Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

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Changes in the Allowance for Loan Losses

The following tables present, by portfolio segment, the changes in the allowance for loan losses for the three months ended March 31, 2019 and 2018.

Allowance for loan losses:

March 31, 2019	Beginningbalance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,747	$	—		$	1	$	86		$	1,834
Commercial Real Estate:
Owner Occupied		1,962		(60	)		223		(146	)		1,979
Non-Owner Occupied		5,803		—			14		172			5,989
Residential Real Estate		1,531		(98	)		124		(123	)		1,434
Real Estate Construction		1,046		(24	)		—		(51	)		971
Farm Real Estate		397		—			1		(32	)		366
Consumer and Other		284		(57	)		19		5			251
Unallocated		909		—			—		89			998
Total	$	13,679	$	(239	)	$	382	$	—		$	13,822

Allowance for loan losses:

March 31, 2018	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,562	$	(125	)	$	19	$	(97	)	$	1,359
Commercial Real Estate:
Owner Occupied		2,043		(193	)		9		171			2,030
Non-Owner Occupied		5,307		(44	)		14		393			5,670
Residential Real Estate		1,910		(22	)		58		(196	)		1,750
Real Estate Construction		834		—			—		(14	)		820
Farm Real Estate		430		—			1		(20	)		411
Consumer and Other		290		(41	)		4		(6	)		247
Unallocated		758		—			—		(231	)		527
Total	$	13,134	$	(425	)	$	105	$	—		$	12,814

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of March 31, 2019 and December 31, 2018.

March 31, 2019	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	53	$	1,781	$	1,834
Commercial Real Estate:
Owner Occupied		—		10		1,969		1,979
Non-Owner Occupied		—		—		5,989		5,989
Residential Real Estate		—		124		1,310		1,434
Real Estate Construction		—		—		971		971
Farm Real Estate		—		7		359		366
Consumer and Other		—		—		251		251
Unallocated		—		—		998		998
Total	$	—	$	194	$	13,628	$	13,822
Outstanding loan balances:
Commercial & Agriculture	$	35	$	367	$	178,798	$	179,200
Commercial Real Estate:
Owner Occupied		—		472		216,558		217,030
Non-Owner Occupied		—		382		539,038		539,420
Residential Real Estate		823		1,148		459,369		461,340
Real Estate Construction		—		—		123,905		123,905
Farm Real Estate		—		692		34,953		35,645
Consumer and Other		—		—		16,653		16,653
Total	$	858	$	3,061	$	1,569,274	$	1,573,193

December 31, 2018	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	—	$	1,747	$	1,747
Commercial Real Estate:
Owner Occupied		—		12		1,950		1,962
Non-Owner Occupied		—		—		5,803		5,803
Residential Real Estate		8		122		1,401		1,531
Real Estate Construction		—		—		1,046		1,046
Farm Real Estate		—		7		390		397
Consumer and Other		—		—		284		284
Unallocated		—		—		909		909
Total	$	8	$	141	$	13,530	$	13,679
Outstanding loan balances:
Commercial & Agriculture	$	41	$	367	$	176,693	$	177,101
Commercial Real Estate:
Owner Occupied		—		484		209,637		210,121
Non-Owner Occupied		—		31		523,567		523,598
Residential Real Estate		883		1,279		455,688		457,850
Real Estate Construction		—		—		135,195		135,195
Farm Real Estate		—		696		37,817		38,513
Consumer and Other		—		—		19,563		19,563
Total	$	924	$	2,857	$	1,558,160	$	1,561,941

Credit Exposures by Internally Assigned Grades

March 31, 2019	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	174,339	$	2,978	$	1,883	$	—	$	179,200
Commercial Real Estate:
Owner Occupied		208,242		3,532		5,256		—		217,030
Non-Owner Occupied		536,178		2,384		858		—		539,420
Residential Real Estate		73,163		490		6,143		—		79,796
Real Estate Construction		115,899		12		12		—		115,923
Farm Real Estate		31,218		1,955		2,472		—		35,645
Consumer and Other		776		—		24		—		800
Total	$	1,139,815	$	11,351	$	16,648	$	—	$	1,167,814

December 31, 2018	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	173,783	$	1,509	$	1,809	$	—	$	177,101
Commercial Real Estate:
Owner Occupied		201,228		3,512		5,381		—		210,121
Non-Owner Occupied		520,487		2,023		1,088		—		523,598
Residential Real Estate		70,908		580		7,363		—		78,851
Real Estate Construction		124,769		13		41		—		124,823
Farm Real Estate		32,908		3,096		2,509		—		38,513
Consumer and Other		1,713		—		20		—		1,733
Total	$	1,125,796	$	10,733	$	18,211	$	—	$	1,154,740

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.

