LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS | LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS Portfolio Segments: Residential real estate loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower's documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home's appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential real estate portfolio as relatively small loan amounts are spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis. Commercial and agricultural real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Local commercial real estate municipal loans are based on unrestricted assets, tax base and overall borrowing capacity. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75%. Land development loans are underwritten using feasibility studies, independent appraisal reviews and financial analysis of the developers or property owners. Commercial construction loans are based upon estimates of cost and value of the completed project. Commercial construction loans often involve the disbursement of substantial funds with the repayment dependent on the success of the ultimate project. Sources of repayment for these loans may be the sale of the developed property or increased cash flow as a result of business expansion. Consumer non-real estate loans are comprised of originated indirect paper loans secured primarily by boats and recreational vehicles, purchased indirect paper loans secured primarily by household goods and other consumer loans secured primarily by automobiles and other personal assets. Consumer loans underwriting terms often depend on the collateral type, debt to income ratio and the borrower's creditworthiness as evidenced by their credit score. Collateral value alone may not provide an adequate source of repayment of the outstanding loan balance in the event of a consumer non-real estate default. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral. Commercial non-real estate loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Commercial non-real estate municipal loans may be granted based on the unrestricted assets, tax base and overall borrowing capacity of local governments. Agricultural non-real estate loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as, but not limited to, drought, hail or floods that can severely limit crop yields. Credit Quality/Risk Ratings: Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant. Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio is presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows: 1 through 4 - Pass. A "Pass" loan means that the condition of the borrower and the performance of the loan is satisfactory or better. 5 - Watch. A "Watch" loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future. 6 - Special Mention. A "Special Mention" loan has one or more potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future. 7 - Substandard. A "Substandard" loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. 8 - Doubtful. A "Doubtful" loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. 9 - Loss. Loans classified as "Loss" are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future. Below is a summary of originated and acquired loans by type and risk rating as of December 31, 2016 : 1 to 5 6 7 8 9 TOTAL Originated Loans: Residential real estate: One to four family $ 149,213 $ — $ 1,967 $ — $ — $ 151,180 Commercial/Agricultural real estate: Commercial real estate 62,724 — — — — 62,724 Agricultural real estate 4,803 — — — — 4,803 Multi-family real estate 15,550 — — — — 15,550 Construction and land development 12,812 — — — — 12,812 Consumer non-real estate: Originated indirect paper 111,264 10 232 — 1 111,507 Purchased indirect paper 44,006 — — — — 44,006 Other Consumer 17,755 — 95 — 1 17,851 Commercial/Agricultural non-real estate: Commercial non-real estate 20,624 — 179 — — 20,803 Agricultural non-real estate 9,621 — — — — 9,621 Total