Loans | Loans: Loan balances were as follows: (In Thousands of Dollars) March 31, 2017 December 31, 2016 Originated loans: Commercial real estate Owner occupied $ 116,108 $ 109,750 Non-owner occupied 165,916 165,861 Farmland 41,157 34,155 Other 77,456 70,823 Commercial Commercial and industrial 178,194 171,145 Agricultural 26,564 24,598 Residential real estate 1-4 family residential 237,841 224,222 Home equity lines of credit 62,593 59,642 Consumer Indirect 161,596 156,633 Direct 27,835 26,663 Other 7,517 7,611 Total originated loans $ 1,102,777 $ 1,051,103 Acquired loans: Commercial real estate Owner occupied $ 59,376 $ 60,928 Non-owner occupied 23,931 24,949 Farmland 51,315 54,204 Other 14,130 14,665 Commercial Commercial and industrial 30,719 33,626 Agricultural 14,832 16,024 Residential real estate 1-4 family residential 107,502 112,015 Home equity lines of credit 33,657 34,795 Consumer Direct 19,543 21,681 Other 157 247 Total acquired loans $ 355,162 $ 373,134 Net Deferred loan costs 3,522 3,398 Allowance for loan losses (11,319 ) (10,852 ) Net loans $ 1,450,142 $ 1,416,783 Purchased credit impaired loans As part of the NBOH acquisition the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected. The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables: (In Thousands of Dollars) March 31, 2017 December 31, 2016 Commercial real estate Owner occupied $ 662 $ 689 Non-owner occupied 410 436 Commercial Commercial and industrial 1,171 1,213 Total outstanding balance $ 2,243 $ 2,338 Carrying amount, net of allowance of $0 in 2017 and 2016 $ 1,790 $ 1,864 Accretable yield, or income expected to be collected, is shown in the table below: (In Thousands of Dollars) Three Months Ended March 31, 2017 Beginning balance $ 247 New loans purchased 0 Accretion of income (19 ) Ending balance $ 228 The key assumptions considered include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income and principal expected to be collected. In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary. There were no adjustments to forecasted cash flows that impacted the allowance for loan losses for the three months ended March 31, 2017. The following tables present the activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2017 and 2016: Three Months Ended March 31, 2017 (In Thousands of Dollars) Commercial Real Estate Commercial Residential Real Estate Consumer Unallocated Total Allowance for loan losses Beginning balance $ 3,577 $ 1,874 $ 2,205 $ 2,766 $ 430 $ 10,852 Provision for loan losses 77 17 109 576 271 1,050 Loans charged off (140 ) (102 ) (6 ) (695 ) 0 (943 ) Recoveries 124 57 13 166 0 360 Total ending allowance balance $ 3,638 $ 1,846 $ 2,321 $ 2,813 $ 701 $ 11,319 Three Months Ended March 31, 2016 (In Thousands of Dollars) Commercial Real Estate Commercial Residential Real Estate Consumer Unallocated Total Allowance for loan losses Beginning balance $ 3,127 $ 1,373 $ 1,845 $ 2,160 $ 473 $ 8,978 Provision for loan losses 43 64 75 446 152 780 Loans charged off 0 0 (34 ) (544 ) 0 (578 ) Recoveries 11 15 28 156 0 210 Total ending allowance balance $ 3,181 $ 1,452 $ 1,914 $ 2,218 $ 625 $ 9,390 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of March 31, 2017 and December 31, 2016. The recorded investment in loans includes the unpaid principal balance and unamortized loan origination fees and costs, but excludes accrued interest receivable, which is not considered to be material: March 31, 2017 (In Thousands of Dollars) Commercial Real Estate Commercial Residential Real Estate Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 35 $ 4 $ 56 $ 0 $ 0 $ 95 Collectively evaluated for impairment 3,603 1,842 2,259 2,813 701 11,218 Acquired loans 0 0 6 0 0 6 Acquired with deteriorated credit quality 0 0 0 0 0 0 Total ending allowance balance $ 3,638 $ 1,846 $ 2,321 $ 2,813 $ 701 $ 11,319 Loans: Loans individually evaluated for impairment $ 2,306 $ 336 $ 3,601 $ 52 $ 0 $ 6,295 Loans collectively evaluated for impairment 