ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

NOTE 4 LOANS

Loan balances as of June 30, 2018 and December 31, 2017:

	(In Thousands)
Loans:	June 30, 2018			December 31, 2017
Consumer Real Estate	$	82,853		$	83,620
Agricultural Real Estate		69,701			64,073
Agricultural		104,830			95,111
Commercial Real Estate		411,509			410,520
Commercial and Industrial		116,351			126,275
Consumer		40,513			37,757
Industrial Development Bonds		6,071			6,415
		831,828			823,771
Less: Net deferred loan fees and costs		(813	)		(747	)
		831,015			823,024
Less: Allowance for loan losses		(6,789	)		(6,868	)

Loans - Net	$	824,226		$	816,156

The following is a contractual maturity schedule by major category of loans as of June 30, 2018:

	(In Thousands)
			After One
	Within		Year Within		After
	One Year		Five Years		Five Years
Consumer Real Estate	$	4,338	$	14,305	$	64,210
Agricultural Real Estate		867		5,642		63,192
Agricultural		63,873		29,129		11,828
Commercial Real Estate		12,918		140,932		257,659
Commercial and Industrial		60,579		45,926		9,846
Consumer		5,218		26,031		9,264
Industrial Development Bonds		600		65		5,406

The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of June 30, 2018:

	(In Thousands)
	Fixed		Variable
	Rate		Rate
Consumer Real Estate	$	39,784	$	43,069
Agricultural Real Estate		50,538		19,163
Agricultural		37,971		66,859
Commercial Real Estate		249,029		162,480
Commercial and Industrial		41,256		75,095
Consumer		35,945		4,568
Industrial Development Bonds		6,071		-

As of June 30, 2018 and December 31, 2017 one to four family residential mortgage loans amounting to $15.8 and $17.3 million, respectively, have been pledged as security for future loans and existing loans the Bank has received from the Federal Home Loan Bank.

Unless listed separately, Industrial Development Bonds are included in the Commercial and Industrial category for the remainder of the tables in this Note 4.

The following table represents the contractual aging of the recorded investment (in thousands) in past due loans by portfolio classification of loans as of June 30, 2018 and December 31, 2017, net of deferred loan fees and costs:

June 30, 2018	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	$	325	$	143	$	250	$	718	$	81,650	$	82,368	$	-
Agricultural Real Estate		16		-		-		16		69,660		69,676		-
Agricultural		-		-		-		-		104,980		104,980		-
Commercial Real Estate		-		-		-		-		410,886		410,886		-
Commercial and Industrial		44		-		-		44		122,466		122,510		-
Consumer		25		28		-		53		40,542		40,595		-

Total	$	410	$	171	$	250	$	831	$	830,184	$	831,015	$	-

December 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	$	565	$	212	$	113	$	890	$	82,310	$	83,200	$	-
Agricultural Real Estate		-		-		101		101		63,943		64,044		-
Agricultural		-		-		-		-		95,238		95,238		-
Commercial Real Estate		-		-		38		38		409,915		409,953		-
Commercial and Industrial		-		42		-		42		132,745		132,787		-
Consumer		34		2		7		43		37,759		37,802		-

Total	$	599	$	256	$	259	$	1,114	$	821,910	$	823,024	$	-

The following table presents the recorded investment in nonaccrual loans by class of loans as of June 30, 2018 and December 31, 2017:

	(In Thousands)
	June 30, 2018		December 31, 2017

Consumer Real Estate	$	796	$	708
Agricultural Real Estate		-		101
Agricultural		-		-
Commercial Real Estate		-		38
Commercial & Industrial		107		149
Consumer		-		7
Total	$	903	$	1,003

Following are the characteristics and underwriting criteria for each major type of loan the Bank offers:

Consumer Real Estate: Purchase, refinance, or equity financing of one to four family owner occupied dwelling. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment, and others.

Agricultural Real Estate: Purchase of farm real estate or for permanent improvements to the farm real estate. Cash flow from the farm operation is the repayment source and is therefore subject to the financial success of the farm operation.

Agricultural: Loans for the production and housing of crops, fruits, vegetables, and livestock or to fund the purchase or re-finance of capital assets such as machinery and equipment and livestock. The production of crops and livestock is especially vulnerable to commodity prices and weather. The vulnerability to commodity prices is offset by the farmer’s ability to hedge their position by the use of the future contracts. The risk related to weather is often mitigated by requiring crop insurance.

