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Loans and Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Outstanding loans
Outstanding loans are summarized as follows (in thousands):
Loan Type 
 
December 31,
2015
 
% of Total 
loans
 
December 31,
2014
 
% of Total 
loans
Commercial:
 
 

 
 

 
 

 
 

Commercial and industrial
 
$
102,197

 
17.1
%
 
$
89,007

 
15.5
%
Agricultural land and production
 
30,472

 
5.1
%
 
39,140

 
6.8
%
Total commercial
 
132,669

 
22.2
%
 
128,147

 
22.3
%
Real estate:
 
 
 
 
 
 
 
 
Owner occupied
 
168,910

 
28.2
%
 
176,804

 
30.9
%
Real estate construction and other land loans
 
38,685

 
6.5
%
 
38,923

 
6.8
%
Commercial real estate
 
117,244

 
19.6
%
 
106,788

 
18.7
%
Agricultural real estate
 
74,867

 
12.5
%
 
57,501

 
10.0
%
Other real estate
 
10,520

 
1.8
%
 
6,611

 
1.2
%
Total real estate
 
410,226

 
68.6
%
 
386,627

 
67.6
%
Consumer:
 
 
 
 
 
 
 
 
Equity loans and lines of credit
 
42,296

 
7.1
%
 
47,575

 
8.3
%
Consumer and installment
 
12,503

 
2.1
%
 
10,093

 
1.8
%
Total consumer
 
54,799

 
9.2
%
 
57,668

 
10.1
%
Net deferred origination costs
 
417

 
 
 
146

 
 
Total gross loans
 
598,111

 
100.0
%
 
572,588

 
100.0
%
Allowance for credit losses
 
(9,610
)
 
 

 
(8,308
)
 
 

Total loans
 
$
588,501

 
 

 
$
564,280

 
 
Allowance for credit losses
Changes in the allowance for credit losses were as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Balance, beginning of year
 
$
8,308

 
$
9,208

 
$
10,133

Provision charged to operations
 
600

 
7,985

 
—

Losses charged to allowance
 
(961
)
 
(9,834
)
 
(1,446
)
Recoveries
 
1,663

 
949

 
521

Balance, end of year
 
$
9,610

 
$
8,308

 
$
9,208


The following table shows the summary of activities for the allowance for credit losses as of and for the years ended December 31, 2015 and 2014 by portfolio segment (in thousands):
 
 
Commercial
 
Real Estate
 
Consumer
 
Unallocated
 
Total
Allowance for credit losses:
 
 

 
 

 
 

 
 

 
 

Beginning balance, January 1, 2015
 
$
3,130

 
$
4,058

 
$
1,078

 
$
42

 
$
8,308

Provision charged to operations
 
190

 
1,114

 
(772
)
 
68

 
600

Losses charged to allowance
 
(802
)
 
—

 
(159
)
 
—

 
(961
)
Recoveries
 
1,044

 
32

 
587

 
—

 
1,663

Ending balance, December 31, 2015
 
$
3,562

 
$
5,204

 
$
734

 
$
110

 
$
9,610

 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses:
 
 

 
 

 
 

 
 

 
 

Beginning balance, January 1, 2014
 
$
2,444

 
$
5,174

 
$
1,168

 
$
422

 
$
9,208

Provision charged to operations
 
9,660

 
(1,447
)
 
152

 
(380
)
 
7,985

Losses charged to allowance
 
(9,145
)
 
(183
)
 
(506
)
 
—

 
(9,834
)
Recoveries
 
171

 
514

 
264

 
—

 
949

Ending balance, December 31, 2014
 
$
3,130

 
$
4,058

 
$
1,078

 
$
42

 
$
8,308


The following is a summary of the allowance for credit losses by impairment methodology and portfolio segment as of December 31, 2015 and December 31, 2014 (in thousands):
 
 
Commercial
 
Real Estate
 
Consumer
 
Unallocated
 
Total
Allowance for credit losses:
 
 

 
 

 
 

 
 

 
 

Ending balance, December 31, 2015
 
$
3,562

 
$
5,204

 
$
734

 
$
110

 
$
9,610

Ending balance: individually evaluated for impairment
 
$
1

 
$
128

 
$
35

 
$
—

 
$
164

Ending balance: collectively evaluated for impairment
 
$
3,561

 
$
5,076

 
$
699

 
$
110

 
$
9,446

 
 
 
 
 
 
 
 
 
 
