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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 12 Months Ended
Dec. 31, 2019
Loans and Leases Receivable Disclosure [Abstract]  
Composition of Loan Portfolio by Type
The composition of the loan portfolio, net of deferred loan fees is summarized as follows (in thousands):
 
December 31, 2019
 
December 31, 2018
Commercial and agricultural:
 
 
 
Commercial and industrial
$
230,018

 
$
202,526

Agricultural
274

 
328

Commercial mortgages:
 

 
 

Construction
43,962

 
54,476

Commercial mortgages
604,832

 
606,694

Residential mortgages
188,338

 
182,724

Consumer loans:
 

 
 

Credit cards
—

 
1,449

Home equity lines and loans
91,784

 
98,145

Indirect consumer loans
134,973

 
149,380

Direct consumer loans
15,038

 
16,184

Total loans, net of deferred loan fees
1,309,219

 
1,311,906

Interest receivable on loans
3,684

 
3,703

Total recorded investment in loans
$
1,312,903

 
$
1,315,609
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, 2019, 2018 and 2017, respectively (in thousands):
 
December 31, 2019
Allowance for loan losses
Commercial, and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance:
$
5,383

 
$
8,184

 
$
1,226

 
$
4,151

 
$
18,944

Charge Offs:
(312
)
 
(1
)
 
(151
)
 
(1,511
)
 
(1,975
)
Recoveries:
59

 
4

 
45

 
456

 
564

Net (charge offs) recoveries
(253
)
 
3

 
(106
)
 
(1,055
)
 
(1,411
)
Provision
5,097

 
682

 
132

 
34

 
5,945

Ending balance
$
10,227

 
$
8,869

 
$
1,252

 
$
3,130

 
$
23,478


 
December 31, 2018
Allowance for loan losses
Commercial, and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance:
$
6,976

 
$
8,514

 
$
1,316

 
$
4,355

 
$
21,161

Charge Offs:
(3,644
)
 
(213
)
 
(226
)
 
(1,836
)
 
(5,919
)
Recoveries:
47

 
3

 
5

 
494

 
549

Net recoveries (charge offs)
(3,597
)
 
(210
)
 
(221
)
 
(1,342
)
 
(5,370
)
Provision
2,004

 
(120
)
 
131

 
1,138

 
3,153

Ending balance
$
5,383

 
$
8,184

 
$
1,226

 
$
4,151

 
$
18,944


 
December 31, 2017
Allowance for loan losses
Commercial, and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance:
$
1,589

 
$
7,270

 
$
1,523

 
$
3,871

 
$
14,253

Charge Offs:
(96
)
 
(419
)
 
(225
)
 
(1,831
)
 
(2,571
)
Recoveries:
109

 
5

 
30

 
313

 
457

Net recoveries (charge offs)
13

 
(414
)
 
(195
)
 
(1,518
)
 
(2,114
)
Provision
5,374

 
1,658

 
(12
)
 
2,002

 
9,022

Ending balance
$
6,976

 
$
8,514

 
$
1,316

 
$
4,355

 
$
21,161
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, 2019 and December 31, 2018 (in thousands):

 
December 31, 2019
Allowance for loan losses
Commercial
and
Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
6,000

 
$
2,097

 
$
—

 
$
—

 
$
8,097

Collectively evaluated for impairment
4,227

 
6,772

 
1,252

 
3,130

 
15,381

Total ending allowance balance
$
10,227

 
$
8,869

 
$
1,252

 
$
3,130

 
$
23,478


 
December 31, 2018
Allowance for loan losses
Commercial
and
Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,743

 
$
446

 
$
—

 
$
—

 
$
2,189

Collectively evaluated for impairment
3,640

 
7,738

 
1,226

 
4,151

 
16,755

Total ending allowance balance
$
5,383

 
$
8,184

 
$
1,226

 
$
4,151

 
$
18,944


 
December 31, 2019
Loans:
Commercial
and
Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
6,147

 
$
8,844

 
$
525

 
$
149

 
$
15,665

Loans collectively evaluated for impairment
224,775

 
641,726

 
188,349

 
242,388

 
1,297,238

Total ending loans balance
$
230,922

 
$
650,570

 
$
188,874

 
$
242,537

 
$
1,312,903


 
December 31, 2018
Loans:
Commercial
and
Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
2,128

 
$
6,146

 
$
402

 
$
55

 
$
8,731

Loans collectively evaluated for impairment
201,284

 
656,842

 
182,823

 
265,929

 
1,306,878

Total ending loans balance
$
203,412

 
$
662,988

 
$
183,225

 
$
265,984

 
$
1,315,609
Summary of Impaired Financing Receivables
The following tables present loans individually evaluated for impairment recognized by class of loans as of December 31, 2019 and December 31, 2018, the average recorded investment and interest income recognized by class of loans as of the years ended December 31, 2019, 2018 and 2017 (in thousands):

