Loan Portfolio | 6 Months Ended |
Jun. 30, 2014 |
Loan Portfolio | ' |
Note 3. Loan Portfolio |
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The following table sets forth the composition of the Company’s loan portfolio in dollar amounts and as a percentage of the Company’s total gross loans at the dates indicated: |
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| | June 30, 2014 | | December 31, 2013 | | | | | | | | | | |
(dollars in thousands) | | Amount | | Percent | | Amount | | Percent | | | | | | | | | | |
Commercial, industrial and agricultural | | $ | 56,991 | | | 8.16 | % | $ | 53,673 | | | 8.17 | % | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 240,805 | | | 34.5 | % | | 218,472 | | | 33.25 | % | | | | | | | | | |
Home equity lines | | | 97,572 | | | 13.98 | % | | 99,839 | | | 15.19 | % | | | | | | | | | |
Total real estate - one to four family residential | | | 338,377 | | | 48.48 | % | | 318,311 | | | 48.44 | % | | | | | | | | | |
Real estate - multifamily residential | | | 19,932 | | | 2.86 | % | | 18,077 | | | 2.75 | % | | | | | | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 17,168 | | | 2.46 | % | | 16,169 | | | 2.46 | % | | | | | | | | | |
Other construction, land development and other land | | | 24,827 | | | 3.56 | % | | 21,690 | | | 3.3 | % | | | | | | | | | |
Total real estate - construction | | | 41,995 | | | 6.02 | % | | 37,859 | | | 5.76 | % | | | | | | | | | |
Real estate - farmland | | | 7,207 | | | 1.03 | % | | 8,172 | | | 1.24 | % | | | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 128,322 | | | 18.38 | % | | 126,569 | | | 19.26 | % | | | | | | | | | |
Non-owner occupied | | | 75,804 | | | 10.86 | % | | 74,831 | | | 11.39 | % | | | | | | | | | |
Total real estate - non-farm, non-residential | | | 204,126 | | | 29.24 | % | | 201,400 | | | 30.65 | % | | | | | | | | | |
Consumer | | | 15,125 | | | 2.17 | % | | 16,782 | | | 2.55 | % | | | | | | | | | |
Other | | | 14,240 | | | 2.04 | % | | 2,923 | | | 0.44 | % | | | | | | | | | |
Total loans | | | 697,993 | | | 100 | % | | 657,197 | | | 100 | % | | | | | | | | | |
Less allowance for loan losses | | | -14,618 | | | | | | -14,767 | | | | | | | | | | | | | |
Loans, net | | $ | 683,375 | | | | | $ | 642,430 | | | | | | | | | | | | | |
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The following table presents the aging of the recorded investment in past due loans as of June 30, 2014 by class of loans: |
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(dollars in thousands) | | 30-59 Days | | 60-89 Days | | Over 90 Days | | Total Past Due | | Total | | Total Loans | | | | |
Past Due | Past Due | Past Due | Current* | | | |
Commercial, industrial and agricultural | | $ | 71 | | $ | 8 | | $ | 139 | | $ | 218 | | $ | 56,773 | | $ | 56,991 | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 6,310 | | | 967 | | | 1,870 | | | 9,147 | | | 231,658 | | | 240,805 | | | | |
Home equity lines | | | 563 | | | 194 | | | 331 | | | 1,088 | | | 96,484 | | | 97,572 | | | | |
Total real estate - one to four family residential | | | 6,873 | | | 1,161 | | | 2,201 | | | 10,235 | | | 328,142 | | | 338,377 | | | | |
Real estate - multifamily residential | | | - | | | - | | | - | | | - | | | 19,932 | | | 19,932 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 288 | | | - | | | 132 | | | 420 | | | 16,748 | | | 17,168 | | | | |
Other construction, land development and other land | | | 10 | | | - | | | - | | | 10 | | | 24,817 | | | 24,827 | | | | |
Total real estate - construction | | | 298 | | | - | | | 132 | | | 430 | | | 41,565 | | | 41,995 | | | | |
Real estate - farmland | | | - | | | - | | | 590 | | | 590 | | | 6,617 | | | 7,207 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 198 | | | 37 | | | 2,060 | | | 2,295 | | | 126,027 | | | 128,322 | | | | |
Non-owner occupied | | | - | | | - | | | 623 | | | 623 | | | 75,181 | | | 75,804 | | | | |
Total real estate - non-farm, non-residential | | | 198 | | | 37 | | | 2,683 | | | 2,918 | | | 201,208 | | | 204,126 | | | | |
Consumer | | | 122 | | | 16 | | | 65 | | | 203 | | | 14,922 | | | 15,125 | | | | |
Other | | | 5 | | | - | | | - | | | 5 | | | 14,235 | | | 14,240 | | | | |
Total loans | | $ | 7,567 | | $ | 1,222 | | $ | 5,810 | | $ | 14,599 | | $ | 683,394 | | $ | 697,993 | | | | |
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* For purposes of this table only, the "Total Current" column includes loans that are 1-29 days past due. |
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The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 by class of loans: |
