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LOANS (Tables)
 3 Months Ended
Mar. 31, 2017
LOANS [Abstract]  
Composition of Loan Portfolio, by Loan Class
The composition of the Company's loan portfolio, by loan class, as of March 31, 2017 and December 31, 2016 was as follows:
 
($ in thousands)
 
March 31, 2017
  
December 31, 2016
 
 
      
Commercial
 
$
121,053
  
$
126,311
 
Commercial Real Estate
  
342,180
   
344,210
 
Agriculture
  
94,652
   
101,905
 
Residential Mortgage
  
43,176
   
40,237
 
Residential Construction
  
22,738
   
23,650
 
Consumer
  
40,124
   
43,250
 
 
  
663,923
   
679,563
 
Allowance for loan losses
  
(11,499
)
  
(10,899
)
Net deferred origination fees and costs
  
1,029
   
1,106
 
Loans, net
 
$
653,453
  
$
669,770
 
Non-accrual Loans by Loan Class
The Company's loans by delinquency and non-accrual status, as of March 31, 2017 and December 31, 2016, were as follows:
   
($ in thousands)
 
Current & Accruing
  
30-59 Days Past Due & Accruing
  
60-89 Days Past Due & Accruing
  
90 Days or
more Past Due & Accruing
  
Nonaccrual
  
Total Loans
 
March 31, 2017
                  
Commercial
 
$
115,988
  
$
65
  
$
—
  
$
—
  
$
5,000
  
$
121,053
 
Commercial Real Estate
  
341,188
   
478
   
—
   
—
   
514
   
342,180
 
Agriculture
  
94,652
   
—
   
—
   
—
   
—
   
94,652
 
Residential Mortgage
  
42,508
   
—
   
—
   
—
   
668
   
43,176
 
Residential Construction
  
22,738
   
—
   
—
   
—
   
—
   
22,738
 
Consumer
  
40,061
   
63
   
—
   
—
   
—
   
40,124
 
Total
 
$
657,135
  
$
606
  
$
—
  
$
—
  
$
6,182
  
$
663,923
 
 
                        
December 31, 2016
                        
Commercial
 
$
121,311
  
$
—
  
$
—
  
$
—
  
$
5,000
  
$
126,311
 
Commercial Real Estate
  
343,186
   
484
   
—
   
—
   
540
   
344,210
 
Agriculture
  
101,905
   
—
   
—
   
—
   
—
   
101,905
 
Residential Mortgage
  
39,463
   
—
   
120
   
—
   
654
   
40,237
 
Residential Construction
  
23,650
   
—
   
—
   
—
   
—
   
23,650
 
Consumer
  
43,106
   
—
   
41
   
—
   
103
   
43,250
 
Total
 
$
672,621
  
$
484
  
$
161
  
$
—
  
$
6,297
  
$
679,563
 
Impaired Loans, Segregated by Loan Class
Impaired loans, segregated by loan class, as of March 31, 2017 and December 31, 2016 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, 2017
               
Commercial
 
$
5,544
  
$
—
  
$
5,544
  
$
5,544
  
$
1,341
 
Commercial Real Estate
  
870
   
514
   
281
   
795
   
38
 
Agriculture
  
—
   
—
   
—
   
—
   
—
 
Residential Mortgage
  
3,380
   
668
   
2,354
   
3,022
   
578
 
Residential Construction
  
812
   
—
   
812
   
812
   
98
 
Consumer
  
593
   
—
   
593
   
593
   
24
 
Total
 
$
11,199
  
$
1,182
  
$
9,584
  
$
10,766
  
$
2,079
 
 
                    
December 31, 2016
                    
Commercial
 
$
5,578
  
$
—
  
$
5,578
  
$
5,578
  
$
898
 
Commercial Real Estate
  
885
   
540
   
283
   
823
   
39
 
Agriculture
  
—
   
—
   
—
   
—
   
—
 
Residential Mortgage
  
3,392
   
654
   
2,380
   
3,034
   
584
 
Residential Construction
  
820
   
—
   
820
   
820
   
98
 
Consumer
  
708
   
103
   
601
   
704
   
25
 
Total
 
$
11,383
  
$
1,297
  
$
9,662
  
$
10,959
  
$
1,644
 
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, 2017 and March 31, 2016 was as follows:
 
($ in thousands)
 
Three Months Ended
March 31, 2017
  
Three Months Ended
March 31, 2016
 
 
 
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
Commercial
 
$
5,561
  
$
9
  
$
990
  
$
12
 
Commercial Real Estate
  
809
   
15
   
1,075
   
4
 
Agriculture
  
—
   
—
   
—
   
—
 
Residential Mortgage
  
3,028
   
31
   
3,560
   
24
 
Residential Construction
  
816
   
9
   
1,001
   
11
 
Consumer
  
649
   
9
   
1,013
   
45
 
Total
 
$
10,863
  
$
73
  
$
7,639
  
$
96
 
Loans Modified as TDR's
Loans modified as TDRs during the three months ended March 31, 2016, 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
 
Risk Ratings by Loan Class
The following table presents the risk ratings by loan class as of March 31, 2017 and December 31, 2016:
 
($ in thousands)
 
