XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Loans
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Loans
Loans
 
Loans were comprised of the following classifications at September 30, 2018 and December 31, 2017: 
 
 
September 30,
2018
 
December 31,
2017
Commercial:
 
 

 
 

Commercial and Industrial Loans and Leases
 
$
527,938

 
$
486,668

Commercial Real Estate Loans
 
985,915

 
926,729

Agricultural Loans
 
358,543

 
333,227

Retail:
 
 

 
 

Home Equity Loans
 
175,008

 
152,187

Consumer Loans
 
72,853

 
67,475

Residential Mortgage Loans
 
219,916

 
178,733

Subtotal
 
2,340,173

 
2,145,019

Less: Unearned Income
 
(3,548
)
 
(3,381
)
Allowance for Loan Losses
 
(16,051
)
 
(15,694
)
Loans, Net
 
$
2,320,574

 
$
2,125,944



As further described in Note 14, during 2018 the Company acquired loans with a fair value of $117,604 as part of a branch acquisition. This was made up of loans with an acquired balance of $120,484, net of $2,880 of fair value discounts at date of acquisition. At September 30, 2018, the remaining carrying amount of such loans totaled $112,873, which is included in the September 30, 2018 table above. This amount is made up of loans with a remaining balance of $115,523 net of remaining fair value discounts of $2,650. No loans with deteriorated credit quality were acquired as part of the branch acquisition described in Note 14.

The following tables present the activity in the allowance for loan losses by portfolio class for the three months ended September 30, 2018 and 2017:
September 30, 2018
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural
Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
3,563

 
$
4,958

 
$
5,578

 
$
366

 
$
347

 
$
366

 
$
459

 
$
15,637

Provision for Loan Losses
 
(444
)
 
138

 
618

 
(80
)
 
195

 
67

 
6

 
500

Recoveries
 
69

 
7

 
20

 
1

 
82

 
3

 
—

 
182

Loans Charged-off
 
—

 
(9
)
 
—

 
(10
)
 
(238
)
 
(11
)
 
—

 
(268
)
Ending Balance
 
$
3,188

 
$
5,094

 
$
6,216

 
$
277

 
$
386

 
$
425

 
$
465

 
$
16,051


September 30, 2017
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural
Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
3,672

 
$
5,316

 
$
4,829

 
$
300

 
$
254

 
$
353

 
$
596

 
$
15,320

Provision for Loan Losses
 
204

 
(81
)
 
(10
)
 
37

 
135

 
56

 
(91
)
 
250

Recoveries
 
1

 
4

 
9

 
6

 
78

 
3

 
—

 
101

Loans Charged-off
 
(140
)
 
(6
)
 
—

 
—

 
(204
)
 
—

 
—

 
(350
)
Ending Balance
 
$
3,737

 
$
5,233

 
$
4,828

 
$
343

 
$
263

 
$
412

 
$
505

 
$
15,321



The following tables present the activity in the allowance for loan losses by portfolio class for the nine months ended September 30, 2018 and 2017:
September 30, 2018
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural
Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
4,735

 
$
4,591

 
$
4,894

 
$
330

 
$
298

 
$
343

 
$
503

 
$
15,694

Provision for Loan Losses
 
(121
)
 
498

 
1,302

 
(38
)
 
399

 
68

 
(38
)
 
2,070

Recoveries
 
74

 
18

 
20

 
11

 
239

 
34

 
—

 
396

Loans Charged-off
 
(1,500
)
 
(13
)
 
—

 
(26
)
 
(550
)
 
(20
)
 
—

 
(2,109
)
Ending Balance
 
$
3,188

 
$
5,094

 
$
6,216

 
$
277

 
$
386

 
$
425

 
$
465

 
$
16,051


September 30, 2017
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural
Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
3,725

 
$
5,452

 
$
4,094

 
$
283

 
$
235

 
$
329

 
$
690

 
$
14,808

Provision for Loan Losses
 
151

 
(62
)
 
725

 
70

 
307

 
94

 
(185
)
 
1,100

Recoveries
 
10

 
43

 
9

 
8

 
205

 
38

 
—

 
313

Loans Charged-off
 
(149
)
 
(200
)
 
—

 
(18
)
 
(484
)
 
(49
)
 
—

 
(900
)
Ending Balance
 
$
3,737

 
$
5,233

 
$
4,828

 
$
343

 
$
263

 
$
412

 
$
505

 
$
15,321


In determining the adequacy of the allowance for loan loss, general allocations are made for pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios, judgmentally adjusted for current economic factors and portfolio trends.

