| Loans | Major classifications of loans held for investment
are as follows:
June 30, 2017 December 31, 2016
Legacy (1) Acquired Total Legacy (1) Acquired Total
Commercial Real Estate
Owner Occupied $ 266,686,058 $ 45,923,998 $ 312,610,056 $ 238,220,475 $ 53,850,612 $ 292,071,087
Investment 453,597,514 32,857,002 486,454,516 414,012,709 37,687,804 451,700,513
Hospitality 157,457,044 6,814,105 164,271,149 141,611,858 11,193,427 152,805,285
Land and A&D 44,742,020 5,452,470 50,194,490 51,323,297 6,015,813 57,339,110
Residential Real Estate
First Lien-Investment 81,285,353 20,860,372 102,145,725 72,150,512 23,623,660 95,774,172
First Lien-Owner Occupied 61,719,823 40,800,994 102,520,817 54,732,604 42,443,767 97,176,371
Residential Land and A&D 43,290,769 5,012,688 48,303,457 39,667,222 5,558,232 45,225,454
HELOC and Jr. Liens 22,692,006 2,352,459 25,044,465 24,385,215 2,633,718 27,018,933
Commercial and Industrial 149,943,871 4,823,533 154,767,404 136,259,560 5,733,904 141,993,464
Consumer 4,405,042 88,696 4,493,738 4,868,909 139,966 5,008,875
1,285,819,500 164,986,317 1,450,805,817 1,177,232,361 188,880,903 1,366,113,264
Allowance for loan losses (5,807,254 ) (104,588 ) (5,911,842 ) (6,084,478 ) (110,991 ) (6,195,469 )
Deferred loan costs, net 1,679,274 — 1,679,274 1,257,411 — 1,257,411
$ 1,281,691,520 $ 164,881,729 $ 1,446,573,249 $ 1,172,405,294 $ 188,769,912 $ 1,361,175,206
(1) As a result of the acquisitions of Maryland Bankcorp, Inc. (“Maryland Bankcorp”), the parent company of Maryland Bank & Trust Company, N.A. (“MB&T”), in April 2011, WSB Holdings Inc., the parent company of The Washington Savings Bank (“WSB”), in May 2013, and Regal Bancorp, Inc. (“Regal”), the parent company of Regal Bank & Trust (“Regal Bank), in December 2015, we have segmented the portfolio into two components, “Legacy” loans originated by Old Line Bank and “Acquired” loans acquired from MB&T, WSB and Regal Bank. Credit Policies and Administration We have adopted a comprehensive lending policy,
which includes stringent underwriting standards for all types of loans. We have designed our underwriting standards to promote
a complete banking relationship rather than a transactional relationship. In an effort to manage risk, prior to funding, the loan
committee consisting of the Executive Officers and seven members of the Board of Directors must approve by a majority vote all
credit decisions in excess of a lending officer’s lending authority. Management believes that it employs experienced
lending officers, secures appropriate collateral and carefully monitors the financial condition of its borrowers and loan concentrations. In addition to the internal business processes
employed in the credit administration area, Old Line Bank retains an outside independent firm to review the loan portfolio. This
firm performs a detailed annual review and an interim update. We use the results of the firm’s report to validate our internal
ratings and we review the commentary on specific loans and on our loan administration activities in order to improve our operations. Commercial Real Estate Loans We finance commercial real estate for our clients,
for owner occupied and investment properties, hospitality and land acquisition and development. Commercial real estate loans totaled
$1.0 billion and $953.9 million at June 30, 2017 and December 31, 2016, respectively. This lending has involved loans secured
by owner-occupied commercial buildings for office, storage and warehouse space, as well as non-owner occupied commercial buildings.