 
December 31, 2019
 
December 31, 2018
 
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
$
133

 
$
133

 
$
—

 
$
345

 
$
346

 
$
—

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
247

 
247

 
—

 
307

 
308

 
—

Commercial mortgages
3,501

 
3,503

 
—

 
4,007

 
3,935

 
—

Residential mortgages
554

 
525

 
—

 
424

 
402

 
—

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
171

 
149

 
—

 
54

 
55

 
—

With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 

Commercial and agricultural:
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
6,013

 
6,014

 
6,000

 
1,780

 
1,782

 
1,743

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgages
5,093

 
5,094

 
2,097

 
1,902

 
1,903

 
446

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
—

 
—

 
—

 
—

 
—

 
—

Total
$
15,712

 
$
15,665

 
$
8,097

 
$
8,819

 
$
8,731

 
$
2,189


 
December 31, 2019
 
December 31, 2018
 
December 31, 2017
 
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
$
248

 
$
—

 
$
608

 
$
12

 
$
706

 
$
35

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
278

 
10

 
337

 
11

 
830

 
12

Commercial mortgages
3,605

 
12

 
4,193

 
21

 
5,606

 
78

Residential mortgages
422

 
44

 
416

 
7

 
418

 
8

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines & loans
137

 
6

 
60

 
3

 
74

 
3

With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 

Commercial and agricultural:
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
3,209

 
—

 
3,043

 
3

 
1,170

 
6

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgages
6,524

 
—

 
2,315

 
4

 
3,751

 
12

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
—

 
—

 
—

 
—

 
144

 
—

Total
$
14,423

 
$
72

 
$
10,972

 
$
61

 
$
12,699

 
$
154


(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, 2019 and December 31, 2018 (in thousands):

 
Non-accrual
 
Loans Past Due 90 Days or More and Still Accruing
 
2019
 
2018
 
2019
 
2018
Commercial and agricultural:
 
 
 
 
 
 
 
Commercial and industrial
$
6,147

 
$
2,048

 
$
7

 
$
10

Commercial mortgages:
 
 
 
 
 
 
 
Construction
80

 
109

 
—

 
—

Commercial mortgages
8,407

 
5,529

 
—

 
—

Residential mortgages
2,155

 
2,655

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
Credit cards
—

 
—

 
—

 
9

Home equity lines and loans
641

 
1,183

 
—

 
—

Indirect consumer loans
571

 
693

 
—

 
—

Direct consumer loans
7

 
37

 
—

 
—

Total
$
18,008

 
$
12,254

 
$
7

 
$
19


The following tables present the aging of the recorded investment in loans as of December 31, 2019 and December 31, 2018 (in thousands):

 
December 31, 2019
 
30 - 59 Days Past Due
 
60 - 89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Loans Not Past Due
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
1,285

 
$
49

 
$
4,398

 
$
5,732

 
$
224,916

 
$
230,648

Agricultural
—

 
—

 
—

 
—

 
274

 
274

Commercial mortgages:
 
 
 
 
 
 
 
 
 
 
 

Construction
—

 
—

 
—

 
—

 
44,082

 
44,082

Commercial mortgages
440

 
277

 
2,165

 
2,883

 
603,605

 
606,488

Residential mortgages
1,016

 
803

 
956

 
2,775

 
186,099

 
188,874

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 

Credit cards
—

 
—

 
—

 
—

 
—

 
—

Home equity lines and loans
353

 
151

 
149

 
653

 
91,412

 
92,065

Indirect consumer loans
1,546

 
377

 
355

 
2,278

 
133,088

 
135,366

Direct consumer loans
32

 
11

 
6

 
49

 
15,057

 
15,106

Total
$
4,672

 
$
1,668

 
$
8,029

 
$
14,370

 
$
1,298,533

 
$
1,312,903



 
December 31, 2018
 
30 - 59 Days Past Due
 
60 - 89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Loans Not Past Due
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
284

 
$
61

 
$
71

 
$
416

 
$
202,667

 
$
203,083

Agricultural
16

 
—

 
—

 
16

 
313

 
329

Commercial mortgages:
 

 
 

 
 

 


 
 
 


Construction
—

 
—

 
—

 
—

 
54,626

 
54,626

Commercial mortgages
6,273

 
158

 
169

 
6,600

 
601,762

 
608,362

Residential mortgages
2,204

 
516

 
1,026

 
3,746

 
179,479

 
183,225

Consumer loans:
 

 
 

 
 

 


 
 
 


