Loans:

Loan balances were as follows:

(In Thousands of Dollars)	June 30, 2016			December 31, 2015
Originated loans:
Commercial real estate
Owner occupied	$	127,504		$	113,160
Non-owner occupied		146,959			139,502
Other		57,568			50,855
Commercial		179,963			157,447
Residential real estate
1-4 family residential		206,121			179,657
Home equity lines of credit		50,290			41,171
Consumer
Indirect		139,424			127,335
Direct		21,193			17,325
Other		5,359			4,508
Subtotal	$	934,381		$	830,960
Net deferred loan costs		2,943			2,731
Allowance for loan losses		(9,717	)		(8,947	)
Total originated loans	$	927,607		$	824,744
Acquired loans:
Commercial real estate
Owner occupied	$	128,009		$	131,673
Non-owner occupied		25,513			28,045
Other		17,542			23,536
Commercial		61,077			73,621
Residential real estate
1-4 family residential		124,389			133,701
Home equity lines of credit		38,374			40,929
Consumer
Direct		26,017			31,465
Other		239			204
Subtotal	$	421,160		$	463,174
Allowance for loan losses		(3	)		(31	)
Total acquired loans		421,157			463,143
Net loans	$	1,348,764		$	1,287,887

Purchased credit impaired loans

As part of the NBOH acquisition the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected. The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

(In Thousands of Dollars)	June 30, 2016		December 31, 2015
Commercial real estate
Owner occupied	$	822	$	986
Non-owner occupied		460		501
Commercial		1,260		1,576
Total outstanding balance	$	2,542	$	3,063
Carrying amount, net of allowance of $3 in 2016 and $31 in 2015	$	2,028	$	2,184

Accretable yield, or income expected to be collected, is shown in the table below:

(In Thousands of Dollars)	Six Months Ended June 30, 2016
Beginning balance	$	323
New loans purchased	0
Accretion of income		(38	)
Ending balance	$	285

The key assumptions considered include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income and principal expected to be collected. In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary. There were no adjustments to forecasted cash flows that impacted the allowance for loan losses for the six months ended June 30, 2016.

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six month periods ended June 30, 2016 and 2015:

Three Months Ended June 30, 2016

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,181		$	1,452		$	1,914		$	2,218		$	625		$	9,390
Provision for loan losses		335			212			196			521			(274	)		990
Loans charged off		(307	)		(37	)		(44	)		(431	)		0			(819	)
Recoveries		1			7			15			136			0			159
Total ending allowance balance	$	3,210		$	1,634		$	2,081		$	2,444		$	351		$	9,720

Six Months Ended June 30, 2016

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473		$	8,978
Provision for loan losses		378			276			271			967			(122	)		1,770
Loans charged off		(307	)		(37	)		(78	)		(975	)		0			(1,397	)
Recoveries		12			22			43			292			0			369
Total ending allowance balance	$	3,210		$	1,634		$	2,081		$	2,444		$	351		$	9,720

Three Months Ended June 30, 2015

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	2,917		$	1,351		$	1,640		$	1,705		$	110		$	7,723
Provision for loan losses		223			183			49			505			(110	)		850
Loans charged off		(516	)		(254	)		(160	)		(566	)		0			(1,496	)
Recoveries		9			0			19			181			0			209
Total ending allowance balance	$	2,633		$	1,280		$	1,548		$	1,825		$	0		$	7,286

Six Months Ended June 30, 2015

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	2,676		$	1,420		$	1,689		$	1,663		$	184		$	7,632
Provision for loan losses		455			113			59			857			(184	)		1,300
Loans charged off		(520	)		(254	)		(241	)		(1,099	)		0		$	(2,114	)
Recoveries		22			1			41			404			0			468
Total ending allowance balance	$	2,633		$	1,280		$	1,548		$	1,825		$	0		$	7,286

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2016 and December 31, 2015. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

June 30, 2016

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	70	$	5	$	76	$	0	$	0	$	151
Collectively evaluated for impairment		3,140		1,626		2,005		2,444		351		9,566
Acquired loans		0		0		0		0		0		0
Acquired with deteriorated credit quality		0		3		0		0		0		3
Total ending allowance balance	$	3,210	$	1,634	$	2,081	$	2,444	$	351	$	9,720

