Note 6 – Loans by Type

A summary of loan categories is as follows:

	September 30,		December 31,
*(In thousands)*	2015		2014
Commercial and industrial	$	195,175	$	203,350
Real estate
Commercial:
Mortgage		119,751		117,754
Construction		71		—
Church, church-related:
Mortgage		314,822		305,887
Construction		20,077		18,612
Industrial Revenue Bonds		20,911		23,348
Other		35		395
Total loans	$	670,842	$	669,346

The following table presents the aging of loans by loan categories at September 30, 2015 and December 31, 2014:

	Performing						Nonperforming
								90 Days
				30-59		60-89		and		Non-	Total
*(In thousands)*	Current		Days		Days		Over		accrual		Loans
September 30, 2015
Commercial and industrial	$	195,175	$	—	$	—	$	—	$	—	$	195,175
Real estate
Commercial:
Mortgage		116,704		—		—		—		3,047		119,751
Construction		71		—		—		—		—		71
Church, church-related:
Mortgage		314,714		—		—		—		108		314,822
Construction		20,077		—		—		—		—		20,077
Industrial Revenue Bonds		20,911		—		—		—		—		20,911
Other		35		—		—		—		—		35
Total	$	667,687	$	—	$	—	$	—	$	3,155	$	670,842
December 31, 2014
Commercial and industrial	$	203,350	$	—	$	—	$	—	$	—	$	203,350
Real estate
Commercial:
Mortgage		117,393		—		—		—		361		117,754
Construction		—		—		—		—		—		—
Church, church-related:
Mortgage		305,760		—		—		—		127		305,887
Construction		18,612		—		—		—		—		18,612
Industrial Revenue Bonds		23,348		—		—		—		—		23,348
Other		395		—		—		—		—		395
Total	$	668,858	$	—	$	—	$	—	$	488	$	669,346

The following table presents the credit exposure of the loan portfolio as of September 30, 2015 and December 31, 2014:

	Loans		Performing		Nonperforming
	Subject to		Loans Subject to		Loans Subject
	Normal		Special		to Special
*(In thousands)*	Monitoring¹		Monitoring²		Monitoring²		Total Loans
September 30, 2015
Commercial and industrial	$	192,135	$	3,040	$	—	$	195,175
Real estate
Commercial:
Mortgage		107,985		8,719		3,047		119,751
Construction		71		—		—		71
Church, church-related:
Mortgage		310,145		4,569		108		314,822
Construction		20,077		—		—		20,077
Industrial Revenue Bonds		20,911		—		—		20,911
Other		35		—		—		35
Total	$	651,359	$	16,328	$	3,155	$	670,842
December 31, 2014
Commercial and industrial	$	199,837	$	3,513	$	—	$	203,350
Real estate
Commercial:
Mortgage		103,097		14,296		361		117,754
Construction		—		—		—		—
Church, church-related:
Mortgage		304,219		1,541		127		305,887
Construction		18,612		—		—		18,612
Industrial Revenue Bonds		23,348		—		—		23,348
Other		395		—		—		395
Total	$	649,508	$	19,350	$	488	$	669,346

¹	Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.

²	Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

Impaired loans consist primarily of nonaccrual loans, loans greater than 90 days past due and still accruing interest and troubled debt restructurings, both performing and nonperforming. Troubled debt restructuring involves the granting of a concession to a borrower experiencing financial difficulty resulting in the modification of terms of the loan, such as changes in payment schedule or interest rate. Management measures impairment in accordance with FASB ASC 310, “Allowance for Credit Losses.” At September 30, 2015 and December 31, 2014, all impaired loans were evaluated based on the fair value of the collateral. The fair value of the collateral is based upon an observable market price or current appraised value and therefore, the Company classifies these assets as nonrecurring Level 3. There were no loans delinquent 90 days or more and still accruing interest at September 30, 2015 and December 31, 2014. There were no loans classified as troubled debt restructuring at September 30, 2015 and December 31, 2014.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of September 30, 2015, and December 31, 2014.

The following table presents the recorded investment and unpaid principal balance for impaired loans at September 30, 2015 and December 31, 2014:

			Unpaid		Related
	Recorded		Principal		Allowance for
*(In thousands)*	Investment		Balance		Loan Losses
September 30, 2015
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		3,047		3,047		1,127
Church – Mortgage:
Nonaccrual		108		108		108
Total impaired loans	$	3,155	$	3,155	$	1,235
December 31, 2014
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		361		361		—
Church – Mortgage:
Nonaccrual		127		127		127
Total impaired loans	$	488	$	488	$	127

A summary of the activity in the allowance for loan losses from December 31, 2014 to September 30, 2015 is as follows:

	December 31,		Charge-							September 30,
*(In thousands)*	2014		Offs		Recoveries		Provision			2015
Commercial and industrial	$	3,515	$	30	$	10	$	(133	)	$	3,362
Real estate
Commercial:
Mortgage		3,060		—		5		(3	)		3,062
Construction		—		—		—		1			1
Church, church-related:
Mortgage		4,016		—		2		127			4,145
Construction		140		—		—		10			150
Industrial Revenue Bonds		394		—		—		(50	)		344
Other		769		—		1		48			818
Total	$	11,894	$	30	$	18	$	0		$	11,882

A summary of the activity in the allowance for loan losses from December 31, 2013 to September 30, 2014 is as follows:

	December 31,		Charge-							September 30,
*(In thousands)*	2013		Offs		Recoveries		Provision			2014
Commercial and industrial	$	3,036	$	3	$	34	$	230		$	3,297
Real estate
Commercial:
Mortgage		3,946		—		222		235			4,403
Construction		151		—		—		(151	)		—
Church, church-related:
Mortgage		4,354		76		3		(494	)		3,787
Construction		124		—		—		45			169
Industrial Revenue Bonds		68		—		—		133			201
Other		—		—		—		2			2
Total	$	11,679	$	79	$	259	$	—		$	11,859