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Loans
 12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Loans
Loans
 
Loans were comprised of the following classifications at December 31: 
 
 
2015
 
2014
Commercial:
 
 

 
 

Commercial and Industrial Loans and Leases
 
$
418,154

 
$
380,079

Commercial Real Estate Loans
 
618,788

 
583,086

Agricultural Loans
 
246,886

 
216,774

Retail:
 
 

 
 

Home Equity Loans
 
97,902

 
86,234

Consumer Loans
 
50,029

 
48,613

Residential Mortgage Loans
 
136,316

 
137,204

Subtotal
 
1,568,075

 
1,451,990

Less: Unearned Income
 
(3,728
)
 
(4,008
)
Allowance for Loan Losses
 
(14,438
)
 
(14,929
)
Loans, net
 
$
1,549,909

 
$
1,433,053



The following table presents the activity in the allowance for loan losses by portfolio class for the years ended December 31, 2015, 2014, and 2013: 
 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2015
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
$
14,929

Provision for Loan Losses
 
(451
)
 
(688
)
 
992

 
160

 
(48
)
 
7

 
28

 
—

Recoveries
 
102

 
107

 
—

 
10

 
236

 
18

 
—

 
473

Loans Charged-off
 
(36
)
 
(350
)
 
—

 
(33
)
 
(312
)
 
(233
)
 
—

 
(964
)
Ending Balance
 
$
4,242

 
$
6,342

 
$
2,115

 
$
383

 
$
230

 
$
414

 
$
712

 
$
14,438

 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
3,983

 
$
8,335

 
$
946

 
$
239

 
$
188

 
$
281

 
$
612

 
$
14,584

Provision for Loan Losses
 
732

 
(1,596
)
 
177

 
37

 
291

 
437

 
72

 
150

Recoveries
 
111

 
863

 
—

 
42

 
173

 
21

 
—

 
1,210

Loans Charged-off
 
(199
)
 
(329
)
 
—

 
(72
)
 
(298
)
 
(117
)
 
—

 
(1,015
)
Ending Balance
 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
$
14,929

 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2013
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
4,555

 
$
8,931

 
$
989

 
$
141

 
$
214

 
$
186

 
$
504

 
$
15,520

Provision for Loan Losses
 
(197
)
 
(160
)
 
(43
)
 
419

 
112

 
111

 
108

 
350

Recoveries
 
128

 
102

 
—

 
—

 
148

 
8

 
—

 
386

Loans Charged-off
 
(503
)
 
(538
)
 
—

 
(321
)
 
(286
)
 
(24
)
 
—

 
(1,672
)
Ending Balance
 
$
3,983

 
$
8,335

 
$
946

 
$
239

 
$
188

 
$
281

 
$
612

 
$
14,584


 
In determining the adequacy of the allowance for loan loss, general allocations are made for other 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. For purchased loans, the assessment is made at the time of acquisition as well as over the life of 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.
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of December 31, 2015 and 2014:
December 31, 2015
 
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
 
$
1,202

 
$
106

 
$
1,096

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
13,236

 
4,136

 
5,246

 
2,115

 
383

 
230

 
414

 
712

Acquired with Deteriorated Credit Quality
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total Ending Allowance Balance
 
$
14,438

 
$
4,242

 
$
6,342

 
$
2,115

 
$
383

 
$
230

 
$
414

 
$
712

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
4,435

 
$
1,578

 
$
2,845

 
$
12

 
$
—

 
$
—

 
$
—

 
n/m(2)

Loans Collectively Evaluated for Impairment
 
1,562,037

 
416,273

 
611,955

 
249,687

 
98,167

 
50,169

 
135,786

 
n/m(2)

Loans Acquired with Deteriorated Credit Quality
 
7,555

 
1,325

 
5,363

 
—

 
—

 
—

 
867

 
n/m(2)

Total Ending Loans Balance (1)
 
$
1,574,027

 
$
419,176

 
$
620,163

 
$
249,699

 
$
98,167

 
$
50,169

 
$
136,653

 
n/m(2)

 
(1) Total recorded investment in loans includes $5,952 in accrued interest.
 (2)n/m = not meaningful
December 31, 2014
 
