Document And Entity Information
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Document And Entity Information
6 Months Ended
Jun. 30, 2014
Aug. 13, 2014
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2014  
Document Fiscal Year Focus 2014  
Document Fiscal Period Focus Q2  
Entity Registrant Name NEW PEOPLES BANKSHARES INC  
Entity Central Index Key 0001163389  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   21,872,293

Consolidated Statements Of Income (Loss)
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Consolidated Statements Of Income (Loss) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
INTEREST AND DIVIDEND INCOME        
Loans including fees $ 6,240 $ 7,370 $ 12,628 $ 14,623
Federal funds sold     1 1
Interest-earning deposits with banks 47 53 85 103
Investments 348 195 690 392
Dividends on equity securities (restricted) 32 36 63 64
Total Interest and Dividend Income 6,667 7,654 13,467 15,183
INTEREST EXPENSE        
Demand 10 19 19 49
Savings 49 48 98 116
Time deposits below $100,000 475 556 966 1,138
Time deposits above $100,000 323 397 662 803
FHLB Advances 50 62 103 126
Trust Preferred Securities 113 117 229 230
Total Interest Expense 1,020 1,199 2,077 2,462
NET INTEREST INCOME 5,647 6,455 11,390 12,721
PROVISION FOR LOAN LOSSES         550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,647 6,455 11,390 12,171
NONINTEREST INCOME        
Service charges 554 565 1,058 1,098
Fees, commissions and other income 705 586 1,634 1,307
Insurance and investment fees 97 97 183 174
Net realized gains on sale of investment securities 1   4 99
Life insurance investment income 19 29 36 68
Total Noninterest Income 1,376 1,277 2,915 2,746
NONINTEREST EXPENSES        
Salaries and employee benefits 3,175 3,211 6,409 6,657
Occupancy and equipment expense 958 1,027 1,969 2,108
Advertising and public relations 121 124 238 197
Data processing and telecommunications 544 465 1,109 876
FDIC insurance premiums 376 379 750 755
Other real estate owned and repossessed vehicles, net 752 255 1,528 632
Other operating expenses 1,258 1,360 2,536 2,615
Total Noninterest Expenses 7,184 6,821 14,539 13,840
INCOME (LOSS) BEFORE INCOME TAXES (161) 911 (234) 1,077
INCOME TAX EXPENSE (BENEFIT) (4) (34) (5) (15)
NET INCOME (LOSS) $ (157) $ 945 $ (229) $ 1,092
Income (Loss) Per Share        
Basic $ (0.01) $ 0.04 $ (0.01) $ 0.05
Fully Diluted $ (0.01) $ 0.04 $ (0.01) $ 0.05
Average Weighted Shares of Common Stock        
Basic 21,872,293 21,871,063 21,872,293 21,869,768
Fully Diluted 21,872,293 21,871,063 21,872,293 21,869,768

Consolidated Statements Of Comprehensive Income
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Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Statement of Other Comprehensive Income [Abstract]        
NET INCOME (LOSS) $ (157) $ 945 $ (229) $ 1,092
Investment Securities Activity        
Unrealized gains (losses) arising during the period 400 (708) 763 (856)
Tax related to unrealized gains (losses) (136) 241 (259) 292
Reclassification of realized gains during the period (1)   (4) (99)
Tax related to realized gains 1   2 33
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 264 (467) 502 (630)
TOTAL COMPREHENSIVE INCOME $ 107 $ 478 $ 273 $ 462

Consolidated Balance Sheets
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Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
ASSETS    
Cash and due from banks $ 19,216 $ 18,770
Interest-bearing deposits with banks 48,717 35,908
Federal funds sold 7 2
Total Cash and Cash Equivalents 67,940 54,680
Investment Securities Available-for-sale 85,831 79,126
Loans receivable 471,646 493,023
Allowance for loan losses (11,576) (13,080)
Net Loans 460,070 479,943
Bank premises and equipment, net 29,649 29,976
Equity securities (restricted) 2,457 2,704
Other real estate owned 14,381 15,853
Accrued interest receivable 2,032 2,286
Life insurance investments 12,219 12,118
Intangible assets   8
Deferred taxes 5,188 5,446
Other assets 3,049 2,571
Total Assets 682,816 684,711
Demand deposits:    
Noninterest bearing 143,334 137,745
Interest-bearing 30,954 30,138
Savings deposits 112,373 104,123
Time deposits 330,222 346,991
Total Deposits 616,883 618,997
Federal Home Loan Bank advances 4,758 5,358
Accrued interest payable 2,487 2,287
Accrued expenses and other liabilities 1,959 1,613
Trust preferred securities 16,496 16,496
Total Liabilities 642,583 644,751
Commitments and contingencies      
STOCKHOLDERS' EQUITY    
Common stock $2.00 par value; 50,000,000 shares authorized; 21,872,293 shares issued and outstanding 43,745 43,745
Common stock warrants 2,050 2,050
Additional paid-in-capital 13,050 13,050
Retained earnings (deficit) (18,154) (17,925)
Accumulated other comprehensive income (loss) (458) (960)
Total Stockholders' Equity 40,233 39,960
Total Liabilities and Stockholders' Equity $ 682,816 $ 684,711

Consolidated Balance Sheets (Parenthetical)
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Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Consolidated Balance Sheets [Abstract]    
Common stock, par value $ 2.00 $ 2.00
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 21,872,293 21,872,293
Common stock, shares outstanding 21,872,293 21,872,293

Consolidated Statements Of Changes In Stockholders' Equity
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Consolidated Statements Of Changes In Stockholders' Equity (USD $)
In Thousands, except Share data
Common Stock [Member]
Common Stock Warrants [Member]
Additional Paid-In Capital [Member]
Retained Earnings (Deficit) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
Balance at Dec. 31, 2012 $ 43,731 $ 2,056 $ 13,081 $ (19,409) $ 407 $ 39,866
Balance, Shares at Dec. 31, 2012 21,866,000          
NET INCOME (LOSS)       1,092   1,092
Exercise of Common Stock Warrants, Amount 11 (5) 5     11
Exercise of Common Stock Warrants, Shares 5,000          
Stock offering costs     (37)     (37)
Other comprehensive income (loss), net of tax         (630) (630)
Balance at Jun. 30, 2013 43,742 2,051 13,049 (18,317) (223) 40,302
Balance, Shares at Jun. 30, 2013 21,871,000          
Balance at Dec. 31, 2013 43,745 2,050 13,050 (17,925) (960) 39,960
Balance, Shares at Dec. 31, 2013 21,872,000         21,872,293
NET INCOME (LOSS)       (229)   (229)
Other comprehensive income (loss), net of tax         502 502
Balance at Jun. 30, 2014 $ 43,745 $ 2,050 $ 13,050 $ (18,154) $ (458) $ 40,233
Balance, Shares at Jun. 30, 2014 21,872,000         21,872,293

Consolidated Statements Of Cash Flows
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Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income (loss) $ (229) $ 1,092
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation 1,124 1,184
Provision for loan losses   550
Income (less expenses) on life insurance (101) (133)
Gain on sale of securities available-for-sale (4) (99)
(Gain) loss on sale of premises and equipment (40) 29
(Gain) Loss on sale of foreclosed real estate 117 (27)
Proceeds from sale of loans 2,905  
Adjustment of carrying value of foreclosed real estate 930 157
Accretion of bond premiums/discounts 497 420
Deferred tax expense   (4)
Amortization of core deposit intangible 8 28
Net change in:    
Interest receivable 254 108
Other assets (478) 152
Accrued interest payable 200 203
Accrued expenses and other liabilities 346 397
Net Cash Provided by Operating Activities 5,529 4,057
CASH FLOWS FROM INVESTING ACTIVITIES    
Net decrease in loans 16,028 5,897
Purchase of securities available-for-sale (25,109) (23,137)
Proceeds from sale and maturities of securities available-for-sale 18,671 9,262
Sale of Federal Home Loan Bank stock 247 309
Purchase of Federal Reserve Bank stock   (210)
Payments for the purchase of premises and equipment (1,167) (862)
Proceeds from sales of premises and equipment 410 380
Proceeds from sales of other real estate owned 1,365 2,789
Net Cash Provided by (Used In) Investing Activities 10,445 (5,572)
CASH FLOWS FROM FINANCING ACTIVITIES    
Exercise of common stock warrants   11
Stock offering costs   (37)
Repayments to Federal Home Loan Bank (600) (600)
Net change in:    
Demand deposits 6,405 5,315
Savings deposits 8,250 (12,725)
Time deposits (16,769) (12,803)
Net Cash Used in Financing Activities (2,714) (20,839)
Net increase (decrease) in cash and cash equivalents 13,260 (22,354)
Cash and Cash Equivalents, Beginning of Period 54,680 94,109
Cash and Cash Equivalents, End of Period 67,940 71,755
Supplemental Disclosure of Cash Paid During the Period for:    
Interest 1,877 2,259
Taxes      
Supplemental Disclosure of Non Cash Transactions:    
Other real estate acquired in settlement of foreclosed loans 1,515 3,322
Loans made to finance sale of foreclosed real estate $ 575  

Nature Of Operations
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Nature Of Operations
6 Months Ended
Jun. 30, 2014
Nature Of Operations [Abstract]  
Nature Of Operations

NOTE 1  NATURE OF OPERATIONS:

 

New Peoples Bankshares, Inc. (“The Company”) is a bank holding company whose principal activity is the ownership and management of a community bank.  New Peoples Bank, Inc. (“Bank”) was organized and incorporated under the laws of the Commonwealth of Virginia on December 9, 1997.  The Bank commenced operations on October 28, 1998, after receiving regulatory approval.  As a state chartered member bank, the Bank is subject to regulation by the Virginia Bureau of Financial Institutions, the Federal Deposit Insurance Corporation and the Federal Reserve Bank.  The Bank provides general banking services to individuals, small and medium size businesses and the professional community of southwestern Virginia, southern West Virginia, and eastern Tennessee.  On June 9, 2003, the Company formed two wholly owned subsidiaries, NPB Financial Services, Inc. and NPB Web Services, Inc.  On July 7, 2004 the Company established NPB Capital Trust I for the purpose of issuing trust preferred securities.  On September 27, 2006, the Company established NPB Capital Trust 2 for the purpose of issuing additional trust preferred securities.  NPB Financial Services, Inc. was a subsidiary of the Company until January 1, 2009 when it became a subsidiary of the Bank.  In June 2012 the name of NPB Financial Services, Inc. was changed to NPB Insurance Services, Inc. which operates solely as an insurance agency.    


Accounting Principles
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Accounting Principles
6 Months Ended
Jun. 30, 2014
Accounting Principles [Abstract]  
Accounting Principles

NOTE 2  ACCOUNTING PRINCIPLES:

 

The financial statements conform to U. S. generally accepted accounting principles and to general industry practices.  In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position at June 30, 2014, and the results of operations for the three and six month periods ended June 30, 2014 and 2013.  The notes included herein should be read in conjunction with the notes to financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.  The results of operations for the three and six month periods ended June 30, 2014 and 2013 are not necessarily indicative of the results to be expected for the full year.

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  The determination of the adequacy of the allowance for loan losses and the determination of the deferred tax asset and valuation allowance are based on estimates that are particularly susceptible to significant changes in the economic environment and market conditions.


Formal Written Agreement
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Formal Written Agreement
6 Months Ended
Jun. 30, 2014
Formal Written Agreement [Abstract]  
Formal Written Agreement

NOTE 3  FORMAL WRITTEN AGREEMENT:

Effective July 29, 2010, the Company and the Bank entered into a written agreement with the Federal Reserve Bank of Richmond (“Reserve Bank”) and the Virginia State Corporation Commission Bureau of Financial Institutions (the “Bureau”) called (the “Written Agreement”).  At June 30, 2014, we believe we have not yet achieved full compliance with the Written Agreement but we have made progress in our compliance efforts under the Written Agreement and all of the written plans required to date, as discussed in the following paragraphs, have been submitted on a timely basis. 

 

Under the terms of the Written Agreement, the Bank has agreed to develop and submit for approval within specified  time periods written plans to: (a) strengthen board oversight of management and the Bank’s operation; (b) if appropriate after review, to strengthen the Bank’s management and board governance; (c) strengthen credit risk management policies; (d) enhance lending and credit administration; (e) enhance the Bank’s management of commercial real estate concentrations; (f) conduct ongoing review and grading of the Bank’s loan portfolio; (g) improve the Bank’s position with respect to loans, relationships, or other assets in excess of $1 million which are now or in the future become past due more than 90 days, which are on the Bank’s problem loan list, or which are adversely classified in any report of examination of the Bank; (h) review and revise, as appropriate, current policy and maintain sound processes for maintaining an adequate allowance for loan and lease losses; (i) enhance management of the Bank’s liquidity position and funds management practices; (j) revise its contingency funding plan; (k)  revise its strategic plan; and (l)  enhance the Bank’s anti-money laundering and related activities. 

In addition, the Bank has agreed that it will: (a) not extend, renew, or restructure any credit that has been criticized by the Reserve Bank or the Bureau absent prior board of directors approval in accordance with the restrictions in the Written Agreement; (b) eliminate all assets or portions of assets classified as “loss” and thereafter charge off all assets classified as “loss” in a federal or state report of examination, unless otherwise approved by the Reserve Bank.

Under the terms of the Written Agreement, both the Company and the Bank have agreed to submit capital plans to maintain sufficient capital at the Company, on a consolidated basis, and the Bank, on a stand-alone basis, and to refrain from declaring or paying dividends without prior regulatory approval. The Company has agreed that it will not take any other form of payment representing a reduction in the Bank’s capital or make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without prior regulatory approval. The Company may not incur, increase or guarantee any debt without prior regulatory approval and has agreed not to purchase or redeem any shares of its stock without prior regulatory approval.

 

Under the terms of the Written Agreement, the Company and the Bank have appointed a committee to monitor compliance with the Written Agreement. The directors of the Company and the Bank have recognized and unanimously agree with the common goal of financial soundness represented by the Written Agreement and have confirmed the intent of the directors and executive management to diligently seek to comply with all requirements of the Written Agreement.


Capital
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Capital
6 Months Ended
Jun. 30, 2014
Capital [Abstract]  
Capital

NOTE 4  CAPITAL:

 

Capital Requirements and Ratios

 

The Company and the Bank are subject to various capital requirements administered by federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Prompt corrective action provisions are not applicable to bank holding companies.

 

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined).  Management believes that, as of June 30, 2014, the Company and the Bank meet all capital adequacy requirements to which they are subject. 

 

As of June 30, 2014, the Bank was well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables.  There are no conditions or events since the notification that management believes have changed the Company’s and Bank’s category. 

 

The Company’s and the Bank’s actual capital amounts and ratios are presented in the table as of June 30, 2014 and December 31, 2013, respectively.

 

 

 

 

 

 

 

 

 

 

 

Actual

Minimum Capital Requirement

Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions

(Dollars are in thousands)

Amount

Ratio

Amount

Ratio

 

Amount

Ratio

June 30, 2014:

Total Capital to Risk Weighted Assets:

The Company

$

57,442 
14.86% 

$  30,918

8% 

$

N/A

N/A

The Bank

 

56,064 
14.49% 
30,946 
8% 

 

38,682 
10% 

Tier 1 Capital to Risk Weighted Assets:

The Company

 

50,092 
12.96% 
15,459 
4% 

 

N/A

N/A

The Bank

 

51,146 
13.22% 
15,473 
4% 

 

23,209 
6% 

Tier 1 Capital to Average Assets:

The Company

 

50,092 
7.33% 
27,336 
4% 

 

N/A

N/A

The Bank

 

51,146 
7.48% 
27,348 
4% 

 

34,185 
5% 

 

 

December 31, 2013:

Total Capital to Risk Weighted Assets:

The Company

$

58,305 
14.39% 
$
32,417 
8% 

$

N/A

N/A

The Bank

 

56,602 
13.96% 
32,430 
8% 

 

40,538 
10% 

Tier 1 Capital to Risk Weighted Assets:

The Company

 

50,776 
12.53% 
16,208 
4% 

 

N/A

N/A

The Bank

 

51,436 
12.69% 
16,215 
4% 

 

24,323 
6% 

Tier 1 Capital to Average Assets:

The Company

 

50,776 
7.40% 
27,445 
4% 

 

N/A

N/A

The Bank

 

51,436 
7.49% 
27,460 
4% 

 

34,326 
5% 

 


Investment Securities
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Investment Securities
6 Months Ended
Jun. 30, 2014
Investment Securities [Abstract]  
Investment Securities

NOTE 5  INVESTMENT SECURITIES:

 

The amortized cost and estimated fair value of securities (all available-for-sale (“AFS”)) are as follows:

 

 

 

 

 

 

 

 

 

 

 

Gross

 

Gross

 

Approximate

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

(Dollars are in thousands)

Cost

 

Gains

 

Losses

 

Value

June 30, 2014

U.S. Government Agencies

$

40,111 

$

181 

$

583 

$

39,709 

Taxable municipals

-

-

-

-

Tax-exempt municipals

-

-

-

-

Mortgage backed securities

46,415 
104 
397 
46,122 

Total Securities AFS

$

86,526 

$

285 

$

980 

$

85,831 

 

December 31, 2013

U.S. Government Agencies

$

39,296 

$

246 

$

941 

$

38,601 

Taxable municipals

-

-

-

-

Tax-exempt municipals

-

-

-

-

Mortgage backed securities

41,284 
60 
819 
40,525 

Total Securities AFS

$

80,580 

$

306 

$

1,760 

$

79,126 

 

The following table details unrealized losses and related fair values in the available-for-sale portfolio.  This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2014 and December 31, 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

 

(Dollars are in thousands)

 

Fair Value

 

Unrealized

Losses

 

Fair

Value

 

Unrealized

Losses

 

Fair

Value

 

Unrealized

Losses

 

June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Agencies

$

10,037 

$

72 

$

13,583 

$

511 

$

23,620 

$

583 

 

Mtg. backed securities

 

16,931 

 

114 

 

16,785 

 

283 

 

33,716 

 

397 

 

Total Securities AFS

$

26,968 

$

186 

$

30,368 

$

794 

$

57,336 

$

980 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Agencies

$

26,090 

$

936 

$

570 

$

$

26,660 

$

941 

 

Mtg. backed securities

 

27,461 

 

693 

 

5,046 

 

126 

 

32,507 

 

819 

 

Total Securities AFS

$

53,551 

$

1,629 

$

5,616 

$

131 

$

59,167 

$

1,760 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2014, the available-for-sale portfolio included eighty three investments for which the fair market value was less than amortized cost.  At December 31, 2013, the available-for-sale portfolio included eighty investments for which the fair market value was less than amortized cost.  Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial conditions and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  No securities had an other than temporary impairment.

 

The amortized cost and fair value of investment securities at June 30, 2014, by contractual maturity, are shown in the following schedule.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

 

 

 

 

 

 

Weighted

(Dollars are in thousands)

Amortized

 

Fair

 

Average

Securities Available-for-Sale

Cost

 

Value

 

Yield

Due in one year or less

$

51 

$

52 

 

2.28% 

Due after one year through five years

1,551 
1,551 
0.97% 

Due after five years through fifteen years

 

32,195 

 

32,155 

 

1.73% 

Due after fifteen years

 

52,729 

 

52,073 

 

1.84% 

Total

$

86,526 

$

85,831 

 

1.78% 

 

Investment securities with a carrying value of $19.1 million and $17.0 million at June 30, 2014 and December 31, 2013, were pledged to secure public deposits, overnight payment processing and for other purposes required by law.

 

The Bank, as a member of the Federal Reserve Bank and the Federal Home Loan Bank, is required to hold stock in each. These equity securities are restricted from trading and are recorded at a cost of $2.5 million and $2.7 million as of June 30, 2014 and December 31, 2013, respectively.


Loans
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Loans
6 Months Ended
Jun. 30, 2014
Loans [Abstract]  
Loans

NOTE 6  LOANS:

 

Loans receivable outstanding are summarized as follows:

 

 

 

 

 

 

(Dollars are in thousands)

 

June 30, 2014

 

December 31, 2013

Real estate secured:

 

 

 

 

Commercial

$

116,844 

$

126,174 

Construction and land development

 

15,903 

 

22,421 

Residential 1-4 family

 

248,454 

 

249,187 

Multifamily

 

11,873 

 

11,482 

Farmland

 

26,386 

 

28,892 

Total real estate loans

 

419,460 

 

438,156 

Commercial

 

21,286 

 

24,955 

Agriculture

 

3,923 

 

3,718 

Consumer installment loans

 

26,861 

 

26,055 

All other loans

 

116 

 

139 

Total loans

$

471,646 

$

493,023 

 

Loans receivable on nonaccrual status are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

(Dollars are in thousands)

 

June 30, 2014

 

December 31, 2013

Real estate secured:

 

 

 

 

Commercial

$

11,328 

$

16,098 

Construction and land development

 

743 

 

775 

Residential 1-4 family

 

6,975 

 

4,852 

Multifamily

 

164 

 

171 

Farmland

 

4,951 

 

5,315 

Total real estate loans

 

24,161 

 

27,211 

Commercial

 

859 

 

947 

Agriculture

 

40 

 

45 

Consumer installment loans

 

53 

 

104 

All other loans

 

-

 

-

Total loans receivable on nonaccrual status

$

25,113 

$

28,307 

 

Total interest income not recognized on nonaccrual loans for six months ended June 30, 2014 and 2013 was $273 thousand and $193 thousand, respectively.

 

 

The following table presents information concerning the Company’s investment in loans considered impaired as of June 30, 2014 and December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2014

(Dollars are in thousands)

 

 

Average

Recorded

Investment

 

 

Interest

Income

Recognized

 

 

 

Recorded

Investment

 

 

 

 

Unpaid Principal Balance

 

 

 

Related

Allowance

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

Real estate secured:

 

 

 

 

 

 

 

 

 

 

Commercial

$

11,969 

$

126 

$

10,754 

$

11,574 

$

-

Construction and land development

 

282 

 

 

202 

 

213 

 

-

Residential 1-4 family

 

2,690 

 

52 

 

2,441 

 

2,643 

 

-

Multifamily

 

324 

 

 

322 

 

322 

 

-

Farmland

 

4,980 

 

77 

 

5,997 

 

6,733 

 

-

Commercial

 

310 

 

-

 

298 

 

298 

 

-

Agriculture

 

66 

 

 

65 

 

81 

 

-

Consumer installment loans

 

 

-

 

13 

 

13 

 

-

All other loans

 

-

 

-

 

-

 

-

 

-

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

Real estate secured:

 

 

 

 

 

 

 

 

 

 

Commercial

 

7,738 

 

76 

 

4,966 

 

5,423 

 

893 

Construction and land development

 

639 

 

13 

 

800 

 

897 

 

218 

Residential 1-4 family

 

5,198 

 

113 

 

4,954 

 

5,161 

 

1,288 

Multifamily

 

321 

 

13 

 

429 

 

429 

 

75 

Farmland

 

3,527 

 

60 

 

2,245 

 

2,272 

 

560 

Commercial

 

633 

 

 

561 

 

669 

 

39 

Agriculture

 

43 

 

 

36 

 

36 

 

36 

Consumer installment loans

 

16 

 

-

 

 

 

-

All other loans

 

-

 

-

 

-

 

-

 

-

Total

$

38,745 

$

544 

$

34,089 

$

36,770 

$

3,109 

 

 

As of December 31, 2013

(Dollars are in thousands)

 

 

Average

Recorded

Investment

 

 

Interest

Income

Recognized

 

 

 

Recorded

Investment

 

 

Unpaid Principal Balance

 

 

 

Related

Allowance

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

Real estate secured:

 

 

 

 

 

 

 

 

 

 

Commercial

$

16,270 

$

300 

$

9,807 

$

10,276 

$

-

Construction and land development

 

2,246 

 

26 

 

336 

 

345 

 

-

Residential 1-4 family

 

4,276 

 

126 

 

2,557 

 

2,727 

 

-

Multifamily

 

652 

 

16 

 

326 

 

326 

 

-

Farmland

 

4,260 

 

166 

 

2,533 

 

2,670 

 

-

Commercial

 

717 

 

 

315 

 

423 

 

-

Agriculture

 

71 

 

 

60 

 

60 

 

-

Consumer installment loans

 

51 

 

 

12 

 

12 

 

-

All other loans

 

-

 

-

 

-

 

-

 

-

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

Real estate secured:

 

 

 

 

 

 

 

 

 

 

Commercial

 

12,080 

 

441 

 

12,092 

 

13,924 

 

1,942 

Construction and land development

 

492 

 

 

554 

 

640 

 

138 

Residential 1-4 family

 

3,980 

 

260 

 

5,458 

 

5,824 

 

1,180 

Multifamily

 

561 

 

17 

 

268 

 

268 

 

39 

Farmland

 

4,116 

 

114 

 

6,109 

 

6,797 

 

653 

Commercial

 

1,012 

 

 

672 

 

740 

 

208 

Agriculture

 

138 

 

 

55 

 

71 

 

43 

Consumer installment loans

 

22 

 

 

22 

 

22 

 

All other loans

 

-

 

-

 

-

 

-

 

-

Total

$

50,944 

$

1,499 

$

41,176 

$

45,125 

$

4,206 

 

 

An age analysis of past due loans receivable was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2014

(Dollars are in thousands)

 

 

 

Loans

30-59

Days

Past

Due

 

 

 

Loans

60-89

Days

Past

Due

 

 

Loans

90 or

More

Days

Past

Due

 

 

 

 

Total

Past

Due

Loans

 

 

 

 

 

 

Current

Loans

 

 

 

 

 

 

Total

Loans

 

Accruing

Loans

90 or

More

Days

Past

Due

Real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

1,902 

$

547 

$

5,035 

$

7,484 

$

109,360 

$

116,844 

$

-

Construction and  land

  development

 

237 

 

152 

 

363 

 

752 

 

15,151 

 

15,903 

 

-

Residential 1-4 family

 

6,202 

 

1,798 

 

2,014 

 

10,014 

 

238,440 

 

248,454 

 

-

Multifamily

 

246 

 

-

 

-

 

246 

 

11,627 

 

11,873 

 

-

Farmland

 

130 

 

32 

 

3,870 

 

4,032 

 

22,354 

 

26,386 

 

-

Total real estate loans

 

8,717 

 

2,529 

 

11,282 

 

22,528 

 

396,932 

 

419,460 

 

-

Commercial

 

570 

 

-

 

343 

 

913 

 

20,373 

 

21,286 

 

-

Agriculture

 

 

-

 

40 

 

48 

 

3,875 

 

3,923 

 

-

Consumer installment

  Loans

 

181 

 

20 

 

23 

 

224 

 

26,637 

 

26,861 

 

-

All other loans

 

13 

 

 

-

 

19 

 

97 

 

116 

 

-

Total loans

$

9,489 

$

2,555 

$

11,688 

$

23,732 

$

447,914 

$

471,646 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2013

(Dollars are in thousands)

 

 

 

Loans

30-59

Days

Past

Due

 

 

 

Loans

60-89

Days

Past

Due

 

 

Loans

90 or

More

Days

Past

Due

 

 

 

 

Total

Past

Due

Loans

 

 

 

 

 

 

Current

Loans

 

 

 

 

 

 

Total

Loans

 

Accruing

Loans

90 or

More

Days

Past

Due

Real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

7,192 

$

1,713 

$

4,174 

$

13,079 

$

113,095 

$

126,174 

$

-

Construction and  land

  development

 

505 

 

183 

 

347 

 

1,035 

 

21,386 

 

22,421 

 

-

Residential 1-4 family

 

6,391 

 

1,067 

 

1,271 

 

8,729 

 

240,458 

 

249,187 

 

-

Multifamily

 

-

 

436 

 

-

 

436 

 

11,046 

 

11,482 

 

-

Farmland

 

1,869 

 

137 

 

3,986 

 

5,992 

 

22,900 

 

28,892 

 

-

Total real estate loans

 

15,957 

 

3,536 

 

9,778 

 

29,271 

 

408,885 

 

438,156 

 

-

Commercial

 

135 

 

14 

 

902 

 

1,051 

 

23,904 

 

24,955 

 

-

Agriculture

 

26 

 

20 

 

13 

 

59 

 

3,659 

 

3,718 

 

-

Consumer installment

  Loans

 

241 

 

48 

 

 

297 

 

25,758 

 

26,055 

 

-

All other loans

 

11 

 

 

 

19 

 

120 

 

139 

 

Total loans

$

16,370 

$

3,625 

$

10,702 

$

30,697 

$

462,326 

$

493,023 

$

 

The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans receivable as to credit risk.  The Company uses the following definitions for risk ratings:

 

Pass - Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

 

Special Mention - Loans in this category are currently protected but are potentially weak, including adverse trends in borrower’s operations, credit quality or financial strength.  Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances.  Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company’s credit position at some future date.

 

Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

 

Doubtful - Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus 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.

 

Based on the most recent analysis performed, the risk category of loans receivable was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2014

(Dollars are in thousands)

 

 

 

Pass

 

 

Special

Mention

 

 

 

Substandard

 

 

 

 

 

Doubtful

 

 

 

Total

Real estate secured:

 

 

 

 

 

 

 

 

 

 

  Commercial

$

97,476 

$

5,040 

$

14,328 

$

-

$

116,844 

  Construction and land development

 

12,652 

 

1,999 

 

1,252 

 

-

 

15,903 

  Residential 1-4 family

 

234,639 

 

1,911 

 

11,904 

 

-

 

248,454 

  Multifamily

 

11,444 

 

-

 

429 

 

-

 

11,873 

  Farmland

 

17,840 

 

405 

 

8,141 

 

-

 

26,386 

Total real estate loans

 

374,051 

 

9,355 

 

36,054 

 

-

 

419,460 

Commercial

 

17,534 

 

2,794 

 

958 

 

-

 

21,286 

Agriculture

 

3,816 

 

-

 

107 

 

-

 

3,923 

Consumer installment loans

 

26,716 

 

-

 

145 

 

-

 

26,861 

All other loans

 

116 

 

-

 

-

 

-

 

116 

Total

$

422,233 

$

12,149 

$

37,264 

$

-

$

471,646 

 

As of December 31, 2013

(Dollars are in thousands)

 

 

 

Pass

 

 

Special

Mention

 

 

 

Substandard

 

 

 

 

 

Doubtful

 

 

 

Total

Real estate secured:

 

 

 

 

 

 

 

 

 

 

  Commercial

$

100,403 

$

4,586 

$

21,185 

$