Our underwriting criteria for commercial real estate loans include maximum loan-to-value ratios, debt coverage ratios, secondary
sources of repayments, guarantor requirements, net worth requirements and quality of cash flows. Loans secured by commercial real
estate may be large in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments
on such loans are often dependent on successful operation or management of the properties. We will generally finance owner occupied
commercial real estate that does not exceed loan to value of 80% and investor real estate at a maximum loan to value of 75%. Commercial real estate lending entails significant
risks. Risks inherent in managing our commercial real estate portfolio relate to sudden or gradual drops in property values as
well as changes in the economic climate that may detrimentally impact the borrower’s ability to repay. We monitor the financial
condition and operating performance of the borrower through a review of annual tax returns and updated financial statements. In
addition, we meet with the borrower and/or perform site visits as required. At June 30, 2017, we had approximately $164.3
million of commercial real estate loans outstanding to the hospitality industry. An individual review of these loans indicates
that they generally have a low loan to value, more than acceptable existing or projected cash flow, are to experienced operators
and are generally dispersed throughout the region. Residential Real Estate Loans We offer a variety of consumer oriented residential
real estate loans including home equity lines of credit, home improvement loans and first or second mortgages on owner occupied
and investment properties. Our residential loan portfolio amounted to $278.0 million and $265.2 million at June 30, 2017 and
December 31, 2016, respectively. Although most of these loans are in our market area, the diversity of the individual loans in
the portfolio reduces our potential risk. Usually, we secure our residential real estate loans with a security interest in the
borrower’s primary or secondary residence with a loan to value not exceeding 85%. Our initial underwriting includes an analysis
of the borrower’s debt/income ratio which generally may not exceed 43%, collateral value, length of employment and prior
credit history. A credit score of 660 is required. We do not originate any subprime residential real estate loans. This segment of our portfolio also consists
of funds advanced for construction of custom single family residences homes (where the home buyer is the borrower) and financing
to builders for the construction of pre-sold homes and multi-family housing. These loans generally have short durations, meaning
maturities typically of twelve months or less. Old Line Bank limits its construction lending risk through adherence to established
underwriting procedures. These loans generally have short durations, meaning maturities typically of twelve months or less. Residential
houses, multi-family dwellings and commercial buildings under construction and the underlying land for which the loan was obtained
secure the construction loans. The vast majority of these loans are concentrated in our market area. Construction lending also entails significant
risk. These risks generally involve larger loan balances concentrated with single borrowers with funds advanced upon the security
of the land or the project under construction. An appraisal of the property estimates the value of the project “as is and
as if” completed. An appraisal of the property estimates the value of the project prior to completion of construction. Thus,
initial funds are advanced based on the current value of the property with the remaining construction funds advanced under a budget
sufficient to successfully complete the project within the “as completed” loan to value. To further mitigate the risks,
we generally limit loan amounts to 80% or less of appraised values and obtain first lien positions on the property. We generally only offer real estate construction
financing only to experienced builders, commercial entities or individuals who have demonstrated the ability to obtain a permanent
loan “take-out” (conversion to a permanent mortgage upon completion of the project). We also perform a complete analysis
of the borrower and the project under construction. This analysis includes a review of the cost to construct, the borrower’s
ability to obtain a permanent “take-out” the cash flow available to support the debt payments and construction costs
in excess of loan proceeds, and the value of the collateral. During construction, we advance funds on these loans on a percentage
of completion basis. We inspect each project as needed prior to advancing funds during the term of the construction loan. We may
provide permanent financing on the same projects for which we have provided the construction financing. We also offer fixed rate home improvement loans.