Loan impairment is reported when full repayment under the terms of the loan is not expected. This methodology is used for all loans, including loans acquired with deteriorated credit quality if such loans perform worse than what was expected at the time of acquisition. For purchased loans, the assessment is made at the time of acquisition as well as over the life of the loan. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Specific allocations on impaired loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Allocations are also applied to categories of loans not considered individually impaired but for which the rate of loss is expected to be greater than historical averages, including non-performing consumer or residential real estate loans. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of September 30, 2018 and December 31, 2017:
September 30, 2018
 
Total
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
Allowance for Loan Losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending Allowance Balance Attributable to Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually Evaluated for Impairment
 
$
1,594

 
$
208

 
$
1,386

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
14,422

 
2,980

 
3,678

 
6,216

 
277

 
386

 
420

 
465

Acquired with Deteriorated Credit Quality
 
35

 
—

 
30

 
—

 
—

 
—

 
5

 
—

Total Ending Allowance Balance
 
$
16,051

 
$
3,188

 
$
5,094

 
$
6,216

 
$
277

 
$
386

 
$
425

 
$
465


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
9,394

 
$
3,521

 
$
5,873

 
$
—

 
$
—

 
$
—

 
$
—

 
n/m(2)

Loans Collectively Evaluated for Impairment
 
2,334,284

 
524,754

 
978,124

 
362,982

 
175,800

 
73,050

 
219,574

 
n/m(2)

Loans Acquired with Deteriorated Credit Quality
 
7,599

 
1,189

 
4,578

 
972

 
—

 
—

 
860

 
n/m(2)

Total Ending Loans Balance(1)
 
$
2,351,277

 
$
529,464

 
$
988,575

 
$
363,954

 
$
175,800

 
$
73,050

 
$
220,434

 
n/m(2)

 
 
(1)Total recorded investment in loans includes $11,104 in accrued interest.
(2)n/m = not meaningful
December 31, 2017
 
Total
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
Allowance for Loan Losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending Allowance Balance Attributable to Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually Evaluated for Impairment
 
$
2,228

 
$
1,399

 
$
829

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
13,455

 
3,333

 
3,759

 
4,894

 
330

 
298

 
338

 
503

Acquired with Deteriorated Credit Quality
 
11

 
3

 
3

 
—

 
—

 
—

 
5

 
—

Total Ending Allowance Balance
 
$
15,694

 
$
4,735

 
$
4,591

 
$
4,894

 
$
330

 
$
298

 
$
343

 
$
503


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
11,633

 
$
5,918

 
$
5,552

 
$
163

 
$
—

 
$
—

 
$
—

 
n/m(2)

Loans Collectively Evaluated for Impairment
 
2,133,752

 
481,152

 
917,036

 
336,849

 
152,757

 
67,647

 
178,311

 
n/m(2)

Loans Acquired with Deteriorated Credit Quality
 
9,117

 
988

 
6,452

 
789

 
—

 
—

 
888

 
n/m(2)

Total Ending Loans Balance(1)
 
$
2,154,502

 
$
488,058

 
$
929,040

 
$
337,801

 
$
152,757

 
$
67,647

 
$
179,199

 
n/m(2)

 
(1)Total recorded investment in loans includes $9,483 in accrued interest.
(2)n/m = not meaningful 

The following tables present loans individually evaluated for impairment by class of loans as of September 30, 2018 and December 31, 2017:
September 30, 2018
 
Unpaid Principal Balance(1)
 
 Recorded Investment
 
Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,117

 
$
1,120

 
$
—

Commercial Real Estate Loans
 
2,102

 
1,974

 
—

Agricultural Loans
 
659

 
552

 
—

Subtotal
 
3,878

 
3,646

 
—

With An Allowance Recorded:
 
 

 
 

 


Commercial and Industrial Loans and Leases
 
2,400

 
2,400

 
208

Commercial Real Estate Loans
 
4,713

 
4,546

 
1,416

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
7,113

 
6,946

 
1,624

Total
 
$
10,991

 
$
10,592

 
$
1,624

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
1,194

 
$
1,003

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
363

 
$
195

 
$
30

   
(1) Unpaid Principal Balance is the remaining contractual principal payments gross of partial charge-offs and discounts.