Commercial Real Estate: Construction, purchase, and refinance of business purpose real estate. Risks include potential construction delays and overruns, vacancies, collateral value subject to market value fluctuations, interest rate, market demands, borrower’s ability to repay in orderly fashion, and others. The Bank does employ stress testing on higher balance loans to mitigate risk by ensuring the customer’s ability to repay in a changing rate environment before granting loan approval.

Commercial and Industrial: Loans to proprietorships, partnerships, or corporations to provide temporary working capital and seasonal loans as well as long term loans for capital asset acquisition. Risks include adequacy of cash flow, reasonableness of projections, financial leverage, economic trends, management ability and estimated capital expenditures during the fiscal year. The Bank does employ stress testing on higher balance loans to mitigate risk by ensuring the customer's ability to repay in a changing rate environment before granting loan approval.

Industrial Development Bonds (IDB): Funds for public improvements in the Bank’s service area. Repayment ability is based on the continuance of the taxation revenue as the source of repayment.

Consumer: Funding for individual and family purposes. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment, and others.

The Bank uses a nine tier risk rating system to grade its loans. The grade of a loan may change during the life of the loan.

The risk ratings are described as follows.

Zero (0) Unclassified. Any loan which has not been assigned a classification.

One (1) Excellent. Credit to premier customers having the highest credit rating based on an extremely strong financial condition, which compares favorably with industry standards (upper quartile of Risk Management Association ratios). Financial statements indicate a sound earnings and financial ratio trend for several years with satisfactory profit margins and excellent liquidity exhibited. Prime credits may also be borrowers with loans fully secured by highly liquid collateral such as traded stocks, bonds, certificates of deposit, savings account, etc. No credit or collateral exceptions exist and the loan adheres to the Bank's loan policy in every respect. Financing alternatives would be readily available and would qualify for unsecured credit. This grade is summarized by high liquidity, minimum risk, strong ratios, and low handling costs.

Two (2) Good. Desirable loans of somewhat less stature than Grade 1, but with strong financial statements. Loan supported by financial statements containing strong balance sheets, generally with a leverage position less than 1.50, and a history of profitability. Probability of serious financial deterioration is unlikely. Possessing a sound repayment source (and a secondary source), which would allow repayment in a reasonable period of time. Individual loans backed by liquid personal assets, established history and unquestionable character.

Three (3) Satisfactory. Satisfactory loans of average or slightly above average risk – having some deficiency or vulnerability to changing economic conditions, but still fully collectible. Projects should normally demonstrate acceptable debt service coverage. Generally, customers should have a leverage position less than 2.00. May be some weakness but with offsetting features of other support readily available. Loans that are meeting the terms of repayment.

Loans may be graded 3 when there is no recent information on which to base a current risk evaluation and the following conditions apply:

At inception, the loan was properly underwritten and did not possess an unwarranted level of credit risk:

At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss;

The loan exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance;

During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the business is in an industry which is known to be experiencing problems. If any of the credit weaknesses is observed, a lower risk grade is warranted.

Four (4) Satisfactory / Monitored. A “4” (Satisfactory/Monitored) risk grade may be established for a loan considered satisfactory but which is of average credit risk due to financial weakness or uncertainty. The loans warrant a higher than average level of monitoring to ensure that weaknesses do not advance. The level of risk in Satisfactory/Monitored classification is considered acceptable and within normal underwriting guidelines, so long as the loan is given management supervision.

Five (5) Special Mention. Loans that possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential”, versus “defined”, impairments to the primary source of loan repayment and collateral.

Six (6) Substandard. One or more of the following characteristics may be exhibited in loans classified substandard:

Loans, which possess a defined credit weakness and the likelihood that a loan will be paid from the primary source, are uncertain. Financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss.

Loans are inadequately protected by the current net worth and paying capacity of the borrower.

The primary source of repayment is weakened, and the Bank is forced to rely on a secondary source of repayment such as collateral liquidation or guarantees.

Loans are characterized by the distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

Unusual courses of action are needed to maintain a high probability of repayment.

The borrower is not generating enough cash flow to repay loan principal; however, continues to make interest payments.

The lender is forced into a subordinate position or unsecured collateral position due to flaws in documentation.

Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms.

The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

There is significant deterioration in the market conditions and the borrower is highly vulnerable to these conditions.

Seven (7) Doubtful. One or more of the following characteristics may be exhibited in loans classified Doubtful:

Loans have all of the weaknesses of those classified as Substandard. Additionally, however, these weaknesses make collection or liquidation in full based on existing conditions improbable.

The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

The possibility of loss is high, but, because of certain important pending factors which may strengthen the loan, loss classification is deferred until its exact status is known. A Doubtful classification is established deferring the realization of the loss.

Eight (8) Loss. Loans are considered uncollectable and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

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 June 30, 2018 and December 31, 2017:

	(In Thousands)
									Industrial
	Agricultural				Commercial		Commercial		Development
	Real Estate		Agricultural		Real Estate		and Industrial		Bonds
June 30, 2018
1-2	$	3,919	$	4,493	$	5,604	$	2,151	$	-
3		14,414		34,305		30,774		18,285		3,217
4		50,899		65,061		363,946		93,664		2,854
5		431		1,121		7,601		1,151		-
6		13		-		2,961		1,081		-
7		-		-		-		107		-
8		-		-		-		-		-
Total	$	69,676	$	104,980	$	410,886	$	116,439	$	6,071

									Industrial
	Agricultural				Commercial		Commercial		Development
	Real Estate		Agricultural		Real Estate		and Industrial		Bonds
December 31, 2017
1-2	$	4,143	$	6,558	$	1,244	$	9,205	$	-
3		15,244		37,267		32,498		15,277		3,489
4		43,416		51,312		359,600		99,581		2,926
5		1,125		101		7,758		1,381		-
6		116		-		8,853		817		-
7		-		-		-		111		-
8		-		-		-		-		-
Total	$	64,044	$	95,238	$	409,953	$	126,372	$	6,415

For consumer residential real estate, and other, the Company also evaluates credit quality based on the aging status of the loan, as was previously stated, and by payment activity. The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of June 30, 2018 and December 31, 2017.

	(In Thousands)
	Consumer		Consumer
	Real Estate		Real Estate
	June 30, 2018		December 31, 2017
Grade
Pass	$	81,834	$	82,632
Special Mention (5)		-		-
Substandard (6)		454		488
Doubtful (7)		80		80
Total	$	82,368	$	83,200

	(In Thousands)
	Consumer - Credit				Consumer - Other
	June 30, 2018		December 31, 2017		June 30, 2018		December 31, 2017
Performing	$	3,998	$	4,108	$	36,579	$	33,666
Nonperforming		-		-		18		28
Total	$	3,998	$	4,108	$	36,597	$	33,694

Information about impaired loans as of June 30, 2018, December 31, 2017 and June 30, 2017 are as follows:

			(In Thousands)
	June 30, 2018		December 31, 2017		June 30, 2017

Impaired loans without a valuation allowance		804		1,131		1,024
Impaired loans with a valuation allowance		648		614		691
Total impaired loans	$	1,452	$	1,745	$	1,715
Valuation allowance related to impaired loans	$	132	$	106	$	115
Total non-accrual loans	$	903	$	1,003	$	1,365
Total loans past-due ninety days or more and still accruing	$	-	$	-	$	-
Quarter ended average investment in impaired loans	$	1,452	$	2,160	$	1,744
Year to date average investment in impaired loans	$	1,570	$	1,885	$	1,789

No additional funds are committed to be advanced in connection with impaired loans.

The Bank had approximately $107 thousand of its impaired loans classified as troubled debt restructured (TDR) as of June 30, 2018, $534 thousand as of December 31, 2017 and $546 thousand as of June 30, 2017. During the year to date 2018 and 2017, there were no new loans considered TDR.

For the three and six month period ended June 30, 2018 and 2017, there were no TDRs that subsequently defaulted after modification.

For the six month period ended June 30, 2018, $418 thousand of impaired loans classified as TDR involving one relationship was paid off.

For the majority of the Bank’s impaired loans, the Bank will apply the fair value of collateral or use a measurement incorporating the present value of expected future cash flows discounted at the loan’s effective rate of interest. To determine fair value of collateral, collateral asset values securing an impaired loan are periodically evaluated. Maximum time of re-evaluation is every 12 months for chattels and titled vehicles and every two years for real estate. In this process, third party evaluations are obtained. Until such time that updated appraisals are received, the Bank may discount the collateral value used.