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(dollars in thousands) | | 30-59 Days | | 60-89 Days | | Over 90 Days | | Total Past Due | | Total Current* | | Total Loans | | | | |
Past Due | Past Due | Past Due | | | |
Commercial, industrial and agricultural | | $ | 2,083 | | $ | 170 | | $ | 383 | | $ | 2,636 | | $ | 51,037 | | $ | 53,673 | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 6,217 | | | 1,513 | | | 2,564 | | | 10,294 | | | 208,178 | | | 218,472 | | | | |
Home equity lines | | | 700 | | | 303 | | | 353 | | | 1,356 | | | 98,483 | | | 99,839 | | | | |
Total real estate - one to four family residential | | | 6,917 | | | 1,816 | | | 2,917 | | | 11,650 | | | 306,661 | | | 318,311 | | | | |
Real estate - multifamily residential | | | - | | | - | | | - | | | - | | | 18,077 | | | 18,077 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 112 | | | 176 | | | 132 | | | 420 | | | 15,749 | | | 16,169 | | | | |
Other construction, land development and other land | | | 167 | | | - | | | 137 | | | 304 | | | 21,386 | | | 21,690 | | | | |
Total real estate - construction | | | 279 | | | 176 | | | 269 | | | 724 | | | 37,135 | | | 37,859 | | | | |
Real estate - farmland | | | 808 | | | - | | | 590 | | | 1,398 | | | 6,774 | | | 8,172 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 2,933 | | | - | | | 3,074 | | | 6,007 | | | 120,562 | | | 126,569 | | | | |
Non-owner occupied | | | 1,779 | | | - | | | 23 | | | 1,802 | | | 73,029 | | | 74,831 | | | | |
Total real estate - non-farm, non-residential | | | 4,712 | | | - | | | 3,097 | | | 7,809 | | | 193,591 | | | 201,400 | | | | |
Consumer | | | 283 | | | 21 | | | 166 | | | 470 | | | 16,312 | | | 16,782 | | | | |
Other | | | 7 | | | - | | | - | | | 7 | | | 2,916 | | | 2,923 | | | | |
Total loans | | $ | 15,089 | | $ | 2,183 | | $ | 7,422 | | $ | 24,694 | | $ | 632,503 | | $ | 657,197 | | | | |
* For purposes of this table only, the "Total Current" column includes loans that are 1-29 days past due. |
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The following table presents nonaccrual loans, loans past due 90 days and accruing interest, and restructured loans at the dates indicated: |
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| | June 30, | | December 31, | | | | | | | | | | | | | | | | |
(dollars in thousands) | | 2014 | | 2013 | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 9,770 | | $ | 11,018 | | | | | | | | | | | | | | | | |
Loans past due 90 days and accruing interest | | | - | | | - | | | | | | | | | | | | | | | | |
Restructured loans (accruing) | | | 16,383 | | | 16,026 | | | | | | | | | | | | | | | | |
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At June 30, 2014 and December 31, 2013, there were approximately $4.0 million and $4.2 million, respectively, in troubled debt restructurings (“TDRs”) included in nonaccrual loans. |
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The past due status of a loan is based on the contractual due date of the most delinquent payment due. Loans, including impaired loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well-secured and in the process of collection. Loans greater than 90 days past due may remain on an accrual status if management determines it has adequate collateral to cover the principal and interest. If a loan or a portion of a loan is adversely classified, or is partially charged off, the loan is generally classified as nonaccrual. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact the collectability of principal or interest on loans, it is management’s practice to place such loans on a nonaccrual status immediately, rather than delaying such action until the loans become 90 days past due. |
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When a loan is placed on nonaccrual status, previously accrued and uncollected interest is reversed, and the amortization of related deferred loan fees or costs is suspended. While a loan is classified as nonaccrual and the future collectability of the recorded loan balance is doubtful, collections of interest and principal are generally applied as a reduction to principal outstanding. When the future collectability of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where a nonaccrual loan has been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Cash interest receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered. These policies are applied consistently across our loan portfolio. |
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Loans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within an acceptable period of time, and there is a sustained period of repayment performance by the borrower, in accordance with the contractual terms of interest and principal. |