December 31, 2017
 
Unpaid Principal Balance(1)
 
 Recorded Investment
 
Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,205

 
$
1,166

 
$
—

Commercial Real Estate Loans
 
1,812

 
1,495

 
—

Agricultural Loans
 
919

 
749

 
—

Subtotal
 
3,936

 
3,410

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
4,804

 
4,763

 
1,402

Commercial Real Estate Loans
 
4,489

 
4,465

 
832

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
9,293

 
9,228

 
2,234

Total
 
$
13,229

 
$
12,638

 
$
2,234

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
1,255

 
$
797

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
252

 
$
208

 
$
6

    
(1) Unpaid Principal Balance is the remaining contractual payments gross of partial charge-offs and discounts.
 
The following tables present the average balance and related interest income of loans individually evaluated for impairment by class of loans for the three month period ended September 30, 2018 and 2017:
September 30, 2018
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis
Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,130

 
$
14

 
$
2

Commercial Real Estate Loans
 
1,988

 
26

 
—

Agricultural Loans
 
537

 
—

 
—

Subtotal
 
3,655

 
40

 
2

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
2,594

 
1

 
9

Commercial Real Estate Loans
 
4,693

 
4

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
7,287

 
5

 
9

Total
 
$
10,942

 
$
45

 
$
11

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
995

 
$
11

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
197

 
$
5

 
$
—


September 30, 2017
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis
Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,202

 
$
13

 
$
—

Commercial Real Estate Loans
 
1,554

 
13

 
—

Agricultural Loans
 
735

 
—

 
—

Subtotal
 
3,491

 
26

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
2,865

 
2

 
1

Commercial Real Estate Loans
 
3,654

 
3

 
—

Agricultural Loans
 
228

 
—

 
—

Subtotal
 
6,747

 
5

 
1

Total
 
$
10,238

 
$
31

 
$
1

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
771

 
$
—

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
215

 
$
4

 
$
—



The following tables present the average balance and related interest income of loans individually evaluated for impairment by class of loans for the nine month period ended September 30, 2018 and 2017:
September 30, 2018
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis
Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,152

 
$
40

 
$
2

Commercial Real Estate Loans
 
1,525

 
52

 
7

Agricultural Loans
 
594

 
—

 
—

Subtotal
 
3,271

 
92

 
9

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
3,189

 
2

 
9

Commercial Real Estate Loans
 
4,816

 
14

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
8,005

 
16

 
9

Total
 
$
11,276

 
$
108

 
$
18

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
697

 
$
11

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
200

 
$
16

 
$
—

September 30, 2017
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis
Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
456

 
$
15

 
$
2

Commercial Real Estate Loans
 
1,067

 
43

 
29

Agricultural Loans
 
650

 
24

 
16

Subtotal
 
2,173

 
82

 
47

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,011

 
4

 
2

Commercial Real Estate Loans
 
2,290

 
13

 
6

Agricultural Loans
 
484

 
—

 
—

Subtotal
 
3,785

 
17

 
8

Total
 
$
5,958

 
$
99

 
$
55

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
826

 
$
25

 
$
25

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
255

 
$
15

 
$
7


All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection.

The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of September 30, 2018 and December 31, 2017:
 
 
Non-Accrual Loans
 
Loans Past Due 90 Days
or More & Still Accruing
 
 
September 30,
 
December 31,
 
September 30,
 
December 31,
 
 
2018
 
2017
 
2018
 
2017
Commercial and Industrial Loans and Leases
 
$
2,400

 
$
4,753

 
$
—

 
$
—

Commercial Real Estate Loans
 
4,667

 
4,618

 
70

 
474

Agricultural Loans
 
552

 
748

 
—

 
268

Home Equity Loans
 
59

 
199

 
—

 
—

Consumer Loans
 
148

 
286

 
—

 
—

Residential Mortgage Loans
 
602

 
487

 
—

 
—

Total
 
$
8,428

 
$
11,091

 
$
70

 
$
742

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
609

 
$
866

 
$
70

 
$
—



The following tables present the aging of the recorded investment in past due loans by class of loans as of September 30, 2018 and December 31, 2017:
September 30, 2018
 
