Loans (Tables)

6 Months Ended

Jun. 30, 2015

Summary of loan portfolio and allowance for loan losses

The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for loan losses as of June 30, 2015 and December 31, 2014 (in thousands):

June 30, 2015	Total Loans	Individually evaluated for impairment	Collectively evaluated for impairment
Real estate loans:
Residential	$ 181,566	$ 333	$ 181,233
Commercial and agricultural	224,450	5,578	218,872
Construction	8,025	-	8,025
Consumer	8,374	-	8,374
Other commercial and agricultural loans	64,506	2,248	62,258
State and political subdivision loans	84,730	-	84,730
Total	571,651	$ 8,159	$ 563,492
Allowance for loan losses	6,959
Net loans	$ 564,692

December 31, 2014
Real estate loans:
Residential	$ 185,438	$ 316	$ 185,122
Commercial and agricultural	215,584	6,112	209,472
Construction	6,353	-	6,353
Consumer	8,497	-	8,497
Other commercial and agricultural loans	58,516	2,394	56,122
State and political subdivision loans	79,717	-	79,717
Total	554,105	$ 8,822	$ 545,283
Allowance for loan losses	6,815
Net loans	$ 547,290

Impaired financing receivables with associated allowance amount

The following table includes the recorded investment and unpaid principal balances for impaired financing receivables by class, with the associated allowance amount, if applicable (in thousands):

		Recorded	Recorded
	Unpaid	Investment	Investment	Total
	Principal	With No	With	Recorded	Related
June 30, 2015	Balance	Allowance	Allowance	Investment	Allowance
Real estate loans:
Mortgages	$ 305	$ 118	$ 152	$ 270	$ 29
Home Equity	63	-	63	63	12
Commercial	8,051	5,469	109	5,578	48
Agricultural	-	-	-	-	-
Construction	-	-	-	-	-
Consumer	-	-	-	-	-
Other commercial loans	2,354	1,164	1,084	2,248	185
Other agricultural loans	-	-	-	-	-
State and political subdivision loans	-	-	-	-	-
Total	$ 10,773	$ 6,751	$ 1,408	$ 8,159	$ 274

December 31, 2014
Real estate loans:
Mortgages	$ 222	$ 125	$ 66	$ 191	$ 13
Home Equity	130	60	65	125	12
Commercial	8,433	5,708	404	6,112	72
Agricultural	-	-	-	-	-
Construction	-	-	-	-	-
Consumer	-	-	-	-	-
Other commercial loans	2,480	2,346	48	2,394	1
Other agricultural loans	-	-	-	-	-
State and political subdivision loans	-	-	-	-	-
Total	$ 11,265	$ 8,239	$ 583	$ 8,822	$ 98

The following tables includes the average balance of impaired financing receivables by class and the income recognized on impaired loans for the three and six month periods ended June 30, 2015 and 2014(in thousands):

	For the Six Months ended
	June 30, 2015			June 30, 2014
			Interest			Interest
	Average	Interest	Income	Average	Interest	Income
	Recorded	Income	Recognized	Recorded	Income	Recognized
	Investment	Recognized	Cash Basis	Investment	Recognized	Cash Basis
Real estate loans:
Mortgages	$ 224	$ 4	$ 5	$ 202	$ 4	$ -
Home Equity	114	2	-	132	2	-
Commercial	5,862	32	-	8,039	44	-
Agricultural	-	-	-	-	-	-
Construction	-	-	-	-	-	-
Consumer	-	-	-	15	-	-
Other commercial loans	2,678	49	3	2,000	46	-
Other agricultural loans	-	-	-	-	-	-
State and political
subdivision loans	-	-	-	-	-	-
Total	$ 8,878	$ 87	$ 8	$ 10,388	$ 96	$ -

	For the Three Months Ended
	June 30, 2015			June 30, 2014
Real estate loans:
Mortgages	$ 259	$ 2	$ 5	$ 200	$ 2	$ -
Home Equity	103	1	-	131	1	-
Commercial	5,700	19	-	7,544	18	-
Agricultural	-	-	-	-	-	-
Construction	-	-	-	-	-	-
Consumer	-	-	-	15	-	-
Other commercial loans	2,629	24	2	2,108	13	-
Other agricultural loans	-	-	-	-	-	-
State and political
subdivision loans	-	-	-	-	-	-
Total	$ 8,691	$ 46	$ 7	$ 9,998	$ 34	$ -

Summary of financing receivable credit exposures by internally assigned grades

The following tables represent credit exposures by internally assigned grades as of June 30, 2015 and December 31, 2014 (in thousands):

June 30, 2015	Pass	Special Mention	Substandard	Doubtful	Loss	Ending Balance
Real estate loans:
Commercial	$ 177,073	$ 4,390	$ 12,220	$ 44	$ -	$ 193,727
Agricultural	27,638	2,600	485	-	-	30,723
Construction	8,025	-	-	-	-	8,025
Other commercial loans	45,715	817	5,443	145	-	52,120
Other agricultural loans	11,989	397	-	-	-	12,386
State and political
subdivision loans	84,730	-	-	-	-	84,730
Total	$ 355,170	$ 8,204	$ 18,148	$ 189	$ -	$ 381,711

