Loans | Loans Loans were comprised of the following classifications at June 30, 2018 and December 31, 2017: June 30, December 31, Commercial: Commercial and Industrial Loans and Leases $ 518,299 $ 486,668 Commercial Real Estate Loans 986,486 926,729 Agricultural Loans 352,308 333,227 Retail: Home Equity Loans 169,456 152,187 Consumer Loans 71,859 67,475 Residential Mortgage Loans 223,437 178,733 Subtotal 2,321,845 2,145,019 Less: Unearned Income (3,335 ) (3,381 ) Allowance for Loan Losses (15,637 ) (15,694 ) Loans, Net $ 2,302,873 $ 2,125,944 As further described in Note 14, during 2018 the Company acquired loans with a fair value of $117,619 as part of a branch acquisition. This was made up of loans with an acquired balance of $120,499 , net of $2,880 of fair value discounts at date of acquisition. At June 30, 2018, the remaining carrying amount of such loans totaled $115,713 , which is included in the table above. This amount is made up of loans with a remaining balance of $118,517 net of remaining fair value discounts of $2,804 . No loans with deteriorated credit quality were acquired as part of the branch acquisition described in Note 14. The following tables present the activity in the allowance for loan losses by portfolio class for the three months ended June 30, 2018 and 2017: June 30, 2018 Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Total Beginning Balance $ 3,603 $ 4,622 $ 4,825 $ 272 $ 316 $ 327 $ 495 $ 14,460 Provision for Loan Losses (44 ) 335 753 86 107 19 (36 ) 1,220 Recoveries 4 5 — 8 68 29 — 114 Loans Charged-off — (4 ) — — (144 ) (9 ) — (157 ) Ending Balance $ 3,563 $ 4,958 $ 5,578 $ 366 $ 347 $ 366 $ 459 $ 15,637 June 30, 2017 Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Total Beginning Balance $ 3,612 $ 5,696 $ 4,361 $ 299 $ 244 $ 348 $ 606 $ 15,166 Provision for Loan Losses 62 (259 ) 468 16 54 19 (10 ) 350 Recoveries 7 34 — 2 67 8 — 118 Loans Charged-off (9 ) (155 ) — (17 ) (111 ) (22 ) — (314 ) Ending Balance $ 3,672 $ 5,316 $ 4,829 $ 300 $ 254 $ 353 $ 596 $ 15,320 The following tables present the activity in the allowance for loan losses by portfolio class for the six months ended June 30, 2018 and 2017: June 30, 2018 Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Total Beginning Balance $ 4,735 $ 4,591 $ 4,894 $ 330 $ 298 $ 343 $ 503 $ 15,694 Provision for Loan Losses 323 360 684 42 204 1 (44 ) 1,570 Recoveries 5 11 — 10 157 31 — 214 Loans Charged-off (1,500 ) (4 ) — (16 ) (312 ) (9 ) — (1,841 ) Ending Balance $ 3,563 $ 4,958 $ 5,578 $ 366 $ 347 $ 366 $ 459 $ 15,637 June 30, 2017 Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Total Beginning Balance $ 3,725 $ 5,452 $ 4,094 $ 283 $ 235 $ 329 $ 690 $ 14,808 Provision for Loan Losses (53 ) 19 735 33 172 38 (94 ) 850 Recoveries 9 39 — 2 127 35 — 212 Loans Charged-off (9 ) (194 ) — (18 ) (280 ) (49 ) — (550 ) Ending Balance $ 3,672 $ 5,316 $ 4,829 $ 300 $ 254 $ 353 $ 596 $ 15,320 In determining the adequacy of the allowance for loan loss, general allocations are made for pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios, judgmentally adjusted for current economic factors and portfolio trends. Loan impairment is reported when full repayment under the terms of the loan is not expected. This methodology is used for all loans, including loans acquired with deteriorated credit quality if such loans perform worse than what was expected at the time of acquisition. For purchased loans, the assessment is made at the time of acquisition as well as over the life of the loan. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Specific allocations on impaired loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Allocations are also applied to categories of loans not considered individually impaired but for which the rate of loss is expected to be greater than historical averages, including non-performing consumer or residential real estate loans. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2018 and December 31, 2017: June 30, 2018 Total Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Allowance for Loan Losses: Ending Allowance Balance Attributable to Loans: Individually Evaluated for Impairment $ 1,372 $ 233 $ 1,139 $ — $ — $ — $ — $ — Collectively Evaluated for Impairment 14,228 3,327 3,790 5,578 366 347 361 459 Acquired with Deteriorated Credit Quality 37 3 29 — — — 5 — Total Ending Allowance Balance $ 15,637 $ 3,563 $ 4,958 $ 5,578 $ 366 $ 347 $ 366 $ 459 Loans: Loans Individually Evaluated for Impairment $ 9,897 $ 3,840 $ 6,057 $ — $ — $ — $ — n/m (2) Loans Collectively Evaluated for Impairment 2,313,658 515,126 977,762 355,566 170,141 72,045 223,018 n/m (2) Loans Acquired with Deteriorated Credit Quality 7,776 783 5,174 951 — — 868 n/m (2) Total Ending Loans Balance (1) $ 2,331,331 $ 519,749 $ 988,993 $ 356,517 $ 170,141 $ 72,045 $ 223,886 n/m (2) (1) Total recorded investment in loans includes $9,486 in accrued interest. (2) n/m = not meaningful December 31, 2017 Total Commercial and Industrial Loans and Leases Commercial Real Estate Loans Agricultural Loans Home Equity Loans Consumer Loans Residential Mortgage Loans Unallocated Allowance for Loan Losses: Ending Allowance Balance Attributable to Loans: Individually Evaluated for Impairment $ 2,228 $ 1,399 $ 829 $ — $ — $ — $ — $ — Collectively Evaluated for Impairment 13,455 3,333 3,759 4,894 330 298 338 503 Acquired with Deteriorated Credit Quality 11 3 3 — — — 5 — Total Ending Allowance Balance $ 15,694 $ 4,735 $ 4,591 $ 4,894 $ 330 $ 298 $ 343 $ 503 Loans: Loans Individually Evaluated for Impairment $ 11,633 $ 5,918 $ 5,552 $ 163 $ — $ — $ — n/m (2) Loans Collectively Evaluated for Impairment 2,133,752 481,152 917,036 336,849 152,757 67,647 178,311 n/m (2) Loans Acquired with Deteriorated Credit Quality 9,117 988 6,452 789 — — 888 n/m (2) Total Ending Loans Balance (1) $ 2,154,502 $ 488,058 $ 929,040 $ 337,801 $ 152,757 $ 67,647 $ 179,199 n/m (2) (1) Total recorded investment in loans includes $9,483 in accrued interest. (2) n/m = not meaningful The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2018 and December 31, 2017: June 30, 2018 Unpaid Principal Balance (1) Recorded Investment Allowance for Loan Losses Allocated With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 1,135 $ 1,139 $ — Commercial Real Estate Loans 1,203 1,177 — Agricultural Loans 663 538 — Subtotal 3,001 2,854 — With An Allowance Recorded: Commercial and Industrial Loans and Leases 2,923 2,706 236 Commercial Real Estate Loans 5,265 5,079 1,168 Agricultural Loans — — — Subtotal 8,188 7,785 1,404 Total $ 11,189 $ 10,639 $ 1,404 Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 663 $ 538 $ — Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 410 $ 204 $ 32 (1) Unpaid Principal Balance is the remaining contractual principal payments gross of partial charge-offs and discounts. December 31, 2017 Unpaid Principal Balance (1) Recorded Investment Allowance for Loan Losses Allocated With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 1,205 $ 1,166 $ — Commercial Real Estate Loans 1,812 1,495 — Agricultural Loans 919 749 — Subtotal 3,936 3,410 — With An Allowance Recorded: Commercial and Industrial Loans and Leases 4,804 4,763 1,402 Commercial Real Estate Loans 4,489 4,465 832 Agricultural Loans — — — Subtotal 9,293 9,228 2,234 Total $ 13,229 $ 12,638 $ 2,234 Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 1,255 $ 797 $ — Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 252 $ 208 $ 6 (1) Unpaid Principal Balance is the remaining contractual principal payments gross of partial charge-offs and discounts. The following tables present the