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The following table presents the recorded investment in nonaccrual loans by class at June 30, 2014 and December 31, 2013: |
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| | Nonaccrual | | | | | | | | | | | | | | | | |
| | June 30, | | December 31, | | | | | | | | | | | | | | | | |
(dollars in thousands) | | 2014 | | 2013 | | | | | | | | | | | | | | | | |
Commercial, industrial and agricultural | | $ | 139 | | $ | 383 | | | | | | | | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 4,411 | | | 5,630 | | | | | | | | | | | | | | | | |
Home equity lines | | | 506 | | | 688 | | | | | | | | | | | | | | | | |
Total real estate - one to four family residential | | | 4,917 | | | 6,318 | | | | | | | | | | | | | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 132 | | | 318 | | | | | | | | | | | | | | | | |
Other construction, land development and other land | | | - | | | 137 | | | | | | | | | | | | | | | | |
Total real estate - construction | | | 132 | | | 455 | | | | | | | | | | | | | | | | |
Real estate - farmland | | | 590 | | | 590 | | | | | | | | | | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 2,914 | | | 3,074 | | | | | | | | | | | | | | | | |
Non-owner occupied | | | 623 | | | 23 | | | | | | | | | | | | | | | | |
Total real estate - non-farm, non-residential | | | 3,537 | | | 3,097 | | | | | | | | | | | | | | | | |
Consumer | | | 455 | | | 175 | | | | | | | | | | | | | | | | |
Total loans | | $ | 9,770 | | $ | 11,018 | | | | | | | | | | | | | | | | |
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At June 30, 2014 and December 31, 2013, the Company did not have any loans past due 90 days and accruing interest. |
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The Company uses a risk grading system for real estate (including multifamily residential, construction, farmland and non-farm, non-residential) and commercial loans. Loans are graded on a scale from 1 to 9. Non-impaired real estate and commercial loans are assigned an allowance factor which increases with the severity of risk grading. A general description of the characteristics of the risk grades is as follows: |
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Pass Grades |
| ⋅ | Risk Grade 1 loans have little or no risk and are generally secured by cash or cash equivalents; | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety; | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment; | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 4 loans are satisfactory loans with borrowers not as strong as risk grade 3 loans but may exhibit a higher degree of financial risk based on the type of business supporting the loan; and | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 5 loans are loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay. | | | | | | | | | | | | | | | | | | | | |
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Special Mention |
| ⋅ | Risk Grade 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position. | | | | | | | | | | | | | | | | | | | | |
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Classified Grades |
| ⋅ | Risk Grade 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged. These have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and | | | | | | | | | | | | | | | | | | | | |
| ⋅ | Risk Grade 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as a bank asset is not warranted. | | | | | | | | | | | | | | | | | | | | |
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The Company uses a past due grading system for consumer loans, including one to four family residential first and seconds and home equity lines. The past due status of a loan is based on the contractual due date of the most delinquent payment due. The past due grading of consumer loans is based on the following categories: current, 1-29 days past due, 30-59 days past due, 60-89 days past due and over 90 days past due. The consumer loans are segregated between performing and nonperforming loans. Performing loans are those that have made timely payments in accordance with the terms of the loan agreement and are not past due 90 days or more. Nonperforming loans are those that do not accrue interest, are greater than 90 days past due and accruing interest or considered impaired. Non-impaired consumer loans are assigned an allowance factor which increases with the severity of past due status. This component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the loan portfolio. |
