Loans (Tables)

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Schedule of Loan Balances

Loan balances were as follows:

(In Thousands of Dollars)	September 30, 2018			December 31, 2017
Originated loans:
Commercial real estate
Owner occupied	$	153,088		$	140,321
Non-owner occupied		240,871			199,080
Farmland		94,987			70,534
Other		91,962			89,025
Commercial
Commercial and industrial		213,552			193,347
Agricultural		33,946			32,587
Residential real estate
1-4 family residential		303,337			272,421
Home equity lines of credit		78,082			71,507
Consumer
Indirect		168,643			155,950
Direct		30,628			28,519
Other		10,874			8,876
Total originated loans	$	1,419,970		$	1,262,167
Acquired loans:
Commercial real estate
Owner occupied	$	47,438		$	53,031
Non-owner occupied		18,190			20,286
Farmland		42,257			47,754
Other		10,723			11,964
Commercial
Commercial and industrial		19,636			27,094
Agricultural		10,848			12,206
Residential real estate
1-4 family residential		83,268			96,759
Home equity lines of credit		25,165			28,755
Consumer
Direct		10,523			14,378
Other		157			128
Total acquired loans	$	268,205		$	312,355
Net Deferred loan costs		3,357			2,859
Allowance for loan losses		(13,377	)		(12,315	)
Net loans	$	1,678,155		$	1,565,066

Purchased Credit Impaired Loans

As part of past acquisitions the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected.  The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

(In Thousands of Dollars)	September 30, 2018		December 31, 2017
Commercial real estate
Owner occupied	$	0	$	670
Non-owner occupied		309		387
Commercial
Commercial and industrial		928		1,072
Total outstanding balance	$	1,237	$	2,129
Carrying amount, net of allowance of $0 in 2018 and 2017	$	898	$	1,733

Schedule of Accretable Yield or Income Expected to be Collected

Accretable yield, or income expected to be collected, is shown in the table below:

	Three Months Ended						Nine Months Ended
(In Thousands of Dollars)	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
Beginning balance	$	132		$	209		$	170		$	247
New loans purchased	0			0			0			0
Accretion of income		(19	)		(19	)		(57	)		(57	)
Ending balance	$	113		$	190		$	113		$	190

Activity in the Allowance for Loan Losses by Portfolio Segment

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and nine month periods ended September 30, 2018 and 2017:

Three Months Ended September 30, 2018

(In Thousands of Dollars)	Commercial Real Estate		Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	4,339	$	1,937		$	2,651		$	3,050		$	787		$	12,764
Provision for loan losses		380		96			177			309			(12	)		950
Loans charged off		0		(32	)		(48	)		(464	)		0			(544	)
Recoveries		21		6			40			140			0			207
Total ending allowance balance	$	4,740	$	2,007		$	2,820		$	3,035		$	775		$	13,377

Nine Months Ended September 30, 2018

(In Thousands of Dollars)	Commercial Real Estate		Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	4,260	$	2,011		$	2,521		$	2,848		$	675	$	12,315
Provision for loan losses		426		182			345			1,422			100		2,475
Loans charged off		0		(194	)		(172	)		(1,737	)		0		(2,103	)
Recoveries		54		8			126			502			0		690
Total ending allowance balance	$	4,740	$	2,007		$	2,820		$	3,035		$	775	$	13,377

Three Months Ended September 30, 2017

(In Thousands of Dollars)	Commercial Real Estate		Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,954	$	1,936		$	2,310		$	2,927		$	619	$	11,746
Provision for loan losses		264		87			36			552			11		950
Loans charged off		0		(10	)		(74	)		(725	)		0		(809	)
Recoveries		1		2			61			153			0		217
Total ending allowance balance	$	4,219	$	2,015		$	2,333		$	2,907		$	630	$	12,104

Nine Months Ended September 30, 2017

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430	$	10,852
Provision for loan losses		706			302			150			1,592			200		2,950
Loans charged off		(207	)		(225	)		(116	)		(1,929	)		0		(2,477	)
Recoveries		143			64			94			478			0		779
Total ending allowance balance	$	4,219		$	2,015		$	2,333		$	2,907		$	630	$	12,104

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment, Based on Impairment Method

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of September 30, 2018 and December 31, 2017.  The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

September 30, 2018

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	6	$	4	$	308	$	0	$	0	$	318
Collectively evaluated for impairment		4,676		1,987		2,469		3,031		775		12,938
Acquired loans collectively evaluated for impairment		58		16		43		4		0		121
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	4,740	$	2,007	$	2,820	$	3,035	$	775	$	13,377
Loans:
Loans individually evaluated for impairment	$	804	$	147	$	5,539	$	64	$	0	$	6,554
Loans collectively evaluated for impairment		579,225		247,094		375,708		215,774		0		1,417,801
Acquired loans		117,907		29,791		107,903		10,678		0		266,279
Acquired with deteriorated credit quality		236		662		0		0		0		898
Total ending loans balance	$	698,172	$	277,694	$	489,150	$	226,516	$	0	$	1,691,532

