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Loans
 6 Months Ended
Jun. 30, 2016
Receivables [Abstract]  
Loans
Loans
 
Loans were comprised of the following classifications at June 30, 2016 and December 31, 2015: 
 
 
June 30,
2016
 
December 31,
2015
Commercial:
 
 

 
 

Commercial and Industrial Loans and Leases
 
$
463,501

 
$
418,154

Commercial Real Estate Loans
 
840,215

 
618,788

Agricultural Loans
 
285,353

 
246,886

Retail:
 
 

 
 

Home Equity Loans
 
124,284

 
97,902

Consumer Loans
 
58,326

 
50,029

Residential Mortgage Loans
 
192,603

 
136,316

Subtotal
 
1,964,282

 
1,568,075

Less: Unearned Income
 
(3,727
)
 
(3,728
)
Allowance for Loan Losses
 
(15,304
)
 
(14,438
)
Loans, Net
 
$
1,945,251

 
$
1,549,909


 
As further described in Note 12, during 2016 the Company acquired loans with a fair value of $317,760 as a part of a business combination. This was made up of loans with an acquired balance of $328,431, net of $10,671 of fair value discounts at date of acquisition. At June 30, 2016, the remaining carrying amount of such loans total $292,678, which is included in the June 30, 2016 table above. This amount is made up of loans with a remaining balance of $301,826 net of remaining fair value discounts of $9,148.

The following tables present the activity in the allowance for loan losses by portfolio class for the three months ended June 30, 2016 and 2015:
June 30, 2016
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
4,346

 
$
6,463

 
$
2,529

 
$
352

 
$
230

 
$
531

 
$
710

 
$
15,161

Provision for Loan Losses
 
(180
)
 
68

 
175

 
9

 
66

 
196

 
16

 
350

Recoveries
 
24

 
2

 
—

 
—

 
43

 
4

 
—

 
73

Loans Charged-off
 
—

 
—

 
—

 
(11
)
 
(97
)
 
(172
)
 
—

 
(280
)
Ending Balance
 
$
4,190

 
$
6,533

 
$
2,704

 
$
350

 
$
242

 
$
559

 
$
726

 
$
15,304


June 30, 2015
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
4,747

 
$
7,229

 
$
1,142

 
$
318

 
$
389

 
$
673

 
$
671

 
$
15,169

Provision for Loan Losses
 
(114
)
 
54

 
81

 
57

 
5

 
128

 
39

 
250

Recoveries
 
26

 
43

 
—

 
6

 
54

 
9

 
—

 
138

Loans Charged-off
 
—

 
(11
)
 
—

 
(31
)
 
(66
)
 
(191
)
 
—

 
(299
)
Ending Balance
 
$
4,659

 
$
7,315

 
$
1,223

 
$
350

 
$
382

 
$
619

 
$
710

 
$
15,258

The following tables present the activity in the allowance for loan losses by portfolio class for the six months ended June 30, 2016 and 2015:
June 30, 2016
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
4,242

 
$
6,342

 
$
2,115

 
$
383

 
$
230

 
$
414

 
$
712

 
$
14,438

Provision for Loan Losses
 
(75
)
 
188

 
589

 
40

 
93

 
351

 
14

 
1,200

Recoveries
 
28

 
3

 
—

 
1

 
88

 
9

 
—

 
129

Loans Charged-off
 
(5
)
 
—

 
—

 
(74
)
 
(169
)
 
(215
)
 
—

 
(463
)
Ending Balance
 
$
4,190

 
$
6,533

 
$
2,704

 
$
350

 
$
242

 
$
559

 
$
726

 
$
15,304


June 30, 2015
 
Commercial and Industrial
Loans and Leases
 
Commercial Real Estate Loans
 
Agricultural Loans
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
 
Unallocated
 
Total
Beginning Balance
 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
$
14,929

Provision for Loan Losses
 
(13
)
 
2

 
100

 
129

 
40

 
216

 
26

 
500

Recoveries
 
67

 
51

 
—

 
6

 
154

 
11

 
—

 
289

Loans Charged-off
 
(22
)
 
(11
)
 
—

 
(31
)
 
(166
)
 
(230
)
 