December 31, 2014
Real estate loans:
Commercial	$ 169,383	$ 8,948	$ 12,614	$ -	$ -	$ 190,945
Agricultural	19,575	3,394	1,670	-	-	24,639
Construction	6,353	-	-	-	-	6,353
Other commercial loans	40,683	4,413	2,355	-	-	47,451
Other agricultural loans	9,221	727	1,117	-	-	11,065
State and political
subdivision loans	79,717	-	-	-	-	79,717
Total	$ 324,932	$ 17,482	$ 17,756	$ -	$ -	$ 360,170

The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2015 and December 31, 2014 (in thousands):

June 30, 2015	Performing	Non-performing	Total
Real estate loans:
Mortgages	$ 119,649	$ 1,160	$ 120,809
Home Equity	60,608	149	60,757
Consumer	8,320	54	8,374
Total	$ 188,577	$ 1,363	$ 189,940

December 31, 2014
Real estate loans:
Mortgages	$ 121,968	$ 890	$ 122,858
Home Equity	62,296	284	62,580
Consumer	8,444	53	8,497
Total	$ 192,708	$ 1,227	$ 193,935

Aging analysis of past due financing receivables

The following table includes an aging analysis of the recorded investment of past due financing receivables as of June 30, 2015 and December 31, 2014 (in thousands):

								90 Days or
		30-59 Days	60-89 Days	90 Days	Total Past		Total Financing	Greater and
June 30, 2015		Past Due	Past Due	Or Greater	Due	Current	Receivables	Accruing
Real estate loans:
Mortgages		$ 502	$ 154	$ 866	$ 1,522	$ 119,287	$ 120,809	$ 380
Home Equity		395	84	136	615	60,142	60,757	80
Commercial		114	524	4,034	4,672	189,055	193,727	104
Agricultural		39	170	-	209	30,514	30,723	-
Construction		-	-	-	-	8,025	8,025	-
Consumer		38	30	12	80	8,294	8,374	1
Other commercial loans		526	56	919	1,501	50,619	52,120	261
Other agricultural loans		-	97	-	97	12,289	12,386	-
State and political subdivision loans		-	-	-	-	84,730	84,730	-
	Total	$ 1,614	$ 1,115	$ 5,967	$ 8,696	$ 562,955	$ 571,651	$ 826
Loans considered non-accrual		$ 524	$ 496	$ 5,141	$ 6,161	$ 406	$ 6,567
Loans still accruing		1,090	619	826	2,535	562,549	565,084
	Total	$ 1,614	$ 1,115	$ 5,967	$ 8,696	$ 562,955	$ 571,651

December 31, 2014
Real estate loans:
Mortgages		$ 318	$ 230	$ 675	$ 1,223	$ 121,635	$ 122,858	$ 214
Home Equity		442	99	260	801	61,779	62,580	132
Commercial		97	231	1,432	1,760	189,185	190,945	310
Agricultural		-	-	-	-	24,639	24,639	-
Construction		-	-	-	-	6,353	6,353	-
Consumer		119	4	7	130	8,367	8,497	6
Other commercial loans		503	258	476	1,237	46,214	47,451	174
Other agricultural loans		-	-	-	-	11,065	11,065	-
State and political subdivision loans		-	-	-	-	79,717	79,717	-
	Total	$ 1,479	$ 822	$ 2,850	$ 5,151	$ 548,954	$ 554,105	$ 836
Loans considered non-accrual		$ 48	$ 181	$ 2,014	$ 2,243	$ 4,356	$ 6,599
Loans still accruing		1,431	641	836	2,908	544,598	547,506
	Total	$ 1,479	$ 822	$ 2,850	$ 5,151	$ 548,954	$ 554,105

Summary of financing receivables on nonaccrual status

The following table reflects the financing receivables on non-accrual status as of June 30, 2015 and December 31, 2014, respectively. The balances are presented by class of financing receivable (in thousands):

	June 30, 2015	December 31, 2014
Real estate loans:
Mortgages	$ 780	$ 676
Home Equity	69	152
Commercial	4,547	5,010
Agricultural	-	-
Construction	-	-
Consumer	53	47
Other commercial loans	1,118	714
Other agricultural loans	-	-
State and political subdivision loans	-	-
	$ 6,567	$ 6,599

Summary of troubled debt restructurings on financing receivables

Loan modifications that are considered TDRs completed during the three and six months ended June 30, 2015 and 2014 were as follows (dollars in thousands):

	For the Three Months Ended June 30, 2015
	Number of contracts		Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	Interest Modification	Term Modification	Interest Modification	Term Modification	Interest Modification	Term Modification
Real estate loans:
Mortgages	-	1	$ -	$ 19	$ -	$ 19
Total	-	1	$ -	$ 19	$ -	$ 19

