Loans | NOTE 4 LOANS The Company had $1.3 million in loans held for sale at June 30, 2015 as compared to $459 thousand in loans held for sale at December 31, 2014. Due to materiality, these loans are included in the Consumer Real Estate loan numbers with a portion included in Agricultural Real Estate loans as well. Loan balances as of June 30, 2015 and December 31, 2014: (In Thousands) June 30, 2015 December 31, 2014 Loans: Consumer real estate $ 86,796 $ 97,550 Agricultural real estate 52,682 50,895 Agricultural 74,229 74,611 Commercial real estate 279,489 270,188 Commercial and industrial 95,275 100,126 Consumer 25,140 24,277 Industrial Development Bonds 7,452 4,698 621,063 622,345 Less: Net deferred loan fees and costs (472 ) (419 ) 620,591 621,926 Less: Allowance for loan losses (5,927 ) (5,905 ) Loans - Net $ 614,664 $ 616,021 The following is a maturity schedule by major category of loans as of June 30, 2015: Maturities (In Thousands) Within After One After Consumer real estate $ 10,935 $ 16,257 $ 59,604 Agricultural real estate 4,447 12,895 35,340 Agricultural 45,329 24,916 3,984 Commercial real estate 27,833 92,588 159,068 Commercial and industrial 62,213 26,823 6,239 Consumer 5,084 15,059 4,997 Industrial development bonds 2,185 127 5,140 The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of June 30, 2015. Variable rate loans whose current rates are equal to their floor or ceiling are classified as fixed in this table. (In Thousands) Fixed Variable Consumer real estate $ 69,445 $ 17,351 Agricultural real estate 39,089 13,593 Agricultural 69,757 4,472 Commercial real estate 192,856 86,633 Commercial and industrial 76,980 18,295 Consumer 20,834 4,306 Industrial development bonds 7,297 155 As of June 30, 2015 and December 31, 2014 one to four family residential mortgage loans amounting to $19.4 and $20.8 million, respectively, have been pledged as security for future loans the Bank may utilize from the Federal Home Loan Bank. Unless listed separately, Industrial Development Bonds are included in the commercial and industrial category for the remainder of the tables in this Note 4. The following table represents the contractual aging of the recorded investment in past due loans by portfolio classification of loans as of June 30, 2015 and December 31, 2014, net of deferred loan fees and costs: June 30, 2015 30-59 Days 60-89 Days Greater Than Total Current Total Recorded Consumer real estate $ 381 $ 123 $ 464 $ 968 $ 85,673 $ 86,641 $ — Agricultural real estate — — 222 222 52,392 52,614 — Agricultural — — — — 74,352 74,352 — Commercial real estate — — 1,407 1,407 277,595 279,002 — Commercial and industrial 20 — 10 30 102,792 102,822 — Consumer 64 — — 64 25,096 25,160 — Total $ 465 $ 123 $ 2,103 $ 2,691 $ 617,900 $ 620,591 $ — December 31, 2014 30-59 Days 60-89 Days Greater Than Total Current Total Recorded Consumer real estate $ 713 $ 50 $ 436 $ 1,199 $ 96,351 $ 97,550 $ — Agricultural real estate — — — — 50,895 50,895 — Agricultural 25 — — 25 74,586 74,611 — Commercial real estate 78 204 709 991 269,197 270,188 — Commercial and industrial — 8 — 8 104,816 104,824 — Consumer 25 8 29 62 23,796 23,858 — Total $ 841 $ 270 $ 1,174 $ 2,285 $ 619,641 $ 621,926 $ — The following table presents the recorded investment in nonaccrual loans by class of loans as of June 30, 2015 and December 31, 2014: (In Thousands) June 30 December 31 Consumer real estate $ 956 $ 628 Agricultural real estate 222 — Agricultural 23 — Commercial real estate 1,529 709 Commercial and industrial 333 339 Consumer — 29 Total $ 3,063 $ 1,705 The Bank uses a nine tier risk rating system to grade its loans. The grade of a loan may change during the life of the loan. The risk ratings are described as follows. 1. Zero (0) Unclassified. Any loan which has not been assigned a classification. 