Our home equity and home improvement loan portfolio gives us a diverse client base. Although most of these loans are in our market
area, the diversity of the individual loans in the portfolio reduces our potential risk. Usually, we secure our home equity loans
and lines of credit with a security interest in the borrower’s primary or secondary residence. Under our loan approval policy, all residential
real estate loans approved must comply with federal regulations. Generally, we will make residential mortgage loans in amounts
up to the limits established by Fannie Mae and Freddie Mac for secondary market resale purposes. Currently this amount for single-family
residential loans currently varies from $424,100 up to a maximum of $636,150 for certain high-cost designated areas. We also make
residential mortgage loans up to limits established by the Federal Housing Administration, which currently is $636,150. The Washington,
D.C. and Baltimore areas are both considered high-cost designated areas. We will, however, make loans in excess of these amounts
if we believe that we can sell the loans in the secondary market or that the loans should be held in our portfolio. For loans sold
in the secondary market, we typically require a credit score or 640, with some exceptions provided we receive an approval recommendation
from FannieMae, FreddieMac or FHA’s automated underwriting approval system. For Veteran Administration loans, we require
a minimum score of 620. Loans sold in the secondary market are sold to investors on a servicing released basis and recorded
as loans as held-for-sale. The premium is recorded in income on marketable loans in non-interest income, net of commissions
paid to the loan officers. Commercial and Industrial Lending Our commercial and industrial lending consists
of lines of credit, revolving credit facilities, accounts receivable financing, term loans, equipment loans, Small Business Administration
(“SBA”) loans, standby letters of credit and unsecured loans. We originate commercial loans for any business purpose
including the financing of leasehold improvements and equipment, the carrying of accounts receivable, general working capital,
and acquisition activities. We have a diverse client base and we do not have a concentration of these types of loans in any specific
industry segment. We generally secure commercial business loans with accounts receivable, equipment, deeds of trust and other collateral
such as marketable securities, cash value of life insurance and time deposits at Old Line Bank. Commercial business loans have a higher degree
of risk than residential mortgage loans because the availability of funds for repayment generally depends on the success of the
business. They may also involve high average balances, increased difficulty monitoring and a high risk of default. To help manage
this risk, we typically limit these loans to proven businesses and we generally obtain appropriate collateral and personal guarantees
from the borrower’s principal owners and monitor the financial condition of the business. For loans in excess of $250,000,
monitoring generally includes a review of the borrower’s annual tax returns and updated financial statements. Consumer Installment Lending We offer various types of secured and unsecured
consumer loans. We make consumer loans for personal, family or household purposes as a convenience to our customer base. Consumer
loans, however, are not a focus of our lending activities. The underwriting standards for consumer loans include a determination
of the applicant’s payment history on other debts and an assessment of his or her ability to meet existing obligations and
payments on the proposed loan. As a general guideline, a consumer’s total debt service should not exceed 40% of his or her
gross income. Consumer loans may present greater credit risk
than residential mortgage loans because many consumer loans are unsecured or rapidly depreciating assets secure these loans. Repossessed
collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because
of the greater likelihood of damage, loss or depreciation. Consumer loan collections depend on the borrower’s continuing
financial stability. If a borrower suffers personal financial difficulties, the consumer may not repay the loan. Also, various
federal and state laws, including bankruptcy and insolvency laws, may limit the amount we can recover on such loans. Concentrations of Credit Most of our lending activity occurs within the
state of Maryland within the suburban Washington, D.C. market area in Anne Arundel, Calvert, Charles, Montgomery, Prince George’s
and St. Mary’s Counties. The majority of our loan portfolio consists of commercial real estate loans and residential
real estate loans. We also have a presence in Baltimore County and Carroll County, Maryland due to the Regal acquisition. Non-Accrual and Past Due Loans We consider loans past due if the borrower has
not paid the required principal and interest payments when due under the original or modified terms of the promissory note and
place a loan on non-accrual status when the payment of principal or interest has become 90 days past due. When we classify
a loan as non-accrual, we no longer accrue interest on such loan and we reverse any interest previously accrued but not collected.
