Loans:

Loan balances were as follows:

(In Thousands of Dollars)	March 31, 2018			December 31, 2017
Originated loans:
Commercial real estate
Owner occupied	$	147,907		$	140,321
Non-owner occupied		208,306			199,080
Farmland		83,800			70,534
Other		73,101			89,025
Commercial
Commercial and industrial		207,807			193,347
Agricultural		29,894			32,587
Residential real estate
1-4 family residential		281,002			272,421
Home equity lines of credit		71,449			71,507
Consumer
Indirect		160,804			155,950
Direct		27,756			28,519
Other		8,584			8,876
Total originated loans	$	1,300,410		$	1,262,167
Acquired loans:
Commercial real estate
Owner occupied	$	51,157		$	53,031
Non-owner occupied		19,489			20,286
Farmland		45,552			47,754
Other		11,668			11,964
Commercial
Commercial and industrial		23,691			27,094
Agricultural		11,479			12,206
Residential real estate
1-4 family residential		91,616			96,759
Home equity lines of credit		28,283			28,755
Consumer
Direct		12,837			14,378
Other		107			128
Total acquired loans	$	295,879		$	312,355
Net Deferred loan costs		3,050			2,859
Allowance for loan losses		(12,550	)		(12,315	)
Net loans	$	1,586,789		$	1,565,066

Purchased credit impaired loans

As part of past acquisitions 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)	March 31, 2018		December 31, 2017
Commercial real estate
Owner occupied	$	706	$	670
Non-owner occupied		378		387
Commercial
Commercial and industrial		1,015		1,072
Total outstanding balance	$	2,099	$	2,129
Carrying amount, net of allowance of $0 in 2018 and 2017	$	1,722	$	1,733

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

	Three Months Ended
(In Thousands of Dollars)	March 31, 2018			March 31, 2017
Beginning balance	$	170		$	247
New loans purchased	0			0
Accretion of income		(19	)		(19	)
Ending balance	$	151		$	228

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 month period ended March 31, 2018.

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:

Three Months Ended March 31, 2018

(In Thousands of Dollars)	Commercial Real Estate		Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	4,260	$	2,011		$	2,521		$	2,848		$	675		$	12,315
Provision for loan losses		142		147			75			527			(116	)		775
Loans charged off		0		(97	)		(56	)		(629	)		0			(782	)
Recoveries		2		1			61			178			0			242
Total ending allowance balance	$	4,404	$	2,062		$	2,601		$	2,924		$	559		$	12,550

Three Months Ended March 31, 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		77			17			109			576			271		1,050
Loans charged off		(140	)		(102	)		(6	)		(695	)		0		(943	)
Recoveries		124			57			13			166			0		360
Total ending allowance balance	$	3,638		$	1,846		$	2,321		$	2,813		$	701	$	11,319

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 March 31, 2018 and December 31, 2017. 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:

March 31, 2018

(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	$	0	$	3	$	206	$	1	$	0	$	210
Collectively evaluated for impairment		4,352		2,043		2,350		2,919		559		12,223
Acquired loans collectively evaluated for impairment		52		16		45		4		0		117
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	4,404	$	2,062	$	2,601	$	2,924	$	559	$	12,550

Loans:
Loans individually evaluated for impairment	$	537	$	255	$	4,553	$	65	$	0	$	5,410
Loans collectively evaluated for impairment		511,423		237,114		347,718		202,388		0		1,298,643
Acquired loans		126,721		34,425		119,475		12,943		0		293,564
Acquired with deteriorated credit quality		987		735		0		0		0		1,722
Total ending loans balance	$	639,668	$	272,529	$	471,746	$	215,396	$	0	$	1,599,339

December 31, 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	$	0	$	4	$	158	$	0	$	0	$	162
Collectively evaluated for impairment		4,214		1,993		2,322		2,844		675		12,048
Acquired loans collectively evaluated for impairment		46		14		41		4		0		105
Acquired with deteriorated credit quality		0		0		0		0		0		0
Total ending allowance balance	$	4,260	$	2,011	$	2,521	$	2,848	$	675	$	12,315

