Loans (Tables)

3 Months Ended

Mar. 31, 2019

Loan Portfolio and Allowance for Loan Losses

The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for loan losses as of March 31, 2019 and December 31, 2018 (in thousands):

March 31, 2019	Total Loans		Individually evaluated for impairment		Loans acquired with deteriorated credit quality		Collectively evaluated for impairment
Real estate loans:
Residential	$	214,635	$	1,178	$	28	$	213,429
Commercial		334,371		10,724		1,291		322,356
Agricultural		295,547		5,562		-		289,985
Construction		18,611		-		-		18,611
Consumer		9,773		-		-		9,773
Other commercial loans		74,323		2,072		486		71,765
Other agricultural loans		43,245		1,428		-		41,817
State and political subdivision loans		100,412		-		-		100,412
Total		1,090,917		20,964		1,805		1,068,148
Allowance for loan losses		13,084		721		-		12,363
Net loans	$	1,077,833	$	20,243	$	1,805	$	1,055,785

December 31, 2018	Total Loans		Individually evaluated for impairment		Loans acquired with deteriorated credit quality		Collectively evaluated for impairment
Real estate loans:
Residential	$	215,305	$	890	$	28	$	214,387
Commercial		319,265		13,327		1,321		304,617
Agricultural		284,520		5,592		-		278,928
Construction		33,913		-		-		33,913
Consumer		9,858		-		-		9,858
Other commercial loans		74,118		2,206		510		71,402
Other agricultural loans		42,186		1,435		-		40,751
State and political subdivision loans		102,718		-		-		102,718
Total		1,081,883		23,450		1,859		1,056,574
Allowance for loan losses		12,884		676		-		12,208
Net loans	$	1,068,999	$	22,774	$	1,859	$	1,044,366

Accretable Yield for Purchased Credit Impaired Loans

Changes in the accretable yield for PCI loans were as follows for the three months ended March 31, 2019 and 2018, respectively (in thousands):

	Three months ended
	March 31,
	2019			2018
Balance at beginning of period	$	104		$	106
Accretion		(2	)		(24	)
Balance at end of period	$	102		$	82

Loans Acquired with Specific Evidence of Deterioration in Credit Quality

The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30 (in thousands):

	March 31,		December 31, 2018
Outstanding balance	$	4,521	$	4,529
Carrying amount		1,805		1,859

Impaired Financing Receivables with Associated Allowance Amount

The following table includes the recorded investment and unpaid principal balances for impaired financing receivables by class, excluding PCI loans, with the associated allowance amount, if applicable (in thousands):

			Recorded		Recorded
	Unpaid		Investment		Investment		Total
	Principal		With No		With		Recorded		Related
March 31, 2019	Balance		Allowance		Allowance		Investment		Allowance
Real estate loans:
Mortgages	$	1,239	$	856	$	238	$	1,094	$	10
Home Equity		103		11		73		84		13
Commercial		11,242		9,635		1,089		10,724		310
Agricultural		5,569		2,368		3,194		5,562		83
Construction		-		-		-		-		-
Consumer		-		-		-		-		-
Other commercial loans		2,608		1,752		320		2,072		146
Other agricultural loans		1,483		119		1,309		1,428		159
State and political
subdivision loans		-		-		-		-		-
Total	$	22,244	$	14,741	$	6,223	$	20,964	$	721

			Recorded		Recorded
	Unpaid		Investment		Investment		Total
	Principal		With No		With		Recorded		Related
December 31, 2018	Balance		Allowance		Allowance		Investment		Allowance
Real estate loans:
Mortgages	$	932	$	515	$	288	$	803	$	10
Home Equity		106		12		75		87		14
Commercial		16,326		11,933		1,394		13,327		216
Agricultural		5,598		2,386		3,206		5,592		84
Construction		-		-		-		-		-
Consumer		-		-		-		-		-
Other commercial loans		2,711		1,836		370		2,206		193
Other agricultural loans		1,487		120		1,315		1,435		159
State and political
subdivision loans		-		-		-		-		-
Total	$	27,160	$	16,802	$	6,648	$	23,450	$	676

The following tables includes the average balance of impaired financing receivables by class and the income recognized on these receivables for the three month periods ended March 31, 2019 and 2018(in thousands):

	For the Three Months ended
	March 31, 2019						March 31, 2018
					Interest						Interest
	Average		Interest		Income		Average		Interest		Income
	Recorded		Income		Recognized		Recorded		Income		Recognized
	Investment		Recognized		Cash Basis		Investment		Recognized		Cash Basis
Real estate loans:
Mortgages	$	1,103	$	4	$	-	$	1,023	$	4	$	-
Home Equity		85		1		-		107		1		-
Commercial		12,548		119		6		13,795		122		5
Agricultural		5,575		32		-		4,086		51		-
Construction		-		-		-		-		-		-
Consumer		-		-		-		4		-		-
Other commercial loans		2,137		1		-		4,156		26		-
Other agricultural loans		1,431		2		-		1,370		10		-
State and political
subdivision loans		-		-		-		-		-		-
Total	$	22,879	$	159	$	6	$	24,541	$	214	$	5