—

 
(460
)
Ending Balance
 
$
4,659

 
$
7,315

 
$
1,223

 
$
350

 
$
382

 
$
619

 
$
710

 
$
15,258


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.  When comparing to June 30, 2015, the overall allowance for loan and lease losses was increased in the agricultural sector as a result of qualitative considerations for current economic conditions and 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 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 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 June 30, 2016 and December 31, 2015:
June 30, 2016
 
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
 
$
1,165

 
$
76

 
$
1,089

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
14,139

 
4,114

 
5,444

 
2,704

 
350

 
242

 
559

 
726

Acquired with Deteriorated Credit Quality
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total Ending Allowance Balance
 
$
15,304

 
$
4,190

 
$
6,533

 
$
2,704

 
$
350

 
$
242

 
$
559

 
$
726


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
3,718

 
$
246

 
$
3,158

 
$
314

 
$
—

 
$
—

 
$
—

 
n/a(2)

Loans Collectively Evaluated for Impairment
 
1,954,509

 
463,103

 
829,946

 
287,335

 
124,711

 
58,453

 
190,961

 
n/a(2)

Loans Acquired with Deteriorated Credit Quality
 
13,275

 
1,379

 
9,000

 
699

 
—

 
53

 
2,144

 
n/a(2)

Total Ending Loans Balance(1)
 
$
1,971,502

 
$
464,728

 
$
842,104

 
$
288,348

 
$
124,711

 
$
58,506

 
$
193,105

 
n/a(2)

 
 
(1)Total recorded investment in loans includes $7,220 in accrued interest.
(2)n/a = not applicable

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/a(2)

Loans Collectively Evaluated for Impairment
 
1,562,037

 
416,273

 
611,955

 
249,687

 
98,167

 
50,169

 
135,786

 
n/a(2)

Loans Acquired with Deteriorated Credit Quality
 
7,555

 
1,325

 
5,363

 
—

 
—

 
—

 
867

 
n/a(2)

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

 
$
419,176

 
$
620,163

 
$
249,699

 
$
98,167

 
$
50,169

 
$
136,653

 
n/a(2)

 
(1)Total recorded investment in loans includes $5,952 in accrued interest.
(2)n/a = not applicable 
The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015:
June 30, 2016
 
Unpaid Principal Balance(1)
 
 Recorded Investment
 
Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
241

 
$
168

 
$
—

Commercial Real Estate Loans
 
4,278

 
2,808

 
—

Agricultural Loans
 
965

 
813

 
—

Subtotal
 
5,484

 
3,789

 
—

With An Allowance Recorded:
 
 

 
 

 


Commercial and Industrial Loans and Leases
 
86

 
86

 
76

Commercial Real Estate Loans
 
2,312

 
2,185

 
1,089

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
2,398

 
2,271

 
1,165

Total
 
$
7,882

 
$
6,060

 
$
1,165

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
3,890

 
$
2,342

 
$
—

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.


December 31, 2015
 
Unpaid Principal Balance(1)
 
 Recorded Investment
 
Allowance for Loan Losses Allocated
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.
 
The following tables present loans individually evaluated for impairment by class of loans for the three month periods ended June 30, 2016 and 2015:
June 30, 2016
 
Average Recorded Investment
 
Interest Income Recognized
 
Cash Basis Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
279

 
$
3

 
$
1

Commercial Real Estate Loans
 
4,943

 
6

 
1

Agricultural Loans
 
1,057

 
—

 
—

Subtotal
 
6,279

 
9

 
2

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
86

 
—

 
—

Commercial Real Estate Loans
 
2,180

 
1

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
2,266

 
1

 
—

Total
 
$
8,545

 
$
10

 
$
2

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
3,739

 
$
4

 
$
1

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

 
$
—

 
$
—



June 30, 2015
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
724

 
$
9

 
$
9

Commercial Real Estate Loans
 
1,191

 
66

 
66

Agricultural Loans
 
12

 
—

 
—

Subtotal
 
1,927

 
75

 
75

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,554

 
23

 
23

Commercial Real Estate Loans
 
3,181

 
3

 
2

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,735

 
26

 
25

Total
 
$
6,662

 
$
101

 
$
100

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
45

 
$
62

 
$
62

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
286

 
$
—

 
$
—

The following tables present loans individually evaluated for impairment by class of loans for the six month periods ended June 30, 2016 and 2015:
June 30, 2016
 