Loans:
Loans individually evaluated for impairment	$	658	$	260	$	4,559	$	59	$	0	$	5,536
Loans collectively evaluated for impairment		497,168		225,312		339,143		198,370		0		1,259,993
Acquired loans		131,926		38,503		125,182		14,507		0		310,118
Acquired with deteriorated credit quality		948		786		0		0		0		1,734
Total ending loans balance	$	630,700	$	264,861	$	468,884	$	212,936	$	0	$	1,577,381

The following tables present information related to impaired loans by class of loans as of March 31, 2018 and December 31, 2017:

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
March 31, 2018
With no related allowance recorded:
Commercial real estate
Owner occupied	$	536	$	537	$	0
Commercial
Commercial and industrial		210		189		0
Residential real estate
1-4 family residential		2,849		2,630		0
Home equity lines of credit		331		319		0
Consumer		159		63		0
Subtotal		4,085		3,738		0

With an allowance recorded:
Commercial
Commercial and industrial		66		66		3
Residential real estate
1-4 family residential		1,473		1,447		131
Home equity lines of credit		169		157		75
Consumer		2		2		1
Subtotal		1,710		1,672		210
Total	$	5,795	$	5,410	$	210

(In Thousands of Dollars)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	659	$	658	$	0
Commercial
Commercial and industrial		214		192		0
Residential real estate
1-4 family residential		2,923		2,697		0
Home equity lines of credit		341		319		0
Consumer		145		59		0
Subtotal		4,282		3,925		0

With an allowance recorded:
Commercial
Commercial and industrial		68		68		4
Residential real estate
1-4 family residential		1,409		1,387		84
Home equity lines of credit		159		156		74
Subtotal		1,636		1,611		162
Total	$	5,918	$	5,536	$	162

The following tables present the average recorded investment in impaired loans by class and interest income recognized by loan class for the three month periods ended March 31, 2018 and 2017:

	Average Recorded Investment				Interest Income Recognized
	For Three Months Ended March 31,				For Three Months Ended March 31,
(In Thousands of Dollars)	2018		2017		2018		2017
With no related allowance recorded:
Commercial real estate
Owner occupied	$	420	$	1,051	$	7	$	2
Non-owner occupied		0		226		0		0
Commercial
Commercial and industrial		873		210		1		1
Residential real estate
1-4 family residential		2,636		2,380		49		37
Home equity lines of credit		325		227		4		4
Consumer		63		74		3		3
Subtotal		4,317		4,168		64		47

With an allowance recorded:
Commercial real estate
Owner occupied		0		422		0		2
Non-owner occupied		0		1,107		0		14
Commercial
Commercial and industrial		67		273		1		1
Residential real estate
1-4 family residential		1,429		773		10		8
Home equity lines of credit		155		82		2		1
Consumer		1		1		0		0
Subtotal		1,652		2,658		13		26
Total	$	5,969	$	6,826	$	77	$	73

Cash basis interest recognized during the three month periods ended March 31, 2018 and 2017 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 March 31, 2018 and December 31, 2017:


	March 31, 2018				December 31, 2017
(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	$	381	$	0	$	501	$	0
Farmland		41		0		45		0
Commercial
Commercial and industrial		271		0		249		0
Agricultural		0		35		2		0
Residential real estate
1-4 family residential		2,730		300		2,653		393
Home equity lines of credit		651		7		602		8
Consumer
Indirect		405		183		457		361
Direct		85		151		63		153
Other		90		19		0		14
Total originated loans	$	4,654	$	695	$	4,572	$	929
Acquired loans:
Commercial real estate
Non-owner occupied	$	118	$	0	$	216	$	0
Farmland		257		0		0		0
Commercial
Commercial and industrial		926		59		943		19
Agricultural		5		0		9		0
Residential real estate
1-4 family residential		795		66		613		69
Home equity lines of credit		167		0		170		0
Consumer
Direct		105		46		140		15
Total acquired loans	$	2,373	$	171	$	2,091	$	103
Total loans	$	7,027	$	866	$	6,663	$	1,032

