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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2017
Loans and Leases Receivable Disclosure [Abstract]  
Composition of the loan portfolio by type
The composition of the loan portfolio, net of deferred origination fees and costs, is summarized as follows (in thousands):
 
 
June 30, 
 2017
 
December 31, 
 2016
Commercial and agricultural:
 
 
 
 
Commercial and industrial
 
$
188,930

 
$
176,201

Agricultural
 
531

 
360

Commercial mortgages:
 
 

 
 

Construction
 
57,549

 
46,387

Commercial mortgages, other
 
547,165

 
522,269

Residential mortgages
 
200,629

 
198,493

Consumer loans:
 
 

 
 

Credit cards
 
1,403

 
1,476

Home equity lines and loans
 
97,273

 
98,590

Indirect consumer loans
 
142,791

 
139,572

Direct consumer loans
 
16,376

 
16,942

Total loans, net of deferred origination fees and costs
 
$
1,252,647

 
$
1,200,290

Interest receivable on loans
 
3,149

 
3,192

Total recorded investment in loans
 
$
1,255,796

 
$
1,203,482
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 six-month periods ended June 30, 2017 and 2016 (in thousands):
 
Three Months Ended June 30, 2017
Allowance for loan losses
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance
$
1,650

 
$
7,749

 
$
1,512

 
$
4,049

 
$
14,960

Charge-offs
(2
)
 
—

 
(48
)
 
(397
)
 
(447
)
Recoveries
36

 
2

 
13

 
119

 
170

Net recoveries (charge-offs)
34

 
2

 
(35
)
 
(278
)
 
(277
)
Provision
199

 
27

 
40

 
155

 
421

Ending balance
$
1,883

 
$
7,778

 
$
1,517

 
$
3,926

 
$
15,104

 
Three Months Ended June 30, 2016
Allowance for loan losses
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance
$
1,795

 
$
7,532

 
$
1,482

 
$
3,718

 
$
14,527

Charge-offs
(9
)
 
—

 
(58
)
 
(272
)
 
(339
)
Recoveries
18

 
2

 
—

 
72

 
92

Net recoveries (charge-offs)
9

 
2

 
(58
)
 
(200
)
 
(247
)
Provision
(33
)
 
220

 
80

 
121

 
388

Ending balance
$
1,771

 
$
7,754

 
$
1,504

 
$
3,639

 
$
14,668


 
Six Months Ended June 30, 2017
Allowance for loan losses
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance:
$
1,589

 
$
7,270

 
$
1,523

 
$
3,871

 
$
14,253

Charge-offs:
(7
)
 
—

 
(60
)
 
(825
)
 
(892
)
Recoveries:
61

 
3

 
30

 
188

 
282

Net recoveries (charge-offs)
54

 
3

 
(30
)
 
(637
)
 
(610
)
Provision
240

 
505

 
24

 
692

 
1,461

Ending balance
$
1,883

 
$
7,778

 
$
1,517

 
$
3,926

 
$
15,104

 
Six Months Ended June 30, 2016
Allowance for loan losses
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance:
$
1,831

 
$
7,112

 
$
1,464

 
$
3,853

 
$
14,260

Charge-offs:
(17
)
 
—

 
(58
)
 
(715
)
 
(790
)
Recoveries:
50

 
9

 
—

 
156

 
215

Net recoveries (charge-offs)
33

 
9

 
(58
)
 
(559
)
 
(575
)
Provision
(93
)
 
633

 
98

 
345

 
983

Ending balance
$
1,771

 
$
7,754

 
$
1,504

 
$
3,639

 
$
14,668
Allowance for loan losses and the recorded investment in loans 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 and based on impairment method as of June 30, 2017 and December 31, 2016 (in thousands):
 
June 30, 2017
Allowance for loan losses:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
84

 
$
886

 
$
—

 
$
—

 
$
970

Collectively evaluated for impairment
1,799

 
6,862

 
1,517

 
3,926

 
14,104

Loans acquired with deteriorated credit quality
—

 
30

 
—

 
—

 
30

   Total ending allowance balance
$
1,883

 
$
7,778

 
$
1,517

 
$
3,926

 
$
15,104

 
December 31, 2016
Allowance for loan losses:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
—

