| Loans and Allowance | Note 5: Loans and Allowance The Company’s loan and allowance policies are as follows: Loans Receivable Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan. The accrual of interest on loans is 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 nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. There were no changes in the Company’s nonaccrual policy during the six month-end periods ended September 30, 2015 (unaudited) and September 30, 2014 (unaudited). All interest accrued but not collected for loans that are placed on nonaccrual 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 accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. For all loan portfolio segments, the Company promptly charges off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral. When cash payments are received on impaired loans in each loan class, the Company records the payment as interest income unless collection of the remaining recorded principal amount is doubtful, at which time payments are used to reduce the principal balance of the loan. Troubled debt restructured loans recognize interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms. Allowance for Loan Losses The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the uncollectibility 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 collectibility of the loans in light of historical experience, the nature and volume 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. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest 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 construction 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, the Company does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. Categories of loans receivable include:
September 30 December 31,
2015 2014
(Unaudited)
Real estate loans:
Residential 1-4 family $ 44,960,702 $ 45,353,599
Commercial 35,486,264 27,908,662
Construction and land 2,154,603 1,523,281
Total real estate 82,601,569 74,785,542
Commercial and industrial 7,360,460 5,536,805
Warehouse Line 10,000,000 -
Consumer loans:
Home equity loans and lines of credit 9,036,190 9,331,608
Other consumer loans 1,065,147 883,864
Total consumer 10,101,337 10,215,472
Gross loans 110,063,366 90,537,819
Less
Net deferred loan fees (16,262 ) (17,057 )
Allowance for loan losses 1,054,474 1,075,351
Net loans $ 109,025,154 $ 89,479,525 The risk characteristics of each loan portfolio segment are as follows: Residential 1-4 Family, Home Equity Loans and Lines of Credit and Other Consumer: Commercial Real Estate including Construction and Land: the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Construction and land real estate loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Bank until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Company’s market areas. Commercial and Industrial: Warehouse Line: The following presents by portfolio segment, the activity in the allowance for loan losses:
Residential Commercial Commercial Warehouse
1-4 Family Real Estate and Industrial Line Consumer Total
(Unaudited)
Three Months Ended September 30, 2015:
Balance, beginning of period $ 205,076 $ 479,157 $ 229,584 $ 54,988 $ 55,273 $ 1,024,078
Provision (credit) for loan losses 30,751 173,933 (193,321 ) 5,092 13,545 30,000
Loans charged to the allowance (569 ) - - - - (569 )
Recoveries of loans previously charged off 365 600 - - - 965
Balance, end of period $ 235,623 $ 653,690 $ 36,263 $ 60,080 $ 68,818 $ 1,054,474
Nine Months Ended September 30, 2015:
Balance, beginning of period $ 222,618 $ 503,621 $ 248,388 $ - $ 100,724 $ 1,075,351
Provision (credit) for loan losses 209 210,084 (212,125 ) 60,080 (13,248 ) 45,000
Loans charged to the allowance (569 ) (62,015 ) - - (18,658 ) (81,242 )
Recoveries of loans previously charged off 13,365 2,000 - - - 15,365
Balance, end of period $ 235,623 $ 653,690 $ 36,263 $ 60,080 $ 68,818 $ 1,054,474
Residential Commercial Commercial Warehouse
1-4 Family Real Estate and Industrial Line Consumer Total
(Unaudited)
Three Months Ended September 30, 2014:
Balance, beginning of period $ 232,254 $ 555,963 $ 131,219 $ - $ 162,969 $ 1,082,405
Provision (credit) for loan losses 36,558 (120,302 ) 31,764 - 51,980 -
Loans charged to the allowance (6,150 ) - - - (23,104 ) (29,254 )
Recoveries of loans previously charged off 300 1,000 - - - 1,300
Balance, end of period $ 262,962 $ 436,661 $ 162,983 $ - $ 191,845 $ 1,054,451
Nine Months Ended September 30, 2014:
Balance, beginning of period $ 188,325 $ 587,331 $ 138,268 $ - $ 147,217 $ 1,061,141
Provision (credit) for loan losses 98,861 (241,024 ) 24,715 - 117,448 -
Loans charged to the allowance (27,134 ) - - - (73,220 ) (71,100 )
