Company Quick10K Filing
First Northern Community Bancorp
Price11.05 EPS1
Shares12 P/E12
MCap136 P/FCF13
Net Debt-136 EBIT17
TEV0 TEV/EBIT0
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-05
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-03-08
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-01
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-08
10-Q 2017-09-30 Filed 2017-11-01
10-Q 2017-06-30 Filed 2017-08-02
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-03-09
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-03-10
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-03-10
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-05-08
10-K 2013-12-31 Filed 2014-03-18
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-08
10-Q 2013-03-31 Filed 2013-05-09
10-K 2012-12-31 Filed 2013-03-18
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-10
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-21
10-Q 2011-09-30 Filed 2011-11-10
10-Q 2011-06-30 Filed 2011-08-15
10-Q 2011-05-12 Filed 2011-05-12
10-K 2011-03-21 Filed 2011-03-22
10-Q 2010-11-12 Filed 2010-11-12
10-Q 2010-08-11 Filed 2010-08-12
10-Q 2010-05-14 Filed 2010-05-14
10-K 2010-03-29 Filed 2010-03-29
8-K 2020-05-09
8-K 2020-04-29
8-K 2020-01-28
8-K 2019-12-31
8-K 2019-09-30
8-K 2019-06-30
8-K 2019-05-17
8-K 2019-03-31
8-K 2018-12-31
8-K 2018-09-30
8-K 2018-06-30
8-K 2018-06-21
8-K 2018-05-17
8-K 2018-03-31
8-K 2018-01-16
8-K 2017-12-31

FNRN 10Q Quarterly Report

Part I - Financial Information
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. - Quantitative and Qualitative Disclosures About Market Risk
Item 4. - Controls and Procedures
Part II - Other Information
Item 1. - Legal Proceedings
Item 1A. - Risk Factors
Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. - Defaults Upon Senior Securities
Item 4. - Mine Safety Disclosures
Item 5. - Other Information
Item 6. - Exhibits
EX-31.1 exhibit31_1.htm
EX-31.2 exhibit31_2.htm
EX-32.1 exhibit32_1.htm
EX-32.2 exhibit32_2.htm

First Northern Community Bancorp Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

10-Q 1 form10q.htm FIRST NORTHERN COMMUNITY BANCORP FORM 10-Q  
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549
 
 
FORM 10-Q
 
(Mark one)
 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended March 31, 2020
 
OR
 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______________ to _______________
 
Commission File Number 000-30707
 
FIRST NORTHERN COMMUNITY BANCORP
(Exact name of registrant as specified in its charter)
 
California
 
68-0450397
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
 
195 N. First Street, Dixon, California
 
95620
(Address of principal executive offices)
 
(Zip Code)
 
707-678-3041
(Registrant’s telephone number including area code)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
 
Yes ☑
No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 
Yes ☑
No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ☐
Accelerated filer ☑
Non-accelerated filer  ☐
Smaller reporting company ☑
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes ☐
No ☑
 
The number of shares of Common Stock outstanding as of May 1, 2020 was 12,968,567.
1

FIRST NORTHERN COMMUNITY BANCORP
 
INDEX
 
 
Page
PART I – Financial Information
 
   
ITEM I. – Financial Statements (Unaudited)
3
   
Condensed Consolidated Balance Sheets (Unaudited)
3
   
Condensed Consolidated Statements of Income (Unaudited)
4
   
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
5
   
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)
6
   
Condensed Consolidated Statements of Cash Flows (Unaudited)
7
   
Notes to Condensed Consolidated Financial Statements
8
   
ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
30
   
ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
46
   
ITEM 4. – CONTROLS AND PROCEDURES
46
   
PART II – OTHER INFORMATION
46
   
ITEM 1. – LEGAL PROCEEDINGS
46
   
ITEM 1A. – RISK FACTORS
46
   
ITEM 2. – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
53
   
ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
53
   
ITEM 4. – MINE SAFETY DISCLOSURES
53
   
ITEM 5. – OTHER INFORMATION
53
   
ITEM 6. – EXHIBITS
53
   
SIGNATURES
54
 
2

PART I – FINANCIAL INFORMATION
 
FIRST NORTHERN COMMUNITY BANCORP
 
ITEM I.    – FINANCIAL STATEMENTS (UNAUDITED)
 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
(in thousands, except share amounts)
 
March 31, 2020
   
December 31, 2019
 
 
           
Assets
           
 
           
