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LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES | 12 Months Ended
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Dec. 31, 2019
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract] |
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES | 5. LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES The Company grants commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central, central and south central Pennsylvania and southern New York. Although the Company had a diversified loan portfolio at December 31, 2019 and 2018, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for loan losses as of December 31, 2019 and 2018 (in thousands):
2019 |  | Total Loans |  |  | Individually evaluated for impairment |  |  | Loans acquired with deteriorated credit quality |  |  | Collectively evaluated for impairment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 217,088 |  |  | $ | 1,166 |  |  | $ | 23 |  |  | $ | 215,899 |
Commercial |  |  | 342,023 |  |  |  | 11,537 |  |  |  | 1,210 |  |  |  | 329,276 |
Agricultural |  |  | 311,464 |  |  |  | 3,782 |  |  |  | - |  |  |  | 307,682 |
Construction |  |  | 15,519 |  |  |  | - |  |  |  | - |  |  |  | 15,519 |
Consumer |  |  | 9,947 |  |  |  | 4 |  |  |  | - |  |  |  | 9,943 |
Other commercial loans |  |  | 69,970 |  |  |  | 1,902 |  |  |  | 49 |  |  |  | 68,019 |
Other agricultural loans |  |  | 55,112 |  |  |  | 1,281 |  |  |  | - |  |  |  | 53,831 |
State and political subdivision loans |  |  | 94,446 |  |  |  | - |  |  |  | - |  |  |  | 94,446 |
Total |  |  | 1,115,569 |  |  |  | 19,672 |  |  |  | 1,282 |  |  |  | 1,094,615 |
Allowance for loan losses |  |  | 13,845 |  |  |  | 735 |  |  |  | - |  |  |  | 13,110 |
Net loans |  | $ | 1,101,724 |  |  | $ | 18,937 |  |  | $ | 1,282 |  |  | $ | 1,081,505 |
2018 |  | Total Loans |  |  | Individually evaluated for impairment |  |  | Loans acquired with deteriorated credit quality |  |  | Collectively evaluated for impairment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 215,305 |  |  | $ | 890 |  |  | $ | 28 |  |  | $ | 214,387 |
Commercial |  |  | 319,265 |  |  |  | 13,327 |  |  |  | 1,321 |  |  |  | 304,617 |
Agricultural |  |  | 284,520 |  |  |  | 5,592 |  |  |  | - |  |  |  | 278,928 |
Construction |  |  | 33,913 |  |  |  | - |  |  |  | - |  |  |  | 33,913 |
Consumer |  |  | 9,858 |  |  |  | - |  |  |  | - |  |  |  | 9,858 |
Other commercial loans |  |  | 74,118 |  |  |  | 2,206 |  |  |  | 510 |  |  |  | 71,402 |
Other agricultural loans |  |  | 42,186 |  |  |  | 1,435 |  |  |  | - |  |  |  | 40,751 |
State and political subdivision loans |  |  | 102,718 |  |  |  | - |  |  |  | - |  |  |  | 102,718 |
Total |  |  | 1,081,883 |  |  |  | 23,450 |  |  |  | 1,859 |  |  |  | 1,056,574 |
Allowance for loan losses |  |  | 12,884 |  |  |  | 676 |  |  |  | - |  |  |  | 12,208 |
Net loans |  | $ | 1,068,999 |  |  | $ | 22,774 |  |  | $ | 1,859 |  |  | $ | 1,044,366 |
As of December 31, 2019 and 2018, net unamortized loan fees and costs of $937,000 and $918,000, respectively, were included in the carrying value of loans. Purchased loans acquired in connection with the FNB acquisition and the State College branch acquisition were recorded at fair value on their purchase date without a carryover of the related allowance for loan losses. Upon acquisition, the Company evaluated whether an acquired loan was within the scope of ASC 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality. PCI loans are loans that have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. The fair value of PCI loans, on the acquisition date, was determined, primarily based on the fair value of the loans’ collateral. The carrying value of PCI loans was $1,282,000 and $1,859,000 at December 31, 2019 and 2018, respectively. The carrying value of the PCI loans was determined by projected discounted contractual cash flows. Changes in the accretable discount for PCI loans were as follows for the years ended December 31, 2019 and 2018 (in thousands):
|  | December 31, 2019 |  |  | December 31, 2018 |
Balance at beginning of period |  | $ | 104 |  |  | $ | 106 |
Accretion |  |  | (15 | ) |  |  | (95 | )
Reclassification of non-accretable discount |  |  | - |  |  |  | 93 |
Balance at end of period |  | $ | 89 |  |  | $ | 104 |
The following table presents additional information regarding PCI loans (in thousands):
|  | December 31, 2019 |  |  | December 31, 2018 |
Outstanding balance |  | $ | 4,072 |  |  | $ | 4,529 |
Carrying amount |  |  | 1,282 |  |  |  | 1,859 |