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The allocation methodology applied by the Company includes management’s ongoing review and grading of the loan portfolio into criticized loan categories (defined as specific loans warranting either specific allocation, or a classified status of substandard, doubtful or loss). The allocation methodology focuses on evaluation of several factors, including but not limited to: evaluation of facts and issues related to specific loans, management’s ongoing review and grading of the loan portfolio, consideration of migration analysis and delinquency experience on each portfolio category, trends in past due and nonaccrual loans, the level of classified loans, the risk characteristics of the various classifications of loans, changes in the size and character of the loan portfolio, concentrations of loans to specific borrowers or industries, existing economic conditions, the fair value of underlying collateral, and other qualitative and quantitative factors which could affect potential credit losses. Because each of the criteria used is subject to change, the allocation of the allowance for loan losses is made for analytical purposes and is not necessarily indicative of the trend of future loan losses in any particular loan category. The total allowance is available to absorb losses from any segment of the portfolio. In determining the allowance for loan losses, the Company considers its portfolio segments and loan classes to be the same. |
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The following table presents commercial loans by credit quality indicator at June 30, 2014: |
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(dollars in thousands) | | Pass | | Special Mention | | Substandard | | Doubtful | | Impaired | | Total | | | | |
Commercial, industrial and agricultural | | $ | 49,473 | | $ | 2,407 | | $ | 2,847 | | $ | 84 | | $ | 2,180 | | $ | 56,991 | | | | |
Real estate - multifamily residential | | | 19,932 | | | - | | | - | | | - | | | - | | | 19,932 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 16,290 | | | 229 | | | 350 | | | - | | | 299 | | | 17,168 | | | | |
Other construction, land development and other land | | | 8,445 | | | 3,896 | | | 6,825 | | | - | | | 5,661 | | | 24,827 | | | | |
Total real estate - construction | | | 24,735 | | | 4,125 | | | 7,175 | | | - | | | 5,960 | | | 41,995 | | | | |
Real estate - farmland | | | 6,284 | | | 333 | | | 590 | | | - | | | - | | | 7,207 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 93,515 | | | 8,276 | | | 12,121 | | | - | | | 14,410 | | | 128,322 | | | | |
Non-owner occupied | | | 52,355 | | | 6,079 | | | 7,008 | | | - | | | 10,362 | | | 75,804 | | | | |
Total real estate - non-farm, non-residential | | | 145,870 | | | 14,355 | | | 19,129 | | | - | | | 24,772 | | | 204,126 | | | | |
Total commercial loans | | $ | 246,294 | | $ | 21,220 | | $ | 29,741 | | $ | 84 | | $ | 32,912 | | $ | 330,251 | | | | |
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The following table presents commercial loans by credit quality indicator at December 31, 2013: |
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(dollars in thousands) | | Pass | | Special Mention | | Substandard | | Doubtful | | Impaired | | Total | | | | |
Commercial, industrial and agricultural | | $ | 44,571 | | $ | 3,851 | | $ | 3,229 | | $ | 22 | | $ | 2,000 | | $ | 53,673 | | | | |
Real estate - multifamily residential | | | 18,077 | | | - | | | - | | | - | | | - | | | 18,077 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 14,890 | | | 235 | | | 738 | | | - | | | 306 | | | 16,169 | | | | |
Other construction, land development and other land | | | 6,638 | | | 7,104 | | | 4,634 | | | - | | | 3,314 | | | 21,690 | | | | |
Total real estate - construction | | | 21,528 | | | 7,339 | | | 5,372 | | | - | | | 3,620 | | | 37,859 | | | | |
Real estate - farmland | | | 6,288 | | | 338 | | | 1,068 | | | - | | | 478 | | | 8,172 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 87,187 | | | 13,341 | | | 15,983 | | | - | | | 10,058 | | | 126,569 | | | | |
Non-owner occupied | | | 43,406 | | | 15,533 | | | 7,520 | | | - | | | 8,372 | | | 74,831 | | | | |
Total real estate - non-farm, non-residential | | | 130,593 | | | 28,874 | | | 23,503 | | | - | | | 18,430 | | | 201,400 | | | | |
Total commercial loans | | $ | 221,057 | | $ | 40,402 | | $ | 33,172 | | $ | 22 | | $ | 24,528 | | $ | 319,181 | | | | |
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At June 30, 2014 and December 31, 2013, the Company did not have any loans classified as Loss. |
