| LOAN PORTFOLIO COMPOSITION | 5. LOAN PORTFOLIO COMPOSITION At June 30, 2016 and December 31, 2015, the composition of the Company’s loan portfolio is shown below.
June 30, 2016 December 31, 2015
Amount Percent Amount Percent
Real estate loans:
One-to-four family residential $ 45,994,916 24.4 % $ 47,395,344 24.6 %
Commercial 40,409,491 21.4 40,381,680 20.9
Agricultural 41,126,629 21.8 41,223,190 21.3
Home equity 11,203,055 5.9 11,691,545 6.1
Total real estate loans 138,734,091 73.5 140,691,759 72.9
Commercial loans 25,747,471 13.6 25,453,058 13.2
Agricultural loans 13,424,032 7.1 16,102,856 8.3
Consumer loans 14,021,513 7.4 13,741,093 7.1
Total loans receivable 191,927,107 101.6 195,988,766 101.5
Less:
Net deferred loan fees 17,967 0.0 29,293 0.0
Allowance for loan losses 2,958,565 1.6 2,919,594 1.5
Total loans receivable, net $ 188,950,575 100.0 % $ 193,039,879 100.0 % The Company believes that originating or purchasing sound loans are a necessary and desirable means of employing funds available for investment. Recognizing the Company’s obligations to its depositors and to the communities it serves, authorized personnel are expected to seek to develop and make sound, profitable loans that resources permit and that opportunity affords. The Company maintains lending policies and procedures designed to focus lending efforts on the types, locations, and duration of loans most appropriate for the business model and markets. The Company’s principal lending activities include the origination of one-to four-family residential mortgage loans, multi-family loans, commercial real estate loans, agricultural loans, home equity lines of credits, commercial business loans, and consumer loans. The primary lending market includes the Illinois counties of Morgan, Macoupin and Montgomery. Generally, loans are collateralized by assets, primarily real estate, of the borrowers and guaranteed by individuals. The loans are expected to be repaid from cash flows of the borrowers or from proceeds from the sale of selected assets of the borrowers. Loan originations are derived from a number of sources such as real estate broker referrals, existing customers, builders, attorneys and walk-in customers. Upon receipt of a loan application, a credit report is obtained to verify specific information relating to the applicant’s employment, income, and credit standing. In the case of a real estate loan, an appraisal of the real estate intended to secure the proposed loan is undertaken by an independent appraiser approved by the Company. A loan application file is first reviewed by a loan officer in the loan department who checks applications for accuracy and completeness, and verifies the information provided. The financial resources of the borrower and the borrower’s credit history, as well as the collateral securing the loan, are considered an integral part of each risk evaluation prior to approval. The board of directors has established individual lending authorities for each loan officer by loan type. Loans over an individual officer’s lending limit must be approved by the officers’ loan committee consisting of the chairman of the board, president, chief lending officer and all lending officers, which meets three times a week, and has lending authority up to $750,000 depending on the type of loan. Loans to borrowers with an aggregate principal balance over this limit, up to $1.0 million, must be approved by the directors’ loan committee, which meets weekly and consists of the chairman of the board, president, senior vice president, chief lending officer and at least two outside directors, plus all lending officers as non-voting members. The board of directors approves all loans to borrowers with an aggregate principal balance over $1.0 million. The board of directors ratifies all loans that are originated. Once the loan is approved, the applicant is informed and a closing date is scheduled. Loan commitments are typically funded within 30 days. If the loan is approved, the borrower must provide proof of fire and casualty insurance on the property serving as collateral which insurance must be maintained during the full term of the loan; flood insurance is required in certain instances. Title insurance or an attorney’s opinion based on a title search of the property is generally required on loans secured by real property. One-to-Four Family Mortgage Loans - Fixed rate one-to-four family residential mortgage loans are generally conforming loans, underwritten according to secondary market guidelines. The Company generally originates both fixed and adjustable rate mortgage loans in amounts up to the maximum conforming loan limits established by the Federal Housing Finance Agency. The Company originates for resale to Freddie Mac and the Federal Home Loan Bank fixed-rate one-to-four family residential mortgage loans with terms of 15 years or more. The fixed-rate mortgage loans amortize monthly with principal and interest due each month. Residential real estate loans often remain outstanding for significantly shorter periods than their contractual terms because borrowers may refinance or prepay loans at their option. The Company offers fixed-rate one-to-four family residential mortgage loans with terms of up to 30 years without prepayment penalty. The Company currently offers adjustable-rate mortgage loans for terms ranging up to 30 years. They generally offer adjustable-rate mortgage loans that adjust between one and five years on the anniversary date of origination. Interest rate adjustments are up to two hundred basis points per year, with a cap of up to six hundred basis points on interest rate increases over the life of the loan. In a rising interest rate environment, such rate limitations may prevent adjustable-rate mortgage loans from repricing to market interest rates, which would have an adverse effect on net interest income. In the low interest rate environment that has existed over the past five years, the adjustable-rate portfolio has repriced downward resulting