Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2021

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- and six-months ended June 30, 2021 and 2020.

Allowance for loan losses:

For the three months ended June 30, 2021	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,360	$	(15	)	$	18	$	(43	)	$	2,320
Commercial Real Estate:
Owner Occupied		4,049		—			—		(22	)		4,027
Non-Owner Occupied		13,209		—			4		333			13,546
Residential Real Estate		2,509		—			37		(15	)		2,531
Real Estate Construction		2,902		—			—		(725	)		2,177
Farm Real Estate		283		—			3		4			290
Consumer and Other		170		(10	)		27		15			202
Unallocated		651		—			—		453			1,104
Total	$	26,133	$	(25	)	$	89	$	—		$	26,197

Allowance for loan losses:

For the three months ended June 30, 2020	Beginning balance		Charge-offs			Recoveries		Provision		Ending Balance
Commercial & Agriculture	$	2,400	$	(15	)	$	3	$	411	$	2,799
Commercial Real Estate:
Owner Occupied		2,810		(1	)		7		595		3,411
Non-Owner Occupied		7,617		—			37		1,515		9,169
Residential Real Estate		1,950		(74	)		31		527		2,434
Real Estate Construction		1,606		—			2		236		1,844
Farm Real Estate		310		—			4		47		361
Consumer and Other		246		(26	)		18		9		247
Unallocated		9		—			—		146		155
Total	$	16,948	$	(116	)	$	102	$	3,486	$	20,420

Allowance for loan losses:

For the six months ended June 30, 2021	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,810	$	(15	)	$	163	$	(638	)	$	2,320
Commercial Real Estate:
Owner Occupied		4,057		—			6		(36	)		4,027
Non-Owner Occupied		12,451		—			11		1,084			13,546
Residential Real Estate		2,484		(37	)		179		(95	)		2,531
Real Estate Construction		2,439		—			1		(263	)		2,177
Farm Real Estate		338		—			6		(54	)		290
Consumer and Other		209		(19	)		44		(32	)		202
Unallocated		240		—			—		864			1,104
Total	$	25,028	$	(71	)	$	410	$	830		$	26,197

Allowance for loan losses:

For the six months ended June 30, 2020	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,219	$	(15	)	$	4	$	591		$	2,799
Commercial Real Estate:
Owner Occupied		2,541		(1	)		14		857			3,411
Non-Owner Occupied		6,584		—			41		2,544			9,169
Residential Real Estate		1,582		(97	)		79		870			2,434
Real Estate Construction		1,250		—			2		592			1,844
Farm Real Estate		344		—			7		10			361
Consumer and Other		247		(27	)		34		(7	)		247
Unallocated		—		—			—		155			155
Total	$	14,767	$	(140	)	$	181	$	5,612		$	20,420

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of June 30, 2021 and December 31, 2020.

June 30, 2021	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	—	$	2,320	$	2,320
Commercial Real Estate:
Owner Occupied		—		8		4,019		4,027
Non-Owner Occupied		—		—		13,546		13,546
Residential Real Estate		—		18		2,513		2,531
Real Estate Construction		—		—		2,177		2,177
Farm Real Estate		—		—		290		290
Consumer and Other		—		—		202		202
Unallocated		—		—		1,104		1,104
Total	$	—	$	26	$	26,171	$	26,197
Outstanding loan balances:
Commercial & Agriculture	$	—	$	—	$	328,871	$	328,871
Commercial Real Estate:
Owner Occupied		—		299		271,368		271,667
Non-Owner Occupied		—		30		762,953		762,983
Residential Real Estate		379		557		425,795		426,731
Real Estate Construction		—		—		188,368		188,368
Farm Real Estate		—		592		28,024		28,616
Consumer and Other		—		—		11,960		11,960
Total	$	379	$	1,478	$	2,017,339	$	2,019,196

December 31, 2020	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	73	$	2,737	$	2,810
Commercial Real Estate:
Owner Occupied		—		5		4,052		4,057
Non-Owner Occupied		—		—		12,451		12,451
Residential Real Estate		—		29		2,455		2,484
Real Estate Construction		—		—		2,439		2,439
Farm Real Estate		—		—		338		338
Consumer and Other		—		—		209		209
Unallocated		—		—		240		240
Total	$	—	$	107	$	24,921	$	25,028
Outstanding loan balances:
Commercial & Agriculture	$	—	$	74	$	409,802	$	409,876
Commercial Real Estate:
Owner Occupied		—		980		277,433		278,413
Non-Owner Occupied		—		48		705,024		705,072
Residential Real Estate		388		946		441,254		442,588
Real Estate Construction		—		—		175,609		175,609
Farm Real Estate		—		618		32,484		33,102
Consumer and Other		—		—		12,842		12,842
Total	$	388	$	2,666	$	2,054,448	$	2,057,502

Credit Exposures by Internally Assigned Grades

June 30, 2021	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	321,890	$	2,466	$	4,515	$	—	$	328,871
Commercial Real Estate:
Owner Occupied		255,219		6,744		9,704		—		271,667
Non-Owner Occupied		676,152		50,669		36,162		—		762,983
Residential Real Estate		77,427		739		4,595		—		82,761
Real Estate Construction		172,910		279		491		—		173,680
Farm Real Estate		26,882		211		1,523		—		28,616
Consumer and Other		824		—		24		—		848
Total	$	1,531,304	$	61,108	$	57,014	$	—	$	1,649,426

December 31, 2020	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	401,636	$	4,472	$	3,768	$	—	$	409,876
Commercial Real Estate:
Owner Occupied		248,316		19,429		10,668		—		278,413
Non-Owner Occupied		604,909		58,270		41,893		—		705,072
Residential Real Estate		81,409		668		5,524		—		87,601
Real Estate Construction		158,207		962		492		—		159,661
Farm Real Estate		30,486		216		2,400		—		33,102
Consumer and Other		833		—		33		—		866
Total	$	1,525,796	$	84,017	$	64,778	$	—	$	1,674,591

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.