Real estate loans serviced for Freddie Mac, Fannie Mae and the FHLB, which are not included in the Consolidated Balance Sheet, totaled $148,889,000 and $147,072,000 at December 31, 2019 and 2018, respectively. Loans sold to Freddie Mac and Fannie Mae were sold without recourse and total $127,402,000 and $122,219,000 at December 31, 2019 and 2018, respectively. Additionally, the Bank acquired a portfolio of loans sold to the FHLB during the acquisition of FNB, which were sold under the Mortgage Partnership Finance Program ("MPF"). The Bank was not an active participant in the MPF program in 2019 or 2018. The MPF portfolio balance was $21,487,000 and $24,853,000 at December 31, 2019 and 2018, respectively. The FHLB maintains a first-loss position for the MPF portfolio that totals $143,000. Should the FHLB exhaust its first-loss position, recourse to the Bank's credit enhancement would be up to the next $764,000 of losses. The Bank did not experience any losses for the MPF portfolio during 2019, 2018 or 2017. The segments of the Bank’s loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consists of 15 to 30 year first mortgages on residential real estate, while residential real estate home equities are consumer purpose installment loans or lines of credit secured by a mortgage which is often a second lien on residential real estate with terms of 15 years or less. Commercial real estate are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate are loans secured by a mortgage on real estate used in agriculture production. Construction real estate are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by collateral other than real estate and overdraft lines of credit connected with customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non real estate collateral. State and political subdivisions are loans for state and local municipalities for capital and operating expenses or tax free loans used to finance commercial development. Management considers other commercial loans, other agricultural loans, commercial and agricultural real estate loans and state and political subdivision loans which are 90 days or more past due to be impaired. Certain residential mortgages, home equity and consumer loans that are cross collateralized with commercial relationships determined to be impaired may be classified as impaired as well. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance allocation or a charge-off to the allowance. The following table includes the recorded investment and unpaid principal balances for impaired loans by class, with the associated allowance amount as of December 31, 2019 and 2018, if applicable (in thousands):
|  |  |  |  | Recorded |  |  | Recorded |  |  |  |  |  |  |
|  | Unpaid |  |  | Investment |  |  | Investment |  |  | Total |  |  |  |
|  | Principal |  |  | With No |  |  | With |  |  | Recorded |  |  | Related |
2019 |  | Balance |  |  | Allowance |  |  | Allowance |  |  | Investment |  |  | Allowance |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 1,212 |  |  | $ | 794 |  |  | $ | 223 |  |  | $ | 1,017 |  |  | $ | 20 |
Home Equity |  |  | 170 |  |  |  | 83 |  |  |  | 66 |  |  |  | 149 |  |  |  | 12 |
Commercial |  |  | 12,070 |  |  |  | 10,723 |  |  |  | 814 |  |  |  | 11,537 |  |  |  | 251 |
Agricultural |  |  | 3,900 |  |  |  | 1,580 |  |  |  | 2,202 |  |  |  | 3,782 |  |  |  | 151 |
Consumer |  |  | 4 |  |  |  | 4 |  |  |  | - |  |  |  | 4 |  |  |  | - |
Other commercial loans |  |  | 2,517 |  |  |  | 1,555 |  |  |  | 347 |  |  |  | 1,902 |  |  |  | 147 |
Other agricultural loans |  |  | 1,347 |  |  |  | 126 |  |  |  | 1,155 |  |  |  | 1,281 |  |  |  | 154 |
Total |  | $ | 21,220 |  |  | $ | 14,865 |  |  | $ | 4,807 |  |  | $ | 19,672 |  |  | $ | 735 |
|  |  |  |  | Recorded |  |  | Recorded |  |  |  |  |  |  |
|  | Unpaid |  |  | Investment |  |  | Investment |  |  | Total |  |  |  |
2018 |  | Principal |  |  | With No |  |  | With |  |  | Recorded |  |  | Related |
Real estate loans: |  | Balance |  |  | Allowance |  |  | Allowance |  |  | Investment |  |  | Allowance |
Mortgages |  | $ | 932 |  |  | $ | 515 |  |  | $ | 288 |  |  | $ | 803 |  |  | $ | 10 |
Home Equity |  |  | 106 |  |  |  | 12 |  |  |  | 75 |  |  |  | 87 |  |  |  | 14 |
Commercial |  |  | 16,326 |  |  |  | 11,933 |  |  |  | 1,394 |  |  |  | 13,327 |  |  |  | 216 |
Agricultural |  |  | 5,598 |  |  |  | 2,386 |  |  |  | 3,206 |  |  |  | 5,592 |  |  |  | 84 |
Other commercial loans |  |  | 2,711 |  |  |  | 1,836 |  |  |  | 370 |  |  |  | 2,206 |  |  |  | 193 |
Other agricultural loans |  |  | 1,487 |  |  |  | 120 |  |  |  | 1,315 |  |  |  | 1,435 |  |  |  | 159 |
Total |  | $ | 27,160 |  |  | $ | 16,802 |  |  | $ | 6,648 |  |  | $ | 23,450 |  |  | $ | 676 |
The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2019, 2018 and 2017 (in thousands):
|  |  |  |  |  |  |  | Interest |
|  | Average |  |  | Interest |  |  | Income |
|  | Recorded |  |  | Income |  |  | Recognized |
2019 |  | Investment |  |  | Recognized |  |  | Cash Basis |
Real estate loans: |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 1,062 |  |  | $ | 16 |  |  | $ | - |
Home Equity |  |  | 119 |  |  |  | 6 |  |  |  | - |
Commercial |  |  | 11,756 |  |  |  | 453 |  |  |  | 24 |
Agricultural |  |  | 4,899 |  |  |  | 78 |  |  |  | - |
Consumer |  |  | 2 |  |  |  | - |  |  |  | - |
Other commercial loans |  |  | 2,056 |  |  |  | 1 |  |  |  | - |
Other agricultural loans |  |  | 1,400 |  |  |  | 4 |  |  |  | - |
Total |  | $ | 21,294 |  |  | $ | 558 |  |  | $ | 24 |
|  |  |  |  |  |  |  | Interest |
