| Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses The composition of net loans is as follows: March 31, 2018 December 31, 2017 Real estate secured: Residential 1-4 family $ 171,731 $ 174,889 Multifamily 18,157 19,469 Construction and land loans 16,933 15,907 Commercial, owner occupied 82,151 82,121 Commercial, non-owner occupied 34,437 33,748 Second mortgages 4,670 4,684 Equity lines of credit 35,568 34,378 Farmland 12,977 13,188 Total real estate secured 376,624 378,384 Non-real estate secured Personal 13,617 14,192 Commercial 38,734 36,785 Agricultural 3,002 2,950 Total non-real estate secured 55,353 53,927 Gross loans 431,977 432,311 Less: Allowance for loan losses 4,000 3,954 Net deferred fees 711 737 Loans, net $ 427,266 $ 427,620 The following table is an analysis of past due loans as of March 31, 2018 : Past Due 30-89 days 90 days and over Total Current Total > 90 Days and Accruing Real estate secured Residential 1-4 family $ 1,647 $ 689 $ 2,336 $ 169,395 $ 171,731 $ 243 Equity lines of credit — — — 35,568 35,568 — Multifamily — — — 18,157 18,157 — Farmland 678 194 872 12,105 12,977 — Construction, land development, other land loans 74 — 74 16,859 16,933 — Commercial real estate: Owner-occupied 601 317 918 81,233 82,151 — Non-owner-occupied 1,707 — 1,707 32,730 34,437 — Second mortgages — — — 4,670 4,670 — Non-real estate secured Personal 95 17 112 13,505 13,617 — Commercial 104 209 313 38,421 38,734 — Agricultural — — — 3,002 3,002 — Total $ 4,906 $ 1,426 $ 6,332 $ 425,645 $ 431,977 $ 243 The following table is an analysis of past due loans as of December 31, 2017 : Past Due 30-89 days 90 days and over Total Current Total > 90 Days and Accruing Real estate secured Residential 1-4 family $ 1,092 $ 566 $ 1,658 $ 173,231 $ 174,889 $ — Equity lines of credit — — — 34,378 34,378 — Multifamily — — — 19,469 19,469 — Farmland 234 50 284 12,904 13,188 — Construction, land development, other land loans — — — 15,907 15,907 — Commercial real estate: Owner-occupied 11 708 719 81,402 82,121 — Non-owner-occupied — — — 33,748 33,748 — Second mortgages — — — 4,684 4,684 — Non-real estate secured Personal 211 23 234 13,958 14,192 — Commercial 502 279 781 36,004 36,785 26 Agricultural 49 — 49 2,901 2,950 — Total $ 2,099 $ 1,626 $ 3,725 $ 428,586 $ 432,311 $ 26 Loans are considered delinquent when payments have not been made according to the terms of the contract. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Additionally, in certain instances, loans that have been restructured or modified may also be classified as non-accrual per regulatory guidance until a satisfactory payment history has been established. Credit card loans and other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. The following is a summary of non-accrual loans at March 31, 2018 and December 31, 2017 : March 31, 2018 December 31, 2017 Real estate secured Residential 1-4 family $ 553 $ 887 Commercial real estate: Owner-occupied 575 708 Non-owner-occupied — — Second mortgages — — Equity lines of credit — — Farmland 194 193 Non-real estate secured Personal 14 23 Commercial and agricultural 209 254 Total $ 1,545 $ 2,065 The following is a summary of residential real estate currently in the process of foreclosure as well as foreclosed residential real estate as of March 31, 2018 . Number Balance Residential real estate in the process of foreclosure 5 $ 392 Foreclosed residential real estate 3 228 The following tables represent a summary of credit quality indicators of the Company's loan portfolio at March 31, 2018 and December 31, 2017 . The grades are assigned and/or modified by the Company's credit review and credit analysis departments based on the creditworthiness of the borrower and the overall strength of the loan. The following tables provide the credit risk profile by internally assigned grade as of March 31, 2018 and December 31, 2017 : March 31, 2018 Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 36,436 $ — $ 11 $ 3,158 $ 3,174 $ 230 Satisfactory 89,329 10,055 3,965 5,921 45,999 13,932 Acceptable 39,696 8,102 3,616 6,177 28,795 16,351 Special Mention 909 — 3,185 1,677 978 1,569 Substandard 5,361 — 2,200 — 3,205 2,355 Doubtful — — — — — — Total $ 171,731 $ 18,157 $ 12,977 $ 16,933 $ 82,151 $ 34,437 December 31, 2017 Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 33,107 $ — $ 13 $ 2,870 $ 3,535 $ 295 Satisfactory 95,659 10,653 4,419 5,445 45,906 13,602 Acceptable 40,487 8,816 3,333 5,906 28,344 15,609 Special Mention 388 — 3,206 1,565 2,542 2,226 Substandard 5,248 — 2,217 121 1,661 2,016 Doubtful — — — — 133 — Total $ 174,889 $ 19,469 $ 13,188 $ 15,907 $ 82,121 $ 33,748 Explanation of credit grades: Quality --This grade is reserved for the Bank's top quality loans. These loans have excellent sources of repayment, with no significant identifiable risk of collection. Generally, loans assigned this rating will demonstrate the following characteristics: • Conformity in all respects with Bank policy, guidelines, underwriting