in lower interest income from this portion of the loan portfolio. In addition, during this period borrowers have shown a preference for fixed-rate loans. The Company has used different interest indices for adjustable-rate mortgage loans in the past such as the average yield on U.S. Treasury securities, adjusted to a constant maturity of one year, three years or five years. The origination of fixed-rate mortgage loans versus adjustable-rate mortgage loans is monitored on an ongoing basis and is affected significantly by the level of market interest rates, customer preference, interest rate risk position and competitors’ loan products. Adjustable-rate mortgage loans make the loan portfolio more interest rate sensitive and provide an alternative for those borrowers who meet the underwriting criteria, but are unable to qualify for a fixed-rate mortgage. However, as the interest income earned on adjustable-rate mortgage loans varies with prevailing interest rates, such loans do not offer predictable cash flows in the same manner as long-term, fixed-rate loans. Adjustable-rate mortgage loans carry increased credit risk associated with potentially higher monthly payments by borrowers as general market interest rates increase. During periods of rising interest rates the risk of delinquencies and defaults on adjustable-rate mortgage
loans increases due to the upward adjustment of interest costs to the borrower, which may result in increased loan losses. Residential first mortgage loans customarily include due-on-sale clauses, which gives the Company the right to declare a loan immediately due and payable in the event that, among other things, the borrower sells or otherwise disposes of the underlying real property serving as collateral for the loan. Due-on-sale clauses are a means of imposing assumption fees and increasing the interest rate on the mortgage portfolio during periods of rising interest rates. When underwriting residential real estate loans, the Company reviews and verifies each loan applicant’s income and credit history. Management believes that stability of income and past credit history are integral parts in the underwriting process. Generally, the applicant’s total monthly mortgage payment, including all escrow amounts, is limited to 28% of the applicant’s total monthly income. In addition, total monthly obligations of the applicant, including mortgage payments, generally should not exceed 38% of total monthly income. Written appraisals are generally required on real estate property offered to secure an applicant’s loan. For one-to-four family real estate loans with loan to value ratios of over 80%, private mortgage insurance is generally required. Fire and casualty insurance is also required on all properties securing real estate loans. Title insurance, or an attorney’s title opinion, may be required, as circumstances warrant. The Company does not offer an “interest only” mortgage loan product on one-to-four family residential properties (where the borrower pays interest for an initial period, after which the loan converts to a fully amortizing loan). They also do not offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loan. The Company does not offer a “subprime loan” program (loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (traditionally defined as loans having less than full documentation). Commercial Real Estate Loans - Underwriting standards for commercial real estate loans include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The income approach is primarily utilized to determine whether income generated from the applicant’s business or real estate offered as collateral is adequate to repay the loan. There is an emphasis on the ratio of the property’s projected net cash flow to the loan’s debt service requirement (generally requiring a minimum
ratio of 120%). In underwriting a loan, the value of the real estate offered as collateral in relation to the proposed loan amount is considered. Generally, the loan amount cannot be greater than 80% of the value of the real estate. Written appraisals are usually obtained from either licensed or certified appraisers on all commercial real estate loans in excess of $250,000. Creditworthiness of the applicant is assessed by reviewing a credit report, financial statements and tax returns of the applicant, as well as obtaining other public records regarding the applicant. Loans secured by commercial real estate generally involve a greater degree of credit risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the effects of general economic conditions on income producing properties and the successful operation or management of the properties securing the loans. Furthermore, the repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related business and real estate property. If the cash flows from the project are reduced, the borrower’s ability to repay the loan may be impaired. Agricultural Real Estate Loans - Underwriting standards for agricultural real estate include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The income approach is primarily utilized to determine whether income generated from the applicant’s farm operation or real estate offered as collateral is adequate to repay the loan. We emphasize the ratio of the property’s projected cash flow to the loan’s debt service requirement (generally requiring a minimum ratio of 120%). In underwriting a loan, we consider the value of the real estate offered as collateral in relation to the proposed loan amount. Generally, the loan amount cannot be greater than 80% of the value of the real estate. We usually obtain written appraisals from either licensed or certified appraisers on all agricultural real estate loans in excess of $250,000. We assess the creditworthiness of the applicant by reviewing a credit report, financial statements and tax returns of the applicant, as well as obtaining other public records regarding the applicant. Loans secured by agricultural real estate generally involve a greater degree of credit risk than one-to-four family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the effects of general economic and market conditions on farm operations and the successful operation or management of the properties securing the loans. The repayment of loans secured by agricultural estate is typically dependent upon the successful operation of the farm and real estate property. If the cash flows are reduced, the borrower’s ability to repay the loan may be impaired. Home Equity Loans – Underwriting standards for home equity loans include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and additionally from any verifiable secondary income. We also consider the length of employment with the borrower’s present employer as well as the amount of time the borrower has lived in the local area. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount. Home equity loans entail greater risks than one-to-four family residential mortgage loans, which are secured by first lien mortgages. Collateral repossessed after a default may not provide an adequate source of repayment of the outstanding loan balance because of damage or depreciation in the value of the property or loss of equity to the first lien position. Further, home equity loan payments are dependent on the borrower’s continuing financial stability, and therefore are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Finally, the application of various Federal and state laws, including Federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans in the event of a default. Commercial Business Loans - Underwriting standards for commercial and agricultural business loans include a determination of the applicant’s ability to meet existing obligations and payments on the proposed loan from normal cash flows generated in the applicant’s business. The financial strength of each applicant is assessed through the review of financial statements and tax returns provided by the applicant. The creditworthiness of an applicant is derived from a review of credit reports as well as a search of public records. Business loans are periodically reviewed following origination. Financial
statements are requested at least annually and review them for substantial deviations or changes that might affect repayment of the loan. Loan officers also visit the premises of borrowers to observe the business premises, facilities, and personnel and to inspect the pledged collateral. Underwriting standards for business loans are different for each type of loan depending on the financial strength of the applicant and the value of collateral offered as security. Agricultural Business Loans - Underwriting standards for agricultural business loans include a determination of the applicant’s ability to meet existing obligations and payments on the proposed loan from normal cash flows generated in the applicant’s business. The financial strength of each applicant is assessed through the review of financial statements, pro-forma cash flow statements, and tax returns provided by the applicant. The creditworthiness of an applicant is derived from a review of credit reports as well as a search of public records. Financial statements are requested at least annually and reviewed for substantial deviations or changes that might affect repayment of the loan. Loan officers may also visit the premises of borrowers to observe the operation, facilities, equipment, and personnel and to inspect the pledged collateral. Underwriting standards for agricultural business loans are different for each type of loan depending on the financial strength of the applicant and the value of collateral offered as security. The repayment of agricultural business loans generally is dependent on the successful operation of a farm and can be adversely affected by fluctuations in crop prices, increase in interest rates, and changes in weather conditions. These developments may result in smaller harvests and less income for farmers which may adversely affect such borrower’s ability to repay a loan, and potentially result in an increase in the level of problem loans and loan losses in our agricultural portfolio. While not required, the majority of our agricultural business loans are covered by crop insurance, which provides protection against loss due to lower crop yields as a result of unfavorable weather conditions. Consumer Loans – Underwriting standards for consumer loans include a determination of the applicant’s credit history and an assessment of the applicant’s ability to meet existing obligations and payments on the proposed loan. The stability of the applicant’s monthly income may be determined by verification of gross monthly income from primary employment, and
additionally from any verifiable secondary income. We also consider the length of employment with the borrower’s present employer as well as the amount of time the borrower has lived in the local area. Creditworthiness of the applicant is of primary consideration; however, the underwriting process also includes a comparison of the value of the collateral in relation to the proposed loan amount. Consumer loans entail greater risks than one-to-four family residential mortgage loans, particularly consumer loans secured by rapidly depreciating assets such as automobiles or loans that are unsecured. In such cases, collateral repossessed after a default may not provide an adequate source of repayment of the outstanding loan balance because of damage, loss or depreciation. Further, consumer loan payments are dependent on the borrower’s continuing financial stability, and therefore are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Such events would increase our risk of loss on unsecured loans. Finally, the application of various Federal and state laws, including Federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans in the event of a default. The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of and for the periods ended June 30, 2016, June 30, 2015, and December 31, 2015.