We will generally restore a non-accrual loan to accrual status when the borrower brings delinquent principal and interest payments
current and we expect to collect future monthly principal and interest payments. We recognize interest on non-accrual legacy loans
only when received. We originally recorded purchased, credit-impaired loans at fair value upon acquisition, and an accretable yield
is established and recognized as interest income on purchased loans to the extent subsequent cash flows support the estimated accretable
yield. Purchased, credit-impaired loans that perform consistently with the accretable yield expectations are not reported as non-accrual
or nonperforming. However, purchased, credit-impaired loans that do not continue to perform according to accretable yield expectations
are considered impaired, and presented as non-accrual and nonperforming. Currently, management expects to fully collect the carrying
value of acquired, credit-impaired loans. The table below presents an age analysis of the loans held for investment
portfolio at June 30, 2017 and December 31, 2016. Age Analysis of Past Due Loans
June 30, 2017 December 31, 2016
Legacy Acquired Total Legacy Acquired Total
Current $ 1,279,091,477 $ 160,607,927 $ 1,439,699,404 $ 1,167,380,870 $ 185,631,054 $ 1,353,011,924
Accruing past due loans:
30-89 days past due
Commercial Real Estate:
Owner Occupied 4,864,845 717,930 5,582,775 2,799,802 — 2,799,802
Investment — 769,539 769,539 — 794,037 794,037
Residential Real Estate:
First Lien-Investment 461,119 515,168 976,287 517,498 397,944 915,442
First Lien-Owner Occupied 233,891 1,134,676 1,368,567 — 879,718 879,718
HELOC and Jr. Liens 136,820 — 136,820 99,946 — 99,946
Commercial and Industrial 353,665 — 353,665 325,161 — 325,161
Consumer — 550 550 — — —
Total 30-89 days past due 6,050,340 3,137,863 9,188,203 3,742,407 2,071,699 5,814,106
90 or more days past due
Commercial Real Estate:
Owner Occupied — — — — 634,290 634,290
Residential Real Estate:
First Lien-Owner Occupied — 3,360 3,360 — 250,000 250,000
Commercial 19,159 — 19,159 — — —
Consumer — — — 19,242 — 19,242
Total 90 or more days past due 19,159 3,360 22,519 19,242 884,290 903,532
Total accruing past due loans 6,069,499 3,141,223 9,210,722 3,761,649 2,955,989 6,717,638
Commercial Real Estate:
Owner Occupied — 225,432 225,432 2,370,589 — 2,370,589
Hospitality — — — 1,346,736 — 1,346,736
Land and A&D — 192,382 192,382 77,395 194,567 271,962
Residential Real Estate:
First Lien-Investment 233,759 — 233,759 312,061 99,293 411,354
First Lien-Owner Occupied 222,237 819,353 1,041,590 222,237 — 222,237
Commercial and Industrial 202,528 — 202,528 1,760,824 — 1,760,824
Non-accruing loans: 658,524 1,237,167 1,895,691 6,089,842 293,860 6,383,702
Total Loans $ 1,285,819,500 $ 164,986,317 $ 1,450,805,817 $ 1,177,232,361 $ 188,880,903 $ 1,366,113,264 We consider all nonperforming loans and troubled
debt restructurings (“TDRs”) to be impaired. We do not recognize interest income on nonperforming loans during the
time period that the loans are nonperforming. We only recognize interest income on nonperforming loans when we receive payment
in full for all amounts due of all contractually required principle and interest, and the loan is current with its contractual
terms. The tables below present our impaired loans at and for the periods ended June 30, 2017 and December 31, 2016.