|  | Average |  |  | Interest |  |  | Income |
|  | Recorded |  |  | Income |  |  | Recognized |
2018 |  | Investment |  |  | Recognized |  |  | Cash Basis |
Real estate loans: |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 944 |  |  | $ | 13 |  |  | $ | - |
Home Equity |  |  | 95 |  |  |  | 4 |  |  |  | - |
Commercial |  |  | 13,907 |  |  |  | 506 |  |  |  | 20 |
Agricultural |  |  | 4,736 |  |  |  | 151 |  |  |  | - |
Consumer |  |  | 1 |  |  |  | - |  |  |  | - |
Other commercial loans |  |  | 3,659 |  |  |  | 89 |  |  |  | - |
Other agricultural loans |  |  | 1,401 |  |  |  | 23 |  |  |  | - |
Total |  | $ | 24,743 |  |  | $ | 786 |  |  | $ | 20 |
|  |  |  |  |  |  |  | Interest |
|  | Average |  |  | Interest |  |  | Income |
|  | Recorded |  |  | Income |  |  | Recognized |
2017 |  | Investment |  |  | Recognized |  |  | Cash Basis |
Real estate loans: |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 900 |  |  | $ | 13 |  |  | $ | - |
Home Equity |  |  | 67 |  |  |  | 4 |  |  |  | - |
Commercial |  |  | 11,567 |  |  |  | 385 |  |  |  | 7 |
Agricultural |  |  | 3,574 |  |  |  | 131 |  |  |  | - |
Consumer |  |  | 3 |  |  |  | - |  |  |  | - |
Other commercial loans |  |  | 4,790 |  |  |  | 152 |  |  |  | 52 |
Other agricultural loans |  |  | 1,491 |  |  |  | 65 |  |  |  | - |
Total |  | $ | 22,392 |  |  | $ | 750 |  |  | $ | 59 |
Credit Quality Information For commercial real estate, agricultural real estate, construction, other commercial, other agricultural loans and state and political subdivision loans, management uses a nine point internal risk rating system to monitor the credit quality. The first five categories are considered not criticized and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:
• | Pass (Grades 1-5) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.
• | Special Mention (Grade 6) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.
• | Substandard (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
• | Doubtful (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.
• | Loss (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.
To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial and agricultural loans are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis. The external consultant is engaged to 1) review a minimum of 50% of the dollar volume of the commercial loan portfolio on an annual basis, 2) review new loans originated over $1.0 million in the last years, 3) review a majority of borrowers with commitments greater than or equal to $1.0 million, 4) review selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 5) such other loans which management or the consultant deems appropriate. The following tables represent credit exposures by internally assigned grades as of December 31, 2019 and 2018 (in thousands):
2019 |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Ending Balance |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 329,831 |  |  | $ | 4,305 |  |  | $ | 7,848 |  |  | $ | 39 |  |  | $ | - |  |  | $ | 342,023 |
Agricultural |  |  | 287,044 |  |  |  | 14,261 |  |  |  | 10,159 |  |  |  | - |  |  |  | - |  |  |  | 311,464 |
Construction |  |  | 15,519 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,519 |
Other commercial loans |  |  | 66,880 |  |  |  | 984 |  |  |  | 2,042 |  |  |  | 64 |  |  |  | - |  |  |  | 69,970 |
Other agricultural loans |  |  | 51,711 |  |  |  | 1,077 |  |  |  | 2,324 |  |  |  | - |  |  |  | - |  |  |  | 55,112 |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | 93,993 |  |  |  | - |  |  |  | 453 |  |  |  | - |  |  |  | - |  |  |  | 94,446 |
Total |  | $ | 844,978 |  |  | $ | 20,627 |  |  | $ | 22,826 |  |  | $ | 103 |  |  | $ | - |  |  | $ | 888,534 |
2018 |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Ending Balance |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 297,690 |  |  | $ | 10,792 |  |  | $ | 10,743 |  |  | $ | 40 |  |  | $ | - |  |  | $ | 319,265 |
Agricultural |  |  | 264,732 |  |  |  | 10,017 |  |  |  | 9,771 |  |  |  | - |  |  |  | - |  |  |  | 284,520 |
Construction |  |  | 33,913 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 33,913 |
Other commercial loans |  |  | 70,425 |  |  |  | 777 |  |  |  | 2,800 |  |  |  | 116 |  |  |  | - |  |  |  | 74,118 |
Other agricultural loans |  |  | 38,628 |  |  |  | 1,724 |  |  |  | 1,834 |  |  |  | - |  |  |  | - |  |  |  | 42,186 |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | 92,666 |  |  |  | 9,481 |  |  |  | 571 |  |  |  | - |  |  |  | - |  |  |  | 102,718 |
Total |  | $ | 798,054 |  |  | $ | 32,791 |  |  | $ | 25,719 |  |  | $ | 156 |  |  | $ | - |  |  | $ | 856,720 |
For residential real estate mortgages, home equities and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below and all loans past due 90 or more days. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019 and 2018 (in thousands):
2019 |  | Performing |  |  | Non-performing |  |  | PCI |  |  | Total |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 156,151 |  |  | $ | 904 |  |  | $ | 23 |  |  | $ | 157,078 |
