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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 9 Months Ended
Sep. 30, 2020
Loans and Leases Receivable Disclosure [Abstract]  
Composition of the loan portfolio by type
The composition of the loan portfolio, net of deferred origination fees and costs, is summarized as follows (in thousands):
September 30, 2020December 31, 2019
Commercial and agricultural:
Commercial and industrial$403,911 $230,018 
Agricultural682 274 
Commercial mortgages:
Construction54,332 43,962 
Commercial mortgages, other636,179 604,832 
Residential mortgages227,372 188,338 
Consumer loans:
Home equity lines and loans81,556 91,784 
Indirect consumer loans121,406 134,973 
Direct consumer loans13,055 15,038 
Total loans, net of deferred loan fees1,538,493 1,309,219 
Interest receivable on loans5,035 3,684 
Total recorded investment in loans$1,543,528 $1,312,903 
Allowance for loan losses by portfolio segment
The following tables present the activity in the allowance for loan losses by portfolio segment for the three month periods ended September 30, 2020 and 2019 (in thousands):
Three Months Ended September 30, 2020
Allowance for loan lossesCommercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance$8,327 $10,549 $1,891 $3,363 $24,130 
Charge-offs(68)— (42)(216)(326)
Recoveries18 2 — 87 107 
Net recoveries (charge-offs)(50)2 (42)(129)(219)
Provision180 361 232 (94)679 
Ending balance$8,457 $10,912 $2,081 $3,140 $24,590 
Three Months Ended September 30, 2019
Allowance for loan lossesCommercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance$5,476 $9,545 $1,229 $3,406 $19,656 
Charge-offs— — (19)(283)(302)
Recoveries29 — — 99 128 
Net recoveries (charge-offs)29 — (19)(184)(174)
Provision4,651 (285)(26)101 4,441 
Ending balance$10,156 $9,260 $1,184 $3,323 $23,923 


The following tables present the activity in the allowance for loan losses by portfolio segment for the nine month periods ended September 30, 2020 and 2019 (in thousands):
Nine Months Ended September 30, 2020
Allowance for loan lossesCommercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance:$10,227 $8,869 $1,252 $3,130 $23,478 
Charge-offs:(134)(2,143)(56)(915)(3,248)
Recoveries:27 2 49 293 371 
Net recoveries (charge-offs)(107)(2,141)(7)(622)(2,877)
Provision(1,663)4,184 836 632 3,989 
Ending balance$8,457 $10,912 $2,081 $3,140 $24,590 

