Loans | Loans A summary of the balances of loans follows (in thousands): March 31, 2016 December 31, 2015 Construction and Land Development $ 27,798 $ 22,082 Farmland and Agricultural Production 9,060 9,989 Residential 1-4 Family 139,208 135,864 Multifamily 31,511 34,272 Commercial Real Estate 378,304 381,098 Commercial and Industrial 181,142 179,623 Consumer and other 7,318 9,417 774,341 772,345 Net deferred loan fees (68 ) (26 ) Allowance for loan losses (11,335 ) (11,741 ) $ 762,938 $ 760,578 The following table presents the contractual aging of the recorded investment in past due and non-accrual loans by class of loans as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due and Still Accruing Total Accruing Loans Non-accrual Loans Total Loans Construction and Land Development $ 27,798 $ — $ — $ — $ 27,798 $ — $ 27,798 Farmland and Agricultural Production 9,060 — — — 9,060 — 9,060 Residential 1-4 Family 138,919 203 74 — 139,196 12 139,208 Multifamily 31,511 — — — 31,511 — 31,511 Commercial Real Estate Retail 95,578 — — — 95,578 — 95,578 Office 59,210 — — — 59,210 — 59,210 Industrial and Warehouse 64,106 — — — 64,106 — 64,106 Health Care 29,333 — — — 29,333 — 29,333 Other 129,988 — — — 129,988 89 130,077 Commercial and Industrial 179,097 — — — 179,097 2,045 181,142 Consumer and other 7,318 — — — 7,318 — 7,318 Total $ 771,918 $ 203 $ 74 $ — $ 772,195 $ 2,146 $ 774,341 December 31, 2015 Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due and Still Accruing Total Accruing Loans Non-accrual Loans Total Loans Construction and Land Development $ 21,885 $ — $ 197 $ — $ 22,082 $ — $ 22,082 Farmland and Agricultural Production 9,989 — — — 9,989 — 9,989 Residential 1-4 Family 135,632 182 — — 135,814 50 135,864 Multifamily 34,272 — — — 34,272 — 34,272 Commercial Real Estate Retail 95,570 — — — 95,570 — 95,570 Office 55,151 — — — 55,151 — 55,151 Industrial and Warehouse 65,536 — — — 65,536 — 65,536 Health Care 29,985 — — — 29,985 — 29,985 Other 134,762 — — — 134,762 94 134,856 Commercial and Industrial 178,289 — — 67 178,356 1,267 179,623 Consumer and other 9,417 — — — 9,417 — 9,417 Total $ 770,488 $ 182 $ 197 $ 67 $ 770,934 $ 1,411 $ 772,345 As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt and comply with various terms of their loan agreements. The Company considers current financial information, historical payment experience, credit documentation, public information and current economic trends. Generally, all sizable credits receive a financial review no less than annually to monitor and adjust, if necessary, the credit’s risk profile. Credits classified as watch generally receive a review more frequently than annually. For special mention, substandard, and doubtful credit classifications, the frequency of review is increased to no less than quarterly in order to determine potential impact on credit loss estimates. The Company categorizes loans into the following risk categories based on relevant information about the ability of borrowers to service their debt: Pass - A pass asset is well protected by the current worth and paying capacity of the borrower (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Pass assets also include certain assets considered watch, which are still protected by the worth and paying capacity of the borrower but deserve closer attention and a higher level of credit monitoring. Special Mention - A special mention asset, or risk rating of 5, has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard - A substandard asset, or risk rating of 6 or 7, is an asset with a well-defined weakness that jeopardizes repayment, in whole or in part, of the debt. These credits are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These assets are characterized by the distinct possibility that the Company will or has sustained some loss of principal and/or interest if the deficiencies are not corrected. Loans rated a 6 are still on accrual status, while loans rated at 7 are placed on nonaccrual. Doubtful - An asset that has all the weaknesses, or risk rating of 8, inherent in the substandard classification, with 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. These credits have a high probability for loss, yet because certain important and reasonably specific