average balance and related interest income of loans individually evaluated for impairment by class of loans for the three month period ended June 30, 2018 and 2017: June 30, 2018 Average Recorded Investment Interest Income Recognized Cash Basis Recognized With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 1,142 $ 13 $ — Commercial Real Estate Loans 1,180 13 — Agricultural Loans 546 — — Subtotal 2,868 26 — With An Allowance Recorded: Commercial and Industrial Loans and Leases 2,690 1 — Commercial Real Estate Loans 5,130 6 — Agricultural Loans — — — Subtotal 7,820 7 — Total $ 10,688 $ 33 $ — Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 546 $ — $ — Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 207 $ 7 $ — June 30, 2017 Average Recorded Investment Interest Income Recognized Cash Basis Recognized With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 150 $ 2 $ 1 Commercial Real Estate Loans 1,124 26 26 Agricultural Loans 496 19 16 Subtotal 1,770 47 43 With An Allowance Recorded: Commercial and Industrial Loans and Leases 65 1 — Commercial Real Estate Loans 795 4 — Agricultural Loans 727 — — Subtotal 1,587 5 — Total $ 3,357 $ 52 $ 43 Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 245 $ 25 $ 25 Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 712 $ 4 $ — The following tables present the average balance and related interest income of loans individually evaluated for impairment by class of loans for the six month period ended June 30, 2018 and 2017: June 30, 2018 Average Recorded Investment Interest Income Recognized Cash Basis Recognized With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 1,163 $ 26 $ 1 Commercial Real Estate Loans 1,294 26 6 Agricultural Loans 623 — — Subtotal 3,080 52 7 With An Allowance Recorded: Commercial and Industrial Loans and Leases 3,487 2 — Commercial Real Estate Loans 4,876 9 — Agricultural Loans — — — Subtotal 8,363 11 — Total $ 11,443 $ 63 $ 7 Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 548 $ — $ — Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 211 $ 11 $ — June 30, 2017 Average Recorded Investment Interest Income Recognized Cash Basis Recognized With No Related Allowance Recorded: Commercial and Industrial Loans and Leases $ 83 $ 2 $ 2 Commercial Real Estate Loans 823 30 29 Agricultural Loans 607 24 16 Subtotal 1,513 56 47 With An Allowance Recorded: Commercial and Industrial Loans and Leases 84 2 1 Commercial Real Estate Loans 1,609 10 6 Agricultural Loans 612 — — Subtotal 2,305 12 7 Total $ 3,818 $ 68 $ 54 Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above) $ 311 $ 25 $ 25 Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above) $ 721 $ 11 $ 7 All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection. The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of June 30, 2018 and December 31, 2017: Non-Accrual Loans Loans Past Due 90 Days or More & Still Accruing June 30, December 31, June 30, December 31, 2018 2017 2018 2017 Commercial and Industrial Loans and Leases $ 2,701 $ 4,753 $ 455 $ — Commercial Real Estate Loans 4,966 4,618 93 474 Agricultural Loans 538 748 — 268 Home Equity Loans 94 199 — — Consumer Loans 47 286 — — Residential Mortgage Loans 607 487 — — Total $ 8,953 $ 11,091 $ 548 $ 742 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ 600 $ 866 $ — $ — The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2018 and December 31, 2017: June 30, 2018 Total 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Not Past Due Commercial and Industrial Loans and Leases $ 519,749 $ 4,438 $ 178 $ 1,073 $ 5,689 $ 514,060 Commercial Real Estate Loans 988,993 485 532 2,266 3,283 985,710 Agricultural Loans 356,517 616 1,313 — 1,929 354,588 Home Equity Loans 170,141 500 127 94 721 169,420 Consumer Loans 72,045 496 77 47 620 71,425 Residential Mortgage