Nine Months Ended September 30, 2019
Allowance for loan lossesCommercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Beginning balance:$5,383 $8,184 $1,226 $4,151 $18,944 
Charge-offs:(55)— (60)(1,040)(1,155)
Recoveries:44 2 45 359 450 
Net recoveries (charge-offs)(11)2 (15)(681)(705)
Provision4,784 1,074 (27)(147)5,684 
Ending balance$10,156 $9,260 $1,184 $3,323 $23,923 
Allowance for loan losses and the 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 September 30, 2020 and December 31, 2019 (in thousands):
 September 30, 2020
Allowance for loan losses:Commercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Ending allowance balance attributable to loans:
Individually evaluated for impairment$5,530 $184 $— $52 $5,766 
Collectively evaluated for impairment2,927 10,728 2,081 3,088 18,824 
   Total ending allowance balance$8,457 $10,912 $2,081 $3,140 $24,590 
 December 31, 2019
Allowance for loan losses:Commercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Ending allowance balance attributable to loans:
Individually evaluated for impairment$6,000 $2,097 $— $— $8,097 
Collectively evaluated for impairment4,227 6,772 1,252 3,130 15,381 
   Total ending allowance balance$10,227 $8,869 $1,252 $3,130 $23,478 
 September 30, 2020
Loans:Commercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Loans individually evaluated for impairment$7,515 $6,750 $1,277 $812 $16,354 
Loans collectively evaluated for  impairment398,498 686,185 226,707 215,784 1,527,174 
   Total ending loans balance$406,013 $692,935 $227,984 $216,596 $1,543,528 
 December 31, 2019
Loans:Commercial and AgriculturalCommercial MortgagesResidential MortgagesConsumer LoansTotal
Loans individually evaluated for impairment$6,147 $8,844 $525 $149 $15,665 
Loans collectively evaluated for  impairment224,775 641,726 188,349 242,388 1,297,238 
Loans acquired with deteriorated credit quality— — — — — 
   Total ending loans balance$230,922 $650,570 $188,874 $242,537 $1,312,903 
Summary of impaired financing receivables
The following table presents loans individually evaluated for impairment recognized by class of loans as of September 30, 2020 and December 31, 2019 (in thousands):
 September 30, 2020December 31, 2019
With no related allowance recorded:Unpaid Principal BalanceRecorded InvestmentAllowance for Loan Losses AllocatedUnpaid Principal BalanceRecorded InvestmentAllowance for Loan Losses Allocated
Commercial and agricultural:
Commercial and industrial$1,391 $1,391 $— $133 $133 $— 
Commercial mortgages:
Construction204 204 — 247 247 — 
Commercial mortgages, other6,339 4,287 — 3,501 3,503 — 
Residential mortgages1,297 1,277 — 554 525 — 
Consumer loans:
Home equity lines and loans657 642 — 171 149 — 
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial6,118 6,124 5,530 6,013 6,014 6,000 
Commercial mortgages:
Commercial mortgages, other2,347 2,259 184 5,093 5,094 2,097 
Consumer loans:
Home equity lines and loans170 170 52 — — — 
Total$18,523 $16,354 $5,766 $15,712 $15,665 $8,097 
The following table presents the average recorded investment and interest income of loans individually evaluated for impairment recognized by class of loans for the three and nine month periods ended September 30, 2020 and 2019 (in thousands):
 Three Months Ended 
 September 30, 2020		Three Months Ended 
 September 30, 2019		Nine Months Ended 
 September 30, 2020		Nine Months Ended 
 September 30, 2019
With no related allowance recorded:Average Recorded InvestmentInterest Income Recognized
(1)		Average Recorded InvestmentInterest Income Recognized
(1)		Average Recorded InvestmentInterest Income Recognized
(1)		Average Recorded InvestmentInterest Income Recognized
(1)
Commercial and agricultural:
Commercial and industrial$1,239 $2 $228 $— $679 $2 $277 $1 
Commercial mortgages:
Construction213 2 270 2 226 6 285 7 
Commercial mortgages, other4,515 — 3,372 3 3,938 — 3,630 9 
Residential mortgages1,224 7 396 36 873 17 396 40 
Consumer loans:
Home equity lines & loans650 2 156 3 399 5 134 4 
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial5,804 2 3,983 — 5,867 4 2,508 — 
Commercial mortgages:
Commercial mortgages, other2,229 8 10,240 — 3,645 16 6,881 — 
Consumer loans:
Home equity lines and loans175 — — — 88 — — — 
Total$16,049 $23 $18,645 $44 $15,715 $50 $14,111 $61 
(1)Cash basis interest income approximates interest income recognized.
The following table presents the recorded investment in non-accrual and loans past due 90 days or more and still accruing by class of loans as of September 30, 2020 and December 31, 2019 (in thousands):
Non-accrualLoans Past Due 90 Days or More and Still Accruing
September 30, 2020December 31, 2019September 30, 2020December 31, 2019
Commercial and agricultural:
Commercial and industrial$6,272 $6,147 $— $7 
Commercial mortgages:
Construction63 80 — — 
Commercial mortgages, other6,027 8,407 — — 
Residential mortgages1,742 2,155 — — 
Consumer loans:
Home equity lines and loans1,017 641 — — 
Indirect consumer loans604 571 — — 
Direct consumer loans1 7 — — 
Total$15,726 $18,008 $— $7 
Recorded investment in past due and non-accrual status by class of loans
The following tables present the aging of the recorded investment in loans as of September 30, 2020 and December 31, 2019 (in thousands):
September 30, 2020
 30 - 59 Days Past Due60 - 89 Days Past Due90 Days or More Past DueTotal Past DueLoans Not Past DueTotal
Commercial and agricultural:
Commercial and industrial$2,433 $1 $3,982 $6,416 $398,913 $405,329 
Agricultural— — — — 684 684 
Commercial mortgages: 
Construction— — — — 54,523 54,523 
Commercial mortgages, other11,077 262 1,878 13,217 625,195 638,412 
Residential mortgages631 9 434 1,074 226,910 227,984 
Consumer loans: 
Credit cards— — — — — — 
Home equity lines and loans169 30 147 346 81,424 81,770 
Indirect consumer loans753 190 213 1,156 120,564 121,720 
Direct consumer loans18 187 1 206 12,900 13,106 
Total$15,081 $679 $6,655 $22,415 $1,521,113 $1,543,528 