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The following table presents consumer loans, including one to four family residential first and seconds and home equity lines, by payment activity at June 30, 2014: |
|
(dollars in thousands) | | Performing | | Nonperforming | | Total | | | | | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | $ | 228,954 | | $ | 11,851 | | $ | 240,805 | | | | | | | | | | | | | |
Home equity lines | | | 96,824 | | | 748 | | | 97,572 | | | | | | | | | | | | | |
Total real estate - one to four family residential | | | 325,778 | | | 12,599 | | | 338,377 | | | | | | | | | | | | | |
Consumer | | | 14,678 | | | 447 | | | 15,125 | | | | | | | | | | | | | |
Other | | | 13,775 | | | 465 | | | 14,240 | | | | | | | | | | | | | |
Total consumer loans | | $ | 354,231 | | $ | 13,511 | | $ | 367,742 | | | | | | | | | | | | | |
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The following table presents consumer loans, including one to four family residential first and seconds and home equity lines, by payment activity at December 31, 2013: |
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(dollars in thousands) | | Performing | | Nonperforming | | Total | | | | | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | $ | 205,860 | | $ | 12,612 | | $ | 218,472 | | | | | | | | | | | | | |
Home equity lines | | | 99,311 | | | 528 | | | 99,839 | | | | | | | | | | | | | |
Total real estate - one to four family residential | | | 305,171 | | | 13,140 | | | 318,311 | | | | | | | | | | | | | |
Consumer | | | 16,314 | | | 468 | | | 16,782 | | | | | | | | | | | | | |
Other | | | 2,451 | | | 472 | | | 2,923 | | | | | | | | | | | | | |
Total consumer loans | | $ | 323,936 | | $ | 14,080 | | $ | 338,016 | | | | | | | | | | | | | |
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The Company measures impaired loans based on the present value of expected future cash flows discounted at the effective interest rate of the loan or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The Company maintains a valuation allowance to the extent that the measure of the impaired loan is less than the recorded investment. TDRs are considered impaired loans. TDRs occur when we agree to modify the original terms of a loan by granting a concession due to the deterioration in the financial condition of the borrower. These concessions can be temporary and are made in an attempt to avoid foreclosure and with the intent to restore the loan to a performing status once sufficient payment history can be demonstrated. These concessions could include, without limitation, rate reductions to below market rates, payment deferrals, forbearance, and, in some cases, forgiveness of principal or interest. |
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At the time of a TDR, the loan is placed on nonaccrual status. A loan may be returned to accrual status if the borrower has demonstrated a sustained period of repayment performance (typically six months) in accordance with the contractual terms of the loan and there is reasonable assurance the borrower will continue to make payments as agreed. |
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The following table presents a rollforward of the Company’s allowance for loan losses for the six months ended June 30, 2014: |
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| | Beginning Balance | | | | | | | | | | | Ending Balance | | | | | | | |
(dollars in thousands) | | January 1, 2014 | | Charge-offs | | Recoveries | | Provision | | June 30, 2014 | | | | | | | |
Commercial, industrial and agricultural | | $ | 1,787 | | $ | -290 | | $ | 30 | | $ | -331 | | $ | 1,196 | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 2,859 | | | -304 | | | 211 | | | -188 | | | 2,578 | | | | | | | |
Home equity lines | | | 1,642 | | | -54 | | | 13 | | | 244 | | | 1,845 | | | | | | | |
Total real estate - one to four family residential | | | 4,501 | | | -358 | | | 224 | | | 56 | | | 4,423 | | | | | | | |
Real estate - multifamily residential | | | 79 | | | - | | | - | | | 29 | | | 108 | | | | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 364 | | | - | | | 6 | | | -69 | | | 301 | | | | | | | |
Other construction, land development and other land | | | 1,989 | | | - | | | 2 | | | 501 | | | 2,492 | | | | | | | |
Total real estate - construction | | | 2,353 | | | - | | | 8 | | | 432 | | | 2,793 | | | | | | | |
Real estate - farmland | | | 116 | | | - | | | - | | | 11 | | | 127 | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 3,236 | | | - | | | 27 | | | -1,144 | | | 2,119 | | | | | | | |
