Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2016

Changes in the Allowance for Loan Losses and Loan Balances Outstanding

The following tables present, by portfolio segment, the changes in the allowance for loan losses for the three months ended March 31, 2016 and 2015.

Allowance for loan losses:


March 31, 2016	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,478	$	(22	)	$	5	$	(15	)	$	1,446
Commercial Real Estate:
Owner Occupied		2,467		—			49		(144	)		2,372
Non-Owner Occupied		4,657		—			40		14			4,711
Residential Real Estate		4,086		(96	)		89		35			4,114
Real Estate Construction		371		—			1		36			408
Farm Real Estate		538		—			—		(42	)		496
Consumer and Other		382		(8	)		14		(30	)		358
Unallocated		382		—			—		146			528

Total	$	14,361	$	(126	)	$	198	$	—		$	14,433

Allowance for loan losses:


March 31, 2015	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,819	$	—		$	19	$	(43	)	$	1,795
Commercial Real Estate:
Owner Occupied		2,221		(198	)		2		(217	)		1,808
Non-Owner Occupied		4,334		(9	)		14		587			4,926
Residential Real Estate		3,747		(328	)		131		116			3,666
Real Estate Construction		428		—			1		69			498
Farm Real Estate		822		—			51		(74	)		799
Consumer and Other		200		(50	)		14		26			190
Unallocated		697		—			—		(64	)		633

Total	$	14,268	$	(585	)	$	232	$	400		$	14,315

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of March 31, 2016 and December 31, 2015.


March 31, 2016	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:

Commercial & Agriculture	$	—	$	—	$	1,446	$	1,446
Commercial Real Estate:
Owner Occupied		—		4		2,368		2,372
Non-Owner Occupied		—		23		4,688		4,711
Residential Real Estate		113		163		3,838		4,114
Real Estate Construction		—		—		408		408
Farm Real Estate		—		—		496		496
Consumer and Other		—		—		358		358
Unallocated		—		—		528		528

Total	$	113	$	190	$	14,130	$	14,433


Outstanding loan balances:

Commercial & Agriculture	$	131	$	2,521	$	119,555	$	122,207
Commercial Real Estate:
Owner Occupied		—		1,650		165,209		166,859
Non-Owner Occupied		—		1,982		342,735		344,717
Residential Real Estate		193		1,865		241,777		243,835
Real Estate Construction		—		—		64,176		64,176
Farm Real Estate		—		1,398		43,562		44,960
Consumer and Other		—		3		19,046		19,049

Total	$	324	$	9,419	$	996,060	$	1,005,803


December 31, 2015	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:

Commercial & Agriculture	$	—	$	23	$	1,455	$	1,478
Commercial Real Estate:
Owner Occupied		—		103		2,364		2,467
Non-Owner Occupied		—		—		4,657		4,657
Residential Real Estate		123		137		3,826		4,086
Real Estate Construction		—		—		371		371
Farm Real Estate		—		—		538		538
Consumer and Other		—		—		382		382
Unallocated		—		—		382		382

Total	$	123	$	263	$	13,975	$	14,361


Outstanding loan balances:

Commercial & Agriculture	$	132	$	873	$	123,397	$	124,402
Commercial Real Estate:
Owner Occupied		—		2,141		165,756		167,897
Non-Owner Occupied		—		1,742		346,697		348,439
Residential Real Estate		131		1,642		234,565		236,338
Real Estate Construction		—		—		58,898		58,898
Farm Real Estate		—		953		46,040		46,993
Consumer and Other		—		3		18,557		18,560

Total	$	263	$	7,354	$	993,910	$	1,001,527

Credit Exposures by Internally Assigned Grades


March 31, 2016	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	115,464	$	3,510	$	3,233	$	—	$	122,207
Commercial Real Estate:
Owner Occupied		157,323		4,363		5,173		—		166,859
Non-Owner Occupied		335,107		6,095		3,515		—		344,717
Residential Real Estate		60,528		1,640		7,574		—		69,742
Real Estate Construction		60,024		308		28		—		60,360
Farm Real Estate		36,407		5,664		2,889		—		44,960
Consumer and Other		2,006		2		122		—		2,130

Total	$	766,859	$	21,582	$	22,534	$	—	$	810,975


December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	117,739	$	3,090	$	3,573	$	—	$	124,402
Commercial Real Estate:
Owner Occupied		156,622		5,571		5,704		—		167,897
Non-Owner Occupied		339,734		6,100		2,605		—		348,439
Residential Real Estate		62,147		1,671		7,435		—		71,253
Real Estate Construction		52,399		216		29		—		52,644
Farm Real Estate		39,787		4,024		3,182		—		46,993
Consumer and Other		1,987		3		111		—		2,101

Total	$	770,415	$	20,675	$	22,639	$	—	$	813,729

Performing and Nonperforming Loans

Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.


	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
March 31, 2016
Performing	$	174,057	$	3,816	$	16,919	$	194,792
Nonperforming		36		—		—		36

Total	$	174,093	$	3,816	$	16,919	$	194,828


	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
December 31, 2015
Performing	$	165,048	$	6,254	$	16,458	$	187,760
Nonperforming		37		—		1		38

Total	$	165,085	$	6,254	$	16,459	$	187,798

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of March 31, 2016 and December 31, 2015.


