304	)		(2,503,417	)		(76,820	)		(112,490	)		(3,244,183	)
Recoveries on loans/leases previously charged off		109,270			32,843			92,764			900			146,782			382,559
Balance, ending	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448

	Year Ended December 31, 2015
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	8,833,832		$	8,353,386		$	3,359,400		$	1,525,952		$	1,001,795		$	23,074,365
Provisions charged to expense		1,470,526			3,080,611			1,688,031			430,087			201,645			6,870,900
Loans/leases charged off		(453,782	)		(2,560,749	)		(1,788,772	)		(169,996	)		(251,838	)		(5,225,137	)
Recoveries on loans/leases previously charged off		633,504			501,869			136,429			4,107			144,869			1,420,778
Balance, ending	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906

The allowance by impairment evaluation and by portfolio

segment as of

December 31, 2017

and

2016

is presented as follows:

	2017
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	715,627		$	1,429,460		$	504,469		$	355,167		$	38,596		$	3,043,319
Allowance for nonimpaired loans/leases		13,607,409			12,533,228			1,877,629			2,111,264			1,182,879			31,312,409
	$	14,323,036		$	13,962,688		$	2,382,098		$	2,466,431		$	1,221,475		$	34,355,728
Impaired loans/leases	$	6,248,209		$	6,529,262		$	3,669,492		$	1,704,846		$	202,354		$	18,354,163
Nonimpaired loans/leases		1,128,268,106			1,296,962,620			137,778,740			256,941,419			118,408,445			2,938,359,330
	$	1,134,516,315		$	1,303,491,882		$	141,448,232		$	258,646,265		$	118,610,799		$	2,956,713,493
Allowance as a percentage of impaired loans/leases		11.45	%		21.89	%		13.75	%		20.83	%		19.07	%		16.58	%
Allowance as a percentage of nonimpaired loans/leases		1.21	%		0.97	%		1.36	%		0.82	%		1.00	%		1.07	%
Total allowance as a percentage of total loans/leases		1.26	%		1.07	%		1.68	%		0.95	%		1.03	%		1.16	%

	2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	1,771,537		$	693,919		$	848,919		$	289,112		$	39,481		$	3,642,968
Allowance for nonimpaired loans/leases		10,773,573			10,976,690			2,262,979			2,053,232			1,048,006			27,114,480
	$	12,545,110		$	11,670,609		$	3,111,898		$	2,342,344		$	1,087,487		$	30,757,448
Impaired loans/leases	$	8,936,451		$	6,112,114		$	3,256,264		$	1,661,180		$	106,090		$	20,072,099
Nonimpaired loans/leases		818,700,812			1,087,346,746			162,163,096			227,571,924			81,559,605			2,377,342,183
	$	827,637,263		$	1,093,458,860		$	165,419,360		$	229,233,104		$	81,665,695		$	2,397,414,282
Allowance as a percentage of impaired loans/leases		19.82	%		11.35	%		26.07	%		17.40	%		37.21	%		18.15	%
Allowance as a percentage of nonimpaired loans/leases		1.32	%		1.01	%		1.40	%		0.90	%		1.28	%		1.14	%
Total allowance as a percentage of total loans/leases		1.52	%		1.07	%		1.88	%		1.02	%		1.33	%		1.28	%

Information for impaired loans/leases is presented in the tables below. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease. The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for

the years ended

December 31, 2017,

2016,

and

2015

are presented as follows:

	2017
Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,634,269	$	1,644,706	$	-	$	1,406,310	$	71,183	$	71,183
CRE
Owner-Occupied CRE		289,261		289,261		-		79,317		11,902		11,902
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,171,565		1,171,565		-		1,176,738		-		-
Direct Financing Leases		2,944,540		2,944,540		-		2,879,695		132,167		132,167
Residential Real Estate		943,388		1,018,167		-		685,807		1,161		1,161
Installment and Other Consumer		134,245		134,245		-		126,474		-		-
	$	7,117,268	$	7,202,484	$	-	$	6,354,341	$	216,413	$	216,413
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	4,613,940	$	4,617,879	$	715,627	$	4,584,142	$	203,221	$	203,221
CRE
Owner-Occupied CRE		151,962		151,962		48,462		221,260		-		-
Commercial Construction, Land Development, and Other Land		4,844,312		4,844,312		1,379,235		4,447,831		-		-
Other Non Owner-Occupied CRE		72,163		72,163		1,763		44,667		-		-
Direct Financing Leases		724,953		724,953		504,469		625,107		-		-
Residential Real Estate		761,458		761,458		355,167		549,286		14,990		14,990
Installment and Other Consumer		68,109		68,109		38,596		40,152		410		410
	$	11,236,897	$	11,240,836	$	3,043,319	$	10,512,445	$	218,621	$	218,621
Total Impaired Loans/Leases:
C&I	$	6,248,209	$	6,262,585	$	715,627	$	5,990,452	$	274,404	$	274,404
CRE
Owner-Occupied CRE		441,222		441,222		48,462		300,577		11,902		11,902
Commercial Construction, Land Development, and Other Land		4,844,312		4,844,312		1,379,235		4,447,831		-		-
Other Non Owner-Occupied CRE		1,243,728		1,243,728		1,763		1,221,405		-		-
Direct Financing Leases		3,669,492		3,669,492		504,469		3,504,802		132,167		132,167
Residential Real Estate		1,704,846		1,779,625		355,167		1,235,093		16,151		16,151
Installment and Other Consumer		202,354		202,354		38,596		166,626		410		410
	$	18,354,163	$	18,443,318	$	3,043,319	$	16,866,786	$	435,034	$	435,034

Impaired loans/leases for which

no

allowance has been provided have adequate collateral, based on management

’s current estimates.

	2016
Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	841,895	$	951,600	$	-	$	2,858,343	$	16,748	$	16,748
CRE
Owner-Occupied CRE		-		93,774		-		312,242		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,196,549		1,196,549		-		1,322,654		-		-
Direct Financing Leases		1,690,121		1,690,121		-		1,731,982		43,461		43,461
Residential Real Estate		853,294		892,495		-		964,590		9,903		9,903
Installment and Other Consumer		55,734		55,734		-		321,175		4,475		4,475
	$	4,637,593	$	4,880,273	$	-	$	7,510,986	$	74,587	$	74,587
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	8,094,556	$	8,098,395	$	1,771,537	$	2,959,495	$	17,742	$	17,742
CRE
Owner-Occupied CRE		322,148		322,148		57,398		385,269		-		-
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,819		577,611		1,022,930		-		-
Other Non Owner-Occupied CRE		239,600		239,600		58,910		47,920		-		-
Direct Financing Leases		1,566,143		1,566,143		848,919		841,733		36,303		36,303
Residential Real Estate		807,886		882,018		289,112		573,211		11,675		11,675
Installment and Other Consumer		50,356		50,356		39,481		40,384		527		527
	$	15,434,506	$	15,512,479	$	3,642,968	$	5,870,942	$	66,247	$	66,247
Total Impaired Loans/Leases:
C&I	$	8,936,451	$	9,049,995	$	1,771,537	$	5,817,838	$	34,490	$	34,490
CRE
Owner-Occupied CRE		322,148		415,922		57,398		697,511		-		-
Commercial Construction, Land Development, and Other Land		4,353,817		4,353,819		577,611		1,022,930		-		-
Other Non Owner-Occupied CRE		1,436,149		1,436,149		58,910		1,370,574		-		-
Direct Financing Leases		3,256,264		3,256,264		848,919		2,573,715		79,764		79,764
Residential Real Estate		1,661,180		1,774,513		289,112		1,537,801		21,578		21,578
Installment and Other Consumer		106,090		106,090		39,481		361,559		5,002		5,002
	$	20,072,099	$	20,392,752	$	3,642,968	$	13,381,928	$	140,834	$	140,834

Impaired loans/leases for which

no

allowance has been provided have adequate collateral, based on management

’s current estimates.

