Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 7. The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at March 31, 2017 December 31, 2016 Summary of Loans by Type (In Thousands) Mar ch 31, Dec. 31, 2017 2016 Residential mortgage: Residential mortgage loans - first liens $ 340,431 $ 334,102 Residential mortgage loans - junior liens 23,717 23,706 Home equity lines of credit 36,810 38,057 1-4 Family residential construction 24,041 24,908 Total residential mortgage 424,999 420,773 Commercial: Commercial loans secured by real estate 153,385 150,468 Commercial and industrial 79,493 83,854 Political subdivisions 44,625 38,068 Commercial construction and land 15,252 14,287 Loans secured by farmland 7,497 7,294 Multi-family (5 or more) residential 7,622 7,896 Agricultural loans 3,992 3,998 Other commercial loans 11,131 11,475 Total commercial 322,997 317,340 Consumer 14,025 13,722 Total 762,021 751,835 Less: allowance for loan losses (8,744 ) (8,473 ) Loans, net $ 753,277 $ 743,362 The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in the Pennsylvania and New York counties that comprise the market serviced by Citizens & Northern Bank. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. There is no 10% March 31, 2017 December 31, 2016. The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and recorded as a reduction of the investment in loans. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may may portfolio, management also considers the Corporation’s exposure to losses from unfunded loan commitments. As of March 31, 2017 December 31, 2016, Transactions within the allowance for loan losses, summarized by segment and class, for the three March 31, 2017 2016 Three Months Ended March 31, 2017 Dec. 31 , March 31 , (In Thousands) 2016 Balance Charge-offs Recoveries Provision (Credit) 2017 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,033 $ (63 ) $ 2 $ 153 $ 3,125 Residential mortgage loans - junior liens 258 0 1 (3 ) 256 Home equity lines of credit 350 0 0 (12 ) 338 1-4 Family residential construction 249 0 0 (9 ) 240 Total residential mortgage 3,890 (63 ) 3 129 3,959 Commercial: Commercial loans secured by real estate 2,380 (96 ) 0 401 2,685 Commercial and industrial 999 0 1 (94 ) 906 Commercial construction and land 162 0 0 7 169 Loans secured by farmland 110 0 0 1 111 Multi-family (5 or more) residential 241 0 0 (5 ) 236 Agricultural loans 40 0 0 (1 ) 39 Other commercial loans 115 0 0 (6 ) 109 Total commercial 4,047 (96 ) 1 303 4,255 Consumer 138 (41 ) 15 20 132 Unallocated 398 0 0 0 398 Total Allowance for Loan Losses $ 8,473 $ (200 ) $ 19 $ 452 $ 8,744 Three Months Ended March 31, 2016 Dec. 31, March 31 , (In Thousands) 2015 Balance Charge-offs Recoveries Provision (Credit) 2016 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 2,645 $ 0 $ 0 $ 77 $ 2,722 Residential mortgage loans - junior liens 219 0 0 9 228 Home equity lines of credit 347 0 0 4 351 1-4 Family residential construction 207 0 0 (7 ) 200 Total residential mortgage 3,418 0 0 83 3,501 Commercial: Commercial loans secured by real estate 1,939 0 1 87 2,027 Commercial and industrial 981 0 1 (6 ) 976 Commercial construction and land 58 0 0 26 84 Loans secured by farmland 106 0 0 2 108 Multi-family (5 or more) residential 675 (595 ) 0 176 256 Agricultural loans 45 0 0 (1 ) 44 Other commercial loans 118 0 0 (6 ) 112 Total commercial 3,922 (595 ) 2 278 3,607 Consumer 122 (18 ) 15 7 126 Unallocated 427 0 0 0 427 Total Allowance for Loan Losses $ 7,889 $ (613 ) $ 17 $ 368 $ 7,661 In the evaluation of the loan portfolio, management determines two (1) (2) In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table below. The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of March 31, 2017 December 31, 2016: March 31, 2017 (In Thousands) Special Pass Mention Substandard Doubtful Total Residential Mortgage: Residential mortgage loans - first liens $ 330,808 $ 293 $ 9,274 $ 56 $ 340,431 Residential mortgage loans - junior liens 23,318 142 257 0 23,717 Home equity lines of credit 36,150 63 597 0 36,810 1-4 Family residential construction 23,954 0 87 0 24,041 Total residential mortgage 