Loans (Tables)

3 Months Ended

Mar. 31, 2017

Loan balances as of March 31, 2017 and December 31, 2016:


	(In Thousands)
Loans:	March 31, 2017			December 31, 2016
Consumer Real Estate	$	84,465		$	86,234
Agricultural Real Estate		62,840			62,375
Agricultural		86,950			84,563
Commercial Real Estate		382,758			377,481
Commercial and Industrial		115,415			109,256
Consumer		33,840			33,179
Industrial Development Bonds		5,667			5,732

		771,935			758,820
Less: Net deferred loan fees and costs		(729	)		(726	)

		771,206			758,094
Less: Allowance for loan losses		(6,850	)		(6,784	)

Loans - Net	$	764,356		$	751,310

Maturity Schedule by Major Category of Loans

The following is a maturity schedule by major category of loans as of March 31, 2017:


	(In Thousands)
	Within		After One Year Within		After
	One Year		Five Years		Five Years
Consumer Real Estate	$	1,766	$	12,975	$	69,724
Agricultural Real Estate		286		4,176		58,378
Agricultural		52,159		25,435		9,356
Commercial Real Estate		6,669		112,032		264,057
Commercial and Industrial		50,749		41,073		23,593
Consumer		5,372		20,950		7,518
Industrial Development Bonds		1,032		85		4,550

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 March 31, 2017.


	Rate		Rate
Consumer Real Estate	$	48,151	$	36,314
Agricultural Real Estate		46,507		16,333
Agricultural		38,916		48,034
Commercial Real Estate		264,121		118,637
Commercial and Industrial		47,189		68,226
Consumer		29,547		4,293
Industrial Development Bonds		5,667		—

Contractual Aging of the Recorded Investment in Past Due Loans by Portfolio Classification of Loans

The following table represents the contractual aging of the recorded investment (in thousands) in past due loans by portfolio classification of loans as of March 31, 2017 and December 31, 2016, net of deferred loan fees and costs:


March 31, 2017	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
Consumer Real Estate	$	502	$	10	$	472	$	984	$	83,097	$	84,081	$	—
Agricultural Real Estate		169		31		101		301		62,502		62,803		—
Agricultural		—		—		—		—		87,078		87,078		—
Commercial Real Estate		1,118		—		—		1,118		381,065		382,183		—
Commercial and Industrial		—		—		—		—		121,183		121,183		—
Consumer		37		13		7		57		33,821		33,878		—

Total	$	1,826	$	54	$	580	$	2,460	$	768,746	$	771,206	$	0


December 31, 2016	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
Consumer Real Estate	$	882	$	15	$	507	$	1,404	$	84,469	$	85,873	$	—
Agricultural Real Estate		12		—		132		144		62,192		62,336		—
Agricultural		101		—		—		101		84,591		84,692		—
Commercial Real Estate		60		—		—		60		376,827		376,887		—
Commercial and Industrial		—		—		—		—		115,093		115,093		—
Consumer		29		6		—		35		33,178		33,213		—

Total	$	1,084	$	21	$	639	$	1,744	$	756,350	$	758,094	$	0

Recorded Investment in Nonaccrual Loans by Portfolio Class of Loans

The following table presents the recorded investment in nonaccrual loans by class of loans as of March 31, 2017 and December 31, 2016:


	(In Thousands)
	March 31 2017		December 31, 2016
Consumer Real Estate	$	1,154	$	1,091
Agricultural Real Estate		101		132
Agricultural		—		—
Commercial Real Estate		—		—
Commercial & Industrial		158		161
Consumer		17		—

Total	$	1,430	$	1,384

Risk Category of Loans by Portfolio Class

The following table represents the risk category of loans by portfolio class, net of deferred fees and costs, based on the most recent analysis performed as of March 31, 2017 and December 31, 2016:


	(In Thousands)
	Agricultural Real Estate		Agricultural		Commercial Real Estate		Commercial and Industrial		Industrial Development Bonds
March 31, 2017
1-2	$	3,719	$	4,064	$	877	$	9,857	$	—
3		15,901		33,151		25,899		18,131		2,609
4		41,594		48,278		340,854		85,740		3,058
5		1,365		1,424		11,993		1,062		—
6		224		161		2,560		611		—
7		—		—		—		115		—
8		—		—		—		—		—

Total	$	62,803	$	87,078	$	382,183	$	115,516	$	5,667


	Agricultural Real Estate		Agricultural		Commercial Real Estate		Commercial and Industrial		Industrial Development Bonds
December 31, 2016
1-2	$	4,399	$	7,334	$	677	$	10,060	$	—
3		16,660		31,397		27,858		14,064		2,640
4		39,808		44,560		333,523		83,100		3,092
5		1,209		1,234		8,321		1,379		—
6		260		167		6,508		641		—
7		—		—		—		117		—
8		—		—		—		—		—

Total	$	62,336	$	84,692	$	376,887	$	109,361	$	5,732

Recorded Investment for Consumer Loans, Credit Quality based on Status of Loan and Payment Activity

The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of March 31, 2017 and December 31, 2016.