	2015
Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	234,636	$	346,072	$	-	$	380,495	$	7,436	$	7,436
CRE
Owner-Occupied CRE		256,761		350,535		-		447,144		-		-
Commercial Construction, Land Development, and Other Land		-		228,818		-		117,406		-		-
Other Non Owner-Occupied CRE		1,578,470		1,578,470		-		2,953,888		-		-
Direct Financing Leases		871,884		871,884		-		892,281		4,142		4,142
Residential Real Estate		613,486		649,064		-		1,047,001		3,929		3,929
Installment and Other Consumer		377,304		377,304		-		817,854		9,563		9,563
	$	3,932,541	$	4,402,147	$	-	$	6,656,069	$	25,070	$	25,070
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,051,846	$	5,055,685	$	2,592,270	$	4,811,046	$	-	$	-
CRE
Owner-Occupied CRE		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		193,804		205,804		76,934		195,986		-		-
Other Non Owner-Occupied CRE		-		-		-		-		-		-
Direct Financing Leases		829,457		829,457		306,193		474,458		-		-
Residential Real Estate		805,301		805,301		185,801		712,085		7,913		7,913
Installment and Other Consumer		210,438		210,438		143,089		189,539		5,693		5,693
	$	7,090,846	$	7,106,685	$	3,304,287	$	6,383,114	$	13,606	$	13,606
Total Impaired Loans/Leases:
C&I	$	5,286,482	$	5,401,757	$	2,592,270	$	5,191,541	$	7,436	$	7,436
CRE
Owner-Occupied CRE		256,761		350,535		-		447,144		-		-
Commercial Construction, Land Development, and Other Land		193,804		434,622		76,934		313,392		-		-
Other Non Owner-Occupied CRE		1,578,470		1,578,470		-		2,953,888		-		-
Direct Financing Leases		1,701,341		1,701,341		306,193		1,366,739		4,142		4,142
Residential Real Estate		1,418,787		1,454,365		185,801		1,759,086		11,842		11,842
Installment and Other Consumer		587,742		587,742		143,089		1,007,393		15,256		15,256
	$	11,023,387	$	11,508,832	$	3,304,287	$	13,039,183	$	38,676	$	38,676

Impaired loans/leases for which

no

allowance has been provided have adequate collateral, based on management

’s current estimates.

For

C&I and CRE loans, the Company’s credit quality indicator is internally assigned risk ratings. Each commercial loan is assigned a risk rating upon origination. The risk rating is reviewed every

15

months, at a minimum, and on an as needed basis depending on the specific circumstances of the loan. See Note

1

for further discussion on the Company’s risk ratings.

For direct financing leases, residential real estate loans, and installment and other consumer loans, the Company

’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated daily by the Company’s loan system.

For each class of financing receivable, the following presents the recorded investment by credit quality i

ndicator as of

December 31, 2017

and

2016:

	2017
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	1,098,722,101	$	318,293,608	$	179,142,839	$	767,119,909	$	2,363,278,457		96.94	%
Special Mention (Rating 6)		10,944,924		8,230,060		1,780,000		10,068,870		31,023,854		1.27	%
Substandard (Rating 7)		24,578,731		6,218,809		5,479,565		7,158,221		43,435,326		1.78	%
Doubtful (Rating 8)		270,559		-		-		-		270,559		0.01	%
	$	1,134,516,315	$	332,742,477	$	186,402,404	$	784,347,000	$	2,438,008,197		100.00	%

	2017
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	137,778,740	$	256,935,448	$	118,333,529	$	513,047,716		98.91	%
Nonperforming		3,669,492		1,710,818		277,270		5,657,580		1.09	%
	$	141,448,232	$	258,646,265	$	118,610,799	$	518,705,296		100.00	%

	2016
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	796,568,451	$	314,447,662	$	158,108,465	$	582,854,048	$	1,851,978,626		96.40	%
Special Mention (Rating 6)		6,305,772		7,559,380		1,780,000		4,437,122	$	20,082,274		1.05	%
Substandard (Rating 7)		24,763,040		10,380,369		5,261,026		8,630,578	$	49,035,013		2.55	%
Doubtful (Rating 8)		-		210		-		-	$	210		0.00	%
	$	827,637,263	$	332,387,621	$	165,149,491	$	595,921,748	$	1,921,096,123		100.00	%

	2016
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	161,749,710	$	227,277,070	$	81,449,104	$	470,475,884		98.77	%
Nonperforming		3,669,650		1,956,034		216,591	$	5,842,275		1.23	%
	$	165,419,360	$	229,233,104	$	81,665,695	$	476,318,159		100.00	%

*Performing = loans/leases accruing and less than

90

days past due

. Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to

90

days past due, and accruing troubled debt restructurings.

As

of

December 31, 2017

and

2016,

TDRs totaled

$9,394,967

and

$8,647,007,

respectively.