standards, and Federal and State regulations (no exceptions of any kind). • Documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. • Adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor. For existing loans, all of the requirements above apply plus all payments have been made as agreed, current financial information on all borrowers and guarantors has been obtained and analyzed, and overall business operating trends are either stable or improving. Satisfactory- This grade is given to performing loans. These loans have adequate sources of repayment, with little identifiable risk of collection. Loans assigned this rating will demonstrate the following characteristics: • General conformity to the Bank's policy requirements, product guidelines and underwriting standards. Any exceptions that are identified during the underwriting and approval process have been adequately mitigated by other factors. • Documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. • Adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor. For existing loans, all of the requirements outlined above will apply, plus all payments have been made as agreed, current financial information on all borrowers and guarantors has been obtained and analyzed, and overall business operating trends are stable with any declines considered minor and temporary. Acceptable- This grade is given to loans that show signs of weakness in either adequate sources of repayment or collateral, but have demonstrated mitigating factors that minimize the risk of delinquency or loss. Loans assigned this rating may demonstrate some or all of the following characteristics: • Additional exceptions to the Bank's policy requirements, product guidelines or underwriting standards that present a higher degree of risk to the Bank. Although the combination and/or severity of identified exceptions is greater, all exceptions have been properly mitigated by other factors. • Unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. Repayment weaknesses may be due to minor operational issues, financial trends, or reliance on projected (not historic) performance. • Marginal or unproven secondary sources to liquidate the debt, including combinations of liquidation of collateral and liquidation value to the net worth of the borrower or guarantor. For existing loans, payments have generally been made as agreed with only minor and isolated delinquencies. Special Mention -This grade is given to Watch List loans that include the following characteristics: • Loans with underwriting guideline tolerances and/or exceptions with no identifiable mitigating factors. • Extending loans that are currently performing satisfactorily but with potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank's position at some future date. Potential weaknesses are the result of deviations from prudent lending practices. • Loans where adverse economic conditions that develop subsequent to the loan origination do not jeopardize liquidation of the debt, but do substantially increase the level of risk may also warrant this rating. Substandard- Loans in this category are characterized by deterioration in quality exhibited by any number of well-defined weaknesses requiring corrective action. A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. The weaknesses may include, but are not limited to: • High debt to worth ratios and or declining or negative earnings trends • Declining or inadequate liquidity • Improper loan structure or questionable repayment sources • Lack of well-defined secondary repayment source, and • Unfavorable competitive comparisons. Such loans are no longer considered to be adequately protected due to the borrower's declining net worth, lack of earnings capacity, declining collateral margins and/or unperfected collateral positions. A possibility of loss of a portion of the loan balance cannot be ruled out. The repayment ability of the borrower is marginal or weak and the loan may have exhibited excessive overdue status or extensions and/or renewals. Doubtful -Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. The ability of the borrower to service the debt is extremely weak, overdue status is constant, the debt has been placed on non-accrual status, and no definite repayment schedule exists. However, these loans are not yet rated as loss because certain events may occur which would salvage the debt. Among these events are: • Injection of capital • Alternative financing • Liquidation of assets or the pledging of additional collateral. Credit Risk Profile based on payment activity as of March 31, 2018 : Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 13,600 $ 40,238 $ 38,525 $ 3,002 Nonperforming (>90 days past due) 17 — 209 — Total $ 13,617 $ 40,238 $ 38,734 $ 3,002 Credit Risk Profile based on payment activity as of December 31, 2017 : Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 14,169 $ 39,062 $ 36,506 $ 2,950 Nonperforming (>90 days past due) 23 — 279 — Total $ 14,192 $ 39,062 $ 