LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

12 Months Ended

Dec. 31, 2015

Loans and Leases Receivable Disclosure [Abstract]

The composition of the loan portfolio, net of deferred loan fees is summarized as follows (in thousands):



	December 31, 2015		December 31, 2014
Commercial and agricultural:
Commercial and industrial	$	192,197	$	165,385
Agricultural	1,036		1,021
Commercial mortgages:
Construction	41,131		54,831
Commercial mortgages	465,347		397,762
Residential mortgages	195,778		196,809
Consumer loans:
Credit cards	1,483		1,654
Home equity lines and loans	101,726		99,354
Indirect consumer loans	151,327		184,763
Direct consumer loans	18,608		19,995
Total loans, net of deferred loan fees	$	1,168,633	$	1,121,574
Interest receivable on loans	2,870		2,780
Total recorded investment in loans	$	1,171,503	$	1,124,354

Allowance for Loan Losses by Portfolio Segment

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2015, 2014 and 2013, respectively (in thousands):



	December 31, 2015
Allowance for loan losses	Commercial, and Agricultural			Commercial Mortgages			Residential Mortgages			Consumer Loans			Unallocated		Total
Beginning balance:	$	1,460		$	6,326		$	1,572		$	4,328		$	—	$	13,686
Charge Offs:	(186		)	(104		)	(47		)	(1,294		)	—		(1,631		)
Recoveries:	96			131			—			407			—		634
Net (charge offs) recoveries	(90		)	27			(47		)	(887		)	—		(997		)
Provision	461			759			(61		)	412			—		1,571
Ending balance	$	1,831		$	7,112		$	1,464		$	3,853		$	—	$	14,260



	December 31, 2014
Allowance for loan losses	Commercial, and Agricultural			Commercial Mortgages			Residential Mortgages			Consumer Loans			Unallocated		Total
Beginning balance:	$	1,979		$	6,243		$	1,517		$	3,037		$	—	$	12,776
Charge Offs:	(444		)	(2,229		)	(97		)	(1,508		)	—		(4,278		)
Recoveries:	385			156			32			634			—		1,207
Net recoveries (charge offs)	(59		)	(2,073		)	(65		)	(874		)	—		(3,071		)
Provision	(460		)	2,156			120			2,165			—		3,981
Ending balance	$	1,460		$	6,326		$	1,572		$	4,328		$	—	$	13,686



	December 31, 2013
Allowance for loan losses	Commercial, and Agricultural			Commercial Mortgages			Residential Mortgages			Consumer Loans			Unallocated			Total
Beginning balance:	$	1,708		$	4,428		$	1,565		$	2,706		$	26		$	10,433
Charge Offs:	(186		)	(44		)	(124		)	(1,139		)	—			(1,493		)
Recoveries:	537			98			65			381			—			1,081
Net recoveries (charge offs)	351			54			(59		)	(758		)	—			(412		)
Provision	(80		)	1,761			11			1,089			(26		)	2,755
Ending balance	$	1,979		$	6,243		$	1,517		$	3,037		$	—		$	12,776

Allowance for Loan Losses and Recorded Investment in Loans Based on Impairment Method

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2015 and December 31, 2014 (in thousands):



	December 31, 2015
Allowance for loan losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8	$	1,481	$	—	$	77	$	1,566
Collectively evaluated for impairment	1,823		5,572		1,424		3,776		12,595
Loans acquired with deteriorated credit quality	—		59		40		—		99
Total ending allowance balance	$	1,831	$	7,112	$	1,464	$	3,853	$	14,260



	December 31, 2014
Allowance for loan losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	89	$	1,145	$	—	$	1	$	1,235
Collectively evaluated for impairment	1,335		5,145		1,550		4,327		12,357
Loans acquired with deteriorated credit quality	36		36		22		—		94
Total ending allowance balance	$	1,460	$	6,326	$	1,572	$	4,328	$	13,686



	December 31, 2015
Loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Loans individually evaluated for impairment	$	1,498	$	12,773	$	235	$	474	$	14,980
Loans collectively evaluated for impairment	192,202		493,102		195,731		273,393		1,154,428
Loans acquired with deteriorated credit quality	—		1,825		270		—		2,095
Total ending loans balance	$	193,700	$	507,700	$	196,236	$	273,867	$	1,171,503



	December 31, 2014
Loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Loans individually evaluated for impairment	$	1,452	$	13,712	$	254	$	486	$	15,904
Loans collectively evaluated for impairment	164,748		438,246		196,783		306,042		1,105,819
Loans acquired with deteriorated credit quality	620		1,761		250		—		2,631
Total ending loans balance	$	166,820	$	453,719	$	197,287	$	306,528	$	1,124,354

Summary of Impaired Financing Receivables

The following tables present loans individually evaluated for impairment recognized by class of loans as of December 31, 2015 and December 31, 2014, the average recorded investment and interest income recognized by class of loans as of the years ended December 31, 2015, 2014 and 2013 (in thousands):



