Loans (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Major Classifications of Loans

Major classifications of loans at June 30, 2016 and December 31, 2015 are as follows (in thousands):

	June 30, 2016		December 31, 2015
Commercial and industrial	$	45,153	45,275
Commercial, secured by real estate	455,654		419,633
Residential real estate	266,625		273,139
Consumer	18,545		18,510
Agricultural	13,605		13,479
Other loans, including deposit overdrafts	635		665
	800,217		770,701
Deferred net origination costs (fees)	248		237
	800,465		770,938
Less allowance for loan losses	3,373		3,129
Loans, net	$	797,092	767,809

Non-accrual, Past Due, and Accruing Restructured Loans

Non-accrual, past-due, and accruing restructured loans as of June 30, 2016 and December 31, 2015 are as follows (in thousands):

	June 30, 2016		December 31, 2015
Non-accrual loans:
Commercial and industrial	$	—	—
Commercial, secured by real estate	1,362		876
Residential real estate	951		799
Consumer	—		—
Agricultural	384		48
Total non-accrual loans	2,697		1,723
Past-due 90 days or more and still accruing	369		559
Total non-accrual and past-due 90 days or more and still accruing	3,066		2,282
Accruing restructured loans	13,855		13,723
Total	$	16,921	16,005

Allowance for Loan Losses and Recorded Investments in Loans

The allowance for loan losses for the three and six months ended June 30, 2016 and 2015 are as follows (in thousands):

	Commercial & Industrial			Commercial, Secured by Real Estate		Residential Real Estate		Consumer		Agricultural		Other		Total
Three Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning of period	$	247		1,868		896		81		56		2		3,150
Provision charged to expenses	74			320		(1	)	(12	)	6		9		396
Losses charged off	(49		)	(117	)	(14	)	(9	)	—		(19	)	(208	)
Recoveries	1			—		4		20		—		10		35
Balance, end of period	$	273		2,071		885		80		62		2		3,373
Six Months Ended June 30, 2016
Allowance for loan losses:
Balance, beginning of year	$	244		1,908		854		54		66		3		3,129
Provision charged to expenses	74			285		65		49		(4	)	17		486
Losses charged off	(49		)	(140	)	(42	)	(53	)	—		(42	)	(326	)
Recoveries	4			18		8		30		—		24		84
Balance, end of period	$	273		2,071		885		80		62		2		3,373
Three Months Ended June 30, 2015
Allowance for loan losses:
Balance, beginning of period	$	131		1,640		934		54		77		1		2,837
Provision charged to expenses	41			552		53		16		6		9		677
Losses charged off	(11		)	(633	)	(115	)	(18	)	(67	)	(12	)	(856	)
Recoveries	1			96		42		10		67		5		221
Balance, end of period	$	162		1,655		914		62		83		3		2,879
Six Months Ended June 30, 2015
Allowance for loan losses:
Balance, beginning of year	$	129		1,990		926		63		11		2		3,121
Provision charged to expenses	42			515		117		(13	)	72		13		746
Losses charged off	(11		)	(946	)	(197	)	(29	)	(67	)	(26	)	(1,276	)
Recoveries	2			96		68		41		67		14		288
Balance, end of period	$	162		1,655		914		62		83		3		2,879

A breakdown of the allowance for loan losses and the loan portfolio by loan segment at June 30, 2016 and December 31, 2015 are as follows (in thousands):

	Commercial & Industrial		Commercial, Secured by Real Estate	Residential Real Estate	Consumer	Agricultural	Other	Total
June 30, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	6	195	90	9	—	—	300
Collectively evaluated for impairment	267		1,875	795	71	62	2	3,072
Acquired credit impaired loans	—		1	—	—	—	—	1
Balance, end of period	$	273	2,071	885	80	62	2	3,373
Loans:
Individually evaluated for impairment	$	354	12,672	1,584	47	384	—	15,041
Collectively evaluated for impairment	43,452		436,405	262,558	18,571	13,230	164	774,380
Acquired credit impaired loans	1,363		6,249	2,941	20	—	471	11,044
Balance, end of period	$	45,169	455,326	267,083	18,638	13,614	635	800,465
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	9	306	48	—	—	—	363
Collectively evaluated for impairment	235		1,602	806	54	66	3	2,766
Acquired credit impaired loans	—		—	—	—	—	—	—
Balance, end of period	$	244	1,908	854	54	66	3	3,129
Loans:
Individually evaluated for impairment	$	370	12,351	1,541	56	—	—	14,318
Collectively evaluated for impairment	43,726		399,092	269,001	18,516	13,438	179	743,952
Acquired credit impaired loans	1,191		7,877	3,039	27	48	486	12,668
Balance, end of period	$	45,287	419,320	273,581	18,599	13,486	665	770,938