36,785 $ 2,950 The following tables reflect the Bank's impaired loans at March 31, 2018 : March 31, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance Real estate secured Residential 1-4 family $ 4,769 $ 4,769 — $ 6,084 $ 74 Equity lines of credit 35 35 — 42 — Multifamily — — — — — Farmland 656 656 — 571 12 Construction, land development, other land loans 1,677 1,677 — 1,721 — Commercial real estate- owner occupied 932 932 — 1,242 — Commercial real estate- non owner occupied — — — 32 — Second mortgages 122 122 — 166 — Non-real estate secured Personal — — — 48 11 Commercial and agricultural 1,177 1,177 — 841 12 Total $ 9,368 $ 9,368 — $ 10,747 $ 109 March 31, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an allowance recorded Real estate secured Residential 1-4 family $ 525 $ 525 $ 19 $ 300 $ 2 Equity lines of credit — — — — — Multifamily — — — — — Farmland 1,621 1,621 192 1,676 — Construction, land development, other land loans — — — — — Commercial real estate- owner occupied 2,376 2,376 516 2,125 — Commercial real estate- non owner occupied 4,027 4,027 782 3,960 — Second mortgages — — — — — Non-real estate secured Personal 21 21 23 12 — Commercial and agricultural 349 349 234 426 — Total $ 8,919 $ 8,919 $ 1,766 $ 8,499 $ 2 The following tables reflect the Bank's impaired loans at December 31, 2017 : December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance Real estate secured Residential 1-4 family $ 7,398 $ 7,398 — $ 6,123 $ 279 Equity lines of credit 49 49 — 37 — Multifamily — — — 495 56 Farmland 486 486 — 586 42 Construction, land development, other land loans 1,765 1,765 — 1,753 67 Commercial real estate- owner occupied 1,552 1,552 — 3,677 22 Commercial real estate- non owner occupied 63 63 — 973 19 Second mortgages 209 209 — 198 3 Non real estate secured Personal 95 95 — 55 — Commercial and agricultural 504 504 — 274 — Total $ 12,121 $ 12,121 — $ 14,171 $ 488 December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an allowance recorded Real estate secured Residential 1-4 family $ 74 $ 74 $ 11 $ 267 $ 24 Equity lines of credit — — — — — Multifamily — — — — — Farmland 1,731 1,731 257 962 13 Construction, land development, other land loans — — — 183 24 Commercial real estate- owner occupied 1,873 1,873 465 1,506 196 Commercial real estate- non owner occupied 3,892 3,892 955 2,951 141 Second mortgages — — — 9 — Non real estate secured Personal 2 2 2 27 — Commercial and agricultural 502 502 418 568 4 Total $ 8,074 $ 8,074 $ 2,108 $ 6,473 $ 402 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by loan category and is segregated by impairment evaluation method as of and for the three month periods ended March 31, 2018 and March 31, 2017 . Three months ended March 31, 2018 Residential 1-4 Family Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Loan Losses: Balance at December 31, 2017 $ 133 — $ 1 $ 1,636 $ 955 $ 12 $ — $ 54 $ 265 $ 383 $ 515 $ 3,954 Provision expense (credit) for credit losses 3 3 2 (219 ) (167 ) (3 ) 6 139 21 (136 ) 523 172 Charge-offs — — — 95 — 5 — — 88 149 — 337 Recoveries (8 ) — (1 ) (17 ) — — — (1 ) (30 ) (154 ) — (211 ) Net charge-offs (recoveries) (8 ) — (1 ) 78 — 5 — (1 ) 58 (5 ) — 126 Balance at March 31, 2018 $ 144 $ 3 $ 4 $ 1,339 $ 788 $ 4 $ 6 $ 194 $ 228 $ 252 $ 1,038 $ 4,000 Allowance allocated by impairment method: Individually evaluated $ 19 $ — $ — $ 516 $ 782 $ — $ — $ 192 $ 24 $ 233 $ — $ 1,766 Collectively evaluated 125 3 4 823 6 4 6 2 204 19 1,038 2,234 Loan balances by impairment method used: Individually evaluated $ 5,269 $ — $ 1,677 $ 3,194 $ 3,835 $ 122 $ 35 $ 2,200 $ 21 $ 1,509 $ — $ 17,862 Collectively evaluated 166,462 18,157 15,256 78,957 30,602 4,548 35,533 10,777 13,596 40,227 — 414,115 Balance at March 31, 2018 $ 171,731 $ 18,157 $ 16,933 $ 82,151 $ 34,437 $ 4,670 $ 35,568 $ 12,977 $ 13,617 $ 41,736 — $ 431,977 Three months ended March 31, 2017 Residential 1-4 Family Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Loan Losses: Balance at December 31, 2016 $ 371 — $ 21 $ 1,339 $ 445 $ 15 $ 27 $ 16 $ 802 $ 535 $ 1,258 $ 4,829 Provision for credit losses (16 ) — (1 ) 350 403 (11 ) 4 37 204 (99 ) (854 ) 17 Charge-offs 14 — — — — — — — 79 59 — 152 Recoveries (3 ) — (1 ) — (1 ) — — (1 ) (25 ) (3 ) — (34 ) Net charge-offs 11 — (1 ) — (1 ) — — (1 ) 54 56 — 118 Balance at March 31, 2017 $ 344 $ — $ 21 $ 1,689 $ 849 $ 4 $ 31 $ 54 $ 952 $ 380 $ 404 $ 4,728 Allowance allocated by impairment method: Individually evaluated $ 47 $ — $ 20 $ 960 $ 768 $ — $ — $ 20 $ — $ 280 $ — $ 2,095 Collectively evaluated 297 — 1 729 81 4 31 34 952 100 404 2,633 Loan balances by impairment method used: Individually evaluated $ 6,396 $ 980 $ 1,902 $ 4,263 $ 4,225 $ 64 $ — $ 773 $ 260 $ 466 $ — $ 19,329 Collectively evaluated 176,684 21,743 14,619 65,035 25,179 6,131 19,882 11,510 16,777 32,941 — 390,501 Balance at March 31, 2017 $ 183,080 $ 22,723 $ 16,521 $ 69,298 $ 29,404 $ 6,195 $ 19,882 $ 12,283 $ 17,037 $ 33,407 — $ 409,830 The Company's credit administration personnel