The following tables present the aging of the recorded investment in past due loans as of March 31, 2018 and December 31, 2017 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
March 31, 2018
Originated loans:
Commercial real estate
Owner occupied	$	167	$	3	$	381	$	551	$	146,937	$	147,488
Non-owner occupied		0		0		0		0		207,770		207,770
Farmland		0		0		41		41		83,657		83,698
Other		0		0		0		0		72,841		72,841
Commercial
Commercial and industrial		228		79		271		578		206,788		207,366
Agricultural		124		12		35		171		29,823		29,994
Residential real estate
1-4 family residential		1,235		76		3,030		4,341		276,027		280,368
Home equity lines of credit		60		106		658		824		70,654		71,478
Consumer
Indirect		1,730		467		588		2,785		163,143		165,928
Direct		670		335		236		1,241		26,699		27,940
Other		122		25		109		256		8,328		8,584
Total originated loans:	$	4,336	$	1,103	$	5,349	$	10,788	$	1,292,667	$	1,303,455
Acquired loans:
Commercial real estate
Owner occupied	$	24	$	0	$	0	$	24	$	51,180	$	51,204
Non-owner occupied		0		0		118		118		19,327		19,445
Farmland		78		0		257		335		45,218		45,553
Other		78		0		0		78		11,591		11,669
Commercial
Commercial and industrial		29		4		985		1,018		22,672		23,690
Agricultural		14		0		5		19		11,460		11,479
Residential real estate
1-4 family residential		696		0		861		1,557		90,060		91,617
Home equity lines of credit		193		0		167		360		27,923		28,283
Consumer
Direct		399		18		151		568		12,269		12,837
Other		0		1		0		1		106		107
Total acquired loans	$	1,511	$	23	$	2,544	$	4,078	$	291,806	$	295,884
Total loans	$	5,847	$	1,126	$	7,893	$	14,866	$	1,584,473	$	1,599,339

(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, 2017
Originated loans:
Commercial real estate
Owner occupied	$	4	$	340	$	501	$	845	$	139,081	$	139,926
Non-owner occupied		0		0		0		0		198,588		198,588
Farmland		0		0		45		45		70,398		70,443
Other		0		0		0		0		88,703		88,703
Commercial
Commercial and industrial		292		3		249		544		192,335		192,879
Agricultural		74		0		2		76		32,605		32,681
Residential real estate
1-4 family residential		2,044		403		3,046		5,493		266,338		271,831
Home equity lines of credit		155		18		610		783		70,754		71,537
Consumer
Indirect		2,429		829		818		4,076		156,772		160,848
Direct		632		250		216		1,098		27,608		28,706
Other		115		11		14		140		8,736		8,876
Total originated loans	$	5,745	$	1,854	$	5,501	$	13,100	$	1,251,918	$	1,265,018
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	0	$	0	$	53,051	$	53,051
Non-owner occupied		0		0		216		216		20,042		20,258
Farmland		454		0		0		454		47,301		47,755
Other		0		0		0		0		11,976		11,976
Commercial
Commercial and industrial		327		96		962		1,385		25,709		27,094
Agricultural		87		0		9		96		12,111		12,207
Residential real estate
1-4 family residential		858		77		682		1,617		95,144		96,761
Home equity lines of credit		161		0		170		331		28,424		28,755
Consumer
Direct		380		151		155		686		13,692		14,378
Other		0		1		0		1		127		128
Total acquired loans	$	2,267	$	325	$	2,194	$	4,786	$	307,577	$	312,363
Total loans	$	8,012	$	2,179	$	7,695	$	17,886	$	1,559,495	$	1,577,381