Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 7 . LOANS The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at September 30, 2017 December 31, 2016 Summary of Loans by Type (In Thousands) Sept. 30, Dec. 31, 2017 2016 Residential mortgage: Residential mortgage loans - first liens $ 355,285 $ 334,102 Residential mortgage loans - junior liens 24,694 23,706 Home equity lines of credit 36,534 38,057 1-4 Family residential construction 25,286 24,908 Total residential mortgage 441,799 420,773 Commercial: Commercial loans secured by real estate 158,520 150,468 Commercial and industrial 83,243 83,854 Political subdivisions 54,730 38,068 Commercial construction and land 13,937 14,287 Loans secured by farmland 7,744 7,294 Multi-family (5 or more) residential 7,566 7,896 Agricultural loans 6,137 3,998 Other commercial loans 12,383 11,475 Total commercial 344,260 317,340 Consumer 14,953 13,722 Total 801,012 751,835 Less: allowance for loan losses (8,900 ) (8,473 ) Loans, net $ 792,112 $ 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% September 30, 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 September 30, 2017 December 31, 2016, no Transactions within the allowance for loan losses, summarized by segm ent and class, for the three nine September 30, 2017 2016 Three Months Ended September 30, 2017 June 30, Sept. 30, (In Thousands) 2017 Balance Charge-offs Recoveries Provision (Credit) 2017 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,052 $ 0 $ 1 $ 112 $ 3,165 Residential mortgage loans - junior liens 261 0 1 3 265 Home equity lines of credit 332 0 0 (6 ) 326 1-4 Family residential construction 251 0 0 (8 ) 243 Total residential mortgage 3,896 0 2 101 3,999 Commercial: Commercial loans secured by real estate 2,610 0 0 27 2,637 Commercial and industrial 910 0 1 93 1,004 Commercial construction and land 162 0 0 (13 ) 149 Loans secured by farmland 107 0 0 3 110 Multi-family (5 or more) residential 169 0 0 2 171 Agricultural loans 42 0 0 16 58 Other commercial loans 105 0 0 12 117 Total commercial 4,105 0 1 140 4,246 Consumer 134 (67 ) 7 81 155 Unallocated 500 0 0 0 500 Total Allowance for Loan Losses $ 8,635 $ (67 ) $ 10 $ 322 $ 8,900 Three Months Ended September 30, 2016 June 30, Sept. 30, (In Thousands) 2016 Balance Charge-offs Recoveries Provision (Credit) 2016 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 2,830 $ (31 ) $ 2 $ 155 $ 2,956 Residential mortgage loans - junior liens 239 0 0 9 248 Home equity lines of credit 359 0 0 0 359 1-4 Family residential construction 222 0 0 14 236 Total residential mortgage 3,650 (31 ) 2 178 3,799 Commercial: Commercial loans secured by real estate 2,083 0 0 304 2,387 Commercial and industrial 1,038 (2 ) 1 1 1,038 Commercial construction and land 105 0 0 41 146 Loans secured by farmland 103 0 0 3 106 Multi-family (5 or more) residential 248 0 0 (5 ) 243 Agricultural loans 47 0 0 (4 ) 43 Other commercial loans 119 0 0 (3 ) 116 Total commercial 3,743 (2 ) 1 337 4,079 Consumer 138 (28 ) 12 23 145 Unallocated 398 0 0 0 398 Total Allowance for Loan Losses $ 7,929 $ (61 ) $ 15 $ 538 $ 8,421 Nine Months Ended September 30, 2017 Dec. 31, Sept. 30, (In Thousands) 2016 Balance Charge-offs Recoveries Provision (Credit) 2017 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 3,033 $ (162 ) $ 15 $ 279 $ 3,165 Residential mortgage loans - junior liens 258 (16 ) 3 20 265 Home equity lines of credit 350 0 0 (24 ) 326 1-4 Family residential construction 249 0 0 (6 ) 243 Total residential mortgage 3,890 (178 ) 18 269 3,999 Commercial: Commercial loans secured by real estate 2,380 (96 ) 0 353 2,637 