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
 
$
1,532

 
$
87

 
$
1,445

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
13,343

 
4,540

 
5,818

 
1,123

 
246

 
354

 
578

 
684

Acquired with Deteriorated Credit Quality
 
54

 
—

 
10

 
—

 
—

 
—

 
44

 
—

Total Ending Allowance Balance
 
$
14,929

 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
6,044

 
$
1,964

 
$
4,080

 
$
—

 
$
—

 
$
—

 
$
—

 
n/m(2)

Loans Collectively Evaluated for Impairment
 
1,443,363

 
378,533

 
573,961

 
219,640

 
86,570

 
48,614

 
136,045

 
n/m(2)

Loans Acquired with Deteriorated Credit Quality
 
8,361

 
354

 
6,385

 
—

 
—

 
118

 
1,504

 
n/m(2)

Total Ending Loans Balance (1)
 
$
1,457,768

 
$
380,851

 
$
584,426

 
$
219,640

 
$
86,570

 
$
48,732

 
$
137,549

 
n/m(2)

 
(1) Total recorded investment in loans includes $5,778 in accrued interest.
 (2)n/m = not meaningful

The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2015 and 2014:
 
 
Unpaid
Principal
Balance(1)
 
Recorded
Investment
 
Allowance for
Loan Losses
Allocated
December 31, 2015
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
161

 
$
161

 
$
—

Commercial Real Estate Loans
 
1,292

 
768

 
—

Agricultural Loans
 
12

 
12

 
—

Subtotal
 
1,465

 
941

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,403

 
1,417

 
106

Commercial Real Estate Loans
 
2,207

 
2,077

 
1,096

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
3,610

 
3,494

 
1,202

Total
 
$
5,075

 
$
4,435

 
$
1,202

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
528

 
$
—

 
$
—

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

 
$
—

 
$
—

 
(1) Unpaid Principal Balance is the remaining contractual payments gross of partial charge-offs.
 
 
 
Unpaid
Principal
Balance(1)
 
Recorded
Investment
 
Allowance for
Loan Losses
Allocated
December 31, 2014
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,887

 
$
1,877

 
$
—

Commercial Real Estate Loans
 
1,944

 
1,447

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
3,831

 
3,324

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
84

 
87

 
87

Commercial Real Estate Loans
 
3,653

 
2,975

 
1,455

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
3,737

 
3,062

 
1,542

Total
 
$
7,568

 
$
6,386

 
$
1,542

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
289

 
$
133

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
759

 
$
209

 
$
10

 
(1) Unpaid Principal Balance is the remaining contractual payments gross of partial charge-offs.
 
The following tables present loans individually evaluated for impairment by class of loans for the years ended December 31, 2015, 2014 and 2013:
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2015
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
447

 
$
29

 
$
29

Commercial Real Estate Loans
 
1,282

 
104

 
103

Agricultural Loans
 
9

 
1

 
1

Subtotal
 
1,738

 
134

 
133

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,726

 
89

 
89

Commercial Real Estate Loans
 
2,840

 
5

 
3

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,566

 
94

 
92

Total
 
$
6,304

 
$
228

 
$
225

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
196

 
$
—

 
$
—

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

 
$
—

 
$
—

 
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2014
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
2,082

 
$
132

 
$
135

Commercial Real Estate Loans
 
2,489

 
84

 
81

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,571

 
216

 
216

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,222

 
2

 
2

Commercial Real Estate Loans
 
3,074

 
20

 
16

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,296

 
22

 
18

Total
 
$
8,867

 
$
238

 
$
234

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
421

 
$
5

 
$
5

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
328

 
$
—

 
$
—

 
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2013
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,192

 
$
65

 
$
65

Commercial Real Estate Loans
 
2,251

 
5

 
7

Agricultural Loans
 
1,420

 
209

 
225

Subtotal
 
4,863

 
279

 
297

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,360

 
3

 
3

Commercial Real Estate Loans
 
5,424

 
22

 
18

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
6,784

 
25

 
21

Total
 
$
11,647

 
$
304

 
$
318

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
30

 
$
3

 
$
3

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
142

 
$
2

 
$
2


 
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 December 31, 2015 and 2014:
 
 
 
 
 