Impaired at June 30, 2017
Three months June 30, 2017 Six Months June 30, 2017
Unpaid Average Interest Average Interest
Principal Recorded Related Recorded Income Recorded Income
Balance Investment Allowance Investment Recognized Investment Recognized
Legacy
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied $ 1,825,757 $ 1,825,757 $ — $ 1,825,757 $ 19,303 $ 1,967,633 $ 32431
Investment 1,183,812 1,183,812 — 1,183,812 9,070 1,196,978 26,001
Residential Real Estate:
First Lien-Investment 41,258 41,258 — 41,258 — 41,258 —
First Lien-Owner Occupied 222,237 222,237 — 222,237 — 222,237 —
Commercial 405,368 405,368 — 405,368 3,700 345,972 23,130
With an allowance recorded:
Commercial Real Estate:
Owner Occupied — — — — —
Investment 601,535 601,535 28,803 601,535 7,739 605,929 15,364
Residential Real Estate:
First Lien-Investment 192,501 192,501 20,263 192,501 — 192,501 —
Commercial 300,234 300,234 300,234 300,234 1,255 300,806 2,493
Total legacy impaired 4,772,702 4,772,702 349,300 4,772,702 41,067 4,873,314 99,419
Acquired(1)
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied 252,687 252,687 — 252,687 — 252,743 2,155
Residential Real Estate:
First Lien-Owner Occupied 1,581,891 1,469,632 — 1,581,653 8,526 1,587,209 21,844
First Lien-Investment 132,715 71,348 — 132,715 1,106 133,367 2,194
Land and A&D 334,271 45,000 — 334,271 — 334,271 —
With an allowance recorded:
Commercial Real Estate:
Land and A&D 150,430 150,430 80,072 155,611 — 155,780 823
Commercial 74,197 74,197 24,516 73,898 948 75,077 1900
Total acquired impaired 2,526,191 2,063,294 104,588 2,530,835 10,580 2,538,447 28,916
Total impaired $ 7,298,893 $ 6,835,996 $ 453,888 $ 7,303,537 $ 51,647 $ 7,411,761 $ 128,335
(1) Generally accepted accounting principles require that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not performing according to their contractual terms and meet the definition of an impaired loan. Although we do not accrue interest income at the contractual rate on these loans, we do recognize an accretable yield as interest income to the extent such yield is supported by cash flow analysis of the underlying loans.
Impaired Loans
December 31, 2016
Unpaid Average Interest
Principal Recorded Related Recorded Income
Balance Investment Allowance Investment Recognized
Legacy
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied $ 566,973 $ 566,973 $ — $ 1,223,360 $ 12,759
Investment 1,212,771 1,212,771 — 1,208,240 54,531
Residential Real Estate:
First Lien-Owner Occupied 222,237 222,237 — 243,699 5,440
Commercial 843,809 843,809 — 3,338,295 3,761
With an allowance recorded:
Commercial Real Estate:
Owner Occupied 2,048,989 2,048,989 443,489 6,605,858 50,348
Investment 610,485 610,485 33,335 610,373 46,550
Hospitality 1,346,736 1,346,736 134,674 4,199,162 20,959
Land and A&D 77,395 77,395 15,860 82,587 4,729
Residential Real Estate:
First Lien-Owner Occupied 312,061 312,061 45,505 547,024 9,348
Commercial 1,016,479 1,016,479 609,152 1,976,689 4,476
Total legacy impaired 8,257,935 8,257,935 1,282,015 20,035,287 212,901
Acquired(1)
With no related allowance recorded:
Commercial Real Estate:
Land and A&D 255,716 91,669 — 255,661 13,686
Residential Real Estate:
First Lien-Owner Occupied 662,835 662,835 — 1,408,689 19,899
First Lien-Investment 292,349 171,348 — 233,133 4,383
Land and A&D 334,271 45,000 — 334,271 —
With an allowance recorded:
Commercial Real Estate:
Land and A&D 151,634 151,634 83,784 161,622 5,264
Commercial 76,243 76,243 27,207 83,049 3,992
Total acquired impaired 1,773,048 1,198,729 110,991 2,476,425 47,224
Total impaired $ 10,030,983 $ 9,456,664 $ 1,393,006 $ 22,511,712 $ 260,125
(1) Generally accepted accounting principles require that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not performing according to their contractual terms and meet the definition of an impaired loan. Although we do not accrue interest income at the contractual rate on these loans, we do recognize an accretable yield as interest income to the extent such yield is supported by cash flow analysis of the underlying loans. We consider a loan a TDR when we conclude that
both of the following conditions exist: the restructuring constitutes a concession and the debtor is experiencing financial difficulties.
