Loans (Tables)

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

Major Classifications of Loans

Major classifications of loans at March 31, 2018 and December 31, 2017 are as follows (in thousands):

	March 31, 2018		December 31, 2017
Commercial and industrial	$	37,118	$	36,057
Commercial, secured by real estate	542,890		527,947
Residential real estate	246,487		251,582
Consumer	17,176		17,450
Agricultural	12,217		15,194
Other loans, including deposit overdrafts	506		539
	856,394		848,769
Deferred origination costs, net	263		291
	856,657		849,060
Less allowance for loan losses	3,529		3,403
Loans, net	$	853,128	$	845,657

Non-accrual, Past Due, and Accruing Restructured Loans

Non-accrual, past-due, and accruing restructured loans as of March 31, 2018 and December 31, 2017 are as follows (in thousands):

	March 31, 2018		December 31, 2017
Non-accrual loans:
Commercial and industrial	$	—	$	—
Commercial, secured by real estate	1,876		2,183
Residential real estate	691		604
Consumer	—		—
Agricultural	177		178
Total non-accrual loans	2,744		2,965
Past-due 90 days or more and still accruing	146		—
Total non-accrual and past-due 90 days or more and still accruing	2,890		2,965
Accruing restructured loans	10,366		10,469
Total	$	13,256	$	13,434

Allowance for Loan Losses and Recorded Investments in Loans

A breakdown of the allowance for loan losses and the loan portfolio by loan segment at March 31, 2018 and December 31, 2017 are as follows (in thousands):

	Commercial & Industrial		Commercial, Secured by Real Estate		Residential Real Estate		Consumer		Agricultural		Other		Total
March 31, 2018
Allowance for loan losses:
Individually evaluated for impairment	$	11	$	4	$	189	$	12	$	—	$	—	$	216
Collectively evaluated for impairment	382		2,139		680		66		44		2		3,313
Acquired credit impaired loans	—		—		—		—		—		—		—
Balance, end of period	$	393	$	2,143	$	869	$	78	$	44	$	2	$	3,529
Loans:
Individually evaluated for impairment	$	294	$	10,879	$	1,468	$	46	$	178	$	—	$	12,865
Collectively evaluated for impairment	36,603		527,656		243,526		17,240		12,053		94		837,172
Acquired credit impaired loans	258		3,989		1,961		—		—		412		6,620
Balance, end of period	$	37,155	$	542,524	$	246,955	$	17,286	$	12,231	$	506	$	856,657
December 31, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	8	$	146	$	29	$	8	$	—	$	—	$	191
Collectively evaluated for impairment	370		2,032		688		68		53		1		3,212
Acquired credit impaired loans	—		—		—		—		—		—		—
Balance, end of period	$	378	$	2,178	$	717	$	76	$	53	$	1	$	3,403
Loans:
Individually evaluated for impairment	$	303	$	11,289	$	1,351	$	47	$	177	$	—	$	13,167
Collectively evaluated for impairment	34,792		512,259		248,674		17,516		15,033		137		828,411
Acquired credit impaired loans	1,008		4,048		2,024		—		—		402		7,482
Balance, end of period	$	36,103	$	527,596	$	252,049	$	17,563	$	15,210	$	539	$	849,060

The allowance for loan losses for the three months ended March 31, 2018 and 2017 are as follows (in thousands):

	Commercial & Industrial			Commercial, Secured by Real Estate			Residential Real Estate			Consumer			Agricultural			Other			Total
Three Months Ended March 31, 2018
Balance, beginning of year	$	378		$	2,178		$	717		$	76		$	53		$	1		$	3,403
Provision charged to expenses	15			(131		)	186			8			(9		)	10			79
Losses charged off	—			(29		)	(35		)	(11		)	—			(31		)	(106		)
Recoveries	—			125			1			5			—			22			153
Balance, end of period	$	393		$	2,143		$	869		$	78		$	44		$	2		$	3,529
Three Months Ended March 31, 2017
Balance, beginning of year	$	350		$	2,179		$	885		$	96		$	60		$	5		3,575
Provision charged to expenses	(2		)	90			(107		)	23			6			5			15
Losses charged off	—			(262		)	(17		)	(45		)	—			(30		)	(354		)
Recoveries	5			—			48			17			—			22			92
Balance, end of period	$	353		$	2,007		$	809		$	91		$	66		$	2		$	3,328

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

A breakdown of the loan portfolio by credit quality indicators at March 31, 2018 and December 31, 2017 is as follows (in thousands):

	Pass		OAEM		Substandard		Doubtful		Total
March 31, 2018
Commercial & industrial	$	36,716	$	155	$	284	$	—	$	37,155
Commercial, secured by real estate	523,298		796		18,430		—		542,524
Residential real estate	244,998		—		1,957		—		246,955
Consumer	17,252		—		34		—		17,286
Agricultural	11,669		—		562		—		12,231
Other	506		—		—		—		506
Total	$	834,439	$	951	$	21,267	$	—	$	856,657
December 31, 2017
Commercial & industrial	$	35,683	$	176	$	244	$	—	$	36,103
Commercial, secured by real estate	506,833		2,180		18,583		—		527,596
Residential real estate	250,039		—		2,010		—		252,049
Consumer	17,522		—		41		—		17,563
Agricultural	14,233		—		977		—		15,210
Other	539		—		—		—		539
Total	$	824,849	$	2,356	$	21,855	$	—	$	849,060