Average Recorded Investment
 
Interest Income Recognized
 
Cash Basis Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
572

 
$
25

 
$
12

Commercial Real Estate Loans
 
4,067

 
24

 
4

Agricultural Loans
 
1,030

 
2

 
1

Subtotal
 
5,669

 
51

 
17

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
107

 
—

 
—

Commercial Real Estate Loans
 
2,199

 
2

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
2,306

 
2

 
—

Total
 
$
7,975

 
$
53

 
$
17

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
3,511

 
$
12

 
$
2

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

 
$
—

 
$
—



June 30, 2015
 
Average Recorded
Investment
 
Interest Income Recognized
 
Cash Basis Recognized
With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
524

 
$
12

 
$
12

Commercial Real Estate Loans
 
1,338

 
77

 
77

Agricultural Loans
 
6

 
—

 
—

Subtotal
 
1,868

 
89

 
89

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,744

 
46

 
46

Commercial Real Estate Loans
 
3,107

 
7

 
5

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,851

 
53

 
51

Total
 
$
6,719

 
$
142

 
$
140

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
124

 
$
62

 
$
62

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
292

 
$
—

 
$
—


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 June 30, 2016 and December 31, 2015:
 
 
Non-Accrual
 
Loans Past Due 90 Days
or More & Still Accruing
 
 
June 30,
 
December 31,
 
June 30,
 
December 31,
 
 
2016
 
2015
 
2016
 
2015
Commercial and Industrial Loans and Leases
 
$
183

 
$
134

 
$
25

 
$
98

Commercial Real Estate Loans
 
5,088

 
2,047

 
174

 
48

Agricultural Loans
 
802

 
—

 
903

 
—

Home Equity Loans
 
160

 
204

 
—

 
—

Consumer Loans
 
338

 
90

 
—

 
—

Residential Mortgage Loans
 
1,723

 
668

 
—

 
—

Total
 
$
8,294

 
$
3,143

 
$
1,102

 
$
146

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
2,833

 
$
68

 
$
29

 
$
—



The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2016 and December 31, 2015:
June 30, 2016
 
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
 
$
464,728

 
$
235

 
$
634

 
$
55

 
$
924

 
$
463,804

Commercial Real Estate Loans
 
842,104

 
2,097

 
595

 
1,044

 
3,736

 
838,368

Agricultural Loans
 
288,348

 
192

 
136

 
1,523

 
1,851

 
286,497

Home Equity Loans
 
124,711

 
223

 
29

 
140

 
392

 
124,319

Consumer Loans
 
58,506

 
347

 
4

 
183

 
534

 
57,972

Residential Mortgage Loans
 
193,105

 
4,360

 
1,738

 
965

 
7,063

 
186,042

Total(1)
 
$
1,971,502

 
$
7,454

 
$
3,136

 
$
3,910

 
$
14,500

 
$
1,957,002

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
13,275

 
$
264

 
$
529

 
$
1,338

 
$
2,131

 
$
11,144

Net Carrying Value of Loans Acquired in Current Year (Included in the Total Above)
 
$
293,812

 
$
3,824

 
$
2,046

 
$
3,192

 
$
9,062

 
$
284,750

 
(1)Total recorded investment in loans includes $7,220 in accrued interest.
December 31, 2015
 
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
 
$
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.
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 six months ended June 30, 2016 and 2015, there were no loans modified as troubled debt restructurings.

The following tables present the recorded investment of troubled debt restructurings by class of loans as of June 30, 2016 and December 31, 2015:
June 30, 2016
 
Total
 
Performing
 
Non-Accrual(1)
Commercial and Industrial Loans and Leases
 
$
73

 
$
73

 
$
—

Commercial Real Estate Loans
 
1,640

 
24

 
1,616

Total
 
$
1,713

 
$
97

 
$
1,616

December 31, 2015
 
Total
 
Performing
 
Non-Accrual(1)
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

 
 
(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 June 30, 2016 and December 31, 2015 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 three months ending June 30, 2016 and 2015: 
June 30, 2016
 
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 three months ending June 30, 2016.

June 30, 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 three months ending June 30, 2015.

The following tables present loans by class modified as troubled debt restructurings that occurred during the six months ending June 30, 2016 and 2015: 
June 30, 2016
 
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 six months ending June 30, 2016.

June 30, 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 six months ending June 30, 2015.