June 30, 2016
Commercial Agricultural
1-4 Family Real Estate Real Estate Home Equity Commercial Agricultural Consumer Unallocated Total
Allowance for Loan Losses:
Beginning Balance, April 1, 2016 $ 864,863 $ 900,422 $ 202,004 $ 201,537 $ 345,975 $ 160,370 $ 161,474 $ 98,046 $ 2,934,691
Provision charged to expense (27,142 ) 10,337 3,629 (4,161 ) 26,196 2,293 19,485 (637 ) 30,000
Losses charged off (6,414 ) - - - - - (11,899 ) - (18,313 )
Recoveries 5,205 2,971 - 525 116 - 3,370 - 12,187
Ending balance, June 30, 2016 $ 836,512 $ 913,730 $ 205,633 $ 197,901 $ 372,287 $ 162,663 $ 172,430 $ 97,409 $ 2,958,565
Beginning Balance, January 1, 2016 $ 829,604 $ 917,526 $ 201,918 $ 149,253 $ 386,620 $ 163,346 $ 169,381 $ 101,946 $ 2,919,594
Provision charged to expense 24,501 (6,796 ) 3,715 47,598 (14,449 ) (683 ) 10,651 (4,537 ) 60,000
Losses charged off (26,879 ) - - - - - (11,899 ) - (38,778 )
Recoveries 9,286 3,000 - 1,050 116 - 4,297 - 17,749
Ending balance, June 30, 2016 $ 836,512 $ 913,730 $ 205,633 $ 197,901 $ 372,287 $ 162,663 $ 172,430 $ 97,409 $ 2,958,565
Ending balance:
individually evaluated for impairment $ 240,962 $ 523,618 $ - $ 9,561 $ 111,625 $ - $ - $ - $ 885,766
Ending balance:
collectively evaluated for impairment $ 595,550 $ 390,112 $ 205,633 $ 188,340 $ 260,662 $ 162,663 $ 172,430 $ 97,409 $ 2,072,799
Loans:
Ending balance $ 45,994,916 $ 40,409,491 $ 41,126,629 $ 11,203,055 $ 25,747,471 $ 13,424,032 $ 14,021,513 $ - $ 191,927,107
Ending balance:
individually evaluated for impairment $ 638,345 $ 1,408,875 $ - $ 61,786 $ 256,547 $ - $ - $ - $ 2,365,553
Ending balance:
collectively evaluated for impairment $ 45,356,571 $ 39,000,616 $ 41,126,629 $ 11,141,269 $ 25,490,924 $ 13,424,032 $ 14,021,513 $ - $ 189,561,554
June 30, 2015
Commercial Agricultural
1-4 Family Real Estate Real Estate Home Equity Commercial Agricultural Consumer Unallocated Total
Allowance for Loan Losses:
Beginning Balance, April 1, 2015 $ 1,032,299 $ 799,534 $ 212,051 $ 162,167 $ 401,231 $ 116,529 $ 159,703 $ 87,482 $ 2,970,996
Provision charged to expense (15,895 ) 41,544 1,759 (4,591 ) (9,263 ) 8,533 19,578 (6,665 ) 35,000
Losses charged off (105,118 ) - - - - - (6,822 ) - (111,940 )
Recoveries 19,447 6,346 - 525 26 - 2,646 - 28,990
Ending balance, June 30, 2015 $ 930,733 $ 847,424 $ 213,810 $ 158,101 $ 391,994 $ 125,062 $ 175,105 $ 80,817 $ 2,923,046
Beginning Balance, January 1, 2015 $ 999,260 $ 855,463 $ 195,546 $ 205,577 $ 421,809 $ 57,934 $ 167,319 $ 53,356 $ 2,956,264
Provision charged to expense 16,844 4,334 18,264 (57,014 ) (29,926 ) 67,128 17,909 27,461 65,000
Losses charged off (105,118 ) (27,464 ) - - - - (13,252 ) - (145,834 )
Recoveries 19,747 15,091 - 9,538 111 - 3,129 - 47,616
Ending balance, June 30, 2015 $ 930,733 $ 847,424 $ 213,810 $ 158,101 $ 391,994 $ 125,062 $ 175,105 $ 80,817 $ 2,923,046
Ending balance:
individually evaluated for impairment $ 192,916 $ 430,596 $ - $ 9,982 $ 141,946 $ - $ - $ - $ 775,440
Ending balance:
collectively evaluated for impairment $ 737,817 $ 416,828 $ 213,810 $ 148,119 $ 250,048 $ 125,062 $ 175,105 $ 80,817 $ 2,147,606
Loans:
Ending balance $ 42,895,033 $ 39,843,156 $ 43,624,784 $ 11,182,130 $ 25,113,932 $ 12,227,735 $ 12,906,675 $ - $ 187,793,445