2. One (1) Excellent. Credit to premier customers having the highest credit rating based on an extremely strong financial condition, which compares favorably with industry standards (upper quartile of Risk Management Association ratios). Financial statements indicate a sound earnings and financial ratio trend for several years with satisfactory profit margins and excellent liquidity exhibited. Prime credits may also be borrowers with loans fully secured by highly liquid collateral such as traded stocks, bonds, certificates of deposit, savings account, etc. No credit or collateral exceptions exist and the loan adheres to the Bank’s loan policy in every respect. Financing alternatives would be readily available and would qualify for unsecured credit. This grade is summarized by high liquidity, minimum risk, strong ratios, and low handling costs. 3. Two (2) Good. Desirable loans of somewhat less stature than Grade 1, but with strong financial statements. Loan supported by financial statements containing strong balance sheets, generally with a leverage position less than 1.50, and a history of profitability. Probability of serious financial deterioration is unlikely. Possessing a sound repayment source (and a secondary source), which would allow repayment in a reasonable period of time. Individual loans backed by liquid personal assets, established history and unquestionable character. 4. Three (3) Satisfactory. Satisfactory loans of average or slightly above average risk – having some deficiency or vulnerability to changing economic conditions, but still fully collectible. Projects should normally demonstrate acceptable debt service coverage. Generally, customers should have a leverage position less than 2.00. May be some weakness but with offsetting features of other support readily available. Loans that are meeting the terms of repayment. Loans may be graded 3 when there is no recent information on which to base a current risk evaluation and the following conditions apply: At inception, the loan was properly underwritten and did not possess an unwarranted level of credit risk: a. At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss; b. The loan exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance; c. During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the business is in an industry which is known to be experiencing problems. If any of the credit weaknesses is observed, a lower risk grade is warranted. 5. Four (4) Satisfactory / Monitored. A “4” (Satisfactory/Monitored) risk grade may be established for a loan considered satisfactory but which is of average credit risk due to financial weakness or uncertainty. The loans warrant a higher than average level of monitoring to ensure that weaknesses do not advance. The level of risk in Satisfactory/Monitored classification is considered acceptable and within normal underwriting guidelines, so long as the loan is given management supervision. 6. Five (5) Special Mention. Loans that possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential”, versus “defined”, impairments to the primary source of loan repayment and collateral. 7. Six (6) Substandard. One or more of the following characteristics may be exhibited in loans classified substandard: a. Loans, which possess a defined credit weakness and the likelihood that a loan will be paid from the primary source, are uncertain. Financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss. b. Loans are inadequately protected by the current net worth and paying capacity of the borrower. c. The primary source of repayment is weakened, and the Bank is forced to rely on a secondary source of repayment such as collateral liquidation or guarantees. d. Loans are characterized by the distinct possibility that the Bank will sustain some loss if deficiencies are not corrected. e. Unusual courses of action are needed to maintain a high probability of repayment. f. The borrower is not generating enough cash flow to repay loan principal; however, continues to make interest payments. g. The lender is forced into a subordinate position or unsecured collateral position due to flaws in documentation. h. Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms. i. The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan. j. There is significant deterioration in the market conditions and the borrower is highly vulnerable to these conditions. 