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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 3 Months Ended
Mar. 31, 2018
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):
 
 
March 31, 
 2018
 
December 31, 
 2017
Commercial and agricultural:
 
 
 
 
Commercial and industrial
 
$
199,947

 
$
198,463

Agricultural
 
529

 
544

Commercial mortgages:
 
 

 
 

Construction
 
55,404

 
45,558

Commercial mortgages, other
 
592,195

 
598,772

Residential mortgages
 
194,600

 
194,440

Consumer loans:
 
 

 
 

Credit cards
 
1,418

 
1,517

Home equity lines and loans
 
100,611

 
100,591

Indirect consumer loans
 
156,958

 
153,060

Direct consumer loans
 
18,249

 
18,879

Total loans, net of deferred origination fees and costs
 
$
1,319,911

 
$
1,311,824

Interest receivable on loans
 
3,618

 
3,758

Total recorded investment in loans
 
$
1,323,529

 
$
1,315,582
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-month periods ended March 31, 2018 and 2017 (in thousands):
 
Three Months Ended March 31, 2018
Allowance for loan losses
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Beginning balance
$
6,976

 
$
8,514

 
$
1,316

 
$
4,355

 
$
21,161

Charge-offs
(19
)
 
—

 
(94
)
 
(458
)
 
(571
)
Recoveries
9

 
1

 
5

 
76

 
91

Net recoveries (charge-offs)
(10
)
 
1

 
(89
)
 
(382
)
 
(480
)
Provision
37

 
125

 
180

 
367

 
709

Ending balance
$
7,003

 
$
8,640

 
$
1,407

 
$
4,340

 
$
21,390

 
Three Months Ended March 31, 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
(5
)
 
—

 
(12
)
 
(427
)
 
(444
)
Recoveries
24

 
1

 
17

 
69

 
111

Net recoveries (charge-offs)
19

 
1

 
5

 
(358
)
 
(333
)
Provision
42

 
478

 
(16
)
 
536

 
1,040

Ending balance
$
1,650

 
$
7,749

 
$
1,512

 
$
4,049

 
$
14,960
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 March 31, 2018 and December 31, 2017 (in thousands):
 
March 31, 2018
Allowance for loan losses:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Ending allowance balance attributable to loans:
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
4,910

 
$
771

 
$
—

 
$
—

 
$
5,681

Collectively evaluated for impairment
2,093

 
7,869

 
1,407

 
4,340

 
15,709

   Total ending allowance balance
$
7,003

 
$
8,640

 
$
1,407

 
$
4,340

 
$
21,390

 
December 31, 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
$
5,135

 
$
802

 
$
—

 
$
—

 
$
5,937

Collectively evaluated for impairment
1,841

 
7,683

 
1,316

 
4,355

 
15,195

Loans acquired with deteriorated credit quality
—

 
29

 
—

 
—

 
29

   Total ending allowance balance
$
6,976

 
$
8,514

 
$
1,316

 
$
4,355

 
$
21,161

 
March 31, 2018
Loans:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
5,795

 
$
7,359

 
$
425

 
$
61

 
$
13,640

Loans collectively evaluated for  impairment
195,242

 
642,054

 
194,671

 
277,922

 
1,309,889

   Total ending loans balance
$
201,037

 
$
649,413

 
$
195,096

 
$
277,983

 
$
1,323,529

 
December 31, 2017
Loans:
Commercial and Agricultural
 
Commercial Mortgages
 
Residential Mortgages
 
Consumer Loans
 
Total
Loans individually evaluated for impairment
$
6,133

 
$
7,302

 
$
427

 
$
64

 
$
13,926

Loans collectively evaluated for  impairment
193,443

 
638,080

 
194,510

 
274,831

 
1,300,864

Loans acquired with deteriorated credit quality
—

 
792

 
—

 
—

 
792

   Total ending loans balance
$
199,576

 
$
646,174

 
$
194,937

 
$
274,895

 
$
1,315,582
Summary of impaired financing receivables
The following table presents loans individually evaluated for impairment recognized by class of loans as of March 31, 2018 and December 31, 2017 (in thousands):
 
March 31, 2018
 
December 31, 2017
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
$
770

 
$
773

 
$
—

 
$
861

 
$
867

 
$
—

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Construction
351

 
352

 
—

 
364

 
365

 
—

Commercial mortgages, other
4,210

 
4,212

 
—

 
4,135

 
4,138

 
—

Residential mortgages
447

 
425

 
—

 
450

 
427

 
—

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

Home equity lines and loans
61

 
61

 
—

 
64

 
64

 
—

With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 

Commercial and agricultural:
 