Ending balance:
individually evaluated for impairment $ 681,410 $ 1,569,830 $ 862,765 $ 43,046 $ 221,519 $ 375,979 $ 1,149 $ - $ 3,755,698
Ending balance:
collectively evaluated for impairment $ 42,213,623 $ 38,273,326 $ 42,762,019 $ 11,139,084 $ 24,892,413 $ 11,851,756 $ 12,905,526 $ - $ 184,037,747
December 31, 2015
Commercial Agricultural
1-4 Family Real Estate Real Estate Home Equity Commercial Agricultural Consumer Unallocated Total
Allowance for Loan Losses:
Beginning Balance, December 31, 2014 $ 999,260 $ 855,463 $ 195,546 $ 205,577 $ 421,809 $ 57,934 $ 167,319 $ 53,356 $ 2,956,264
Provision charged to expense (10,386 ) 29,238 6,372 (53,188 ) (35,327 ) 105,412 49,289 48,590 140,000
Losses charged off (199,392 ) (27,464 ) - (13,724 ) - - (53,249 ) - (293,829 )
Recoveries 40,122 60,289 - 10,588 138 - 6,022 - 117,159
Ending balance, December 31, 2015 $ 829,604 $ 917,526 $ 201,918 $ 149,253 $ 386,620 $ 163,346 $ 169,381 $ 101,946 $ 2,919,594
Ending balance:
individually evaluated for impairment $ 176,079 $ 487,205 $ - $ 9,922 $ 127,458 $ - $ - $ - $ 800,664
Ending balance:
collectively evaluated for impairment $ 653,525 $ 430,321 $ 201,918 $ 139,331 $ 259,162 $ 163,346 $ 169,381 $ 101,946 $ 2,118,930
Loans:
Ending balance $ 47,395,344 $ 40,381,680 $ 41,223,190 $ 11,691,545 $ 25,453,058 $ 16,102,856 $ 13,741,093 $ - $ 195,988,766
Ending balance:
individually evaluated for impairment $ 658,734 $ 1,598,530 $ 839,546 $ 58,340 $ 277,628 $ 406,950 $ 428 $ - $ 3,840,156
Ending balance:
collectively evaluated for impairment $ 46,736,610 $ 38,783,150 $ 40,383,644 $ 11,633,205 $ 25,175,430 $ 15,695,906 $ 13,740,665 $ - $ 192,148,610 Management’s opinion as to the
ultimate collectability of loans is subject to estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. The allowance for loan losses is maintained at a level that, in management’s judgment, is adequate to cover probable credit losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the size and composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that the scheduled payments of principal or interest will not be able to be collected when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, individual consumer and residential loans are not separately identified for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. The general component covers non-classified loans and is based on historical charge-off experience and expected loss
given the internal risk rating process. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss characteristics and an appropriate loss ratio adjusted for other qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio. There have been no changes to the Company’s accounting policies or methodology from the prior periods. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on all loans at origination. In addition, lending relationships over $500,000, new commercial and commercial real estate loans, and watch list credits are reviewed annually by our loan review department in order to verify risk ratings. The Company uses the following definitions for risk ratings: Special Mention Substandard Doubtful Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of June 30, 2016 and December 31, 2015.