8. Seven (7) Doubtful. One or more of the following characteristics may be exhibited in loans classified Doubtful: a. Loans have all of the weaknesses of those classified as Substandard. Additionally, however, these weaknesses make collection or liquidation in full based on existing conditions improbable. b. The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment. c. The possibility of loss is high, but, because of certain important pending factors which may strengthen the loan, loss classification is deferred until its exact status is known. A Doubtful classification is established deferring the realization of the loss. 9. Eight (8) Loss. Loans are considered uncollectable and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. The following table represents the risk category of loans by portfolio class, net of deferred fees and costs, based on the most recent analysis performed as of June 30, 2015 and December 31, 2014: (In Thousands) Agricultural Agricultural Commercial Commercial Industrial June 30, 2015 1-2 $ 5,152 $ 11,273 $ 782 $ 1,737 $ — 3 16,205 20,837 25,492 15,515 3,962 4 30,719 42,220 247,246 75,408 3,490 5 109 — 1,086 1,348 — 6 429 — 3,057 1,159 — 7 — 22 1,339 203 — 8 — — — — — Total $ 52,614 $ 74,352 $ 279,002 $ 95,370 $ 7,452 Agricultural Agricultural Commercial Commercial Industrial December 31, 2014 1-2 $ 4,319 $ 11,490 $ 1,072 $ 1,771 $ — 3 15,780 26,871 34,229 15,582 4,289 4 30,472 36,225 225,015 80,079 409 5 111 — 7,083 2,299 — 6 213 — 2,080 165 — 7 — 25 709 230 — 8 — — — — — Total $ 50,895 $ 74,611 $ 270,188 $ 100,126 $ 4,698 For consumer residential real estate, and other, the Company also evaluates credit quality based on the aging status of the loan, which was previously stated, and by payment activity. The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of June 30, 2015 and December 31, 2014. (In Thousands) Consumer Consumer June 30, December 31, Grade Pass $ 86,238 $ 97,007 Special Mention (5) — — Substandard (6) 306 446 Doubtful (7) 97 97 Total $ 86,641 $ 97,550 (In Thousands) Consumer - Credit Consumer - Other June 30, December 31, June 30, December 31, Performing $ 3,665 $ 3,987 $ 21,473 $ 19,846 Nonperforming — — 22 25 Total $ 3,665 $ 3,987 $ 21,495 $ 19,871 Information about impaired loans as of June 30, 2015, December 31, 2014 and June 30, 2014 are as follows: June 30, 2015 December 31, 2014 June 30, 2014 Impaired loans without a valuation allowance $ 3,239 $ 675 $ 1,444 Impaired loans with a valuation allowance 1,783 1,168 345 Total impaired loans $ 5,022 $ 1,843 $ 1,789 Valuation allowance related to impaired loans $ 475 $ 387 $ 202 Total non-accrual loans $ 3,063 $ 1,705 $ 1,327 Total loans past-due ninety days or more and still accruing $ — $ — $ — Quarter ended average investment in impaired loans $ 3,435 $ 1,730 $ 1,928 Year to date average investment in impaired loans $ 2,451 $ 1,929 $ 2,090 No additional funds are committed to be advanced in connection with impaired loans. The Bank had approximately $1.3 million of its impaired loans classified as troubled debt restructured (TDR) as of June 30, 2015, $797.2 thousand as of December 31, 2014 and $964.0 thousand as of June 30, 2014. During the first quarter 2015, two new loans were considered TDR. These encompassed one loan that is making interest-only payments, and one loan that is on a modified amortization schedule. The following table represents three and six months ended June 30, 2015. Three Months June 30, 2015 Troubled Debt Restructurings Number of Pre- Post- Six Months June 30, 2015 Number of Pre- Post- Commercial Real Estate — $ — $ — Commercial Real Estate 1 $ 528 $ 430 Commercial and Industrial — — — Commercial and Industrial 1 25 24 The following table represents three and six months ended June 30, 2014. Three Months June 30, 2014 Troubled Debt Restructurings Number of Pre- Post- Six Months June 30, 2014 Number of Pre- Post- Ag Real Estate — $ — $ — Ag Real Estate 2 $ 153 $ 141 For the three and six month periods ended June 30, 2015 and 2014, there were no TDRs that subsequently defaulted after modification. For the majority of the Bank’s impaired loans, the Bank will apply the