 
$
735

 
$
—

 
$
141

 
$
876

Collectively evaluated for impairment
1,589

 
6,476

 
1,498

 
3,730

 
13,293

Loans acquired with deteriorated credit quality
—

 
59

 
25

 
—

 
84

   Total ending allowance balance
$
1,589

 
$
7,270

 
$
1,523

 
$
3,871

 
$
14,253

 
June 30, 2017
Loans:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
772

 
$
11,823

 
$
443

 
$
70

 
$
13,108

Loans collectively evaluated for  impairment
189,167

 
593,413

 
200,674

 
258,428

 
1,241,682

Loans acquired with deteriorated credit quality
—

 
1,006

 
—

 
—

 
1,006

   Total ending loans balance
$
189,939

 
$
606,242

 
$
201,117

 
$
258,498

 
$
1,255,796

 
December 31, 2016
Loans:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
693

 
$
10,382

 
$
396

 
$
455

 
$
11,926

Loans collectively evaluated for  impairment
176,334

 
558,451

 
198,474

 
256,879

 
1,190,138

Loans acquired with deteriorated credit quality
—

 
1,323

 
95

 
—

 
1,418

   Total ending loans balance
$
177,027

 
$
570,156

 
$
198,965

 
$
257,334

 
$
1,203,482
Summary of impaired financing receivables
The following table presents loans individually evaluated for impairment recognized by class of loans as of June 30, 2017 and December 31, 2016 (in thousands):
 
June 30, 2017
 
December 31, 2016
With no related allowance recorded:
Unpaid Principal Balance
 
Recorded Investment
 
Allowance for Loan Losses Allocated
 
Unpaid Principal Balance
 
Recorded Investment
 
Allowance for Loan Losses Allocated
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
602

 
$
604

 
$
—

 
$
690

 
$
693

 
$
—

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
1,550

 
1,551

 
—

 
277

 
278

 
—

Commercial mortgages, other
5,641

 
5,615

 
—

 
8,792

 
7,857

 
—

Residential mortgages
466

 
443

 
—

 
395

 
396

 
—

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
69

 
70

 
—

 
93

 
95

 
—

With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 

Commercial and agricultural:
 
 
 

 
 

 
 

 
 

 
 

Commercial and industrial
168

 
168

 
84

 
—

 
—

 
—

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgages, other
5,595

 
4,657

 
886

 
2,245

 
2,247

 
735

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
—

 
—

 
—

 
360

 
360

 
141

Total
$
14,091

 
$
13,108

 
$
970

 
$
12,852

 
$
11,926

 
$
876


The following table presents the average recorded investment and interest income of loans individually evaluated for impairment recognized by class of loans as of the three and six-month periods ended June 30, 2017 and 2016 (in thousands):

 
 
Three Months Ended 
 June 30, 2017
 
Three Months Ended 
 June 30, 2016
 
Six Months Ended 
 June 30, 2017
 
Six Months Ended 
 June 30, 2016
With no related allowance recorded:
 
Average Recorded Investment
 
Interest Income Recognized
(1)
 
Average Recorded Investment
 
Interest Income Recognized
(1)
 
Average Recorded Investment
 
Interest Income Recognized
(1)
 
Average Recorded Investment
 
Interest Income Recognized
(1)
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
626

 
$
8

 
$
1,048

 
$
12

 
$
649

 
$
17

 
$
1,195

 
$
25

Commercial mortgages:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
 
1,555

 
3

 
340

 
3

 
1,130

 
6

 
343

 
7

Commercial mortgages, other
 
5,879

 
32

 
6,733

 
59

 
6,538

 
90

 
7,014

 
121

Residential mortgages
 
417

 
2

 
399

 
1

 
410

 
4

 
344

 
1

Consumer loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Home equity lines & loans
 
71

 
1

 
104

 
1

 
79

 
1

 
105

 
3

With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and agricultural:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and industrial
 
84

 
1

 
4

 
—

 
56

 
1

 
6

 
—

Commercial mortgages:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgages, other
 
4,461

 
4

 
4,942

 
1

 
3,723

 
7

 
4,910

 
3

Consumer loans:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
 
180

 
—

 
362

 
—

 
240

 
—

 
363

 
—

Total
 
$
13,273

 
$
51

 
$
13,932

 
$
77

 
$
12,825

 
$
126

 
$
14,280

 
$
160

(1)Cash basis interest income approximates interest income recognized.

