LOANS (Tables)

3 Months Ended

Mar. 31, 2019

LOANS [Abstract]

Loan Portfolio, by Loan Class

The composition of the Company’s loan portfolio, by loan class, as of March 31, 2019 and December 31, 2018 was as follows:

($ in thousands)	March 31, 2019			December 31, 2018
Commercial	$	113,575		$	125,177
Commercial Real Estate		419,540			420,106
Agriculture		109,749			123,626
Residential Mortgage		51,682			51,064
Residential Construction		17,626			20,124
Consumer		31,435			35,397
		743,607			775,494
Allowance for loan losses		(12,746	)		(12,822	)
Net deferred origination fees and costs		744			721
Loans, net	$	731,605		$	763,393

Loans by Delinquency and Non-Accrual Status

The Company’s loans by delinquency and non-accrual status, as of March 31, 2019 and December 31, 2018, 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, 2019
Commercial	$	111,929	$	771	$	—	$	662	$	213	$	113,575
Commercial Real Estate		419,173		—		—		—		367		419,540
Agriculture		104,791		180		—		—		4,778		109,749
Residential Mortgage		51,408		177		—		—		97		51,682
Residential Construction		17,626		—		—		—		—		17,626
Consumer		30,983		150		110		—		192		31,435
Total	$	735,910	$	1,278	$	110	$	662	$	5,647	$	743,607
December 31, 2018
Commercial	$	123,765	$	662	$	—	$	—	$	750	$	125,177
Commercial Real Estate		419,725		—		—		—		381		420,106
Agriculture		118,639		157		—		—		4,830		123,626
Residential Mortgage		50,964		—		—		—		100		51,064
Residential Construction		20,124		—		—		—		—		20,124
Consumer		35,054		114		38		—		191		35,397
Total	$	768,271	$	933	$	38	$	—	$	6,252	$	775,494

Impaired Loans, Segregated by Loan Class

Impaired loans, segregated by loan class, as of March 31, 2019 and December 31, 2018 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, 2019
Commercial	$	2,930	$	213	$	1,961	$	2,174	$	37
Commercial Real Estate		767		367		258		625		21
Agriculture		4,779		4,779		—		4,779		—
Residential Mortgage		1,471		96		1,255		1,351		267
Residential Construction		743		—		743		743		48
Consumer		400		192		191		383		2
Total	$	11,090	$	5,647	$	4,408	$	10,055	$	375
December 31, 2018
Commercial	$	3,591	$	300	$	2,602	$	2,902	$	496
Commercial Real Estate		780		381		261		642		21
Agriculture		4,830		4,830		—		4,830		—
Residential Mortgage		1,669		100		1,451		1,551		287
Residential Construction		560		—		560		560		49
Consumer		403		191		198		389		2
Total	$	11,833	$	5,802	$	5,072	$	10,874	$	855

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, 2019 and March 31, 2018 was as follows:

($ in thousands)	Three Months Ended March 31, 2019				Three Months Ended March 31, 2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	2,538	$	42	$	3,425	$	46
Commercial Real Estate		634		4		1,971		4
Agriculture		4,804		—		—		—
Residential Mortgage		1,451		12		2,234		15
Residential Construction		652		9		647		9
Consumer		386		3		470		3
Total	$	10,465	$	70	$	8,747	$	77

Loans Modified as TDR's

Loans modified as TDRs during the three months ended March 31, 2019 were as follows:

	Three Months Ended March 31, 2019
	Number of Contracts		Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment
Residential Construction		2	$	189	$	189
Total		2	$	189	$	189

Risk Ratings by Loan Class

The following table presents the risk ratings by loan class as of March 31, 2019 and December 31, 2018:

($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2019
Commercial	$	110,899	$	510	$	2,166	$	—	$	—	$	113,575
Commercial Real Estate		396,130		14,753		8,657		—		—		419,540
Agriculture		89,670		13,139		6,940		—		—		109,749
Residential Mortgage		51,121		—		561		—		—		51,682
Residential Construction		17,626		—		—		—		—		17,626
Consumer		30,595		538		302		—		—		31,435
Total	$	696,041	$	28,940	$	18,626	$	—	$	—	$	743,607
December 31, 2018
Commercial	$	121,848	$	66	$	2,813	$	450	$	—	$	125,177
Commercial Real Estate		395,436		14,272		10,398		—		—		420,106
Agriculture		104,809		11,750		7,067		—		—		123,626
Residential Mortgage		50,149		—		915		—		—		51,064
Residential Construction		19,372		752		—		—		—		20,124
Consumer		34,272		590		535		—		—		35,397
Total	$	725,886	$	27,430	$	21,728	$	450	$	—	$	775,494