	For the Six Months Ended June 30, 2015
	Number of contracts		Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	Interest Modification	Term Modification	Interest Modification	Term Modification	Interest Modification	Term Modification
Real estate loans:
Mortgages	1	1	$ 71	$ 19	$ 71	$ 19
Total	1	1	$ 71	$ 19	$ 71	$ 19

	For the Three Months Ended June 30, 2014
	Number of contracts		Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	Interest Modification	Term Modification	Interest Modification	Term Modification	Interest Modification	Term Modification
Real estate loans:
Commercial	-	1	$ -	$ 28	$ -	$ 28
Total	-	1	$ -	$ 28	$ -	$ 28

	For the Six Months Ended June 30, 2014
	Number of contracts		Pre-modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	Interest Modification	Term Modification	Interest Modification	Term Modification	Interest Modification	Term Modification
Real estate loans:
Commercial	-	2	$ -	$ 153	$ -	$ 153
Total	-	2	$ -	$ 153	$ -	$ 153

The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2015 and 2014 (six month periods) and April 1, 2015 and 2014 (3 month periods), respectively, and that subsequently defaulted during these reporting periods (dollars in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
	Number of contracts	Recorded investment	Number of contracts	Recorded investment	Number of contracts	Recorded investment	Number of contracts	Recorded investment
Real estate loans:
Commercial	-	$ -	-	$ -	-	$ -	1	$ 483
Total recidivism	-	$ -	-	$ -	-	$ -	1	$ 483

Allowance for loan losses by impairment method

The following table segregates the allowance for loan losses (ALLL) into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of June 30,2015 and December 31, 2014, respectively (in thousands):

	June 30, 2015			December 31, 2014
	Individually evaluated for impairment	Collectively evaluated for impairment	Total	Individually evaluated for impairment	Collectively evaluated for impairment	Total
Real estate loans:
Residential	$ 41	$ 890	$ 931	$ 25	$ 853	$ 878
Commercial and agricultural	48	3,631	3,679	72	3,798	3,870
Construction	-	14	14	-	26	26
Consumer	-	89	89	-	84	84
Other commercial and agricultural loans	185	1,317	1,502	1	1,223	1,224
State and political subdivision loans	-	568	568	-	545	545
Unallocated	-	176	176	-	188	188
Total	$ 274	$ 6,685	$ 6,959	$ 98	$ 6,717	$ 6,815

Roll forward of allowance for loan losses by portfolio segment

The following tables roll forward the balance of the ALLL by portfolio segment for the three and six month periods ended June 30, 2015 and 2014, respectively (in thousands):

	Balance at March 31, 2015	Charge-offs	Recoveries	Provision	Balance at June 30, 2015
Real estate loans:
Residential	$ 923	$ (17)	$ -	$ 25	$ 931
Commercial and agricultural	3,699	(56)	3	33	3,679
Construction	11	-	-	3	14
Consumer	82	(17)	4	20	89
Other commercial and agricultural loans	1,286	-	-	216	1,502
State and political subdivision loans	572	-	-	(4)	568
Unallocated	349	-	-	(173)	176
Total	$ 6,922	$ (90)	$ 7	$ 120	$ 6,959

	Balance at December 31, 2014	Charge-offs	Recoveries	Provision	Balance at June 30, 2015
Real estate loans:
Residential	$ 878	$ (34)	$ -	$ 87	$ 931
Commercial and agricultural	3,870	(56)	7	(142)	3,679
Construction	26	-	-	(12)	14
Consumer	84	(24)	12	17	89
Other commercial and agricultural loans	1,224	(1)	-	279	1,502
State and political subdivision loans	545	-	-	23	568
Unallocated	188	-	-	(12)	176
Total	$ 6,815	$ (115)	$ 19	$ 240	$ 6,959

	Balance at March 31, 2014	Charge-offs	Recoveries	Provision	Balance at June 30, 2014
Real estate loans:
Residential	$ 886	$ (7)	$ -	$ -	$ 879
Commercial and agricultural	4,530	(465)	3	(259)	3,809
Construction	8	-	-	5	13
Consumer	83	(6)	6	3	86
Commercial and other loans	1,173	(163)	-	141	1,151
State and political subdivision loans	396	-	-	59	455
Unallocated	157	-	-	201	358
Total	$ 7,233	$ (641)	$ 9	$ 150	$ 6,751

	Balance at December 31, 2013	Charge-offs	Recoveries	Provision	Balance at June 30, 2014
Real estate loans:
Residential	$ 946	$ (45)	$ -	$ (22)	$ 879
Commercial and agricultural	4,558	(475)	5	(279)	3,809
Construction	50	-	-	(37)	13
Consumer	105	(14)	15	(20)	86
Commercial and other loans	942	(163)	-	372	1,151
State and political subdivision loans	330	-	-	125	455
Unallocated	167	-	-	191	358
Total	$ 7,098	$ (697)	$ 20	$ 330	$ 6,751