and senior financial officers are responsible for tracking, coding, and monitoring loans that become Troubled Debt Restructurings ("TDRs"). Concessions are made to existing borrowers in the form of modified interest rates and / or payment terms. The loans are segregated for regulatory and external reporting. Each specific TDR is reviewed to determine if the accrual of interest should be discontinued and also reviewed for impairment. The Company's senior credit officer performs this analysis on a quarterly basis in addition to determining any other loans that are impaired within the loan portfolio. The Company had a total of $9,955 and $8,005 of loans categorized as troubled debt restructurings as of March 31, 2018 and December 31, 2017 , respectively. Interest is accrued on TDRs if the loan is otherwise not impaired and the full collection of principal and interest under the modified terms is still deemed probable. In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on restructured loans evaluated individually. The following table identifies restructurings completed during the three-month period ended March 31, 2018 that represent new TDRs. March 31, 2018 Interest only Number Pre-Modification Recorded Investment Post-Modification Recorded Investment Below Market Rate Residential 1-4 family 1 $ 162 $ 162 Commercial real estate-non-owner occupied 1 1,479 1,479 Total below market rate 2 1,641 1,641 Total restructurings 2 $ 1,641 $ 1,641 There were no new TDRs in the three-month period ended March 31, 2017 . There were no defaults in the three month periods ending March 31, 2018 and March 31, 2017 of TDRs modified in the previous 12 months. The Bank has engaged an external third party to perform its loan review function in order to identify weaknesses within the loan portfolio. The review, which seeks to cover 50 percent of loan balances each year, considers collateral, repayment history, guarantor strength, debt service coverage, and other relevant information on an individual and global level. These reviews consider borrower cash flow capacity, using financial statements, income tax returns and internally prepared interim statements for borrowers and guarantors. Debt service coverage (DSC) is calculated on each individual customer, or guarantor, as well as the aggregate or global DSC. The DSC is discounted to determine a stressed DSC. Collateral evaluation includes an inspection of the collateral file to determine if the Bank is properly secured. Collateral is discounted, when appropriate, to determine a stressed loan to value (LTV) ratio. The Company also seeks to identify potential problem relationships through a monthly watch list review, which includes a review of past due loans, as well as any other information that might be presented by loan officers, regarding a particular loan relationship that is exhibiting stress. Watch list relationships display distinct characteristics including, but not limited to, late payments greater than 60 days , a low DSC calculation, bankruptcy filings, casualty losses, or other issues that would cause a perceived increase in the risk of loss to the Bank. The segments of the Company's loan portfolio are disaggregated to a level that allows management to monitor risk and performance. In reviewing risk, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) the commercial loan portfolio; (ii) the commercial real estate loan portfolio; (iii) the construction loan portfolio; (iv) the consumer loan portfolio; and, (v) the residential loan portfolio. The commercial real estate ("CRE") loan segment is further disaggregated into two classes. Non-owner occupied CRE loans, which include loans secured by non-owner occupied nonfarm nonresidential properties, generally have a greater risk profile than all other CRE loans, which include multifamily structures and owner-occupied commercial structures. The construction loan segment is further disaggregated into two classes. One-to-four family residential construction loans are generally made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Commercial construction loans are generally made to developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures. Construction lending is generally considered to involve a higher degree of credit risk than long-term permanent financing. The following describes the Company's basic methodology for computing its ALLL. On a quarterly basis, the ALLL methodology begins with the identification of loans subject to ASC 310. All loans that are rated "7" (Doubtful) are assessed as impaired based on the expectation that the full collection of principal and interest is in doubt. All loans that are rated "6" (Substandard) or are expected to be downgraded to "6", require additional analysis to determine whether they may be impaired under ASC 310. All loans that are rated "5" (Special Mention) are presumed not to be impaired. However, "5" rated loans, together with any Troubled Debt Restructured (TDR) loan, may warrant