Recoveries of loans previously charged off 2,910 90,354 - - 400 92,364
Balance, end of period $ 262,962 $ 436,661 $ 162,983 $ - $ 191,845 $ 1,054,451 The following presents the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of September 30, 2015 and December 31, 2014:
Residential Commercial Commercial Warehouse
1-4 Family Real Estate and Industrial Line Consumer Total
(Unaudited)
At September 30, 2015:
Allowance:
Balance, end of period $ 235,623 $ 653,690 $ 36,263 $ 60,080 $ 68,818 $ 1,054,474
Ending balance: individually evaluated for impairment $ 14,440 $ 465 $ - $ - $ 277 $ 15,182
Ending balance: collectively evaluated for impairment $ 221,183 $ 653,225 $ 36,263 $ 60,080 $ 68,541 $ 1,039,292
Loans:
Ending balance $ 44,960,702 $ 37,640,867 $ 7,360,460 $ 10,000,000 $ 10,101,337 $ 110,063,366
Ending balance individually evaluated for impairment $ 2,363,178 $ 380,002 $ - $ - $ 127,657 $ 2,870,837
Ending balance collectively evaluated for impairment $ 42,597,524 $ 37,260,865 $ 7,360,460 $ 10,000,000 $ 9,973,680 $ 107,192,529
Residential Commercial Commercial Warehouse
1-4 Family Real Estate and Industrial Line Consumer Total
At December 31, 2014:
Allowance:
Balance, end of period $ 222,618 $ 503,621 $ 248,388 $ - $ 100,724 $ 1,075,351
Ending balance: individually evaluated for impairment $ 16,325 $ 644 $ - $ - $ 533 $ 17,502
Ending balance: collectively evaluated for impairment $ 206,293 $ 502,977 $ 248,388 $ - $ 100,191 $ 1,057,849
Loans:
Ending balance $ 45,353,599 $ 29,431,943 $ 5,536,805 $ - $ 10,215,472 $ 90,537,819
Ending balance individually evaluated for impairment $ 2,727,712 $ 1,356,103 $ - $ - $ 152,879 $ 4,236,694
Ending balance collectively evaluated for impairment $ 42,625,887 $ 28,075,840 $ 5,536,805 $ - $ 10,062,593 $ 86,301,125 Internal Risk Categories In adherence with policy, the Bank uses the following internal risk grading categories and definitions for loans: RISK RATING 1 – EXCELLENT General: The highest quality asset rating reflects superior, in-depth management, and superior financial flexibility. Conservative balance sheets are both strong and liquid, and historic cash flows (last five years) have provided exceptionally large and stable margins of protection. Specific: Financial statements are current, audited, of superior quality and in complete detail. Financial condition is superior and compares favorably to the industry average. Cash flow is outstanding relative to historical and projected debt service requirements. The borrower adheres to all loan covenants. Management (or individual) integrity and ability are outstanding. RISK RATING 2 – STRONG General: The borrower is fully responsible for the credit. Asset quality and liquidity are very good, and debt capacity and coverage are strong. The company has strong management in all positions, and is highly regarded with excellent financial flexibility including access to other sources of financing. Specific: Financial statements are current, of excellent quality and in adequate detail. Financial condition is very good and compares favorably to the industry average. Statements reflect a stable record of earnings over time and consistent profitability. Cash flow is strong relative to historical and projected debt service requirements. The borrower consistently adheres to the repayment schedules for both principal and interest. The borrower adheres to all loan covenants. Management (or individual) integrity and ability are outstanding. RISK RATING 3 – GOOD General: Asset quality and liquidity are strong, and debt capacity and coverage are good to above average. General financial trends are stable to favorable and financial and profitability ratios are consistent with industry peers. Management strength is apparent. The industry is average. Some modest elements of uncertainty may be present due to liquidity, margin and cash flow stability, asset of customer concentrations, dependence on one business type, or cyclical trends that may affect the borrower. Specific: The financial statements are generally current, of adequate detail, and of good quality. Publication of statements is at least once annually but in most cases more frequent. Financial condition is good relative to the industry. The earnings record is stable and consistent, although modest year-to-year earnings may fluctuate more than for borrowers rated Excellent (1) or Strong (2). Cash flow may vary during the repayment of the loan but does not fall below debt service requirements. Historical profitability may be inconsistent but losses are typically non-existent or infrequent. Liquidity and leverage are at the industry average. The borrower consistently adheres to repayment schedules