Loans:

Loan balances were as follows:

(In Thousands of Dollars)	June 30, 2017			December 31, 2016
Originated loans:
Commercial real estate
Owner occupied	$	124,664		$	109,750
Non-owner occupied		182,900			165,861
Farmland		50,873			34,155
Other		78,496			70,823
Commercial
Commercial and industrial		184,854			171,145
Agricultural		30,355			24,598
Residential real estate
1-4 family residential		246,771			224,222
Home equity lines of credit		66,035			59,642
Consumer
Indirect		166,835			156,633
Direct		27,995			26,663
Other		8,066			7,611
Total originated loans	$	1,167,844		$	1,051,103
Acquired loans:
Commercial real estate
Owner occupied	$	56,330		$	60,928
Non-owner occupied		20,969			24,949
Farmland		47,884			54,204
Other		13,485			14,665
Commercial
Commercial and industrial		30,822			33,626
Agricultural		13,575			16,024
Residential real estate
1-4 family residential		101,690			112,015
Home equity lines of credit		31,495			34,795
Consumer
Direct		17,429			21,681
Other		129			247
Total acquired loans	$	333,808		$	373,134
Net Deferred loan costs		3,621			3,398
Allowance for loan losses		(11,746	)		(10,852	)
Net loans	$	1,493,527		$	1,416,783

Purchased credit impaired loans

As part of the NBOH acquisition the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected. The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

(In Thousands of Dollars)	June 30, 2017		December 31, 2016
Commercial real estate
Owner occupied	$	707	$	689
Non-owner occupied		394		436
Commercial
Commercial and industrial		1,148		1,213
Total outstanding balance	$	2,249	$	2,338
Carrying amount, net of allowance of $0 in 2017 and 2016	$	1,815	$	1,864

Accretable yield, or income expected to be collected, is shown in the table below:

(In Thousands of Dollars)	Six Months Ended June 30, 2017
Beginning balance	$	247
New loans purchased	0
Accretion of income		(38	)
Ending balance	$	209

The key assumptions considered include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income and principal expected to be collected. In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary. There were no adjustments to forecasted cash flows that impacted the allowance for loan losses for the three and six month periods ended June 30, 2017.

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:

Three Months Ended June 30, 2017

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,638		$	1,846		$	2,321		$	2,813		$	701		$	11,319
Provision for loan losses		365			198			5			464			(82	)		950
Loans charged off		(67	)		(113	)		(36	)		(509	)		0			(725	)
Recoveries		18			5			20			159			0			202
Total ending allowance balance	$	3,954		$	1,936		$	2,310		$	2,927		$	619		$	11,746

Six Months Ended June 30, 2017

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430	$	10,852
Provision for loan losses		442			215			114			1,040			189		2,000
Loans charged off		(207	)		(215	)		(42	)		(1,204	)		0		(1,668	)
Recoveries		142			62			33			325			0		562
Total ending allowance balance	$	3,954		$	1,936		$	2,310		$	2,927		$	619	$	11,746

Three Months Ended June 30, 2016

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,181		$	1,452		$	1,914		$	2,218		$	625		$	9,390
Provision for loan losses		335			212			196			521			(274	)		990
Loans charged off		(307	)		(37	)		(44	)		(431	)		0			(819	)
Recoveries		1			7			15			136			0			159
Total ending allowance balance	$	3,210		$	1,634		$	2,081		$	2,444		$	351		$	9,720

Six Months Ended June 30, 2016

(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473		$	8,978
Provision for loan losses		378			276			271			967			(122	)		1,770
Loans charged off		(307	)		(37	)		(78	)		(975	)		0			(1,397	)
Recoveries		12			22			43			292			0			369
Total ending allowance balance	$	3,210		$	1,634		$	2,081		$	2,444		$	351		$	9,720

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of June 30, 2017 and December 31, 2016. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material:

June 30, 2017

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	29	$	4	$	59	$	0	$	0	$	92
Collectively evaluated for impairment		3,889		1,920		2,218		2,923		619		11,569
Acquired loans collectively evaluated for impairment		36		12		33		4		0		85
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	3,954	$	1,936	$	2,310	$	2,927	$	619	$	11,746

Loans:
Loans individually evaluated for impairment	$	1,948	$	253	$	3,388	$	108	$	0	$	5,697
Loans collectively evaluated for impairment		433,957		214,691		309,146		208,407		0		1,166,201
Acquired loans		137,534		43,550		132,947		17,529		0		331,560
Acquired with deteriorated credit quality		969		846		0		0		0		1,815
Total ending loans balance	$	574,408	$	259,340	$	445,481	$	226,044	$	0	$	1,505,273

