Loans (Tables)

12 Months Ended

Dec. 31, 2013

Loans at December 31 are summarized below:


	(In Thousands)
Loans:	2013			2012
Commercial real estate	$	248,893		$	199,999
Agricultural real estate		44,301			40,143
Consumer real estate		92,438			80,287
Commercial and industrial		99,498			101,624
Agricultural		65,449			57,770
Consumer		21,406			20,413
Industrial Development Bonds		4,358			1,299

	$	576,343		$	501,535
Less: Net deferred loan fees and costs		(230	)		(133	)

		576,113			501,402
Less: Allowance for loan losses		(5,194	)		(5,224	)


Loans - Net	$	570,919		$	496,178

Maturity Schedule by Major Category of Loans

The following is a maturity schedule by major category of loans at December 31, 2013:


	(In Thousands)
	Within One Year		After One Year Within Five Years		After Five Years		Total
Commercial Real Estate	$	34,689	$	101,279	$	112,925	$	248,893
Agricultural Real Estate		1,981		11,301		31,019		44,301
Consumer Real Estate		10,483		16,694		65,261		92,438
Commercial and industrial		54,079		39,597		5,822		99,498
Agricultural		40,158		21,682		3,609		65,449
Consumer		5,524		12,770		3,112		21,406
Industrial Development Bonds		1,932		542		1,884		4,358

	$	148,846	$	203,865	$	223,632	$	576,343

Distribution of Fixed Rate Loans and Variable Rate Loans by Major Loan Category

The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of December 31, 2013:


	(In Thousands)
	Fixed Rate		Variable Rate
Commercial Real Estate	$	150,698	$	98,195
Agricultural Real Estate		34,741		9,560
Consumer Real Estate		75,105		17,333
Commercial and industrial loans		78,906		20,592
Agricultural		60,441		5,008
Consumer, Master Card and Overdrafts		16,837		4,569
Industrial Development Bonds		4,358		—

Contractual Aging of Recorded Investment in Past Due Loans by Portfolio Segment of Loans

The following table represents the contractual aging of the recorded investment in past due loans by portfolio segment of loans as of December 31, 2013 and 2012 net of deferred fees:


	(In Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
2013
Residential	$	778	$	—	$	234	$	1,012	$	91,426	$	92,438	$	—
Ag RE		—		—		—		—		44,301	$	44,301		—
Ag		—		—		—		—		65,449	$	65,449		—
Commercial Real Estate		—		—		373		373		248,520	$	248,893		—
Commercial and Industrial		—		—		26		26		103,830	$	103,856		—
Consumer		28		2		—		30		21,146		21,176		—


Total	$	806	$	2	$	633	$	1,441	$	574,672	$	576,113	$	—


2012
Residential	$	575	$	—	$	648	$	1,223	$	79,064	$	80,287	$	—
Ag RE		—		—		—		—		40,143		40,143		—
Ag		11		—		—		11		57,759		57,770		—
Commercial Real Estate		—		—		877		877		199,122		199,999		—
Commercial and Industrial		78		—		2,567		2,645		100,278		102,923		—
Consumer		51		1		—		52		20,228		20,280		1


Total	$	715	$	1	$	4,092	$	4,808	$	496,594	$	501,402	$	1

Recorded Investment in Nonaccrual Loans by Portfolio Segment of Loans

The following table presents the recorded investment in nonaccrual loans by portfolio segment of loans as of December 31, 2013 and December 31, 2012:


	(In Thousands)
	2013		2012

Consumer real estate	$	483	$	964
Agricultural real estate		—		—
Agriculture		—		—
Commercial real estate		2,436		877
Commercial		410		2,987
Consumer		—		—


Total	$	3,329	$	4,828

Risk Category of Loans by Portfolio Segment

The following table represents the risk category of loans by portfolio segment based on the most recent analysis performed as of the time periods shown of December 31, 2013 and December 31, 2012.


	(In Thousands)
	Agriculture Real Estate				Agriculture				Commercial Real Estate				Commercial				Industrial Development Bonds
	2013		2012		2013		2012		2013		2012		2013		2012		2013		2012
1-2	$	3,764	$	2,719	$	9,263	$	5,022	$	1,104	$	4,046	$	2,525	$	750	$	—	$	97
3		14,588		15,111		27,212		23,525		55,060		42,467		21,610		21,750		3,869		859
4		25,186		21,481		28,974		29,188		182,277		137,537		72,059		71,228		489		343
5		729		794		—		35		4,987		8,984		2,119		3,385		—		—
6		34		38		—		—		5,092		6,295		758		2,202		—		—
7		—		—		—		—		373		670		427		2,309		—		—
8		—		—		—		—		—		—		—		—		—		—

Total	$	44,301	$	40,143	$	65,449	$	57,770	$	248,893	$	199,999	$	99,498	$	101,624	$	4,358	$	1,299

Recorded Investment in Those Classes Based on Payment Activity and Assigned Risk Grading

The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of December 31, 2013 and December 31, 2012.


