LOANS (Tables)

3 Months Ended

Mar. 31, 2016

Composition of Loan Portfolio, by Loan Class

The composition of the Company's loan portfolio, by loan class, is as follows:

($ in thousands)	March 31, 2016			December 31, 2015

Commercial	$	130,414		$	136,095
Commercial Real Estate		316,950			292,316
Agriculture		77,185			84,813
Residential Mortgage		41,412			43,375
Residential Construction		16,760			12,110
Consumer		43,386			45,386
		626,107			614,095
Allowance for loan losses		(9,607	)		(9,251	)
Net deferred origination fees and costs		1,034			1,009
Loans, net	$	617,534		$	605,853

Non-accrual Loans by Loan Class

The Company's non-accrual loans by loan class, as of March 31, 2016 and December 31, 2015, were as follows:

($ in thousands)	March 31, 2016		December 31, 2015

Commercial	$	275	$	112
Commercial Real Estate		600		964
Agriculture		—		—
Residential Mortgage		1,083		1,092
Residential Construction		—		—
Consumer		70		560
	$	2,028	$	2,728

Age Analysis of Past Due Loans, Segregated by Loan Class

An age analysis of past due loans, segregated by loan class, as of March 31, 2016 and December 31, 2015 is as follows:

($ in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Total Loans
March 31, 2016
Commercial	$	108	$	166	$	57	$	331	$	130,083	$	130,414
Commercial Real Estate		493		5,426		—		5,919		311,031		316,950
Agriculture		—		—		—		—		77,185		77,185
Residential Mortgage		117		—		—		117		41,295		41,412
Residential Construction		—		—		—		—		16,760		16,760
Consumer		—		—		12		12		43,374		43,386
Total	$	718	$	5,592	$	69	$	6,379	$	619,728	$	626,107

December 31, 2015
Commercial	$	218	$	—	$	57	$	275	$	135,820	$	136,095
Commercial Real Estate		130		—		232		362		291,954		292,316
Agriculture		—		—		—		—		84,813		84,813
Residential Mortgage		—		—		—		—		43,375		43,375
Residential Construction		—		—		—		—		12,110		12,110
Consumer		19		5		429		453		44,933		45,386
Total	$	367	$	5	$	718	$	1,090	$	613,005	$	614,095

Impaired Loans, Segregated by Loan Class

Impaired loans, segregated by loan class, as of March 31, 2016 and December 31, 2015 were as follows:

($ in thousands)	Unpaid Contractual Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance
March 31, 2016
Commercial	$	1,076	$	82	$	980	$	1,062	$	188
Commercial Real Estate		925		600		291		891		41
Agriculture		—		—		—		—		—
Residential Mortgage		3,939		1,083		2,461		3,544		607
Residential Construction		996		206		791		997		114
Consumer		1,008		154		550		704		33
Total	$	7,944	$	2,125	$	5,073	$	7,198	$	983

December 31, 2015
Commercial	$	933	$	97	$	821	$	918	$	43
Commercial Real Estate		1,292		964		294		1,258		42
Agriculture		—		—		—		—		—
Residential Mortgage		3,968		1,092		2,484		3,576		615
Residential Construction		1,005		—		1,005		1,005		119
Consumer		1,625		631		690		1,321		33
Total	$	8,823	$	2,784	$	5,294	$	8,078	$	852

Average Recorded Investment and Interest Income in Impaired Loans Recognized Using Accrual Basis Method of Accounting

The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the three months ended March 31, 2016 and March 31, 2015 was as follows:

($ in thousands)	Three Months Ended March 31, 2016				Three Months Ended March 31, 2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	990	$	12	$	2,628	$	8
Commercial Real Estate		1,075		4		968		4
Agriculture		—		—		—		—
Residential Mortgage		3,560		24		4,621		31
Residential Construction		1,001		11		891		9
Consumer		1,013		45		1,494		11
Total	$	7,639	$	96	$	10,602	$	63

Loans Modified as TDR's

Loans modified as TDRs during the three months ended March 31, 2016 and March 31, 2015, were as follows:

($ in thousands)	Three Months Ended March 31, 2016
	Number of Contracts		Pre-modification outstanding recorded investment			Post-modification outstanding recorded investment
Commercial		1			180			180
Total		1		$	180		$	180

($ in thousands)	Three Months Ended March 31, 2015
	Number of Contracts		Pre-modification outstanding recorded investment			Post-modification outstanding recorded investment
Consumer		1			109			109
Total		1		$	109		$	109

Risk Ratings by Loan Class

The following table presents the risk ratings by loan class as of March 31, 2016 and December 31, 2015:

($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2016
Commercial	$	120,371	$	7,595	$	2,448	$	—	$	—	$	130,414
Commercial Real Estate		292,519		9,762		14,669		—		—		316,950
Agriculture		75,409		1,059		717		—		—		77,185
Residential Mortgage		38,370		1,826		1,216		—		—		41,412
Residential Construction		16,162		449		149		—		—		16,760
Consumer		41,601		842		943		—		—		43,386
Total	$	584,432	$	21,533	$	20,142	$	—	$	—	$	626,107

