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Loans (Tables)
 3 Months Ended
Mar. 31, 2021
Loans [Abstract]  
Loan Portfolio and Allowance for Loan Losses

The Company grants loans primarily to customers throughout north central, central and south central Pennsylvania and the southern tier of New York. The recently completed MidCoast acquisition has expanded our lending market into Wilmington and Dover, Delaware.   Although the Company had a diversified loan portfolio at March 31, 2021 and December 31, 2020, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. 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 March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
  
Total Loans
    
Individually evaluated
for impairment
    
Loans acquired with
deteriorated credit quality
    
Collectively evaluated
for impairment
  
Real estate loans:
                        
Residential
  
$
203,273
    
$
969
    
$
20
    
$
202,284
  
Commercial
    
605,547
      
9,321
      
2,911
      
593,315
  
Agricultural
    
315,313
      
4,561
      
1,664
      
309,088
  
Construction
    
42,651
      
-
      
-
      
42,651
  
Consumer
    
26,181
      
1
      
-
      
26,180
  
Other commercial loans
    
109,168
      
1,127
      
132
      
107,909
  
Other agricultural loans
    
41,378
      
1,118
      
-
      
40,260
  
State and political subdivision loans
    
60,890
      
-
      
-
      
60,890
  
Total
    
1,404,401
      
17,097
      
4,727
      
1,382,577
  
Allowance for loan losses
    
16,560
      
485
      
-
      
16,075
  
Net loans
  
$
1,387,841
    
$
16,612
    
$
4,727
    
$
1,366,502
  

December 31, 2020
  
Total Loans
   
Individually evaluated
for impairment
   
Loans acquired with
deteriorated credit quality
   
Collectively evaluated
for impairment
  
Real estate loans:
                        
Residential
  
$
201,911
    
$
990
    
$
20
    
$
200,901
  
Commercial
    
596,255
      
9,183
      
2,937
      
584,135
  
Agricultural
    
315,158
      
4,645
      
1,686
      
308,827
  
Construction
    
35,404
      
-
      
-
      
35,404
  
Consumer
    
30,277
      
2
      
-
      
30,275
  
Other commercial loans
    
114,169
      
1,335
      
232
      
112,602
  
Other agricultural loans
    
48,779
      
1,122
      
-
      
47,657
  
State and political subdivision loans
    
63,328
      
-
      
-
      
63,328
  
Total
    
1,405,281
      
17,277
      
4,875
      
1,383,129
  
Allowance for loan losses
    
15,815
      
510
      
-
      
15,305
  
Net loans
  
$
1,389,466
    
$
16,767
    
$
4,875
    
$
1,367,824
  
Purchase Accounting Adjustments Related to Purchased Impaired Loans Acquired

The table below presents the components of the purchase accounting adjustments related to the purchased impaired loans acquired in the MidCoast acquisition as of the April 17, 2020 Acquisition date (in thousands):

  
April 17, 2020
  
Contractually required principal and interest at acquisition
  
$
8,801
  
Non-accretable  discount
    
(2,966
)
Expected cash flows
    
5,835
  
Accretable discount
  
$
(966
)
Estimated fair value
  
$
4,869
  
Accretable Yield for Purchased Credit Impaired Loans

Changes in the accretable yield for PCI loans were as follows for the three months ended March 31, 2021 and 2020, respectively (in thousands):

  
Three months ended
March 31
  
   
2021
    
2020
  
Balance at beginning of period
  
$
788
    
$
89
  
Accretion
    
(100
)
    
(1
)
Balance at end of period
  
$
688
    
$
88
  
Loans Acquired with Specific Evidence of Deterioration in Credit Quality

The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30 (in thousands):

  
March 31, 2021
    
December 31, 2020
  
Outstanding balance
  
$
8,747
    
$
8,958
  
Carrying amount
    
4,727
      
4,875
  
Impaired Loan Receivables with Associated Allowance Amount

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

March 31, 2021
  
Unpaid
Principal
Balance
    
Recorded
Investment
With No
Allowance
    
Recorded
Investment
With
Allowance
    
Total
Recorded
Investment
    
Related
Allowance
  
Real estate loans:
                              