	(In Thousands)
	Consumer Real Estate
	2013		2012
Grade
Pass	$	92,226	$	79,766
Special mention (5)		—		—
Substandard (6)		18		110
Doubtful (7)		194		411

Total	$	92,438	$	80,287


	(In Thousands)
	Consumer - Credit Card				Consumer - Other
	2013		2012		2013		2012
Performing	$	3,721	$	3,470	$	17,425	$	16,775
Nonperforming		—		3		30		32

Total	$	3,721	$	3,473	$	17,455	$	16,807

Schedule of Impaired Loans

Information about impaired loans as of and for the years ended December 31, 2013 and 2012 are as follows:


	(In Thousands)
	2013		2012
Impaired loans without a valuation allowance	$	924	$	730
Impaired loans with a valuation allowance		1,516		3,861

Total impaired loans	$	2,440	$	4,591

Valuation allowance related to impaired loans	$	516	$	865

Total non-accrual loans	$	3,329	$	4,828

Total loans past-due ninety days or more and still accruing	$	—	$	1


	(In Thousands)
	2013		2012		2011
Average investment in impaired loans	$	3,274	$	3,436	$	5,466

Interest income recognized on impaired loans	$	60	$	26	$	1,230

Interest income recognized on a cash basis on impaired loans	$	17	$	21	$	1,175

Impaired Loans Classified as Troubled Debt Restructured

The following table represents three months ended and year ended December 31, 2013.

Pre-

Post-

Pre-

Post-

Number of

Modification

Number of

Modification

December 31, 2013

Contracts

Outstanding

December 31, 2013

Contracts

Outstanding

Troubled Debt

Modified in the

Recorded

Troubled Debt

Modified in the

Recorded

Restructurings

Last 3 Months

Investment

Restructurings

Last 12 Months

Investment

Commercial Real Estate

—

Commercial Real Estate

—

Ag Real Estate

—

Ag Real Estate

—

Commercial and Industrial

—

Commercial and Industrial

Troubled Debt Restructurings

Number of Contracts

Modified in the

Recorded

Troubled Debt Restructurings

Number of Contracts
Modified in the

Recorded

That Subsequently Defaulted

Last 3 Months

Investment

That Subsequently Defaulted

Last 12 Months

Investment

Commercial Real Estate

—

Commercial Real Estate

—

Ag Real Estate

—

Ag Real Estate

—

Commercial and Industrial

—

Commercial and Industrial

—

The following table represents three months ended and year ended December 31, 2012.

(In Thousands)

Pre-

Post-

Pre-

Post-

Number of

Modification

Number of

Modification

Contracts

Outstanding

Contracts

Outstanding

December 31, 2012

Modified in the

Recorded

December 31, 2012

Modified in the

Recorded

Troubled Debt Restructurings

Last 3 Months

Investment

Troubled Debt Restructurings

Last 12 Months

Investment

Commercial Real Estate

—

Commercial Real Estate

1,937

1,921

Ag Real Estate

—

Ag Real Estate

—

Commercial and Industrial

—

Commercial and Industrial

420

Number of

Contracts

Troubled Debt Restructurings

Modified in the

Recorded

Troubled Debt Restructurings

Recorded

That Subsequently Defaulted

Last 3 Months

Investment

That Subsequently Defaulted

Investment

Commercial Real Estate

—

Commercial Real Estate

—

Ag Real Estate

—

Ag Real Estate

—

Commercial and Industrial

—

Commercial and Industrial

—

Loans Individually Evaluated for Impairment by Portfolio Segment of Loans

The following table presents loans individually evaluated for impairment by portfolio segment of loans as of December 31, 2013 and 2012:


	(In Thousands)
	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Recorded Investment		YTD Interest Income Recognized
2013
With no related allowance recorded:
Residential	$	18	$	18	$	—	$	138	$	10
Agriculture real estate		—		—		—		—		—
Agriculture		—		—		—		—		—
Commercial real estate		906		906		—		630		21
Commercial		—		—		—		203		—
Consumer		—		—		—		—		—
With a specific allowance recorded:
Residential		282		282		78		204		5
Agriculture real estate		88		88		9		72		—
Agriculture		—		—		—		—		—
Commercial real estate		769		1,116		295		518		22
Commercial		377		377		134		1,549		2
Consumer		—		—		—		—		—

Totals:
Residential	$	300	$	300	$	78	$	342	$	15

Agriculture real estate	$	88	$	88	$	9	$	72	$	—

Agriculture	$	—	$	—	$	—	$	—	$	—

Commercial real estate	$	1,675	$	2,022	$	295	$	1,148	$	43

Commercial	$	377	$	377	$	134	$	1,752	$	2

Consumer	$	—	$	—	$	—	$	—	$	—


	(In Thousands)
	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Recorded Investment		YTD Interest Income Recognized
2012
With no related allowance recorded:
Residential	$	236	$	236	$	—	$	269	$	12
Agriculture real estate		—		—		—		—		—
Agriculture		—		—		—		—		—
Commercial real estate		207		384		—		206		—
Commercial		287		334		—		212		—
Consumer		—		—		—		—		—
With a specific allowance recorded:
Residential		411		512		70		454		1
Agriculture real estate		—		—		—		—		—
Agriculture		—		—		—		—		—
Commercial real estate		670		916		25		657		—
Commercial		2,780		2,780		770		1,636		13
Consumer		—		—		—		2		—