Loans 223,886 3,054 560 407 4,021 219,865 Total (1) $ 2,331,331 $ 9,589 $ 2,787 $ 3,887 $ 16,263 $ 2,315,068 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ 7,776 $ 60 $ 71 $ 26 $ 157 $ 7,619 Loans Acquired in Current Year (Included in the Total Above) $ 115,960 $ 106 $ 17 $ — $ 123 $ 115,837 (1) Total recorded investment in loans includes $9,486 in accrued interest. December 31, 2017 Total 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Loans Not Past Due Commercial and Industrial Loans and Leases $ 488,058 $ 209 $ 1,365 $ 905 $ 2,479 $ 485,579 Commercial Real Estate Loans 929,040 1,229 1,650 677 3,556 925,484 Agricultural Loans 337,801 27 — 268 295 337,506 Home Equity Loans 152,757 366 93 199 658 152,099 Consumer Loans 67,647 246 97 286 629 67,018 Residential Mortgage Loans 179,199 2,850 1,247 261 4,358 174,841 Total (1) $ 2,154,502 $ 4,927 $ 4,452 $ 2,596 $ 11,975 $ 2,142,527 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ 9,117 $ 342 $ 74 $ 27 $ 443 $ 8,674 (1) Total recorded investment in loans includes $9,483 in accrued interest. Troubled Debt Restructurings: In certain instances, the Company may choose to restructure the contractual terms of loans. A troubled debt restructuring occurs when the Bank grants a concession to the borrower that it would not otherwise consider due to a borrower’s financial difficulty. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. This evaluation is performed under the Company’s internal underwriting policy. The Company uses the same methodology for loans acquired with deteriorated credit quality as for all other loans when determining whether the loan is a troubled debt restructuring. During the three and six months ended June 30, 2018, there were no loans modified as a troubled debt restructuring. During the three months ended June 30, 2017, there was one loan modified as a troubled debt restructuring. During the six months ended June 30, 2017, there was two loans modified as troubled debt restructurings. The following tables present the recorded investment of troubled debt restructurings by class of loans as of June 30, 2018 and December 31, 2017: June 30, 2018 Total Performing Non-Accrual (1) Commercial and Industrial Loans and Leases $ 190 $ 123 $ 67 Commercial Real Estate Loans — — — Total $ 190 $ 123 $ 67 December 31, 2017 Total Performing Non-Accrual (1) Commercial and Industrial Loans and Leases $ 258 $ 125 $ 133 Commercial Real Estate Loans 24 24 — Total $ 282 $ 149 $ 133 (1) The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on a previous page. The Company had not committed to lending any additional amounts as of June 30, 2018 and December 31, 2017 to customers with outstanding loans that are classified as troubled debt restructurings. The following tables present loans by class modified as troubled debt restructurings that occurred during the three months ending June 30, 2018 and 2017: June 30, 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial and Industrial Loans and Leases — $ — $ — Commercial Real Estate Loans — — — Total — $ — $ — The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2018. June 30, 2017 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial and Industrial Loans and Leases 1 $ 127 $ 127 Commercial Real Estate Loans — — — Total 1 $ 127 $ 127 The troubled debt restructurings described above increased the allowance for loan losses by $8 and resulted in charge-offs of $0 during the three months ending June 30, 2017. The following tables present loans by class modified as troubled debt restructurings that occurred during the six months ending June 30, 2018 and 2017: June 30, 2018 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial and Industrial Loans and Leases — $ — $ — Commercial Real Estate Loans — — — Total — $ — $ — The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2018. June 30, 2017 Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial and Industrial Loans and Leases 1 $ 127 $ 127 Commercial Real Estate Loans 1 28 28 Total 2 $ 155 $ 155 The troubled debt restructurings described above increased the allowance for loan losses by $10 and resulted in charge-offs of $0 during the six months ending June 30, 2017. Additionally, there were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three and six months ending June 30, 2018 and 2017. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $250 . This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, 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. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows: June 30, 2018 Pass Special Mention Substandard Doubtful Total Commercial and Industrial Loans and Leases $ 499,876 $ 4,247 $ 15,626 $ — $ 519,749 Commercial Real Estate Loans 960,045 14,248 14,700 — 988,993 Agricultural Loans 323,339 20,427 12,751 — 356,517 Total $ 1,783,260 $ 38,922 $ 43,077 $ — $ 1,865,259 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ 2,552 $ 1,597 $ 2,759 $ — $ 6,908 Loans Acquired in Current Year (Included in the Total Above) $ 52,771 $ — $ — $ — $ 52,771 December 31, 2017 Pass Special Mention Substandard Doubtful Total Commercial and Industrial Loans and Leases $ 462,212 $ 7,901 $ 17,945 $ — $ 488,058 Commercial Real Estate Loans 894,027 18,037 16,976 — 929,040 Agricultural Loans 304,032 27,288 6,481 — 337,801 Total $ 1,660,271 $ 53,226 $ 41,402 $ — $ 1,754,899 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ 2,604 $ 1,647 $ 3,978 $ — $ 8,229 The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For home equity, consumer and residential mortgage loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of June 30, 2018 and December 31, 2017: June 30, 2018 Home Equity Loans Consumer Loans Residential Mortgage Loans Performing $ 170,047 $ 71,998 $ 223,279 Nonperforming 94 47 607 Total $ 170,141 $ 72,045 $ 223,886 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ — $ — $ 868 December 31, 2017 Home Equity Loans Consumer Loans Residential Mortgage Loans Performing $ 152,558 $ 67,361 $ 178,712 Nonperforming 199 286 487 Total $ 152,757 $ 67,647 $ 179,199 Loans Acquired With Deteriorated Credit Quality (Included in the Total Above) $ — $ — $ 888 The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows: June 30, 2018 December 31, 2017 Commercial and Industrial Loans $ 783 $ 988 Commercial Real Estate Loans 5,174 6,452 Agricultural Loans 951 789 Residential Mortgage Loans 868 888 Total $ 7,776 $ 9,117 Carrying Amount, Net of Allowance $ 7,739 $ 9,106 Accretable yield, or income expected to be collected, is as follows: 2018 2017 Balance at April 1 $ 2,739 $ 2,790 New Loans Purchased — — Accretion of Income (140 ) (240 ) Reclassifications from Non-accretable Difference 65 155 Charge-off of Accretable Yield (97 ) — Balance at June 30 $ 2,567 $ 2,705 For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three months ended June 30, 2018 and 2017. The Company reversed allowance for loan losses of $3 and $56 during the three months ended June 30, 2018 and 2017. 2018 2017 Balance at January 1 $ 2,734 $ 2,521 New Loans Purchased — — Accretion of Income (221 ) (282 ) Reclassifications from Non-accretable Difference 151 466 Charge-off of Accretable Yield (97 ) — Balance at June 30 $ 2,567 $ 2,705 For those purchased loans disclosed above, the Company increased the allowance for loan losses by $30 and $11 during the six months ended June 30, 2018 and 2017. The Company reversed allowance for loan losses of $3 and $56 during the six months ended June 30, 2018 and 2017. The carrying amount of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $0 as of June 30, 2018 and $14 as of December 31, 2017. |