December 31, 2016

(In Thousands of Dollars)	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	86	$	111	$	52	$	0	$	0	$	249
Collectively evaluated for impairment		3,491		1,763		2,153		2,766		430		10,603
Acquired loans collectively evaluated for impairment		0		0		0		0		0		0
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	3,577	$	1,874	$	2,205	$	2,766	$	430	$	10,852

Loans:
Loans individually evaluated for impairment	$	3,457	$	477	$	3,308	$	96	$	0	$	7,338
Loans collectively evaluated for impairment		376,632		195,146		280,215		196,081		0		1,048,074
Acquired loans		153,228		48,536		146,672		21,923		0		370,359
Acquired with deteriorated credit quality		968		896		0		0		0		1,864
Total ending loans balance	$	534,285	$	245,055	$	430,195	$	218,100	$	0	$	1,427,635

The following tables present information related to impaired loans by class of loans as of June 30, 2017 and December 31, 2016:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
June 30, 2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,198	$	681	$	0
Non-owner occupied		18		18		0
Commercial
Commercial and industrial		203		182		0
Agricultural		123		0		0
Residential real estate
1-4 family residential		2,466		2,221		0
Home equity lines of credit		306		284		0
Consumer		207		108		0
Subtotal		4,521		3,494		0

With an allowance recorded:
Commercial real estate
Owner occupied		163		163		7
Non-owner occupied		1,086		1,086		22
Commercial
Commercial and industrial		71		71		4
Residential real estate
1-4 family residential		831		795		56
Home equity lines of credit		91		88		3
Subtotal		2,242		2,203		92
Total	$	6,763	$	5,697	$	92

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2016
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,974	$	1,456	$	0
Non-owner occupied		332		331		0
Commercial
Commercial and industrial		205		184		0
Residential real estate
1-4 family residential		2,650		2,403		0
Home equity lines of credit		195		179		0
Consumer		205		96		0
Subtotal		5,561		4,649		0

With an allowance recorded:
Commercial real estate
Owner occupied		173		173		14
Non-owner occupied		1,118		1,118		30
Farmland		380		379		42
Commercial
Commercial and industrial		75		75		4
Agricultural		219		218		107
Residential real estate
1-4 family residential		661		642		51
Home equity lines of credit		84		84		1
Subtotal		2,710		2,689		249
Total	$	8,271	$	7,338	$	249

The following tables present the average recorded investment in impaired loans by class and interest income recognized by loan class for the three and six month periods ended June 30, 2017 and 2016:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended June 30,				For Three Months Ended June 30,
(In Thousands of Dollars)	2017		2016		2017		2016
With no related allowance recorded:
Commercial real estate
Owner occupied	$	682	$	1,266	$	2	$	28
Non-owner occupied		18		334		0		0
Farmland		17		0		0		0
Commercial
Commercial and industrial		182		331		1		5
Agricultural production		15		0		0		0
Residential real estate
1-4 family residential		2,251		2,249		35		33
Home equity lines of credit		326		227		3		3
Consumer		105		86		4		3
Subtotal		3,596		4,493		45		72

With an allowance recorded:
Commercial real estate
Owner occupied		164		908		2		9
Non-owner occupied		1,092		1,401		14		19
Commercial
Commercial and industrial		72		78		1		1
Residential real estate
1-4 family residential		794		845		9		11
Home equity lines of credit		84		86		1		1
Consumer	0		0		0		0
Subtotal		2,206		3,318		27		41
Total	$	5,802	$	7,811	$	72	$	113

	Average Recorded Investment				Interest Income Recognized
	For Six Months Ended June 30,				For Six Months Ended June 30,
(In Thousands of Dollars)	2017		2016		2017		2016
With no related allowance recorded:
Commercial real estate
Owner occupied	$	851	$	1,786	$	5	$	38
Non-owner occupied		122		335		1		4
Farmland		24		0		0		0
Commercial
Commercial and industrial		183		472		2		10
Agricultural		21		0		0		0
Residential real estate
1-4 family residential		2,315		2,270		72		71
Home equity lines of credit		276		234		7		6
Consumer		90		101		6		6
Subtotal		3,882		5,198		93		135

With an allowance recorded:
Commercial real estate
Owner occupied		166		1,248		4		18
Non-owner occupied		1,099		1,435		28		38
Farmland		126	0		0		0
Commercial
Commercial and industrial		73		79		2		2
Agricultural		100	0		0		0
Residential real estate
1-4 family residential		784		797		17		20
Home equity lines of credit		84		86		2		2
Subtotal		2,432		3,645		53		80
Total	$	6,314	$	8,843	$	146	$	215

Cash basis interest recognized during the three and six month periods ended June 30, 2017 and 2016 was materially equal to interest income recognized.

Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of June 30, 2017 and December 31, 2016:

	June 30, 2017				December 31, 2016
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing		Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	549	$	0	$	958	$	0
Non-owner occupied		18		0		343		0
Farmland		51		0		58		0
Commercial
Commercial and industrial		297		0		400		0
Agricultural		2		0		12		0
Residential real estate
1-4 family residential		1,667		537		1,929		295
Home equity lines of credit		532		22		202		118
Consumer
Indirect		396		182		298		438
Direct		6		36		9		65
Other		0		0		0		16
Total originated loans	$	3,518	$	777	$	4,209	$	932
Acquired loans:
Commercial real estate
Owner occupied	$	34	$	0	$	85	$	0
Non-owner occupied		185		0		0		0
Other		0		0		24		0
Farmland		0		0		380		0
Commercial
Commercial and industrial		879		0		961		0
Agricultural		18		0		236		0
Residential real estate
1-4 family residential		402		124		386		545
Home equity lines of credit		215		38		119		109
Consumer
Direct		135		30		89		95
Total acquired loans	$	1,868	$	192	$	2,280	$	749
Total loans	$	5,386	$	969	$	6,489	$	1,681

The following tables present the aging of the recorded investment in past due loans as of June 30, 2017 and December 31, 2016 by class of loans:

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
June 30, 2017
Originated loans:
Commercial real estate
Owner occupied	$	0	$	0	$	549	$	549	$	123,757	$	124,306
Non-owner occupied		0		0		18		18		182,415		182,433
Farmland		0		0		51		51		50,763		50,814
Other		0		0		0		0		78,184		78,184
Commercial
Commercial and industrial		121		0		297		418		184,079		184,497
Agricultural		35		0		2		37		30,409		30,446
Residential real estate
1-4 family residential		1,520		465		2,204		4,189		242,033		246,222
Home equity lines of credit		123		80		554		757		65,314		66,071
Consumer
Indirect		1,924		430		578		2,932		169,298		172,230
Direct		456		240		42		738		27,452		28,190
Other		30		17		0		47		8,018		8,065
Total originated loans:	$	4,209	$	1,232	$	4,295	$	9,736	$	1,161,722	$	1,171,458
Acquired loans:
Commercial real estate
Owner occupied	$	323	$	49	$	34	$	406	$	55,925	$	56,331
Non-owner occupied		0		0		185		185		20,769		20,954
Farmland		0		0		0		0		47,885		47,885
Other		0		0		0		0		13,501		13,501
Commercial
Commercial and industrial		69		1		879		949		29,872		30,821
Agricultural		10		0		18		28		13,548		13,576
Residential real estate
1-4 family residential		479		184		526		1,189		100,504		101,693
Home equity lines of credit		116		0		253		369		31,126		31,495
Consumer
Direct		341		40		165		546		16,884		17,430
Other		0		0		0		0		129		129
Total acquired loans	$	1,338	$	274	$	2,060	$	3,672	$	330,143	$	333,815
Total loans	$	5,547	$	1,506	$	6,355	$	13,408	$	1,491,865	$	1,505,273

(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2016
Originated loans:
Commercial real estate
Owner occupied	$	0	$	0	$	958	$	958	$	108,475	$	109,433
Non-owner occupied		0		0		343		343		165,105		165,448
Farmland		0		0		58		58		34,057		34,115
Other		0		0		0		0		70,542		70,542
Commercial
Commercial and industrial		90		0		400		490		170,242		170,732
Agricultural		0		29		12		41		24,632		24,673
Residential real estate
1-4 family residential		3,368		356		2,224		5,948		217,752		223,700
Home equity lines of credit		77		37		320		434		59,248		59,682
Consumer
Indirect		2,844		696		736		4,276		157,437		161,713
Direct		744		213		74		1,031		25,815		26,846
Other		92		28		16		136		7,476		7,612
Total originated loans	$	7,215	$	1,359	$	5,141	$	13,715	$	1,040,781	$	1,054,496
Acquired loans:
Commercial real estate
Owner occupied	$	8	$	205	$	85	$	298	$	60,630	$	60,928
Non-owner occupied		134		0		0		134		24,815		24,949
Farmland		83		0		380		463		53,741		54,204
Other		0		0		24		24		14,642		14,666
Commercial
Commercial and industrial		278		0		961		1,239		32,387		33,626
Agricultural		21		0		236		257		15,767		16,024
Residential real estate
1-4 family residential		1,556		504		931		2,991		109,027		112,018
Home equity lines of credit		152		9		228		389		34,406		34,795
Consumer
Direct		938		184		184		1,306		20,376		21,682
Other		100		0		0		100		147		247
Total acquired loans	$	3,270	$	902	$	3,029	$	7,201	$	365,938	$	373,139
Total loans	$	10,485	$	2,261	$	8,170	$	20,916	$	1,406,719	$	1,427,635