December 31, 2017

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	0	$	4	$	158	$	0	$	0	$	162
Collectively evaluated for impairment		4,214		1,993		2,322		2,844		675		12,048
Acquired loans collectively evaluated for impairment		46		14		41		4		0		105
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	4,260	$	2,011	$	2,521	$	2,848	$	675	$	12,315
Loans:
Loans individually evaluated for impairment	$	658	$	260	$	4,559	$	59	$	0	$	5,536
Loans collectively evaluated for impairment		497,168		225,312		339,143		198,370		0		1,259,993
Acquired loans		131,926		38,503		125,182		14,507		0		310,118
Acquired with deteriorated credit quality		948		786		0		0		0		1,734
Total ending loans balance	$	630,700	$	264,861	$	468,884	$	212,936	$	0	$	1,577,381

Loans Individually Evaluated for Impairment by Class of Loans

The following tables present information related to impaired loans by class of loans as of September 30, 2018 and December 31, 2017:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
September 30, 2018
With no related allowance recorded:
Commercial real estate
Owner occupied	$	532	$	507	$	0
Non-owner occupied		41		40		0
Commercial
Commercial and industrial		108		74		0
Residential real estate
1-4 family residential		3,608		2,943		0
Home equity lines of credit		345		294		0
Consumer		163		64		0
Subtotal		4,797		3,922		0
With an allowance recorded:
Commercial real estate
Farmland		258		257		6
Commercial
Commercial and industrial		73		73		4
Residential real estate
1-4 family residential		2,145		2,125		227
Home equity lines of credit		190		177		81
Subtotal		2,666		2,632		318
Total	$	7,463	$	6,554	$	318

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	659	$	658	$	0
Commercial
Commercial and industrial		214		192		0
Residential real estate
1-4 family residential		2,923		2,697		0
Home equity lines of credit		341		319		0
Consumer		145		59		0
Subtotal		4,282		3,925		0
With an allowance recorded:
Commercial
Commercial and industrial		68		68		4
Residential real estate
1-4 family residential		1,409		1,387		84
Home equity lines of credit		159		156		74
Subtotal		1,636		1,611		162
Total	$	5,918	$	5,536	$	162

The following tables present the average recorded investment in impaired loans by class and interest income recognized by loan class for the three and nine month periods ended September 30, 2018 and 2017:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended September 30,				For Three Months Ended September 30,
(In Thousands of Dollars)	2018		2017		2018		2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	512	$	680	$	8	$	2
Non-owner occupied		40		16		1		1
Commercial
Commercial and industrial		155		181		1		1
Residential real estate
1-4 family residential		2,941		2,208		40		32
Home equity lines of credit		294		326		4		4
Consumer		68		91		2		2
Subtotal		4,010		3,502		56		42
With an allowance recorded:
Commercial real estate
Owner occupied		0		159		0		2
Non-owner occupied		0		362		0		0
Farmland		257		0		0		0
Commercial
Commercial and industrial		78		70		1		1
Residential real estate
1-4 family residential		2,132		785		19		10
Home equity lines of credit		170		97		2		1
Consumer		11		9		0		0
Subtotal		2,648		1,482		22		14
Total	$	6,658	$	4,984	$	78	$	56

	Average Recorded Investment				Interest Income Recognized
	For Nine Months Ended September 30,				For Nine Months Ended September 30,
(In Thousands of Dollars)	2018		2017		2018		2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	487	$	794	$	23	$	7
Non-owner occupied		22		87		1		2
Farmland		0		16		0		0
Commercial
Commercial and industrial		411		182		3		3
Agricultural		0		14		0		0
Residential real estate
1-4 family residential		2,751		2,279		131		104
Home equity lines of credit		307		293		12		11
Consumer		69		90		8		8
Subtotal		4,047		3,755		178		135
With an allowance recorded:
Commercial real estate
Owner occupied		0		164		0		6
Non-owner occupied		0		854		0		28
Farmland		171		84		0		0
Commercial
Commercial and industrial		71		72		3		3
Agricultural		0		66		0		0
Residential real estate
1-4 family residential		1,837		784		38		27
Home equity lines of credit		161		88		5		3
Consumer		4		3		0		0
Subtotal		2,244		2,115		46		67
Total	$	6,291	$	5,870	$	224	$	202

Schedule of Investment in Nonaccrual and Loans Past Due 90 Days or More Still on Accrual by Class of Loans

