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Loans by Type

3 Months Ended

Mar. 31, 2016

Note 6 – Loans by Type

A summary of loan categories is as follows:

	March 31,		December 31,
*(In thousands)*	2016		2015
Commercial and industrial	$	209,663	$	193,430
Real estate
Commercial:
Mortgage		106,656		108,836
Construction		9,857		1,182
Church, church-related:
Mortgage		306,155		306,728
Construction		33,259		28,957
Industrial Revenue Bonds		19,018		19,831
Other		9		91
Total loans	$	684,617	$	659,055

The following table presents the aging of loans by loan categories at March 31, 2016 and December 31, 2015:

	Performing						Nonperforming
							90 Days
			30-59		60-89		and		Non-		Total
*(In thousands)*	Current		Days		Days		Over		accrual		Loans
March 31, 2016
Commercial and industrial	$	209,663	$	—	$	—	$	—	$	—	$	209,663
Real estate
Commercial:
Mortgage		106,366		—		—		—		290		106,656
Construction		9,857		—		—		—		—		9,857
Church, church-related:
Mortgage		306,061		—		—		—		94		306,155
Construction		33,259		—		—		—		—		33,259
Industrial Revenue Bonds		19,018		—		—		—		—		19,018
Other		9		—		—		—		—		9
Total	$	684,233	$	—	$	—	$	—	$	384	$	684,617
December 31, 2015
Commercial and industrial	$	193,430	$	—	$	—	$	—	$	—	$	193,430
Real estate
Commercial:
Mortgage		105,804		—		—		—		3,032		108,836
Construction		1,182		—		—		—		—		1,182
Church, church-related:
Mortgage		306,625		—		—		—		103		306,728
Construction		28,957		—		—		—		—		28,957
Industrial Revenue Bonds		19,831		—		—		—		—		19,831
Other		91		—		—		—		—		91
Total	$	655,920	$	—	$	—	$	—	$	3,135	$	659,055

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2016 and December 31, 2015:

	Loans		Performing		Nonperforming
	Subject to		Loans Subject to		Loans Subject
	Normal		Special		to Special
*(In thousands)*	Monitoring¹		Monitoring²		Monitoring²		Total Loans
March 31, 2016
Commercial and industrial	$	206,999	$	2,664	$	—	$	209,663
Real estate
Commercial:
Mortgage		105,233		1,133		290		106,656
Construction		9,857		—		—		9,857
Church, church-related:
Mortgage		298,242		7,819		94		306,155
Construction		33,259		—		—		33,259
Industrial Revenue Bonds		19,018		—		—		19,018
Other		9		—		—		9
Total	$	672,617	$	11,616	$	384	$	684,617
December 31, 2015
Commercial and industrial	$	190,303	$	3,127	$	—	$	193,430
Real estate
Commercial:
Mortgage		104,642		1,162		3,032		108,836
Construction		1,182		—		—		1,182
Church, church-related:
Mortgage		299,135		7,490		103		306,728
Construction		28,957		—		—		28,957
Industrial Revenue Bonds		19,831		—		—		19,831
Other		91		—		—		91
Total	$	644,141	$	11,779	$	3,135	$	659,055

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 March 31, 2016 impaired loans were evaluated using the expected cash flow method. At December 31, 2015, all impaired loans were evaluated based on the fair value of the collateral and the expected cash flow method. 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 March 31, 2016 and December 31, 2015. There were no loans classified as troubled debt restructuring at March 31, 2016 and December 31, 2015.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of March 31, 2016, and December 31, 2015.

The following table presents the recorded investment and unpaid principal balance for impaired loans at March 31, 2016 and December 31, 2015:

			Unpaid		Related
	Recorded		Principal		Allowance for
*(In thousands)*	Investment		Balance		Loan Losses
March 31, 2016
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		290		290		—
Church – Mortgage:
Nonaccrual		94		94		94
Total impaired loans	$	384	$	384	$	94
December 31, 2015
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		3,032		3,032		1,039
Church – Mortgage:
Nonaccrual		103		103		103
Total impaired loans	$	3,135	$	3,135	$	1,142

A summary of the activity in the allowance for loan losses from December 31, 2015 to March 31, 2016 is as follows:

	December 31,		Charge-							March 31,
*(In thousands)*	2015		Offs		Recoveries		Provision			2016
Commercial and industrial	$	3,083	$	—	$	2	$	356		$	3,441
Real estate
Commercial:
Mortgage		2,803		—		—		(1,072	)		1,731
Construction		9		—		—		65			74
Church, church-related:
Mortgage		4,082		—		—		(16	)		4,066
Construction		217		—		—		33			250
Industrial Revenue Bond		320		—		—		(13	)		307
Other		1,121		—		—		(353	)		768
Total	$	11,635	$	—	$	2	$	(1,000	)	$	10,637

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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