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Loans
 12 Months Ended
Dec. 31, 2014
Receivables [Abstract]  
Loans
Loans
 
Loans were comprised of the following classifications at December 31: 
 
 
2014

 
2013

Commercial:
 
 

 
 

Commercial and Industrial Loans and Leases
 
$
380,079

 
$
350,955

Commercial Real Estate Loans
 
583,086

 
582,066

Agricultural Loans
 
216,774

 
192,880

Retail:
 
 

 
 

Home Equity Loans
 
86,234

 
81,504

Consumer Loans
 
48,613

 
49,124

Residential Mortgage Loans
 
137,204

 
128,683

Subtotal
 
1,451,990

 
1,385,212

Less: Unearned Income
 
(4,008
)
 
(2,830
)
Allowance for Loan Losses
 
(14,929
)
 
(14,584
)
Loans, net
 
$
1,433,053

 
$
1,367,798



The following table presents the activity in the allowance for loan losses by portfolio class for the years ended December 31, 2014, 2013 and 2012: 
 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
3,983

 
$
8,335

 
$
946

 
$
239

 
$
188

 
$
281

 
$
612

 
$
14,584

Provision for Loan Losses
 
732

 
(1,596
)
 
177

 
37

 
291

 
437

 
72

 
150

Recoveries
 
111

 
863

 
—

 
42

 
173

 
21

 
—

 
1,210

Loans Charged-off
 
(199
)
 
(329
)
 
—

 
(72
)
 
(298
)
 
(117
)
 
—

 
(1,015
)
Ending Balance
 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
$
14,929

 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2013
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
4,555

 
$
8,931

 
$
989

 
$
141

 
$
214

 
$
186

 
$
504

 
$
15,520

Provision for Loan Losses
 
(197
)
 
(160
)
 
(43
)
 
419

 
112

 
111

 
108

 
350

Recoveries
 
128

 
102

 
—

 
—

 
148

 
8

 
—

 
386

Loans Charged-off
 
(503
)
 
(538
)
 
—

 
(321
)
 
(286
)
 
(24
)
 
—

 
(1,672
)
Ending Balance
 
$
3,983

 
$
8,335

 
$
946

 
$
239

 
$
188

 
$
281

 
$
612

 
$
14,584

 
 
Commercial
and
Industrial
Loans and
Leases
 
Commercial
Real Estate
Loans
 
Agricultural
Loans
 
Home
Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage
Loans
 
Unallocated
 
Total
December 31, 2012
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
3,493

 
$
9,297

 
$
926

 
$
258

 
$
190

 
$
402

 
$
746

 
$
15,312

Provision for Loan Losses
 
1,150

 
1,326

 
63

 
(32
)
 
194

 
(47
)
 
(242
)
 
2,412

Recoveries
 
74

 
97

 
—

 
2

 
123

 
30

 
—

 
326

Loans Charged-off
 
(162
)
 
(1,789
)
 
—

 
(87
)
 
(293
)
 
(199
)
 
—

 
(2,530
)
Ending Balance
 
$
4,555

 
$
8,931

 
$
989

 
$
141

 
$
214

 
$
186

 
$
504

 
$
15,520


 
In determining the adequacy of the allowance for loan loss, general allocations are made for pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios, judgmentally adjusted for current economic factors and portfolio trends. During the third quarter of 2014, a modification was made to the Company’s standard methodology for calculating the allowance for loan losses. This modification centered on commercial and agricultural loans that are graded as substandard and was undertaken as a part of the Company’s annual update of its migration analysis utilized in the allowance for loan losses calculations. Prior to the third quarter of 2014, the allocation for substandard, non-impaired commercial and agricultural loans was based on evaluating the amount of loss of each individual credit relationship internally graded substandard. Beginning in the third quarter of 2014, the Company adjusted its methodology to assign allocations for substandard commercial and agricultural credits based on migration analysis techniques for these types of credits. The modification to the methodology resulted in a decrease of $63 to the overall required loan loss allowance.