Mortgages
  
$
1,059
    
$
724
    
$
122
    
$
846
    
$
9
  
Home Equity
    
147
      
69
      
54
      
123
      
8
  
Commercial
    
10,100
      
8,408
      
913
      
9,321
      
101
  
Agricultural
    
4,791
      
2,777
      
1,784
      
4,561
      
12
  
Consumer
    
1
      
1
      
-
      
1
      
-
  
Other commercial loans
    
1,793
      
889
      
238
      
1,127
      
170
  
Other agricultural loans
    
1,301
      
17
      
1,101
      
1,118
      
185
  
Total
  
$
19,192
    
$
12,885
    
$
4,212
    
$
17,097
    
$
485
  

December 31, 2020
  
Unpaid
Principal
Balance
    
Recorded
Investment
With No
Allowance
    
Recorded
Investment
With
Allowance
    
Total
Recorded
Investment
    
Related
Allowance
  
Real estate loans:
                              
Mortgages
  
$
1,070
    
$
740
    
$
123
    
$
863
    
$
9
  
Home Equity
    
150
      
70
      
57
      
127
      
9
  
Commercial
    
9,847
      
8,323
      
860
      
9,183
      
95
  
Agricultural
    
4,811
      
2,799
      
1,846
      
4,645
      
83
  
Consumer
    
2
      
2
      
-
      
2
      
-
  
Other commercial loans
    
1,908
      
1,094
      
241
      
1,335
      
170
  
Other agricultural loans
    
1,262
      
19
      
1,103
      
1,122
      
144
  
Total
  
$
19,050
    
$
13,047
    
$
4,230
    
$
17,277
    
$
510
  


The following tables includes the average balance of impaired loan receivables by class and the income recognized on these receivables for the three month periods ended March 31, 2021 and 2020 (in thousands):

  
For the Three Months Ended
  
   
March 31, 2021
    
March 31, 2020
  
   
Average
Recorded
Investment
    
Interest
Income
Recognized
    
Interest
Income
Recognized
Cash Basis
    
Average
Recorded
Investment
    
Interest
Income
Recognized
    
Interest
Income
Recognized
Cash Basis
  
Real estate loans:
                                    
Mortgages
  
$
851
    
$
5
    
$
-
    
$
1,031
    
$
5
    
$
-
  
Home Equity
    
124
      
1
      
-
      
146
      
2
      
-
  
Commercial
    
9,238
      
67
      
7
      
11,486
      
104
      
2
  
Agricultural
    
4,590
      
22
      
-
      
3,777
      
21
      
-
  
Consumer
    
1
      
-
      
-
      
3
      
-
      
-
  
Other commercial loans
    
1,121
      
1
      
-
      
1,839
      
1
      
-
  
Other agricultural loans
    
1,103
      
2
      
-
      
1,276
      
2
      
-
  
Total
  
$
17,028
    
$
98
    
$
7
    
$
19,558
    
$
135
    
$
2
  
Financing Receivable Credit Exposures by Internally Assigned Grades

The following tables represent credit exposures by internally assigned grades as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
  
Pass
    
Special
Mention
    
Substandard
    
Doubtful
    
Loss
    
Ending
Balance
  
Real estate loans:
                                    
Commercial
  
$
567,989
    
$
28,936
    
$
8,622
    
$
-
    
$
-
    
$
605,547
  
Agricultural
    
288,128
      
15,603
      
11,582
      
-
      
-
      
315,313
  
Construction
    
42,651
      
-
      
-
      
-
      
-
      
42,651
  
Other commercial loans
    
102,276
      
3,134
      
3,675
      
83
      
-
      
109,168
  
Other agricultural loans
    
38,114
      
1,849
      
1,415
      
-
      
-
      
41,378
  
State and political subdivision loans
    
56,245
      
4,372
      
273
      
-
      
-
      
60,890
  
Total
  
$
1,095,403
    
$
53,894
    
$
25,567
    
$
83
    
$
-
    
$
1,174,947
  

December 31, 2020
                                    
Real estate loans:
                                    