Financing Receivable Credit Exposures by Internally Assigned Grades

The following tables represent credit exposures by internally assigned grades as of March 31, 2019 and December 31, 2018 (in thousands):

March 31, 2019	Pass		Special Mention		Substandard		Doubtful		Loss		Ending Balance
Real estate loans:
Commercial	$	316,782	$	10,140	$	7,410	$	39	$	-	$	334,371
Agricultural		273,727		11,735		10,085		-		-		295,547
Construction		18,611		-		-		-		-		18,611
Other commercial loans		71,048		736		2,469		70		-		74,323
Other agricultural loans		39,699		1,660		1,886		-		-		43,245
State and political
subdivision loans		99,873		-		539		-		-		100,412
Total	$	819,740	$	24,271	$	22,389	$	109	$	-	$	866,509

December 31, 2018	Pass		Special Mention		Substandard		Doubtful		Loss		Ending Balance
Real estate loans:
Commercial	$	297,690	$	10,792	$	10,743	$	40	$	-	$	319,265
Agricultural		264,732		10,017		9,771		-		-		284,520
Construction		33,913		-		-		-		-		33,913
Other commercial loans		70,425		777		2,800		116		-		74,118
Other agricultural loans		38,628		1,724		1,834		-		-		42,186
State and political
subdivision loans		92,666		9,481		571		-		-		102,718
Total	$	798,054	$	32,791	$	25,719	$	156	$	-	$	856,720

The following table presents the recorded investment in those loan classes based on payment activity as of March 31, 2019 and December 31, 2018 (:

March 31, 2019	Performing		Non-performing		PCI		Total
Real estate loans:
Mortgages	$	155,440	$	1,032	$	28	$	156,500
Home Equity		58,041		94		-		58,135
Consumer		9,773		-		-		9,773
Total	$	223,254	$	1,126	$	28	$	224,408

December 31, 2018	Performing		Non-performing		PCI		Total
Real estate loans:
Mortgages	$	155,360	$	1,099	$	28	$	156,487
Home Equity		58,736		82		-		58,818
Consumer		9,832		26		-		9,858
Total	$	223,928	$	1,207	$	28	$	225,163

Aging Analysis of Past Due Financing Receivables

The following table includes an aging analysis of the recorded investment of past due financing receivables as of March 31, 2019 and December 31, 2018

													Total		90 Days or
	30-59 Days		60-89 Days		90 Days		Total Past						Financing		Greater and
March 31, 2019	Past Due		Past Due		Or Greater		Due		Current		PCI		Receivables		Accruing
Real estate loans:
Mortgages	$	592	$	83	$	717	$	1,392	$	155,080	$	28	$	156,500	$	23
Home Equity		401		87		89		577		57,558		-		58,135		17
Commercial		1,888		499		2,368		4,755		328,325		1,291		334,371		4
Agricultural		991		-		3,596		4,587		290,960		-		295,547		-
Construction		-		-		-		-		18,611		-		18,611		-
Consumer		96		-		-		96		9,677		-		9,773		-
Other commercial loans		396		-		1,980		2,376		71,461		486		74,323		20
Other agricultural loans		180		36		1,196		1,412		41,833		-		43,245		-
State and political
subdivision loans		-		-		-		-		100,412		-		100,412		-
Total	$	4,544	$	705	$	9,946	$	15,195	$	1,073,917	$	1,805	$	1,090,917	$	64

Loans considered non-accrual	$	354	$	425	$	9,882	$	10,661	$	1,039	$	-	$	11,700
Loans still accruing		4,190		280		64		4,534		1,072,878		1,805		1,079,217
Total	$	4,544	$	705	$	9,946	$	15,195	$	1,073,917	$	1,805	$	1,090,917

															90 Days or
	30-59 Days		60-89 Days		90 Days		Total Past						Total Financing		Greater and
December 31, 2018	Past Due		Past Due		Or Greater		Due		Current		PCI		Receivables		Accruing
Real estate loans:
Mortgages	$	483	$	789	$	686	$	1,958	$	154,501	$	28	$	156,487	$	20
Home Equity		257		108		63		428		58,390		-		58,818		-
Commercial		999		631		4,706		6,336		311,608		1,321		319,265		36
Agricultural		121		-		3,184		3,305		281,215		-		284,520		-
Construction		-		-		-		-		33,913		-		33,913		-
Consumer		37		14		12		63		9,795		-		9,858		12
Other commercial loans		141		53		2,061		2,255		71,353		510		74,118		-
Other agricultural loans		-		-		1,201		1,201		40,985		-		42,186		-
State and political
subdivision loans		-		-		-		-		102,718		-		102,718		-
Total	$	2,038	$	1,595	$	11,913	$	15,546	$	1,064,478	$	1,859	$	1,081,883	$	68

