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EX-99 - TAX CREDIT GUARANTY AGREEMENT - PEOPLES BANCORP OF NORTH CAROLINA INCpebk_ex99.htm
EX-32 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - PEOPLES BANCORP OF NORTH CAROLINA INCpebk_ex32.htm
EX-31.B - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - PEOPLES BANCORP OF NORTH CAROLINA INCpebk_ex31b.htm
EX-31.A - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - PEOPLES BANCORP OF NORTH CAROLINA INCpebk_ex31a.htm
 


 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: September 30, 2018
 
OR
 
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
(Exact name of registrant as specified in its charter)
 
North Carolina
(State or other jurisdiction of incorporation or organization)
 
000-27205
56-2132396
(Commission File No.)
(IRS Employer Identification No.)
 
518 West C Street, Newton, North Carolina
28658
(Address of principal executive offices)
(Zip Code)
 
(828) 464-5620
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
Accelerated filer
Non-accelerated filer

Smaller reporting company
 
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a)
 
Induicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).
Yes No
 
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 5,995,256 shares of common stock, outstanding at October 31, 2018.
 

 
 
INDEX
  PART I.                     FINANCIAL INFORMATION
 
 
 
PAGE(S)
Item 1.
Financial Statements

 
 
 
 
Consolidated Balance Sheets at September 30, 2018 (Unaudited) and December 31, 2017 (Audited)
3
 
 
 
 
Consolidated Statements of Earnings for the three and nine months ended September 30, 2018 and 2017 (Unaudited)
4
 
 
 
 
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017 (Unaudited)
5
 
 
 
 
Consolidated Statements of Changes in Shareholders' Equity for the nine months ended September 30, 2018 and 2017 (Unaudited)
6
 
 
 
 
Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 (Unaudited)
7-8
 
 
 
 
Notes to Consolidated Financial Statements (Unaudited)
9-28
 
 
 
Item 2.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations
29-41
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
42
 
 
 
Item 4.
Controls and Procedures
42
 
PART II.                        OTHER INFORMATION
 
Item 1.
Legal Proceedings
42
Item 1A.
Risk Factors
42
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
43
Item 3.
Defaults upon Senior Securities
43
Item 5.
Other Information
43
Item 6.
Exhibits
43-45
Signatures
 
46
Certifications
 
47-49
 
 
 
Statements made in this Form 10-Q, other than those concerning historical information, should be considered forward-looking statements pursuant to the safe harbor provisions of the Securities Exchange Act of 1934 and the Private Securities Litigation Act of 1995. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management and on the information available to management at the time that this Form 10-Q was prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate,” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, (1) competition in the markets served by the registrant and its subsidiaries, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectibility of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environments and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in other filings with the Securities and Exchange Commission, including but not limited to, those described in the registrant’s Annual Report on Form 10-K for the year ended December 31, 2017.
 
 
2
 
 
PART I.
FINANCIAL INFORMATION
 
Item 1.
Financial Statements
  PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Balance Sheets
September 30, 2018 and December 31, 2017
(Dollars in thousands)

 
2018
 
 
2017
 
Assets
 
(Unaudited)
 
 
(Audited)
 
 
 
 
 
 
 
 
Cash and due from banks, including reserve requirements
 
 
 
 
 
 
of $10,581 at 09/30/18 and $7,472 at 12/31/17
 $44,743 
  53,186 
Interest-bearing deposits
  12,298 
  4,118 
Cash and cash equivalents
  57,041 
  57,304 
 
    
    
Investment securities available for sale
  205,966 
  229,321 
Other investments
  4,394 
  1,830 
Total securities
  210,360 
  231,151 
 
    
    
Mortgage loans held for sale
  1,740 
  857 
 
    
    
Loans
  786,724 
  759,764 
Less allowance for loan losses
  (6,295)
  (6,366)
Net loans
  780,429 
  753,398 
 
    
    
Premises and equipment, net
  19,453 
  19,911 
Cash surrender value of life insurance
  15,839 
  15,552 
Other real estate
  - 
  118 
Accrued interest receivable and other assets
  15,430 
  13,875 
Total assets
 $1,100,292 
  1,092,166 
 
    
    
Liabilities and Shareholders' Equity
    
    
 
    
    
Deposits:
    
    
Noninterest-bearing demand
 $306,834 
  285,406 
NOW, MMDA & savings
  478,898 
  498,445 
Time, $250,000 or more
  16,777 
  18,756 
Other time
  90,950 
  104,345 
Total deposits
  893,459 
  906,952 
 
    
    
Securities sold under agreements to repurchase
  55,766 
  37,757 
Junior subordinated debentures
  20,619 
  20,619 
Accrued interest payable and other liabilities
  10,729 
  10,863 
Total liabilities
  980,573 
  976,191 
 
    
    
Commitments
    
    
 
    
    
Shareholders' equity:
    
    
Series A preferred stock, $1,000 stated value; authorized
    
    
5,000,000 shares; no shares issued and outstanding
  - 
  - 
Common stock, no par value; authorized
    
    
20,000,000 shares; issued and outstanding 5,995,256 shares
  62,096 
  62,096 
Retained earnings
  57,882 
  50,286 
Accumulated other comprehensive income (loss)
  (259)
  3,593 
Total shareholders' equity
  119,719 
  115,975 
 
    
    
Total liabilities and shareholders' equity
 $1,100,292 
  1,092,166 
 
    
    
See accompanying Notes to Consolidated Financial Statements.
    
    
 
 
3
 
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Earnings
Three and Nine Months Ended September 30, 2018 and 2017
(Dollars in thousands, except per share amounts)
 
 
Three months ended
 
 
Nine months ended
 
 
 
September 30,
 
 
September 30,
 
 
 
 2018
 
 
 2017
 
 
 2018
 
 
 2017
 
 
 
 (Unaudited)
 
 
 (Unaudited)
 
 
 (Unaudited)
 
 
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 $9,907 
  8,966 
  28,362 
  25,935 
Interest on due from banks
  86 
  60 
  255 
  138 
Interest on investment securities:
    
    
    
    
U.S. Government sponsored enterprises
  591 
  578 
  1,721 
  1,795 
State and political subdivisions
  974 
  1,047 
  2,950 
  3,198 
Other
  50 
  47 
  138 
  157 
Total interest income
  11,608 
  10,698 
  33,426 
  31,223 
 
    
    
    
    
Interest expense:
    
    
    
    
NOW, MMDA & savings deposits
  189 
  156 
  551 
  431 
Time deposits
  127 
  112 
  342 
  360 
FHLB borrowings
  - 
  211 
  - 
  604 
Junior subordinated debentures
  209 
  152 
  578 
  432 
Other
  32 
  19 
  66 
  43 
Total interest expense
  557 
  650 
  1,537 
  1,870 
 
    
    
    
    
Net interest income
  11,051 
  10,048 
  31,889 
  29,353 
 
    
    
    
    
Provision for (reduction of provision for) loan losses
  110 
  (218)
  372 
  (405)
 
    
    
    
    
Net interest income after provision for loan losses
  10,941 
  10,266 
  31,517 
  29,758 
 
    
    
    
    
Non-interest income:
    
    
    
    
Service charges
  1,083 
  1,140 
  3,163 
  3,340 
Other service charges and fees
  173 
  145 
  528 
  447 
Gain on sale of securities
  - 
  - 
  50 
  - 
Mortgage banking income
  216 
  280 
  672 
  945 
Insurance and brokerage commissions
  206 
  221 
  591 
  568 
Appraisal management fee income
  799 
  855 
  2,442 
  2,447 
Gain/(loss) on sale and write-down of
    
    
    
    
other real estate
  14 
  43 
  17 
  (240)
Miscellaneous
  1,424 
  1,475 
  4,204 
  4,023 
Total non-interest income
  3,915 
  4,159 
  11,667 
  11,530 
 
    
    
    
    
Non-interest expense:
    
    
    
    
Salaries and employee benefits
  5,519 
  4,933 
  15,866 
  15,038 
Occupancy
  1,761 
  1,669 
  5,367 
  4,981 
Professional fees
  314 
  303 
  1,067 
  788 
Advertising
  207 
  247 
  708 
  859 
Debit card expense
  282 
  320 
  774 
  894 
FDIC Insurance
  81 
  87 
  248 
  260 
Appraisal management fee expense
  627 
  655 
  1,873 
  1,869 
Other
  1,911 
  1,792 
  5,401 
  5,661 
Total non-interest expense
  10,702 
  10,006 
  31,304 
  30,350 
 
    
    
    
    
Earnings before income taxes
  4,154 
  4,419 
  11,880 
  10,938 
 
    
    
    
    
Income tax expense
  687 
  1,177 
  1,934 
  2,680 
 
    
    
    
    
Net earnings
 $3,467 
  3,242 
  9,946 
  8,258 
 
    
    
    
    
Basic net earnings per share
 $0.58 
  0.54 
  1.66 
  1.38 
Diluted net earnings per share
 $0.57 
  0.52 
  1.65 
  1.35 
Cash dividends declared per share
 $0.13 
  0.11 
  0.39 
  0.33 
 
    
    
    
    
 
See accompanying Notes to Consolidated Financial Statements.
 
    
    
 
 
4
 
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Comprehensive Income
Three and Nine Months Ended September 30, 2018 and 2017
(Dollars in thousands)
 
 
 
Three months ended
 
 
Nine months ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2018
 
 
2017
 
 
2018
 
 
2017
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings
 $3,467 
  3,242 
  9,946 
  8,258 
 
    
    
    
    
Other comprehensive income:
    
    
    
    
Unrealized holding gains (losses) on securities
    
    
    
    
available for sale
  (1,469)
  (666)
  (4,951)
  2,027 
Reclassification adjustment for other than temporary
    
    
    
    
impairment losses included in net earnings
  - 
  - 
  - 
  - 
Reclassification adjustment for gains on
    
    
    
    
securities available for sale
    
    
    
    
included in net earnings
  - 
  - 
  (50)
  - 
Unrealized holding losses on derivative
    
    
    
    
financial instruments qualifying as cash flow
    
    
    
    
hedges
  - 
  - 
  - 
  - 
 
    
    
    
    
Total other comprehensive income (loss),
    
    
    
    
before income taxes
  (1,469)
  (666)
  (5,001)
  2,027 
 
    
    
    
    
Income tax expense related to other
    
    
    
    
comprehensive income:
    
    
    
    
 
    
    
    
    
Unrealized holding gains (losses) on securities
    
    
    
    
available for sale
  (338)
  (239)
  (1,138)
  502 
Reclassification adjustment for gains
    
    
    
    
on securities available for sale
    
    
    
    
included in net earnings
  - 
  - 
  (11)
  - 
Unrealized holding losses on derivative
    
    
    
    
financial instruments qualifying as cash flow
    
    
    
    
hedges
  - 
  - 
  - 
  - 
Reclassification adjustment for losses on
    
    
    
    
derivative financial instruments qualifying as
    
    
    
    
cash flow hedges included in net earnings
  - 
  - 
  - 
  - 
 
    
    
    
    
Total income tax expense related to
    
    
    
    
other comprehensive income (loss)
  (338)
  (239)
  (1,149)
  502 
 
    
    
    
    
Total other comprehensive income (loss),
    
    
    
    
net of tax
  (1,131)
  (427)
  (3,852)
  1,525 
 
    
    
    
    
Total comprehensive income
 $2,336 
  2,815 
  6,094 
  9,783 
 
    
    
    
    
See accompanying Notes to Consolidated Financial Statements.
    
    
    
    
 
 
5
 
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Changes in Shareholders' Equity
Nine Months Ended September 30, 2018 and 2017
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
Common Stock
 
 
Retained
 
 
Comprehensive
 
 
 
 
 
 
Shares
 
 
Amount
 
 
Earnings
 
 
Income (Loss)
 
 
Total
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2017
  5,995,256 
 $62,096 
  50,286 
  3,593 
  115,975 
 
    
    
    
    
    
Common stock repurchase
  - 
  - 
  - 
  - 
  - 
Cash dividends declared on
    
    
    
    
    
common stock
  - 
  - 
  (2,350)
  - 
  (2,350)
Restricted stock units exercised
  - 
  - 
  - 
  - 
  - 
Net earnings
  - 
  - 
  9,946 
  - 
  9,946 
Change in accumulated other
    
    
    
    
    
comprehensive income (loss), net of tax
  - 
  - 
  - 
  (3,852)
  (3,852)
Balance, September 30, 2018
  5,995,256 
 $62,096 
  57,882 
  (259)
  119,719 
 
    
    
    
    
    
Balance, December 31, 2016
  5,417,800 
 $44,187 
  60,254 
  2,987 
  107,428 
 
    
    
    
    
    
Common stock repurchase
  - 
  - 
  - 
  - 
  - 
Cash dividends declared on
    
    
    
    
    
common stock
  - 
  - 
  (1,973)
  - 
  (1,973)
Restricted stock units exercised
  32,612 
  915 
  - 
  - 
  915 
Net earnings
  - 
  - 
  8,258 
  - 
  8,258 
Change in accumulated other
    
    
    
    
    
comprehensive income (loss), net of tax
  - 
  - 
  - 
  1,525 
  1,525 
Balance, September 30, 2017
  5,450,412 
 $45,102 
  66,539 
  4,512 
  116,153 
 
    
    
    
    
    
See accompanying Notes to Consolidated Financial Statements.
    
    
    
    
    
 
 
6
 
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2018 and 2017
(Dollars in thousands)
 
 
2018
 
 
2017
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
Net earnings
 $9,946 
  8,258 
Adjustments to reconcile net earnings to
    
    
net cash provided by operating activities:
    
    
Depreciation, amortization and accretion
  3,508 
  3,764 
Provision (reduction of provision) for loan losses
  372 
  (405)
Deferred income taxes
  (1,159)
  (1,122)
Gain on sale of investment securities
  (50)
  - 
Write-down of investment securities
  - 
  - 
Gain on sale of other real estate
  (17)
  - 
Write-down of other real estate
  - 
  240 
Loss on sale of premises and equipment
  2 
  32 
Restricted stock expense
  131 
  566 
Proceeds from sales of mortgage loans held for sale
  27,209 
  49,259 
Origination of mortgage loans held for sale
  (28,092)
  (46,173)
Change in:
    
    
Cash surrender value of life insurance
  (287)
  (500)
Other assets
     754
  763 
Other liabilities
  (265)
  (408)
 
    
    
Net cash provided by operating activities
 12,052
  14,274 
 
    
    
Cash flows from investing activities:
    
    
Net change in certificates of deposit
  - 
  - 
Purchases of investment securities available for sale
  (20,218)
  (6,492)
Proceeds from sales, calls and maturities of investment securities
    
    
available for sale
  24,203 
  6,535 
Proceeds from paydowns of investment securities available for sale
  12,651 
  13,963 
Purchases of other investments
  (2,611)
  - 
Proceeds from paydowns on other investments
  73 
  - 
Purchases of FHLB stock
  (4)
  (45)
FHLB stock redemption
  - 
  - 
Net change in loans
  (27,500)
  (23,927)
Purchases of premises and equipment
  (1,307)
  (4,810)
Purchases of bank owned life insurance
  - 
  - 
Proceeds from sale of premises and equipment
  - 
  - 
Proceeds from sale of other real estate and repossessions
  232 
  43 
 
    
    
Net cash used by investing activities
  (14,481)
  (14,733)
 
    
    
Cash flows from financing activities:
    
    
Net change in deposits
  (13,493)
  8,721 
Net change in demand notes payable to U.S. Treasury
  - 
  - 
Net change in securities sold under agreement to repurchase
  18,009 
  16,873 
Proceeds from Fed Funds purchased
  850 
  - 
Repayments of Fed Funds purchased
  (850)
  - 
Cash dividends paid on Series A preferred stock
  - 
  - 
Cash dividends paid on common stock
  (2,350)
  (1,973)
 
    
    
Net cash provided by financing activities
  2,166 
  23,621 
 
    
    
Net change in cash and cash equivalents
  (263)
  23,162 
 
    
    
Cash and cash equivalents at beginning of period
  57,304 
  70,094 
 
    
    
Cash and cash equivalents at end of period
 $57,041 
  93,256 
 
 
7
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Consolidated Statements of Cash Flows, continued
Nine Months Ended September 30, 2018 and 2017
(Dollars in thousands)
 
 
 
2018
 
 
2017
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
Supplemental disclosures of cash flow information:
 
 
 
 
 
 
Cash paid during the period for:
 
 
 
 
 
 
Interest
 $1,531 
  1,858 
Income taxes
 $905 
  872 
 
    
    
Noncash investing and financing activities:
    
    
Change in unrealized gain on investment securities
    
    
 available for sale, net
 $(3,852)
  1,525 
Issuance of accrued restricted stock units
 $- 
  (915)
Transfers of loans to other real estate and repossessions
 $97 
  - 
 
    
    
See accompanying Notes to Consolidated Financial Statements.
    
    
 
 
8
 
 
PEOPLES BANCORP OF NORTH CAROLINA, INC.
 
Notes to Consolidated Financial Statements (Unaudited)
 
(1) 
Summary of Significant Accounting Policies
 
The consolidated financial statements include the financial statements of Peoples Bancorp of North Carolina, Inc. and its wholly owned subsidiary, Peoples Bank (the “Bank”), along with the Bank’s wholly owned subsidiaries, Peoples Investment Services, Inc. (“PIS”), Real Estate Advisory Services, Inc. (“REAS”), Community Bank Real Estate Solutions, LLC (“CBRES”) and PB Real Estate Holdings, LLC (collectively called the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.
 
The Bank operates three banking offices focused on the Latino population that were formerly operated as a division of the Bank under the name Banco de la Gente (“Banco”). These offices are now branded as Bank branches and considered a separate market territory of the Bank as they offer normal and customary banking services as are offered in the Bank’s other branches such as the taking of deposits and the making of loans.
 
The consolidated financial statements in this report (other than the Consolidated Balance Sheet at December 31, 2017) are unaudited. In the opinion of management, all adjustments (none of which were other than normal accruals) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates.
 
The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. Many of the Company’s accounting policies require significant judgment regarding valuation of assets and liabilities and/or significant interpretation of the specific accounting guidance. A description of the Company’s significant accounting policies can be found in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2017 Annual Report to Shareholders which is Appendix A to the Proxy Statement for the May 3, 2018 Annual Meeting of Shareholders.
 
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, (Topic 606): Revenue from Contracts with Customers. ASU No. 2014-09 provides guidance on the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASU No. 2014-09 is effective for reporting periods beginning after December 15, 2017.
 
The Company has applied ASU No. 2014-09 using a modified retrospective approach. The Company’s revenue is comprised of net interest income and noninterest income. The scope of ASU No. 2014-09 explicitly excludes net interest income as well as many other revenues for financial assets and liabilities including loans, leases, securities, and derivatives. Accordingly, the majority of the Company’s revenues are not affected. Appraisal management fee income and expense from the Bank’s subsidiary, CBRES, was reported as a net amount prior to March 31, 2018, which was included in miscellaneous non-interest income. This income and expense is now reported on separate line items under non-interest income and non-interest expense. See below for additional information related to revenue generated from contracts with customers.
 
 
9
 
 
Revenue and Method of Adoption
The majority of the Company's revenue is derived primarily from interest income from receivables (loans) and securities. Other revenues are derived from fees received in connection with deposit accounts, investment advisory, and appraisal services. On January 1, 2018,  the Company adopted the requirements of ASU No. 2014-09. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
 
The Company adopted ASU No. 2014-09 using the modified retrospective transition approach which does not require restatement of prior periods. The method was selected as there were no material changes in the timing of revenue recognition resulting in no comparability issues with prior periods. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature of and reason for the change, which is
solely a result of the adoption of the required standard. When applying the modified retrospective approach under ASU No. 2014-09, the Company has elected, as a practical expedient, to apply this approach only to contracts that were not completed as of January 1, 2018. A completed contract is considered to be a contract for which all (or substantially all) of the revenue was recognized in accordance with revenue guidance that was in effect before January 1, 2018. There were no uncompleted contracts as of January 1, 2018 for which application of the new standard required an adjustment to retained earnings.
 
The following disclosures involve the Company's material income streams derived from contracts with customers which are within the scope of ASU No. 2014-09. Through the Company's wholly-owned subsidiary, PIS, the Company contracts with a registered investment advisor to perform investment advisory services on behalf of our customers. We receive commissions from this third party investment advisor based on the volume of business that the Company's customers do with such investment advisor. Total revenue recognized from these contracts for the nine months ended September 30, 2018 was $590,000. The Company utilizes third parties to contract with the Company's customers to perform debit and credit card clearing services. These third parties pay the Company commissions based on the volume of transactions that they process on behalf of the Company's customers. Total revenue recognized for the nine months ended September 30, 2018 from the contract with these third parties was $2.9 million. Through the Company's wholly-owned subsidiary, REAS, the Company provides property appraisal services for negotiated fee amounts on a per appraisal basis. Total revenue recognized for the nine months ended September 30, 2018 from these contracts with customers was $422,000. Through  the Company's wholly-owned subsidiary, CBRES,  the Company provides appraisal management services. Total revenue recognized for the nine months ended September 30, 2018 from these contracts with customers was $2.4 million. Due to the nature of the Company's relationship with the customers that the Company provides services, the Company does not incur costs to obtain contracts and there are no material incremental costs to fulfill these contracts that should be capitalized.
 
Disaggregation of RevenueThe Company's portfolio of services provided to the Company's customers consists of over 50,000 active contracts.  The Company has disaggregated revenue according to timing of the transfer of service. Total revenue for the nine months ended September 30, 2018 derived from contracts in which services are transferred at a point in time was approximately $8.5 million. None of  the Company's revenue is derived from contracts in which services are transferred over time. Revenue is recognized as the services are provided to the customers. Economic factors impacting the customers could affect the nature, amount, and timing of these cash flows, as unfavorable economic conditions could impair the customers’ ability to provide payment for services. For the Company's deposit contracts, this risk is mitigated as we generally deducts payments from customers’ accounts as services are rendered. For the Company's appraisal services, the risk is mitigated in that the appraisal is not released until payment is received.
 
 
10
 
 
Contract Balances. The timing of revenue recognition, billings, and cash collections results in billed accounts receivable on the balance sheet. Most contracts call for payment by a charge or deduction to the respective customer account but there are some that require a receipt of payment from the customer. For fee per transaction contracts, the customers are billed as the transactions are processed.  The Company has no contracts in which customers are billed in advance for services to be performed. These would create contract liabilities or deferred revenue, as the customers pay in advance for services. There are no contract liabilities or accounts receivables balances that are material to the Company’s balance sheet.
 
Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASU No. 2014-09. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Performance obligations are satisfied as the service is provided to the customer at a point in time. There are no significant financing components in the Company's contracts. Excluding deposit and appraisal service revenues which are primarily billed at a point in time as a fee for services incurred, all other contracts within the scope of ASU No. 2014-09 contain variable consideration in that fees earned are derived from market values of accounts which determine the amount of consideration to which the Company is entitled. The variability is resolved when the services are provided. The contracts do not include obligations for returns, refunds, or warranties. The contracts are specific to the amounts owed to the Company for services performed during a period should the contracts be terminated.
 
Significant Judgements. All of the contracts create performance obligations that are satisfied at a point in time excluding some immaterial deposit revenues. Revenue is recognized as services are billed to the customers. Variable consideration does exist for contracts related to our contract with the registered investment advisor as some revenues are based on market values of accounts at the end of the period.
 
In January 2016, FASB issued ASU No. 2016-01, (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU No. 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU No. 2016-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In February 2016, FASB issued ASU No. 2016-02, (Topic 842): Leases. ASU No. 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU No. 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018.
 
The Company expects to adopt ASU No. 2016-02 using the modified retrospective method and practical expedients for transition. The practical expedients allow the Company to largely account for its existing leases consistent with current guidance except for the incremental balance sheet recognition for lessees. The Company has started an initial evaluation of its leasing contracts and activities and has started developing its methodology to estimate the right-of use assets and lease liabilities, which is based on the present value of lease payments (at December 31, 2017, the future minimum lease payments were $4.8 million). While the Company does not expect there to be a material change in the timing of expense recognition, it is too early in the evaluation process to determine if there will be a material change to the timing of expense recognition. The Company is evaluating its existing disclosures and may need to provide additional information as a result of adoption of ASU No. 2016-02.
 
In June 2016, FASB issued ASU No. 2016-13, (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 provides guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. ASU No. 2016-13 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted for all organizations for periods beginning after December 15, 2018.
 
The Company will apply the amendments to ASU No. 2016-13 through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. While early adoption is permitted beginning in the first quarter of 2019, the Company does not expect to elect that option. The Company is evaluating the impact of ASU No. 2016-13 on its consolidated financial statements. The Company anticipates that ASU No. 2016-13 will have no material impact on the recorded allowance for loan losses given the change to estimated losses over the contractual life of the loans adjusted for expected prepayments. In addition to the Company’s allowance for loan losses, it will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time.
 
 
11
 
 
In January 2017, FASB issued ASU No. 2017-01, (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 adds guidance to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU No. 2017-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In January 2017, FASB issued ASU No. 2017-04, (Topic 350): Simplifying the Test for Goodwill Impairment. ASU No. 2017-04 provides guidance to simplify the accounting related to goodwill impairment. ASU No. 2017-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
In February 2017, FASB issued ASU No. 2017-05, (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU No. 2017-05 clarifies the scope of established guidance on nonfinancial asset derecognition (issued as part of the new revenue standard, ASU No. 2014-09, Revenue from Contracts with Customers), as well as the accounting for partial sales of nonfinancial assets. ASU No. 2017-05 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In March 2017, FASB issued ASU No. 2017-07, (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs. ASU No. 2017-07 amended the requirements related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. ASU No. 2017-07 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In March 2017, FASB issued ASU No. 2017-08, (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU No. 2017-08 amended the requirements related to the amortization period for certain purchased callable debt securities held at a premium. ASU No. 2017-08 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
In May 2017, FASB issued ASU No. 2017-09, (Topic 718): Scope of Modification Accounting. ASU No. 2017-09 amended the requirements related to changes to the terms or conditions of a share-based payment award. ASU No. 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In September 2017, FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). ASU No. 2017-13 updated the Revenue from Contracts with Customers and the Leases Topics of the Accounting Standards Codification ("ASC"). The amendments incorporate into the ASC recent Securities Exchange Commission (“SEC”) guidance about certain public business entities ("PBEs") electing to use the non-PBE effective dates solely to adopt the FASB’s new standards on revenue and leases. ASU No. 2017-13 was effective upon issuance.  The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
 
12
 
 
In November 2017, FASB issued ASU No. 2017-14, Income Statement—Reporting Comprehensive, Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606). ASU No. 2017-14 incorporates into the ASC recent SEC guidance related to revenue recognition. ASU No. 2017-14 was effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In February 2018, FASB issued ASU 2018-02, Income Statement (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU No. 2018-02 requires companies to reclassify the stranded effects in other comprehensive income to retained earnings as a result of the change in the tax rates under the Tax Cuts and Jobs Act (“TCJA”). The Company has opted to early adopt this pronouncement by retrospective application to each period in which the effect of the change in the tax rate under the TCJA is recognized. The impact of the reclassification from other comprehensive income to retained earnings at December 31, 2017 was $607,000.
 
In February 2018, FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. ASU No. 2018-03 clarifies certain aspects of the guidance issued in ASU 2016-01. ASU No. 2018-03 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In March 2018, FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update). ASU No. 2018-04 incorporates recent SEC guidance which was issued in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulation. ASU No. 2018-04 was effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In March 2018, FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update). ASU No. 2018-05 incorporates recent SEC guidance related to the income tax accounting implications of the TCJA. ASU No. 2018-05 was effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In May 2018, FASB issued ASU 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending. ASU No. 2018-06 eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from the ASC. The Office of the Comptroller of the Currency published the guidance in 1985 but has since rescinded it. The amendments were effective upon issuance. The adoption of this guidance did not have a material impact on the Company’s results of operations, financial position or disclosures.
 
In July 2018, FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. ASU No. 2018-11 is intended to reduce costs and ease implementation of ASU No. 2016-02. ASU No. 2018-11 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company is evaluating its existing disclosures and may need to provide additional information as a result of adoption of ASU No. 2016-02 and ASU No. 2018-11.
 
In August 2018, FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820). ASU No. 2018-13 updates the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement. ASU No. 2018-13 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
In August 2018, FASB issued ASU 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20). ASU No. 2018-14 updates disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU No. 2018-14 is effective for fiscal years beginning after December 15, 2020. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
 
13
 

In August 2018, FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). ASU No. 2018-15 reduces complexity of the accounting for costs of implementing a cloud computing service arrangement. ASU No. 2018-15 is effective for fiscal years beginning after December 15, 2019. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
Other accounting standards that have been issued or proposed by FASB or other standards-setting bodies are not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
 
(2) 
Investment Securities
 
Investment securities available for sale at September 30, 2018 and December 31, 2017 are as follows:
 
(Dollars in thousands)
 
 
 
September 30,
2018
 
 
 
Amortized Cost
 
 
Gross Unrealized Gains
 
 
Gross Unrealized Losses
 
 
Estimated Fair Value
 
Mortgage-backed securities
 $47,017 
  250 
  977 
  46,290 
U.S. Government
    
    
    
    
sponsored enterprises
  36,278 
  1 
  1,278 
  35,001 
State and political subdivisions
  121,755 
  1,911
  252 
  123,414 
Corporate bonds
  1,000 
  11 
  - 
  1,011 
Trust preferred securities
  250 
  - 
  - 
  250 
Total
 $206,300 
  2,173
  2,507 
  205,966 
 
 
14
 
 
(Dollars in thousands)
 
 
 
December 31,
2017
 
 
 
Amortized Cost
 
 
Gross Unrealized Gains
 
 
Gross Unrealized Losses
 
 
Estimated Fair Value
 
Mortgage-backed securities
 $53,124 
  814 
  329 
  53,609 
U.S. Government
    
    
    
    
sponsored enterprises
  40,504 
  140 
  264 
  40,380 
State and political subdivisions
  129,276 
  4,310 
  16 
  133,570 
Corporate bonds
  1,500 
  12 
  - 
  1,512 
Trust preferred securities
  250 
  - 
  - 
  250 
Total
 $224,654 
  5,276 
  609 
  229,321 
 
The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2018 and December 31, 2017 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.
 
(Dollars in thousands)
 
 
 
September 30,
2018
 
 
 
Less than 12 Months
 
 
12 Months or More
 
 
  Total
 
 
 
Fair Value
 
 
Unrealized Losses
 
 
Fair Value
 
 
Unrealized Losses
 
 
Fair Value
 
 
Unrealized Losses
 
Mortgage-backed securities
 $20,557 
  276 
  14,698 
  701 
  35,255 
  977 
U.S. Government
    
    
    
    
    
    
sponsored enterprises
  19,435 
  586 
  14,564 
  692 
  33,999 
  1,278 
State and political subdivisions
  15,042 
  212 
  1,733 
  40 
  16,775 
  252 
Total
 $55,034 
  1,074 
  30,995 
  1,433 
  86,029 
  2,507 
 
 (Dollars in thousands)
 
 
 
December 31,
2017
 
 
 
Less than 12 Months
 
 
12 Months or More
 
 
  Total
 
 
 
Fair Value
 
 
Unrealized Losses
 
 
Fair Value
 
 
Unrealized Losses
 
 
Fair Value
 
 
Unrealized Losses
 
Mortgage-backed securities
 $8,701 
  75 
  11,259 
  254 
  19,960 
  329 
U.S. Government
    
    
    
    
    
    
sponsored enterprises
  12,661 
  98 
  10,067 
  166 
  22,728 
  264 
State and political subdivisions
  798 
  2 
  1,501 
  14 
  2,299 
  16 
Total
 $22,160 
  175 
  22,827 
  434 
  44,987 
  609 
 
At September 30, 2018, unrealized losses in the investment securities portfolio relating to debt securities totaled $2.5 million. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2018 tables above, 23 out of 152 securities issued by state and political subdivisions contained unrealized losses and 37 out of 44 securities issued by U.S. Government sponsored enterprises contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed.
 
The amortized cost and estimated fair value of investment securities available for sale at September 30, 2018, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
15
 
 
September 30, 2018
(Dollars in thousands)
 
 
 
Amortized
Cost
 
 
Estimated
Fair Value
 
Due within one year
 $24,659 
  24,800 
Due from one to five years
  95,923 
  96,934 
Due from five to ten years
  31,869 
  31,208 
Due after ten years
  6,582 
  6,484 
Mortgage-backed securities
  47,017 
  46,290 
Trust preferred securities
  250 
  250 
Total
 $206,300 
  205,966 
 
Proceeds from sales of securities available for sale during the three and nine months ended September 30, 2018 were $14.0 million and resulted in net gains of $50,000. No securities available for sale were sold during the three and nine months ended September 30, 2017.
 
Securities with a fair value of approximately $92.1 million and $105.6 million at September 30, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and for other purposes as required by law.
 
 (3)            
Loans
 
Major classifications of loans at September 30, 2018 and December 31, 2017 are summarized as follows:
 
(Dollars in thousands)
 
 
 
September 30,
2018
 
 
December 31,
2017
 
Real estate loans:
 
 
 
 
 
 
Construction and land development
 $76,987 
  84,987 
Single-family residential
  249,812 
  246,703 
Single-family residential -
    
    
Banco de la Gente non-traditional
  34,742 
  37,249 
Commercial
  275,629 
  248,637 
Multifamily and farmland
  31,102 
  28,937 
Total real estate loans
  668,272 
  646,513 
 
    
    
Loans not secured by real estate:
    
    
Commercial loans
  97,085 
  89,022 
Farm loans
  994 
  1,204 
Consumer loans
  9,512 
  9,888 
All other loans
  10,861 
  13,137 
 
    
    
Total loans
  786,724 
  759,764 
 
    
    
Less allowance for loan losses
  6,295 
  6,366 
 
    
    
Total net loans
 $780,429 
  753,398 
 
The Bank grants loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties, and also in Mecklenburg, Wake and Durham counties of North Carolina. Although the Bank has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate, the value of which is dependent upon the real estate market. Risk characteristics of the major components of the Bank’s loan portfolio are discussed below:
 
 
16
 
 
Construction and land development loans – The risk of loss is largely dependent on the initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns. If the estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral. As of September 30, 2018, construction and land development loans comprised approximately 10% of the Bank’s total loan portfolio.
 
Single-family residential loans – Declining home sales volumes, decreased real estate values and higher than normal levels of unemployment could contribute to losses on these loans. As of September 30, 2018, single-family residential loans comprised approximately 36% of the Bank’s total loan portfolio, and include Banco’s non-traditional single-family residential loans, which were approximately 4% of the Bank’s total loan portfolio.
 
Commercial real estate loans – Repayment is dependent on income being generated in amounts sufficient to cover operating expenses and debt service. These loans also involve greater risk because they are generally not fully amortizing over a loan period, but rather have a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically will depend on being able to either refinance the loan or timely sell the underlying property. As of September 30, 2018, commercial real estate loans comprised approximately 35% of the Bank’s total loan portfolio.
 
Commercial loans – Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid or fluctuate in value based on the success of the business. As of September 30, 2018, commercial loans comprised approximately 12% of the Bank’s total loan portfolio.
 
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
 
The following tables present an age analysis of past due loans, by loan type, as of September 30, 2018 and December 31, 2017:
 
September 30, 2018
(Dollars in thousands)
 
 
 
Loans 30-89 Days Past Due
 
 
Loans 90 or More Days Past Due
 
 
Total Past Due Loans
 
 
Total Current Loans
 
 
Total Loans
 
 
Accruing Loans 90 or More Days Past Due
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 $1,170 
  38 
  1,208 
  75,779 
  76,987 
  - 
Single-family residential
  2,597 
  366 
  2,963 
  246,849 
  249,812 
  - 
Single-family residential -
    
    
    
    
    
    
Banco de la Gente non-traditional
  940 
  485 
  1,425 
  33,317 
  34,742 
  - 
Commercial
  1,157 
  100 
  1,257 
  274,372 
  275,629 
  - 
Multifamily and farmland
  - 
  - 
  - 
  31,102 
  31,102 
  - 
Total real estate loans
  5,864 
  989 
  6,853 
  661,419 
  668,272 
  - 
 
    
    
    
    
    
    
Loans not secured by real estate:
    
    
    
    
    
    
Commercial loans
  490 
  94 
  584 
  96,501 
  97,085 
  - 
Farm loans
  - 
  - 
  - 
  994 
  994 
  - 
Consumer loans
  85 
  35 
  120 
  9,392 
  9,512 
  - 
All other loans
  - 
  - 
  - 
  10,861 
  10,861 
  - 
Total loans
 $6,439 
  1,118 
  7,557 
  779,167 
  786,724 
  - 
 
 17
 
 
December 31, 2017
(Dollars in thousands)
 
 
 
Loans 30-89 Days Past Due
 
 
Loans 90 or More Days Past Due
 
 
Total Past Due Loans
 
 
Total Current Loans
 
 
Total Loans
 
 
Accruing Loans 90 or More Days Past Due
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 $277 
  - 
  277 
  84,710 
  84,987 
  - 
Single-family residential
  3,241 
  193 
  3,434 
  243,269 
  246,703 
  - 
Single-family residential -
    
    
    
    
    
    
Banco de la Gente non-traditional
  4,078 
  465 
  4,543 
  32,706 
  37,249 
  - 
Commercial
  588 
  - 
  588 
  248,049 
  248,637 
  - 
Multifamily and farmland
  - 
  12 
  12 
  28,925 
  28,937 
  - 
Total real estate loans
  8,184 
  670 
  8,854 
  637,659 
  646,513 
  -