originated loans $ 448,372 $ 10 $ 2,473 $ — $ 2 $ 450,857 Acquired Loans: Residential real estate: One to four family $ 24,095 $ 600 $ 189 $ — $ — $ 24,884 Commercial/Agricultural real estate: Commercial real estate 28,058 33 353 — — 28,444 Agricultural real estate 19,844 11 4,278 — — 24,133 Multi-family real estate — — — — — — Construction and land development 2,575 — 135 — — 2,710 Consumer non-real estate: Other Consumer 591 9 4 — — 604 Commercial/Agricultural non-real estate: Commercial non-real estate 11,245 — 1,405 — — 12,650 Agricultural non-real estate 4,359 7 100 — — 4,466 Total acquired loans $ 90,767 $ 660 $ 6,464 $ — $ — $ 97,891 Total Loans: Residential real estate: One to four family $ 173,308 $ 600 $ 2,156 $ — $ — $ 176,064 Commercial/Agricultural real estate: Commercial real estate 90,782 33 353 — — 91,168 Agricultural real estate 24,647 11 4,278 — — 28,936 Multi-family real estate 15,550 — — — — 15,550 Construction and land development 15,387 — 135 — — 15,522 Consumer non-real estate: Originated indirect paper 111,264 10 232 — 1 111,507 Purchased indirect paper 44,006 — — — — 44,006 Other Consumer 18,346 9 99 — 1 18,455 Commercial/Agricultural non-real estate: Commercial non-real estate 31,869 — 1,584 — — 33,453 Agricultural non-real estate 13,980 7 100 — — 14,087 Gross loans $ 539,139 $ 670 $ 8,937 $ — $ 2 $ 548,748 Less: Net deferred loan costs (fees) 156 Allowance for loan losses (5,917 ) Loans receivable, net $ 542,987 Below is a summary of originated loans by type and risk rating as of September 30, 2016 : 1 to 5 6 7 8 9 TOTAL Originated Loans: Residential real estate: One to four family $ 159,244 $ — $ 1,632 $ — $ 85 $ 160,961 Commercial/Agricultural real estate: Commercial real estate 58,768 — — — — 58,768 Agricultural real estate 3,418 — — — — 3,418 Multi-family real estate 18,935 — — — — 18,935 Construction and land development 12,977 — — — — 12,977 Consumer non-real estate: Originated indirect paper 118,809 10 254 — — 119,073 Purchased indirect paper 49,221 — — — — 49,221 Other Consumer 18,889 — 37 — — 18,926 Commercial/Agricultural non-real estate: Commercial non-real estate 17,790 — 179 — — 17,969 Agricultural non-real estate 9,994 — — — — 9,994 Total originated loans $ 468,045 $ 10 $ 2,102 $ — $ 85 $ 470,242 Acquired Loans: Residential real estate: One to four family $ 25,613 $ 603 $ 561 $ — $ — $ 26,777 Commercial/Agricultural real estate: Commercial real estate 29,607 167 398 — — 30,172 Agricultural real estate 21,922 11 2,847 — — 24,780 Multi-family real estate 200 — — — — 200 Construction and land development 3,487 — 116 — — 3,603 Consumer non-real estate: Other Consumer 746 11 32 — — 789 Commercial/Agricultural non-real estate: Commercial non-real estate 13,010 11 11 — — 13,032 Agricultural non-real estate 4,546 7 100 — — 4,653 Total acquired loans $ 99,131 $ 810 $ 4,065 $ — $ — $ 104,006 Total Loans: Residential real estate: One to four family $ 184,857 $ 603 $ 2,193 $ — $ 85 $ 187,738 Commercial/Agricultural real estate: Commercial real estate 88,375 167 398 — — 88,940 Agricultural real estate 25,340 11 2,847 — — 28,198 Multi-family real estate 19,135 — — — — 19,135 Construction and land development 16,464 — 116 — — 16,580 Consumer non-real estate: Originated indirect paper 118,809 10 254 — — 119,073 Purchased indirect paper 49,221 — — — — 49,221 Other Consumer 19,635 11 69 — — 19,715 Commercial/Agricultural non-real estate: Commercial non-real estate 30,800 11 190 — — 31,001 Agricultural non-real estate 14,540 7 100 — — 14,647 Gross loans $ 567,176 $ 820 $ 6,167 $ — $ 85 $ 574,248 Less: Net deferred loan costs (fees) 191 Allowance for loan losses (6,068 ) Loans receivable, net $ 568,371 Allowance for Loan Losses - The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL requires the exercise of significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of other qualitative factors such as current economic trends and