Loans by Type

9 Months Ended

Sep. 30, 2017

Note 6 – Loans by Type

A summary of loan categories is as follows:

*(In thousands)*	September 30, 2017		December 31, 2016
Commercial and industrial	$	213,942	$	214,767
Real estate
Commercial:
Mortgage		94,485		104,779
Construction		14,919		6,325
Church, church-related:
Mortgage		322,614		321,168
Construction		7,907		11,152
Industrial Revenue Bonds		4,191		6,639
Other		32		36
Total loans	$	658,090	$	664,866

The following table presents the aging of loans by loan categories at September 30, 2017 and December 31, 2016:

	Performing						Nonperforming
							90 Days
			30-59		60-89		and		Non-		Total
*(In thousands)*	Current		Days		Days		Over		accrual		Loans
September 30, 2017
Commercial and industrial	$	213,942	$	—	$	—	$	—	$	—	$	213,942
Real estate
Commercial:
Mortgage		94,270		—		—		—		215		94,485
Construction		14,919		—		—		—		—		14,919
Church, church-related:
Mortgage		322,614		—		—		—		—		322,614
Construction		7,907		—		—		—		—		7,907
Industrial Revenue Bonds		4,191		—		—		—		—		4,191
Other		32		—		—		—		—		32
Total	$	657,875	$	—	$	—	$	—	$	215	$	658,090
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 as of September 30, 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
September 30, 2017
Commercial and industrial	$	211,820	$	2,122	$	—	$	213,942
Real estate
Commercial:
Mortgage		93,560		710		215		94,485
Construction		14,919		—		—		14,919
Church, church-related:
Mortgage		322,561		53		—		322,614
Construction		7,907		—		—		7,907
Industrial Revenue Bonds		4,191		—		—		4,191
Other		32		—		—		32
Total	$	654,990	$	2,885	$	215	$	658,090
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
¹Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.
²Loans 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, 2017 and December 31, 2016, impaired loans were evaluated using the expected cash flow method. There were no loans delinquent 90 days or more and still accruing interest at September 30, 2017 or December 31, 2016. There were no loans classified as troubled debt restructuring at September 30, 2017 or December 31, 2016.

There were no foreclosed loans recorded as other real estate owned (included in other assets) as of September 30, 2017 and December 31, 2016.

The following table presents the recorded investment and unpaid principal balance for impaired loans at September 30, 2017 and December 31, 2016:

			Unpaid		Related
	Recorded		Principal		Allowance for
*(In thousands)*	Investment		Balance		Loan Losses
September 30, 2017
Commercial and industrial:
Nonaccrual	$	—	$	—	$	—
Real estate
Commercial – Mortgage:
Nonaccrual		215		215		—
Church – Mortgage:
Nonaccrual		—		—		—
Total impaired loans	$	215	$	215	$	—
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 September 30, 2017 is as follows:

	December 31,		Charge-							September 30,
*(In thousands)*	2016		Offs		Recoveries		Provision			2017
Commercial and industrial	$	3,261	$	—	$	27	$	(61	)	$	3,227
Real estate
Commercial:
Mortgage		1,662		—		—		(160	)		1,502
Construction		47		—		—		54			101
Church, church-related:
Mortgage		4,027		—		—		20			4,047
Construction		85		—		—		(26	)		59
Industrial Revenue Bonds		101		—		—		(37	)		64
Other		992		—		—		210			1,202
Total	$	10,175	$	—	$	27	$	—		$	10,202

A summary of the activity in the allowance for loan losses from December 31, 2015 to September 30, 2016 is as follows:

	December 31,		Charge-							September 30,
*(In thousands)*	2015		Offs		Recoveries		Provision			2016
Commercial and industrial	$	3,083	$	—	$	38	$	217		$	3,338
Real estate
Commercial:
Mortgage		2,803		—		—		(1,179	)		1,624
Construction		9		—		—		93			102
Church, church-related:
Mortgage		4,082		—		—		48			4,130
Construction		217		—		—		(102	)		115
Industrial Revenue Bonds		320		—		—		(47	)		273
Other		1,121		—		—		(30	)		1,091
Total	$	11,635	$	—	$	38	$	(1,000	)	$	10,673

- 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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