
	December 31, 2020		December 31, 2019
Commercial and agricultural:
Commercial and industrial	$	368,663	$	230,018
Agricultural	283		274
Commercial mortgages:
Construction	61,945		43,962
Commercial mortgages	654,663		604,832
Residential mortgages	239,401		188,338
Consumer loans:

Home equity lines and loans	78,547		91,784
Indirect consumer loans	120,538		134,973
Direct consumer loans	12,423		15,038
Total loans, net of deferred loan fees	1,536,463		1,309,219
Interest receivable on loans	5,035		3,684
Total recorded investment in loans	$	1,541,498	$	1,312,903

As of December 31, 2020, the Corporation had outstanding loan balances of $150.9 million for PPP loans which are included in commercial and industrial loans in the table above. These loans require no allowance for loan losses as of December 31, 2020 since they are government guaranteed loans.


	December 31, 2020
Allowance for loan losses	Commercial, and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance:	$	10,227	$	8,869	$	1,252	$	3,130	$	23,478
Charge Offs:	(4,068)		(2,143)		(56)		(1,113)		(7,380)
Recoveries:	89		14		86		398		587
Net (charge offs) recoveries	(3,979)		(2,129)		30		(715)		(6,793)
Provision	(1,755)		4,756		797		441		4,239
Ending balance	$	4,493	$	11,496	$	2,079	$	2,856	$	20,924


	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 recoveries (charge offs)	(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, 2020
Allowance for loan losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,401	$	74	$	—	$	52	$	1,527
Collectively evaluated for impairment	3,092		11,422		2,079		2,804		19,397

Total ending allowance balance	$	4,493	$	11,496	$	2,079	$	2,856	$	20,924


	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, 2020
Loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Loans individually evaluated for impairment	$	3,400	$	5,117	$	1,271	$	801	$	10,589
Loans collectively evaluated for impairment	366,852		714,028		238,742		211,287		1,530,909

Total ending loans balance	$	370,252	$	719,145	$	240,013	$	212,088	$	1,541,498


	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

The following tables present loans individually evaluated for impairment recognized by class of loans as of December 31, 2020 and December 31, 2019, the average recorded investment and interest income recognized by class of loans as of the years ended December 31, 2020, 2019 and 2018 (in thousands):


	December 31, 2020						December 31, 2019
	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	$	1,960	$	1,963	$	—	$	133	$	133	$	—
Commercial mortgages:
Construction	188		189		—		247		247		—
Commercial mortgages	6,814		4,760		—		3,501		3,503		—
Residential mortgages	1,283		1,271		—		554		525		—
Consumer loans:
Home equity lines and loans	645		631		—		171		149		—
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	5,228		1,437		1,401		6,013		6,014		6,000
Commercial mortgages:
Commercial mortgages	258		168		74		5,093		5,094		2,097
Consumer loans:
Home equity lines and loans	170		170		52		—		—		—
Total	$	16,546	$	10,589	$	1,527	$	15,712	$	15,665	$	8,097


	December 31, 2020				December 31, 2019				December 31, 2018
	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	$	936	$	16	$	248	$	—	$	608	$	12
Commercial mortgages:
Construction	219		8		278		10		337		11
Commercial mortgages	4,103		16		3,605		12		4,193		21
Residential mortgages	952		25		422		44		416		7
Consumer loans:
Home equity lines & loans	446		7		137		6		60		3
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	4,981		4		3,209		—		3,043		3
Commercial mortgages:

Commercial mortgages	2,949		—		6,524		—		2,315		4

Consumer loans:
Home equity lines and loans	104		—		—		—		—		—

Total	$	14,690	$	76	$	14,423	$	72	$	10,972	$	61


	Non-accrual				Loans Past Due 90 Days or More and Still Accruing
	2020		2019		2020		2019
Commercial and agricultural:
Commercial and industrial	$	2,167	$	6,147	$	2	$	7

Commercial mortgages:
Construction	55		80		—		—
Commercial mortgages	4,415		8,407		—		—
Residential mortgages	1,632		2,155		—		—
Consumer loans:

Home equity lines and loans	1,159		641		—		—
Indirect consumer loans	519		571		—		—
Direct consumer loans	5		7		—		—
Total	$	9,952	$	18,008	$	2	$	7


	December 31, 2020
	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	$	520	$	14	$	30	$	564	$	369,404	$	369,968
Agricultural	—		—		—		—		284		284
Commercial mortgages:
Construction	—		—		—		—		62,164		62,164
Commercial mortgages	1,438		3,696		308		5,442		651,539		656,981
Residential mortgages	817		406		461		1,684		238,329		240,013
Consumer loans:

Home equity lines and loans	521		41		474		1,036		77,725		78,761
Indirect consumer loans	1,268		198		252		1,718		119,135		120,853
Direct consumer loans	34		2		—		36		12,438		12,474
Total	$	4,598	$	4,357	$	1,525	$	10,480	$	1,531,018	$	1,541,498


	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:

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

A modification of a loan may result in classification as a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Corporation offers various types of modifications which may involve a change in the schedule of payments, a reduction in the interest rate, an extension of the maturity date, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, requesting additional collateral, releasing collateral for consideration, substituting or adding a new borrower or guarantor, a permanent reduction of the recorded investment in the loan or a permanent reduction of the interest on the loan. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 related modifications and therefore will not be treated as TDRs. As of December 31, 2020, in conformance with Section 4013 of the CARES Act, the Corporation modified a total of 1,064 commercial and consumer loans represented by a total loan balance of $211.2 million. As of December 31, 2020, 31 loans totaling $20.8 million remained in modified status, of which 18 loans totaling $20.1 million had been modified more than once.