414,230 498 10,215 56 424,999 Commercial: Commercial loans secured by real estate 142,711 2,721 7,953 0 153,385 Commercial and Industrial 73,006 5,046 1,430 11 79,493 Political subdivisions 44,625 0 0 0 44,625 Commercial construction and land 15,112 60 80 0 15,252 Loans secured by farmland 5,482 601 1,399 15 7,497 Multi-family (5 or more) residential 7,013 0 609 0 7,622 Agricultural loans 3,138 84 770 0 3,992 Other commercial loans 11,057 0 74 0 11,131 Total commercial 302,144 8,512 12,315 26 322,997 Consumer 13,812 7 206 0 14,025 Totals $ 730,186 $ 9,017 $ 22,736 $ 82 $ 762,021 December 31, 2016 (In Thousands) Special Pass Mention Substandard Doubtful Total Residential Mortgage: Residential mortgage loans - first liens $ 324,377 $ 408 $ 9,258 $ 59 $ 334,102 Residential mortgage loans - junior liens 23,274 132 300 0 23,706 Home equity lines of credit 37,360 123 574 0 38,057 1-4 Family residential construction 24,820 0 88 0 24,908 Total residential mortgage 409,831 663 10,220 59 420,773 Commercial: Commercial loans secured by real estate 139,358 3,092 8,018 0 150,468 Commercial and Industrial 79,202 4,180 461 11 83,854 Political subdivisions 38,068 0 0 0 38,068 Commercial construction and land 14,136 70 81 0 14,287 Loans secured by farmland 5,745 129 1,404 16 7,294 Multi-family (5 or more) residential 7,277 0 619 0 7,896 Agricultural loans 3,208 0 790 0 3,998 Other commRercial loans 11,401 0 74 0 11,475 Total commercial 298,395 7,471 11,447 27 317,340 Consumer 13,546 0 176 0 13,722 Totals $ 721,772 $ 8,134 $ 21,843 $ 86 $ 751,835 The general component of the allowance for loan losses covers pools of loans including commercial loans not considered individually impaired, as well as smaller balance homogeneous classes of loans, such as residential real estate, home equity lines of credit and other consumer loans. Accordingly, the Corporation generally does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are subject to a restructuring agreement. The pools of loans are evaluated for loss exposure based upon three three three The qualitative factors used in the general component calculations are designed to address credit risk characteristics associated with each segment. The Corporation’s credit risk associated with all of the segments is significantly impacted by these factors, which include economic conditions within its market area, the Corporation’s lending policies, changes or trends in the portfolio, risk profile, competition, regulatory requirements and other factors. Further, the residential mortgage segment is significantly affected by the values of residential real estate that provide collateral for the loans. The majority of the Corporation’s commercial segment loans (approximately 57% March 31, 2017) Loans are classified as impaired, when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans, by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price. The scope of loans reviewed individually each quarter to determine if they are impaired include all loan relationships greater than $200,000 one not March 31, 2017 December 31, 2016. $200,000 $100,000 The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of March 31, 2017 December 31, 2016: March 31, 2017 Loans: Allowance for Loan Losses: (In Thousands) Individually Collectively Individually Collectively Evaluated Evaluated Totals Evaluated Evaluated Totals Residential mortgage: Residential mortgage loans - first liens $ 743 $ 339,688 $ 340,431 $ 0 $ 3,125 $ 3,125 Residential mortgage loans - junior liens 66 23,651 23,717 0 256 256 Home equity lines of credit 0 36,810 36,810 0 338 338 1-4 Family residential construction 0 24,041 24,041 0 240 240 Total residential mortgage 809 424,190 424,999 0 3,959 3,959 Commercial: Commercial loans secured by real estate 5,915 147,470 153,385 753 1,932 2,685 Commercial and industrial 162 79,331 79,493 77 829 906 Political subdivisions 0 44,625 44,625 0 0 0 Commercial construction and land 0 15,252 15,252 0 169 169 Loans secured by farmland 1,387 6,110 7,497 51 60 111 Multi-family (5 or more) residential 392 7,230 7,622 0 236 236 Agricultural loans 12 3,980 3,992 0 39 39 