Home Equity |  |  | 59,950 |  |  |  | 60 |  |  |  | - |  |  |  | 60,010 |
Consumer |  |  | 9,939 |  |  |  | 8 |  |  |  | - |  |  |  | 9,947 |
Total |  | $ | 226,040 |  |  | $ | 972 |  |  | $ | 23 |  |  | $ | 227,035 |
2018 |  | Performing |  |  | Non-performing |  |  | PCI |  |  | Total |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 155,360 |  |  | $ | 1,099 |  |  | $ | 28 |  |  | $ | 156,487 |
Home Equity |  |  | 58,736 |  |  |  | 82 |  |  |  | - |  |  |  | 58,818 |
Consumer |  |  | 9,832 |  |  |  | 26 |  |  |  | - |  |  |  | 9,858 |
Total |  | $ | 223,928 |  |  | $ | 1,207 |  |  | $ | 28 |  |  | $ | 225,163 |
Aging Analysis of Past Due Loans by Class Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loans as of December 31, 2019 and 2018 (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 90 Days |
|  | 30-59 Days |  |  | 60-89 Days |  |  | 90 Days |  |  | Total Past |  |  |  |  |  |  |  |  | Total Financing |  |  | Past due |
2019 |  | Past Due |  |  | Past Due |  |  | Or Greater |  |  | Due |  |  | Current |  |  | PCI |  |  | Receivables |  |  | and Accruing |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 581 |  |  | $ | 57 |  |  | $ | 319 |  |  | $ | 957 |  |  | $ | 156,098 |  |  | $ | 23 |  |  | $ | 157,078 |  |  | $ | 1 |
Home Equity |  |  | 334 |  |  |  | 11 |  |  |  | 56 |  |  |  | 401 |  |  |  | 59,609 |  |  |  | - |  |  |  | 60,010 |  |  |  | 1 |
Commercial |  |  | 750 |  |  |  | 573 |  |  |  | 3,720 |  |  |  | 5,043 |  |  |  | 335,770 |  |  |  | 1,210 |  |  |  | 342,023 |  |  |  | - |
Agricultural |  |  | 118 |  |  |  | - |  |  |  | 785 |  |  |  | 903 |  |  |  | 310,561 |  |  |  | - |  |  |  | 311,464 |  |  |  | 299 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,519 |  |  |  | - |  |  |  | 15,519 |  |  |  | - |
Consumer |  |  | 113 |  |  |  | 10 |  |  |  | 8 |  |  |  | 131 |  |  |  | 9,816 |  |  |  | - |  |  |  | 9,947 |  |  |  | 2 |
Other commercial loans |  |  | 217 |  |  |  | 71 |  |  |  | 1,946 |  |  |  | 2,234 |  |  |  | 67,687 |  |  |  | 49 |  |  |  | 69,970 |  |  |  | 184 |
Other agricultural loans |  |  | 29 |  |  |  | 32 |  |  |  | - |  |  |  | 61 |  |  |  | 55,051 |  |  |  | - |  |  |  | 55,112 |  |  |  | - |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 94,446 |  |  |  | - |  |  |  | 94,446 |  |  |  | - |
Total |  | $ | 2,142 |  |  | $ | 754 |  |  | $ | 6,834 |  |  | $ | 9,730 |  |  | $ | 1,104,557 |  |  | $ | 1,282 |  |  | $ | 1,115,569 |  |  | $ | 487 |
Loans considered non-accrual |  | $ | 90 |  |  | $ | 95 |  |  | $ | 6,347 |  |  | $ | 6,532 |  |  | $ | 5,004 |  |  | $ | - |  |  | $ | 11,536 |  |  |  |  |
Loans still accruing |  |  | 2,052 |  |  |  | 659 |  |  |  | 487 |  |  |  | 3,198 |  |  |  | 1,099,553 |  |  |  | 1,282 |  |  |  | 1,104,033 |  |  |  |  |
Total |  | $ | 2,142 |  |  | $ | 754 |  |  | $ | 6,834 |  |  | $ | 9,730 |  |  | $ | 1,104,557 |  |  | $ | 1,282 |  |  | $ | 1,115,569 |  |  |  |  |
|  | 30-59 Days |  |  | 60-89 Days |  |  | 90 Days |  |  | Total Past |  |  |  |  |  |  |  |  | Total Financing |  |  | 90 Days Past Due |
2018 |  | Past Due |  |  | Past Due |  |  | Or Greater |  |  | Due |  |  | Current |  |  | PCI |  |  | Receivables |  |  | And Accruing |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  | $ | 483 |  |  | $ | 789 |  |  | $ | 686 |  |  | $ | 1,958 |  |  | $ | 154,501 |  |  | $ | 28 |  |  | $ | 156,487 |  |  | $ | 20 |
Home Equity |  |  | 257 |  |  |  | 108 |  |  |  | 63 |  |  |  | 428 |  |  |  | 58,390 |  |  |  | - |  |  |  | 58,818 |  |  |  | - |
Commercial |  |  | 999 |  |  |  | 631 |  |  |  | 4,706 |  |  |  | 6,336 |  |  |  | 311,608 |  |  |  | 1,321 |  |  |  | 319,265 |  |  |  | 36 |
Agricultural |  |  | 121 |  |  |  | - |  |  |  | 3,184 |  |  |  | 3,305 |  |  |  | 281,215 |  |  |  | - |  |  |  | 284,520 |  |  |  | - |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 33,913 |  |  |  | - |  |  |  | 33,913 |  |  |  | - |
Consumer |  |  | 37 |  |  |  | 14 |  |  |  | 12 |  |  |  | 63 |  |  |  | 9,795 |  |  |  | - |  |  |  | 9,858 |  |  |  | 12 |
Other commercial loans |  |  | 141 |  |  |  | 53 |  |  |  | 2,061 |  |  |  | 2,255 |  |  |  | 71,353 |  |  |  | 510 |  |  |  | 74,118 |  |  |  | - |
Other agricultural loans |  |  | - |  |  |  | - |  |  |  | 1,201 |  |  |  | 1,201 |  |  |  | 40,985 |  |  |  | - |  |  |  | 42,186 |  |  |  | - |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 102,718 |  |  |  | - |  |  |  | 102,718 |  |  |  | - |
Total |  | $ | 2,038 |  |  | $ | 1,595 |  |  | $ | 11,913 |  |  | $ | 15,546 |  |  | $ | 1,064,478 |  |  | $ | 1,859 |  |  | $ | 1,081,883 |  |  | $ | 68 |
Loans considered non-accrual |  | $ | 72 |  |  | $ | 253 |  |  | $ | 11,845 |  |  | $ | 12,170 |  |  | $ | 1,554 |  |  | $ | - |  |  | $ | 13,724 |  |  |  |  |
Loans still accruing |  |  | 1,966 |  |  |  | 1,342 |  |  |  | 68 |  |  |  | 3,376 |  |  |  | 1,062,924 |  |  |  | 1,859 |  |  |  | 1,068,159 |  |  |  |  |
Total |  | $ | 2,038 |  |  | $ | 1,595 |  |  | $ | 11,913 |  |  | $ | 15,546 |  |  | $ | 1,064,478 |  |  | $ | 1,859 |  |  | $ | 1,081,883 |  |  |  |  |