	December 31, 2015						December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial and agricultural:
Commercial and industrial	$	1,487	$	1,489	$	—	$	1,359	$	1,364	$	—
Commercial mortgages:
Construction	349		350		—		1,927		1,910		—
Commercial mortgages	7,551		7,577		—		7,803		7,708		—
Residential mortgages	234		235		—		253		253		—
Consumer loans:
Home equity lines and loans	107		108		—		429		432		—
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	9		9		8		89		89		89
Commercial mortgages:
Commercial mortgages	4,913		4,846		1,481		4,210		4,094		1,145
Consumer loans:
Home equity lines and loans	364		366		77		54		54		1
Total	$	15,014	$	14,980	$	1,566	$	16,124	$	15,904	$	1,235



	December 31, 2015				December 31, 2014				December 31, 2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
With no related allowance recorded:
Commercial and agricultural:
Commercial and industrial	$	1,358	$	64	$	1,463	$	40	$	1,605	$	71
Commercial mortgages:
Construction	992		36		2,104		102		3,364		95
Commercial mortgages	7,728		264		7,492		259		5,991		249
Residential mortgages	244		4		141		1		125		—
Consumer loans:
Home equity lines & loans	396		6		143		6		47		2
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	146		3		502		—		719		—
Commercial mortgages:
Construction	—		—		—		—		—		—
Commercial mortgages	4,503		49		1,611		41		867		—
Consumer loans:
Home equity lines and loans	84		18		56		4		47		3
Direct consumer loans	—		—		—		—		3		—
Total	$	15,451	$	444	$	13,512	$	453	$	12,768	$	420

(1) Cash basis interest income approximates interest income recognized.

Recorded Investment in Past Due and Non-Accrual Status by Class of Loans

The following tables present the recorded investment in non-accrual and loans past due 90 days or more and still accruing by class of loans as of December 31, 2015 and December 31, 2014 (in thousands):



	Non-accrual				Loans Past Due 90 Days or More and Still Accruing
	2015		2014		2015		2014
Commercial and agricultural:
Commercial and industrial	$	13	$	312	$	3	$	—
Agricultural	—		—		—		—
Commercial mortgages:
Construction	63		150		—		1,446
Commercial mortgages	7,203		2,831		—		—
Residential mortgages	3,610		3,615		—		—
Consumer loans:
Credit cards	—		—		15		8
Home equity lines and loans	758		515		—		—
Indirect consumer loans	542		325		—		—
Direct consumer loans	43		30		—		—
Total	$	12,232	$	7,778	$	18	$	1,454

The following tables present the aging of the recorded investment in loans as of December 31, 2015 and December 31, 2014 (in thousands):



	December 31, 2015
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Acquired with Deteriorated Credit Quality		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	398	$	3	$	12	$	413	$	—	$	192,248	$	192,661
Agricultural	—		—		—		—		—		1,039		1,039
Commercial mortgages:
Construction	—		—		—		—		—		41,231		41,231
Commercial mortgages	4,197		199		5,239		9,635		1,825		455,009		466,469
Residential mortgages	2,983		725		1,703		5,411		270		190,555		196,236
Consumer loans:
Credit cards	30		4		15		49		—		1,433		1,482
Home equity lines and loans	233		77		239		549		—		101,428		101,977
Indirect consumer loans	1,744		4		447		2,195		—		149,531		151,726
Direct consumer loans	208		—		19		227		—		18,455		18,682
Total	$	9,793	$	1,012	$	7,674	$	18,479	$	2,095	$	1,150,929	$	1,171,503



	December 31, 2014
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Acquired with Deteriorated Credit Quality		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	551	$	257	$	37	$	845	$	620	$	164,332	$	165,797
Agricultural	—		—		—		—		—		1,023		1,023
Commercial mortgages:
Construction	—		—		1,446		1,446		—		53,521		54,967
Commercial mortgages	276		3,151		1,160		4,587		1,761		392,404		398,752
Residential mortgages	2,327		1,161		1,533		5,021		250		192,016		197,287
Consumer loans:
Credit cards	2		3		8		13		—		1,641		1,654
Home equity lines and loans	635		217		167		1,019		—		98,572		99,591
Indirect consumer loans	1,444		345		292		2,081		—		183,136		185,217
Direct consumer loans	35		13		30		78		—		19,988		20,066
Total	$	5,270	$	5,147	$	4,673	$	15,090	$	2,631	$	1,106,633	$	1,124,354

Loans by Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the years ended December 31, 2015, 2014 and 2013 (in thousands):



December 31, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial	1	$	477	$	477
Commercial mortgages:
Commercial mortgages	5	2,810		2,810
Total	6	$	3,287	$	3,287



December 31, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial	4	$	1,028	$	1,028
Commercial mortgages:
Commercial mortgages	4	2,666		2,623
Residential mortgages	1	149		150
Consumer loans:
Home equity lines and loans	1	366		366
Total	10	$	4,209	$	4,167



December 31, 2013	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial	5	$	1,343	$	1,343
Commercial mortgages:
Construction	1	326		326
Commercial mortgages	1	133		133
Consumer loans:
Home equity lines and loans	3	$	134	$	134
Total	10	$	1,936	$	1,936