 
 

 
 

 
 

 
 

 
 

Commercial and industrial
5,019

 
5,022

 
4,910

 
5,231

 
5,266

 
5,135

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgages, other
2,984

 
2,795

 
771

 
2,989

 
2,799

 
802

Total
$
13,842

 
$
13,640

 
$
5,681

 
$
14,094

 
$
13,926

 
$
5,937


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-month periods ended March 31, 2018 and 2017 (in thousands):

 
 
Three Months Ended 
 March 31, 2018
 
Three Months Ended 
 March 31, 2017
With no related allowance recorded:
 
Average Recorded Investment
 
Interest Income Recognized
(1)
 
Average Recorded Investment
 
Interest Income Recognized
(1)
Commercial and agricultural:
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
820

 
$
9

 
$
671

 
$
9

Commercial mortgages:
 
 

 
 

 
 

 
 

Construction
 
359

 
3

 
919

 
3

Commercial mortgages, other
 
4,175

 
5

 
7,000

 
59

Residential mortgages
 
426

 
2

 
393

 
2

Consumer loans:
 
 

 
 

 
 

 
 

Home equity lines & loans
 
63

 
1

 
84

 
1

With an allowance recorded:
 
 

 
 

 
 

 
 

Commercial and agricultural:
 
 

 
 

 
 

 
 

Commercial and industrial
 
5,144

 
—

 
—

 
—

Commercial mortgages:
 
 

 
 

 
 

 
 

Commercial mortgages, other
 
2,797

 
1

 
3,257

 
1

Consumer loans:
 
 

 
 

 
 

 
 

Home equity lines and loans
 
—

 
—

 
360

 
—

Total
 
$
13,784

 
$
21

 
$
12,684

 
$
75

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

The following table present the recorded investment in non-accrual and loans past due 90 days or more and still accruing by class of loans as of March 31, 2018 and December 31, 2017 (in thousands):

 
 
Non-accrual
 
Loans Past Due 90 Days or More and Still Accruing
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2018
 
December 31, 2017
Commercial and agricultural:
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
5,164

 
$
5,250

 
$
2

 
$
5

Commercial mortgages:
 
 
 
 
 
 
 
 
Construction
 
130

 
135

 
—

 
—

Commercial mortgages, other
 
6,597

 
6,520

 
—

 
—

Residential mortgages
 
3,155

 
3,160

 
—

 
—

Consumer loans:
 
 
 
 
 
 
 
 
Credit cards
 
—

 
—

 
26

 
24

Home equity lines and loans
 
1,302

 
1,310

 
—

 
—

Indirect consumer loans
 
886

 
935

 
—

 
—

Direct consumer loans
 
46

 
14

 
—

 
—

Total
 
$
17,280

 
$
17,324

 
$
28

 
$
29
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 March 31, 2018 and December 31, 2017 (in thousands):
 
March 31, 2018
 
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
$
1,397

 
$
—

 
$
3,642

 
$
5,039

 
$
—

 
$
195,468

 
$
200,507

Agricultural
—

 
—

 
—

 
—

 
—

 
530

 
530

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
—

 
—

 
—

 
—

 
55,560

 
55,560

Commercial mortgages, other
442

 
—

 
928

 
1,370

 
—

 
592,483

 
593,853

Residential mortgages
1,719

 
308

 
1,263

 
3,290

 
—

 
191,806

 
195,096

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 
 
 
Credit cards
3

 
9

 
26

 
38

 
—

 
1,380

 
1,418

Home equity lines and loans
283

 
231

 
856

 
1,370

 
—

 
99,532

 
100,902

Indirect consumer loans
1,332

 
216

 
489

 
2,037

 
—

 
155,303

 
157,340

Direct consumer loans
38

 
4

 
35

 
77

 
—

 
18,246

 
18,323

Total
$
5,214

 
$
768

 
$
7,239

 
$
13,221

 
$
—

 
$
1,310,308

 
$
1,323,529



 
December 31, 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
$
1,689

 
$
999

 
$
20

 
$
2,708

 
$
—

 
$
196,322

 
$
199,030

Agricultural
—

 
—

 
—

 
—

 
—

 
546

 
546

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
—

 
—

 
—

 
—

 
45,688

 
45,688

Commercial mortgages, other
2,399

 
115

 
748

 
3,262

 
792

 
596,432

 
600,486

Residential mortgages
1,399

 
939

 
1,474

 
3,812

 
—

 
191,125

 
194,937

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 
 
 
Credit cards
17

 
9

 
24

 
50

 
—

 
1,466

 
1,516

Home equity lines and loans
265

 
31

 
983

 
1,279

 
—

 
99,599

 
100,878

Indirect consumer loans
1,822

 
484

 
581

 
2,887

 
—

 
150,645

 
153,532

Direct consumer loans
48

 
28

 
2

 
78

 
—

 
18,891

 
18,969

Total
$
7,639

 
$
2,605

 
$
3,832

 
$
14,076

 
$
792

 
$
1,300,714

 
$
1,315,582
Loans by class modified as troubled debt restructurings
The following table presents loans by class modified as TDRs that occurred during the three month periods ended March 31, 2018 and 2017 (dollars in thousands):