December 31, 2019
 30 - 59 Days Past Due60 - 89 Days Past Due90 Days or More Past DueTotal Past DueLoans Not Past DueTotal
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, other440 277 2,165 2,883 603,605 606,488 
Residential mortgages1,016 803 956 2,775 186,099 188,874 
Consumer loans: 
Credit cards— — — — — — 
Home equity lines and loans353 151 149 653 91,412 92,065 
Indirect consumer loans1,546 377 355 2,278 133,088 135,366 
Direct consumer loans32 11 6 49 15,057 15,106 
Total$4,672 $1,668 $8,029 $14,370 $1,298,533 $1,312,903 
Loans by class modified as troubled debt restructurings
The following tables present loans by class modified as TDRs that occurred during the three month period ended September 30, 2020 and September 30, 2019 (dollars in thousands):

September 30, 2020Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial2 $1,138 $1,138 
Agricultural
Commercial mortgages:
Commercial mortgages, other— — — 
Residential mortgages1 320 320 
Consumer loans:
Home equity lines and loans— — — 
Total3 $1,458 $1,458 

The TDRs described above did not increase the allowance for loan losses and resulted in no charge-offs during the three month period ended September 30, 2020.


September 30, 2019Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial mortgages:
Commercial mortgages, other1 $4,223 $4,223 
Total1 $4,223 $4,223 
The TDR described above did not increase the allowance for loan losses and resulted in no charge-offs during the three month period ended September 30, 2019.

The following tables present loans by class modified as TDRs that occurred during the nine month period ended September 30, 2020 and September 30, 2019 (dollars in thousands):

September 30, 2020Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial4 $2,068 $2,068 
Commercial mortgages:
Commercial mortgages, other4 1,297 1,297 
Residential mortgages4 997 997 
Consumer loans:
Home equity lines and loans3 738 738 
Total15 $5,100 $5,100 

The TDRs described above increased the allowance for loan losses by $142 thousand and resulted in no charge-offs during the nine months ended September 30, 2020.
September 30, 2019Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial mortgages:
Commercial mortgages, other1 $4,223 $4,223 
Consumer loans:
Home equity lines and loans1 137 137 
Total2 $4,360 $4,360 
Risk category of the recorded investment of loans by class of loans Based on the analyses performed as of September 30, 2020 and December 31, 2019, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):
 September 30, 2020
 Not RatedPassSpecial MentionSubstandardDoubtfulTotal
Commercial and agricultural:
Commercial and industrial$— $392,378 $2,779 $4,966 $5,206 $405,329 
Agricultural— 684 — — — 684 
Commercial mortgages:
Construction— 51,126 610 2,787 — 54,523 
Commercial mortgages— 610,687 6,732 18,755 2,238 638,412 
Residential mortgages226,242 — — 1,742 — 227,984 
Consumer loans:
Credit cards— — — — — — 
Home equity lines and loans80,753 — — 1,017 — 81,770 
Indirect consumer loans121,116 — — 604 — 121,720 
Direct consumer loans13,105 — — 1 — 13,106 
Total$441,216 $1,054,875 $10,121 $29,872 $7,444 $1,543,528 
 December 31, 2019
 Not RatedPassSpecial MentionSubstandardDoubtfulTotal
Commercial and agricultural:
Commercial and industrial$— $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 mortgages186,719 — — 2,155 — 188,874 
Consumer loans:
Credit cards— — — — — — 
Home equity lines and loans91,424 — — 641 — 92,065 
Indirect consumer loans134,795 — — 571 — 135,366 
Direct consumer loans15,099 — — 7 — 15,106 
Total$428,037 $826,396 $18,534 $29,701 $10,235 $1,312,903 
Recorded investment in residential and consumer loans based on payment activity The following tables present the recorded investment in residential and consumer loans based on payment activity as of September 30, 2020 and December 31, 2019 (in thousands):
 September 30, 2020
 Consumer Loans
 Residential MortgagesHome Equity Lines and LoansIndirect Consumer LoansOther Direct Consumer Loans
Performing$226,242 $80,753 $121,117 $13,104 
Non-Performing1,742 1,017 604 1 
 $227,984 $81,770 $121,721 $13,105 

 December 31, 2019
 Consumer Loans
 Residential MortgagesHome Equity Lines and LoansIndirect Consumer LoansOther Direct Consumer Loans
Performing$186,719 $91,424 $134,795 $15,099 
Non-Performing2,155 641 571 7 
 $188,874 $92,065 $135,366 $15,106