The following tables present the recorded investment in non-accrual and loans past due 90 days or more and still accruing by class of loans as of June 30, 2017 and December 31, 2016 (in thousands):

 
 
Non-accrual
 
Loans Past Due 90 Days or More and Still Accruing
 
 
June 30, 2017
 
December 31, 2016
 
June 30, 2017
 
December 31, 2016
Commercial and agricultural:
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
—

 
$
—

 
$
9

 
$
2

Commercial mortgages:
 
 
 
 
 
 
 
 
Construction
 
1,307

 
19

 
—

 
—

Commercial mortgages, other
 
8,752

 
5,454

 
—

 
—

Residential mortgages
 
3,278

 
4,201

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
 
Credit cards
 
—

 
—

 
27

 
11

Home equity lines and loans
 
1,181

 
1,670

 
—

 
—

Indirect consumer loans
 
673

 
654

 
—

 
—

Direct consumer loans
 
17

 
45

 
—

 
—

Total
 
$
15,208

 
$
12,043

 
$
36

 
$
13
Recorded investment in past due and non-accrual status by class of loans
The following tables present the aging of the recorded investment in loans as of June 30, 2017 and December 31, 2016 (in thousands):
 
June 30, 2017
 
30 - 59 Days Past Due
 
60 - 89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Loans Acquired with Deteriorated Credit Quality
 
Loans Not Past Due
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
6

 
$
16

 
$
9

 
$
31

 
$
—

 
$
189,376

 
$
189,407

Agricultural
—

 
—

 
—

 
—

 
—

 
532

 
532

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
—

 
1,288

 
1,288

 
—

 
56,406

 
57,694

Commercial mortgages, other
493

 
3,208

 
2,547

 
6,248

 
1,006

 
541,294

 
548,548

Residential mortgages
1,373

 
485

 
1,766

 
3,624

 
—

 
197,493

 
201,117

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 
 
 
Credit cards
6

 
13

 
27

 
46

 
—

 
1,357

 
1,403

Home equity lines and loans
257

 
98

 
760

 
1,115

 
—

 
96,409

 
97,524

Indirect consumer loans
1,616

 
165

 
384

 
2,165

 
—

 
140,967

 
143,132

Direct consumer loans
51

 
3

 
—

 
54

 
—

 
16,385

 
16,439

Total
$
3,802

 
$
3,988

 
$
6,781

 
$
14,571

 
$
1,006

 
$
1,240,219

 
$
1,255,796



 
December 31, 2016
 
30 - 59 Days Past Due
 
60 - 89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Loans Acquired with Deteriorated Credit Quality
 
Loans Not Past Due
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
160

 
$
7

 
$
2

 
$
169

 
$
—

 
$
176,497

 
$
176,666

Agricultural
—

 
—

 
—

 
—

 
—

 
361

 
361

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
1,177

 
—

 
1,177

 
—

 
45,333

 
46,510

Commercial mortgages, other
652

 
4,460

 
2,412

 
7,524

 
1,323

 
514,799

 
523,646

Residential mortgages
2,100

 
436

 
2,383

 
4,919

 
95

 
193,951

 
198,965

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 
 
 
Credit cards
3

 
9

 
11

 
23

 
—

 
1,453

 
1,476

Home equity lines and loans
227

 
—

 
1,149

 
1,376

 
—

 
97,477

 
98,853

Indirect consumer loans
1,773

 
287

 
542

 
2,602

 
—

 
137,391

 
139,993

Direct consumer loans
54

 
7

 
22

 
83

 
—

 
16,929

 
17,012

Total
$
4,969

 
$
6,383

 
$
6,521

 
$
17,873

 
$
1,418

 
$
1,184,191

 
$
1,203,482
Loans by class modified as troubled debt restructurings
The following table presents loans by class modified as TDRs that occurred during the three months ended June 30, 2017 and June 30, 2016 (dollars in thousands):

June 30, 2017
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial and agricultural:
 
 
 
 
 
 
Commercial and industrial
 
3

 
$
171

 
$
171

Residential mortgages
 
1

 
105

 
105

Total
 
4

 
$
276

 
$
276


June 30, 2016
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial mortgages:
 
 

 
 

 
 

Commercial mortgages
 
5

 
$
312

 
$
310

Residential mortgages
 
1

 
174

 
182

Consumer loans:
 
 
 
 
 
 
Home equity lines and loans
 
1

 
74

 
74

Total
 
7

 
$
560

 
$
566



The TDRs described above increased the allowance for loan losses by $0.1 million and resulted in no charge-offs during the three month period ended June 30, 2017. The TDRs described above did not increase the allowance for loan losses and resulted in no charge-offs during the three months ended June 30, 2016.