Non-owner occupied | | | 1,770 | | | - | | | 3 | | | 855 | | | 2,628 | | | | | | | |
Total real estate - non-farm, non-residential | | | 5,006 | | | - | | | 30 | | | -289 | | | 4,747 | | | | | | | |
Consumer | | | 387 | | | -86 | | | 55 | | | -1 | | | 355 | | | | | | | |
Other | | | 538 | | | -26 | | | 14 | | | 343 | | | 869 | | | | | | | |
Total | | $ | 14,767 | | $ | -760 | | $ | 361 | | $ | 250 | | $ | 14,618 | | | | | | | |
|
The following table presents a rollforward of the Company’s allowance for loan losses for the six months ended June 30, 2013: |
|
| | Beginning Balance | | | | | | | | | | | Ending Balance | | | | | | | |
(dollars in thousands) | | January 1, 2013 | | Charge-offs | | Recoveries | | Provision | | June 30, 2013 | | | | | | | |
Commercial, industrial and agricultural | | $ | 2,340 | | $ | -559 | | $ | 102 | | $ | 485 | | $ | 2,368 | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 2,876 | | | -269 | | | 33 | | | 523 | | | 3,163 | | | | | | | |
Home equity lines | | | 720 | | | -58 | | | 1 | | | 105 | | | 768 | | | | | | | |
Total real estate - one to four family residential | | | 3,596 | | | -327 | | | 34 | | | 628 | | | 3,931 | | | | | | | |
Real estate - multifamily residential | | | 62 | | | - | | | - | | | -2 | | | 60 | | | | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 419 | | | -51 | | | 31 | | | -106 | | | 293 | | | | | | | |
Other construction, land development and other land | | | 3,897 | | | -950 | | | 67 | | | -694 | | | 2,320 | | | | | | | |
Total real estate - construction | | | 4,316 | | | -1,001 | | | 98 | | | -800 | | | 2,613 | | | | | | | |
Real estate - farmland | | | 41 | | | - | | | - | | | -11 | | | 30 | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 5,092 | | | -449 | | | - | | | 562 | | | 5,205 | | | | | | | |
Non-owner occupied | | | 4,093 | | | -1,534 | | | - | | | 234 | | | 2,793 | | | | | | | |
Total real estate - non-farm, non-residential | | | 9,185 | | | -1,983 | | | - | | | 796 | | | 7,998 | | | | | | | |
Consumer | | | 215 | | | -75 | | | 58 | | | 46 | | | 244 | | | | | | | |
Other | | | 583 | | | -72 | | | 20 | | | 58 | | | 589 | | | | | | | |
Total | | $ | 20,338 | | $ | -4,017 | | $ | 312 | | $ | 1,200 | | $ | 17,833 | | | | | | | |
|
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class based on impairment method as of June 30, 2014: |
|
| | Allowance allocated to loans: | | Total Loans: | | | | |
(dollars in thousands) | | Individually | | Collectively | | Total | | Individually | | Collectively | | Total | | | | |
evaluated for | evaluated for | evaluated for | evaluated for | | | |
impairment | impairment | impairment | impairment | | | |
Commercial, industrial and agricultural | | $ | 42 | | $ | 1,154 | | $ | 1,196 | | $ | 2,180 | | $ | 54,811 | | $ | 56,991 | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 1,416 | | | 1,162 | | | 2,578 | | | 9,981 | | | 230,824 | | | 240,805 | | | | |
Home equity lines | | | - | | | 1,845 | | | 1,845 | | | 417 | | | 97,155 | | | 97,572 | | | | |
Total real estate - one to four family residential | | | 1,416 | | | 3,007 | | | 4,423 | | | 10,398 | | | 327,979 | | | 338,377 | | | | |
Real estate - multifamily residential | | | - | | | 108 | | | 108 | | | - | | | 19,932 | | | 19,932 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 173 | | | 128 | | | 301 | | | 299 | | | 16,869 | | | 17,168 | | | | |
Other construction, land development and other land | | | 1,382 | | | 1,110 | | | 2,492 | | | 5,661 | | | 19,166 | | | 24,827 | | | | |
Total real estate - construction | | | 1,555 | | | 1,238 | | | 2,793 | | | 5,960 | | | 36,035 | | | 41,995 | | | | |
Real estate - farmland | | | - | | | 127 | | | 127 | | | - | | | 7,207 | | | 7,207 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 944 | | | 1,175 | | | 2,119 | | | 14,410 | | | 113,912 | | | 128,322 | | | | |
Non-owner occupied | | | 1,648 | | | 980 | | | 2,628 | | | 10,362 | | | 65,442 | | | 75,804 | | | | |
Total real estate - non-farm, non-residential | | | 2,592 | | | 2,155 | | | 4,747 | | | 24,772 | | | 179,354 | | | 204,126 | | | | |
Consumer | | | 114 | | | 241 | | | 355 | | | 382 | | | 14,743 | | | 15,125 | | | | |
Other | | | 302 | | | 567 | | | 869 | | | 465 | | | 13,775 | | | 14,240 | | | | |
Total | | $ | 6,021 | | $ | 8,597 | | $ | 14,618 | | $ | 44,157 | | $ | 653,836 | | $ | 697,993 | | | | |
|
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class based on impairment method as of December 31, 2013: |
|
| | Allowance allocated to loans: | | Total Loans: | | | | |