Loans:
Loans individually evaluated for impairment	$	3,452	$	405	$	3,428	$	79	$	0	$	7,364
Loans collectively evaluated for impairment		327,707		179,190		252,521		170,542		0		929,960
Acquired loans		169,962		60,148		162,763		26,256		0		419,129
Acquired with deteriorated credit quality		1,102		929		0		0		0		2,031
Total ending loans balance	$	502,223	$	240,672	$	418,712	$	196,877	$	0	$	1,358,484

December 31, 2015

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	429	$	5	$	63	$	0	$	0	$	497
Collectively evaluated for impairment		2,698		1,337		1,782		2,160		473		8,450
Acquired loans		0		0		0		0		0		0
Acquired with deteriorated credit quality		0		31		0		0		0		31
Total ending allowance balance	$	3,127	$	1,373	$	1,845	$	2,160	$	473	$	8,978

Loans:
Loans individually evaluated for impairment	$	5,853	$	712	$	3,414	$	103	$	0	$	10,082
Loans collectively evaluated for impairment		296,866		156,415		217,023		153,305		0		823,609
Acquired loans		181,987		72,673		174,630		31,669		0		460,959
Acquired with deteriorated credit quality		1,267		948		0		0		0		2,215
Total ending loans balance	$	485,973	$	230,748	$	395,067	$	185,077	$	0	$	1,296,865

The following tables present information related to impaired loans by class of loans as of June 30, 2016 and December 31, 2015:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
June 30, 2016
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,772	$	1,253	$	0
Non-owner occupied		335		334		0
Commercial		349		327		0
Residential real estate
1-4 family residential		2,495		2,207		0
Home equity lines of credit		240		225		0
Consumer		157		79		0
Subtotal		5,348		4,425		0

With an allowance recorded:
Commercial real estate
Owner occupied		572		570		31
Non-owner occupied		1,295		1,295		39
Commercial		78		78		5
Residential real estate
1-4 family residential		927		910		75
Home equity lines of credit		86		86		1
Subtotal		2,958		2,939		151
Total	$	8,306	$	7,364	$	151

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,956	$	2,436	$	0
Non-owner occupied		343		342		0
Commercial		834		631		0
Residential real estate
1-4 family residential		2,575		2,310		0
Home equity lines of credit		283		268		0
Consumer		214		103		0
Subtotal		7,205		6,090		0

With an allowance recorded:
Commercial real estate
Owner occupied		1,597		1,595		379
Non-owner occupied		1,480		1,480		50
Commercial		81		81		5
Residential real estate
1-4 family residential		769		749		61
Home equity lines of credit		87		87		2
Subtotal		4,014		3,992		497
Total	$	11,219	$	10,082	$	497

The following tables present the average recorded investment in impaired loans by class and interest income recognized by loan class for the three and six month periods ended June 30, 2016 and 2015:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended June 30,				For Three Months Ended June 30,
(In Thousands of Dollars)	2016		2015		2016		2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,266	$	2,226	$	28	$	29
Non-owner occupied		334		380		0		7
Commercial		331		409		5		5
Residential real estate
1-4 family residential		2,249		2,108		33		38
Home equity lines of credit		227		275		3		4
Consumer		86		81		3		3
Subtotal		4,493		5,479		72		86

With an allowance recorded:
Commercial real estate
Owner occupied		908		2,680		9		24
Non-owner occupied		1,401		1,520		19		20
Commercial		78		457		1		1
Residential real estate
1-4 family residential		845		908		11		11
Home equity lines of credit		86		89		1		1
Subtotal		3,318		5,654		41		57
Total	$	7,811	$	11,133	$	113	$	143

	Average Recorded Investment				Interest Income Recognized
	For Six Months Ended June 30,				For Six Months Ended June 30,
(In Thousands of Dollars)	2016		2015		2016		2015
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,786	$	2,268	$	38	$	45
Non-owner occupied		335		383		4		13
Commercial		472		436		10		11
Residential real estate
1-4 family residential		2,270		2,116		71		69
Home equity lines of credit		234		263		6		7
Consumer		101		86		6		7
Subtotal		5,198		5,552		135		152

With an allowance recorded:
Commercial real estate
Owner occupied		1,248		1,818		18		48
Non-owner occupied		1,435		1,528		38		40
Commercial		79		787		2		2
Residential real estate
1-4 family residential		797		945		20		20
Home equity lines of credit		86		89		2		2
Consumer		0		0		0		0
Subtotal		3,645		5,167		80		112
Total	$	8,843	$	10,719	$	215	$	264

Cash basis interest recognized during the three and six month periods ended June 30, 2016 and 2015 was materially equal to interest income recognized.

Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of June 30, 2016 and December 31, 2015:

	June 30, 2016				December 31, 2015
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	1,104	$	0	$	3,313	$	0
Non-owner occupied		334		0		345		0
Commercial		346		0		541		73
Residential real estate
1-4 family residential		2,294		399		2,406		336
Home equity lines of credit		172		13		127		112
Consumer
Indirect		200		49		266		297
Direct		12		118		30		3
Other		0		1		0		24
Total originated loans	$	4,462	$	580	$	7,028	$	845
Acquired loans:
Commercial real estate
Owner occupied	$	492	$	232	$	126	$	18
Other		58		0		92		0
Commercial		1,240		173		1,068		0
Residential real estate
1-4 family residential		402		480		458		467
Home equity lines of credit		122		32		125		7
Consumer
Direct		86		1		161		50
Total acquired loans	$	2,400	$	918	$	2,030	$	542
Total loans	$	6,862	$	1,498	$	9,058	$	1,387

The following table presents the aging of the recorded investment in past due loans as of June 30, 2016 and December 31, 2015 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
June 30, 2016
Originated loans:
Commercial real estate
Owner occupied	$	422	$	0	$	1,104	$	1,526	$	125,673	$	127,199
Non-owner occupied		0		0		334		334		146,247		146,581
Other		0		0		0		0		57,379		57,379
Commercial		108		0		346		454		179,141		179,595
Residential real estate
1-4 family residential		2,857		907		2,693		6,457		199,155		205,612
Home equity lines of credit		211		51		185		447		49,890		50,337
Consumer
Indirect		2,070		417		249		2,736		141,134		143,870
Direct		289		51		130		470		20,922		21,392
Other		26		10		1		37		5,322		5,359
Total originated loans:	$	5,983	$	1,436	$	5,042	$	12,461	$	924,863	$	937,324
Acquired loans:
Commercial real estate
Owner occupied	$	518	$	24	$	724	$	1,266	$	126,743	$	128,009
Non-owner occupied		0		28		0		28		25,485		25,513
Other		0		0		58		58		17,484		17,542
Commercial		559		100		1,413		2,072		59,005		61,077
Residential real estate
1-4 family residential		1,316		625		882		2,823		121,566		124,389
Home equity lines of credit		4		10		154		168		38,206		38,374
Consumer
Direct		747		20		87		854		25,164		26,018
Other		0		1		0		1		237		238
Total acquired loans	$	3,144	$	808	$	3,318	$	7,270	$	413,890	$	421,160
Total loans	$	9,127	$	2,244	$	8,360	$	19,731	$	1,338,753	$	1,358,484

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2015
Originated loans:
Commercial real estate
Owner occupied	$	34	$	0	$	3,313	$	3,347	$	109,532	$	112,879
Non-owner occupied		0		0		345		345		138,824		139,169
Other		112		0		0		112		50,559		50,671
Commercial		0		0		614		614		156,513		157,127
Residential real estate
1-4 family residential		1,694		402		2,742		4,838		174,376		179,214
Home equity lines of credit		62		5		239		306		40,917		41,223
Consumer
Indirect		2,059		525		563		3,147		128,280		131,427
Direct		311		5		33		349		17,124		17,473
Other		13		10		24		47		4,461		4,508
Total originated loans	$	4,285	$	947	$	7,873	$	13,105	$	820,586	$	833,691
Acquired loans:
Commercial real estate
Owner occupied	$	669	$	0	$	144	$	813	$	130,860	$	131,673
Non-owner occupied		0		0		0		0		28,045		28,045
Other		0		0		92		92		23,444		23,536
Commercial		276		2		1,068		1,346		72,275		73,621
Residential real estate
1-4 family residential		1,994		244		925		3,163		130,538		133,701
Home equity lines of credit		78		11		132		221		40,708		40,929
Consumer
Direct		567		56		211		834		30,631		31,465
Other		0		0		0		0		204		204
Total acquired loans	$	3,584	$	313	$	2,572	$	6,469	$	456,705	$	463,174
Total loans	$	7,869	$	1,260	$	10,445	$	19,574	$	1,277,291	$	1,296,865