Loan Portfolio Aging Analysis

A loan portfolio aging analysis at March 31, 2018 and December 31, 2017 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
March 31, 2018
Commercial & industrial	$	6	$	—	$	—	$	6	$	37,149	$	37,155	$	—
Commercial, secured by real estate	59		—		335		394		542,130		542,524		—
Residential real estate	420		77		576		1,073		245,882		246,955		146
Consumer	30		8		—		38		17,248		17,286		—
Agricultural	185		—		177		362		11,869		12,231		—
Other	42		—		—		42		464		506		—
Total	$	742	$	85	$	1,088	$	1,915	$	854,742	$	856,657	$	146
December 31, 2017
Commercial & industrial	$	—	$	—	$	—	$	—	$	36,103	$	36,103	$	—
Commercial, secured by real estate	124		—		598		722		526,874		527,596		—
Residential real estate	362		135		496		993		251,056		252,049		—
Consumer	29		2		—		31		17,532		17,563		—
Agricultural	—		—		177		177		15,033		15,210		—
Other	82		—		—		82		457		539		—
Total	$	597	$	137	$	1,271	$	2,005	$	847,055	$	849,060	$	—

Impaired Loans

Impaired loans, including acquired credit impaired loans, at March 31, 2018 and December 31, 2017 are as follows (in thousands):

	March 31, 2018						December 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & industrial	$	264	$	348	$	—	$	1,015	$	1,100	$	—
Commercial, secured by real estate	14,713		15,504		—		12,677		13,608		—
Residential real estate	2,688		3,413		—		2,822		3,516		—
Consumer	6		6		—		6		6		—
Agricultural	178		178		—		177		177		—
Other	412		553		—		402		554		—
Total	$	18,261	$	20,002	$	—	$	17,099	$	18,961	$	—
With an allowance recorded:
Commercial & industrial	$	288	$	288	$	11	$	296	$	301	$	8
Commercial, secured by real estate	155		155		4		2,660		2,660		146
Residential real estate	741		772		189		553		572		29
Consumer	40		40		12		41		41		8
Agricultural	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	1,224	$	1,255	$	216	$	3,550	$	3,574	$	191
Total:
Commercial & industrial	$	552	$	636	$	11	$	1,311	$	1,401	$	8
Commercial, secured by real estate	14,868		15,659		4		15,337		16,268		146
Residential real estate	3,429		4,185		189		3,375		4,088		29
Consumer	46		46		12		47		47		8
Agricultural	178		178		—		177		177		—
Other	412		553		—		402		554		—
Total	$	19,485	$	21,257	$	216	$	20,649	$	22,535	$	191

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 months ended March 31, 2018 and 2017 (in thousands):

	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial & industrial	$	639	$	11	$	261	$	26
Commercial, secured by real estate	14,991		196		15,859		186
Residential real estate	2,791		45		3,219		89
Consumer	6		—		21		—
Agricultural	177		—		334		—
Other	407		11		463		18
Total	$	19,011	$	263	$	20,157	$	319
With an allowance recorded:
Commercial & industrial	$	291	$	4	$	322	$	4
Commercial, secured by real estate	157		3		1,931		24
Residential real estate	755		9		704		8
Consumer	41		1		52		1
Agricultural	—		—		—		—
Other	—		—		—		—
Total	$	1,244	$	17	$	3,009	$	37
Total:
Commercial & industrial	$	930	$	15	$	583	$	30
Commercial, secured by real estate	15,148		199		17,790		210
Residential real estate	3,546		54		3,923		97
Consumer	47		1		73		1
Agricultural	177		—		334		—
Other	407		11		463		18
Total	$	20,255	280		$	23,166	$	356

Troubled Debt Restructurings

Loan modifications that were classified as troubled debt restructurings during the three months ended March 31, 2018 and 2017 are as follows (dollars in thousands):

	2018					2017
	Number of Loans	Pre-Modification Recorded Balance		Post-Modification Recorded Balance		Number of Loans	Pre-Modification Recorded Balance		Post-Modification Recorded Balance
Commercial & industrial	—	$	—	$	—	—	$	—	$	—
Commercial, secured by real estate	—	—		—		—	—		—
Residential real estate	—	—		—		1	18		9
Consumer	—	—		—		1	14		14
Total	—	$	—	$	—	2	$	32	$	23

Schedule of Troubled Debt Restructurings by Modification Type

Post-modification balances of newly restructured troubled debt by type of modification for the three months ended March 31, 2018 and 2017 were as follows (in thousands):

	Term Modification		Rate Modification		Interest Only		Principal Forgiveness		Combination		Total Modifications
Three Months Ended March 31, 2018
Commercial & industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial, secured by real estate	—		—		—		—		—		—
Residential real estate	—		—		—		—		—		—
Consumer	—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	—
Three Months Ended March 31, 2017
Commercial & industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial, secured by real estate	—		—		—		—		—		—
Residential real estate	—		—		—		9		—		9
Consumer	14		—		—		—		—		14
Total	$	14	$	—	$	—	$	9	$	—	$	23