March 31, 2019	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	381,544	$	7,982	$	15,843	$	405,369
Nonperforming		—		—		10		10
Total	$	381,544	$	7,982	$	15,853	$	405,379

December 31, 2018	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	378,999	$	10,372	$	17,830	$	407,201
Nonperforming		—		—		—		—
Total	$	378,999	$	10,372	$	17,830	$	407,201

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, 2019 and December 31, 2018.

March 31, 2019	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	80	$	13	$	107	$	200	$	178,965	$	35	$	179,200	$	—
Commercial Real Estate:
Owner Occupied		862		336		534		1,732		215,298		—		217,030		—
Non-Owner Occupied		72		—		159		231		539,189		—		539,420		—
Residential Real Estate		3,031		201		758		3,990		456,527		823		461,340		—
Real Estate Construction		11		—		—		11		123,894		—		123,905		—
Farm Real Estate		—		70		152		222		35,423		—		35,645		—
Consumer and Other		118		42		25		185		16,468		—		16,653		10
Total	$	4,174	$	662	$	1,735	$	6,571	$	1,565,764	$	858	$	1,573,193	$	10

December 31, 2018	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	225	$	—	$	92	$	317	$	176,743	$	41	$	177,101	$	—
Commercial Real Estate:
Owner Occupied		547		413		564		1,524		208,597		—		210,121		—
Non-Owner Occupied		288		290		372		950		522,648		—		523,598		—
Residential Real Estate		7,118		677		806		8,601		448,366		883		457,850		—
Real Estate Construction		—		12		27		39		135,156		—		135,195		—
Farm Real Estate		33		—		158		191		38,322		—		38,513		—
Consumer and Other		117		57		9		183		19,380		—		19,563		—
Total	$	8,328	$	1,449	$	2,028	$	11,805	$	1,549,212	$	924	$	1,561,941	$	—

Summary of Nonaccrual Loans Excluding Purchased Credit-Impaired (PCI) Loans

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of March 31, 2019 and December 31, 2018.

	March 31, 2019		December 31, 2018
Commercial & Agriculture	$	333	$	270
Commercial Real Estate:
Owner Occupied		917		942
Non-Owner Occupied		160		374
Residential Real Estate		3,240		3,886
Real Estate Construction		12		41
Farm Real Estate		329		338
Consumer and Other		21		18
Total	$	5,012	$	5,869

Schedule of Troubled Debt Restructurings

Loan modifications that are considered TDRs completed during the periods ended March 31, 2019 and March 31, 2018 were as follows:

	For the three months ended
	March 31, 2019
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate—Owner Occupied		—		—		—
Commercial Real Estate—Non-Owner Occupied		1		382		382
Residential Real Estate		—		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	382	$	382

	For the three months ended
	March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		3	$	591	$	591
Commercial Real Estate—Owner Occupied		—		—		—
Commercial Real Estate—Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		3	$	591	$	591

Impaired Loans Excluding PCI Loans

The following table includes the recorded investment and unpaid principal balances for impaired loans, excluding PCI loans, with the associated allowance amount, if applicable, as of March 31, 2019 and December 31, 2018.

	March 31, 2019						December 31, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	168	$	168			$	367	$	367
Commercial Real Estate:
Owner Occupied		187		187				193		193
Non-Owner Occupied		382		382				31		34
Residential Real Estate		892		964				1,017		1,089
Farm Real Estate		252		252				256		256
Total		1,881		1,953				1,864		1,939
With an allowance recorded:
Commercial & Agriculture		199		199	$	53		—		—	$	—
Commercial Real Estate:
Owner Occupied		285		285		10		291		291		12
Residential Real Estate		256		260		124		262		265		122
Farm Real Estate		440		440		7		440		440		7
Total		1,180		1,184		194		993		996		141
Total:
Commercial & Agriculture		367		367		53		367		367		—
Commercial Real Estate:
Owner Occupied		472		472		10		484		484		12
Non-Owner Occupied		382		382		—		31		34		—
Residential Real Estate		1,148		1,224		124		1,279		1,354		122
Farm Real Estate		692		692		7		696		696		7
Total	$	3,061	$	3,137	$	194	$	2,857	$	2,935	$	141

The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three-month periods ended March 31, 2019 and 2018.

	March 31, 2019				March 31, 2018
For the three months ended	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	367	$	6	$	732	$	7
Commercial Real Estate—Owner Occupied		478		8		771		9
Commercial Real Estate—Non-Owner Occupied		206		4		43		1
Residential Real Estate		1,213		16		1,348		17
Farm Real Estate		694		7		701		7
Total	$	2,958	$	41	$	3,595	$	41

Schedule of Changes in Amortized Yield for PCI Loans

Changes in the amortizable yield for PCI loans were as follows, since acquisition: 

	For the Three-Month Period Ended March 31, 2019			For the Three-Month Period Ended March 31, 2018
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	336		$	15
Acquisition of PCI loans		—			—
Accretion		(10	)		(7	)
Balance at end of period	$	326		$	8

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, 2019		At December 31, 2018
	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	$	1,693	$	1,805
Carrying amount		858		924