	(In Thousands)
	Consumer Real Estate		Consumer Real Estate
	March 31, 2017		December 31, 2016
Grade
Pass	$	83,560	$	85,322
Special Mention (5)		25		25
Substandard (6)		338		368
Doubtful (7)		158		158

Total	$	84,081	$	85,873


	(In Thousands)
	Consumer - Credit				Consumer - Other
	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Performing	$	3,762	$	4,061	$	30,094	$	29,120
Nonperforming		—		—		22		32

Total	$	3,762	$	4,061	$	30,116	$	29,152

Schedule of Impaired Loans

Information about impaired loans as of March 31, 2017, December 31, 2016 and March 31, 2016 are as follows:


	(In Thousands)
	March 31, 2017		December 31, 2016		March 31, 2016
Impaired loans without a valuation allowance	$	1,099	$	1,141	$	1,042

Impaired loans with a valuation allowance		694		711		1,169

Total impaired loans	$	1,793	$	1,852	$	2,211

Valuation allowance related to impaired loans	$	117	$	135	$	426

Total non-accrual loans	$	1,430	$	1,384	$	2,003

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

Quarter ended average investment in impaired loans	$	1,832	$	1,684	$	2,130

Year to date average investment in impaired loans	$	1,832	$	1,802	$	2,130

Impaired Loans Classified as Troubled Debt Restructured

The following table represents three months ended March 31, 2017.

Three Months

March 31, 2017

Troubled Debt Restructurings

Number of
Contracts
Modified in the
Last 3 Months

Pre-
Modification
Outstanding
Recorded
Investment

Post-
Modification
Outstanding
Recorded
Investment

Commercial Real Estate

—

Commercial and Industrial

—

Consumer Real Estate

—

The following table represents three months ended March 31, 2016.


Three Months March 31, 2016 Troubled Debt Restructurings	Number of Contracts Modified in the Last 3 Months		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial Real Estate		—	$	—	$	—
Commercial and Industrial		—		—		—
Consumer Real Estate		1		138		138

Loans Individually Evaluated for Impairment by Portfolio Class of Loans

The following tables present loans individually evaluated for impairment by class of loans for three months ended March 31, 2017 and March 31, 2016.


	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended March 31, 2017			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	998	$	998	$	—	$	1,003	$	8	$	6
Agricultural Real Estate		101		101		—		121		—		—
Agricultural		—		—		—		—		—		—
Commercial Real Estate		—		—		—		—		—		—
Commercial and Industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
With a specific allowance recorded:
Consumer Real Estate		83		83		23		94		—		—
Agricultural Real Estate		—		—		—		—		—		—
Agricultural		—		—		—		—		—		—
Commercial Real Estate		496		496		61		498		5		—
Commercial and Industrial		115		115		33		116		—		—
Consumer		—		—		—		—		—		—

Totals:
Consumer Real Estate	$	1,081	$	1,081	$	23	$	1,097	$	8	$	6

Agricultural Real Estate	$	101	$	101	$	—	$	121	$	—	$	—

Agricultural	$	—	$	—	$	—	$	—	$	—	$	—

Commercial Real Estate	$	496	$	496	$	61	$	498	$	5	$	—

Commercial and Industrial	$	115	$	115	$	33	$	116	$	—	$	—

Consumer	$	—	$	—	$	—	$	—	$	—	$	—

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	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended March 31, 2016			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	365	$	365	$	—	$	156	$	3	$	3
Agricultural Real Estate		162		162		—		162		—		—
Agricultural		—		—		—		—		—		—
Commercial Real Estate		515		515		—		409		8		7
Commercial and Industrial		—		—		—		454		6		—
Consumer		—		—		—		—		—		—
With a specific allowance recorded:
Consumer Real Estate		509		628		104		307		1		—
Agricultural Real Estate		57		57		57		38		1		—
Agricultural		—		—		—		—		—		—
Commercial Real Estate		422		422		152		422		—		—
Commercial and Industrial		181		239		113		182		—		—
Consumer		—		—		—		—		—		—

Totals:
Consumer Real Estate	$	874	$	993	$	104	$	463	$	4	$	3

Agricultural Real Estate	$	219	$	219	$	57	$	200	$	1	$	—

Agricultural	$	—	$	—	$	—	$	—	$	—	$	—

Commercial Real Estate	$	937	$	937	$	152	$	831	$	8	$	7

Commercial and Industrial	$	181	$	239	$	113	$	636	$	6	$	—

Consumer	$	—	$	—	$	—	$	—	$	—	$	—

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Summary of Activities in Allowance for Credit Losses

The following tables summarize the activities in the allowance for credit losses.