for both principal and interest, and adheres to all loan covenants. Any waivers are immaterial, and do not negatively impact the strength of the credit. Management (or individual) integrity and ability are sound. Depth and breadth of management is also sound. RISK RATING 4 – ACCEPTABLE General: Asset quality and liquidity are good, and debt capacity and coverage are average to good. General financial trends are stable to favorable and financial and profitability ratios are consistent with industry peers. Management strength is apparent but may be limited to key positions. The industry is average. Some elements of uncertainty may be present due to liquidity, margin and cash flow stability, asset of customer concentrations, dependence on one business type, or cyclical trends that may affect the borrower. Adverse economic conditions may lead to declining trends.
Specific: The financial statements are generally current, of adequate detail, and of average quality. Publication of statements is at least once annually. Financial condition is average relative to the industry. The earnings record is satisfactory, although year-to-year earnings patterns may fluctuate more than for borrowers rated Good (3). Cash flow may vary during the repayment of the loan but does not fall below debt service requirements. Historical profitability may be inconsistent and may have losses in recent years. Liquidity and leverage may be below the industry average, and the borrower may be highly leveraged. The borrower consistently adheres to repayment schedules for both principal and interest, and adheres to all loan covenants. Any waivers are immaterial, and do not negatively impact the strength of the credit. Management (or individual) integrity and ability are sound. Depth and breadth of management is also sound. RISK RATING 5 – WATCH General: Loans in this category are considered to be acceptable credit quality, but contain greater credit risk than Risk Rating 4 loans due to weak balance sheets, marginal earnings or cash flow, lack of financial information, weakening markets, insufficient or questionable collateral coverage, or other uncertainties. These loans warrant a higher than average level of monitoring to ensure that potential weaknesses do not emerge. The level of risk in a Watch loan is within acceptable underwriting guidelines so long as the loan is given the proper level of management supervision. Specific: The financial statements may be missing, outdated, of poor quality, or lacking in important details. Financial condition is below the industry average. The borrower may be experiencing negative trends and/or erratic or unstable financial performance. The borrower may have suffered a loss in a recent period; however, losses have not been of the magnitude to have adversely affected the balance sheet. The borrower generally adheres to repayment schedules for principal and consistently for interest. Cash flow from primary sources has generally been adequate but, if existing trends continue may not be adequate to meet projected debt service requirements in the future. The borrower may have violated one or more financial or other covenants, but such has not materially impacted financial condition or performance. Industry outlook may be unfavorable. The integrity and quality of management remains good; however, management depth may be limited. RISK RATING 6 – SPECIAL MENTION General: Assets in this category have potential weaknesses that deserve the Bank’s close attention. If potential weaknesses are left unchecked or uncorrected, they may result in deterioration of the repayment prospects for the asset or inadequately protect the Bank’s credit position at some future date. These assets pose elevated risk, but their weakness does not expose the Bank to sufficient risk to warrant adverse classification. Specific: Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill-proportioned balance sheet (increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a Special Mention (6) rating. Nonfinancial reasons for rating a credit Special Mention (6) include management problems, pending litigation, an ineffective loan agreement or other material structural weaknesses, and any other significant deviation from prudent lending practices. RISK RATING 7 – SUBSTANDARD General: Assets in this category are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. These assets have a well-defined weakness or weaknesses that jeopardize the timely liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Specific: Substandard assets have a high probability of payment default, or they have other well-defined weaknesses. The financial statements may be