Total
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due
 
Total
Past Due
 
Loans Not Past Due
Commercial and Industrial Loans and Leases
 
$
529,464

 
$
3,172

 
$
4,519

 
$
25

 
$
7,716

 
$
521,748

Commercial Real Estate Loans
 
988,575

 
997

 
594

 
2,044

 
3,635

 
984,940

Agricultural Loans
 
363,954

 
333

 
—

 
—

 
333

 
363,621

Home Equity Loans
 
175,800

 
757

 
111

 
59

 
927

 
174,873

Consumer Loans
 
73,050

 
667

 
26

 
149

 
842

 
72,208

Residential Mortgage Loans
 
220,434

 
3,415

 
858

 
408

 
4,681

 
215,753

Total(1)
 
$
2,351,277

 
$
9,341

 
$
6,108

 
$
2,685

 
$
18,134

 
$
2,333,143

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
7,599

 
$
170

 
$
138

 
$
95

 
$
403

 
$
7,196

Loans Acquired in Current Year
      (Included in the Total Above)
 
$
113,173

 
$
33

 
$
111

 
$
—

 
$
144

 
$
113,029

 
(1)Total recorded investment in loans includes $11,104 in accrued interest.

December 31, 2017
 
Total
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due
 
Total
Past Due
 
Loans Not Past Due
Commercial and Industrial Loans and Leases
 
$
488,058

 
$
209

 
$
1,365

 
$
905

 
$
2,479

 
$
485,579

Commercial Real Estate Loans
 
929,040

 
1,229

 
1,650

 
677

 
3,556

 
925,484

Agricultural Loans
 
337,801

 
27

 
—

 
268

 
295

 
337,506

Home Equity Loans
 
152,757

 
366

 
93

 
199

 
658

 
152,099

Consumer Loans
 
67,647

 
246

 
97

 
286

 
629

 
67,018

Residential Mortgage Loans
 
179,199

 
2,850

 
1,247

 
261

 
4,358

 
174,841

Total(1)
 
$
2,154,502

 
$
4,927

 
$
4,452

 
$
2,596

 
$
11,975

 
$
2,142,527

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
9,117

 
$
342

 
$
74

 
$
27

 
$
443

 
$
8,674

 
(1)Total recorded investment in loans includes $9,483 in accrued interest.

Troubled Debt Restructurings:
 
In certain instances, the Company may choose to restructure the contractual terms of loans. A troubled debt restructuring occurs when the Bank grants a concession to the borrower that it would not otherwise consider due to a borrower’s financial difficulty.   In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. This evaluation is performed under the Company’s internal underwriting policy. The Company uses the same methodology for loans acquired with deteriorated credit quality as for all other loans when determining whether the loan is a troubled debt restructuring.
 
During the three and nine months ended September 30, 2018, there were no loans modified as a troubled debt restructuring. During the three months ended September 30, 2017, there were no loans modified as a troubled debt restructuring. During the nine months ended September 30, 2017, there were two loans modified as troubled debt restructurings.

The following tables present the recorded investment of troubled debt restructurings by class of loans as of September 30, 2018 and December 31, 2017:
September 30, 2018
 
Total
 
Performing
 
Non-Accrual(1)
Commercial and Industrial Loans and Leases
 
$
177

 
$
122

 
$
55

Commercial Real Estate Loans
 
—

 
—

 
—

Total
 
$
177

 
$
122

 
$
55

December 31, 2017
 
Total
 
Performing
 
Non-Accrual(1)
Commercial and Industrial Loans and Leases
 
$
258

 
$
125

 
$
133

Commercial Real Estate Loans
 
24

 
24

 
—

Total
 
$
282

 
$
149

 
$
133

 
 
(1)The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on a previous page.
 
The Company had not committed to lending any additional amounts as of September 30, 2018 and December 31, 2017 to customers with outstanding loans that are classified as troubled debt restructurings.

The Company had no loans modified as troubled debt restructurings during the three months ended September 30, 2018 and 2017. The following tables present loans by class modified as troubled debt restructurings that occurred during the nine months ending September 30, 2018 and 2017:
September 30, 2018
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
—

 
$
—

 
$
—

Commercial Real Estate Loans
 
—

 
—

 
—

Total
 
—

 
$
—

 
$
—

       
The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the nine months ending September 30, 2018.
September 30, 2017
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
1

 
$
127

 
$
127

Commercial Real Estate Loans
 
1

 
28

 
28

Total
 
2

 
$
155

 
$
155

         
The troubled debt restructurings described above increased the allowance for loan losses by $10 and resulted in charge-offs of $0 during the nine months ending September 30, 2017.