 
Ending balance, December 31, 2014
 
$
3,130

 
$
4,058

 
$
1,078

 
$
42

 
$
8,308

Ending balance: individually evaluated for impairment
 
$
230

 
$
162

 
$
220

 
$
—

 
$
612

Ending balance: collectively evaluated for impairment
 
$
2,900

 
$
3,896

 
$
858

 
$
42

 
$
7,696
Loans by impairment methdology
The following table shows the ending balances of loans as of December 31, 2015 and December 31, 2014 by portfolio segment and by impairment methodology (in thousands):
 
 
Commercial
 
Real Estate
 
Consumer
 
Total
Loans:
 
 

 
 

 
 

 
 

Ending balance, December 31, 2015
 
$
132,669

 
$
410,226

 
$
54,799

 
$
597,694

Ending balance: individually evaluated for impairment
 
$
30

 
$
5,199

 
$
1,470

 
$
6,699

Ending balance: collectively evaluated for impairment
 
$
132,639

 
$
405,027

 
$
53,329

 
$
590,995

 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

Ending balance, December 31, 2014
 
$
128,147

 
$
386,627

 
$
57,668

 
$
572,442

Ending balance: individually evaluated for impairment
 
$
7,268

 
$
8,512

 
$
3,046

 
$
18,826

Ending balance: collectively evaluated for impairment
 
$
120,879

 
$
378,115

 
$
54,622

 
$
553,616
Loan portfolio by internal risk rating
The following table shows the loan portfolio by class allocated by management’s internal risk ratings at December 31, 2015 (in thousands):
 
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
77,783

 
$
22,607

 
$
1,807

 
$
—

 
$
102,197

Agricultural land and production
 
20,422

 
—

 
10,050

 
—

 
30,472

Real Estate:
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
163,570

 
3,785

 
1,555

 
—

 
168,910

Real estate construction and other land loans
 
34,916

 
644

 
3,125

 
—

 
38,685

Commercial real estate
 
110,833

 
1,683

 
4,728

 
—

 
117,244

Agricultural real estate
 
66,347

 
—

 
8,520

 
—

 
74,867

Other real estate
 
10,520

 
—

 
—

 
—

 
10,520

Consumer:
 
 
 
 
 
 
 
 
 
 
Equity loans and lines of credit
 
40,332

 
—

 
1,964

 
—

 
42,296

Consumer and installment
 
12,488

 
—

 
15

 
—

 
12,503

Total
 
$
537,211

 
$
28,719

 
$
31,764

 
$
—

 
$
597,694


The following table shows the loan portfolio by class allocated by management’s internally assigned risk grade ratings at December 31, 2014 (in thousands):
 
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
78,333

 
$
2,345

 
$
8,329

 
$
—

 
$
89,007

Agricultural land and production
 
39,140

 
—

 
—

 
—

 
39,140

Real Estate:
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
170,568

 
2,778

 
3,458

 
—

 
176,804

Real estate construction and other land loans
 
32,114

 
1,130

 
5,679

 
—

 
38,923

Commercial real estate
 
95,831

 
215

 
10,742

 
—

 
106,788

Agricultural real estate
 
55,018

 
2,123

 
360

 
—

 
57,501

Other real estate
 
6,611

 
—

 
—

 
—

 
6,611

Consumer:
 
 
 
 
 
 
 
 
 
 
Equity loans and lines of credit
 
42,334

 
72

 
5,169

 
—

 
47,575

Consumer and installment
 
10,072

 
—

 
21

 
—

 
10,093

Total
 
$
530,021

 
$
8,663

 
$
33,758

 
$
—

 
$
572,442
Loan portfolio by time past due
The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2015 (in thousands):
 
 
30-59 Days
Past Due
 
60-89
Days Past
Due
 
Greater
Than
 90 Days
Past Due
 
Total Past
Due
 
Current
 
Total
Loans
 
Recorded
Investment
> 90 Days
Accruing
 
Non-accrual
Commercial:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
—

 
$
—

 
$
—

 
$
—

 
$
102,197

 
$
102,197

 
$
—

 
$
29

Agricultural land and production
 
—

 
—

 
—

 
—

 
30,472

 
30,472

 
—

 
—

Real estate:
 
—

 
 

 
 

 


 
—

 
—

 
 

 
 
Owner occupied
 
—

 
—

 
—

 
—

 
168,910

 
168,910

 
—

 
347

Real estate construction and other land loans
 
—

 
—

 
—

 
—

 
38,685

 
38,685

 
—

 
—

Commercial real estate
 
98

 
—

 
—

 
98

 
117,146

 
117,244

 
—

 
567

Agricultural real estate
 
—

 
—

 
—

 
—

 
74,867

 
74,867

 
—

 
—

Other real estate
 
—

 
—

 
—

 
—

 
10,520

 
10,520

 
—

 
—

Consumer:
 