missing, seriously outdated, of poor quality, or lacking in important details. Financial condition is less than satisfactory. The borrower is experiencing negative trends and material losses. The primary source of cash flow is inadequate to meet current debt service requirements, and unless present conditions improve is potentially inadequate to meet projected debt service requirements. The borrower may have reached the point of employing its secondary source of cash flow. The borrower inconsistently adheres to repayment schedules for either principal or interest. The borrower may have violated one or more financial or other covenants, reflecting unsatisfactory liquidity and/or capitalization. Either the integrity or the ability of management may be in question. For some Substandard (7) assets, the likelihood of full collection of interest and principal may be in doubt; such assets should be placed on nonaccrual. RISK RATING 8 – DOUBTFUL General: Assets in this category have all the weaknesses inherent in one classified substandard 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. Specific: An asset in this category has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity and capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, and the perfection of liens on additional collateral, the valuation of collateral and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on new information. Because of high probability of loss, nonaccrual accounting treatment is required for Doubtful (8) assets. RISK RATING 9 – LOSS General: Assets in this category are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be obtained in the future. Specific: With Loss (9) assets, the underlying borrowers are often in bankruptcy, have formally suspended debt repayments, or have otherwise ceased normal business operations. Once an asset is classified Loss (9), there is little prospect of collecting either its principal or interest. Losses are to be recorded in the period an obligation becomes uncollectable. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of September 30, 2015:
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Consumer Total
(Unaudited)
Pass (1-5) $ 44,233,257 $ 32,386,594 $ 2,120,297 $ 7,360,460 $ 10,000,000 $ 9,036,190 $ 1,065,147 $ 106,201,945
Special Mention (6) - 1,732,016 - - - - - 1,732,016
Substandard (7) 727,445 1,367,654 34,306 - - - - 2,129,405
Doubtful (8) - - - - - - - -
Loss (9) - - - - - - - -
Total $ 44,960,702 $ 35,486,264 $ 2,154,603 $ 7,360,460 $ 10,000,000 $ 9,036,190 $ 1,065,147 $ 110,063,366 The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2014:
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Consumer Total
Pass (1-5) $ 44,618,696 $ 25,726,754 $ 1,344,107 $ 5,536,805 $ - $ 9,321,255 $ 883,864 $ 87,431,481
Special Mention (6) - 219,157 - - - - - 219,157
Substandard (7) 734,903 1,962,751 179,174 - - 10,353 - 2,887,181
Doubtful (8) - - - - - - - -
Loss (9) - - - - - - - -
Total $ 45,353,599 $ 27,908,662 $ 1,523,281 $ 5,536,805 $ - $ 9,331,608 $ 883,864 $ 90,537,819 The following tables present the Company’s loan portfolio aging analysis as of September 30, 2015:
Total Loans >
30-59 Days 60-89 Days Greater Than Total Total 90 Days &
Past Due Past Due 90 Days Past Due Current Loans Accruimg
(Unaudited)
Residential 1-4 family $ 751,115 $ 108,486 $ 727,445 $ 1,587,046 $ 43,373,656 $ 44,960,702 $ -
Commercial real estate - - - - 35,486,264 35,486,264 -
Construction and land - 1,553 34,306 35,859 2,118,744 2,154,603 -
Commercial and industrial - - - - 7,360,460 7,360,460 -
Warehouse Line - - - - 10,000,000 10,000,000 -
Home equity 162,214 56,848 - 219,062 8,817,128 9,036,190 -
Other consumer 3,680 - - 3,680 1,061,467 1,065,147 -
$ 917,009 $ 166,887 $ 761,751 $ 1,845,647 $ 108,217,719 $ 110,063,366 $ - The following tables present the Company’s loan portfolio aging analysis as of December 31, 2014:
Total Loans >
30-59 Days 60-89 Days Greater Than Total Total 90 Days &
Past Due Past Due 90 Days Past Due Current Loans Accruimg
(Unaudited)
Residential 1-4 family $ 1,147,797 $ 557,817 $ 734,903 $ 2,440,517 $ 42,913,082 $ 45,353,599 $ -
Commercial real estate 11,782 - 11,782 27,896,880 27,908,662 -
Construction and land 27,817 - 21,972 49,789 1,473,492 1,523,281 -
Commercial and industrial - - - - 5,536,805 5,536,805 -
Warehouse Line - - - - - - -
Home equity 54,224 25,601 10,353 90,178 9,241,430 9,331,608 -
Other consumer - 6,057 - 6,057 877,807 883,864 -
$ 1,241,620 $ 589,475 $ 767,228 $ 2,598,323 $ 87,939,496 $ 90,537,819 $ - The following table presents the Company’s nonaccrual loans at September 30, 2015 and December 31, 2014. This table excludes performing troubled debt restructurings.