Loan impairment is reported when full repayment under the terms of the loan is not expected. This methodology is used for all loans, including loans acquired with deteriorated credit quality. For purchased loans, the assessment is made at the time of acquisition as well as over the life of loan. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.
 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of December 31, 2014 and 2013:
December 31, 2014
 
Total
 
Commercial
and
Industrial
Loans and Leases
 
Commercial
Real Estate Loans
 
Agricultural Loans
 
Home
Equity Loans
 
Consumer Loans
 
Residential
Mortgage Loans
 
Unallocated
Allowance for Loan Losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending Allowance Balance Attributable to Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually Evaluated for Impairment
 
$
1,532

 
$
87

 
$
1,445

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
13,343

 
4,540

 
5,818

 
1,123

 
246

 
354

 
578

 
684

Acquired with Deteriorated Credit Quality
 
54

 
—

 
10

 
—

 
—

 
—

 
44

 
—

Total Ending Allowance Balance
 
$
14,929

 
$
4,627

 
$
7,273

 
$
1,123

 
$
246

 
$
354

 
$
622

 
$
684

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
6,044

 
$
1,964

 
$
4,080

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Loans Collectively Evaluated for Impairment
 
1,443,363

 
378,533

 
573,961

 
219,640

 
86,570

 
48,614

 
136,045

 
—

Loans Acquired with Deteriorated Credit Quality
 
8,361

 
354

 
6,385

 
—

 
—

 
118

 
1,504

 
—

Total Ending Loans Balance (1)
 
$
1,457,768

 
$
380,851

 
$
584,426

 
$
219,640

 
$
86,570

 
$
48,732

 
$
137,549

 
$
—

 
(1) Total recorded investment in loans includes $5,778 in accrued interest.
 
 
December 31, 2013
 
Total
 
Commercial
and
Industrial
Loans and Leases
 
Commercial
Real Estate Loans
 
Agricultural Loans
 
Home
Equity Loans
 
Consumer Loans
 
Residential
Mortgage Loans
 
Unallocated
Allowance for Loan Losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending Allowance Balance Attributable to Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually Evaluated  for Impairment
 
$
3,095

 
$
45

 
$
3,050

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Collectively Evaluated for Impairment
 
11,481

 
3,938

 
5,277

 
946

 
239

 
188

 
281

 
612

Acquired with Deteriorated Credit Quality
 
8

 
—

 
8

 
—

 
—

 
—

 
—

 
—

Total Ending Allowance Balance
 
$
14,584

 
$
3,983

 
$
8,335

 
$
946

 
$
239

 
$
188

 
$
281

 
$
612

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loans Individually Evaluated for Impairment
 
$
8,458

 
$
2,114

 
$
6,344

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Loans Collectively Evaluated for Impairment
 
1,367,591

 
347,808

 
566,389

 
195,171

 
81,812

 
49,131

 
127,280

 
—

Loans Acquired with Deteriorated Credit Quality
 
14,753

 
1,981

 
10,871

 
—

 
—

 
134

 
1,767

 
—

Total Ending Loans Balance (1)
 
$
1,390,802

 
$
351,903

 
$
583,604

 
$
195,171

 
$
81,812

 
$
49,265

 
$
129,047

 
$
—

 
(1) Total recorded investment in loans includes $5,590 in accrued interest.
 
The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2014 and 2013:
 
 
Unpaid
Principal
Balance(1)
 
Recorded
Investment
 
Allowance for
Loan Losses
Allocated
December 31, 2014
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,887

 
$
1,877

 
$
—

Commercial Real Estate Loans
 
1,944

 
1,447

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
3,831

 
3,324

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
84

 
87

 
87

Commercial Real Estate Loans
 
3,653

 
2,975

 
1,455

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
3,737

 
3,062

 
1,542

Total
 
$
7,568

 
$
6,386

 
$
1,542

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
289

 
$
133

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
759

 
$
209

 
$
10

 
(1) Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.
 
 
 
Unpaid
Principal
Balance(1)
 
Recorded
Investment
 
Allowance for
Loan Losses
Allocated
December 31, 2013
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
2,163

 
$
2,072

 
$
—

Commercial Real Estate Loans
 
4,710

 
2,383

 
—

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
6,873

 
4,455

 
—

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
45

 
45

 
45

Commercial Real Estate Loans
 
4,428

 
4,417

 
3,058

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,473

 
4,462

 
3,103

Total
 
$
11,346

 
$
8,917

 
$
3,103

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
987

 
$
451

 
$
—

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
33

 
$
8

 
$
8

 
(1) Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.
 