The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the year ended December 31, 2015:

Risk Category of Recorded Investment of Loans by Class of Loans

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are included in groups of homogeneous loans. Based on the analyses performed as of December 31, 2015 and December 31, 2014, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):



	December 31, 2015
	Not Rated		Pass		Loans acquired with deteriorated credit quality		Special Mention		Substandard		Doubtful		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	186,359	$	—	$	3,772	$	2,521	$	9	$	192,661
Agricultural	—		1,039		—		—		—		—		1,039
Commercial mortgages:
Construction	—		40,881		—		287		63		—		41,231
Commercial mortgages	—		437,549		1,825		8,437		14,454		4,204		466,469
Residential mortgages	192,245		—		270		—		3,721		—		196,236
Consumer loans
Credit cards	1,482		—		—		—		—		—		1,482
Home equity lines and loans	101,219		—		—		—		758		—		101,977
Indirect consumer loans	151,184		—		—		—		542		—		151,726
Direct consumer loans	18,639		—		—		—		43		—		18,682
Total	$	464,769	$	665,828	$	2,095	$	12,496	$	22,102	$	4,213	$	1,171,503



	December 31, 2014
	Not Rated		Pass		Loans acquired with deteriorated credit quality		Special Mention		Substandard		Doubtful		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	158,140	$	620	$	3,695	$	3,306	$	36	$	165,797
Agricultural	—		1,023		—		—		—		—		1,023
Commercial mortgages:
Construction	—		51,525		—		3,292		150		—		54,967
Commercial mortgages	—		365,448		1,761		20,871		10,266		406		398,752
Residential mortgages	193,422		—		250		—		3,615		—		197,287
Consumer loans
Credit cards	1,654		—		—		—		—		—		1,654
Home equity lines and loans	99,076		—		—		—		515		—		99,591
Indirect consumer loans	184,940		—		—		—		277		—		185,217
Direct consumer loans	20,045		—		—		—		21		—		20,066
Total	$	499,137	$	576,136	$	2,631	$	27,858	$	18,150	$	442	$	1,124,354

Recorded Investment in Residential and Consumer Loans Based on Payment Activity

The following table presents the recorded investment in residential and consumer loans based on payment activity as of December 31, 2015 and December 31, 2014 (in thousands):



	December 31, 2015
			Consumer Loans
	Residential Mortgages		Credit Card		Home Equity Lines and Loans		Indirect Consumer Loans		Other Direct Consumer Loans
Performing	$	192,626	$	1,482	$	101,219	$	151,184	$	18,639
Non-Performing	3,610		—		758		542		43
Total	$	196,236	$	1,482	$	101,977	$	151,726	$	18,682



	December 31, 2014
			Consumer Loans
	Residential Mortgages		Credit Card		Home Equity Lines and Loans		Indirect Consumer Loans		Other Direct Consumer Loans
Performing	$	193,672	$	1,654	$	99,076	$	184,892	$	20,036
Non-Performing	3,615		—		515		325		30
Total	$	197,287	$	1,654	$	99,591	$	185,217	$	20,066

Summary of Changes in Contractually Required Principal and Interest on Loans Acquired

The tables below summarize the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the PCI loans from January 1, 2013 to December 31, 2015 (in thousands):



	Balance at December 31, 2014			Income Accretion		All Other Adjustments			Balance at December 31, 2015
Contractually required principal and interest	$	3,621		$	—	$	(709	)	$	2,912
Contractual cash flows not expected to be collected (non accretable discount)	(570		)	—		64			(506		)
Cash flows expected to be collected	3,051			—		(645		)	2,406
Interest component of expected cash flows (accretable yield)	(420		)	174		(65		)	(311		)
Recorded investment in loans acquired with deteriorating credit quality	$	2,631		$	174	$	(710	)	$	2,095



	Balance at December 31, 2013			Income Accretion		All Other Adjustments			Balance at December 31, 2014
Contractually required principal and interest	$	11,230		$	—	$	(7,609	)	$	3,621
Contractual cash flows not expected to be collected (non accretable discount)	(543		)	—		(27		)	(570		)
Cash flows expected to be collected	10,687			—		(7,636		)	3,051
Interest component of expected cash flows (accretable yield)	(991		)	515		56			(420		)
Recorded investment in loans acquired with deteriorating credit quality	$	9,696		$	515	$	(7,580	)	$	2,631



	Balance at December 31, 2012			Income Accretion		All Other Adjustments			Balance at December 31, 2013
Contractually required principal and interest	$	16,896		$	—	$	(5,666	)	$	11,230
Contractual cash flows not expected to be collected (non accretable discount)	(3,656		)	—		3,113			(543		)
Cash flows expected to be collected	13,240			—		(2,553		)	10,687
Interest component of expected cash flows (accretable yield)	(2,529		)	1,163		375			(991		)
Recorded investment in loans acquired with deteriorating credit quality	$	10,711		$	1,163	$	(2,178	)	$	9,696

December 31, 2015

Number of Loans

Recorded Investment

Commercial mortgages:

Commercial mortgages