Restructured loans at June 30, 2017 consisted of eight loans for $2.8 million compared to seven loans at December 31, 2016 for
$897 thousand. The following table includes the recorded investment
in and number of modifications of TDRs for the three and six months ended June 30, 2017 and 2016. We report the recorded investment
in loans prior to a modification and also the recorded investment in the loans after the loans were restructured. Reductions in
the recorded investment are primarily due to the partial charge-off of the principal balance prior to the modification. We had
no loans that were modified as a TDR that defaulted within the three and six month periods ending June 30, 2017 or 2016.
Loans Modified as a TDR for the three months ended
June 30, 2017 June 30, 2016
Pre- Post Pre- Post
Modification Modification Modification Modification
Outstanding Outstanding Outstanding Outstanding
Troubled Debt Restructurings— # of Recorded Recorded # of Recorded Recorded
(Dollars in thousands) Contracts Investment Investment Contracts Investment Investment
Legacy
— — — — — —
Residential Real Estate Non-Owner Occupied — — — — — —
Commercial — — — — — —
Total legacy TDR's — — — — — —
Acquired
— — — — — —
Residential Real Estate Non-Owner Occupied — — — — — —
Commercial — — — — — —
Total acquired TDR's — — — — — —
Total Troubled Debt Restructurings — $ — $ — — $ — $ —
Loans Modified as a TDR for the six months ended
June 30, 2017 June 30, 2016
Pre- Post Pre- Post
Modification Modification Modification Modification
Outstanding Outstanding Outstanding Outstanding
Troubled Debt Restructurings— # of Recorded Recorded # of Recorded Recorded
(Dollars in thousands) Contracts Investment Investment Contracts Investment Investment
Legacy
1 1,596,740 1,584,913 — — —
Commercial 1 414,324 405,328 — — —
Total legacy TDR's 2 2,011,064 1,990,241 — — —
Acquired
— — — 1 256,669 91,929
Residential Real Estate Non-Owner Occupied — — — 1 136,173 66,453
Total acquired TDR's — — — 2 392,842 158,382
Total Troubled Debt Restructurings 2 $ 2,011,064 $ 1,990,241 2 $ 392,842 $ 158,382 Acquired impaired loans The following table documents changes in the
accretable (premium) discount on acquired impaired loans during the six months ended June 30, 2017 and 2016, along with the outstanding
balances and related carrying amounts for the beginning and end of those respective periods.
June 30, 2017 June 30, 2016
Balance at beginning of period $ (22,980 ) $ 276,892
Accretion of fair value discounts (51,722 ) (44,967 )
Payoff of acquired loans — (390,990 )
Reclassification from non-accretable discount 52,807 352,714
Balance at end of period $ (21,895 ) $ 193,649
Contractually
Required Payments
Receivable Carrying Amount
At June 30, 2017 $ 8,311,088 $ 6,643,878
At December 31, 2016 9,597,703 7,558,415
At June 30, 2016 12,798,858 10,099,810
At December 31, 2015 14,875,352 10,675,943 Credit Quality Indicators We review the adequacy of the allowance for
loan losses at least quarterly. We base the evaluation of the adequacy of the allowance for loan losses upon loan categories. We
categorize loans as residential real estate loans, commercial real estate loans, commercial loans and consumer loans. We further
divide commercial real estate loans by owner occupied, investment, hospitality and land acquisition and development. We also divide
residential real estate by owner occupied, investment, land acquisition and development and junior liens. All categories are divided
by risk rating and loss factors and weighed by risk rating to determine estimated loss amounts. We evaluate delinquent loans and