The following tables present loans individually evaluated for impairment by class of loans for the years ended December 31, 2014, 2013 and 2012:
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2014
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
2,082

 
$
132

 
$
135

Commercial Real Estate Loans
 
2,489

 
84

 
81

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,571

 
216

 
216

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,222

 
2

 
2

Commercial Real Estate Loans
 
3,074

 
20

 
16

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
4,296

 
22

 
18

Total
 
$
8,867

 
$
238

 
$
234

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
421

 
$
5

 
$
5

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
328

 
$
—

 
$
—

 
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2013
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,192

 
$
65

 
$
65

Commercial Real Estate Loans
 
2,251

 
5

 
7

Agricultural Loans
 
1,420

 
209

 
225

Subtotal
 
4,863

 
279

 
297

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
1,360

 
3

 
3

Commercial Real Estate Loans
 
5,424

 
22

 
18

Agricultural Loans
 
—

 
—

 
—

Subtotal
 
6,784

 
25

 
21

Total
 
$
11,647

 
$
304

 
$
318

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
30

 
$
3

 
$
3

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
142

 
$
2

 
$
2

 
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Cash
Basis
Recognized
December 31, 2012
 
 

 
 

 
 

With No Related Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
252

 
$
3

 
$
3

Commercial Real Estate Loans
 
4,506

 
18

 
18

Agricultural Loans
 
535

 
2

 
2

Subtotal
 
5,293

 
23

 
23

With An Allowance Recorded:
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
2,726

 
9

 
8

Commercial Real Estate Loans
 
6,660

 
23

 
19

Agricultural Loans
 
74

 
—

 
—

Subtotal
 
9,460

 
32

 
27

Total
 
$
14,753

 
$
55

 
$
50

 
 
 
 
 
 
 
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
 
$
26

 
$
2

 
$
2

Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
 
$
154

 
$
6

 
$
4


 
All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection.
 
The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of December 31, 2014 and 2013:
 
 
 
 
 
 
Loans Past Due
90 Days or More
 
 
Non-Accrual
 
& Still Accruing
 
 
2014

 
2013

 
2014

 
2013

Commercial and Industrial Loans and Leases
 
$
161

 
$
31

 
$
68

 
$
—

Commercial Real Estate Loans
 
3,460

 
6,658

 
—

 
8

Agricultural Loans
 
—

 
—

 
75

 
—

Home Equity Loans
 
268

 
114

 
—

 
—

Consumer Loans
 
196

 
236

 
—

 
—

Residential Mortgage Loans
 
1,885

 
1,339

 
—

 
—

Total
 
$
5,970

 
$
8,378

 
$
143

 
$
8

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
1,154

 
$
1,705

 
$
—

 
$
—


 
The following tables present the aging of the recorded investment in past due loans by class of loans as of December 31, 2014 and 2013:
 
 
Total
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days
or More
Past Due
 
Total
Past Due
 
Loans Not
Past Due
December 31, 2014
 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
380,851

 
$
628

 
$
—

 
$
148

 
$
776

 
$
380,075

Commercial Real Estate Loans
 
584,426

 
504

 
10

 
753

 
1,267

 
583,159

Agricultural Loans
 
219,640

 
25

 
—

 
75

 
100

 
219,540

Home Equity Loans
 
86,570

 
197

 
4

 
268

 
469

 
86,101

Consumer Loans
 
48,732

 
132

 
28

 
75

 
235

 
48,497

Residential Mortgage Loans
 
137,549

 
2,046

 
329

 
1,720

 
4,095

 
133,454

Total (1)
 
$
1,457,768

 
$
3,532

 
$
371

 
$
3,039

 
$
6,942

 
$
1,450,826

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
8,361

 
$
—

 
$
—

 
$
648

 
$
648

 
$
7,713

 
(1) Total recorded investment in loans includes $5,778 in accrued interest.
 