	(In Thousands)
	Three Months Ended			Twelve Months Ended
	March 31, 2017			December 31, 2016
Allowance for Loan & Lease Losses
Balance at beginning of year	$	6,784		$	6,057
Provision for loan loss		73			1,121
Loans charged off		(44	)		(550	)
Recoveries		37			156

Allowance for Loan & Lease Losses		6,850			6,784

Allowance for Unfunded Loan Commitments &
Letters of Credit	$	219		$	217

Total Allowance for Credit Losses	$	7,069		$	7,001

Analysis of Allowance for Credit Losses

Additional analysis, presented in thousands, related to the allowance for credit losses for three months ended March 31, 2017 and March 31, 2016 is as follows:


	Consumer Real Estate			Agricultural Real Estate		Agricultural		Commercial Real Estate			Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated		Total
Three Months Ended March 31, 2017
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	316		$	241	$	616	$	3,250		$	1,318		$	394		$	217	$	649	$	7,001
Charge Offs		—			—		—		—			—			(44	)		—		—		(44	)
Recoveries		10			—		1		2			3			21			—		—		37
Provision (Credit)		(49	)		3		17		(244	)		(22	)		26			—		342		73
Other Non-interest expense related to unfunded		—			—		—		—			—			—			2		—		2

Ending Balance	$	277		$	244	$	634	$	3,008		$	1,299		$	397		$	219	$	991	$	7,069

Ending balance: individually evaluated for impairment	$	23		$	—	$	—	$	61		$	33		$	—		$	—	$	—	$	117

Ending balance: collectively evaluated for impairment	$	254		$	244	$	634	$	2,947		$	1,266		$	397		$	219	$	991	$	6,952

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

FINANCING RECEIVABLES:
Ending balance	$	84,081		$	62,803	$	87,078	$	382,183		$	121,183		$	33,878		$	—	$	—	$	771,206

Ending balance: individually evaluated for impairment	$	1,081		$	101	$	—	$	496		$	115		$	—		$	—	$	—	$	1,793

Ending balance: collectively evaluated for impairment	$	83,000		$	62,702	$	87,078	$	381,687		$	121,068		$	33,878		$	—	$	—	$	769,413

Ending balance: loans acquired with deteriorated credit quality	$	198		$	—	$	—	$	—		$	—		$	—		$	—	$	—	$	198


	Consumer Real Estate		Agricultural Real Estate		Agricultural			Commercial Real Estate			Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
Three Months Ended March 31, 2016
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	338	$	211	$	582		$	2,516		$	1,229		$	337		$	208	$	844		$	6,265
Charge Offs		—		—		—			(3	)		(20	)		(61	)		—		—			(84	)
Recoveries		2		—		4			1			3			25			—		—			35
Provision (Credit)		117		61		(38	)		164			39			34			—		(100	)		277
Other Non-interest expense related to unfunded		—		—		—			—			—			—			12		—			12

Ending Balance	$	457	$	272	$	548		$	2,678		$	1,251		$	335		$	220	$	744		$	6,505

Ending balance: individually evaluated for impairment	$	104	$	57	$	—		$	152		$	113		$	—		$	—	$	—		$	426

Ending balance: collectively evaluated for impairment	$	353	$	215	$	548		$	2,526		$	1,138		$	335		$	220	$	744		$	6,079

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

FINANCING RECEIVABLES:
Ending balance	$	88,097	$	59,479	$	78,021		$	344,661		$	109,386		$	28,016		$	—	$	—		$	707,660

Ending balance: individually evaluated for impairment	$	874	$	219	$	—		$	937		$	181		$	—		$	—	$	—		$	2,211

Ending balance: collectively evaluated for impairment	$	87,223	$	59,260	$	78,021		$	343,724		$	109,205		$	28,016		$	—	$	—		$	705,449

Ending balance: loans acquired with deteriorated credit quality	$	502	$	—	$	—		$	—		$	—		$	—		$	—	$	—		$	502