Nonaccrual Loans Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans or if full payment of principal and interest is not expected. The following table reflects the loans on nonaccrual status as of December 31, 2019 and 2018, respectively. The balances are presented by class of loan (in thousands):
|  | 2019 |  |  | 2018 |
Real estate loans: |  |  |  |  |  |
Mortgages |  | $ | 903 |  |  | $ | 1,079 |
Home Equity |  |  | 59 |  |  |  | 82 |
Commercial |  |  | 5,080 |  |  |  | 5,957 |
Agricultural |  |  | 2,578 |  |  |  | 3,206 |
Consumer |  |  | 6 |  |  |  | 14 |
Other commercial loans |  |  | 1,837 |  |  |  | 2,185 |
Other agricultural loans |  |  | 1,073 |  |  |  | 1,201 |
|  | $ | 11,536 |  |  | $ | 13,724 |
Interest income on loans would have increased by approximately $647,000, $961,000 and $709,000 during 2019. 2018 and 2017, respectively, if these loans had performed in accordance with their terms. Troubled Debt Restructurings (TDRs) In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a TDR. Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring by calculating the present value of the revised loan terms and comparing this balance to the Company’s investment in the loan prior to the restructuring. As these loans are individually evaluated, they are excluded from pooled portfolios when calculating the allowance for loan and lease losses and a separate allocation within the allowance for loan and lease losses is provided. Management continually evaluates loans that are considered TDRs, including payment history under the modified loan terms, the borrower’s ability to continue to repay the loan based on continued evaluation of their operating results and cash flows from operations. Based on this evaluation management would no longer consider a loan to be a TDR when the relevant facts support such a conclusion. As of December 31, 2019, 2018 and 2017, included within the allowance for loan losses are reserves of $345,000, $255,000 and $41,000, respectively, that are associated with loans modified as TDRs. Loan modifications that are considered TDRs completed during the years ended December 31, 2019, 2018 and 2017 were as follows (dollars in thousands):
|  | Number of contracts |  |  | Pre-modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |
2019 |  | Interest Modification |  |  | Term Modification |  |  | Interest Modification |  |  | Term Modification |  |  | Interest Modification |  |  | Term Modification |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  |  | - |  |  |  | 1 |  |  | $ | - |  |  | $ | 4 |  |  | $ | - |  |  | $ | 4 |
Home Equity |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 40 |  |  |  | - |  |  |  | 40 |
Commercial |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 918 |  |  |  | - |  |  |  | 918 |
Agricultural |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 1,731 |  |  |  | - |  |  |  | 1,731 |
Consumer |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 3 |  |  |  |  |  |  |  | 3 |
Other commercial loans |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 55 |  |  |  |  |  |  |  | 55 |
Other agricultural loans |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 1,054 |  |  |  | - |  |  |  | 1,054 |
Total |  |  | - |  |  |  | 20 |  |  | $ | - |  |  | $ | 3,805 |  |  | $ | - |  |  | $ | 3,805 |
|  | Number of contracts |  |  | Pre-modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |
2018 |  | Interest Modification |  |  | Term Modification |  |  | Interest Modification |  |  | Term Modification |  |  | Interest Modification |  |  | Term Modification |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgages |  |  | - |  |  |  | 1 |  |  | $ | - |  |  | $ | 7 |  |  | $ | - |  |  | $ | 7 |
Home Equity |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 1 |
Commercial |  |  | - |  |  |  | 2 |  |  |  | - |  |  |  | 683 |  |  |  | - |  |  |  | 683 |
Agricultural |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 3,209 |  |  |  | - |  |  |  | 3,209 |
Other agricultural loans |  |  | - |  |  |  | 4 |  |  |  | - |  |  |  | 176 |  |  |  | - |  |  |  | 176 |
Total |  |  | - |  |  |  | 13 |  |  | $ | - |  |  | $ | 4,076 |  |  | $ | - |  |  | $ | 4,076 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home Equity |  |  | - |  |  |  | 1 |  |  | $ | - |  |  | $ | 25 |  |  | $ | - |  |  | $ | 25 |
Commercial |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | 7,021 |  |  |  | - |  |  |  | 7,021 |
Agricultural |  |  | - |  |  |  | 4 |  |  |  | - |  |  |  | 1,475 |  |  |  | - |  |  |  | 1,475 |
Other commercial loans |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | 9 |
Other agricultural loans |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | 161 |  |  |  | - |  |  |  | 161 |
Total |  |  | - |  |  |  | 12 |  |  | $ | - |  |  | $ | 8,691 |  |  | $ | - |  |  | $ | 8,691 |
Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2019, 2018 and 2017, respectively, and that subsequently defaulted during these reporting periods (dollars in thousands):
|  | December 31, 2019 |  |  | December 31, 2018 |  |  | December 31, 2017 |