The Bank uses the following guidelines as stated in policy to determine when to realize a charge-off, whether a partial or full loan balance. A charge-off in whole or in part is realized when unsecured consumer loans, credit card credits and overdraft lines of credit reach 90 days delinquency. At 120 days delinquent, secured consumer loans are charged down to the value of the collateral, if repossession of the collateral is assured and/or in the process of repossession. Consumer mortgage loan deficiencies are charged down upon the sale of the collateral or sooner upon the recognition of collateral deficiency. Commercial and agricultural credits are charged down at 120 days delinquency, unless an established and approved work-out plan is in place or litigation of the credit will likely result in recovery of the loan balance. Upon notification of bankruptcy, unsecured debt is charged off. Additional charge-off may be realized as further unsecured positions are recognized.

The following tables present loans individually evaluated for impairment by class of loans for three months ended June 30, 2018 and June 30, 2017 .

	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended June 30, 2018			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	$	606	$	606	$	-	$	526	$	6	$	4
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		198		198		-		199		3		-
Commercial and Industrial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
With a specific allowance recorded:
Consumer Real Estate		254		254		46		152		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		-		-		-		139		-		-
Commercial and Industrial		394		394		86		436		4		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	860	$	860	$	46	$	678	$	6	$	4
Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-	$	-
Agricultural	$	-	$	-	$	-	$	-	$	-	$	-
Commercial Real Estate	$	198	$	198	$	-	$	338	$	3	$	-
Commercial and Industrial	$	394	$	394	$	86	$	436	$	4	$	-
Consumer	$	-	$	-	$	-	$	-	$	-	$	-

	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended June 30, 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	$	923	$	923	$	-	$	948	$	8	$	6
Agricultural Real Estate		101		101		-		101		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-		-
Commercial and Industrial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
With a specific allowance recorded:
Consumer Real Estate		85		85		25		87		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		492		492		57		493		7		-
Commercial and Industrial		114		114		33		115		-		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	1,008	$	1,008	$	25	$	1,035	$	8	$	6
Agricultural Real Estate	$	101	$	101	$	-	$	101	$	-	$	-
Agricultural	$	-	$	-	$	-	$	-	$	-	$	-
Commercial Real Estate	$	492	$	492	$	57	$	493	$	7	$	-
Commercial and Industrial	$	114	$	114	$	33	$	115	$	-	$	-
Consumer	$	-	$	-	$	-	$	-	$	-	$	-

The following tables present loans individually evaluated for impairment by class of loans for six months ended June 30, 2018 and June 30, 2017.

	(In Thousands)
											YTD
							YTD		YTD		Interest
Six Months Ended June 30, 2018			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	$	606	$	606	$	-	$	509	$	14	$	10
Agricultural Real Estate		-		-		-		34		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		198		198		-		200		5		-
Commercial and Industrial		-		-		-		104		-		-
Consumer		-		-		-		-		-		-
With a specific allowance recorded:
Consumer Real Estate		254		254		46		116		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		-		-		-		279		-		-
Commercial and Industrial		394		394		86		328		8		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	860	$	860	$	46	$	625	$	14	$	10
Agricultural Real Estate	$	-	$	-	$	-	$	34	$	-	$	-
Agricultural	$	-	$	-	$	-	$	-	$	-	$	-
Commercial Real Estate	$	198	$	198	$	-	$	479	$	5	$	-
Commercial and Industrial	$	394	$	394	$	86	$	432	$	8	$	-
Consumer	$	-	$	-	$	-	$	-	$	-	$	-

	(In Thousands)
											YTD
							YTD		YTD		Interest
Six Months Ended June 30, 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	$	923	$	923	$	-	$	976	$	16	$	12
Agricultural Real Estate		101		101		-		111		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		-		-		-		-		-		-
Commercial and Industrial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
With a specific allowance recorded:
Consumer Real Estate		85		85		25		90		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		492		492		57		496		13		-
Commercial and Industrial		114		114		33		116		-		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	1,008	$	1,008	$	25	$	1,066	$	16	$	12
Agricultural Real Estate	$	101	$	101	$	-	$	111	$	-	$	-
Agricultural	$	-	$	-	$	-	$	-	$	-	$	-
Commercial Real Estate	$	492	$	492	$	57	$	496	$	13	$	-
Commercial and Industrial	$	114	$	114	$	33	$	116	$	-	$	-
Consumer	$	-	$	-	$	-	$	-	$	-	$	-

As of June 30, 2018, the Company had no foreclosed residential real estate property obtained by physical possession and $255 thousand of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process according to local jurisdictions. As of June 30, 2017, the Company had $25 thousand of foreclosed residential real estate property obtained by physical possession and $36 thousand of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process according to local jurisdictions.