1-4 Family Commercial Real Estate Agricultural Real Estate Home Equity
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31,
2016 2015 2016 2015 2016 2015 2016 2015
Rating:
Pass $ 43,154,776 $ 44,120,334 $ 37,869,883 $ 37,628,385 $ 41,126,629 $ 40,383,644 $ 10,415,807 $ 11,324,889
Special Mention 1,160,680 1,323,266 447,626 454,194 - 839,546 563,621 68,044
Substandard 1,679,460 1,951,744 2,091,982 2,299,101 - - 223,627 298,612
Total $ 45,994,916 $ 47,395,344 $ 40,409,491 $ 40,381,680 $ 41,126,629 $ 41,223,190 $ 11,203,055 $ 11,691,545
Commercial Agricultural Consumer Total
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31,
2016 2015 2016 2015 2016 2015 2016 2015
Rating:
Pass $ 25,444,203 $ 25,117,982 $ 12,787,458 $ 15,110,606 $ 13,817,414 $ 13,501,477 $ 184,616,170 $ 187,187,317
Special Mention 41,968 51,196 636,574 992,250 18,291 52,656 2,868,760 3,781,152
Substandard 261,300 283,880 - - 185,808 186,960 4,442,177 5,020,297
Total $ 25,747,471 $ 25,453,058 $ 13,424,032 $ 16,102,856 $ 14,021,513 $ 13,741,093 $ 191,927,107 $ 195,988,766 The following tables present the Company’s loan portfolio aging analysis as of June 30, 2016 and December 31, 2015.
June 30, 2016
30-59 Days 60-89 Days Greater than 90 Total Total Loans >90
Past Due Past Due Days Past Due Past Due Current Total Loans Days & Accruing
One-to-four family residential $ 172,411 $ 49,690 $ 457,399 $ 679,500 $ 45,315,416 $ 45,994,916 $ -
Commercial real estate - - 734,173 734,173 39,675,318 40,409,491 -
Agricultural real estate - - - - 41,126,629 41,126,629 -
Home equity - 57,722 26,098 83,820 11,119,235 11,203,055 -
Commercial 32,504 39,203 - 71,707 25,675,764 25,747,471 -
Agricultural - - - - 13,424,032 13,424,032 -
Consumer 125,886 28,756 43,062 197,704 13,823,809 14,021,513 -
Total $ 330,801 $ 175,371 $ 1,260,732 $ 1,766,904 $ 190,160,203 $ 191,927,107 $ -
December 31, 2015
30-59 Days 60-89 Days Greater than 90 Total Total Loans >90
Past Due Past Due Days Past Due Past Due Current Total
Loans Days & Accruing
One-to-four family residential $ 345,169 $ 77,588 $ 623,055 $ 1,045,812 $ 46,349,532 $ 47,395,344 $ -
Commercial real estate - - 766,840 766,840 39,614,840 40,381,680 -
Agricultural real estate - - - - 41,223,190 41,223,190 -
Home equity 22,122 66,305 69,515 157,942 11,533,603 11,691,545 -
Commercial - - - - 25,453,058 25,453,058 -
Agricultural - - - - 16,102,856 16,102,856 -
Consumer 183,526 5,972 6,031 195,529 13,545,564 13,741,093 -
Total $ 550,817 $ 149,865 $ 1,465,441 $ 2,166,123 $ 193,822,643 $ 195,988,766 $ - The accrual of interest on loans is generally discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal and interest is considered doubtful. All interest accrued but not collected for loans that are placed on non-accrual or charged-off are reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to ac |