observable market price methodology. However, the Bank may also utilize a measurement incorporating the present value of expected future cash flows discounted at the loan’s effective rate of interest. To determine observable market price, collateral asset values securing an impaired loan are periodically evaluated. Maximum time for re-evaluation is every 12 months for chattels and titled vehicles and every two years for real estate. In this process, third party evaluations are obtained and heavily relied upon. Until such time that updated appraisals are received, the Bank may discount the collateral value used. The Bank uses the following guidelines as stated in policy to determine when to realize a charge-off, whether a partial or full loan balance. A charge-off in whole or in part is realized when unsecured consumer loans, credit card credits and overdraft lines of credit reach 90 days delinquency. At 120 days delinquent, secured consumer loans are charged down to the value of the collateral, if repossession of the collateral is assured and/or in the process of repossession. Consumer mortgage loan deficiencies are charged down upon the sale of the collateral or sooner upon the recognition of collateral deficiency. Commercial and agricultural credits are charged down at 120 days delinquency, unless an established and approved work-out plan is in place or litigation of the credit will likely result in recovery of the loan balance. Upon notification of bankruptcy, unsecured debt is charged off. Additional charge-off may be realized as further unsecured positions are recognized. The following tables present loans individually evaluated for impairment by class of loans for three months ended June 30, 2015 and June 30, 2014. (In Thousands) Three Months Ended June 30, 2015 Recorded Unpaid Related QTD QTD QTD With no related allowance recorded: Consumer real estate $ 557 $ 557 $ — $ 145 $ — $ — Agricultural real estate 222 222 — 74 — — Agricultural — — — — — — Commercial real estate 1,460 1,546 — 634 — 9 Commercial and industrial 1,000 1,364 — 798 13 — Consumer — — — — — — With a specific allowance recorded: Consumer real estate 121 121 39 120 — 1 Agricultural real estate — — — — — — Agricultural — — — — — — Commercial real estate 1,339 1,339 235 1,340 7 — Commercial and industrial 323 323 201 324 — — Consumer — — — — — — Totals: Consumer real estate $ 678 $ 678 $ 39 $ 265 $ — $ 1 Agricultural real estate $ 222 $ 222 $ — $ 74 $ — $ — Agricultural $ — $ — $ — $ — $ — $ — Commercial real estate $ 2,799 $ 2,885 $ 235 $ 1,974 $ 7 $ 9 Commercial and industrial $ 1,323 $ 1,687 $ 201 $ 1,122 $ 13 $ — Consumer $ — $ — $ — $ — $ — $ — (In Thousands) Three Months Ended June 30, 2014 Recorded Unpaid Related QTD QTD QTD With no related allowance recorded: Consumer real estate $ 26 $ 26 $ — $ 23 $ 1 $ — Agricultural real estate 141 141 — 141 — — Agricultural — — — — — — Commercial real estate 1,277 1,277 — 845 14 — Commercial and industrial — — — 354 14 — Consumer — — — — — — With a specific allowance recorded: Consumer real estate — — — 55 1 — Agricultural real estate — — — — — — Agricultural — — — — — — Commercial real estate — — — — — — Commercial and industrial 345 345 202 510 2 — Consumer — — — — — — Totals: Consumer real estate $ 26 $ 26 $ — $ 78 $ 2 $ — Agricultural real estate $ 141 $ 141 $ — $ 141 $ — $ — Agricultural $ — $ — $ — $ — $ — $ — Commercial real estate $ 1,277 $ 1,277 $ — $ 845 $ 14 $ — Commercial and industrial $ 345 $ 345 $ 202 $ 864 $ 16 $ — Consumer $ — $ — $ — $ — $ — $ — The following tables present loans individually evaluated for impairment by class of loans for six months ended June 30, 2015 and June 30, 2014. Six Months Ended June 30, 2015 Recorded Unpaid Related YTD YTD YTD With no related allowance recorded: Consumer real estate $ 557 $ 557 $ — $ 159 $ — $ — Agricultural real estate 222 222 — 37 — — Agricultural — — — — — — Commercial real estate 1,460 1,546 — 317 — 9 Commercial and industrial 1,000 1,364 — 399 13 — Consumer — — — — — — With a specific allowance recorded: Consumer real estate 121 121 39 108 — 4 Agricultural real estate — — — — — — Agricultural — — — — — — Commercial real estate 1,339 1,339 235 1,096 8 — Commercial and industrial 323 323 201 331 — — Consumer — — — 4 — — Totals: Consumer real estate $ 678 $ 678 $ 39 $ 267 $ — $ 4 Agricultural real estate $ 222 $ 222 $ — $ 37 $ — $ — Agricultural $ — $ — $ — $ — $ — $ — Commercial real estate $ 2,799 $ 2,885 $ 235 $ 1,413 $ 8 $ 9 Commercial and industrial $ 1,323 $ 1,687 $ 201 $ 730 $ 13 $ — Consumer $ — $ — $ — $ 4 $ — $ — Six Months Ended June 30, 2014 Recorded Unpaid Related YTD YTD YTD With no related allowance recorded: Consumer real estate $ 26 $ 26 $ — $ 44 $ 1 $ — Agricultural real estate 141 141 — 141 — — Agricultural — — — — — — Commercial real estate 1,277 1,277 — 874 28 — Commercial and industrial — — — 181 40 — Consumer — — — — — — With a specific allowance recorded: Consumer real estate — — — 127 2 — Agricultural real estate — — — — — — Agricultural — — — — — — Commercial real estate — — — 47 — — Commercial and industrial 345 345 202 676 5 — Consumer — — — — — — Totals: Consumer real estate $ 26 $ 26 $ — $ 171 $ 3 $ — Agricultural real estate $ 141 $ 141 $ — $ 141 $ — $ — Agricultural $ — $ — $ — $ — $ — $ — Commercial real estate $ 1,277 $ 1,277 $ — $ 921 $ 28 $ — Commercial and industrial $ 345 $ 345 $ 202 $ 857 $ 45 $ — Consumer $ — $ — $ — $ — $ — $ — On January 1, 2015, the Company adopted Accounting Standards Update (ASU) 2014-04, Receivables – Troubled Debt Restructuring by Creditors. As of June 30, 2015, the Company had $452 thousand of foreclosed residential real estate property obtained by physical possession and $138 thousand of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process according to local jurisdictions. The Allowance for Loan and Lease Losses (ALLL) has a direct impact on the provision expense. An increase in the ALLL is funded through recoveries and provision expense. The following tables summarize the activities in the allowance for credit losses. (In Thousands) Six Months Ended Twelve Months Ended Allowance for Loan & Lease Losses Balance at beginning of year $ 5,905 $ 5,194 Provision for loan loss 297 1,191 Loans charged off (621 ) (778 ) Recoveries 346 298 Allowance for Loan & Lease Losses $ 5,927 $ 5,905 Allowance for Unfunded Loan Commitments & Letters of Credit $ 201 $ 207 Total Allowance for Credit Losses $ 6,128 $ 6,112 The Company segregates its ALLL into two reserves: The ALLL and the Allowance for Unfunded Loan Commitments and Letters of Credit (AULC). When combined, these reserves constitute the total Allowance for Credit Losses (ACL). The AULC is reported within other liabilities on the balance sheet while the ALLL is netted within the loans, net asset line. The ACL presented above represents the full amount of reserves available to absorb possible credit losses. The following table breaks down the activity within ACL for each loan portfolio classification and shows the contribution provided by both the recoveries and the provision along with the reduction of the allowance caused by charge-offs. Additional analysis related to the allowance for credit losses for three months ended June 30, 2015 and June 30, 2014 is as follows: Consumer Agricultural Agricultural Commercial Commercial Consumer Unfunded Unallocated Total Three Months Ended June 30, 2015 ALLOWANCE FOR CREDIT LOSSES: Beginning balance $ 497 $ 187 $ 524 $ 2,212 $ 1,419 $ 284 $ 202 $ 854 $ 6,179 Charge Offs — — — (85 ) (389 ) (55 ) — — $ (529 ) Recoveries 25 — 2 201 17 51 — — $ 296 Provision (Credit) (213 ) 2 (7 ) (42 ) 241 29 — 173 $ 183 Other Non-interest expense related to unfunded — — — — — — (1 ) — $ (1 ) Ending Balance $ 309 $ 189 $ 519 $ 2,286 $ 1,288 $ 309 $ 201 $ 1,027 $ 6,128 Ending balance: individually evaluated for impairment $ 39 $ — $ — $ 235 $ 201 $ — $ — $ — $ 475 Ending balance: collectively evaluated for impairment $ 270 $ 189 $ 519 $ 2,051 $ 1,087 $ 309 $ 201 $ 1,027 $ 5,653 Ending balance: loans acquired with deteriorated credit quality 1 — — — — — — — 1 FINANCING RECEIVABLES: Ending balance $ 86,641 $ 52,614 $ 74,352 $ 279,002 $ 102,822 $ 25,160 $ — $ — $ 620,591 Ending balance: individually evaluated