The Allowance for Loan and Lease Losses (ALLL) has a direct impact on the provision expense. An increase in the ALLL is funded through recoveries and provision expense. The following tables summarize the activities in the allowance for credit losses.

	(In Thousands)
	Six Months Ended			Twelve Months Ended
	June 30, 2018			December 31, 2017
Allowance for Loan & Lease Losses
Balance at beginning of year	$	6,868		$	6,784
Provision for loan loss		172			222
Loans charged off		(327	)		(288	)
Recoveries		76			150
Allowance for Loan & Lease Losses	$	6,789		$	6,868
Allowance for Unfunded Loan Commitments & Letters of Credit	$	315		$	227
Total Allowance for Credit Losses	$	7,104		$	7,095

The Company segregates its ALLL into two reserves: The ALLL and the Allowance for Unfunded Loan Commitments and Letters of Credit (AULC). When combined, these reserves constitute the total Allowance for Credit Losses (ACL).

The AULC is reported within other liabilities on the balance sheet while the ALLL is netted within the loans, net asset line. The ACL presented above represents the full amount of reserves available to absorb possible credit losses.

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The following table breaks down the activity within ACL for each loan portfolio classification and shows the contribution provided by both the recoveries and the provision along with the reduction of the allowance caused by charge-offs.

Additional analysis, presented in thousands, related to the allowance for credit losses for three months ended June 30, 2018 and June 30, 2017 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 June 30, 2018
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	254		$	263		$	706	$	3,674		$	1,443		$	431		$	265	$	29	$	7,065
Charge Offs		-			-			-		(1	)		(100	)		(81	)		-		-		(182	)
Recoveries		-			-			3		2			3			31			-		-		39
Provision (Credit)		(3	)		(8	)		42		(415	)		74			78			-		364		132
Other Non-interest expense related to unfunded		-			-			-		-			-			-			50		-		50
Ending Balance	$	251		$	255		$	751	$	3,260		$	1,420		$	459		$	315	$	393	$	7,104
Ending balance: individually evaluated for impairment	$	46		$	-		$	-	$	-		$	86		$	-		$	-	$	-	$	132
Ending balance: collectively evaluated for impairment	$	205		$	255		$	751	$	3,260		$	1,334		$	459		$	315	$	393	$	6,972
Ending balance: loans acquired with deteriorated credit quality	$	-		$	-		$	-	$	-		$	-		$	-		$	-	$	-	$	-
FINANCING RECEIVABLES:
Ending balance	$	82,368		$	69,676		$	104,980	$	410,886		$	122,510		$	40,595		$	-	$	-	$	831,015
Ending balance: individually evaluated for impairment	$	860		$	-		$	-	$	198		$	394		$	-		$	-	$	-	$	1,452
Ending balance: collectively evaluated for impairment	$	81,508		$	69,676		$	104,980	$	410,688		$	122,116		$	40,595		$	-	$	-	$	829,563
Ending balance: loans acquired with deteriorated credit quality	$	119		$	-		$	-	$	-		$	-		$	-		$	-	$	-	$	119