June 30, 2021	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	343,970	$	14,688	$	11,112	$	369,770
Nonperforming		—		—		—		—
Total	$	343,970	$	14,688	$	11,112	$	369,770

December 31, 2020	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	354,987	$	15,948	$	11,976	$	382,911
Nonperforming		—		—		—		—
Total	$	354,987	$	15,948	$	11,976	$	382,911

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of June 30, 2021 and December 31, 2020.

June 30, 2021	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	$	11	$	20	$	—	$	31	$	328,840	$	—	$	328,871	$	—
Commercial Real Estate:
Owner Occupied		233		—		60		293		271,374		—		271,667		—
Non-Owner Occupied		—		—		5		5		762,978		—		762,983		—
Residential Real Estate		361		378		721		1,460		424,892		379		426,731		—
Real Estate Construction		—		—		—		—		188,368		—		188,368		—
Farm Real Estate		—		—		—		—		28,616		—		28,616		—
Consumer and Other		50		—		10		60		11,900		—		11,960		—
Total	$	655	$	398	$	796	$	1,849	$	2,016,968	$	379	$	2,019,196	$	—

December 31, 2020	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	$	117	$	25	$	50	$	192	$	409,684	$	—	$	409,876	$	—
Commercial Real Estate:
Owner Occupied		—		4		102		106		278,307		—		278,413		—
Non-Owner Occupied		—		—		6		6		705,066		—		705,072		—
Residential Real Estate		1,059		867		1,314		3,240		438,960		388		442,588		—
Real Estate Construction		—		—		—		—		175,609		—		175,609		—
Farm Real Estate		—		—		4		4		33,098		—		33,102		—
Consumer and Other		59		1		16		76		12,766		—		12,842		—
Total	$	1,235	$	897	$	1,492	$	3,624	$	2,053,490	$	388	$	2,057,502	$	—

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 June 30, 2021 and December 31, 2020.

	June 30, 2021		December 31, 2020
Commercial & Agriculture	$	548	$	139
Commercial Real Estate:
Owner Occupied		292		964
Non-Owner Occupied		5		6
Residential Real Estate		3,126		3,893
Real Estate Construction		6		7
Farm Real Estate		70		85
Consumer and Other		22		31
Total	$	4,069	$	5,125

Impaired Loans Excluding Purchased-Credit Impaired ("PCI") Loans

The following table includes the recorded investment and unpaid principal balances for impaired loans, excluding purchased-credit impaired (“PCI”) loans, with the associated allowance amount, if applicable, as of June 30, 2021 and December 31, 2020.

	June 30, 2021						December 31, 2020
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied	$	86	$	86			$	757	$	757
Non-Owner Occupied		30		30				48		48
Residential Real Estate		526		551				915		940
Farm Real Estate		592		592				618		618
Total		1,234		1,259				2,338		2,363
With an allowance recorded:
Commercial & Agriculture		—		—	$	—		74		74	$	73
Commercial Real Estate:
Owner Occupied		213		213		8		223		223		5
Residential Real Estate		31		35		18		31		35		29
Total		244		248		26		328		332		107
Total:
Commercial & Agriculture		—		—		—		74		74		73
Commercial Real Estate:
Owner Occupied		299		299		8		980		980		5
Non-Owner Occupied		30		30		—		48		48		—
Residential Real Estate		557		586		18		946		975		29
Farm Real Estate		592		592		—		618		618		—
Total	$	1,478	$	1,507	$	26	$	2,666	$	2,695	$	107

The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three- and six-month periods ended June 30, 2021 and 2020.

	June 30, 2021				June 30, 2020
For the three months ended	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial Real Estate—Owner Occupied	$	304	$	5	$	409	$	7
Commercial Real Estate—Non-Owner Occupied		34		—		369		5
Residential Real Estate		563		8		1,462		11
Farm Real Estate		599		6		659		6
Total	$	1,500	$	19	$	2,899	$	29

	June 30, 2021				June 30, 2020
For the six months ended	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	25	$	—	$	122	$	4
Commercial Real Estate—Owner Occupied		529		11		415		14
Commercial Real Estate—Non-Owner Occupied		39		1		371		10
Residential Real Estate		690		16		1,563		24
Farm Real Estate		605		12		662		13
Total	$	1,888	$	40	$	3,133	$	65

Schedule of Changes in Accretable Yield for PCI Loans

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

	For the Three-Month Period Ended June 30, 2021			For the Three-Month Period Ended June 30, 2020
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	224		$	206
Acquisition of PCI loans		—			—
Accretion		(55	)		(7	)
Transfer from non-accretable to accretable		55			6
Balance at end of period	$	224		$	205

	For the Six-Month Period Ended June 30, 2021			For the Six-Month Period Ended June 30, 2020
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	225		$	255
Acquisition of PCI loans		—			—
Accretion		(56	)		(169	)
Transfer fron non-accretable to accretable		55			119
Balance at end of period	$	224		$	205

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 June 30, 2021		At December 31, 2020
	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	$	622	$	687
Carrying amount		379		388

CARES Act [Member]

Schedule of Loan Modifications

Details with respect to loan modifications that remain on deferred status are as follows:

Type of Loan	Number of Loans		Balance		Percent of Loans Outstanding
			(In thousands)
Commercial & Agriculture		13	$	4,222		0.21	%
Commercial Real Estate:
Owner Occupied		5		8,185		0.41	%
Non-Owner Occupied		15		37,544		1.86	%
Real Estate Construction		1		485		0.02	%
Total		34	$	50,436		2.50	%