for impairment $ 678 $ 222 $ — $ 2,799 $ 1,323 $ — $ — $ — $ 5,022 Ending balance: collectively evaluated for impairment $ 85,963 $ 52,392 $ 74,352 $ 276,203 $ 101,499 $ 25,160 $ — $ — $ 615,569 Ending balance: loans acquired with deteriorated credit quality $ 517 $ — $ — $ — $ — $ — $ — $ — $ 517 Consumer Agricultural Agricultural Commercial Commercial Consumer Unfunded Unallocated Total Three Months Ended June 30, 2014 ALLOWANCE FOR CREDIT LOSSES: Beginning balance $ 402 $ 131 $ 323 $ 1,959 $ 1,330 $ 270 $ 180 $ 910 $ 5,505 Charge Offs (66 ) — — (28 ) — (74 ) — — (168 ) Recoveries 7 — 3 — 5 47 — — 62 Provision (Credit) 226 (6 ) (10 ) (44 ) 133 47 — 98 444 Other Non-interest expense related to unfunded — — — — — — 6 — 6 Ending Balance $ 569 $ 125 $ 316 $ 1,887 $ 1,468 $ 290 $ 186 $ 1,008 $ 5,849 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ 202 $ — $ — $ — $ 202 Ending balance: collectively evaluated for impairment $ 569 $ 125 $ 316 $ 1,887 $ 1,266 $ 290 $ 186 $ 1,008 $ 5,647 Ending balance: loans acquired with deteriorated credit quality 2 — — — — — — — 2 FINANCING RECEIVABLES: Ending balance $ 95,863 $ 47,745 $ 63,393 $ 265,902 $ 102,455 $ 22,481 $ — $ — $ 597,839 Ending balance: individually evaluated for impairment $ 26 $ 141 $ — $ 1,277 $ 345 $ — $ — $ — $ 1,789 Ending balance: collectively evaluated for impairment $ 95,837 $ 47,604 $ 63,393 $ 264,625 $ 102,110 $ 22,481 $ — $ — $ 596,050 Ending balance: loans acquired with deteriorated credit quality $ 532 $ — $ — $ — $ — $ — $ — $ — $ 532 Additional analysis related to the allowance for credit losses for six months ended June 30, 2015 and June 30, 2014 is as follows: (In Thousands) Consumer Agricultural Agricultural Commercial Commercial Consumer Unfunded Unallocated Total Six Months Ended June 30, 2015 ALLOWANCE FOR CREDIT LOSSES: Beginning balance $ 537 $ 184 $ 547 $ 2,367 $ 1,421 $ 323 $ 207 $ 526 $ 6,112 Charge Offs — — — (85 ) (390 ) (146 ) — — $ (621 ) Recoveries 27 — 3 202 23 91 — — $ 346 Provision (Credit) (255 ) 5 (31 ) (198 ) 234 41 — 501 $ 297 Other Non-interest expense related to unfunded — — — — — — (6 ) — $ (6 ) Ending Balance $ 309 $ 189 $ 519 $ 2,286 $ 1,288 $ 309 $ 201 $ 1,027 $ 6,128 Ending balance: individually evaluated for impairment $ 39 $ — $ — $ 235 $ 201 $ — $ — $ — $ 475 Ending balance: collectively evaluated for impairment $ 270 $ 189 $ 519 $ 2,051 $ 1,087 $ 309 $ 201 $ 1,027 $ 5,653 Ending balance: loans acquired with deteriorated credit quality $ 1 $ — $ — $ — $ — $ — $ — $ — $ 1 FINANCING RECEIVABLES: Ending balance $ 86,641 $ 52,614 $ 74,352 $ 279,002 $ 102,822 $ 25,160 $ — $ — $ 620,591 Ending balance: individually evaluated for impairment $ 678 $ 222 $ — $ 2,799 $ 1,323 $ — $ — $ — $ 5,022 Ending balance: collectively evaluated for impairment $ 85,963 $ 52,392 $ 74,352 $ 276,203 $ 101,499 $ 25,160 $ — $ — $ 615,569 Ending balance: loans acquired with deteriorated credit quality $ 517 $ — $ — $ — $ — $ — $ — $ — $ 517 Six Months Ended June 30, 2014 ALLOWANCE FOR CREDIT LOSSES: Beginning balance $ 257 $ 131 $ 326 $ 2,107 $ 1,359 $ 292 $ 163 $ 722 $ 5,357 Charge Offs (131 ) — — (229 ) — (174 ) — — $ (534 ) Recoveries 17 — 3 3 10 98 — — $ 131 Provision (Credit) 426 (6 ) (13 ) 6 99 74 — 286 $ 872 Other Non-interest expense related to unfunded — — — — — — 23 — $ 23 Ending Balance $ 569 $ 125 $ 316 $ 1,887 $ 1,468 $ 290 $ 186 $ 1,008 $ 5,849 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ 202 $ — $ — $ — $ 202 Ending balance: collectively evaluated for impairment $ 569 $ 125 $ 316 $ 1,887 $ 1,266 $ 290 $ 186 $ 1,008 $ 5,647 Ending balance: loans acquired with deteriorated credit quality $ 2 $ — $ — $ — $ — $ — $ — $ — $ 2 FINANCING RECEIVABLES: Ending balance $ 95,863 $ 47,745 $ 63,393 $ 265,902 $ 102,455 $ 22,481 $ — $ — $ 597,839 Ending balance: individually evaluated for impairment $ 26 $ 141 $ — $ 1,277 $ 345 $ — $ — $ — $ 1,789 Ending balance: collectively evaluated for impairment $ 95,837 $ 47,604 $ 63,393 $ 264,625 $ 102,110 $ 22,481 $ — $ — $ 596,050 Ending balance: loans acquired with deteriorated credit quality $ 532 $ — $ — $ — $ — $ — $ — $ — $ 532 |