Totals:
Residential	$	647	$	748	$	70	$	723	$	13

Agriculture real estate	$	—	$	—	$	—	$	—	$	—

Agriculture	$	—	$	—	$	—	$	—	$	—

Commercial real estate	$	877	$	1,300	$	25	$	863	$	—

Commercial	$	3,067	$	3,114	$	770	$	1,848	$	13

Consumer	$	—	$	—	$	—	$	2	$	—

Summary of Activities in Allowance for Credit Losses

The following is an analysis of the allowance for credit losses for the years ended December 31:


	(In Thousands)
	2013			2012			2011
Allowance for Loan Losses
Balance at beginning of year	$	5,224		$	5,091		$	5,706
Provision for loan loss		858			738			1,715
Loans charged off		(1,262	)		(891	)		(2,681	)
Recoveries		374			286			351

Balance at ending of year	$	5,194		$	5,224		$	5,091

Allowance for Unfunded Loan Commitments & Letters of Credit	$	163		$	162		$	130

Total Allowance for Credit Losses	$	5,357		$	5,386		$	5,221

Analysis of Allowance for Credit Losses

Additional analysis related to the allowance for credit losses as of December 31, 2013 and 2012 is as follows:


	(In Thousands)
	Consumer Real Estate			Agriculture Real Estate		Agriculture		Commercial Real Estate			Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated		Total
2013
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	368		$	113	$	290	$	1,749		$	2,183		$	268		$	162	$	253	$	5,386
Charge Offs		(147	)		—		—		(164	)		(513	)		(438	)		—		—		(1,262	)
Recoveries		20			—		5		23			141			185			—		—		374
Provision		16			18		31		499			(452	)		277			—		469		858
Other Non-interest expense related to unfunded		—			—		—		—			—			—			1		—		1

Ending Balance	$	257		$	131	$	326	$	2,107		$	1,359		$	292		$	163	$	722	$	5,357

Ending balance: individually evaluated for impairment	$	78		$	9	$	—	$	295		$	134		$	—		$	—	$	—	$	516

Ending balance: collectively evaluated for impairment	$	179		$	122	$	326	$	1,812		$	1,225		$	292		$	163	$	722	$	4,841

Ending balance: loans acquired with deteriorated credit quality	$	1		$	—	$	—	$	—		$	—		$	—		$	—	$	—	$	1

FINANCING RECEIVABLES:
Ending balance	$	92,438		$	44,301	$	65,449	$	248,893		$	103,856		$	21,176		$	—	$	—	$	576,113

Ending balance: individually evaluated for impairment	$	300		$	88	$	—	$	1,675		$	377		$	—		$	—	$	—	$	2,440

Ending balance: collectively evaluated for impairment	$	92,138		$	44,213	$	65,449	$	247,218		$	103,479		$	21,176		$	—	$	—	$	573,673

Ending balance: loans acquired with deteriorated credit quality	$	540		$	—	$	—	$	—		$	—		$	—		$	—	$	—	$	540


	(In Thousands)
	Consumer Real Estate			Agriculture Real Estate			Agriculture			Commercial Real Estate			Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated		Total
2012
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	261		$	140		$	266		$	2,088		$	1,947		$	315		$	130	$	74	$	5,221
Charge Offs		(246	)		—			(6	)		(98	)		(47	)		(494	)		—		—		(891	)
Recoveries		61			—			12			7			30			176			—		—		286
Provision		292			(27	)		18			(248	)		253			271			—		179		738
Other Non-interest expense related to unfunded		—			—			—			—			—			—			32		—		32

Ending Balance	$	368		$	113		$	290		$	1,749		$	2,183		$	268		$	162	$	253	$	5,386

Ending balance: individually evaluated for impairment	$	70		$	—		$	—		$	25		$	770		$	—		$	—	$	—	$	865

Ending balance: collectively evaluated for impairment	$	298		$	113		$	290		$	1,724		$	1,413		$	268		$	162	$	253	$	4,521

Ending balance: loans acquired with deteriorated credit quality	$	1		$	—		$	—		$	—		$	—		$	—		$	—	$	—	$	1

FINANCING RECEIVABLES:
Ending balance	$	80,287		$	40,143		$	57,770		$	199,999		$	102,923		$	20,280		$	—	$	—	$	501,402

Ending balance: individually evaluated for impairment	$	648		$	—		$	—		$	877		$	3,066		$	—		$	—	$	—	$	4,591

Ending balance: collectively evaluated for impairment	$	79,639		$	40,143		$	57,770		$	199,122		$	99,857		$	20,280		$	—	$	—	$	496,811

Ending balance: loans acquired with deteriorated credit quality	$	548		$	—		$	—		$	—		$	—		$	—		$	—	$	—	$	548