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of September 30, 2018 and December 31, 2017:

	September 30, 2018				December 31, 2017
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	353	$	0	$	501	$	0
Farmland		33		0		45		0
Commercial
Commercial and industrial		178		0		249		0
Agricultural		177		0		2		0
Residential real estate
1-4 family residential		3,256		633		2,653		393
Home equity lines of credit		610		183		602		8
Consumer
Indirect		344		228		457		361
Direct		51		119		63		153
Other		0		3		0		14
Total originated loans	$	5,002	$	1,166	$	4,572	$	929
Acquired loans:
Commercial real estate
Non-owner occupied	$	88	$	0	$	216	$	0
Farmland		257		0		0		0
Commercial
Commercial and industrial		762		42		943		19
Agricultural		297		10		9		0
Residential real estate
1-4 family residential		882		220		613		69
Home equity lines of credit		176		123		170		0
Consumer
Direct		147		50		140		15
Total acquired loans	$	2,609	$	445	$	2,091	$	103
Total loans	$	7,611	$	1,611	$	6,663	$	1,032

Schedule of Investment in Past Due Loans

The following tables present the aging of the recorded investment in past due loans as of September 30, 2018 and December 31, 2017 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
September 30, 2018
Originated loans:
Commercial real estate
Owner occupied	$	58	$	0	$	353	$	411	$	152,303	$	152,714
Non-owner occupied		0		0		0		0		240,304		240,304
Farmland		419		0		33		452		94,430		94,882
Other		0		0		0		0		91,673		91,673
Commercial
Commercial and industrial		237		98		178		513		212,653		213,166
Agricultural		112		0		177		289		33,757		34,046
Residential real estate
1-4 family residential		1,385		730		3,889		6,004		296,610		302,614
Home equity lines of credit		83		9		793		885		77,220		78,105
Consumer
Indirect		1,888		818		572		3,278		170,836		174,114
Direct		802		330		170		1,302		29,546		30,848
Other		16		26		3		45		10,829		10,874
Total originated loans:	$	5,000	$	2,011	$	6,168	$	13,179	$	1,410,161	$	1,423,340
Acquired loans:
Commercial real estate
Owner occupied	$	512	$	0	$	0	$	512	$	46,988	$	47,500
Non-owner occupied		60		0		88		148		17,973		18,121
Farmland		527		75		257		859		41,397		42,256
Other		0		0		0		0		10,722		10,722
Commercial
Commercial and industrial		246		57		804		1,107		18,527		19,634
Agricultural		20		6		307		333		10,515		10,848
Residential real estate
1-4 family residential		1,289		100		1,102		2,491		80,775		83,266
Home equity lines of credit		168		14		299		481		24,684		25,165
Consumer
Direct		303		237		197		737		9,786		10,523
Other		1		0		0		1		156		157
Total acquired loans	$	3,126	$	489	$	3,054	$	6,669	$	261,523	$	268,192
Total loans	$	8,126	$	2,500	$	9,222	$	19,848	$	1,671,684	$	1,691,532

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2017
Originated loans:
Commercial real estate
Owner occupied	$	4	$	340	$	501	$	845	$	139,081	$	139,926
Non-owner occupied		0		0		0		0		198,588		198,588
Farmland		0		0		45		45		70,398		70,443
Other		0		0		0		0		88,703		88,703
Commercial
Commercial and industrial		292		3		249		544		192,335		192,879
Agricultural		74		0		2		76		32,605		32,681
Residential real estate
1-4 family residential		2,044		403		3,046		5,493		266,338		271,831
Home equity lines of credit		155		18		610		783		70,754		71,537
Consumer
Indirect		2,429		829		818		4,076		156,772		160,848
Direct		632		250		216		1,098		27,608		28,706
Other		115		11		14		140		8,736		8,876
Total originated loans	$	5,745	$	1,854	$	5,501	$	13,100	$	1,251,918	$	1,265,018
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	0	$	0	$	53,051	$	53,051
Non-owner occupied		0		0		216		216		20,042		20,258
Farmland		454		0		0		454		47,301		47,755
Other		0		0		0		0		11,976		11,976
Commercial
Commercial and industrial		327		96		962		1,385		25,709		27,094
Agricultural		87		0		9		96		12,111		12,207
Residential real estate
1-4 family residential		858		77		682		1,617		95,144		96,761
Home equity lines of credit		161		0		170		331		28,424		28,755
Consumer
Direct		380		151		155		686		13,692		14,378
Other		0		1		0		1		127		128
Total acquired loans	$	2,267	$	325	$	2,194	$	4,786	$	307,577	$	312,363
Total loans	$	8,012	$	2,179	$	7,695	$	17,886	$	1,559,495	$	1,577,381