The following tables presents loans by class modified as TDRs that occurred during the six months ended June 30, 2017 and 2016 (dollars in thousands):
June 30, 2017
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial and agricultural:
 
 
 
 
 
 
Commercial and industrial
 
3

 
$
171

 
$
171

Commercial mortgages:
 
 

 
 

 
 

Commercial mortgages
 
1

 
166

 
166

Residential mortgages
 
1

 
105

 
105

Total
 
5

 
$
442

 
$
442

June 30, 2016
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial mortgages:
 
 

 
 

 
 

Commercial mortgages
 
5

 
$
312

 
$
310

Residential mortgages
 
2

 
295

 
307

Consumer loans:
 
 
 
 
 
 
Home equity lines and loans
 
1

 
74

 
74

Total
 
8

 
$
681

 
$
691


The TDRs described above increased the allowance for loan losses by $0.1 million and resulted in no charge-offs during the six months ended June 30, 2017. The TDRs described above did not increase the allowance for loan losses and resulted in no charge-offs during the six months ended June 30, 2016.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no payment defaults on any loans previously modified as TDRs within twelve months following the modification during the three and six month periods ended June 30, 2017.

There were no payment defaults on any loans previously modified as TDRs within twelve months following the modification during the three months ended June 30, 2016. The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the six months ended June 30, 2016:

 
 
Number of Loans
 
Recorded Investment
Commercial mortgages:
 
 
 
 
Commercial mortgages, other
 
2
 
$
2,120

Total
 
2
 
$
2,120



The TDRs that subsequently defaulted described above did not increase the allowance for loan losses and resulted in no charge offs during the three and six-month periods ended June 30, 2016. 
Risk category of the recorded investment of loans by class of loans
Based on the analyses performed as of June 30, 2017 and December 31, 2016, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):
 
June 30, 2017
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loans acquired with deteriorated credit quality
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
182,211

 
$
5,321

 
$
1,875

 
$
—

 
$
—

 
$
189,407

Agricultural
—

 
532

 
—

 


 
—

 
—

 
532

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
56,388

 
—

 
1,306

 
—

 
—

 
57,694

Commercial mortgages
—

 
522,740

 
8,058

 
15,325

 
1,419

 
1,006

 
548,548

Residential mortgages
197,839

 
—

 
—

 
3,278

 
—

 
—

 
201,117

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 
Credit cards
1,403

 
—

 
—

 
—

 
—

 
—

 
1,403

Home equity lines and loans
96,343

 
—

 
—

 
1,181

 
—

 
—

 
97,524

Indirect consumer loans
142,459

 
—

 
—

 
673

 
—

 
—

 
143,132

Direct consumer loans
16,422

 
—

 
—

 
17

 
—

 
—

 
16,439

Total
$
454,466

 
$
761,871

 
$
13,379

 
$
23,655

 
$
1,419

 
$
1,006

 
$
1,255,796

 
December 31, 2016
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loans acquired with deteriorated credit quality
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
172,873

 
$
2,277

 
$
1,516

 
$
—

 
$
—

 
$
176,666

Agricultural
—

 
361

 
—

 
—

 
—

 
—

 
361

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
45,055

 
259

 
1,196

 
—

 
—

 
46,510

Commercial mortgages
—

 
496,723

 
8,574

 
15,566

 
1,460

 
1,323

 
523,646

Residential mortgages
194,669

 
—

 
—

 
4,201

 
—

 
95

 
198,965

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 
Credit cards
1,476

 
—

 
—

 
—

 
—

 
—

 
1,476

Home equity lines and loans
97,183

 
—

 
—

 
1,670

 
—

 
—

 
98,853

Indirect consumer loans
139,339

 
—

 
—

 
654

 
—

 
—

 
139,993

Direct consumer loans
16,967

 
—

 
—

 
45

 
—

 
—

 
17,012

Total
$
449,634

 
$
715,012

 
$
11,110

 
$
24,848

 
$
1,460

 
$
1,418

 
$
1,203,482
Recorded investment in residential and consumer loans based on payment activity
The following table presents the recorded investment in residential and consumer loans based on payment activity as of June 30, 2017 and December 31, 2016 (in thousands):