 
 
 

 
 

 


 
—

 
—

 
 

 
 
Equity loans and lines of credit
 
—

 
166

 
—

 
166

 
42,130

 
42,296

 
—

 
1,457

Consumer and installment
 
38

 
—

 
—

 
38

 
12,465

 
12,503

 
—

 
13

Total
 
$
136

 
$
166

 
$
—

 
$
302

 
$
597,392

 
$
597,694

 
$
—

 
$
2,413

 
The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2014 (in thousands):
 
 
30-59 Days
Past Due
 
60-89
Days Past
Due
 
Greater
Than
 90 Days
Past Due
 
Total Past
Due
 
Current
 
Total
Loans
 
Recorded
Investment
> 90 Days
Accruing
 
Non-
accrual
Commercial:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
172

 
$
88

 
$
—

 
$
260

 
$
88,747

 
$
89,007

 
$
—

 
$
7,265

Agricultural land and production
 
—

 
—

 
—

 
—

 
39,140

 
39,140

 
—

 
—

Real estate:
 
—

 
 

 
 

 
 
 
 

 
—

 
 

 
 
Owner occupied
 
164

 
—

 
249

 
413

 
176,391

 
176,804

 
—

 
1,363

Real estate construction and other land loans
 
547

 
—

 
—

 
547

 
38,376

 
38,923

 
—

 
547

Commercial real estate
 
—

 
—

 
—

 
—

 
106,788

 
106,788

 
—

 
1,468

Agricultural real estate
 
—

 
—

 
—

 
—

 
57,501

 
57,501

 
—

 
360

Other real estate
 
—

 
—

 
—

 
—

 
6,611

 
6,611

 
—

 
—

Consumer:
 
 

 
 

 
 

 
 
 
 

 
—

 
 

 
 
Equity loans and lines of credit
 
—

 
—

 
227

 
227

 
47,348

 
47,575

 
—

 
3,030

Consumer and installment
 
30

 
—

 
—

 
30

 
10,063

 
10,093

 
—

 
19

Total
 
$
913

 
$
88

 
$
476

 
$
1,477

 
$
570,965

 
$
572,442

 
$
—

 
$
14,052
Impaired loans
The following table shows information related to impaired loans by class at December 31, 2015 (in thousands):
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
With no related allowance recorded:
 
 

 
 

 
 

Commercial:
 
 

 
 

 
 

Commercial and industrial
 
$
—

 
$
1

 
$
—

Real estate:
 
 

 
 

 
 

Owner occupied
 
166

 
245

 
—

Real estate construction and other land loans
 
3,125

 
3,125

 
—

Commercial real estate
 
1,162

 
1,302

 
—

Total real estate
 
4,453

 
4,672

 
—

Consumer:
 
 

 
 

 
 

Equity loans and lines of credit
 
1,291

 
1,991

 
—

Total with no related allowance recorded
 
5,744

 
6,664

 
—

 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

Commercial:
 
 

 
 

 
 

Commercial and industrial
 
30

 
33

 
1

Real estate:
 
 

 
 

 
 

Owner occupied
 
180

 
212

 
18

Commercial real estate
 
566

 
588

 
110

Total real estate
 
746

 
800

 
128

Consumer:
 
 

 
 

 
 

Equity loans and lines of credit
 
166

 
179

 
33

Consumer and installment
 
13

 
15

 
2

Total consumer
 
179

 
194

 
35

Total with an allowance recorded
 
955

 
1,027

 
164

Total
 
$
6,699

 
$
7,691

 
$
164


The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.
The following table shows information related to impaired loans by class at December 31, 2014 (in thousands):
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
With no related allowance recorded:
 
 

 
 

 
 

Commercial:
 
 

 
 

 
 

Commercial and industrial
 
$
6,440

 
$
9,991

 
$
—

Agricultural land and production
 
—

 
1,722

 
—

Total commercial
 
6,440

 
11,713

 
—

Real estate:
 
 

 
 

 
 

Owner occupied
 
1,188

 
1,255

 
—

Real estate construction and other land loans
 
547

 
799

 
—

Commercial real estate
 
1,794

 
1,794

 
—

Agricultural real estate
 
360

 
360

 
—

Total real estate
 
3,889

 
4,208

 
—

Consumer:
 
 

 
 

 
 

Equity loans and lines of credit
 
2,019

 
2,707

 
—

Total with no related allowance recorded
 
12,348

 
18,628

 
—

 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

Commercial:
 
