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Loans by Type

3 Months Ended

Mar. 31, 2017

Note 6 – Loans by Type

A summary of loan categories is as follows:

	March 31,		December 31,
*(In thousands)*	2017		2016
Commercial and industrial	$	227,028	$	214,767
Real estate
Commercial:
Mortgage		95,864		104,779
Construction		7,257		6,325
Church, church-related:
Mortgage		326,895		321,168
Construction		12,454		11,152
Industrial Revenue Bonds		5,824		6,639
Other		58		36
Total loans	$	675,380	$	664,866

The following table presents the aging of loans by loan categories at March 31, 2017 and December 31, 2016:

	Performing						Nonperforming
							90 Days
			30-59		60-89		and		Non-		Total
*(In thousands)*	Current		Days		Days		Over		accrual		Loans
March 31, 2017
Commercial and industrial	$	227,028	$	—	$	—	$	—	$	—	$	227,028
Real estate
Commercial:
Mortgage		95,633		—		—		—		231		95,864
Construction		7,257		—		—		—		—		7,257
Church, church-related:
Mortgage		326,895		—		—		—		—		326,895
Construction		12,454		—		—		—		—		12,454
Industrial Revenue Bonds		5,824		—		—		—		—		5,824
Other		36		22		—		—		—		58
Total	$	675,127	$	22	$	—	$	—	$	231	$	675,380
December 31, 2016
Commercial and industrial	$	214,767	$	—	$	—	$	—	$	—	$	214,767
Real estate
Commercial:
Mortgage		104,534		—		—		—		245		104,779
Construction		6,325		—		—		—		—		6,325
Church, church-related:
Mortgage		321,168		—		—		—		—		321,168
Construction		11,152		—		—		—		—		11,152
Industrial Revenue Bonds		6,639		—		—		—		—		6,639
Other		24		12		—		—		—		36
Total	$	664,609	$	12	$	—	$	—	$	245	$	664,866

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2017 and December 31, 2016:

	Loans		Performing		Nonperforming
	Subject to		Loans Subject to		Loans Subject
	Normal		Special		to Special
*(In thousands)*	Monitoring¹		Monitoring²		Monitoring²		Total Loans
March 31, 2017
Commercial and industrial	$	225,321	$	1,707	$	—	$	227,028
Real estate
Commercial:
Mortgage		94,892		741		231		95,864
Construction		7,257		—		—		7,257
Church, church-related:
Mortgage		323,866		3,029		—		326,895
Construction		12,454		—		—		12,454
Industrial Revenue Bonds		5,824		—		—		5,824
Other		58		—		—		58
Total	$	669,672	$	5,477	$	231	$	675,380
December 31, 2016
Commercial and industrial	$	213,024	$	1,743	$	—	$	214,767
Real estate
Commercial:
Mortgage		103,778		756		245		104,779
Construction		6,325		—		—		6,325
Church, church-related:
Mortgage		318,030		3,138		—		321,168
Construction		11,152		—		—		11,152
Industrial Revenue Bonds		6,639		—		—		6,639
Other		36		—		—		36
Total	$	658,984	$	5,637	$	245	$	664,866

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, 2017 and December 31, 2016, impaired loans were evaluated using 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, 2017 and December 31, 2016. There were no loans classified as troubled debt restructuring at March 31, 2017 and December 31, 2016.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of March 31, 2017 and December 31, 2016.

The following table presents the recorded investment and unpaid principal balance for impaired loans at March 31, 2017 and December 31, 2016:

			Unpaid		Related
	Recorded		Principal		Allowance for
*(In thousands)*	Investment		Balance		Loan Losses
March 31, 2017
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		231		231		—
Church – Mortgage:
Nonaccrual		—		—		—
Total impaired loans	$	231	$	231	$	—
December 31, 2016
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		245		245		—
Church – Mortgage:
Nonaccrual		—		—		—
Total impaired loans	$	245	$	245	$	—

A summary of the activity in the allowance for loan losses from December 31, 2016 to March 31, 2017 is as follows:

	December 31,		Charge-							March 31,
*(In thousands)*	2016		Offs		Recoveries		Provision			2017
Commercial and industrial	$	3,261	$	—	$	16	$	170		$	3,447
Real estate
Commercial:
Mortgage		1,662		—		—		(140	)		1,522
Construction		47		—		—		7			54
Church, church-related:
Mortgage		4,027		—		—		73			4,100
Construction		85		—		—		9			94
Industrial Revenue Bond		101		—		—		(12	)		89
Other		992		—		—		(107	)		885
Total	$	10,175	$	—	$	16	$	—		$	10,191

- 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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