Commercial and industrial 999 (1 ) 3 3 1,004 Commercial construction and land 162 0 0 (13 ) 149 Loans secured by farmland 110 0 0 0 110 Multi-family (5 or more) residential 241 0 0 (70 ) 171 Agricultural loans 40 0 0 18 58 Other commercial loans 115 0 0 2 117 Total commercial 4,047 (97 ) 3 293 4,246 Consumer 138 (127 ) 30 114 155 Unallocated 398 0 0 102 500 Total Allowance for Loan Losses $ 8,473 $ (402 ) $ 51 $ 778 $ 8,900 Nine Months Ended September 30, 2016 Dec. 31, Sept. 30, (In Thousands) 2015 Balance Charge-offs Recoveries Provision (Credit) 2016 Balance Allowance for Loan Losses: Residential mortgage: Residential mortgage loans - first liens $ 2,645 $ (73 ) $ 2 $ 382 $ 2,956 Residential mortgage loans - junior liens 219 0 0 29 248 Home equity lines of credit 347 0 0 12 359 1-4 Family residential construction 207 0 0 29 236 Total residential mortgage 3,418 (73 ) 2 452 3,799 Commercial: Commercial loans secured by real estate 1,939 0 2 446 2,387 Commercial and industrial 981 (2 ) 2 57 1,038 Commercial construction and land 58 0 0 88 146 Loans secured by farmland 106 0 0 0 106 Multi-family (5 or more) residential 675 (595 ) 0 163 243 Agricultural loans 45 0 0 (2 ) 43 Other commercial loans 118 0 0 (2 ) 116 Total commercial 3,922 (597 ) 4 750 4,079 Consumer 122 (67 ) 39 51 145 Unallocated 427 0 0 (29 ) 398 Total Allowance for Loan Losses $ 7,889 $ (737 ) $ 45 $ 1,224 $ 8,421 In the evaluation of the loan portfolio, management determines two r the allowance for loan losses – ( 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 not ’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not The following tables summarize the aggregate credit quality classification of outstan ding loans by risk rating as of September 30, 2017 December 31, 2016: September 30, 2017 (In Thousands) Special Pass Mention Substandard Doubtful Total Residential Mortgage: Residential mortgage loans - first liens $ 346,545 $ 314 $ 8,372 $ 54 $ 355,285 Residential mortgage loans - junior liens 24,463 107 124 0 24,694 Home equity lines of credit 35,933 62 539 0 36,534 1-4 Family residential construction 25,286 0 0 0 25,286 Total residential mortgage 432,227 483 9,035 54 441,799 Commercial: Commercial loans secured by real estate 149,607 1,394 7,519 0 158,520 Commercial and Industrial 77,045 3,658 2,529 11 83,243 Political subdivisions 54,730 0 0 0 54,730 Commercial construction and land 13,848 10 79 0 13,937 Loans secured by farmland 5,759 587 1,385 13 7,744 Multi-family (5 or more) residential 6,974 0 592 0 7,566 Agricultural loans 5,133 278 726 0 6,137 Other commercial loans 12,310 0 73 0 12,383 Total commercial 325,406 5,927 12,903 24 344,260 Consumer 14,840 0 113 0 14,953 Totals $ 772,473 $ 6,410 $ 22,051 $ 78 $ 801,012 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 commercial 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 not (described in the following paragraphs). The time period used in determining the average historical net charge-off rate for each loan class is based on management’s evaluation of an appropriate time period that captures an historical loss experience relevant to the current portfolio. Throughout 2016 March 31, 2017, three June 30, 2017 September 30, 2017, five three Qualitative risk factors are evaluated for the impact on each of the three The q ualitative 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 55% September 30, 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 ’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 not not ted loan balances as of September 30, 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 