Troubled Debt Restructurings:

Total troubled debt restructurings were $7.8 million and $9.3 million at June 30, 2016 and December 31, 2015, respectively. The Company has allocated $154 thousand and $528 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2016 and December 31, 2015. There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at June 30, 2016 and at December 31, 2015.

During the three and six month periods ended June 30, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a deferral of principal payments; or a legal concession. During the quarter ended June 30, 2016 only legal concessions where made to certain loans. During the six month period ended June 30, 2016, the terms of such loans included a reduction of the stated interest rate of the loan by 1.24% and an extension of the maturity date by 120 months. During the same six month period in 2015, loans modified as trouble debt restructurings had an extension of the maturity dates by 9 months.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three and six month periods ended June 30, 2016 and 2015:

			Pre-Modification		Post-Modification
Three Months Ended June 30, 2016	Number of		Outstanding Recorded		Outstanding Recorded
(In thousands of Dollars)	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		3	$	188	$	188
Indirect		5		37		37
Total originated loans		8		225		225
Acquired loans:
1-4 family residential		2		68		68
Total loans		10	$	293	$	293

			Pre-Modification		Post-Modification
Six Months Ended June 30, 2016	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		6	$	235	$	236
Indirect		13		114		114
Total originated loans		19	$	349	$	350
Acquired loans:
Residential real estate
1-4 family residential		2		68		68
Consumer		1		33		33
Total acquired loans		3	$	101	$	101
Total loans		22	$	450	$	451

			Pre-Modification		Post-Modification
Three Months Ended June 30, 2015	Number of		Outstanding Recorded		Outstanding Recorded
(In thousands of Dollars)	Loans		Investment		Investment
Originated loans:
Commercial real estate
Owner occupied		2	$	801	$	801
Residential real estate
1-4 family residential		2		193		193
Total originated loans		4	$	994	$	994

			Pre-Modification		Post-Modification
Six Months Ended June 30, 2015	Number of		Outstanding Recorded		Outstanding Recorded
(In Thousands of Dollars)	Loans		Investment		Investment
Troubled Debt Restructurings:
Commercial real estate
Owner occupied		2	$	801	$	801
Commercial		1		8		8
Residential real estate
1-4 family residential		5		547		547
Home equity lines of credit		1		50		50
Indirect		2		36		36
Total		11	$	1,442	$	1,442

There were $316 thousand and $327 thousand in charge offs during the three and six month periods ended June 30, 2016, respectively. There was no increase to the provision for loan losses during the current three month period and an $11 thousand increase to the provision during the six month period ended June 30, 2016, as a result of troubled debt restructurings. There were $87 thousand in charge offs and a $62 thousand increase to the provision for loan losses during the three and six month period ended June 30, 2015, as a result of troubled debt restructurings.

There were two commercial loans, one residential real estate loan and one home equity line of credit for which there was a payment default for all within twelve months following the modification of the troubled debt restructuring during the three month period and six month period ended June 30, 2016. The two commercial loans were past due at June 30, 2016. There was no provision recorded as a result of the defaults during 2016. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There was one commercial real estate loan modified as a troubled debt restructuring for which there was a payment default within the twelve months following the modification during the three and six month period ended June 30, 2015. This loan was past due at June 30, 2015. There was no provision recorded as a result of the default during 2015.