conditions, all of which may be susceptible to significant change. There are many factors affecting the ALL; some are quantitative, while others require qualitative judgment. The process for determining the ALL (which management believes adequately considers potential factors which result in probable credit losses), includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect the Company’s earnings or financial position in future periods. Allocations of the ALL may be made for specific loans but the entire ALL is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized. As an integral part of their examination process, various regulatory agencies also review the Bank’s ALL. Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of our management based on information available to the regulators at the time of their examinations. Changes in the ALL by loan type for the periods presented below were as follows: Residential Real Estate Commercial/Agriculture Real Estate Consumer Non-real Estate Commercial/Agricultural Non-real Estate Unallocated Total Three Months Ended December 31, 2016: Allowance for Loan Losses: Beginning balance, October 1, 2016 $ 2,039 $ 1,883 $ 1,466 $ 652 $ 28 $ 6,068 Charge-offs (43 ) — (172 ) — — (215 ) Recoveries 3 — 61 — — 64 Provision — — — — — — Allowance allocation adjustment (187 ) (11 ) (17 ) 19 196 — Total Allowance on originated loans $ 1,812 $ 1,872 $ 1,338 $ 671 $ 224 $ 5,917 Purchased credit impaired loans — — — — — — Other acquired loans — — — — — — Total Allowance on acquired loans $ — $ — $ — $ — $ — $ — Ending balance, December 31, 2016 $ 1,812 $ 1,872 $ 1,338 $ 671 $ 224 $ 5,917 Allowance for Loan Losses at December 31, 2016: Amount of allowance for loan losses arising from loans individually evaluated for impairment $ 399 $ — $ 46 $ 32 $ — $ 477 Amount of allowance for loan losses arising from loans collectively evaluated for impairment $ 1,413 $ 1,872 $ 1,292 $ 639 $ 224 $ 5,440 Loans Receivable as of December 31, 2016: — Ending balance of originated loans $ 149,450 $ 95,889 $ 175,250 $ 30,424 $ — $ 451,013 Ending balance of purchased credit-impaired loans 256 2,097 4 867 — 3,224 Ending balance of other acquired loans 24,628 53,190 600 16,249 94,667 Ending balance of loans $ 174,334 $ 151,176 $ 175,854 $ 47,540 $ — $ 548,904 Ending balance: individually evaluated for impairment $ 4,459 $ — $ 609 $ 179 $ — $ 5,247 Ending balance: collectively evaluated for impairment $ 169,875 $ 151,176 $ 175,245 $ 47,361 $ — $ 543,657 Residential Real Estate Commercial/Agriculture Real Estate Consumer Non-real Estate Commercial/Agricultural Non-real Estate Unallocated Total Year Ended September 30, 2016: Allowance for Loan Losses: Beginning balance, October 1, 2015 $ 2,364 $ 989 $ 1,620 $ 1,271 $ 252 $ 6,496 Charge-offs (140 ) (460 ) (118 ) — (718 ) Recoveries 11 — 204 — — 215 Provision 30 10 35 — — 75 Allowance allocation adjustment (226 ) 884 67 (501 ) (224 ) — Total Allowance on originated loans $ 2,039 $ 1,883 $ 1,466 $ 652 $ 28 $ 6,068 Purchased credit impaired loans — — — — — — Other acquired loans — — — — — — Total Allowance on acquired loans $ — $ — $ — $ — $ — $ — Ending balance, September 30, 2016 $ 2,039 $ 1,883 $ 1,466 $ 652 $ 28 $ 6,068 Allowance for Loan Losses at September 30, 2016: Amount of allowance for loan losses arising from loans individually evaluated for impairment $ 503 $ — $ 85 $ 40 $ — $ 628 Amount of allowance for loan losses arising from loans collectively evaluated for impairment $ 1,536 $ 1,883 $ 1,381 $ 612 $ 28 $ 5,440 Loans Receivable as of September 30, 2016: — Ending balance of originated loans $ 160,655 $ 92,374 $ 189,441 $ 27,963 $ — $ 470,433 Ending balance of purchased credit-impaired loans 577 2,309 4 897 — 3,787 Ending balance of other acquired loans 26,200 56,446 785 16,788 — 100,219 Ending balance of loans $ 187,432 $ 151,129 $ 190,230 $ 45,648 $ — $ 574,439 Ending balance: individually evaluated for