As of December 31, 2020, 2019 and 2018, the Corporation has a recorded investment in TDRs of $6.7 million, $9.0 million, and $6.8 million, respectively. There were specific reserves of $0.4 million allocated for TDRs at December 31, 2020, and $2.3 million and $0.9 million allocated for December 31, 2019 and 2018, respectively. As of December 31, 2020, TDRs totaling $2.8 million were accruing interest under the modified terms and $3.9 million were on non-accrual status. As of December 31, 2019, TDRs totaling $0.9 million were accruing interest under the modified terms and $8.1 million were on non-accrual status. As of December 31, 2018, TDRs totaling $0.8 million were accruing interest under the modified terms and $6.0 million were on non-accrual status. The Corporation has committed no additional amounts to customers with outstanding loans that are classified as TDRs as of December 31, 2020, $17 thousand to customers with outstanding loans that are classified as TDRs as of December 31, 2019 and no additional amounts as of December 31, 2018.

During the years ended December 31, 2020, 2019 and 2018, the terms of certain loans were modified as TDRs. During the year ended December 31, 2020, the modification of the terms of one residential mortgage loan included the postponement of scheduled amortized payments for a period of greater than three-months. Additionally, two commercial and industrial loans were modified with the maturity date extended on both loans and one with an extension at a stated rate lower than the current market rate for new debt with similar risk. Additionally, two commercial and industrial loans had payments deferred and both loans were risk rated Substandard while one loan was in non-accrual status prior to the modification. The modifications of four commercial mortgage loans included the deferral of payments with three of the loans risk rated Substandard and in non-accrual status, three of the borrowers were over one year past due in real estate taxes and two of the loans were over 30 days past due in payments. The modifications of three residential mortgages included the deferral of payments while all three were in non-accrual status prior to the modifications, two were risk rated Substandard and one was over 30 days past due in payments. The modifications of three home equity lines and loans included the deferral of payments while all three loans were risk rated Substandard and in non-accrual status prior to the modifications.

During the year ended December 31, 2019, the modification of the terms of one commercial real estate term loan included a reduction of the scheduled amortized payments for greater than a three month period, and modification of the terms of one home equity loan included a reduction in the stated interest rate for the remaining life of the loan, an extension of the maturity date for approximately three years and a reduction of the scheduled amortized payment of the loan for greater than a three month period. Additionally, one residential mortgage loan modification included a reduction in the stated interest rate for the remaining life of the loan, a deferral of the principal balance decreasing the effective borrowing rate, an extension of the maturity date by thirteen years at a stated rate lower than the current market rate for new debt with similar risk and a postponement of the scheduled amortized payments of the loan for greater than a three month period


December 31, 2020	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
Commercial and agricultural:
Commercial and industrial	4	$	2,068	$	2,068
Commercial mortgages:
Commercial mortgages	4	1,297		1,297
Residential mortgages	4	997		997
Consumer loans:
Home equity lines and loans	3	738		738
Total	15	$	5,100	$	5,100


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 Corporation establishes a risk rating at origination for all commercial loans. The main factors considered in assigning risk ratings include, but are not limited to: historic and future debt service coverage, collateral position, operating performance, liquidity, leverage, payment history, management ability, and the customer’s industry. Commercial relationship managers monitor all loans in their respective portfolios for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans at least annually.

For the retail loans, which include residential mortgages, indirect and direct consumer loans, home equity lines and loans, and credit cards, once a loan is properly approved and closed, the Corporation evaluates credit quality based upon loan repayment. Retail loans are not rated until they become 90 days past due.

The Corporation uses the risk rating system to identify criticized and classified loans. Commercial relationships within the criticized and classified risk ratings are analyzed quarterly. The Corporation uses the following definitions for criticized and classified loans (which are consistent with regulatory guidelines):

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 the institution’s credit position as some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capability 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. Loans listed as not rated are included in groups of homogeneous loans. Based on the analyses performed as of December 31, 2020 and 2019, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):


	December 31, 2020
	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	360,500	$	2,999	$	5,092	$	1,377	$	369,968
Agricultural	—		284		—		—		—		284
Commercial mortgages:
Construction	—		59,885		—		2,279		—		62,164
Commercial mortgages	—		616,090		23,631		16,128		1,132		656,981
Residential mortgages	238,381				—		1,632		—		240,013
Consumer loans

Home equity lines and loans	77,602		—		—		1,159		—		78,761
Indirect consumer loans	120,334		—		—		519		—		120,853
Direct consumer loans	12,470		—		—		4		—		12,474
Total	$	448,787	$	1,036,759	$	26,630	$	26,813	$	2,509	$	1,541,498


	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

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

The Corporation considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Corporation also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. Non-performing loans include non-accrual loans and non-accrual troubled debt restructurings.