	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 June 30, 2017
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	277		$	244	$	634		$	3,008	$	1,299	$	397		$	219	$	991		$	7,069
Charge Offs		-			-		-			-		-		(53	)		-		-			(53	)
Recoveries		2			-		1			5		3		25			-		-			36
Provision (Credit)		(29	)		9		(39	)		63		50		38			-		(67	)		25
Other Non-interest expense related to unfunded		-			-		-			-		-		-			-		-			-
Ending Balance	$	250		$	253	$	596		$	3,076	$	1,352	$	407		$	219	$	924		$	7,077
Ending balance: individually evaluated for impairment	$	25		$	-	$	-		$	57	$	33	$	-		$	-	$	-		$	115
Ending balance: collectively evaluated for impairment	$	225		$	253	$	596		$	3,019	$	1,319	$	407		$	219	$	924		$	6,962
Ending balance: loans acquired with deteriorated credit quality	$	-		$	-	$	-		$	-	$	-	$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	83,903		$	64,003	$	83,771		$	394,051	$	129,675	$	35,435		$	-	$	-		$	790,838
Ending balance: individually evaluated for impairment	$	1,008		$	101	$	-		$	492	$	114	$	-		$	-	$	-		$	1,715
Ending balance: collectively evaluated for impairment	$	82,895		$	63,902	$	83,771		$	393,559	$	129,561	$	35,435		$	-	$	-		$	789,123
Ending balance: loans acquired with deteriorated credit quality	$	196		$	-	$	-		$	-	$	-	$	-		$	-	$	-		$	196

Additional analysis, presented in thousands, related to the allowance for credit losses for six months ended June 30, 2018 and June 30, 2017 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
Six Months Ended June 30, 2018
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	343		$	244	$	667	$	3,149		$	1,546		$	441		$	227	$	478		$	7,095
Charge Offs		(34	)		-		-		(16	)		(100	)		(177	)		-		-			(327	)
Recoveries		-			-		6		4			6			60			-		-			76
Provision (Credit)		(58	)		11		78		123			(32	)		135			-		(85	)		172
Other Non-interest expense related to unfunded		-			-		-		-			-			-			88		-			88
Ending Balance	$	251		$	255	$	751	$	3,260		$	1,420		$	459		$	315	$	393		$	7,104
Ending balance: individually evaluated for impairment	$	46		$	-	$	-	$	-		$	86		$	-		$	-	$	-		$	132
Ending balance: collectively evaluated for impairment	$	205		$	255	$	751	$	3,260		$	1,334		$	459		$	315	$	393		$	6,972
Ending balance: loans acquired with deteriorated credit quality	$	-		$	-	$	-	$	-		$	-		$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	82,368		$	69,676	$	104,980	$	410,886		$	122,510		$	40,595		$	-	$	-		$	831,015
Ending balance: individually evaluated for impairment	$	860		$	-	$	-	$	198		$	394		$	-		$	-	$	-		$	1,452
Ending balance: collectively evaluated for impairment	$	81,508		$	69,676	$	104,980	$	410,688		$	122,116		$	40,595		$	-	$	-		$	829,563
Ending balance: loans acquired with deteriorated credit quality	$	119		$	-	$	-	$	-		$	-		$	-		$	-	$	-		$	119

	Consumer Real Estate			Agricultural Real Estate		Agricultural			Commercial Real Estate			Commercial and Industrial		Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated		Total
Six Months Ended June 30, 2017
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	316		$	241	$	616		$	3,250		$	1,318	$	394		$	217	$	649	$	7,001
Charge Offs		-			-		-			-			-		(97	)		-		-		(97	)
Recoveries		13			-		2			7			6		45			-		-		73
Provision (Credit)		(79	)		12		(22	)		(181	)		28		65			-		275		98
Other Non-interest expense related to unfunded		-			-		-			-			-		-			2		-		2
Ending Balance	$	250		$	253	$	596		$	3,076		$	1,352	$	407		$	219	$	924	$	7,077
Ending balance: individually evaluated for impairment	$	25		$	-	$	-		$	57		$	33	$	-		$	-	$	-	$	115
Ending balance: collectively evaluated for impairment	$	225		$	253	$	596		$	3,019		$	1,319	$	407		$	219	$	924	$	6,962
Ending balance: loans acquired with deteriorated credit quality	$	-		$	-	$	-		$	-		$	-	$	-		$	-	$	-	$	-
FINANCING RECEIVABLES:
Ending balance	$	83,903		$	64,003	$	83,771		$	394,051		$	129,675	$	35,435		$	-	$	-	$	790,838
Ending balance: individually evaluated for impairment	$	1,008		$	101	$	-		$	492		$	114	$	-		$	-	$	-	$	1,715
Ending balance: collectively evaluated for impairment	$	82,895		$	63,902	$	83,771		$	393,559		$	129,561	$	35,435		$	-	$	-	$	789,123
Ending balance: loans acquired with deteriorated credit quality	$	196		$	-	$	-		$	-		$	-	$	-		$	-	$	-	$	196