Document And Entity Information
v0.0.0.0
Document And Entity Information
9 Months Ended
Sep. 30, 2014
Nov. 10, 2014
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2014  
Document Fiscal Year Focus 2014  
Document Fiscal Period Focus Q3  
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   22,878,654

Consolidated Statements Of Income
v0.0.0.0
Consolidated Statements Of Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
INTEREST AND DIVIDEND INCOME        
Loans including fees $ 6,186 $ 7,134 $ 18,814 $ 21,757
Federal funds sold 1 1 2 2
Interest-earning deposits with banks 37 43 122 146
Investments 366 220 1,056 612
Dividends on equity securities (restricted) 33 30 96 94
Total Interest and Dividend Income 6,623 7,428 20,090 22,611
INTEREST EXPENSE        
Demand 9 20 28 69
Savings 42 45 140 161
Time deposits below $100,000 449 538 1,415 1,676
Time deposits above $100,000 312 381 974 1,184
FHLB Advances 47 60 150 186
Trust Preferred Securities 120 119 349 349
Total Interest Expense 979 1,163 3,056 3,625
NET INTEREST INCOME 5,644 6,265 17,034 18,986
PROVISION FOR LOAN LOSSES         550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,644 6,265 17,034 18,436
NONINTEREST INCOME        
Service charges 580 586 1,638 1,684
Fees, commissions and other income 905 778 2,539 2,085
Insurance and investment fees 107 79 290 253
Net realized gains on sale of investment securities (1)   3 99
Life insurance investment income 19 24 55 92
Total Noninterest Income 1,610 1,467 4,525 4,213
NONINTEREST EXPENSES        
Salaries and employee benefits 3,201 3,334 9,610 9,991
Occupancy and equipment expense 939 1,040 2,908 3,148
Advertising and public relations 91 76 329 273
Data processing and telecommunications 563 447 1,672 1,323
FDIC insurance premiums 374 386 1,124 1,141
Other real estate owned and repossessed vehicles, net 402 758 1,930 1,390
Other operating expenses 1,295 1,238 3,831 3,853
Total Noninterest Expenses 6,865 7,279 21,404 21,119
INCOME BEFORE INCOME TAXES 389 453 155 1,530
INCOME TAX EXPENSE (BENEFIT) (4) 6 (9) (9)
NET INCOME $ 393 $ 447 $ 164 $ 1,539
Income Per Share        
Basic $ 0.02 $ 0.02 $ 0.01 $ 0.07
Fully Diluted $ 0.02 $ 0.02 $ 0.01 $ 0.07
Average Weighted Shares of Common Stock        
Basic 21,872,293 21,871,170 21,872,293 21,870,240
Fully Diluted 21,872,293 21,871,170 21,872,293 21,870,240

Consolidated Statements Of Comprehensive Income (Loss)
v0.0.0.0
Consolidated Statements Of Comprehensive Income (Loss) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Statement Of Other Comprehensive Income (Loss) [Abstract]        
NET INCOME $ 393 $ 447 $ 164 $ 1,539
Investment Securities Activity        
Unrealized gains (losses) arising during the period 62 (935) 825 (1,791)
Tax related to unrealized gains (losses) (21) 317 (280) 609
Reclassification of realized (gains) losses during the period 1   (3) (99)
Tax related to realized (gains) losses (1)   1 33
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) 41 (618) 543 (1,248)
TOTAL COMPREHENSIVE INCOME (LOSS) $ 434 $ (171) $ 707 $ 291

Consolidated Balance Sheets
v0.0.0.0
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
ASSETS    
Cash and due from banks $ 19,635 $ 18,770
Interest-bearing deposits with banks 32,124 35,908
Federal funds sold 5 2
Total Cash and Cash Equivalents 51,764 54,680
Investment Securities Available-for-sale 97,063 79,126
Loans receivable 463,942 493,023
Allowance for loan losses (10,454) (13,080)
Net Loans 453,488 479,943
Bank premises and equipment, net 29,359 29,976
Equity securities (restricted) 2,354 2,704
Other real estate owned 13,541 15,853
Accrued interest receivable 2,022 2,286
Life insurance investments 12,238 12,118
Intangible assets   8
Deferred taxes 5,167 5,446
Other assets 2,453 2,571
Total Assets 669,449 684,711
Demand deposits:    
Noninterest bearing 145,823 137,745
Interest-bearing 30,607 30,138
Savings deposits 112,279 104,123
Time deposits 314,138 346,991
Total Deposits 602,847 618,997
Federal Home Loan Bank advances 4,458 5,358
Accrued interest payable 2,584 2,287
Accrued expenses and other liabilities 2,397 1,613
Trust preferred securities 16,496 16,496
Total Liabilities 628,782 644,751
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) (17,761) (17,925)
Accumulated other comprehensive income (loss) (417) (960)
Total Stockholders' Equity 40,667 39,960
Total Liabilities and Stockholders' Equity $ 669,449 $ 684,711

Consolidated Balance Sheets (Parenthetical)
v0.0.0.0
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 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
v0.0.0.0
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)       1,539   1,539
Exercise of Common Stock Warrants, Amount 14 (6) 6     14
Exercise of Common Stock Warrants, Shares 6,000          
Stock offering costs     (37)     (37)
Other comprehensive income (loss), net of tax         (1,248) (1,248)
Balance at Sep. 30, 2013 43,745 2,050 13,050 (17,870) (841) 40,134
Balance, Shares at Sep. 30, 2013 21,872,000          
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)       164   164
Other comprehensive income (loss), net of tax         543 543
Balance at Sep. 30, 2014 $ 43,745 $ 2,050 $ 13,050 $ (17,761) $ (417) $ 40,667
Balance, Shares at Sep. 30, 2014 21,872,000         21,872,293

Consolidated Statements Of Cash Flows
v0.0.0.0
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income $ 164 $ 1,539
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 1,673 1,769
Provision for loan losses   550
Income (less expenses) on life insurance (120) (157)
Gain on sale of securities available-for-sale (3) (99)
(Gain) loss on sale of premises and equipment (183) 23
Loss on sale of foreclosed real estate 183 356
Adjustment of carrying value of foreclosed real estate 957 149
Accretion of bond premiums/discounts 780 692
Amortization of core deposit intangible 8 36
Net change in:    
Interest receivable 264 153
Other assets 118 212
Accrued interest payable 297 298
Accrued expenses and other liabilities 784 806
Net Cash Provided by Operating Activities 4,922 6,327
CASH FLOWS FROM INVESTING ACTIVITIES    
Net decrease in loans 22,558 13,115
Proceeds from sale of loans 2,905  
Purchase of securities available-for-sale (43,534) (36,894)
Proceeds from sale and maturities of securities available-for-sale 25,642 12,831
Sale of Federal Home Loan Bank stock 350 309
Purchase of Federal Reserve Bank stock   (210)
Payments for the purchase of premises and equipment (1,426) (1,191)
Proceeds from sales of premises and equipment 553 389
Proceeds from sales of other real estate owned 2,164 4,376
Net Cash Provided by (Used In) Investing Activities 9,212 (7,275)
CASH FLOWS FROM FINANCING ACTIVITIES    
Exercise of common stock warrants   14
Stock offering costs   (37)
Repayments to Federal Home Loan Bank (900) (900)
Net change in:    
Demand deposits 8,547 3,223
Savings deposits 8,156 (12,387)
Time deposits (32,853) (19,506)
Net Cash Used in Financing Activities (17,050) (29,593)
Net decrease in cash and cash equivalents (2,916) (30,541)
Cash and Cash Equivalents, Beginning of Period 54,680 94,109
Cash and Cash Equivalents, End of Period 51,764 63,568
Supplemental Disclosure of Cash Paid During the Period for:    
Interest 2,759 3,327
Supplemental Disclosure of Non Cash Transactions:    
Other real estate acquired in settlement of foreclosed loans 2,224 5,366
Loans made to finance sale of foreclosed real estate $ 1,232 $ 245

Nature Of Operations
v0.0.0.0
Nature Of Operations
9 Months Ended
Sep. 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
v0.0.0.0
Accounting Principles
9 Months Ended
Sep. 30, 2014
Accounting Principles [Abstract]  
Accounting Principles

NOTE 2  ACCOUNTING PRINCIPLES:

 

These consolidated financial statements conform to U. S. generally accepted accounting principles and to general industry practices.  In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position at September 30, 2014, and the results of operations for the three and nine month periods ended September 30, 2014 and 2013.  The notes included herein should be read in conjunction with the notes to the consolidated 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 nine month periods ended September 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
v0.0.0.0
Formal Written Agreement
9 Months Ended
Sep. 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 September 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
v0.0.0.0
Capital
9 Months Ended
Sep. 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 September 30, 2014, the Company and the Bank meet all capital adequacy requirements to which they are subject. 

 

As of September 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 following table as of September 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

September 30, 2014:

Total Capital to Risk Weighted Assets:

The Company

$

58,044 
15.26% 

$  30,438

8% 

$

N/A

N/A

The Bank

 

57,379 
15.09% 
30,418 
8% 

 

38,023 
10% 

Tier 1 Capital to Risk Weighted Assets:

The Company

 

50,913 
13.38% 
15,219 
4% 

 

N/A

N/A

The Bank

 

52,556 
13.82% 
15,209 
4% 

 

22,814 
6% 

Tier 1 Capital to Average Assets:

The Company

 

50,913 
7.57% 
26,894 
4% 

 

N/A

N/A

The Bank

 

52,556 
7.81% 
26,907 
4% 

 

33,633 
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
v0.0.0.0
Investment Securities
9 Months Ended
Sep. 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

September 30, 2014

U.S. Government Agencies

$

40,889 

$

217 

$

461 

$

40,645 

Taxable municipals

296 

-

288 

Tax-exempt municipals

-

-

-

-

Mortgage backed securities

56,510 
103 
483 
56,130 

Total Securities AFS

$

97,695 

$

320 

$

952 

$

97,063 

 

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 September 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

 

September 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government Agencies

$

10,164 

$

42 

$

13,258 

$

419 

$

23,422 

$

461 

 

Taxable municipals

 

288 

 

 

-

 

-

 

288 

 

 

Mtg. backed securities

 

24,840 

 

194 

 

16,190 

 

289 

 

41,030 

 

483 

 

Total Securities AFS

$

35,292 

$

244 

$

29,448 

$

708 

$

64,740 

$

952 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30, 2014, the available-for-sale portfolio included ninety six 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.  Based on the Company’s analysis, the Company concluded that no securities had an other than temporary impairment.

 

The amortized cost and fair value of investment securities at September 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

$

48 

$

49 

 

2.27% 

Due after one year through five years

2,419 
2,422 
1.27% 

Due after five years through fifteen years

 

36,133 

 

36,042 

 

1.70% 

Due after fifteen years

 

59,095 

 

58,550 

 

1.86% 

Total

$

97,695 

$

97,063 

 

1.79% 

 

Investment securities with a carrying value of $18.4 million and $17.0 million at September 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 $2.4 million and $2.7 million as of September 30, 2014 and December 31, 2013, respectively.


Loans
v0.0.0.0
Loans
9 Months Ended
Sep. 30, 2014
Loans [Abstract]  
Loans

NOTE 6  LOANS:

 

Loans receivable outstanding are summarized as follows:

 

 

 

 

 

 

(Dollars are in thousands)

 

September 30, 2014

 

December 31, 2013

Real estate secured:

 

 

 

 

Commercial

$

113,765 

$

126,174 

Construction and land development

 

15,273 

 

22,421 

Residential 1-4 family

 

246,465 

 

249,187 

Multifamily

 

11,684 

 

11,482 

Farmland

 

25,783 

 

28,892 

Total real estate loans

 

412,970 

 

438,156 

Commercial

 

20,898 

 

24,955 

Agriculture

 

3,408 

 

3,718 

Consumer installment loans

 

26,558 

 

26,055 

All other loans

 

108 

 

139 

Total loans

$

463,942 

$

493,023 

 

Loans receivable on nonaccrual status are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

(Dollars are in thousands)

 

September 30, 2014

 

December 31, 2013

Real estate secured:

 

 

 

 

Commercial

$

9,598 

$

16,098 

Construction and land development

 

570 

 

775 

Residential 1-4 family

 

7,774 

 

4,852 

Multifamily

 

121 

 

171 

Farmland

 

5,335 

 

5,315 

Total real estate loans

 

23,398 

 

27,211 

Commercial

 

644 

 

947 

Agriculture

 

30 

 

45 

Consumer installment loans

 

44 

 

104 

All other loans

 

-

 

-

Total loans receivable on nonaccrual status

$

24,116 

$

28,307 

 

Total interest income not recognized on nonaccrual loans for the nine months ended September 30, 2014 and 2013 was $343 thousand and $375 thousand, respectively.

 

In the first nine months of 2014, two nonperforming loans totaling $3.2 million were sold to further reduce the high level of nonaccrual loans.  A charge off of $474 thousand was realized which was fully absorbed by unallocated portion of the allowance for loan losses with no additional provisions needed.  We will continue to evaluate certain loans to determine if additional loans may be sold at minimal impact to earnings and to capital levels in the near future as we aggressively work to reduce the level of nonperforming loans.  There were no nonperforming loans sold during the first nine months of 2013.

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 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

$

11,038 

$

140 

$

8,246 

$

9,569 

$

-

Construction and land development

 

306 

 

 

379 

 

379 

 

-

Residential 1-4 family

 

2,888 

 

132 

 

3,479 

 

3,592 

 

-

Multifamily

 

354 

 

20 

 

442 

 

483 

 

-

Farmland

 

5,288 

 

100 

 

6,209 

 

7,012 

 

-

Commercial

 

390 

 

-

 

628 

 

737 

 

-

Agriculture

 

65 

 

 

61 

 

66 

 

-

Consumer installment loans

 

11 

 

 

17 

 

17 

 

-

All other loans

 

-

 

-

 

-

 

-

 

-

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

Real estate secured:

 

 

 

 

 

 

 

 

 

 

Commercial

 

6,794 

 

76 

 

3,962 

 

4,325 

 

991 

Construction and land development

 

556 

 

11 

 

307 

 

358 

 

92 

Residential 1-4 family

 

4,667 

 

110 

 

3,073 

 

3,284 

 

565 

Multifamily

 

307 

 

12 

 

262 

 

262 

 

32 

Farmland

 

2,940 

 

45 

 

1,179 

 

1,190 

 

396 

Commercial

 

490 

 

 

62 

 

62 

 

15 

Agriculture

 

41 

 

 

33 

 

33 

 

33 

Consumer installment loans

 

12 

 

-

 

-

 

-

 

-

All other loans

 

-

 

-

 

-

 

-

 

-

Total

$

36,147 

$

662 

$

28,339 

$

31,369 

$

2,124 

 

 

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 September 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

$

2,337 

$

456 

$

5,089 

$

7,882 

$

105,883 

$

113,765 

$

-

Construction and  land

  development

 

12 

 

-

 

243 

 

255 

 

15,018 

 

15,273 

 

-

Residential 1-4 family

 

5,958 

 

1,238 

 

1,993 

 

9,189 

 

237,276 

 

246,465 

 

-

Multifamily

 

-

 

-

 

-

 

-

 

11,684 

 

11,684 

 

-

Farmland

 

1,101 

 

30 

 

375 

 

1,506 

 

24,277 

 

25,783 

 

-

Total real estate loans

 

9,408 

 

1,724 

 

7,700 

 

18,832 

 

394,138 

 

412,970 

 

-

Commercial

 

41 

 

27 

 

160 

 

228 

 

20,670 

 

20,898 

 

-

Agriculture

 

-

 

-

 

17 

 

17 

 

3,391 

 

3,408 

 

-

Consumer installment

  Loans

 

146 

 

16 

 

-

 

162 

 

26,396 

 

26,558 

 

-

All other loans

 

13 

 

 

-

 

17 

 

91 

 

108 

 

-

Total loans

$

9,608 

$

1,771 

$

7,877 

$

19,256 

$

444,686 

$

463,942 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30, 2014

(Dollars are in thousands)

 

 

 

Pass

 

 

Special

Mention

 

 

 

Substandard

 

 

 

 

 

Doubtful

 

 

 

Total

Real estate secured:

 

 

 

 

 

 

 

 

 

 

  Commercial

$

94,542 

$

8,117 

$

11,106 

$

-

$

113,765 

  Construction and land development

 

12,355 

 

2,078 

 

840 

 

-

 

15,273 

  Residential 1-4 family

 

233,740 

 

2,321 

 

10,404 

 

-

 

246,465 

  Multifamily

 

11,221 

 

-

 

463 

 

-

 

11,684 

  Farmland

 

18,177 

 

280 

 

7,326 

 

-

 

25,783 

Total real estate loans

 

370,035 

 

12,796 

 

30,139 

 

-

 

412,970 

Commercial

 

17,210 

 

2,794 

 

894 

 

-

 

20,898 

Agriculture

 

3,328 

 

-

 

80 

 

-

 

3,408 

Consumer installment loans

 

26,447 

 

-

 

111 

 

-

 

26,558 

All other loans

 

108 

 

-

 

-

 

-

 

108 

Total

$

417,128 

$

15,590 

$

31,224 

$

-

$

463,942 

 

As of December 31, 2013

(Dollars are in thousands)

 

 

 

Pass

 

 

Special

Mention

 

 

 

Substandard

 

 

 

 

 

Doubtful

 

 

 

Total

Real estate secured:

 

 

 

 

 

 

 

 

 

 

  Commercial

$

100,403 

$

4,586 

$