|  | Number of contracts |  |  | Recorded investment |  |  | Number of contracts |  |  | Recorded investment |  |  | Number of contracts |  |  | Recorded investment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | - |  |  | $ | - |  |  |  | 2 |  |  | $ | 683 |  |  |  | - |  |  | $ | - |
Agricultural |  |  | 1 |  |  |  | 1,439 |  |  |  | 2 |  |  |  | 1,325 |  |  |  | - |  |  |  | - |
Other agricultural loans |  |  | 3 |  |  |  | 137 |  |  |  | 1 |  |  |  | 161 |  |  |  | 2 |  |  |  | 632 |
Total recidivism |  |  | 4 |  |  | $ | 1,576 |  |  |  | 5 |  |  | $ | 2,169 |  |  |  | 2 |  |  | $ | 632 |
Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2019 and 2018 included with other assets are $3,404,000, and $601,000, respectively, of foreclosed assets. As of December 31, 2019, included within the foreclosed assets is $366,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2019, the Company has initiated formal foreclosure proceedings on $479,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets. Allowance for Loan Losses The following tables roll forward the balance of the allowance for loan and lease losses for the years ended December 31, 2019, 2018 and 2017 and is segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2019, 2018 and 2017 (in thousands):
|  | Balance at December 31, 2018 |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Balance at December 31, 2019 |  |  | Individually evaluated for impairment |  |  | Collectively evaluated for impairment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 1,105 |  |  | $ | (32 | ) |  | $ | - |  |  | $ | 41 |  |  | $ | 1,114 |  |  | $ | 32 |  |  | $ | 1,082 |
Commercial |  |  | 4,115 |  |  |  | (578 | ) |  |  | - |  |  |  | 1,012 |  |  |  | 4,549 |  |  |  | 251 |  |  |  | 4,298 |
Agricultural |  |  | 4,264 |  |  |  | - |  |  |  | - |  |  |  | 758 |  |  |  | 5,022 |  |  |  | 151 |  |  |  | 4,871 |
Construction |  |  | 58 |  |  |  | - |  |  |  | - |  |  |  | (15 | ) |  |  | 43 |  |  |  | - |  |  |  | 43 |
Consumer |  |  | 120 |  |  |  | (49 | ) |  |  | 33 |  |  |  | 8 |  |  |  | 112 |  |  |  | - |  |  |  | 112 |
Other commercial loans |  |  | 1,354 |  |  |  | (38 | ) |  |  | 10 |  |  |  | (71 | ) |  |  | 1,255 |  |  |  | 147 |  |  |  | 1,108 |
Other agricultural loans |  |  | 752 |  |  |  | (60 | ) |  |  | - |  |  |  | 269 |  |  |  | 961 |  |  |  | 154 |  |  |  | 807 |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | 762 |  |  |  | - |  |  |  | - |  |  |  | (226 | ) |  |  | 536 |  |  |  | - |  |  |  | 536 |
Unallocated |  |  | 354 |  |  |  | - |  |  |  | - |  |  |  | (101 | ) |  |  | 253 |  |  |  | - |  |  |  | 253 |
Total |  | $ | 12,884 |  |  | $ | (757 | ) |  | $ | 43 |  |  | $ | 1,675 |  |  | $ | 13,845 |  |  | $ | 735 |  |  | $ | 13,110 |
|  | Balance at December 31, 2017 |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Balance at December 31, 2018 |  |  | Individually evaluated for impairment |  |  | Collectively evaluated for impairment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 1,049 |  |  | $ | (118 | ) |  | $ | 69 |  |  | $ | 105 |  |  | $ | 1,105 |  |  | $ | 24 |  |  | $ | 1,081 |
Commercial |  |  | 3,867 |  |  |  | (66 | ) |  |  | 3 |  |  |  | 311 |  |  |  | 4,115 |  |  |  | 216 |  |  |  | 3,899 |
Agricultural |  |  | 3,143 |  |  |  | - |  |  |  | - |  |  |  | 1,121 |  |  |  | 4,264 |  |  |  | 84 |  |  |  | 4,180 |
Construction |  |  | 23 |  |  |  | - |  |  |  | - |  |  |  | 35 |  |  |  | 58 |  |  |  | - |  |  |  | 58 |
Consumer |  |  | 124 |  |  |  | (40 | ) |  |  | 31 |  |  |  | 5 |  |  |  | 120 |  |  |  | - |  |  |  | 120 |
Other commercial loans |  |  | 1,272 |  |  |  | (91 | ) |  |  | 30 |  |  |  | 143 |  |  |  | 1,354 |  |  |  | 193 |  |  |  | 1,161 |
Other agricultural loans |  |  | 492 |  |  |  | (50 | ) |  |  | 1 |  |  |  | 309 |  |  |  | 752 |  |  |  | 159 |  |  |  | 593 |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | 816 |  |  |  | - |  |  |  | - |  |  |  | (54 | ) |  |  | 762 |  |  |  | - |  |  |  | 762 |
Unallocated |  |  | 404 |  |  |  | - |  |  |  | - |  |  |  | (50 | ) |  |  | 354 |  |  |  | - |  |  |  | 354 |
Total |  | $ | 11,190 |  |  | $ | (365 | ) |  | $ | 134 |  |  | $ | 1,925 |  |  | $ | 12,884 |  |  | $ | 676 |  |  | $ | 12,208 |
|  | Balance at December 31, 2016 |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Balance at December 31, 2017 |  |  | Individually evaluated for impairment |  |  | Collectively evaluated for impairment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential |  | $ | 1,064 |  |  | $ | (107 | ) |  | $ | - |  |  | $ | 92 |  |  | $ | 1,049 |  |  | $ | 56 |  |  | $ | 993 |
Commercial |  |  | 3,589 |  |  |  | (41 | ) |  |  | 11 |  |  |  | 308 |  |  |  | 3,867 |  |  |  | 94 |  |  |  | 3,773 |
Agricultural |  |  | 1,494 |  |  |  | (30 | ) |  |  | - |  |  |  | 1,679 |  |  |  | 3,143 |  |  |  | 3 |  |  |  | 3,140 |
Construction |  |  | 47 |  |  |  | - |  |  |  | - |  |  |  | (24 | ) |  |  | 23 |  |  |  | - |  |  |  | 23 |
Consumer |  |  | 122 |  |  |  | (130 | ) |  |  | 49 |  |  |  | 83 |  |  |  | 124 |  |  |  | - |  |  |  | 124 |
Other commercial loans |  |  | 1,327 |  |  |  | - |  |  |  | 16 |  |  |  | (71 | ) |  |  | 1,272 |  |  |  | 231 |  |  |  | 1,041 |