pending factors may work toward the strengthening of the asset, its classification of loss is deferred until its more exact status can be determined. Loss - An asset, or portion thereof, classified as loss, or risk rated 9, is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not necessarily mean that an asset has no recovery or salvage value but that it is not practical or desirable to defer writing off this basically worthless asset even though a partial recovery may occur in the future. There was no balance to report at March 31, 2016 and December 31, 2015 . Residential 1-4 family, consumer and other loans are assessed for credit quality based on the contractual aging status of the loan and payment activity. In certain cases, based upon payment performance, the loan being related with another commercial type loan or for other reasons, a loan may be categorized into one of the risk categories noted above. Such assessment is completed at the end of each reporting period. The following tables present the risk category of loans evaluated by internal asset classification based on the most recent analysis performed and the contractual aging as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 24,116 $ 3,682 $ — $ — $ 27,798 Farmland and Agricultural Production 9,060 — — — 9,060 Multifamily 30,844 667 — — 31,511 Commercial Real Estate Retail 87,723 — 7,855 — 95,578 Office 59,210 — — — 59,210 Industrial and Warehouse 63,281 825 — — 64,106 Health Care 29,333 — — — 29,333 Other 124,407 2,496 3,162 12 130,077 Commercial and Industrial 167,810 8,359 4,203 770 181,142 Total $ 595,784 $ 16,029 $ 15,220 $ 782 $ 627,815 March 31, 2016 Performing Non-performing* Total Residential 1-4 Family $ 139,196 $ 12 $ 139,208 Consumer and other 7,318 — 7,318 Total $ 146,514 $ 12 $ 146,526 December 31, 2015 Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 19,450 $ 2,632 $ — $ — $ 22,082 Farmland and Agricultural Production 9,989 — — — 9,989 Multifamily 33,598 674 — — 34,272 Commercial Real Estate Retail 87,665 — 7,905 — 95,570 Office 55,151 — — — 55,151 Industrial and Warehouse 64,699 837 — — 65,536 Health Care 29,985 — — — 29,985 Other 128,988 2,664 3,192 12 134,856 Commercial and Industrial 173,324 4,714 355 1,230 179,623 Total $ 602,849 $ 11,521 $ 11,452 $ 1,242 $ 627,064 December 31, 2015 Performing Non-performing* Total Residential 1-4 Family $ 135,814 $ 50 $ 135,864 Consumer and other 9,417 — 9,417 Total $ 145,231 $ 50 $ 145,281 * Non-performing loans include those on non-accrual status and those past due 90 days or more and still on accrual. The following table provides additional detail of the activity in the allowance for loan losses, by portfolio segment, for the three months ended March 31, 2016 and 2015 (in thousands): March 31, 2016 Construction and Land Development Farmland and Agricultural Production Residential 1-4 Family Multifamily Commercial Real Estate Commercial and Industrial Consumer and other Total Allowance for loan losses: Beginning balance $ 813 $ 43 $ 1,370 $ 141 $ 4,892 $ 4,286 $ 196 $ 11,741 Provision for loan losses (449 ) (6 ) (126 ) (15 ) (376 ) 1,054 (82 ) — Loans charged-off — — (9 ) — — (496 ) (1 ) (506 ) Recoveries of loans previously charged-off 17 — 27 — 8 48 — 100 Ending balance $ 381 $ 37 $ 1,262 $ 126 $ 4,524 $ 4,892 $ 113 $ 11,335 March 31, 2015 Allowance for loan losses: Beginning balance $ 758 $ 459 $ 1,199 $ 67 $ 6,828 $ 4,296 $ 298 $ 13,905 Provision for loan losses (44 ) (20 ) (131 ) 30 325 (147 ) (13 ) — Loans charged-off — — (72 ) — — (262 ) (1 ) (335 ) Recoveries of loans previously charged-off 17 — 150 — 9 30 2 208 Ending balance $ 731 $ 439 $ 1,146 $ 97 $ 7,162 $ 3,917 $ 286 $ 13,778 The following table presents the balance in the allowance for loan losses and the unpaid principal balance of loans by portfolio segment and based on impairment method as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Construction and Land Development Farmland and Agricultural Production Residential 1-4 Family Multifamily Commercial Real Estate Commercial and Industrial Consumer and other Total Period-ended amount allocated to: Individually evaluated for impairment $ — $ — $ 29 $ — $ — $ 1,196 $ — $ 1,225 Collectively evaluated for impairment 381 37 1,233 126 4,524 