September 30, 2017 December 31, 2016: September 30, 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 $ 723 $ 354,562 $ 355,285 $ 0 $ 3,165 $ 3,165 Residential mortgage loans - junior liens 62 24,632 24,694 0 265 265 Home equity lines of credit 0 36,534 36,534 0 326 326 1-4 Family residential construction 0 25,286 25,286 0 243 243 Total residential mortgage 785 441,014 441,799 0 3,999 3,999 Commercial: Commercial loans secured by real estate 5,917 152,603 158,520 952 1,685 2,637 Commercial and industrial 476 82,767 83,243 165 839 1,004 Political subdivisions 0 54,730 54,730 0 0 0 Commercial construction and land 0 13,937 13,937 0 149 149 Loans secured by farmland 1,371 6,373 7,744 50 60 110 Multi-family (5 or more) residential 392 7,174 7,566 0 171 171 Agricultural loans 8 6,129 6,137 0 58 58 Other commercial loans 0 12,383 12,383 0 117 117 Total commercial 8,164 336,096 344,260 1,167 3,079 4,246 Consumer 20 14,933 14,953 0 155 155 Unallocated 500 Total $ 8,969 $ 792,043 $ 801,012 $ 1,167 $ 7,233 $ 8,900 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 r elated to impaired loans at September 30, 2017 December 31, 2016 (In Thousands) September 30, 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 $ 752 $ 723 $ 0 $ 783 $ 753 $ 0 Residential mortgage loans - junior liens 62 62 0 68 68 0 Commercial loans secured by real estate 3,231 3,231 0 6,975 5,232 0 Commercial and industrial 78 78 0 117 117 0 Loans secured by farmland 874 874 0 890 890 0 Multi-family (5 or more) residential 987 392 0 987 392 0 Agricultural loans 8 8 0 13 13 0 Consumer 20 20 0 23 23 0 Total with no related allowance recorded 6,012 5,388 0 9,856 7,488 0 With a related allowance recorded: Commercial loans secured by real estate 2,686 2,686 952 2,773 2,773 528 Commercial and industrial 398 398 165 95 95 95 Loans secured by farmland 497 497 50 504 504 51 Total with a related allowance recorded 3,581 3,581 1,167 3,372 3,372 674 Total $ 9,593 $ 8,969 $ 1,167 $ 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 9 Months Ended 3 Months Ended 9 Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2017 2016 2017 2016 2017 2016 2017 2016 Residential mortgage: Residential mortgage loans - first lien $ 733 $ 789 $ 738 $ 818 $ 8 $ 11 $ 25 $ 33 Residential mortgage loans - junior lien 64 72 65 72 1 0 3 2 Total residential mortgage 797 861 803 890 9 11 28 35 Commercial: Commercial loans secured by real estate 6,200 7,022 6,377 6,524 36 83 127 274 Commercial and industrial 393 577 317 619 13 7 20 17 Loans secured by farmland 1,378 1,408 1,382 1,413 10 13 32 51 Multi-family (5 or more) residential 392 492 392 541 0 0 0 0 Agricultural loans 10 13 11 14 0 0 1 1 Total commercial 8,373 9,512 8,479 9,111 59 103 180 343 Consumer 25 17 27 16 0 0 0 0 Total $ 9,195 $ 10,390 $ 9,309 $ 10,017 $ 68 $ 114 $ 208 $ 378 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 , 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 no The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety accruing is as follows: (In Thousands) September 30, 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 $ 1,739 $ 4,352 $ 3,022 $ 3,770 Residential mortgage loans - junior liens 4 0 114 0 Home equity lines of credit 208 59 320 11 Total residential mortgage 1,951 4,411 3,456 3,781 Commercial: Commercial loans secured by real estate 126 5,732 2,774 3,080 Commercial and industrial 632 476 286 119 Commercial construction and land 53 0 0 0 Loans secured by farmland 215 1,313 219 1,331 Multi-family (5 or more) residential 0 392 0 392 Agricultural loans 0 8 0 13 Total commercial 1,026 7,921 3,279 4,935 Consumer 2 68 