Page 25 - Annual Report 2017

TEXAS GULF BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements
December 31, 2016 and 2015

NOTE C SECURITIES AVAILABLE FOR SALE (CONTINUED)

Management does not have the intent to sell any of the securities classified as available for
sale that are in an unrealized loss position and believes that it is more likely than not that
the Company will not have to sell any of these securities before a recovery of cost. The
unrealized losses are attributable primarily to changes in market interest rates relative to
those available when the securities were acquired. The fair value of these securities is
expected to recover as the securities reach their maturity or re-pricing date, or if changes
in market rates for such investments decline. Management does not believe that any of the
securities are impaired due to reasons of credit quality. Accordingly, as of December 31,
2016 and 2015, management believes the impairments for securities in an unrealized loss
position are temporary and no impairment loss has been realized in the Company’s
consolidated statements of income for the years then ended.

NOTE D LOANS

Loans by portfolio segment at December 31, 2016 and 2015 are summarized as follows:

2016 2015

Real estate $ 321,927,765 $ 289,459,360
Commercial and industrial 52,851,347 46,942,375
Agricultural 3,113,348 1,563,784
Consumer 4,793,705 4,824,228
Other 5,936,223 5,679,296
388,622,388 348,469,043

Less unearned discount (159,486) (97,123)
Less deferred loan fees, net (646,232) (761,121)
Less allowance for possible credit losses (4,025,368) (3,451,894)
$ 383,791,302 $ 344,158,905

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