Pass
  
Special
Mention
  
Substandard
  
Doubtful
  
Loss
  
Total
 
March 31, 2017
                  
Commercial
 
$
107,626
  
$
7,359
  
$
6,068
  
$
—
  
$
—
  
$
121,053
 
Commercial Real Estate
  
330,711
   
10,200
   
1,269
   
—
   
—
   
342,180
 
Agriculture
  
94,522
   
—
   
130
   
—
   
—
   
94,652
 
Residential Mortgage
  
40,782
   
1,725
   
669
   
—
   
—
   
43,176
 
Residential Construction
  
22,738
   
—
   
—
   
—
   
—
   
22,738
 
Consumer
  
39,059
   
546
   
519
   
—
   
—
   
40,124
 
Total
 
$
635,438
  
$
19,830
  
$
8,655
  
$
—
  
$
—
  
$
663,923
 
 
                        
December 31, 2016
                        
Commercial
 
$
112,656
  
$
7,294
  
$
6,361
  
$
—
  
$
—
  
$
126,311
 
Commercial Real Estate
  
331,653
   
11,058
   
1,499
   
—
   
—
   
344,210
 
Agriculture
  
101,820
   
—
   
85
   
—
   
—
   
101,905
 
Residential Mortgage
  
37,831
   
1,751
   
655
   
—
   
—
   
40,237
 
Residential Construction
  
23,070
   
436
   
144
   
—
   
—
   
23,650
 
Consumer
  
41,826
   
547
   
877
   
—
   
—
   
43,250
 
Total
 
$
648,856
  
$
21,086
  
$
9,621
  
$
—
  
$
—
  
$
679,563
 
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, 2017 and March 31, 2016:

Three months ended March 31, 2017
 
($ in thousands)
 
Commercial
  
Commercial
Real Estate
  
Agriculture
  
Residential
Mortgage
  
Residential
Construction
  
Consumer
  
Unallocated
  
Total
 
Balance as of December 31, 2016
 
$
3,571
  
$
3,910
  
$
1,262
  
$
660
  
$
440
  
$
498
  
$
558
  
$
10,899
 
Provision for (reversal of) loan losses
  
235
   
813
   
25
   
41
   
13
   
(114
)
  
(413
)
  
600
 
 
                                
Charge-offs
  
—
   
—
   
—
   
—
   
—
   
(11
)
  
—
   
(11
)
Recoveries
  
2
   
—
   
—
   
—
   
1
   
8
   
—
   
11
 
Net charge-offs
  
2
   
—
   
—
   
—
   
1
   
(3
)
  
—
   
—
 
Balance as of March 31, 2017
 
$
3,808
  
$
4,723
  
$
1,287
  
$
701
  
$
454
  
$
381
  
$
145
  
$
11,499
 
Period-end amount allocated to:
                                
Loans individually evaluated for impairment
  
1,341
   
38
   
—
   
578
   
98
   
24
   
—
   
2,079
 
Loans collectively evaluated for impairment
  
2,467
   
4,685
   
1,287
   
123
   
356
   
357
   
145
   
9,420
 
Balance as of March 31, 2017
 
$
3,808
  
$
4,723
  
$
1,287
  
$
701
  
$
454
  
$
381
  
$
145
  
$
11,499
 
 
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
 
 
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, 2016.
 
Year ended December 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
  
883
   
582
   
121
   
(67
)
  
101
   
(341
)
  
521
   
1,800
 
 
                                
Charge-offs
  
(446
)
  
(15
)
  
—
   
(13
)
  
—
   
(65
)
  
—
   
(539
)
Recoveries
  
37
   
—
   
81
   
1
   
5
   
263
   
—
   
387
 
Net charge-offs
  
(409
)
  
(15
)
  
81
   
(12
)
  
5
   
198
   
—
   
(152
)
Ending Balance
  
3,571
   
3,910
   
1,262
   
660
   
440
   
498
   
558
   
10,899
 
Period-end amount allocated to:
                                
Loans individually evaluated for impairment
  
898
   
39
   
—
   
584
   
98
   
25
   
—
   
1,644
 
Loans collectively evaluated for impairment
  
2,673
   
3,871
   
1,262
   
76
   
342
   
473
   
558
   
9,255
 
Balance as of December 31, 2016
 
$
3,571
  
$
3,910
  
$
1,262
  
$
660
  
$
440
  
$
498
  
$
558
  
$
10,899
 
 
The Company's investment in loans as of March 31, 2017, March 31, 2016, and December 31, 2016 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, 2017
 
Loans individually evaluated for impairment
 
$
5,544
  
$
795
  
$
—
  
$
3,022
  
$
812
  
$
593
  
$
10,766
 
Loans collectively evaluated for impairment
  
115,509
   
341,385
   
94,652
   
40,154
   
21,926
   
39,531
   
653,157
 
Ending Balance
 
$
121,053
  
$
342,180
  
$
94,652
  
$
43,176
  
$
22,738
  
$
40,124
  
$
663,923
 
 
                            
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
 
 
                            
December 31, 2016
 
Loans individually evaluated for impairment
 
$
5,578
  
$
823
  
$
—
  
$
3,034
  
$
820
  
$
704
  
$
10,959
 
Loans collectively evaluated for impairment
  
120,733
   
343,387
   
101,905
   
37,203
   
22,830
   
42,546
   
668,604
 
Ending Balance
 
$
126,311
  
$
344,210
  
$
101,905
  
$
40,237
  
$
23,650
  
$
43,250
  
$
679,563