further analysis before completing an assessment of impairment. A loan is considered impaired and an allowance for loan losses is established on loans for which it is probable that the full collection of principal and interest is in doubt. Once a loan is identified as individually impaired, management measures impairment using one of several methods, including collateral value based on recent appraisal and /or tax assessment value, liquidation value and/or discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At March 31, 2018 and December 31, 2017 , all of the total impaired loans were evaluated based on either the fair value of the collateral or the discounted cash flows. For ASC 310 loans that are individually evaluated and found to be impaired (primarily those designated as Substandard and Doubtful), the associated ALLL will be based upon one of the three impairment measurement methods specified within ASC 310: (1) Present value of expected future cash flows discounted at the loan's effective interest rate; (2) Loan's observable market price; or (3) Fair value of the collateral. To determine the amount of loan loss exposure for the impaired ASC 310 loans, the value of collateral for secured loans is evaluated to determine the current value and potential exposure. The collateral value is adjusted for its age and condition, and, for real estate, adjusted for condition, location, and age of the most current appraisal. If the adjusted value of the collateral is less than the current principal balance, the difference is designated as direct exposure for loan loss calculations. The total balance of unsecured loans is considered as direct exposure. ASC 450 Loan Loss : For all other loans, including individual loans determined not to be impaired under ASC 310, the associated ALLL is calculated in accordance with ASC 450 that provides for estimated credit losses likely to be realized on groups of loans with similar risk characteristics. The Company uses standard call report categories to segregate loans into groups with similar risk characteristics. Estimated credit losses reflect significant factors that affect the collectability of the portfolio as of the evaluation date. Key factors that influence risk within the Company's loan portfolio are divided into three major categories: Historical loss factors - To calculate the anticipated loan loss in each call report category for ASC 450 loans, the Company begins with the net loss in each category for each of the last twelve quarters. The Company uses a rolling twelve quarter weighted historical loss average where the most recent quarters are weighted heavier than the earlier quarters so that the calculation reflects current risk trends within the portfolio. The weighting used by the Company is similar to the Rule of 78's with the net losses of the most recent quarter weighted at 12/78ths and those in the first quarter in the twelve quarter period weighted at 1/78th. Therefore, the net losses of the most recent year represent approximately 54% of the calculation compared with 33% if a simple average of losses over the three -year period was used. The total of weighted factors for each call report category is applied to the current outstanding loan balance in each category to calculate expected loss based on historical data for a group of loans with similar risk characteristics. The same weighting is applied to all loan types . External economic factors - Economic conditions have a significant impact on Company's loan portfolio because deteriorating conditions can adversely impact both collateral values and the customer's ability to service debt. Management has selected the following external factors as indicators of economic conditions: National GDP growth rate Local unemployment rates Prime interest rate The values for external factors are updated on a quarterly basis based on current economic data. Internal process factors - Internal factors that influence loss rates as a result of risk management and control practices include the following: Past-due loans Non-accrual loans Commercial real estate concentrations Loan volume Level and trend of classified loans The values for internal factors are updated on a quarterly basis based on current portfolio metrics. Once the quarterly ALLL is computed, the calculations are reviewed by the Company's management. The ALLL is then reviewed and approved by the Board of Directors. Loans Held for Sale The Company's mortgage division originates certain single family, residential first mortgage loans for sale on a presold basis. Loan sale activity is summarized below. Loans are typically sold to investors within 20 days of closing. Management feels the carrying amounts approximate the fair values of loans held for sale. Three months ended March 31 2018 2017 Loans held for sale at end of period $ 1,795 $ 3,063 Proceeds from sales of mortgage loans originated for sale 10,664 5,578 Gain on sales of mortgage loans originated for sale 100 226 |