loans for which management has knowledge about possible credit problems of the borrower or knowledge of problems with collateral
separately and assign loss amounts based upon the evaluation. We determine loss ratios for all loans based
upon a review of the three year loss ratio for the category and qualitative factors. We charge off loans that management has identified
as losses. We consider suggestions from our external loan review firm and bank examiners when determining which loans to charge
off. We automatically charge off consumer loan accounts based on regulatory requirements. We partially charge off real estate loans
that are collateral dependent based on the value of the collateral. If a loan that was previously rated a pass performing
loan, from our acquisitions, deteriorates subsequent to the acquisition, the subject loan will be assessed for risk and, if necessary,
evaluated for impairment. If the risk assessment rating is adversely changed and the loan is determined to not be impaired, the
loan will be placed in a migration category and the credit mark established for the loan will be compared to the general reserve
allocation that would be applied using the current allowance for loan losses formula for General Reserves. If the credit mark exceeds
the allowance for loan losses formula for General Reserves, there will be no change to the allowance for loan losses. If the credit
mark is less than the current allowance for loan losses formula for General Reserves, the allowance for loan losses will be increased
by the amount of the shortfall by a provision recorded in the income statement. If the loan is deemed impaired, the loan will be
subject to evaluation for loss exposure and a specific reserve. If the estimate of loss exposure exceeds the credit mark, the allowance
for loan losses will be increased by the amount of the excess loss exposure through a provision. If the credit mark exceeds the
estimate of loss exposure there will be no change to the allowance for loan losses. If a loan from the acquired loan portfolio
is carrying a specific credit mark and a current evaluation determines that there has been an increase in loss exposure, the allowance
for loan losses will be increased by the amount of the current loss exposure in excess of the credit mark. The following tables outline the class of loans by risk rating at
June 30, 2017 and December 31, 2016:
June 30, 2017 Legacy Acquired Total
Risk Rating
Pass(1 - 5)
Commercial Real Estate:
Owner Occupied $ 259,552,188 $ 40,967,683 $ 300,519,871
Investment 450,729,071 31,408,378 482,137,449
Hospitality 157,457,044 5,409,549 162,866,593
Land and A&D 42,304,057 5,269,440 47,573,497
Residential Real Estate:
First Lien-Investment 80,284,280 19,451,885 99,736,165
First Lien-Owner Occupied 61,193,426 36,843,774 98,037,200
Land and A&D 40,849,195 4,076,796 44,925,991
HELOC and Jr. Liens 22,692,006 2,352,459 25,044,465
Commercial 146,413,343 4,692,996 151,106,339
Consumer 4,405,042 88,696 4,493,738
1,265,879,652 150,561,656 1,416,441,308
Special Mention(6)
Commercial Real Estate:
Owner Occupied 4,503,876 3,538,877 8,042,753
Investment 1,083,096 1,057,944 2,141,040
Hospitality — 1,404,556 1,404,556
Land and A&D 2,437,963 138,031 2,575,994
Residential Real Estate:
First Lien-Investment 491,815 1,051,720 1,543,535
First Lien-Owner Occupied 304,160 1,852,090 2,156,250
Land and A&D 2,441,574 678,778 3,120,352
Commercial 1,420,075 56,868 1,476,943
12,682,559 9,778,864 22,461,423
Substandard(7)
Commercial Real Estate:
Owner Occupied 2,629,993 1,417,438 4,047,431
Investment 1,785,347 390,679 2,176,026