397,475 204,206 296,612 202,328 0 1,100,621 Acquired loans 147,563 44,608 140,883 19,701 0 352,755 Acquired with deteriorated credit quality 928 862 0 0 0 1,790 Total ending loans balance $ 548,272 $ 250,012 $ 441,096 $ 222,081 $ 0 $ 1,461,461 December 31, 2016 (In Thousands of Dollars) Commercial Real Estate Commercial Residential Real Estate Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 44 $ 4 $ 48 $ 0 $ 0 $ 96 Collectively evaluated for impairment 3,491 1,763 2,153 2,766 430 10,603 Acquired loans 42 107 4 0 0 153 Acquired with deteriorated credit quality 0 0 0 0 0 0 Total ending allowance balance $ 3,577 $ 1,874 $ 2,205 $ 2,766 $ 430 $ 10,852 Loans: Loans individually evaluated for impairment $ 3,457 $ 477 $ 3,308 $ 96 $ 0 $ 7,338 Loans collectively evaluated for impairment 376,632 195,146 280,215 196,081 0 1,048,074 Acquired loans 153,228 48,536 146,672 21,923 0 370,359 Acquired with deteriorated credit quality 968 896 0 0 0 1,864 Total ending loans balance $ 534,285 $ 245,055 $ 430,195 $ 218,100 $ 0 $ 1,427,635 The following tables present information related to impaired loans by class of loans as of March 31, 2017 and December 31, 2016: (In Thousands of Dollars) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated March 31, 2017 With no related allowance recorded: Commercial real estate Owner occupied $ 1,443 $ 926 $ 0 Non-owner occupied 18 18 0 Farmland 94 93 0 Commercial Commercial and industrial 204 183 0 Agricultural 126 80 0 Residential real estate 1-4 family residential 2,649 2,401 0 Home equity lines of credit 345 326 0 Consumer 127 52 0 Subtotal 5,006 4,079 0 With an allowance recorded: Commercial real estate Owner occupied 167 167 9 Non-owner occupied 1,102 1,102 26 Farmland 0 0 0 Commercial Commercial and industrial 73 73 4 Agricultural 0 0 0 Residential real estate 1-4 family residential 813 791 61 Home equity lines of credit 83 83 1 Subtotal 2,238 2,216 101 Total $ 7,244 $ 6,295 $ 101 (In Thousands of Dollars) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated December 31, 2016 With no related allowance recorded: Commercial real estate Owner occupied $ 1,974 $ 1,456 $ 0 Non-owner occupied 332 331 0 Commercial Commercial and industrial 205 184 0 Residential real estate 1-4 family residential 2,650 2,403 0 Home equity lines of credit 195 179 0 Consumer 205 96 0 Subtotal 5,561 4,649 0 With an allowance recorded: Commercial real estate Owner occupied 173 173 14 Non-owner occupied 1,118 1,118 30 Farmland 380 379 42 Commercial Commercial and industrial 75 75 4 Agricultural 219 218 107 Residential real estate 1-4 family residential 661 642 51 Home equity lines of credit 84 84 1 Subtotal 2,710 2,689 249 Total $ 8,271 $ 7,338 $ 249 The following tables present the average recorded investment in impaired loans by class and interest income recognized by loan class for the three month periods ended March 31, 2017 and 2016: Average Recorded Investment Interest Income Recognized For Three Months Ended March 31, For Three Months Ended March 31, (In Thousands of Dollars) 2017 2016 2017 2016 With no related allowance recorded: Commercial real estate Owner occupied $ 1,051 $ 2,307 $ 2 $ 10 Non-owner occupied 226 336 0 4 Commercial Commercial and industrial 210 614 1 5 Residential real estate 1-4 family residential 2,380 2,292 37 38 Home equity lines of credit 227 240 4 3 Consumer 74 116 3 3 Subtotal 4,168 5,905 47 63 With an allowance recorded: Commercial real estate Owner occupied 422 1,589 2 9 Non-owner occupied 1,107 1,469 14 19 Commercial Commercial and industrial 273 80 1 1 Residential real estate 1-4 family residential 773 749 8 9 Home equity lines of credit 82 86 1 1 Consumer 1 0 0 0 Subtotal 2,658 3,973 26 39 Total $ 6,826 $ 9,878 $ 73 $ 102 Cash basis interest recognized during the three month periods ended March 31, 2017 and 2016 was materially equal to interest income recognized. Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 (In Thousands of Dollars) Nonaccrual Loans Past Due 90 Days or More Still Accruing Nonaccrual Loans Past Due 90 Days or More Still Accruing Originated loans: Commercial real estate Owner occupied $ 806 $ 0 $ 958 $ 0 Non-owner occupied 17 0 343 0 Farmland 55 0 58 0 Commercial Commercial and industrial 309 40 400 0 Agricultural 3 0 12 0 Residential real estate 1-4 family residential 1,857 467 1,929 295 Home equity lines of credit 196 85 202 118 Consumer Indirect 368 262 298 438 Direct 7 0 9 65 Other 0 18 0 16 Total originated loans $ 3,618 $ 872 $ 4,209 $ 932 Acquired loans: Commercial real estate Owner occupied $ 59 $ 0 $ 85 $ 0 Other 8 0 24 0 Farmland 93 0 380 0 Commercial Commercial and industrial 894 0 961 0 Agricultural 98 0 236 0 Residential real estate 1-4 family residential 370 156 386 545 Home equity lines of credit 124 86 119 109 Consumer Direct 94 81 89 95 Total acquired loans $ 1,740 $ 323 $ 2,280 $ 749 Total loans $ 5,358 $ 1,195 $ 6,489 $ 1,681 The following tables present the aging of the recorded investment in past due loans as of March 31, 2017 and December 31, 2016 by class of loans: (In Thousands of Dollars) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Nonaccrual Total Past Due Loans Not Past Due Total March 31, 2017 Originated loans: Commercial real estate Owner occupied $ 176 $ 0 $ 806 $ 982 $ 114,795 $ 115,777 Non-owner occupied 0 0 17 17 165,456 165,473 Farmland 0 0 55 55 41,057 41,112 Other 0 0 0 0 77,156 77,156 Commercial Commercial and industrial 0 143 349 492 177,325 177,817 Agricultural 38 0 3 41 26,603 26,644 Residential real estate 1-4 family residential 2,066 556 2,324 4,946 232,357 237,303 Home equity lines of credit 63 84 281 428 62,203 62,631 Consumer Indirect 1,850 359 630 2,839 163,990 166,829 Direct 554 119 7 680 27,356 28,036 Other 29 10 18 57 7,460 7,517 Total originated loans: $ 4,776 $ 1,271 $ 4,490 $ 10,537 $ 1,095,758 $ 1,106,295 Acquired loans: Commercial real estate Owner occupied $ 0 $ 0 $ 59 $ 59 $ 59,317 $ 59,376 Non-owner occupied 65 200 0 265 23,666 23,931 Farmland 0 0 93 93 51,222 51,315 Other 0 0 8 8 14,124 14,132 Commercial Commercial and industrial 65 0 894 959 29,760 30,719 Agricultural 195 0 98 293 14,539 14,832 Residential real estate 1-4 family residential 664 299 526 1,489 106,015 107,504 Home equity lines of credit 126 113 210 449 33,209 33,658 Consumer Direct 426 58 175 659 18,884 19,543 Other 0 0 0 0 156 156 Total acquired loans $ 1,541 $ 670 $ 2,063 $ 4,274 $ 350,892 $ 355,166 Total loans $ 6,317 $ 1,941 $ 6,553 $ 14,811 $ 1,446,650 $ 1,461,461 (In Thousands of Dollars) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Nonaccrual Total Past Due Loans Not Past Due Total December 31, 2016 Originated loans: Commercial real estate Owner occupied $ 0 $ 0 $ 958 $ 958 $ 108,475 $ 109,433 Non-owner occupied 0 0 343 343 165,105 165,448 Farmland 0 0 58 58 34,057 34,115 Other 0 0 0 0 70,542 70,542 Commercial Commercial and industrial 90 0 400 490 170,242 170,732 Agricultural 0 29 12 41 24,632 24,673 Residential real estate 1-4 family residential 3,368 356 2,224 5,948 217,752 223,700 Home equity lines of credit 77 37 320 434 59,248 59,682 Consumer Indirect 2,844 696 736 4,276 157,437 161,713 Direct 744 213 74 1,031 25,815 26,846 Other 92 28 16 136 7,476 7,612 Total originated loans $ 7,215 $ 1,359 $ 5,141 $ 13,715 $ 1,040,781 $ 1,054,496 Acquired loans: Commercial real estate Owner occupied $ 8 $ 205 $ 85 $ 298 $ 60,630 $ 60,928 Non-owner occupied 134 0 0 134 24,815 24,949 Farmland 83 0 380 463 53,741 54,204 Other 0 0 24 24 14,642 14,666 Commercial Commercial and industrial 278 0 961 1,239 32,387 33,626 Agricultural 21 0 236 257 15,767 16,024 Residential real estate 1-4 family residential 1,556 504 931 2,991 109,027 112,018 Home equity lines of credit 152 9 228 389 34,406 34,795 Consumer Direct 938 184 184 1,306 20,376 21,682 Other 100 0 0 100 147 247 Total acquired loans $ 3,270 $ 902 $ 3,029 $ 7,201 $ 365,938 $ 373,139 Total loans $ 10,485 $ 2,261 $ 8,170 $ 20,916 $ 1,406,719 $ 1,427,635 |