 
 
Total
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days
or More
Past Due
 
Total
Past Due
 
Loans Not
Past Due
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial Loans and Leases
 
$
351,903

 
$
256

 
$
78

 
$
—

 
$
334

 
$
351,569

Commercial Real Estate Loans
 
583,604

 
613

 
62

 
2,234

 
2,909

 
580,695

Agricultural Loans
 
195,171

 
62

 
—

 
—

 
62

 
195,109

Home Equity Loans
 
81,812

 
303

 
33

 
114

 
450

 
81,362

Consumer Loans
 
49,265

 
149

 
66

 
102

 
317

 
48,948

Residential Mortgage Loans
 
129,047

 
2,206

 
192

 
1,115

 
3,513

 
125,534

Total (1)
 
$
1,390,802

 
$
3,589

 
$
431

 
$
3,565

 
$
7,585

 
$
1,383,217

Loans Acquired With Deteriorated Credit Quality
(Included in the Total Above)
 
$
14,753

 
$
148

 
$
—

 
$
1,103

 
$
1,251

 
$
13,502

 
(1) Total recorded investment in loans includes $5,590 in accrued interest.
 
Troubled Debt Restructurings:
 
In certain instances, the Company may choose to restructure the contractual terms of loans. A troubled debt restructuring occurs when the Bank grants a concession to the borrower that it would not otherwise consider due to a borrower’s financial difficulty. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. This evaluation is performed under the Company’s internal underwriting policy. The Company uses the same methodology for loans acquired with deteriorated credit quality as for all other loans when determining whether the loan is a troubled debt restructuring.
 
During the year ended December 31, 2014, there was one loan modified as a troubled debt restructuring. The modification of the terms of this loan included a permanent reduction of the recorded investment in the loan. During the year ended December 31, 2013, there were two loans modified as troubled debt restructurings. The modification of the terms of these loans include an extension of the maturity date and a reduction of the stated interest rate of a loan. There were no troubled debt restructurings for the years ended December 31, 2014 and 2013 for loans acquired with deteriorated credit quality at the time of acquisition.
 
The following tables present the recorded investment of troubled debt restructurings by class of loans as of December 31, 2014 and 2013:
 
 
 
Total
 
Performing
 
Non-Accrual(1)
December 31, 2014
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
1,809

 
$
1,803

 
$
6

Commercial Real Estate Loans
 
2,841

 
960

 
1,881

Total
 
$
4,650

 
$
2,763

 
$
1,887


 
 
Total
 
Performing
 
Non-Accrual(1)
December 31, 2013
 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
2,092

 
$
2,086

 
$
6

Commercial Real Estate Loans
 
4,325

 
364

 
3,961

Total
 
$
6,417

 
$
2,450

 
$
3,967

 
(1) The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on a previous page.
 
The Company has not committed to lending any additional amounts as of December 31, 2014 to customers with outstanding loans that are classified as troubled debt restructurings. The Company had committed to lending an additional amount of $40 as of December 31, 2013 to customers with outstanding loans that are classified as troubled debt restructurings.
 
The following tables present loans by class modified as troubled debt restructurings that occurred during the years ending December 31, 2014, 2013 and 2012:
 
December 31, 2014
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
—

 
$
—

 
$
—

Commercial Real Estate Loans
 
1

 
201

 
197

Total
 
1

 
$
201

 
$
197

 
The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the year ending December 31, 2014.
 
December 31, 2013
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
1

 
$
224

 
$
230

Commercial Real Estate Loans
 
1

 
81

 
118

Total
 
2

 
$
305

 
$
348

 
The troubled debt restructurings described above decreased the allowance for loan losses by $210 and resulted in charge-offs of $0 during the year ending December 31, 2013. 
December 31, 2012
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases
 
2

 
$
9

 
$
9

Commercial Real Estate Loans
 
—

 
—

 
—

Total
 
2

 
$
9

 
$
9

 
The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the year ending December 31, 2012.
 
The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the years ending December 31, 2014, 2013 and 2012:
 
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2014
 
     

 
     

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
1

 
95

Total
 
1

 
$
95

 
The troubled debt restructurings that subsequently defaulted described above decreased the allowance for loan losses by $90 and resulted in charge-offs of $91 during the year ending December 31, 2014.
 
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2013
 
 

 
 

Commercial and Industrial Loans and Leases
 
—

 
$
—

Commercial Real Estate Loans
 
—

 
—

Total
 
—

 
$
—

 
The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the year ending December 31, 2013.
 