Commercial
  
$
563,121
    
$
24,329
    
$
8,805
    
$
-
    
$
-
    
$
596,255
  
Agricultural
    
289,216
      
14,307
      
11,635
      
-
      
-
      
315,158
  
Construction
    
35,404
      
-
      
-
      
-
      
-
      
35,404
  
Other commercial loans
    
106,604
      
3,808
      
3,672
      
85
      
-
      
114,169
  
Other agricultural loans
    
45,758
      
1,431
      
1,590
      
-
      
-
      
48,779
  
State and political subdivision loans
    
58,649
      
4,372
      
307
      
-
      
-
      
63,328
  
Total
  
$
1,098,752
    
$
48,247
    
$
26,009
    
$
85
    
$
-
    
$
1,173,093
  


For residential real estate mortgages, home equity and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
  
Performing
    
Non-performing
    
PCI
    
Total
  
Real estate loans:
                        
Mortgages
  
$
148,560
    
$
1,023
    
$
20
    
$
149,603
  
Home Equity
    
53,648
      
22
      
-
      
53,670
  
Consumer
    
26,181
      
-
      
-
      
26,181
  
Total
  
$
228,389
    
$
1,045
    
$
20
    
$
229,454
  
                                 
December 31, 2020
  
Performing
    
Non-performing
    
PCI
    
Total
  
Real estate loans:
                                
Mortgages
  
$
145,843
    
$
1,039
    
$
20
    
$
146,902
  
Home Equity
    
54,961
      
48
      
-
      
55,009
  
Consumer
    
30,247
      
30
      
-
      
30,277
  
Total
  
$
231,051
    
$
1,117
    
$
20
    
$
232,188
  
Aging Analysis of Past Due Loan Receivables

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of March 31, 2021 and December 31, 2020 (in thousands):

March 31, 2021
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 Days
Or Greater
    
Total
Past
Due
    
Current
    
PCI
    
Total
Loan
Receivables
    
90 Days or
Greater
and
Accruing
  
Real estate loans:
                                                
Mortgages
  
$
288
    
$
29
    
$
517
    
$
834
    
$
148,749
    
$
20
    
$
149,603
    
$
251
  
Home Equity
    
49
      
11
      
8
      
68
      
53,602
      
-
      
53,670
      
-
  
Commercial
    
848
      
190
      
1,440
      
2,478
      
600,158
      
2,911
      
605,547
      
-
  
Agricultural
    
356
      
25
      
1,330
      
1,711
      
311,938
      
1,664
      
315,313
      
150
  
Construction
    
-
      
-
      
-
      
-
      
42,651
      
-
      
42,651
      
-
  
Consumer
    
149
      
4
      
-
      
153
      
26,028
      
-
      
26,181
      
-
  
Other commercial loans
    
919
      
-
      
160
      
1,079
      
107,957
      
132
      
109,168
      
27
  
Other agricultural loans
    
224
      
-
      
50
      
274
      
41,104
      
-
      
41,378
      
50
  
State and political subdivision loans
    
-
      
-
      
-
      
-
      
60,890
      
-
      
60,890
      
-
  
Total
  
$
2,833
    
$
259
    
$
3,505
    
$
6,597
      
1,393,077
    
$
4,727
    
$
1,404,401
    
$
478
  
                                                                 
Loans considered non-accrual
  
$
539
      
171
    
$
3,027
    
$
3,737
    
$
6,943
    
$
-
    
$
10,680
          
Loans still accruing
    
2,294
      
88
      
478
      
2,860
      
1,386,134
      
4,727
      
1,393,721
          
Total
  
$
2,833
    
$
259
    
$
3,505
    
$
6,597
    
$
1,393,077
    
$
4,727
    
$
1,404,401
          

December 31, 2020
                                                
Real estate loans:
                                                