Loans considered non-accrual	$	72	$	253	$	11,845	$	12,170	$	1,554	$	-	$	13,724
Loans still accruing		1,966		1,342		68		3,376		1,062,924		1,859		1,068,159
Total	$	2,038	$	1,595	$	11,913	$	15,546	$	1,064,478	$	1,859	$	1,081,883

Financing Receivables on Nonaccrual Status

The following table reflects the financing receivables, excluding PCI loans, on non-accrual status as of March 31, 2019 and December 31, 2018, respectively. The balances are presented by class of financing receivable (in thousands):

	March 31, 2019		December 31, 2018
Real estate loans:
Mortgages	$	1,009	$	1,079
Home Equity		77		82
Commercial		3,689		5,957
Agricultural		3,607		3,206
Construction		-		-
Consumer		-		14
Other commercial loans		2,053		2,185
Other agricultural loans		1,265		1,201
State and political subdivision		-		-
	$	11,700	$	13,724

Troubled Debt Restructurings on Financing Receivables

Loan modifications that are considered TDRs completed during the three months ended March 31, 2019 and 2018 were as follows (dollars in thousands):

	For the Three Months Ended March 31, 2019
	Number of contracts				Pre-modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment
	Interest Modification		Term Modification		Interest Modification		Term Modification		Interest Modification		Term Modification
Real estate loans:
Commercial		-		1	$	-	$	548	$	-	$	548
Total		-		1	$	-	$	548	$	-	$	548

	For the Three Months Ended March 31, 2018
	Number of contracts				Pre-modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment
	Interest Modification		Term Modification		Interest Modification		Term Modification		Interest Modification		Term Modification
Real estate loans:
Mortgages		-		1	$	-	$	7	$	-	$	7
Total		-		1	$	-	$	7	$	-	$	7

Subsequent Default Recorded Investment

The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which began January 1, 2019 and 2018 (3 month periods), respectively, and that subsequently defaulted during these reporting periods (dollars in thousands):

	For the Three Months Ended
	March 31, 2019				March 31, 2018
	Number of contracts		Recorded investment		Number of contracts		Recorded investment
Other agricultural loans		1	$	124		-	$	-
Total recidivism		1	$	124		-	$	-

Allowance for Loan Losses by Impairment Method

The following table segregates the allowance for loan losses (ALLL) into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of March 31, 2019 and December 31, 2018, respectively (in thousands):

	March 31, 2019						December 31, 2018
	Individually evaluated for impairment		Collectively evaluated for impairment		Total		Individually evaluated for impairment		Collectively evaluated for impairment		Total
Real estate loans:
Residential	$	23	$	1,066	$	1,089	$	24	$	1,081	$	1,105
Commercial		310		3,820		4,130		216		3,899		4,115
Agricultural		83		4,309		4,392		84		4,180		4,264
Construction		-		32		32		-		58		58
Consumer		-		124		124		-		120		120
Other commercial loans		146		1,137		1,283		193		1,161		1,354
Other agricultural loans		159		597		756		159		593		752
State and political
subdivision loans		-		565		565		-		762		762
Unallocated		-		713		713		-		354		354
Total	$	721	$	12,363	$	13,084	$	676	$	12,208	$	12,884

Roll forward of Allowance for Loan Losses by Portfolio Segment

The following tables roll forward the balance of the ALLL by portfolio segment for the three months ended March 31, 2019 and 2018, respectively (in thousands):

	For the three months ended March 31, 2019
	Balance at December 31, 2018		Charge-offs			Recoveries		Provision			Balance at March 31, 2019
Real estate loans:
Residential	$	1,105	$	-		$	-	$	(16	)	$	1,089
Commercial		4,115		(200	)		-		215			4,130
Agricultural		4,264		-			-		128			4,392
Construction		58		-			-		(26	)		32
Consumer		120		(14	)		11		7			124
Other commercial loans		1,354		-			3		(74	)		1,283
Other agricultural loans		752		-			-		4			756
State and political
subdivision loans		762		-			-		(197	)		565
Unallocated		354		-			-		359			713
Total	$	12,884	$	(214	)	$	14	$	400		$	13,084

	For the three months ended March 31, 2018
	Balance at December 31, 2017		Charge-offs			Recoveries		Provision			Balance at March 31, 2018
Real estate loans:
Residential	$	1,049	$	(15	)	$	-	$	43		$	1,077
Commercial		3,867		-			-		139			4,006
Agricultural		3,143		-					197			3,340
Construction		23		-			-		16			39
Consumer		124		(13	)		10		2			123
Other commercial loans		1,272		(45	)		3		43			1,273
Other agricultural loans		492		(43	)		-		83			532
State and political
subdivision loans		816		-			-		(27	)		789
Unallocated		404		-			-		4			408
Total	$	11,190	$	(116	)	$	13	$	500		$	11,587