For each class of financing receivable, the following presents the number and recorded investment of

TDRs, by type of concession, that were restructured during the years ended

December 31, 2017

and

2016.

The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of restructuring. The specific allowance is as of

December 31, 2017

and

2016,

respectively. The following excludes any TDRs that were restructured and paid off or charged off in the same year.

	2017
Classes of Loans/Leases	Number of Loans / Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Extension of Maturity
Direct Financing Leases		3	$	115,236	$	115,236	$	-
		3	$	115,236	$	115,236	$	-
CONCESSION - Significant Payment Delay
C&I		7	$	826,531	$	826,531	$	62,596
CRE - Owner Occupied		1	$	107,322	$	107,322		-
Direct Financing Leases		24		1,703,255		1,703,255		-
		32	$	2,637,108	$	2,637,108	$	62,596
TOTAL		35	$	2,752,344	$	2,752,344	$	62,596

	2016
Classes of Loans/Leases	Number of Loans/Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Extension of Maturity
C&I		3	$	247,476	$	247,476	$	60,767
Direct Financing Leases		4		410,653		410,653		38,476
Residential Real Estate		1		277,092		277,092		187,492
		8	$	935,221	$	935,221	$	286,735
CONCESSION - Significant Payment Delay
C&I		7	$	4,562,427	$	4,562,427	$	813,041
Direct Financing Leases		13		1,149,493		1,149,493		125,940
		20	$	5,711,920	$	5,711,920	$	938,981
CONCESSION - Interest Rate Adjusted Below Market
CRE - Other		1	$	1,233,740	$	1,233,740	$	-
		1	$	1,233,740	$	1,233,740	$	-
TOTAL		29	$	7,880,881	$	7,880,881	$	1,225,716

Of the

TDRs reported above,

seven

with a post-modification recorded investment totaling

$279,245

were on nonaccrual as of

December 31, 2017

and

eight

with a post-modification recorded investment totaling

$2,008,424

was on nonaccrual as of

December 31, 2016.

For the

year ended

December 31, 2017,

the Company had

six

TDRs totaling

$251,940

that redefaulted within

12

months subsequent to restructure, where default is defined as delinquency of

90

days or more and/or placement on nonaccrual status. For the year ended

December 31, 2016,

the Company had

no

TDRs that redefaulted within

12

months subsequent to restructure.

Not

included in the table above, t

he Company had

two

TDRs that were restructured and charged off in

2017,

totaling

$65,623.

There were

three

TDRs that were both restructured and charged off in

2016,

totaling

$341,952.

Loans are made in the normal course of business to directors,

executive officers, and their related interests. The terms of these loans, including interest rates and collateral, are similar to those prevailing for comparable transactions with other persons. An analysis of the changes in the aggregate committed amount of loans greater than or equal to

$60,000

during the years ended

December 31, 2017,

2016,

and

2015,

is as follows:

	2017			2016			2015
Balance, beginning	$	61,608,976		$	42,012,313		$	42,469,111
Net increase (decrease) due to change in related parties		11,926,759			19,945,960			(3,606,418	)
Advances		13,090,798			4,806,616			19,040,675
Repayments		(20,184,585	)		(5,155,913	)		(15,891,055	)
Balance, ending	$	66,441,948		$	61,608,976		$	42,012,313

The Company

’s loan portfolio includes a geographic concentration in the Midwest. Additionally, the loan portfolio includes a concentration of loans in certain industries as of

December 31, 2017

and

2016

as follows:

	2017					2016
Industry Name	Balance		Percentage of Total Loans/Leases			Balance		Percentage of Total Loans/Leases
Lessors of Non-Residential Buildings	$	400,622,681		14	%	$	359,040,649		15	%
Lessors of Residential Buildings		370,353,561		12	%		166,036,201		7	%
Administration of Urban Planning & Community & Rural Development		83,343,541		3	%		37,097,000		2	%
Bank Holding Companies		66,950,294		2	%		66,069,612		3	%
Nonresidential Property Managers		51,984,722		2	%		76,504,076		3	%

Concentrations within the leasing portfolio are monitored by equipment type

–

none

of which represent a concentration within the total loans/leases portfolio. Within the leasing portfolio, diversification is spread among construction, manufacturing and the service industries. Geographically, the lease portfolio is diversified across all

50

states.

No

individual state represents a concentration within the total loan/lease portfolio.