March 31, 2016	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing

Commercial & Agriculture	$	274	$	—	$	1,264	$	1,538	$	120,669	$	122,207	$	—
Commercial Real Estate:
Owner Occupied		245		216		590		1,051		165,808		166,859		—
Non-Owner Occupied		144		1,213		340		1,697		343,020		344,717		—
Residential Real Estate		2,720		70		1,482		4,272		239,563		243,835		—
Real Estate Construction		—		—		—		—		64,176		64,176		—
Farm Real Estate		525		—		—		525		44,435		44,960		—
Consumer and Other		62		9		3		74		18,975		19,049		—

Total	$	3,970	$	1,508	$	3,679	$	9,157	$	996,646	$	1,005,803	$	—


December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing

Commercial & Agriculture	$	9	$	32	$	37	$	78	$	124,324	$	124,402	$	—
Commercial Real Estate:
Owner Occupied		982		36		284		1,302		166,595		167,897		—
Non-Owner Occupied		269		330		123		722		347,717		348,439		—
Residential Real Estate		2,845		404		1,725		4,974		231,364		236,338		—
Real Estate Construction		8		—		—		8		58,890		58,898		—
Farm Real Estate		—		—		—		—		46,993		46,993		—
Consumer and Other		98		68		8		174		18,386		18,560		—

Total	$	4,211	$	870	$	2,177	$	7,258	$	994,269	$	1,001,527	$	—

Summary of Nonaccrual Loans

The following table presents loans on nonaccrual status as of March 31, 2016 and December 31, 2015.


	2016		2015
Commercial & Agriculture	$	2,390	$	1,185
Commercial Real Estate:
Owner Occupied		1,465		1,645
Non-Owner Occupied		1,939		1,428
Residential Real Estate		4,529		4,542
Real Estate Construction		28		29
Farm Real Estate		790		961
Consumer and Other		111		100

Total	$	11,252	$	9,890

Schedule of Troubled Debt Restructurings

Loan modifications that are considered TDRs completed during the three-month periods ended March 31, 2016 and March 31, 2015 were as follows:


	For the Three-Month Period Ended March 31, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		3	$	483	$	483
Commercial Real Estate - Owner Occupied		—		—		—
Commercial Real Estate - Non-Owner Occupied		—		—		—
Residential Real Estate		1		232		232
Real Estate Construction		—		—		—
Farm Real Estate		2		614		614
Consumer and Other		—		—		—

Total Loan Modifications		6	$	1,329	$	1,329


	For the Three-Month Period Ended March 31, 2015
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		1	$	6	$	6
Commercial Real Estate - Owner Occupied		—		—		—
Commercial Real Estate - Non-Owner Occupied		—		—		—
Residential Real Estate		3		374		374
Real Estate Construction		1		41		41
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		5	$	421	$	421

Impaired Financing Receivables

The following tables include the recorded investment and unpaid principal balances for impaired loans with the related allowance amount, if applicable, as of March 31, 2016 and December 31, 2015.


	March 31, 2016						December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	2,521	$	3,071			$	851	$	1,034
Commercial Real Estate:
Owner Occupied		1,399		1,434				1,224		1,343
Non-Owner Occupied		1,921		1,924				1,742		1,826
Residential Real Estate		1,373		2,010				965		1,591
Farm Real Estate		1,398		1,398				953		1,026
Consumer and Other		3		3				3		3

Total		8,615		9,840				5,738		6,823
With an allowance recorded:
Commercial & Agriculture		—		22	$	—		22		23	$	23
Commercial Real Estate:
Owner Occupied		251		251		4		917		999		103
Non-Owner Occupied		61		61		23		—		—		—
Residential Real Estate		492		511		163		808		683		260
Farm Real Estate		—		—		—		—		—		—

Total		804		845		190		1,747		1,705		386
Total:
Commercial & Agriculture		2,521		3,093		—		873		1,057		23
Commercial Real Estate:
Owner Occupied		1,650		1,685		4		2,141		2,342		103
Non-Owner Occupied		1,982		1,985		23		1,742		1,826		—
Residential Real Estate		1,865		2,521		163		1,773		2,274		260
Farm Real Estate		1,398		1,398		—		953		1,026		—
Consumer and Other		3		3		—		3		3		—

Total	$	9,419	$	10,685	$	190	$	7,485	$	8,528	$	386

The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three-month periods ended March 31, 2016 and 2015.


For the three months ended:	March 31, 2016				March 31, 2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,697	$	39	$	2,303	$	26
Commercial Real Estate - Owner Occupied		1,895		26		3,328		47
Commercial Real Estate - Non-Owner Occupied		1,862		13		2,123		9
Residential Real Estate		1,753		31		2,628		27
Real Estate Construction		—		—		20		—
Farm Real Estate		1,175		16		626		14
Consumer and Other		3		—		5		—

Total	$	8,385	$	125	$	11,033	$	123

Schedule of Changes in Amortized Yield for Purchased Credit Impaired Loans

Changes in the amortizable yield for purchased credit-impaired loans were as follows, since acquisition, for the three-month periods ended March 31, 2016 and 2015:


	At March 31, 2016			At March 31, 2015
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	80		$	—
Acquisition of impaired loans		—			140
Accretion		(6	)		—

Balance at end of period	$	74		$	140

Schedule of Loans Acquired and Accounted

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:


	At March 31, 2016		At December 31, 2015
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	943	$	965
Carrying amount		324		263