Loans (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Major Classifications of Loans

Major classifications of loans at June 30, 2018 and December 31, 2017 are as follows (in thousands):

	June 30, 2018		December 31, 2017
Commercial and industrial	$	81,778	$	36,057
Commercial, secured by real estate	705,978		527,947
Residential real estate	339,435		251,582
Consumer	17,705		17,450
Agricultural	13,390		15,194
Other loans, including deposit overdrafts	583		539
	1,158,869		848,769
Deferred origination costs, net	229		291
	1,159,098		849,060
Less allowance for loan losses	3,603		3,403
Loans, net	$	1,155,495	$	845,657

Non-accrual, Past Due, and Accruing Restructured Loans

Non-accrual, past-due, and accruing restructured loans as of June 30, 2018 and December 31, 2017 are as follows (in thousands):

	June 30, 2018		December 31, 2017
Non-accrual loans:
Commercial and industrial	$	—	$	—
Commercial, secured by real estate	3,050		2,183
Residential real estate	838		604
Consumer	—		—
Agricultural	177		178
Total non-accrual loans	4,065		2,965
Past-due 90 days or more and still accruing	5		—
Total non-accrual and past-due 90 days or more and still accruing	4,070		2,965
Accruing restructured loans	10,228		10,469
Total	$	14,298	$	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 June 30, 2018 and December 31, 2017 are as follows (in thousands):

	Commercial & Industrial		Commercial, Secured by Real Estate		Residential Real Estate		Consumer		Agricultural		Other		Total
June 30, 2018
Allowance for loan losses:
Individually evaluated for impairment	$	10	$	3	$	26	$	—	$	—	$	—	$	39
Collectively evaluated for impairment	397		2,380		664		70		52		1		3,564
Acquired credit impaired loans	—		—		—		—		—		—		—
Balance, end of period	$	407	$	2,383	$	690	$	70	$	52	$	1	$	3,603
Loans:
Individually evaluated for impairment	$	285	$	11,748	$	1,366	$	44	$	178	$	—	$	13,621
Collectively evaluated for impairment	80,154		688,669		335,934		17,771		13,232		213		1,135,973
Acquired credit impaired loans	1,378		5,171		2,585		—		—		370		9,504
Balance, end of period	$	81,817	$	705,588	$	339,885	$	17,815	$	13,410	$	583	$	1,159,098
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 and six months ended June 30, 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 June 30, 2018
Balance, beginning of period	$	393		$	2,143		$	869		$	78		$	44		$	2		$	3,529
Provision charged to expenses	14			189			—			(1		)	8			14			224
Losses charged off	—			—			(192		)	(10		)	—			(30		)	(232		)
Recoveries	—			51			13			3			—			15			82
Balance, end of period	$	407		$	2,383		$	690		$	70		$	52		$	1		$	3,603
Six Months Ended June 30, 2018
Balance, beginning of year	$	378		$	2,178		$	717		$	76		$	53		$	1		$	3,403
Provision charged to expenses	29			58			186			7			(1		)	24			303
Losses charged off	—			(29		)	(227		)	(21		)	—			(61		)	(338		)
Recoveries	—			176			14			8			—			37			235
Balance, end of period	$	407		$	2,383		$	690		$	70		$	52		$	1		$	3,603
Three Months Ended June 30, 2017
Balance, beginning of period	$	353		$	2,007		$	809		$	91		$	66		$	2		$	3,328
Provision charged to expenses	(90		)	206			109			(20		)	(5		)	22			222
Losses charged off	—			(82		)	(118		)	(9		)	—			(31		)	(240		)
Recoveries	10			5			22			24			—			11			72
Balance, end of period	$	273		$	2,136		$	822		$	86		$	61		$	4		$	3,382
Six Months Ended June 30, 2017
Balance, beginning of year	$	350		$	2,179		$	885		$	96		$	60		$	5		3,575
Provision charged to expenses	(92		)	296			2			3			1			27			237
Losses charged off	—			(344		)	(135		)	(54		)	—			(61		)	(594		)
Recoveries	15			5			70			41			—			33			164
Balance, end of period	$	273		$	2,136		$	822		$	86		$	61		$	4		$	3,382

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

A breakdown of the loan portfolio by credit quality indicators at June 30, 2018 and December 31, 2017 is as follows (in thousands):