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses and the amount allocated to individually and collectively evaluated for impairment by loan class for the three months ended March 31, 2019 and March 31, 2018:

Three months ended March 31, 2019
($ in thousands)	Commercial			Commercial Real Estate		Agriculture		Residential Mortgage			Residential Construction			Consumer			Unallocated		Total
Balance as of December 31, 2018	$	3,198		$	5,890	$	1,632	$	643		$	318		$	279		$	862	$	12,822
Provision for (reversal of) loan losses		(568	)		496		202		(197	)		(102	)		—			169		—
Charge-offs		(150	)		—		—		—			—			(7	)		—		(157	)
Recoveries		19			—		—		56			1			5			—		81
Net charge-offs		(131	)		—		—		56			1			(2	)		—		(76	)
Balance as of March 31, 2019	$	2,499		$	6,386	$	1,834	$	502		$	217		$	277		$	1,031	$	12,746
Period-end amount allocated to:
Loans individually evaluated for impairment		37			21		—		267			48			2			—		375
Loans collectively evaluated for impairment		2,462			6,365		1,834		235			169			275			1,031		12,371
Balance as of March 31, 2019	$	2,499		$	6,386	$	1,834	$	502		$	217		$	277		$	1,031	$	12,746

Three months ended March 31, 2018
($ in thousands)	Commercial			Commercial Real Estate			Agriculture			Residential Mortgage			Residential Construction			Consumer			Unallocated		Total
Balance as of December 31, 2017	$	2,625		$	5,460		$	1,547		$	628		$	360		$	342		$	171	$	11,133
Provision for (reversal of) loan losses		(85	)		(46	)		(124	)		(1	)		(13	)		(68	)		862		525
Charge-offs		—			—			—			—			—			(6	)		—		(6	)
Recoveries		9			—			—			16			1			37			—		63
Net recoveries		9			—			—			16			1			31			—		57
Balance as of March 31, 2018	$	2,549		$	5,414		$	1,423		$	643		$	348		$	305		$	1,033	$	11,715
Period-end amount allocated to:
Loans individually evaluated for impairment		47			36			—			309			71			4			—		467
Loans collectively evaluated for impairment		2,502			5,378			1,423			334			277			301			1,033		11,248
Balance as of March 31, 2018	$	2,549		$	5,414		$	1,423		$	643		$	348		$	305		$	1,033	$	11,715

The following table details activity in the allowance for loan losses and the amount allocated to loans individually and collectively evaluated for impairment by loan class as of and for the period ended December 31, 2018.

Year ended December 31, 2018
($ in thousands)	Commercial			Commercial Real Estate			Agriculture		Residential Mortgage			Residential Construction			Consumer			Unallocated		Total
Balance as of December 31, 2017	$	2,625		$	5,460		$	1,547	$	628		$	360		$	342		$	171	$	11,133
Provision for (reversal of) loan losses		1,036			572			85		(19	)		(173	)		(92	)		691		2,100
Charge-offs		(509	)		(142	)		—		—			—			(34	)		—		(685	)
Recoveries		46			—			—		34			131			63			—		274
Net charge-offs		(463	)		(142	)		—		34			131			29			—		(411	)
Ending Balance		3,198			5,890			1,632		643			318			279			862		12,822
Period-end amount allocated to:
Loans individually evaluated for impairment		496			21			—		287			49			2			—		855
Loans collectively evaluated for impairment		2,702			5,869			1,632		356			269			277			862		11,967
Balance as of December 31, 2018	$	3,198		$	5,890		$	1,632	$	643		$	318		$	279		$	862	$	12,822

The Company’s investment in loans as of March 31, 2019, March 31, 2018, and December 31, 2018 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, 2019
Loans individually evaluated for impairment	$	2,174	$	625	$	4,779	$	1,351	$	743	$	383	$	10,055
Loans collectively evaluated for impairment		111,401		418,915		104,970		50,331		16,883		31,052		733,552
Ending Balance	$	113,575	$	419,540	$	109,749	$	51,682	$	17,626	$	31,435	$	743,607
March 31, 2018
Loans individually evaluated for impairment	$	3,191	$	1,946	$	—	$	2,192	$	644	$	523	$	8,496
Loans collectively evaluated for impairment		127,558		391,964		104,104		42,596		20,110		36,407		722,739
Ending Balance	$	130,749	$	393,910	$	104,104	$	44,788	$	20,754	$	36,930	$	731,235
December 31, 2018
Loans individually evaluated for impairment	$	2,902	$	642	$	4,830	$	1,551	$	560	$	389	$	10,874
Loans collectively evaluated for impairment		122,275		419,464		118,796		49,513		19,564		35,008		764,620
Ending Balance	$	125,177	$	420,106	$	123,626	$	51,064	$	20,124	$	35,397	$	775,494