 
June 30, 2017
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
197,839

 
$
1,403

 
$
96,343

 
$
142,459

 
$
16,422

Non-Performing
3,278

 
—

 
1,181

 
673

 
17

 
$
201,117

 
$
1,403

 
$
97,524

 
$
143,132

 
$
16,439

 
December 31, 2016
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
194,764

 
$
1,476

 
$
97,183

 
$
139,339

 
$
16,967

Non-Performing
4,201

 
—

 
1,670

 
654

 
45

 
$
198,965

 
$
1,476

 
$
98,853

 
$
139,993

 
$
17,012
Summary of changes in contractually required principal and interest on loans acquired
The table below summarizes the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the PCI loans from April 1, 2017 to June 30, 2017 and April 1, 2016 to June 30, 2016 (in thousands):

Three Months Ended June 30, 2017
 
Balance at March 31, 2017
 
Income Accretion
 
All Other Adjustments
 
Balance at June 30, 2017
Contractually required principal and interest
 
$
1,877

 
$
—

 
$
(710
)
 
$
1,167

Contractual cash flows not expected to be collected (nonaccretable discount)
 
(352
)
 
—

 
319

 
(33
)
Cash flows expected to be collected
 
1,525

 
—

 
(391
)
 
1,134

Interest component of expected cash flows (accretable yield)
 
(155
)
 
25

 
2

 
(128
)
Fair value of loans acquired with deteriorating credit quality
 
$
1,370

 
$
25

 
$
(389
)
 
$
1,006


Three Months Ended June 30, 2016
 
Balance at March 31, 2016
 
Income Accretion
 
All Other Adjustments
 
Balance at June 30, 2016
Contractually required principal and interest
 
$
2,858

 
$
—

 
$
(366
)
 
$
2,492

Contractual cash flows not expected to be collected (nonaccretable discount)
 
(505
)
 
—

 
131

 
(374
)
Cash flows expected to be collected
 
2,353

 
—

 
(235
)
 
2,118

Interest component of expected cash flows (accretable yield)
 
(275
)
 
33

 
(1
)
 
(243
)
Fair value of loans acquired with deteriorating credit quality
 
$
2,078

 
$
33

 
$
(236
)
 
$
1,875


For those purchased credit impaired loans disclosed above, the Corporation decreased the allowance for loan losses by $54 thousand and $15 thousand during the three months ended June 30, 2017 and 2016, respectively. The Corporation reversed $29 thousand of the allowance for loan losses during the three months ended June 30, 2017. The Corporation did not reverse any allowance for loan losses during the three months ended June 30, 2016.

The tables below summarizes the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the PCI loans from January 1, 2017 to June 30, 2017 and January 1, 2016 to June 30, 2016 (in thousands):

Six Months Ended June 30, 2017
 
Balance at December 31, 2016
 
Income Accretion
 
All Other Adjustments
 
Balance at June 30, 2017
Contractually required principal and interest
 
$
1,940

 
$
—

 
$
(773
)
 
$
1,167

Contractual cash flows not expected to be collected (nonaccretable discount)
 
(352
)
 
—

 
319

 
(33
)
Cash flows expected to be collected
 
1,588

 
—

 
(454
)
 
1,134

Interest component of expected cash flows (accretable yield)
 
(170
)
 
40

 
2

 
(128
)
Fair value of loans acquired with deteriorating credit quality
 
$
1,418

 
$
40

 
$
(452
)
 
$
1,006


Six Months Ended June 30, 2016
 
Balance at December 31, 2015
 
Income Accretion
 
All Other Adjustments
 
Balance at June 30, 2016
Contractually required principal and interest
 
$
2,912

 
$
—

 
$
(420
)
 
$
2,492

Contractual cash flows not expected to be collected (nonaccretable discount)
 
(506
)
 
—

 
132

 
(374
)
Cash flows expected to be collected
 
2,406

 
—

 
(288
)
 
2,118

Interest component of expected cash flows (accretable yield)
 
(311
)
 
70

 
(2
)
 
(243
)
Fair value of loans acquired with deteriorating credit quality
 
$
2,095

 
$
70

 
$
(290
)
 
$
1,875