	Pass		OAEM		Substandard		Doubtful		Total
June 30, 2018
Commercial & industrial	$	81,341	$	134	$	342	$	—	$	81,817
Commercial, secured by real estate	685,745		790		18,838		215		705,588
Residential real estate	336,980		—		2,905		—		339,885
Consumer	17,788		—		27		—		17,815
Agricultural	13,233		—		177		—		13,410
Other	583		—		—		—		583
Total	$	1,135,670	$	924	$	22,289	$	215	$	1,159,098
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 June 30, 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
June 30, 2018
Commercial & industrial	$	3	$	24	$	—	$	27	$	81,790	$	81,817	$	—
Commercial, secured by real estate	35		—		1,531		1,566		704,022		705,588		—
Residential real estate	846		96		753		1,695		338,190		339,885		—
Consumer	23		20		5		48		17,767		17,815		5
Agricultural	—		—		177		177		13,233		13,410		—
Other	161		—		—		161		422		583		—
Total	$	1,068	$	140	$	2,466	$	3,674	$	1,155,424	$	1,159,098	$	5
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 June 30, 2018 and December 31, 2017 are as follows (in thousands):

	June 30, 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	$	1,383	$	2,619	$	—	$	1,015	$	1,100	$	—
Commercial, secured by real estate	16,766		18,550		—		12,677		13,608		—
Residential real estate	3,396		4,277		—		2,822		3,516		—
Consumer	21		21		—		6		6		—
Agricultural	178		178		—		177		177		—
Other	370		515		—		402		554		—
Total	$	22,114	$	26,160	$	—	$	17,099	$	18,961	$	—
With an allowance recorded:
Commercial & industrial	$	280	$	285	$	10	$	296	$	301	$	8
Commercial, secured by real estate	153		153		3		2,660		2,660		146
Residential real estate	555		581		26		553		572		29
Consumer	23		23		—		41		41		8
Agricultural	—		—		—		—		—		—
Other	—		—		—		—		—		—
Total	$	1,011	$	1,042	$	39	$	3,550	$	3,574	$	191
Total:
Commercial & industrial	$	1,663	$	2,904	$	10	$	1,311	$	1,401	$	8
Commercial, secured by real estate	16,919		18,703		3		15,337		16,268		146
Residential real estate	3,951		4,858		26		3,375		4,088		29
Consumer	44		44		—		47		47		8
Agricultural	178		178		—		177		177		—
Other	370		515		—		402		554		—
Total	$	23,125	$	27,202	$	39	$	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 and six months ended June 30, 2018 and 2017 (in thousands):

	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended June 30,
With no related allowance recorded:
Commercial & industrial	$	741	$	15	$	261	$	10
Commercial, secured by real estate	15,281		193		16,488		269
Residential real estate	2,934		49		3,351		47
Consumer	10		—		30		1
Agricultural	178		—		217		—
Other	391		11		463		14
Total	$	19,535	$	268	$	20,810	$	341
With an allowance recorded:
Commercial & industrial	$	283	$	4	$	314	$	4
Commercial, secured by real estate	154		3		1,087		25
Residential real estate	566		7		603		8
Consumer	23		—		44		1
Agricultural	—		—		—		—
Other	—		—		—		—
Total	$	1,026	$	14	$	2,048	$	38
Total:
Commercial & industrial	$	1,024	$	19	$	575	$	14
Commercial, secured by real estate	15,435		196		17,575		294
Residential real estate	3,500		56		3,954		55
Consumer	33		—		74		2
Agricultural	178		—		217		—
Other	391		11		463		14
Total	$	20,561	$	282	$	22,858	$	379
Six Months Ended June 30,
With no related allowance recorded:
Commercial & industrial	$	805	$	25	$	261	$	36
Commercial, secured by real estate	15,166		389		16,736		468
Residential real estate	2,950		97		3,332		136
Consumer	15		1		31		1
Agricultural	178		—		267		—
Other	394		22		463		32
Total	$	19,508	$	534	$	21,090	$	673
With an allowance recorded:
Commercial & industrial	$	288	$	9	$	318	$	9
Commercial, secured by real estate	155		6		970		33
Residential real estate	571		15		612		16
Consumer	24		—		43		2
Agricultural	—		—		—		—
Other	—		—		—		—
Total	$	1,038	$	30	$	1,943	$	60
Total:
Commercial & industrial	$	1,093	$	34	$	579	$	45
Commercial, secured by real estate	15,321		395		17,706		501
Residential real estate	3,521		112		3,944		152
Consumer	39		1		74		3
Agricultural	178		—		267		—
Other	394		22		463		32
Total	$	20,546	564		$	23,033	$	733