(dollars in thousands) | | Individually | | Collectively | | Total | | Individually | | Collectively | | Total | | | | |
evaluated for | evaluated for | evaluated for | evaluated for | | | |
impairment | impairment | impairment | impairment | | | |
Commercial, industrial and agricultural | | $ | 612 | | $ | 1,175 | | $ | 1,787 | | $ | 2,000 | | $ | 51,673 | | $ | 53,673 | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 1,833 | | | 1,026 | | | 2,859 | | | 10,048 | | | 208,424 | | | 218,472 | | | | |
Home equity lines | | | - | | | 1,642 | | | 1,642 | | | 175 | | | 99,664 | | | 99,839 | | | | |
Total real estate - one to four family residential | | | 1,833 | | | 2,668 | | | 4,501 | | | 10,223 | | | 308,088 | | | 318,311 | | | | |
Real estate - multifamily residential | | | - | | | 79 | | | 79 | | | - | | | 18,077 | | | 18,077 | | | | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 180 | | | 184 | | | 364 | | | 306 | | | 15,863 | | | 16,169 | | | | |
Other construction, land development and other land | | | 802 | | | 1,187 | | | 1,989 | | | 3,314 | | | 18,376 | | | 21,690 | | | | |
Total real estate - construction | | | 982 | | | 1,371 | | | 2,353 | | | 3,620 | | | 34,239 | | | 37,859 | | | | |
Real estate - farmland | | | - | | | 116 | | | 116 | | | 478 | | | 7,694 | | | 8,172 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 1,223 | | | 2,013 | | | 3,236 | | | 10,058 | | | 116,511 | | | 126,569 | | | | |
Non-owner occupied | | | 617 | | | 1,153 | | | 1,770 | | | 8,372 | | | 66,459 | | | 74,831 | | | | |
Total real estate - non-farm, non-residential | | | 1,840 | | | 3,166 | | | 5,006 | | | 18,430 | | | 182,970 | | | 201,400 | | | | |
Consumer | | | 104 | | | 283 | | | 387 | | | 302 | | | 16,480 | | | 16,782 | | | | |
Other | | | 311 | | | 227 | | | 538 | | | 472 | | | 2,451 | | | 2,923 | | | | |
Total | | $ | 5,682 | | $ | 9,085 | | $ | 14,767 | | $ | 35,525 | | $ | 621,672 | | $ | 657,197 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2014: |
|
(dollars in thousands) | | Recorded | | Unpaid | | Recorded | | Recorded | | Related | | Average | | Interest | |
Investment | Principal | Investment With No | Investment With | Allowance | Recorded | Income |
| Balance | Allowance | Allowance | | Investment | Recognized |
Commercial, industrial and agricultural | | $ | 2,180 | | $ | 2,180 | | $ | 290 | | $ | 1,890 | | $ | 42 | | $ | 2,184 | | $ | 64 | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 9,981 | | | 10,081 | | | 3,462 | | | 6,519 | | | 1,416 | | | 10,033 | | | 178 | |
Home equity lines | | | 417 | | | 417 | | | 417 | | | - | | | - | | | 213 | | | - | |
Total real estate - one to four family residential | | | 10,398 | | | 10,498 | | | 3,879 | | | 6,519 | | | 1,416 | | | 10,246 | | | 178 | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 299 | | | 299 | | | - | | | 299 | | | 173 | | | 360 | | | 4 | |
Other construction, land development and other land | | | 5,661 | | | 5,661 | | | - | | | 5,661 | | | 1,382 | | | 5,173 | | | 157 | |
Total real estate - construction | | | 5,960 | | | 5,960 | | | - | | | 5,960 | | | 1,555 | | | 5,533 | | | 161 | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 14,410 | | | 15,896 | | | 10,013 | | | 4,397 | | | 944 | | | 11,492 | | | 95 | |
Non-owner occupied | | | 10,362 | | | 10,362 | | | 4,676 | | | 5,686 | | | 1,648 | | | 8,558 | | | 139 | |
Total real estate - non-farm, non-residential | | | 24,772 | | | 26,258 | | | 14,689 | | | 10,083 | | | 2,592 | | | 20,050 | | | 234 | |
Consumer | | | 382 | | | 382 | | | 25 | | | 357 | | | 114 | | | 457 | | | 11 | |
Other | | | 465 | | | 465 | | | 8 | | | 457 | | | 302 | | | 471 | | | - | |
Total loans | | $ | 44,157 | | $ | 45,743 | | $ | 18,891 | | $ | 25,266 | | $ | 6,021 | | $ | 38,941 | | $ | 648 | |
|
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2013: |
|
(dollars in thousands) | | Recorded | | Unpaid | | Recorded | | Recorded | | Related | | Average | | Interest | |
Investment | Principal | Investment | Investment With | Allowance | Recorded | Income |
| Balance | With No | Allowance | | Investment | Recognized |
| | Allowance | | | | |
Commercial, industrial and agricultural | | $ | 2,000 | | $ | 2,000 | | $ | - | | $ | 2,000 | | $ | 612 | | $ | 1,712 | | $ | 97 | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 10,048 | | | 10,148 | | | 2,008 | | | 8,040 | | | 1,833 | | | 8,727 | | | 498 | |
Home equity lines | | | 175 | | | 175 | | | 175 | | | - | | | - | | | 382 | | | - | |
Total real estate - one to four family residential | | | 10,223 | | | 10,323 | | | 2,183 | | | 8,040 | | | 1,833 | | | 9,109 | | | 498 | |
Real estate - construction: | | | | | | | | | | | | | | | | | | | | | | |