impairment $ 4,640 $ — $ 578 $ 179 $ — $ 5,397 Ending balance: collectively evaluated for impairment $ 182,792 $ 151,129 $ 189,652 $ 45,469 $ — $ 569,042 The Bank has originated substantially all loans currently recorded on the Company’s accompanying Consolidated Balance Sheet, except as noted below. In February 2016, the Bank selectively purchased loans from Central Bank in Rice Lake and Barron, Wisconsin in the amount of $16,363 . In May 2016, the Bank acquired loans from Community Bank of Northern Wisconsin, headquartered in Rice Lake, Wisconsin totaling $111,740 . During October 2012, the Bank entered into an agreement to purchase short term consumer loans from a third party on an ongoing basis. As part of the servicer agreement entered into in connection with this purchase agreement, the third party seller agreed to purchase or substitute performing consumer loans for all contracts that become 120 days past due. Pursuant to the ongoing loan purchase agreement, a restricted reserve account was established at 3% of the outstanding consumer loan balances purchased up to a maximum of $1,000 , with such percentage amount of the loans being deposited into a segregated reserve account. The funds in the reserve account are to be released to compensate the Bank for any purchased loans that are not purchased back by the seller or substituted with performing loans and are ultimately charged off by the Bank. At December 31, 2016 , the maximum credit limit for these purchased consumer loans was $50,000 . As of December 31, 2016 , the balance of these purchased consumer loans was $ 44,006 compared to $49,221 as of September 30, 2016. As of September 30, 2016, purchases from the third party have been suspended as we review procedures and documentation requirements on any future purchases. The balance in the cash reserve account has reached the maximum allowed balance of $1,000 , which is included in Deposits on the accompanying Consolidated Balance Sheet. To date, the Company has not charged off or experienced losses related to the purchased loans. The weighted average rate earned on these purchased consumer loans was 4.27% as of December 31, 2016 . From March 2014 through December 2015, the rate earned for all new loan originations of these purchased consumer loans was 4.00% . As of January 2016, new loans purchased were at an interest rate of 4.25% due to the increase in the Prime Rate. Loans receivable by loan type as of the end of the periods shown below were as follows: Residential Real Estate Commercial/Agriculture Real Estate Loans Consumer non-Real Estate Commercial/Agriculture non-Real Estate Totals December 31, 2016 September 30, 2016 December 31, 2016 September 30, 2016 December 31, 2016 September 30, 2016 December 31, 2016 September 30, 2016 December 31, 2016 September 30, 2016 Performing loans Performing TDR loans $ 2,616 $ 3,955 $ — $ 1,378 $ 275 $ 288 $ — $ 1,478 $ 2,891 $ 7,099 Performing loans other 170,107 181,734 148,212 148,803 175,184 189,641 45,866 43,892 539,369 564,070 Total performing loans 172,723 185,689 148,212 150,181 175,459 189,929 45,866 45,370 542,260 571,169 Nonperforming loans (1) Nonperforming TDR loans 598 516 — 948 40 43 — 99 638 1,606 Nonperforming loans other 1,013 1,227 2,964 — 355 258 1,674 179 6,006 1,664 Total nonperforming loans 1,611 1,743 2,964 948 395 301 1,674 278 6,644 3,270 Total loans $ 174,334 $ 187,432 $ 151,176 $ 151,129 $ 175,854 $ 190,230 $ 47,540 $ 45,648 $ 548,904 $ 574,439 (1) Nonperforming loans are either 90+ days past due or nonaccrual. An aging analysis of the Company’s real estate, commercial/agriculture real estate, consumer and other loans and purchased third party loans as of December 31, 2016 and September 30, 2016 , respectively, was as follows: 30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Total Past Due Current Total Loans Nonaccrual Loans Recorded December 31, 2016 Residential real estate: One