 

 
 

 
 

Commercial and industrial
 
828

 
835

 
230

Real estate:
 
 

 
 

 
 

Owner occupied
 
199

 
219

 
30

Real estate construction and other land loans
 
3,542

 
3,542

 
72

Commercial real estate
 
882

 
1,022

 
60

Total real estate
 
4,623

 
4,783

 
162

Consumer:
 
 

 
 

 
 

Equity loans and lines of credit
 
1,008

 
1,026

 
217

Consumer and installment
 
19

 
21

 
3

Total consumer
 
1,027

 
1,047

 
220

Total with an allowance recorded
 
6,478

 
6,665

 
612

Total
 
$
18,826

 
$
25,293

 
$
612

 
The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.
The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2015, 2014, and 2013 (in thousands):
 
 
Year Ended
December 31, 2015
 
Year Ended
December 31, 2014
 
Year Ended
December 31, 2013
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With no related allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
$
2,921

 
$
—

 
$
638

 
$
—

 
$
329

 
$
—

Total commercial
 
2,921

 
—

 
638

 
—

 
329

 
—

Real estate:
 
 

 
 

 
 

 
 

 
 

 
 

Owner occupied
 
770

 
231

 
2,063

 
2

 
2,321

 
—

Real estate construction and other land loans
 
1,266

 
79

 
1,276

 
24

 
2,342

 
—

Commercial real estate
 
1,939

 
—

 
574

 
—

 
279

 
—

Agricultural real estate
 
211

 
—

 
28

 
—

 
—

 
—

Total real estate
 
4,186

 
310

 
3,941

 
26

 
4,942

 
—

Consumer:
 
 

 
 

 
 

 
 

 
 

 
 

Equity loans and lines of credit
 
1,858

 
—

 
1,826

 
—

 
1,998

 
—

Consumer and installment
 
—

 
—

 
8

 
—

 
9

 
—

Total consumer
 
1,858

 
—

 
1,834

 
—

 
2,007

 
—

Total with no related allowance recorded
 
8,965

 
310

 
6,413

 
26

 
7,278

 
—

 
 
—

 
 

 
 

 
 

 
 

 
 

With an allowance recorded:
 
—

 
 

 
 

 
 

 
 

 
 

Commercial:
 
1,624,000

 
178,000

 
721,000

 
—

 
721,000

 
—

Commercial and industrial
 
243

 
—

 
423

 
—

 
1,309

 
111

Total commercial
 
243

 
—

 
423

 
—

 
1,309

 
111

Real estate:
 
 

 
—

 
 
 
—

 
 
 
—

Owner occupied
 
190

 
—

 
264

 
—

 
997

 
86

Real estate construction and other land loans
 
2,297

 
—

 
3,782

 
267

 
4,295

 
329

Commercial real estate
 
753

 
—

 
214

 
55

 
—

 
47

Total real estate
 
3,240

 
—

 
4,260

 
322

 
5,292

 
462

Consumer:
 
 

 
 

 
 

 
 

 
 

 
 

Equity loans and lines of credit
 
328

 
—

 
303

 
—

 
489

 
—

Consumer and installment
 
16

 
—

 
27

 
—

 
—

 
—

Total consumer
 
344

 
—

 
330

 
—

 
489

 
—

Total with an allowance recorded
 
3,827

 
—

 
5,013

 
322

 
7,090

 
573

Total
 
$
12,792

 
$
310

 
$
11,426

 
$
348

 
$
14,368

 
$
573
Troubled Debt Restructurings
The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2015 (in thousands):
Troubled Debt Restructurings:
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment (1)
 
Principal Modification
 
Post Modification Outstanding Recorded Investment (2)
 
Outstanding Recorded Investment
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
2

 
$
42

 
$
—

 
$
42

 
$
30

(1)
Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any.
(2)
Balance outstanding after principal modification, if any borrower reduction to recorded investment.

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2014 (in thousands):
Troubled Debt Restructurings:
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment (1)
 
Principal Modification
 
Post Modification Outstanding Recorded Investment (2)
 
Outstanding Recorded Investment
Commercial:
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial
 
1

 
$
25

 
$
—

 
$
25

 
$
25

Consumer
 
 
 
 
 
 
 
 
 
 
Equity loans and line of credit
 
1

 
7

 
—

 
7

 
4

Total
 
2

 
$
32

 
$
—

 
$
32

 
$
29

(1)
Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any.
(2)
Balance outstanding after principal modification, if any borrower reduction to recorded investment.