3,696 113 10,110 Ending balance $ 381 $ 37 $ 1,262 $ 126 $ 4,524 $ 4,892 $ 113 $ 11,335 Loans: Individually evaluated for impairment $ — $ — $ 1,615 $ — $ 3,831 $ 4,537 $ — $ 9,983 Collectively evaluated for impairment 27,798 9,060 137,593 31,511 374,473 176,605 7,318 764,358 Ending balance $ 27,798 $ 9,060 $ 139,208 $ 31,511 $ 378,304 $ 181,142 $ 7,318 $ 774,341 December 31, 2015 Period-ended amount allocated to: Individually evaluated for impairment $ — $ — $ 30 $ — $ — $ 441 $ — $ 471 Collectively evaluated for impairment 813 43 1,340 141 4,892 3,845 196 11,270 Ending balance $ 813 $ 43 $ 1,370 $ 141 $ 4,892 $ 4,286 $ 196 $ 11,741 Loans: Individually evaluated for impairment $ — $ — $ 1,661 $ — $ 4,381 $ 3,777 $ — $ 9,819 Collectively evaluated for impairment 22,082 9,989 134,203 34,272 376,717 175,846 9,417 762,526 Ending balance $ 22,082 $ 9,989 $ 135,864 $ 34,272 $ 381,098 $ 179,623 $ 9,417 $ 772,345 The following tables present additional detail regarding impaired loans, segregated by class, as of and for the three months ended March 31, 2016 and year ended December 31, 2015 (dollars in thousands). The unpaid principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment represents customer balances net of any partial charge-offs recognized on the loans. The interest income recognized column represents all interest income reported after the loan became impaired. March 31, 2016 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized With no related allowance recorded: Construction and Land Development $ — $ — $ — $ — $ — Farmland and Agricultural Production — — — — — Residential 1-4 Family 1,189 1,149 — 1,171 15 Multifamily — — — — — Commercial Real Estate Retail — — — — — Office — — — 247 — Industrial and Warehouse — — — — — Health Care — — — — — Other 3,896 3,831 — 3,859 31 Commercial and Industrial 4,377 3,298 — 3,214 37 Consumer and other — — — — — With an allowance recorded: Construction and Land Development — — — — — Farmland and Agricultural Production — — — — — Residential 1-4 Family 466 466 29 467 6 Multifamily — — — — — Commercial Real Estate Retail — — — — — Office — — — — — Industrial and Warehouse — — — — — Health Care — — — — — Other — — — — — Commercial and Industrial 1,239 1,239 1,196 943 — Consumer and other — — — — — Total $ 11,167 $ 9,983 $ 1,225 $ 9,901 $ 89 December 31, 2015 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized With no related allowance recorded: Construction and Land Development $ — $ — $ — $ — $ — Farmland and Agricultural Production — — — — — Residential 1-4 Family 1,232 1,193 — 1,280 61 Multifamily — — — — — Commercial Real Estate Retail — — — — — Office 494 494 — 502 26 Industrial and Warehouse — — — 1,441 — Health Care — — — — — Other 3,952 3,887 — 5,015 127 Commercial and Industrial 3,331 3,131 — 3,640 130 Consumer and other — — — 4 — With an allowance recorded: Construction and Land Development — — — — — Farmland and Agricultural Production — — — — — Residential 1-4 Family 468 468 30 473 23 Multifamily — — — Commercial Real Estate — — Retail — — — — — Office — — — — — Industrial and Warehouse — — — — — Health Care — — — — — Other — — — 64 — Commercial and Industrial 1,109 646 441 491 — Consumer and other — — — — — Total $ 10,586 $ 9,819 $ 471 $ 12,910 $ 367 During the three months ended March 31, 2016 and 2015, there were no troubled debt restructurings added. Troubled debt restructurings that were accruing were $2.2 million and $2.7 million as of March 31, 2016 and December 31, 2015 , respectively. Troubled debt restructurings that were non-accruing were $89,000 and $94,000 as of March 31, 2016 and December 31, 2015 . The following presents a rollfoward activity of troubled debt restructurings (in thousands, except number of loans): Three Months ended March 31, 2016 Recorded Investment Number of Loans Balance, beginning $ 2,832 6 Additions to troubled debt restructurings — — Removal of troubled debt restructurings (519 ) (2 ) Charge-off related to troubled debt restructurings — — Transfers to other real estate owned — — Repayments and other reductions (17 ) — Balance, ending $ 2,296 4 Restructured loans are evaluated for impairment at each reporting date as part of the Company’s determination of the allowance for loan losses. |