Mortgages
  
$
864
    
$
414
    
$
518
    
$
1,796
    
$
145,086
    
$
20
    
$
146,902
    
$
252
  
Home Equity
    
152
      
62
      
34
      
248
      
54,761
      
-
      
55,009
      
23
  
Commercial
    
836
      
439
      
1,822
      
3,097
      
590,221
      
2,937
      
596,255
      
70
  
Agricultural
    
2,283
      
-
      
1,329
      
3,612
      
309,860
      
1,686
      
315,158
      
150
  
Construction
    
-
      
-
      
-
      
-
      
35,404
      
-
      
35,404
      
-
  
Consumer
    
147
      
9
      
30
      
186
      
30,091
      
-
      
30,277
      
30
  
Other commercial loans
    
930
      
-
      
133
      
1,063
      
112,874
      
232
      
114,169
      
-
  
Other agricultural loans
    
1,044
      
-
      
-
      
1,044
      
47,735
      
-
      
48,779
      
-
  
State and political subdivision loans
    
-
      
-
      
-
      
-
      
63,328
      
-
      
63,328
      
-
  
Total
  
$
6,256
    
$
924
    
$
3,866
    
$
11,046
    
$
1,389,360
    
$
4,875
    
$
1,405,281
    
$
525
  
Loans considered non-accrual
  
$
3,032
    
$
28
    
$
3,341
    
$
6,401
    
$
4,331
    
$
-
    
$
10,732
          
Loans still accruing
    
3,224
      
896
      
525
      
4,645
      
1,385,029
      
4,875
      
1,394,549
          
Total
  
$
6,256
    
$
924
    
$
3,866
    
$
11,046
    
$
1,389,360
    
$
4,875
    
$
1,405,281
          
Loan Receivables on Nonaccrual Status

The following table reflects the loan receivables, excluding PCI loans, on non-accrual status as of March 31, 2021 and December 31, 2020, respectively. The balances are presented by class of loan receivable (in thousands):

  
March 31, 2021
    
December 31, 2020
  
Real estate loans:
            
Mortgages
  
$
772
    
$
787
  
Home Equity
    
22
      
25
  
Commercial
    
4,853
      
4,529
  
Agricultural
    
3,064
      
3,133
  
Other commercial loans
    
1,050
      
1,284
  
Other agricultural loans
    
919
      
974
  
 
  
$
10,680
    
$
10,732
  
Loan Modifications Related to COVID-19

The Company continues to follow the loan modification guidance under Section 4013 of the CARES Act with regard to COVID-19 modifications made between March 1, 2020 and the earlier of either January 1 , 2022 or the 60th day after the end of the COVID-19 national emergency. Under section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Similarly, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. A modification of six months or less is considered to be a short-term loan modification. In response to the COVID-19 pandemic, the Company has prudently executed loan modifications for existing loan customers, which includes deferrals of interest and in certain cases deferrals of principal and interest. The following table presents information regarding loans which were subject to a loan modification related to COVID-19 during 2021, with balances as of the December 31, 2021 and March 31, 2021, as well as the balance by modification type as of March 31, 2021.

  
Number of
loans
    
Balance as of December 31, 2020
    
Number of loans
    
Balance as of March 31, 2021
    
Principal and Interest Deferral
    
Principal Deferral
    
% of loans as of March 31, 2021
  
Real estate loans:
                                          
Mortgages
    
1
    
$
209
      
-
    
$
-
    
$
-
    
$
-
      
0.00
%
Home Equity
    
1
      
49
      
-
      
-
      
-
      
-
      
0.00
%
Commercial
    
12
      
26,039
      
4
      
13,864
      
6,205
      
7,659
      
2.29
%
Agricultural
    
3
      
181
      
-
      
-
      
-
      
-
      
0.00
%
Construction
    
-
      
-
      
-
      
-
      
-
      
-
      
0.00
%
Consumer
    
-
      
-
      
-
      
-
      
-
      
-
      
0.00
%
Other commercial loans
    
2
      
249
      
-
      
-
      
-
      
-
      
0.00
%
Other agricultural loans
    
-
      
-
      
-
      
-
      
-
      
-
      
0.00
%
Total
    
19
    
$
26,727
      
4
    
$
13,864
    
$
6,205
    
$
7,659
      
0.99
%
Troubled Debt Restructurings on Financing Receivables

Loan modifications that are considered TDRs completed during the three months ended March 31, 2021 and 2020 were as follows (dollars in thousands):