September 30, December 31,
2015 2014
(Unaudited)
Residential 1-4 family $ 1,538,572 $ 1,397,529
Commercial real estate 10,067 729,032
Construction and land 35,859 49,789
Commercial and industrial - -
Warehouse Line - -
Home equity 48,559 76,937
Other consumer - -
$ 1,633,057 $ 2,253,287 A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings. The following table presents impaired loans and specific valuation allowance based on class level at September 30, 2015:
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Total
(Unaudited)
Impaired loans without a specific allowance:
Recorded investment $ 837,193 $ 276,836 $ 57,240 $ - $ - $ 79,097 $ 1,250,366
Unpaid principal balance 906,464 276,836 57,240 - - 79,097 1,319,637
Impaired loans with a specific allowance:
Recorded investment 1,525,985 10,066 35,860 - - 48,560 1,620,471
Unpaid principal balance 1,586,078 11,387 39,239 - - 50,249 1,686,953
Specific allowance 14,440 161 304 - - 277 15,182
Total impaired loans:
Recorded investment 2,363,178 286,902 93,100 - - 127,657 2,870,837
Unpaid principal balance 2,492,542 288,223 96,479 - - 129,346 3,006,590
Specific allowance 14,440 161 304 - - 277 15,182 The following table presents average impaired loans based on class level for the three and nine months ended September 30, 2015 and 2014:
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Total
(Unaudited)
Average recorded investment in impaired loans for the three months ended September 30, 2015 $ 2,317,506 $ 287,989 $ 95,764 $ - $ - $ 121,496 $ 2,822,755
Average recorded investment in impaired loans for the three months ended September 30, 2014 2,143,289 1,057,206 333,095 - - 128,325 3,661,915
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Total
(Unaudited)
Average recorded investment in impaired loans for the nine months ended September 30, 2015 $ 2,286,919 $ 292,505 $ 135,334 $ - $ - $ 133,985 $ 2,848,743
Average recorded investment in impaired loans for the nine months ended September 30, 2014 2,165,843 1,091,228 339,569 - - 130,941 3,727,581 The following table presents impaired loans and specific valuation allowance based on class level at December 31, 2014:
Residential Commercial Construction Commercial Warehouse
1-4 Family Real Estate and Land and Industrial Line Home Equity Total
(Unaudited)
Impaired loans without a specific allowance:
Recorded investment $ 1,396,878 $ 1,003,575 $ 290,956 $ - $ - $ 86,296 $ 2,777,705
Unpaid principal balance 1,475,218 1,121,615 304,827 - - 92,277 2,993,937
Impaired loans with a specific allowance:
Recorded investment 1,330,834 11,782 49,790 - - 66,583 1,458,989
Unpaid principal balance 1,373,484 12,700 56,120 - - 69,627 1,511,931
Specific allowance 16,325 46 598 - - 533 17,502
Total impaired loans:
Recorded investment 2,727,712 1,015,357 340,746 - - 152,879 4,236,694
Unpaid principal balance 2,848,702 1,134,315 360,947 - - 161,904 4,505,868
Specific allowance 16,325 46 598 - - 533 17,502 Interest income of $10,777, $32,296, $20,789, $46,657 and $61,499 was recognized on impaired loans for the three and nine months ended September 30, 2015 (unaudited) and September 30, 2014 (unaudited) and for year-end December 31, 2014, respectively. At September 30, 2015, the Company had loans that were modified in troubled debt restructurings and impaired. The modification of terms of such loans included one or a combination of the following: an extension of maturity, a reduction of the stated interest rate or a permanent reduction of the recorded investment in the loan. The following table presents information regarding troubled debt restructurings by class for the three and nine months ended September 30, 2015 and 2014. Newly classified troubled debt restructurings:
Three Months Ended September 30, 2015 Three Months Ended September 30, 2014
Pre- Post Pre- Post
Modification Modification Modification Modification
Number Recorded Recorded Number Recorded Recorded
of Loans Balance Balance of Loans Balance Balance
(Unaudited)
Residential 1-4 family - $ - $ - 1 $ 263,518 $ 263,518
Commercial real estate - - - - - -
Construction and land - - - - - -
Commercial and industrial - - - - - -
Warehouse Line - - - - - -
Home equity - - - - - -
Other consumer - - - - - -
- $ - $ - 1 $ 263,518 $ 263,518
Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014
Pre- Post Pre- Post
Modification Modification Modification Modification
Number Recorded Recorded Number Recorded Recorded
of Loans Balance Balance of Loans Balance Balance
(Unaudited)
Residential 1-4 family - $ - $ - 2 $ 324,518 $ 324,518
Commercial real estate - - - - - -
Construction and land - - - - - -
Commercial and industrial - - - - - -
Warehouse Line - - - - - -
Home equity - - - - - -
Other consumer - - - - - -
- $ - $ - 2 $ 324,518 $ 324,518 The troubled debt restructurings described above increased the allowance for loan losses by $0 for the three months and nine months ended September 30, 2015 and $2,063 for the three and nine months ended September 30, 2014. Charge offs resulted of $0 for three and nine months ended September 30, 2015 and $0 for three and nine months ended September 30, 2014. Newly restructured loans by type of modification:
Interest Total
Only Term Combination Modification
(Unaudited)
Three and Nine Months Ended September 30, 2015:
Residential 1-4 family $ - $ - $ - $ -
Commercial real estate - - - -
Construction and land - - - -
Commercial and industrial - - - -
Warehouse Line - - - -
Home equity - - - -
Other consumer - - - -
$ - $ - $ - $ -
Interest Total
Only Term Combination Modification
(Unaudited)
Three Months Ended September 30, 2014:
Residential 1-4 family $ - $ - $ 263,518 $ 263,518
Commercial real estate - - - -
Construction and land - - - -
Commercial and industrial - - - -
Home equity - - - -
Other consumer - - - -
$ - $ - $ 263,518 $ 263,518
Interest Total
Only Term Combination Modification
(Unaudited)
Nine Months Ended September 30, 2014:
Residential 1-4 family $ - $ 61,000 $ 263,518 $ 324,518
Commercial real estate - - - -
Construction and land - - - -
Commercial and industrial - - - -
Home equity - - - -
Other consumer - - - -
$ - $ 61,000 $ 263,518 $ 324,518 Troubled debt restructurings modified in the past 12 months that subsequently defaulted:
September 30, 2015 September 30, 2014
Number of Recorded Number of Recorded
Loans Balance Loans Balance
(Unaudited)
Residential 1-4 family - $ - - $ -
Commercial real estate - - 1 214,736
Construction and land - - - -
Commercial and industrial - - - -
Home equity - - - -
Other consumer - - - -
- $ - $ 1 $ 214,736 At September 30, 2015, the Company held no residential real estate as foreclosed property. Also, at September 30, 2015, there were no consumer mortgage loans in the process of forec |