Additionally, there were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three and nine months ending September 30, 2018 and 2017.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $250. This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings:
 
Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
 
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
 
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
 
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
September 30, 2018
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial and Industrial Loans and Leases
 
$
506,547

 
$
5,901

 
$
17,016

 
$
—

 
$
529,464

Commercial Real Estate Loans
 
960,077

 
17,807

 
10,691

 
—

 
988,575

Agricultural Loans
 
304,138

 
40,441

 
19,375

 
—

 
363,954

Total
 
$
1,770,762

 
$
64,149

 
$
47,082

 
$
—

 
$
1,881,993

Loans Acquired With Deteriorated Credit Quality
      (Included in the Total Above)
 
$
2,745

 
$
1,802

 
$
2,192

 
$
—

 
$
6,739

Loans Acquired in Current Year
      (Included in the Total Above)
 
$
52,105

 
$
—

 
$
—

 
$
—

 
$
52,105


December 31, 2017
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial and Industrial Loans and Leases
 
$
462,212

 
$
7,901

 
$
17,945

 
$
—

 
$
488,058

Commercial Real Estate Loans
 
894,027

 
18,037

 
16,976

 
—

 
929,040

Agricultural Loans
 
304,032

 
27,288

 
6,481

 
—

 
337,801

Total
 
$
1,660,271

 
$
53,226

 
$
41,402

 
$
—

 
$
1,754,899

Loans Acquired With Deteriorated Credit Quality
      (Included in the Total Above)
 
$
2,604

 
$
1,647

 
$
3,978

 
$
—

 
$
8,229


    
The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For home equity, consumer and residential mortgage loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of September 30, 2018 and December 31, 2017:
September 30, 2018
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
Performing
 
$
175,741

 
$
72,901

 
$
219,832

Nonperforming
 
59

 
149

 
602

Total
 
$
175,800

 
$
73,050

 
$
220,434

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
—

 
$
—

 
$
860


December 31, 2017
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
Performing
 
$
152,558

 
$
67,361

 
$
178,712

Nonperforming
 
199

 
286

 
487

Total
 
$
152,757

 
$
67,647

 
$
179,199

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
—

 
$
—

 
$
888

 

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows: 
 
 
September 30, 2018
 
December 31, 2017
 
 
 
 
 
Commercial and Industrial Loans
 
$
1,189

 
$
988

Commercial Real Estate Loans
 
4,578

 
6,452

Agricultural Loans
 
972

 
789

Residential Mortgage Loans
 
860

 
888

Total
 
$
7,599

 
$
9,117

 
 
 

 
 

Carrying Amount, Net of Allowance
 
$
7,564

 
$
9,106


 
Accretable yield, or income expected to be collected, is as follows:
 
 
2018
 
2017
 
 
 
 
 
Balance at July 1
 
$
2,567

 
$
2,705

New Loans Purchased
 
—

 
—

Accretion of Income
 
(553
)
 
(43
)
Reclassifications from Non-accretable Difference
 
63

 
146

Charge-off of Accretable Yield
 
—

 
—

Balance at September 30
 
$
2,077

 
$
2,808

    
For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three months ended September 30, 2018 and 2017. The Company reversed allowance for loan losses of $3 and $54 during the three months ended September 30, 2018 and 2017.
 
 
2018
 
2017
 
 
 
 
 
Balance at January 1
 
$
2,734

 
$
2,521

New Loans Purchased
 
—

 
—

Accretion of Income
 
(774
)
 
(325
)
Reclassifications from Non-accretable Difference
 
214

 
612

Charge-off of Accretable Yield
 
(97
)
 
—

Balance at September 30
 
$
2,077

 
$
2,808


 
For those purchased loans disclosed above, the Company increased the allowance for loan losses by $30 and $11 during the nine months ended September 30, 2018 and 2017. The Company reversed allowance for loan losses of $6 and $110 during the nine months ended September 30, 2018 and 2017.
The carrying amount of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $60 as of September 30, 2018 and $14 as of December 31, 2017.