 
Loans Past Due
90 Days or More
 
 
Non-Accrual
 
& Still Accruing
 
 
2015
 
2014
 
2015
 
2014
Commercial and Industrial Loans and Leases
 
$
134

 
$
161

 
$
98

 
$
68

Commercial Real Estate Loans
 
2,047

 
3,460

 
48

 
—

Agricultural Loans
 
—

 
—

 
—

 
75

Home Equity Loans
 
204

 
268

 
—

 
—

Consumer Loans
 
90

 
196

 
—

 
—

Residential Mortgage Loans
 
668

 
1,885

 
—

 
—

Total
 
$
3,143

 
$
5,970

 
$
146

 
$
143

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
68

 
$
1,154

 
$
—

 
$
—


 
The following tables present the aging of the recorded investment in past due loans by class of loans as of December 31, 2015 and 2014:
 
 
Total
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days
or More
Past Due
 
Total
Past Due
 
Loans Not
Past Due
December 31, 2015
 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
419,176

 
$
82

 
$
117

 
$
124

 
$
323

 
$
418,853

Commercial Real Estate Loans
 
620,163

 
136

 
163

 
104

 
403

 
619,760

Agricultural Loans
 
249,699

 
—

 
—

 
—

 
—

 
249,699

Home Equity Loans
 
98,167

 
225

 
8

 
204

 
437

 
97,730

Consumer Loans
 
50,169

 
101

 
40

 
90

 
231

 
49,938

Residential Mortgage Loans
 
136,653

 
2,615

 
154

 
668

 
3,437

 
133,216

Total (1)
 
$
1,574,027

 
$
3,159

 
$
482

 
$
1,190

 
$
4,831

 
$
1,569,196

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
7,555

 
$
—

 
$
—

 
$
—

 
$
—

 
$
7,555

 
(1) Total recorded investment in loans includes $5,952 in accrued interest.
 
 
 
Total
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days
or More
Past Due
 
Total
Past Due
 
Loans Not
Past Due
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial Loans and Leases
 
$
380,851

 
$
628

 
$
—

 
$
148

 
$
776

 
$
380,075

Commercial Real Estate Loans
 
584,426

 
504

 
10

 
753

 
1,267

 
583,159

Agricultural Loans
 
219,640

 
25

 
—

 
75

 
100

 
219,540

Home Equity Loans
 
86,570

 
197

 
4

 
268

 
469

 
86,101

Consumer Loans
 
48,732

 
132

 
28

 
75

 
235

 
48,497

Residential Mortgage Loans
 
137,549

 
2,046

 
329

 
1,720

 
4,095

 
133,454

Total (1)
 
$
1,457,768

 
$
3,532

 
$
371

 
$
3,039

 
$
6,942

 
$
1,450,826

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
8,361

 
$
—

 
$
—

 
$
648

 
$
648

 
$
7,713

 
(1) Total recorded investment in loans includes $5,778 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 year ended December 31, 2015, there were no new troubled debt restructurings. During the year ended December 31, 2014, there was one loan modified as troubled debt restructuring. The modification of the terms of this loan included a permanent reduction of the recorded investment in the loan.
 
The following tables present the recorded investment of troubled debt restructurings by class of loans as of December 31, 2015 and 2014: 
 
 
Total
 
Performing
 
Non-Accrual(1)
December 31, 2015
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,446

 
$
1,445

 
$
1

Commercial Real Estate Loans
 
2,455

 
795

 
1,660

Total
 
$
3,901

 
$
2,240

 
$
1,661

 
 
Total
 
Performing
 
Non-Accrual(1)
December 31, 2014
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,809

 
$
1,803

 
$
6

Commercial Real Estate Loans
 
2,841

 
960

 
1,881

Total
 
$
4,650

 
$
2,763

 
$
1,887

 
(1) The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on a previous page.
 
The Company has not committed to lending any additional amounts as of December 31, 2015 and 2014 to customers with outstanding loans that are classified as troubled debt restructurings.
 
The following tables present loans by class modified as troubled debt restructurings that occurred during the years ending December 31, 2015, 2014 and 2013: 
December 31, 2015
 
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 year ending December 31, 2015.
December 31, 2014
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
—

 
$
—

 
$
—

Commercial Real Estate Loans
 
1

 
201

 
197

Total
 
1

 
$
201

 
$
197


The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the year ending December 31, 2014. 

December 31, 2013
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
1

 
$
224

 
$
230

Commercial Real Estate Loans
 
1

 
81

 
118

Total
 
2

 
$
305

 
$
348


The troubled debt restructurings described above decreased the allowance for loan losses by $210 and resulted in charge-offs of $0 during the year ending December 31, 2013.
 