Troubled Debt Restructurings That Subsequently Defaulted:
 
Number of Loans
 
Recorded Investment
December 31, 2012
 
 

 
 

Commercial and Industrial Loans and Leases
 
1

 
$
565

Commercial Real Estate Loans
 
3

 
1,377

Total
 
4

 
$
1,942

 
The troubled debt restructurings that subsequently defaulted described above increased the allowance for loan losses by $12 and resulted in charge-offs of $306 during the year ending December 31, 2012.
 
A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.
 
Credit Quality Indicators:
 
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $100. This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings:
 
Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
 
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
 
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
 
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
December 31, 2014
 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
351,250

 
$
18,387

 
$
11,214

 
$
—

 
$
380,851

Commercial Real Estate Loans
 
545,804

 
23,421

 
15,201

 
—

 
584,426

Agricultural Loans
 
214,974

 
4,211

 
455

 
—

 
219,640

Total
 
$
1,112,028

 
$
46,019

 
$
26,870

 
$
—

 
$
1,184,917

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
651

 
$
1,697

 
$
4,391

 
$
—

 
$
6,739

 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
December 31, 2013
 
 

 
 

 
 

 
 

 
 

Commercial and Industrial Loans and Leases
 
$
324,685

 
$
15,485

 
$
11,733

 
$
—

 
$
351,903

Commercial Real Estate Loans
 
539,533

 
20,168

 
23,903

 
—

 
583,604

Agricultural Loans
 
192,609

 
2,357

 
205

 
—

 
195,171

Total
 
$
1,056,827

 
$
38,010

 
$
35,841

 
$
—

 
$
1,130,678

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
3,121

 
$
661

 
$
9,070

 
$
—

 
$
12,852


 
The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For home equity, consumer and residential mortgage loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of December 31, 2014 and 2013: 
 
 
Home Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage Loans
December 31, 2014
 
 

 
 

 
 

Performing
 
$
86,302

 
$
48,536

 
$
135,664

Nonperforming
 
268

 
196

 
1,885

Total
 
$
86,570

 
$
48,732

 
$
137,549

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
—

 
$
118

 
$
1,504

 
 
 
Home Equity
Loans
 
Consumer
Loans
 
Residential
Mortgage Loans
December 31, 2013
 
 

 
 

 
 

Performing
 
$
81,698

 
$
49,029

 
$
127,708

Nonperforming
 
114

 
236

 
1,339

Total
 
$
81,812

 
$
49,265

 
$
129,047

Loans Acquired with Deteriorated Credit Quality
(Included in the Total Above)
 
$
—

 
$
134

 
$
1,767



The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans at December 31, is as follows:
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
Commercial and Industrial Loans
 
$
354

 
$
1,981

 
$
1,840

Commercial Real Estate Loans
 
6,385

 
10,871

 
9,037

Home Equity Loans
 
—

 
—

 
—

Consumer Loans
 
118

 
134

 
148

Residential Mortgage Loans
 
1,504

 
1,767

 
149

Total
 
$
8,361

 
$
14,753

 
$
11,174

 
 
 
 
 
 
 
Carrying Amount, Net of Allowance
 
$
8,307

 
$
14,745

 
$
11,086



Accretable yield, or income expected to be collected, is as follows:
 
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
Balance at January 1
 
$
1,279

 
$
170

 
$
967

New Loans Purchased
 
—

 
1,358

 
—

Accretion of Income
 
(328
)
 
(249
)
 
(1,265
)
Reclassifications from Non-accretable Difference
 
847

 
—

 
468

Charge-off of Accretable Yield
 
(113
)
 
—

 
—

Balance at December 31
 
$
1,685

 
$
1,279

 
$
170


 
For those purchased loans disclosed above, the Company increased the allowance for loan losses by $54, $0 and $88 for the years ended December 31, 2014, 2013 and 2012. No allowances for loan losses were reversed during the same period. 

Certain directors, executive officers, and principal shareholders of the Company, including their immediate families and companies in which they are principal owners, were loan customers of the Company during 2014. A summary of the activity of these loans follows:
Balance
January 1,
2014
 
Additions
 
Changes in Persons Included
 
Deductions
 
Balance
December 31,
2014
 
 
 
Collected
 
Charged-off
 
$
11,061

 
$
4,464

 
$
203

 
$
(4,273
)
 
$
—

 
$
11,455