Land and A&D — 45,000 45,000
Residential Real Estate:
First Lien-Investment 509,258 356,767 866,025
First Lien-Owner Occupied 222,237 2,105,131 2,327,368
Land and A&D — 257,114 257,114
Commercial 2,110,454 73,668 2,184,122
7,257,289 4,645,797 11,903,086
Doubtful(8) — — —
Loss(9) — — —
Total $ 1,285,819,500 $ 164,986,317 $ 1,450,805,817
At December 31, 2016 Legacy Acquired Total
Risk Rating
Pass(1 - 5)
Commercial Real Estate:
Owner Occupied $ 231,985,682 $ 48,069,046 $ 280,054,728
Investment 408,875,014 35,130,038 444,005,052
Hospitality 140,265,123 9,781,737 150,046,860
Land and A&D 48,817,229 5,815,572 54,632,801
Residential Real Estate:
First Lien-Investment 70,980,640 21,898,603 92,879,243
First Lien-Owner Occupied 54,201,816 39,011,487 93,213,303
Land and A&D 36,910,902 4,299,830 41,210,732
HELOC and Jr. Liens 24,385,215 2,633,718 27,018,933
Commercial 132,518,224 5,460,820 137,979,044
Consumer 4,868,909 139,966 5,008,875
1,153,808,754 172,240,817 1,326,049,571
Special Mention(6)
Commercial Real Estate:
Owner Occupied 2,799,801 4,572,278 7,372,079
Investment 400,228 1,776,837 2,177,065
Hospitality — 1,411,689 1,411,689
Land and A&D 2,506,068 155,241 2,661,309
Residential Real Estate:
First Lien-Investment 577,767 1,248,453 1,826,220
First Lien-Owner Occupied 308,552 1,882,182 2,190,734
Land and A&D 2,678,925 791,399 3,470,324
Commercial 456,093 197,383 653,476
9,727,434 12,035,462 21,762,896
Substandard(7)
Commercial Real Estate:
Owner Occupied 3,434,990 1,209,289 4,644,279
Investment 4,737,465 780,929 5,518,394
Hospitality 1,346,736 — 1,346,736
Land and A&D — 45,000 45,000
Residential Real Estate:
First Lien-Investment 592,106 476,603 1,068,709
First Lien-Owner Occupied 222,237 1,550,098 1,772,335
Land and A&D 77,395 467,004 544,399
Commercial 3,285,244 75,701 3,360,945
Consumer — — —
13,696,173 4,604,624 18,300,797
Doubtful(8) — — —
Loss(9) — — —
Total $ 1,177,232,361 $ 188,880,903 $ 1,366,113,264 The following table details activity in the
allowance for loan losses by portfolio segment for the three and six month periods ended June 30, 2017 and 2016. Allocation of
a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
Commercial Residential
Three Months Ended June 30, 2017 Commercial Real Estate Real Estate Consumer Total
Beginning balance $ 1,233,152 $ 3,683,260 $ 684,541 $ 8,836 $ 5,609,789
Provision for loan losses 84,583 105,746 109,254 (20,667 ) 278,916
Recoveries 512 417 — 22,208 23,137
1,318,247 3,789,423 793,795 10,377 5,911,842
Loans charged off — — — — —
Ending Balance $ 1,318,247 $ 3,789,423 $ 793,795 $ 10,377 $ 5,911,842
Commercial Residential
Six Months Ended June 30, 2017 Commercial Real Estate Real Estate Consumer Total
Beginning balance $ 1,372,235 $ 3,990,152 $ 823,520 $ 9,562 $ 6,195,469
Provision for loan losses 514,972 238,360 (28,357 ) (5,568 ) 719,407
Recoveries 1,563 833 900 25,532 28,828
1,888,770 4,229,345 796,063 29,526 6,943,704
Loans charged off (570,523 ) (439,922 ) (2,268 ) (19,149 ) (1,031,862 )
Ending Balance $ 1,318,247 $ 3,789,423 $ 793,795 $ 10,377 $ 5,911,842
Amount allocated to:
Legacy Loans:
Individually evaluated for impairment $ 300,234 $ 28,803 $ 20,262 $ — $ 349,299
Other loans not individually evaluated 993,496 3,760,620 693,461 10,377 5,457,954
Acquired Loans:
Individually evaluated for impairment 24,517 — 80,072 — 104,589
Ending balance $ 1,318,247 $ 3,789,423 $ 793,795 $ 10,377 $ 5,911,842
Commercial Residential
Three Months Ended June 30, 2016 Commercial Real Estate Real Estate Consumer Total
Beginning balance $ 989,005 $ 3,801,163 $ 904,204 $ 11,485 $ 5,705,857
Provision for loan losses 14 |