March 31, 2018
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial and agricultural:
 
 
 
 
 
 
Commercial and industrial
 
1

 
$
100

 
$
100

Total
 
1

 
$
100

 
$
100


March 31, 2017
 
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
Troubled debt restructurings:
 
 
 
 
 
 
Commercial mortgages:
 
 

 
 

 
 

Commercial mortgages
 
1

 
$
166

 
$
166

Total
 
1

 
$
166

 
$
166
Risk category of the recorded investment of loans by class of loans
Based on the analyses performed as of March 31, 2018 and December 31, 2017, the risk category of the recorded investment of loans by class of loans is as follows (in thousands):
 
March 31, 2018
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loans acquired with deteriorated credit quality
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
183,869

 
$
8,719

 
$
2,911

 
$
5,008

 
$
—

 
$
200,507

Agricultural
—

 
530

 
—

 
—

 
—

 
—

 
530

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
55,430

 
—

 
130

 
—

 
—

 
55,560

Commercial mortgages
—

 
567,624

 
11,570

 
13,307

 
1,352

 
—

 
593,853

Residential mortgages
191,941

 
—

 
—

 
3,155

 
—

 
—

 
195,096

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 
Credit cards
1,418

 
—

 
—

 
—

 
—

 
—

 
1,418

Home equity lines and loans
99,600

 
—

 
—

 
1,302

 
—

 
—

 
100,902

Indirect consumer loans
156,454

 
—

 
—

 
886

 
—

 
—

 
157,340

Direct consumer loans
18,277

 
—

 
—

 
46

 
—

 
—

 
18,323

Total
$
467,690

 
$
807,453

 
$
20,289

 
$
21,737

 
$
6,360

 
$
—

 
$
1,323,529

 
December 31, 2017
 
Not Rated
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loans acquired with deteriorated credit quality
 
Total
Commercial and agricultural:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
—

 
$
186,556

 
$
4,447

 
$
6,605

 
$
1,422

 
$
—

 
$
199,030

Agricultural
—

 
546

 
—

 
—

 
—

 
—

 
546

Commercial mortgages:
 

 
 

 
 

 
 

 
 

 
 

 
 
Construction
—

 
45,553

 
—

 
135

 
—

 
—

 
45,688

Commercial mortgages
—

 
575,321

 
9,665

 
13,331

 
1,377

 
792

 
600,486

Residential mortgages
191,777

 
—

 
—

 
3,160

 
—

 
—

 
194,937

Consumer loans:
 

 
 

 
 

 
 

 
 

 
 

 
 
Credit cards
1,516

 
—

 
—

 
—

 
—

 
—

 
1,516

Home equity lines and loans
99,568

 
—

 
—

 
1,310

 
—

 
—

 
100,878

Indirect consumer loans
152,598

 
—

 
—

 
934

 
—

 
—

 
153,532

Direct consumer loans
18,955

 
—

 
—

 
14

 
—

 
—

 
18,969

Total
$
464,414

 
$
807,976

 
$
14,112

 
$
25,489

 
$
2,799

 
$
792

 
$
1,315,582
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 March 31, 2018 and December 31, 2017 (in thousands):

 
March 31, 2018
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
191,941

 
$
1,418

 
$
99,600

 
$
156,454

 
$
18,277

Non-Performing
3,155

 
—

 
1,302

 
886

 
46

 
$
195,096

 
$
1,418

 
$
100,902

 
$
157,340

 
$
18,323

 
December 31, 2017
 
 
 
Consumer Loans
 
Residential Mortgages
 
Credit Card
 
Home Equity Lines and Loans
 
Indirect Consumer Loans
 
Other Direct Consumer Loans
Performing
$
191,777

 
$
1,516

 
$
99,568

 
$
152,598

 
$
18,955

Non-Performing
3,160

 
—

 
1,310

 
934

 
14

 
$
194,937

 
$
1,516

 
$
100,878

 
$
153,532

 
$
18,969