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 three months ending June 30, 2016 and 2015:
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
June 30, 2016
 
 

 
 

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 three months ending June 30, 2016.

Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
June 30, 2015
 
 

 
 

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
1

 
95

Total
 
1

 
$
95

   
The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge off of $95 during the three months ending June 30, 2015.

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 six months ending June 30, 2016 and 2015:
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
June 30, 2016
 
 

 
 
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 six months ending June 30, 2016.

Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
June 30, 2015
 
 

 
 

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
1

 
95

Total
 
1

 
$
95


 
The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge-off of $95 during the six months ending June 30, 2015.

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:
June 30, 2016
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial and Industrial Loans and Leases
 
$
442,420

 
$
13,293

 
$
9,015

 
$
—

 
$
464,728

Commercial Real Estate Loans
 
793,605

 
35,731

 
12,768

 
—

 
842,104

Agricultural Loans
 
269,447

 
16,307

 
2,594

 
—

 
288,348

Total
 
$
1,505,472

 
$
65,331

 
$
24,377

 
$
—

 
$
1,595,180

Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
 
$
1,659

 
$
3,251

 
$
6,168

 
$
—

 
$
11,078

Net Carrying Value of Loans Acquired in Current Year (Included in the Total Above)
 
$
196,478

 
$
17,379

 
$
5,747

 
$
—

 
$
219,604


December 31, 2015
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
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


    
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 June 30, 2016 and December 31, 2015:
June 30, 2016
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
Performing
 
$
124,551

 
$
58,168

 
$
191,382

Nonperforming
 
160

 
338

 
1,723

Total
 
$
124,711

 
$
58,506

 
$
193,105

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

 
$
53

 
$
2,144

 
December 31, 2015
 
Home Equity Loans
 
Consumer Loans
 
Residential Mortgage Loans
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

 
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: 
 
 
June 30, 2016
 
December 31, 2015
 
 
 
 
 
Commercial and Industrial Loans
 
$
1,379

 
$
1,325

Commercial Real Estate Loans
 
9,000

 
5,363

Agricultural Loans
 
699

 
—

Home Equity Loans
 
—

 
—

Consumer Loans
 
53

 
—

Residential Mortgage Loans
 
2,144

 
867

Total
 
$
13,275

 
$
7,555

 
 
 

 
 

Carrying Amount, Net of Allowance
 
$
13,275

 
$
7,555

 
Accretable yield, or income expected to be collected, is as follows:
 
 
2016
 
2015
 
 
 
 
 
Balance at April 1
 
$
2,613

 
$
1,626

New Loans Purchased
 
—

 
—

Accretion of Income
 
(725
)
 
(23
)
Reclassifications from Non-accretable Difference
 
—

 
104

Charge-off of Accretable Yield
 
—

 
(27
)
Balance at June 30
 
$
1,888

 
$
1,680

    
For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three months ended June 30, 2016 and 2015. No allowance for loan losses were reversed during the three months ended June 30, 2016. Allowances for loan losses were reversed by $44 during the three months ended June 30, 2015.

 
 
2016
 
2015
 
 
 
 
 
Balance at January 1
 
$
1,279

 
$
1,685

New Loans Purchased
 
1,395

 
—

Accretion of Income
 
(786
)
 
(82
)
Reclassifications from Non-accretable Difference
 
—

 
104

Charge-off of Accretable Yield
 
—

 
(27
)
Balance at June 30
 
$
1,888

 
$
1,680


    
For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the six months ended June 30, 2016 and 2015. No allowances for loan losses were reversed during the six months ended June 30, 2016. Allowances for losses were reversed by $44 during the six months ended June 30, 2015.

Contractually required payments receivable of loans purchased with evidence of credit deterioration during the six months ended June 30, 2016 are included in the table below. There were no such loans purchased during the year ended December 31, 2015.
Commercial and Industrial Loans
$
220

Commercial Real Estate Loans
10,612

Agricultural Loans
896

Home Equity Loans
—

Consumer Loans
87

Residential Mortgage Loans
2,279

Total
$
14,094

 
 
Cash Flows Expected to be Collected at Acquisition
$
11,051

Fair Value of Acquired Loans at Acquisition
$
8,807


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 $376 as of June 30, 2016 and $169 as of December 31, 2015.