Other agricultural loans |  |  | 312 |  |  |  | (5 | ) |  |  | 1 |  |  |  | 184 |  |  |  | 492 |  |  |  | 26 |  |  |  | 466 |
State and political |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subdivision loans |  |  | 833 |  |  |  | - |  |  |  | - |  |  |  | (17 | ) |  |  | 816 |  |  |  | - |  |  |  | 816 |
Unallocated |  |  | 98 |  |  |  | - |  |  |  | - |  |  |  | 306 |  |  |  | 404 |  |  |  | - |  |  |  | 404 |
Total |  | $ | 8,886 |  |  | $ | (313 | ) |  | $ | 77 |  |  | $ | 2,540 |  |  | $ | 11,190 |  |  | $ | 410 |  |  | $ | 10,780 |
As discussed in Footnote 1, management evaluates various qualitative factors on a quarterly basis. The following are explanations for the changes in the allowance by portfolio segments: 2019 Residential - There was a slight increase in the historical loss factor for residential loans when comparing 2018 and 2019. The specific reserve for residential loans decreased slightly between 2018 and 2019. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for residential loan categories due to an increase in the unemployment rates in the local economy during 2019. Commercial real estate– There was an increase in the historical loss factor for commercial real estate loans from 2018 to 2019. The specific reserve for commerciall real estate loans increased from 2018 to 2019. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all commercial real estate loans due to an increase in the unemployment rates in the local economy during 2019. The qualitative factors for changes in the levels of and trends in delinquencies, impaired and classified loans was decreased due to a lower amount of classified and past due loans. Agricultural real estate – There was an increase in the historical loss factor for agricultural real estate loans from 2018 to 2019. The specific reserve for agricultural real estate loans increased from 2018 to 2019. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was increased for agricultural real estate due to an increase in classified loans. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for agricultural real estate loans due to an increase in the unemployment rates in the local economy during 2019. Other commercial - There was a slight decrease in the historical loss factor for other commercial loans when comparing 2018 and 2019. The specific reserve for other commercial loans decreased from 2018 to 2019. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was decreased for other commercial loans due to a decrease in classified and non-accrual loans. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for other commercial loans due to an increase in the unemployment rates in the local economy during 2019. Other agricultural - There was a slight increase in the historical loss factor for other agricultural loans from 2018 to 2019. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for other agricultural loan categories due to an increase in the unemployment rates in the local economy during 2019. Municipal loans - There was no change in the historical loss factor or specific reserve for municipal loans from 2018 to 2019. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for municipal loans due to an increase in the unemployment rates in the local economy during 2019. The qualitative factors for changes in the levels of and trends in delinquencies, impaired and classified loans was decreased due to a lower amount of special mention loans. 2018 Residential - There was a slight increase in the historical loss factor for residential loans when comparing 2017 and 2018. The specific reserve for residential loans decreased slightly between 2017 and 2018. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for residential loan categories due to a decrease in the unemployment rates in the local economy during 2018. Commercial real estate– There was no change in the historical loss factor for commercial real estate loans from 2017 to 2018. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for all commercial real estate loans due to a decrease in the unemployment rates in the local economy during 2018. The qualitative factors for changes in the levels of and trends in delinquencies, impaired and classified loans was decreased due to a lower amount of substandard loans. Agricultural real estate – There was no change in the historical loss factor for agricultural real estate loans from 2017 to 2018. The specific reserve for agricultural real estate loans increased from 2017 to 2018. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was increased for agricultural real estate due to an increase in classified and past due loans. The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses, was increased for agricultural real estate due to the prices received for products sold in relation to costs to produce, specifically in the dairy economy in 2018 which negatively affected customer earnings. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for agricultural real estate loans due to a decrease in the unemployment rates in the local economy during 2018. Other commercial - There was an increase in the historical loss factor for other commercial loans when comparing 2017 and 2018. The specific reserve for other commercial loans decreased from 2017 to 2018. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for other commercial loans due to a decrease in the unemployment rates in the local economy during 2018. Other agricultural - There was an increase in the historical loss factor for other agricultural loans from 2017 to 2018. The specific reserve for other agricultural loans increased from 2017 to 2018. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other agricultural loans due to an increase in past due loans. The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses, was increased for other agricultural loans due to the prices received for products sold in relation to costs to produce, specifically in the dairy economy in 2018 which negatively affected customer earnings. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for other agricultural loan categories due to a decrease in the unemployment rates in the local economy during 2018. Municipal loans - There was no change in the historical loss factor or specific reserve for municipal loans from 2017 to 2018. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for municipal loans due to a decrease in the unemployment rates in the local economy during 2018. 2017 Residential - There was an increase in the historical loss factor for residential loans when comparing 2016 and 2017. The specific reserve for residential loans increased slightly between 2016 and 2017. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for residential loans due to an increase in past due. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for residential loan categories due to an decrease in the unemployment rates in the local economy during 2017. Commercial real estate– There was a decrease in the historical loss factor for commercial real estate loans when comparing 2016 and 2017. The specific reserve for commercial real estate loans increased slightly between 2016 and 2017. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for all commercial real estate loans due to a decrease in the unemployment rates in the local economy during 2017. The qualitative factors for changes in the levels of and trends in delinquencies, impaired and classified loans was decreased due to a lower amount of substandard loans. Agricultural real estate – There was an increase in the historical loss factor for agricultural real estate loans from 2016 to 2017. The specific reserve for agricultural real estate loans decreased from 2016 to 2017. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was increased for agricultural real estate due to an increase in classified loans. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for agricultural real estate loans due to a decrease in the unemployment rates in the local economy during 2017. The qualitative factors for existence of credit concentrations and changes in the level of concentrations were increased for agricultural real estate loans due to growth in these loan categories. Other commercial - There was a decrease in the historical loss factor for other commercial loans when comparing 2016 and 2017. The specific reserve for other commercial loans decreased from 2016 to 2017. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was decreased due to the decrease in non-accrual loans and past due loans. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for other commercial loans due to a decrease in the unemployment rates in the local economy during 2017. The qualitative factors for existence of credit concentrations and changes in the level of concentrations were decreased for other commercial loans due to limited organic growth in these loan categories. Other agricultural - There was an increase in the historical loss factor for other agricultural loans from 2016 to 2017. The specific reserve for other agricultural loans decreased slightly from 2016 to 2017. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other agricultural loans due to an increase in past due, non-accrual and substandard loans. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for other agricultural loan categories due to a decrease in the unemployment rates in the local economy during 2017. The qualitative factors for existence of credit concentrations and changes in the level of concentrations were increased for other agricultural loans due to growth in these loan categories. Municipal loans - There was no change in the historical loss factor or specific reserve for municipal loans from 2016 to 2017. The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for municipal loans due to a decrease in the unemployment rates in the local economy during 2017.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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- References No definition available. + Details
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