to four family $ 1,864 $ 454 $ 1,244 $ 3,562 $ 172,502 $ 176,064 $ 976 $ 635 Commercial/Agricultural real estate: Commercial real estate 4 105 104 213 90,955 91,168 460 — Agricultural real estate 22 1,940 563 2,525 26,411 28,936 2,503 — Multi-family real estate — — — — 15,550 15,550 — — Construction and land development — — 35 35 15,487 15,522 — — Consumer non-real estate: Originated indirect paper 299 58 65 422 111,085 111,507 94 35 Purchased indirect paper 744 272 210 1,226 42,780 44,006 — 210 Other Consumer 150 25 32 207 18,248 18,455 43 14 Commercial/Agricultural non-real estate: Commercial non-real estate — — 157 157 33,296 33,453 1,584 — Agricultural non-real estate 70 — 90 160 13,927 14,087 90 — Total $ 3,153 $ 2,854 $ 2,500 $ 8,507 $ 540,241 $ 548,748 $ 5,750 $ 894 September 30, 2016 Residential real estate: One to four family $ 1,062 $ 892 $ 1,238 $ 3,192 $ 184,546 $ 187,738 $ 1,595 $ 123 Commercial/Agricultural real estate: Commercial real estate 33 83 367 483 88,457 88,940 483 — Agricultural real estate — — 623 623 27,575 28,198 623 — Multi-family real estate — — — — 19,135 19,135 — — Construction and land development 27 — 35 62 16,518 16,580 — — Consumer non-real estate: Originated indirect paper 204 30 122 356 118,717 119,073 158 53 Purchased indirect paper 338 286 199 823 48,398 49,221 — 199 Other Consumer 104 16 34 154 19,561 19,715 54 5 Commercial/Agricultural non-real estate: Commercial non-real estate 9 2 155 166 30,835 31,001 188 — Agricultural non-real estate — 60 90 150 14,497 14,647 90 — Total $ 1,777 $ 1,369 $ 2,863 $ 6,009 $ 568,239 $ 574,248 $ 3,191 $ 380 At December 31, 2016 , the Company has identified impaired loans of $8,543 , consisting of $3,529 TDR loans, $3,224 purchased credit impaired loans, and $1,790 substandard non-TDR loans. The $8,543 total of impaired loans includes $2,960 of performing TDR loans. A loan is identified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis. A summary of the Company’s impaired loans as of December 31, 2016 and September 30, 2016 was as follows: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized December 31, 2016 With No Related Allowance Recorded: Residential real estate $ 2,975 $ 2,975 $ — $ 4,080 $ 27 Commercial/agriculture real estate 2,097 2,097 — 2,212 — Consumer non-real estate 317 317 — 298 8 Commercial/agricultural non-real estate 867 867 — 1,552 — Total $ 6,256 $ 6,256 $ — $ 8,142 $ 35 With An Allowance Recorded: Residential real estate $ 1,812 $ 1,812 $ 399 $ 1,852 $ 12 Commercial/agriculture real estate — — — — — Consumer non-real estate 296 296 46 319 — Commercial/agricultural non-real estate 179 179 32 179 — Total $ 2,287 $ 2,287 $ 477 $ 2,350 $ 12 December 31, 2016 Totals: Residential real estate $ 4,787 $ 4,787 $ 399 $ 5,932 $ 39 Commercial/agriculture real estate 2,097 2,097 — 2,212 — Consumer non-real estate 613 613 46 617 8 Commercial/agricultural non-real estate 1,046 1,046 32 1,731 — Total $ 8,543 $ 8,543 $ 477 $ 10,492 $ 47 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized September 30, 2016 With No Related Allowance Recorded: Residential real estate $ 3,807 $ 3,807 $ — $ 3,817 $ 132 Commercial/agriculture real estate 2,326 2,326 — 2,326 27 Consumer non-real estate 247 247 — 451 36 Commercial/agricultural non-real estate 1,577 1,577 — 1,577 42 Total $ 7,957 $ 7,957 $ — $ 8,171 $ 237 With An Allowance Recorded: Residential real estate $ 1,891 $ 1,891 $ 503 $ 1,808 $ 50 Commercial/agriculture real estate — — — — — Consumer non-real estate 342 342 76 339 10 Commercial/agricultural non-real estate 179 179 27 36 1 Total $ 2,412 $ 2,412 $ 606 $ 2,183 $ 61 September 30, 2016 Totals: Residential real estate $ 5,698 $ 5,698 $ 503 $ 5,625 $ 182 Commercial/agriculture real estate 2,326 2,326 — 2,326 27 Consumer non-real estate 589 589 76 790 46 Commercial/agricultural non-real estate 1,756 1,756 27 1,613 43 Total $ 10,369 $ 10,369 $ 606 $ 10,354 $ 298 Troubled Debt