One to four family residential | | | 306 | | | 306 | | | - | | | 306 | | | 180 | | | 794 | | | 9 | |
Other construction, land development and other land | | | 3,314 | | | 5,662 | | | - | | | 3,314 | | | 802 | | | 8,581 | | | 161 | |
Total real estate - construction | | | 3,620 | | | 5,968 | | | - | | | 3,620 | | | 982 | | | 9,375 | | | 170 | |
Real estate - farmland | | | 478 | | | 478 | | | 478 | | | - | | | - | | | 428 | | | 32 | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 10,058 | | | 11,544 | | | 6,730 | | | 3,328 | | | 1,223 | | | 10,472 | | | 506 | |
Non-owner occupied | | | 8,372 | | | 8,372 | | | 4,357 | | | 4,015 | | | 617 | | | 9,353 | | | 348 | |
Total real estate - non-farm, non-residential | | | 18,430 | | | 19,916 | | | 11,087 | | | 7,343 | | | 1,840 | | | 19,825 | | | 854 | |
Consumer | | | 302 | | | 302 | | | - | | | 302 | | | 104 | | | 203 | | | 22 | |
Other | | | 472 | | | 472 | | | 9 | | | 463 | | | 311 | | | 504 | | | - | |
Total loans | | $ | 35,525 | | $ | 39,459 | | $ | 13,757 | | $ | 21,768 | | $ | 5,682 | | $ | 41,156 | | $ | 1,673 | |
|
The following tables present, by class of loans, information related to loans modified as TDRs during the three and six months ended June 30, 2014 and 2013: |
|
| | Three Months Ended June 30, 2014 | | Three Months Ended June 30, 2013 | | | | |
(dollars in thousands) | | Number of | | Pre- | | Post- | | Number | | Pre- | | Post- | | | | |
Loans | Modification | Modification | of Loans | Modification | Modification | | | |
| Recorded | Recorded | | Recorded | Recorded | | | |
| Balance | Balance* | | Balance | Balance* | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 3 | | $ | 512 | | $ | 513 | | | 2 | | $ | 225 | | $ | 225 | | | | |
Consumer | | | 2 | | | 385 | | | 385 | | | - | | | - | | | - | | | | |
Total | | | 5 | | $ | 897 | | $ | 898 | | | 2 | | $ | 225 | | $ | 225 | | | | |
|
*The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. Loans modified as TDRs that were fully paid down, charged-off, or foreclosed upon by period end are not reported. |
|
| | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | | | | |
(dollars in thousands) | | Number of | | Pre- | | Post- | | Number | | Pre- | | Post- | | | | |
Loans | Modification | Modification | of Loans | Modification | Modification | | | |
| Recorded | Recorded | | Recorded | Recorded | | | |
| Balance | Balance* | | Balance | Balance* | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | 3 | | $ | 512 | | $ | 513 | | | 4 | | $ | 570 | | $ | 570 | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Non-owner occupied | | | - | | | - | | | - | | | 1 | | | 164 | | | 164 | | | | |
Consumer | | | 2 | | | 385 | | | 385 | | | - | | | - | | | - | | | | |
Total | | | 5 | | $ | 897 | | $ | 898 | | | 5 | | $ | 734 | | $ | 734 | | | | |
|
* The period end balances are inclusive of all partial paydowns and charge-offs since the modification date. Loans modified as TDRs that were fully paid down, charged-off, or foreclosed upon by period end are not reported. |
|
The following tables present, by class of loans, information related to loans modified as TDRs that subsequently defaulted (i.e., 90 days or more past due following a modification) during the three and six months ended June 30, 2014 and 2013 and were modified as TDRs within the 12 months prior to default: |
|
| | Three Months Ended | | Three Months Ended | | | | | | | | | | |
June 30, 2014 | June 30, 2013 | | | | | | | | | |
(dollars in thousands) | | Number of | | Recorded | | Number of | | Recorded | | | | | | | | | | |
Loans | Balance | Loans | Balance | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | - | | $ | - | | | 1 | | $ | 55 | | | | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Non-owner occupied | | | - | | | - | | | 1 | | | 164 | | | | | | | | | | |
Total | | | - | | $ | - | | | 2 | | $ | 219 | | | | | | | | | | |
|
| | Six Months Ended | | Six Months Ended | | | | | | | | | | |
June 30, 2014 | June 30, 2013 | | | | | | | | | |
(dollars in thousands) | | Number of | | Recorded | | Number of | | Recorded | | | | | | | | | | |
Loans | Balance | Loans | Balance | | | | | | | | | |
Real estate - one to four family residential: | | | | | | | | | | | | | | | | | | | | | | |
Closed end first and seconds | | | - | | $ | - | | | 2 | | $ | 234 | | | | | | | | | | |
Real estate - non-farm, non-residential: | | | | | | | | | | | | | | | | | | | | | | |
Non-owner occupied | | | - | | | - | | | 1 | | | 164 | | | | | | | | | | |
Total | | | - | | $ | - | | | 3 | | $ | 398 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |