Page 34 - Annual Report 2017

TEXAS GULF BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Statements
December 31, 2016 and 2015

NOTE E ALLOWANCE FOR POSSIBLE CREDIT LOSSES (CONTINUED)

Evaluation of Impairment

The following table includes the recorded investment and unpaid principal balances for
impaired loans, segregated by loan class, with the associated allowance amount, if
applicable, as of December 31, 2016 and 2015. The recorded investment for impaired loans
includes the outstanding principal ledger balance, net of any amounts charged-off, accrued
interest, and net deferred loan fees, if any. The unpaid principal balance for impaired loans
represents the outstanding principal balance under the original terms of the loan.

At December 31, 2016 and 2015, three loans totaling $5,933,217 and five loans totaling
$6,732,857, respectively, were individually evaluated for impairment. The Company’s
remaining portfolio was collectively evaluated for impairment.

Unpaid
Principal Recorded Related
Balance Investment Allowance
2016
1-4 family residential $ 18,374 $ 21,513 $ -
Commercial and industrial 5,914,843 5,929,000 -
Total Impaired Loans $ 5,933,217 $ 5,950,513 $ -

2015
1-4 family residential $ 38,143 $ 41,779 $ -
Commercial and industrial 6,688,642 6,688,642 -
Consumer - auto 6,072 7,676 6,072
Total Impaired Loans $ 6,732,857 $ 6,738,097 $ 6,072

For the years ended December 31, 2016 and 2015, the Company’s average impaired loans
were $6,144,377 and $1,819,091 respectively. The Company has no commitment to loan
additional funds to borrowers whose loans have been classified as impaired.

28