Analysis of the Company's Loan Portfolio by Credit Quality Indicators

A breakdown of the loan portfolio by credit quality indicators at June 30, 2016 and December 31, 2015 is as follows (in thousands):

	Pass		OAEM	Substandard	Doubtful	Total
June 30, 2016
Commercial & industrial	$	44,477	39	653	—	45,169
Commercial, secured by real estate	438,822		4,487	12,017	—	455,326
Residential real estate	261,423		998	4,662	—	267,083
Consumer	18,528		—	110	—	18,638
Agricultural	12,037		850	727	—	13,614
Other	635		—	—	—	635
Total	$	775,922	6,374	18,169	—	800,465
December 31, 2015
Commercial & industrial	$	44,596	—	691	—	45,287
Commercial, secured by real estate	397,938		9,316	12,066	—	419,320
Residential real estate	267,567		1,935	4,079	—	273,581
Consumer	18,528		—	71	—	18,599
Agricultural	12,246		850	390	—	13,486
Other	665		—	—	—	665
Total	$	741,540	12,101	17,297	—	770,938

Loan Portfolio Aging Analysis

A loan portfolio aging analysis at June 30, 2016 and December 31, 2015 is as follows (in thousands):

	30-59 Days Past Due		60-89 Days Past Due	Greater Than 90 Days Past Due	Total Past Due	Current	Total Loans Receivable	Total Loans Greater Than 90 Days and Accruing
June 30, 2016
Commercial & industrial	$	15	—	—	15	45,154	45,169	—
Commercial, secured by real estate	—		—	1,362	1,362	453,964	455,326	—
Residential real estate	590		436	1,140	2,166	264,917	267,083	335
Consumer	16		22	34	72	18,566	18,638	34
Agricultural	44		—	384	428	13,186	13,614	—
Other	97		—	—	97	538	635	—
Total	$	762	458	2,920	4,140	796,325	800,465	369
December 31, 2015
Commercial & industrial	$	—	—	—	—	45,287	45,287	—
Commercial, secured by real estate	73		81	876	1,030	418,290	419,320	—
Residential real estate	777		198	1,124	2,099	271,482	273,581	516
Consumer	62		7	43	112	18,487	18,599	43
Agricultural	—		—	—	—	13,486	13,486	—
Other	109		—	—	109	556	665	—
Total	$	1,021	286	2,043	3,350	767,588	770,938	559

Impaired Loans

Impaired loans, including acquired credit impaired loans, at June 30, 2016 and December 31, 2015 are as follows (in thousands):

	Recorded Investment		Unpaid Principal Balance	Related Allowance
June 30, 2016
With no related allowance recorded:
Commercial & industrial	$	1,362	1,635	—
Commercial, secured by real estate	16,289		18,063	—
Residential real estate	3,808		4,980	—
Consumer	33		48	—
Agricultural	384		384	—
Other	471		665	—
Total	$	22,347	25,775	—
With an allowance recorded:
Commercial & industrial	$	355	354	6
Commercial, secured by real estate	2,632		2,709	196
Residential real estate	717		855	90
Consumer	34		34	9
Agricultural	—		—	—
Other	—		—	—
Total	$	3,738	3,952	301
Total:
Commercial & industrial	$	1,717	1,989	6
Commercial, secured by real estate	18,921		20,772	196
Residential real estate	4,525		5,835	90
Consumer	67		82	9
Agricultural	384		384	—
Other	471		665	—
Total	$	26,085	29,727	301
December 31, 2015
With no related allowance recorded:
Commercial & industrial	$	1,205	1,500	—
Commercial, secured by real estate	16,345		18,335	—
Residential real estate	3,734		5,055	—
Consumer	81		109	—
Agricultural	48		151	—
Other	486		701	—
Total	$	21,899	25,851	—
With an allowance recorded:
Commercial & industrial	$	356	356	9
Commercial, secured by real estate	3,883		4,014	306
Residential real estate	846		958	48
Consumer	2		1	—
Agricultural	—		—	—
Other	—		—	—
Total	$	5,087	5,329	363
Total:
Commercial & industrial	$	1,561	1,856	9
Commercial, secured by real estate	20,228		22,349	306
Residential real estate	4,580		6,013	48
Consumer	83		110	—
Agricultural	48		151	—
Other	486		701	—
Total	$	26,986	31,180	363