Other commercial loans 0 11,131 11,131 0 109 109 Total commercial 7,868 315,129 322,997 881 3,374 4,255 Consumer 22 14,003 14,025 0 132 132 Unallocated 398 Total $ 8,699 $ 753,322 $ 762,021 $ 881 $ 7,465 $ 8,744 December 31, 2016 Loans: Allowance for Loan Losses: (In Thousands) Individually Collectively Individually Collectively Evaluated Evaluated Totals Evaluated Evaluated Totals Residential mortgage: Residential mortgage loans - first liens $ 753 $ 333,349 $ 334,102 $ 0 $ 3,033 $ 3,033 Residential mortgage loans - junior liens 68 23,638 23,706 0 258 258 Home equity lines of credit 0 38,057 38,057 0 350 350 1-4 Family residential construction 0 24,908 24,908 0 249 249 Total residential mortgage 821 419,952 420,773 0 3,890 3,890 Commercial: Commercial loans secured by real estate 8,005 142,463 150,468 528 1,852 2,380 Commercial and industrial 212 83,642 83,854 95 904 999 Political subdivisions 0 38,068 38,068 0 0 0 Commercial construction and land 0 14,287 14,287 0 162 162 Loans secured by farmland 1,394 5,900 7,294 51 59 110 Multi-family (5 or more) residential 392 7,504 7,896 0 241 241 Agricultural loans 13 3,985 3,998 0 40 40 Other commercial loans 0 11,475 11,475 0 115 115 Total commercial 10,016 307,324 317,340 674 3,373 4,047 Consumer 23 13,699 13,722 0 138 138 Unallocated 398 Total $ 10,860 $ 740,975 $ 751,835 $ 674 $ 7,401 $ 8,473 Summary information related to impaired loans at March 31, 2017 December 31, 2016 (In Thousands) March 31, 2017 December 31, 2016 Unpaid Unpaid Principal Recorded Related Principal Recorded Related Balance Investment Allowance Balance Investment Allowance With no related allowance recorded: Residential mortgage loans - first liens $ 773 $ 743 $ 0 $ 783 $ 753 $ 0 Residential mortgage loans - junior liens 66 66 0 68 68 0 Commercial loans secured by real estate 3,175 3,175 0 6,975 5,232 0 Commercial and industrial 85 85 0 117 117 0 Loans secured by farmland 885 885 0 890 890 0 Multi-family (5 or more) residential 987 392 0 987 392 0 Agricultural loans 12 12 0 13 13 0 Consumer 22 22 0 23 23 0 Total with no related allowance recorded 6,005 5,380 0 9,856 7,488 0 With a related allowance recorded: Commercial loans secured by real estate 2,740 2,740 753 2,773 2,773 528 Commercial and industrial 77 77 77 95 95 95 Loans secured by farmland 502 502 51 504 504 51 Total with a related allowance recorded 3,319 3,319 881 3,372 3,372 674 Total $ 9,324 $ 8,699 $ 881 $ 13,228 $ 10,860 $ 674 The average balance of impaired loans and interest income recognized on impaired loans is as follows: Interest Income Recognized on Average Investment in Impaired Loans Impaired Loans on a Cash Basis (In Thousands) 3 Months Ended 3 Months Ended March 31, March 31, 2017 2016 2017 2016 Residential mortgage: Residential mortgage loans - first lien $ 748 $ 861 $ 9 $ 10 Residential mortgage loans - junior lien 67 73 1 1 Total residential mortgage 815 934 10 11 Commercial: Commercial loans secured by real estate 6,889 6,160 56 110 Commercial and industrial 247 568 3 3 Loans secured by farmland 1,390 1,423 8 21 Multi-family (5 or more) residential 392 690 0 0 Agricultural loans 12 15 1 1 Total commercial 8,930 8,856 68 135 Consumer 33 12 0 0 Total $ 9,778 $ 9,802 $ 78 $ 146 Loans are placed on nonaccrual status for all classes of loans when, in the opinion of management, collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is not recognized on specific impaired loans unless the likelihood of further loss is remote. Interest payments received on loans for which the risk of further loss is greater than remote are applied as a reduction of the loan principal balance. Interest income on other nonaccrual loans, including impaired loans, is recognized only to the extent of interest payments received. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety (In Thousands) March 31, 2017 December 31, 2016 Past Due Past Due 90+ Days and 90+ Days and Accruing Nonaccrual Accruing Nonaccrual Residential mortgage: Residential mortgage loans - first liens $ 1,979 $ 3,478 $ 3,022 $ 3,770 Residential mortgage loans - junior liens 40 0 114 0 Home equity lines of credit 158 11 320 11 Total residential mortgage 2,177 3,489 3,456 3,781 Commercial: Commercial loans secured by real estate 96 5,713 2,774 3,080 Commercial and industrial 218 160 286 119 Loans secured by farmland 216 1,326 219 1,331 Multi-family (5 or more) residential 0 392 0 392 Agricultural loans 0 12 0 13 Total commercial 530 7,603 3,279 4,935 Consumer 7 139 103 20 Totals $ 2,714 $ 11,231 $ 6,838 $ 8,736 The amounts shown in the table immediately above include loans classified as troubled debt restructurings (described in more detail below), if such loans are past due ninety The table below presents a summary of the contractual aging of loans as of March 31, 2017 December 31, 2016: As of March 31, 2017 As of December 31, 2016 Current & Current & (In Thousands) Past Due Past Due Past Due Past Due Past Due Past Due Less than 30-89 90+ Less than 30-89 90+ 30 Days Days Days Total 30 Days Days Days Total Residential mortgage: Residential mortgage loans - first liens $ 330,781 $ 6,044 $ 3,606 $ 340,431 $ 321,670 $ 6,695 $ 5,737 $ 334,102 Residential mortgage loans - junior liens 23,593 84 40 23,717 23,268 324 114 23,706 Home equity lines of credit 36,427 225 158 36,810 37,603 134 320 38,057 1-4 Family residential construction 23,543 498 0 24,041 24,567 341 0 24,908 Total residential mortgage 414,344 6,851 3,804 424,999 407,108 7,494 6,171 420,773 Commercial: Commercial loans secured by real estate 150,231 240 2,914 153,385 147,464 82 2,922 150,468 Commercial and industrial 79,202 13 278 79,493 83,364 185 305 83,854 Political subdivisions 44,625 0 0 44,625 38,068 0 0 38,068 Commercial construction and land 15,154 98 0 15,252 14,199 88 0 14,287 Loans secured by farmland 6,334 138 1,025 7,497 6,181 83 1,030 7,294 Multi-family (5 or more) residential 7,230 0 392 7,622 7,439 65 392 7,896 Agricultural loans 3,979 1 12 3,992 3,981 4 13 3,998 Other commercial loans 11,131 0 0 11,131 11,475 0 0 11,475 Total commercial 317,886 490 4,621 322,997 312,171 507 4,662 317,340 Consumer 13,857 72 96 14,025 13,446 153 123 13,722 Totals $ 746,087 $ 7,413 $ 8,521 $ 762,021 $ 732,725 $ 8,154 $ 10,956 $ 751,835 Nonaccrual loans are included in the contractual aging in the immediately preceding table. A summary of the contractual aging of nonaccrual loans at March 31, 2017 December 31, 2016 Current & (In Thousands) Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Total March 31, 2017 Nonaccrual Totals $ 4,487 $ 937 $ 5,807 $ 11,231 December 31, 2016 Nonaccrual Totals $ 4,199 $ 419 $ 4,118 $ 8,736 Loans whose terms are modified are classified as Troubled Debt Restructurings (TDRs) if the Corporation grants such borrowers concessions, and it is deemed that those borrowers are experiencing financial difficulty. Loans classified as TDRs are designated as impaired. The outstanding balance of loans subject to TDRs, as well as contractual aging information at March 31, 2017 December 31, 2016 Current & (In Thousandas) Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Nonaccrual Total March 31, 2017 Totals $ 701 $ 51 $ 242 $ 2,841 $ 3,835 December 31, 2016 Totals $ 5,453 $ 350 $ 0 $ 2,874 $ 8,677 At March 31, 2017 December 31, 2016, no TDRs that occurred during the three March 31, 2017 2016 (Balances in Thousands) March 31, 2017 March 31, 2016 Post- Post- Number Modification Number Modification of Recorded of Recorded Loans Investment Loans Investment Commercial and industrial, Extended maturity 0 $ 0 1 $ 5 Total 0 $ 0 1 $ 5 In the three March 31 2017 2016, 12 (Balances in Thousands) March 31, 2017 March 31, 2016 Number Number of Recorded of Recorded Loans Investment Loans Investment Residential mortgage - first liens 2 $ 293 1 $ 31 Residential mortgage - junior liens 1 28 0 0 Commercial and industrial 0 0 1 5 Consumer 1 26 0 0 Total 4 $ 347 2 $ 36 The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the unaudited Consolidated Balance Sheet) is as follows: (In Thousands) March 31, Dec. 31, 2017 2016 Foreclosed residential real estate $ 800 $ 1,102 The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows: (In Thousands) March 31, Dec. 31, 2017 2016 Residential real estate in process of foreclosure $ 2,544 $ 2,738 |