  
For the Three Months Ended March 31, 2021
  
   
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
    
$
-
    
$
290
    
$
-
    
$
290
  
Total
    
-
      
2
    
$
-
    
$
290
    
$
-
    
$
290
  

 
For the Three Months Ended March 31, 2020
  
   
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:
                                    
Agricultural
    
-
      
1
    
$
-
    
$
150
    
$
-
    
$
150
  
Total
    
-
      
1
    
$
-
    
$
150
    
$
-
    
$
150
  
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 March 31, 2021 and December 31, 2020, respectively (in thousands):

  
March 31, 2021
    
December 31, 2020
  
   
Individually evaluated for
impairment
    
Collectively evaluated for
impairment
    
Total
    
Individually evaluated for
impairment
    
Collectively evaluated for
impairment
    
Total
  
Real estate loans:
                                    
Residential
  
$
17
    
$
1,150
    
$
1,167
    
$
18
    
$
1,156
    
$
1,174
  
Commercial
    
101
      
6,582
      
6,683
      
95
      
6,121
      
6,216
  
Agricultural
    
12
      
4,905
      
4,917
      
83
      
4,870
      
4,953
  
Construction
    
-
      
151
      
151
      
-
      
122
      
122
  
Consumer
    
-
      
237
      
237
      
-
      
321
      
321
  
Other commercial loans
    
170
      
1,334
      
1,504
      
170
      
1,056
      
1,226
  
Other agricultural loans
    
185
      
604
      
789
      
144
      
720
      
864
  
State and political subdivision loans
    
-
      
470
      
470
      
-
      
479
      
479
  
Unallocated
    
-
      
642
      
642
      
-
      
460
      
460
  
Total
  
$
485
    
$
16,075
    
$
16,560
    
$
510
    
$
15,305
    
$
15,815
  
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 months ended March 31, 2021 and 2020, respectively (in thousands):

  
For the three months ended March 31, 2021
  
   
Balance at
December 31, 2020
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
March 31, 2021
  
Real estate loans:
                              
Residential
  
$
1,174
    
$
-
    
$
-
    
$
(7
)
  
$
1,167
  
Commercial
    
6,216
      
-
      
89
      
378
      
6,683
  
Agricultural
    
4,953
      
-
      
-
      
(36
)
    
4,917
  
Construction
    
122
      
-
      
-
      
29
      
151
  
Consumer
    
321
      
(4
)
    
6
      
(86
)
    
237
  
Other commercial loans
    
1,226
      
-
      
4
      
274
      
1,504
  
Other agricultural loans
    
864
      
-
      
-
      
(75
)
    
789
  
State and political subdivision loans
    
479
      
-
      
-
      
(9
)
    
470
  
Unallocated
    
460
      
-
      
-
      
182
      
642
  
Total
  
$
15,815
    
$
(4
)
  
$
99
    
$
650
    
$
16,560
  

 
For the three months ended March 31, 2020
  
   
Balance at
December 31, 2019
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
March 31, 2020
  
Real estate loans:
                              
Residential
  
$
1,114
    
$
-
    
$
-
    
$
40
    
$
1,154
  
Commercial
    
4,549
      
(1
)
    
1
      
180
      
4,729
  
Agricultural
    
5,022
      
-
      
-
      
(144
)
    
4,878
  
Construction
    
43
      
-
      
-
      
13
      
56
  
Consumer
    
112
      
(8
)
    
8
      
5
      
117
  
Other commercial loans
    
1,255
      
-
      
2
      
40
      
1,297
  
Other agricultural loans
    
961
      
-
      
-
      
(126
)
    
835
  
State and political subdivision loans
    
536
      
-
      
-
      
22
      
558
  
Unallocated
    
253
      
-
      
-
      
370
      
623
  
Total
  
$
13,845
    
$
(9
)
  
$
11
    
$
400
    
$
14,247