The following presents information related to the average recorded investment and interest income recognized on impaired loans, including acquired credit impaired loans, for the three and six months ended June 30, 2016 and 2015 (in thousands):

	2016			2015
	Average Recorded Investment		Interest Income Recognized	Average Recorded Investment	Interest Income Recognized
Three Months Ended June 30,
With no related allowance recorded:
Commercial & industrial	$	964	26	1,609	60
Commercial, secured by real estate	17,292		278	19,259	742
Residential real estate	3,855		123	4,175	138
Consumer	40		8	93	3
Agricultural	423		123	110	35
Other	495		20	516	20
Total	$	23,069	578	25,762	998
With an allowance recorded:
Commercial & industrial	$	358	5	389	6
Commercial, secured by real estate	2,651		20	3,746	29
Residential real estate	780		8	884	10
Consumer	34		1	18	—
Agricultural	—		—	—	—
Other	—		—	—	—
Total	$	3,823	34	5,037	45
Total:
Commercial & industrial	$	1,322	31	1,998	66
Commercial, secured by real estate	19,943		298	23,005	771
Residential real estate	4,635		131	5,059	148
Consumer	74		9	111	3
Agricultural	423		123	110	35
Other	495		20	516	20
Total	$	26,892	612	30,799	1,043
Six Months Ended June 30,
With no related allowance recorded:
Commercial & industrial	$	964	55	1,437	82
Commercial, secured by real estate	17,460		660	20,317	1,099
Residential real estate	3,823		194	4,305	221
Consumer	54		15	101	7
Agricultural	422		135	107	132
Other	495		40	515	39
Total	$	23,218	1,099	26,782	1,580
With an allowance recorded:
Commercial & industrial	$	362	10	393	11
Commercial, secured by real estate	2,671		42	3,694	56
Residential real estate	760		16	862	20
Consumer	34		2	18	1
Agricultural	—		—	—	—
Other	—		—	—	—
Total	$	3,827	70	4,967	88
Total:
Commercial & industrial	$	1,326	65	1,830	93
Commercial, secured by real estate	20,131		702	24,011	1,155
Residential real estate	4,583		210	5,167	241
Consumer	88		17	119	8
Agricultural	422		135	107	132
Other	495		40	515	39
Total	$	27,045	1,169	31,749	1,668

Troubled Debt Restructurings

Loan modifications that were classified as troubled debt restructurings during the three and six months ended June 30, 2016 and 2015 are as follows (dollars in thousands):

	2016				2015
	Number of Loans	Pre-Modification Recorded Balance		Post-Modification Recorded Balance	Number of Loans	Pre-Modification Recorded Balance		Post-Modification Recorded Balance
Three Months Ended June 30,
Commercial & industrial	—	$	—	—	1	$	72	74
Commercial, secured by real estate	—	—		—	—	—		—
Residential real estate	1	27		27	1	50		50
Consumer	1	10		10	—	—		—
Total	2	$	37	37	2	$	122	124
Six Months Ended June 30,
Commercial & industrial	—	$	—	—	1	$	72	74
Commercial, secured by real estate	1	$	299	372	—	—		—
Residential real estate	2	45		45	4	137		137
Consumer	2	27		27	—	—		—
Total	5	$	371	444	5	$	209	211