The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the years ending December 31, 2015, 2014, and 2013:
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2015
 
     

 
     

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
—

 
—

Total
 
—

 
$
—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the year ending December 31, 2015. 

Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2014
 
 

 
 

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
1

 
95

Total
 
1

 
$
95

The troubled debt restructurings that subsequently defaulted described above decreased the allowance for loan losses by $90 and resulted in charge-offs of $91 during the year ending December 31, 2014.
 
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2013
 
 

 
 

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
—

 
—

Total
 
—

 
$
—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the year ending December 31, 2013.
 
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 $100. 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: 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
December 31, 2015
 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
393,270

 
$
13,675

 
$
12,231

 
$
—

 
$
419,176

Commercial Real Estate Loans
 
586,247

 
25,341

 
8,575

 
—

 
620,163

Agricultural Loans
 
242,728

 
5,177

 
1,794

 
—

 
249,699

Total
 
$
1,222,245

 
$
44,193

 
$
22,600

 
$
—

 
$
1,289,038

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
1,572

 
$
3,319

 
$
1,797

 
$
—

 
$
6,688

 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
December 31, 2014
 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
351,250

 
$
18,387

 
$
11,214

 
$
—

 
$
380,851

Commercial Real Estate Loans
 
545,804

 
23,421

 
15,201

 
—

 
584,426

Agricultural Loans
 
214,974

 
4,211

 
455

 
—

 
219,640

Total
 
$
1,112,028

 
$
46,019

 
$
26,870

 
$
—

 
$
1,184,917

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
651

 
$
1,697

 
$
4,391

 
$
—

 
$
6,739


 
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 December 31, 2015 and 2014: 
 
 
Home Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage Loans
December 31, 2015
 
 

 
 

 
 

Performing
 
$
97,963

 
$
50,079

 
$
135,985

Nonperforming
 
204

 
90

 
668

Total
 
$
98,167

 
$
50,169

 
$
136,653

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

 
$
—

 
$
867

 
 
 
Home Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage Loans
December 31, 2014
 
 

 
 

 
 

Performing
 
$
86,302

 
$
48,536

 
$
135,664

Nonperforming
 
268

 
196

 
1,885

Total
 
$
86,570

 
$
48,732

 
$
137,549

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

 
$
118

 
$
1,504



The Company purchased $4,747 commercial and industrial loans and $5,148 commercial real estate loans during 2015. The Company purchased $7,834 commercial and industrial loans and $298 commercial real estate loans during 2014.

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:
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Commercial and Industrial Loans
 
$
1,325

 
$
354

 
$
1,981

Commercial Real Estate Loans
 
5,363

 
6,385

 
10,871

Home Equity Loans
 
—

 
—

 
—

Consumer Loans
 
—

 
118

 
134

Residential Mortgage Loans
 
867

 
1,504

 
1,767

Total
 
$
7,555

 
$
8,361

 
$
14,753

 
 
 
 
 
 
 
Carrying Amount, Net of Allowance
 
$
7,555

 
$
8,307

 
$
14,745


Accretable yield, or income expected to be collected, is as follows:
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
Balance at January 1
 
$
1,685

 
$
1,279

 
$
170

New Loans Purchased
 
—

 
—

 
1,358

Accretion of Income
 
(483
)
 
(328
)
 
(249
)
Reclassifications from Non-accretable Difference
 
104

 
847

 
—

Charge-off of Accretable Yield
 
(27
)
 
(113
)
 
—

Balance at December 31
 
$
1,279

 
$
1,685

 
$
1,279

 

For those purchased loans disclosed above, the Company increased the allowance for loan losses by $0, $54, and $0 during 2015, 2014, and 2013. The Company reversed allowance for loan losses of $54 during 2015. No allowances for loan losses were reversed during 2014 or 2013. 

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 $169 as of December 31, 2015 and $288 as of December 31, 2014.

Certain directors, executive officers, and principal shareholders of the Company, including their immediate families and companies in which they are principal owners, were loan customers of the Company during 2015. A summary of the activity of these loans follows:
Balance
January 1,
2015
 
Additions
 
Changes in Persons Included
 
Deductions
 
Balance
December 31,
2015
 
 
 
Collected
 
Charged-off
 
$
11,455

 
$
9,883

 
$
—

 
$
(6,544
)
 
$
—

 
$
14,794