December 31, 2015
Commercial	$	125,562	$	6,842	$	3,691	$	—	$	—	$	136,095
Commercial Real Estate		268,707		8,301		15,308		—		—		292,316
Agriculture		84,813		—		—		—		—		84,813
Residential Mortgage		40,231		1,847		1,297		—		—		43,375
Residential Construction		11,593		452		65		—		—		12,110
Consumer		42,990		1,025		1,371		—		—		45,386
Total	$	573,896	$	18,467	$	21,732	$	—	$	—	$	614,095

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by loan class for the three months ended March 31, 2016 and March 31, 2015:

Three months ended March 31, 2016
($ in thousands)	Commercial			Commercial Real Estate			Agriculture			Residential Mortgage			Residential Construction		Consumer			Unallocated		Total
Balance as of December 31, 2015	$	3,097		$	3,343		$	1,060		$	739		$	334	$	641		$	37	$	9,251
Provision for (reversal of) loan losses		(35	)		308			(95	)		(38	)		66		(53	)		297		450

Charge-offs		(100	)		(15	)		—			—			—		(20	)		—		(135	)
Recoveries		18			—			—			1			1		21			—		41
Net charge-offs		(82	)		(15	)		—			1			1		1			—		(94	)
Balance as of March 31, 2016	$	2,980		$	3,636		$	965		$	702		$	401	$	589		$	334	$	9,607
Period-end amount allocated to:
Loans individually evaluated for impairment		188			41			—			607			114		33			—		983
Loans collectively evaluated for impairment		2,792			3,595			965			95			287		556			334		8,624
Balance as of March 31, 2016	$	2,980		$	3,636		$	965		$	702		$	401	$	589		$	334	$	9,607

Three months ended March 31, 2015
($ in thousands)	Commercial			Commercial Real Estate		Agriculture		Residential Mortgage			Residential Construction		Consumer			Unallocated		Total
Balance as of December 31, 2014	$	3,581		$	1,825	$	580	$	1,181		$	161	$	886		$	369	$	8,583
Provision for (reversal of) loan losses		(268	)		660		66		(134	)		33		(8	)		1		350

Charge-offs		—			—		—		—			—		(67	)		—		(67	)
Recoveries		12			—		—		—			1		15			—		28
Net charge-offs		12			—		—		—			1		(52	)		—		(39	)
Balance as of March 31, 2015	$	3,325		$	2,485	$	646	$	1,047		$	195	$	826		$	370	$	8,894
Period-end amount allocated to:
Loans individually evaluated for impairment		31			45		—		638			105		31			—		850
Loans collectively evaluated for impairment		3,294			2,440		646		409			90		795			370		8,044
Balance as of March 31, 2015	$	3,325		$	2,485	$	646	$	1,047		$	195	$	826		$	370	$	8,894

The following table details activity in the allowance for loan losses and the amount allocated to loans individually and collectively evaluated for impairment as of and for the period ended December 31, 2015.

Year ended December 31, 2015
($ in thousands)	Commercial			Commercial Real Estate			Agriculture		Residential Mortgage			Residential Construction		Consumer			Unallocated			Total
Balance as of December 31, 2014	$	3,581		$	1,825		$	580	$	1,181		$	161	$	886		$	369		$	8,583
Provision for (reversal of) loan losses		(542	)		1,507			480		(450	)		113		(126	)		(332	)		650

Charge-offs		(44	)		(7	)		—		(211	)		—		(175	)		—			(437	)
Recoveries		102			18			—		219			60		56			—			455
Net charge-offs		58			11			—		8			60		(119	)		—			18
Ending Balance		3,097			3,343			1,060		739			334		641			37			9,251
Period-end amount allocated to:
Loans individually evaluated for impairment		43			42			—		615			119		33			—			852
Loans collectively evaluated for impairment		3,054			3,301			1,060		124			215		608			37			8,399
Balance as of December 31, 2015	$	3,097		$	3,343		$	1,060	$	739		$	334	$	641		$	37		$	9,251

The Company's investment in loans as of March 31, 2016, March 31, 2015, and December 31, 2015 related to each balance in the allowance for loan losses by loan class and disaggregated on the basis of the Company's impairment methodology was as follows:

($ in thousands)	Commercial		Commercial Real Estate		Agriculture		Residential Mortgage		Residential Construction		Consumer		Total
March 31, 2016
Loans individually evaluated for impairment	$	1,062	$	891	$	—	$	3,544	$	997	$	704	$	7,198
Loans collectively evaluated for impairment		129,352		316,059		77,185		37,868		15,763		42,682		618,909
Ending Balance	$	130,414	$	316,950	$	77,185	$	41,412	$	16,760	$	43,386	$	626,107

March 31, 2015
Loans individually evaluated for impairment	$	2,578	$	960	$	—	$	4,595	$	885	$	1,482	$	10,500
Loans collectively evaluated for impairment		113,355		263,920		54,719		45,101		9,211		47,693		533,999
Ending Balance	$	115,933	$	264,880	$	54,719	$	49,696	$	10,096	$	49,175	$	544,499

December 31, 2015
Loans individually evaluated for impairment	$	918	$	1,258	$	—	$	3,576	$	1,005	$	1,321	$	8,078
Loans collectively evaluated for impairment		135,177		291,058		84,813		39,799		11,105		44,065		606,017
Ending Balance	$	136,095	$	292,316	$	84,813	$	43,375	$	12,110	$	45,386	$	614,095