103 20 Totals $ 2,979 $ 12,400 $ 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 c ontractual aging of loans as of September 30, 2017 December 31, 2016: As of September 30, 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 $ 347,083 $ 4,410 $ 3,792 $ 355,285 $ 321,670 $ 6,695 $ 5,737 $ 334,102 Residential mortgage loans - junior liens 24,409 281 4 24,694 23,268 324 114 23,706 Home equity lines of credit 35,908 369 257 36,534 37,603 134 320 38,057 1-4 Family residential construction 24,597 689 0 25,286 24,567 341 0 24,908 Total residential mortgage 431,997 5,749 4,053 441,799 407,108 7,494 6,171 420,773 Commercial: Commercial loans secured by real estate 155,276 215 3,029 158,520 147,464 82 2,922 150,468 Commercial and industrial 82,407 151 685 83,243 83,364 185 305 83,854 Political subdivisions 54,730 0 0 54,730 38,068 0 0 38,068 Commercial construction and land 13,858 26 53 13,937 14,199 88 0 14,287 Loans secured by farmland 6,726 57 961 7,744 6,181 83 1,030 7,294 Multi-family (5 or more) residential 7,135 39 392 7,566 7,439 65 392 7,896 Agricultural loans 6,052 77 8 6,137 3,981 4 13 3,998 Other commercial loans 12,383 0 0 12,383 11,475 0 0 11,475 Total commercial 338,567 565 5,128 344,260 312,171 507 4,662 317,340 Consumer 14,720 163 70 14,953 13,446 153 123 13,722 Totals $ 785,284 $ 6,477 $ 9,251 $ 801,012 $ 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 September 30, 2017 December 31, 2016 Current & (In Thousands) Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Total September 30, 2017 Nonaccrual Totals $ 5,629 $ 499 $ 6,272 $ 12,400 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 September 30, 2017 December 31, 2016 Current & (In Thousands) Past Due Past Due Past Due Less than 30-89 90+ 30 Days Days Days Nonaccrual Total September 30, 2017 Totals $ 658 $ 0 $ 0 $ 3,075 $ 3,733 December 31, 2016 Totals $ 5,453 $ 350 $ 0 $ 2,874 $ 8,677 At September 30, 2017 December 31, 2016, no TDR s that occurred during the three nine September 30, 2017 2016 (Balances in Thousands) Three Months Ended Three Months Ended September 30, 2017 September 30, 2016 Post- Post- Number Modification Number Modification of Recorded of Recorded Loans Investment Loans Investment Consumer, Accepted short fall from sale of residential real estate on a mortgage loan and made unsecured loan to same borrower 0 $ 0 1 $ 25 Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 Post- Post- Number Modification Number Modification of Recorded of Recorded Loans Investment Loans Investment Residential mortgage, Extended maturity with interest rate reduction 0 $ 0 1 $ 102 Commercial and industrial, Extended maturity with interest rate increase 0 0 1 5 Consumer, Accepted short fall from sale of residential real estate on a mortgage loan and made unsecured loan to same borrower 0 0 1 25 Total 0 $ 0 3 $ 132 There were no ts on loans for which modifications considered to be TDRs were entered into within the previous 12 three September 30, 2017 2016. nine September 30 2017 2016, 12 (Balances in Thousands) Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 Number Number of Recorded of Recorded Loans Investment Loans Investment Residential mortgage - first liens 0 $ 0 1 $ 242 Residential mortgage - junior liens 0 0 1 30 Commercial and industrial 0 0 1 5 Consumer 0 0 1 28 Total 0 $ 0 4 $ 305 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) Sept. 30, Dec. 31, 2017 2016 Foreclosed residential real estate $ 640 $ 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) Sept. 30, Dec. 31, 2017 2016 Residential real estate in process of foreclosure $ 1,871 $ 2,738 |