Credit cards
1

 
3

 
9

 
13

 
1,437

 
1,450

Home equity lines and loans
279

 
97

 
730

 
1,106

 
97,360

 
98,466

Indirect consumer loans
1,511

 
319

 
436

 
2,266

 
147,540

 
149,806

Direct consumer loans
120

 
53

 
31

 
204

 
16,058

 
16,262

Total
$
10,688

 
$
1,207

 
$
2,472

 
$
14,367

 
$
1,301,242

 
$
1,315,609
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, 2019, 2018 and 2017 (in thousands):

December 31, 2019
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial mortgages:
 
 
 
 

 
 

Commercial mortgages
 
1
 
4,223

 
4,223

Residential mortgages
 
1
 
123

 
123

Consumer loans:
 
 
 
 

 
 

Home equity lines and loans
 
1
 
137

 
137

Total
 
3
 
$
4,483

 
$
4,483


The TDRs described above increased the allowance for loan losses by $1.7 million and resulted in no charge offs during the year ended December 31, 2019.

December 31, 2018
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial and agricultural:
 
 
 
 
 
 
Commercial and industrial
 
2
 
$
491

 
$
491

Total
 
2
 
$
491

 
$
491


The TDRs described above increased the allowance for loan losses by $0.4 million and resulted in no charge offs during the year ended December 31, 2018.
December 31, 2017
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial and agricultural:
 
 
 
 
 
 
Commercial and industrial
 
3
 
$
677

 
$
677

Commercial mortgages:
 
 
 
 

 
 

Commercial mortgages
 
1
 
$
166

 
$
166

Residential mortgages
 
1
 
105

 
105

Total
 
5
 
$
948

 
$
948



The TDRs described above increased the allowance for loan losses by $0.1 million and resulted in no charge offs during the year ended December 31, 2017.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no payment defaults on any loans previously modified as troubled debt restructurings during the year ended December 31, 2019, and 2018, within twelve months following the modification.

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, 2017:

December 31, 2017
 
Number of Loans
 
Recorded Investment
Commercial mortgages:
 
 
 
 
Commercial mortgages
 
1
 
$
164

Total
 
1
 
$
164
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, 2019 and 2018, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):

 
December 31, 2019
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
208,552

 
$
5,915

 
$
10,361

 
$
5,820

 
$
230,648

Agricultural
—

 
274

 
—

 
—

 
—

 
274

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
—

 
40,304

 
168

 
3,610

 
—

 
44,082

Commercial mortgages
—

 
577,266

 
12,451

 
12,356

 
4,415

 
606,488

Residential mortgages
186,719

 


 
—

 
2,155

 
—

 
188,874

Consumer loans
 

 
 

 
 

 
 

 
 

 
 

Credit cards
—

 
—

 
—

 
—

 
—

 
—

Home equity lines and loans
91,424

 
—

 
—

 
641

 
—

 
92,065

Indirect consumer loans
134,795

 
—

 
—

 
571

 
—

 
135,366

Direct consumer loans
15,099

 
—

 
—

 
7

 
—

 
15,106

Total
$
428,037

 
$
826,396

 
$
18,534

 
$
29,701

 
$
10,235

 
$
1,312,903



 
December 31, 2018
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
190,666

 
$
4,452

 
$
6,222

 
$
1,743

 
$
203,083

Agricultural
—

 
329

 
—

 
—

 
—

 
329

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
—

 
54,517

 
—

 
109

 
—

 
54,626

Commercial mortgages
—

 
574,221

 
16,830

 
15,948

 
1,363

 
608,362

Residential mortgages
180,570

 
—

 
—

 
2,655

 
—

 
183,225

Consumer loans
 

 
 

 
 

 
 

 
 

 
 

Credit cards
1,450

 
—

 
—

 
—

 
—

 
1,450

Home equity lines and loans
97,283

 
—

 
—

 
1,183

 
—

 
98,466

Indirect consumer loans
149,113

 
—

 
—

 
693

 
—

 
149,806

Direct consumer loans
16,225

 
—

 
—

 
37

 
—

 
16,262

Total
$
444,641

 
$
819,733

 
$
21,282

 
$
26,847

 
$
3,106

 
$
1,315,609
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, 2019 and 2018 (in thousands):

 
December 31, 2019
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
186,719

 
$
—

 
$
91,424

 
$
134,795

 
$
15,099

Non-Performing
2,155

 
—

 
641

 
571

 
7

Total
$
188,874

 
$
—

 
$
92,065

 
$
135,366

 
$
15,106


 
December 31, 2018
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
180,570

 
$
1,450

 
$
97,283

 
$
149,113

 
$
16,225

Non-Performing
2,655

 
—

 
1,183

 
693

 
37

Total
$
183,225

 
$
1,450

 
$
98,466

 
$
149,806

 
$
16,262