Restructuring – A TDR includes a loan modification where a borrower is experiencing financial difficulty and the Bank grants a concession to that borrower that the Bank would not otherwise consider except for the borrower’s financial difficulties. Concessions include, but are not limited to, an extension of loan terms, renewals of existing balloon loans, reductions in interest rates and consolidating existing Bank loans at modified terms. A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status. There were 7 delinquent TDRs greater than 60 days past due with a recorded investment of $834 at December 31, 2016 , compared to 3 such loans with a recorded investment of $226 at September 30, 2016 . Following is a summary of TDR loans by accrual status as of December 31, 2016 and September 30, 2016 . There were no TDR commitments or unused lines of credit as of December 31, 2016 . December 31, 2016 September 30, 2016 Troubled debt restructure loans: Accrual status $ 3,119 $ 3,218 Non-accrual status 410 515 Total $ 3,529 $ 3,733 The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the three months ended December 31, 2016 and the year ended September 30, 2016 : Number of Contracts Modified Rate Modified Payment Modified Under- writing Other Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Specific Reserve Three months ended December 31, 2016 TDRs: Residential real estate 2 $ — $ — $ 73 $ — $ 73 $ 73 $ — Commercial/Agricultural real estate — — — — — — — — Consumer non-real estate 1 — — — 4 4 4 — Commercial/Agricultural non-real estate — — — — — — — — Totals 3 $ — $ — $ 73 $ 4 $ 77 $ 77 $ — Number of Contracts Modified Rate Modified Payment Modified Under- writing Other Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Specific Reserve Year ended September 30, 2016 TDRs: Residential real estate 4 $ 37 $ — $ 359 $ — $ 396 $ 396 $ 74 Commercial/Agricultural real estate — — — — — — — — Consumer non-real estate 3 — — 21 — 21 21 — Commercial/Agricultural non-real estate — — — — — — — — Totals 7 $ 37 $ — $ 380 $ — $ 417 $ 417 $ 74 A summary of loans by loan segment modified in a troubled debt restructuring as of December 31, 2016 and September 30, 2016 , was as follows: December 31, 2016 September 30, 2016 Number of Modifications Recorded Investment Number of Modifications Recorded Investment Troubled debt restructurings: Residential real estate 30 $ 3,214 32 $ 3,413 Commercial/Agricultural real estate — — — — Consumer non-real estate 22 315 21 320 Commercial/Agricultural non-real estate — — — — Total troubled debt restructurings 52 $ 3,529 53 $ 3,733 The following table provides information related to restructured loans that were considered in default as of December 31, 2016 and September 30, 2016 : December 31, 2016 September 30, 2016 Number of Modifications Recorded Investment Number of Modifications Recorded Investment Troubled debt restructurings: Residential real estate 9 $ 669 9 $ 516 Commercial/Agricultural real estate 7 1,787 6 948 Consumer non-real estate 4 40 4 43 Commercial/Agricultural non-real estate 3 1,466 2 99 Total troubled debt restructurings 23 $ 3,962 21 $ 1,606 Included above are three TDR loans that became in default during the three months ended December 31, 2016 . All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows: December 31, 2016 Accountable for under ASC 310-30 (PCI loans) Outstanding balance $ 3,224 Carrying amount $ 1,959 Accountable for under ASC 310-20 (non-PCI loans) Outstanding balance $ 94,667 Carrying amount $ 94,483 Total acquired loans Outstanding balance $ 97,891 Carrying amount $ 96,442 The following table provides changes in accretable yield for all acquired loans accounted for under ASC 310-30: December 31, 2016 Balance at beginning of period $ 192 Acquisitions — Reduction due to unexpected early payoffs — Reclass from non-accretable difference — Disposals/transfers — Accretion (8 ) Balance at end of period $ 184 |