Cash and cash equivalents
 
$
143,861
   
$
111,493
 
Certificates of deposit
   
24,745
     
14,700
 
Investment securities – available-for-sale
   
354,950
     
342,897
 
Loans, net of allowance for loan losses of $12,869 at March 31, 2020 and $12,356 at December 31, 2019
   
758,258
     
768,873
 
Loans held-for-sale
   
6,464
     
4,130
 
Stock in Federal Home Loan Bank and other equity securities, at cost
   
6,574
     
6,574
 
Premises and equipment, net
   
6,404
     
6,594
 
Interest receivable and other assets
   
39,940
     
37,330
 
 
               
Total Assets
 
$
1,341,196
   
$
1,292,591
 
 
               
Liabilities and Stockholders’ Equity
               
 
               
Liabilities:
               
 
               
Demand deposits
 
$
452,662
   
$
423,095
 
Interest-bearing transaction deposits
   
327,649
     
317,681
 
Savings and MMDA's
   
351,172
     
344,415
 
Time, $250,000 or less
   
36,978
     
37,564
 
Time, over $250,000
   
13,569
     
15,877
 
Total deposits
   
1,182,030
     
1,138,632
 
 
               
Interest payable and other liabilities
   
18,373
     
21,044
 
 
               
Total Liabilities
   
1,200,403
     
1,159,676
 
 
Commitments and contingencies
 
               
Stockholders' Equity:
               
Common stock, no par value; 16,000,000 shares authorized; 12,968,567 shares issued and outstanding at March 31, 2020 and 12,919,132 shares issued and outstanding at December 31, 2019
   
100,673
     
100,187
 
Additional paid-in capital
   
977
     
977
 
Retained earnings
   
33,940
     
31,617
 
Accumulated other comprehensive income, net
   
5,203
     
134
 
Total Stockholders’ Equity
   
140,793
     
132,915
 
 
               
Total Liabilities and Stockholders’ Equity
 
$
1,341,196
   
$
1,292,591
 
 
See notes to unaudited condensed consolidated financial statements.

3

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
(in thousands, except per share amounts)
 
Three months ended
March 31, 2020
   
Three months ended
March 31, 2019
 
Interest and dividend income:
           
Loans
 
$
9,235
   
$
9,612
 
Due from banks interest bearing accounts
   
533
     
641
 
Investment securities
               
Taxable
   
1,757
     
1,633
 
Non-taxable
   
100
     
50
 
Other earning assets
   
124
     
115
 
Total interest and dividend income
   
11,749
     
12,051
 
Interest expense:
               
Deposits
   
518
     
371
 
Total interest expense
   
518
     
371
 
Net interest income
   
11,231
     
11,680
 
Provision for loan losses
   
650
     
 
Net interest income after provision for loan losses
   
10,581
     
11,680
 
Non-interest income:
               
Service charges on deposit accounts
   
436
     
480
 
Gains on sales of loans held-for-sale
   
164
     
115
 
Investment and brokerage services income
   
158
     
149
 
Mortgage brokerage income
   
35
     
59
 
Loan servicing income
   
123
     
90
 
Debit card income
   
500
     
491
 
Gains on sales/calls of available-for-sale securities
   
38
     
 
Other income
   
195
     
475
 
Total non-interest income
   
1,649
     
1,859
 
Non-interest expenses:
               
Salaries and employee benefits
   
5,752
     
5,372
 
Occupancy and equipment
   
895
     
654
 
Data processing
   
615
     
603
 
Stationery and supplies
   
79
     
62
 
Advertising
   
70
     
68
 
Directors’ fees
   
44
     
45
 
Other real estate owned expense
   
     
56
 
Other expense
   
1,115
     
1,158
 
Total non-interest expenses
   
8,570
     
8,018
 
Income before provision for income taxes
   
3,660
     
5,521
 
Provision for income taxes
   
981
     
1,536
 
 
               
Net income
 
$
2,679
   
$
3,985
 
 
               
Basic earnings per common share
 
$
0.21
   
$
0.31
 
Diluted earnings per common share
 
$
0.21
   
$
0.31
 

See notes to unaudited condensed consolidated financial statements.

4

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)
 
Three months ended
March 31, 2020
   
Three months ended
March 31, 2019
 
Net income
 
$
2,679
   
$
3,985
 
Other comprehensive income, net of tax:
               
Unrealized holding gains on securities:
               
Unrealized holding gains arising during the period, net of tax effect of $2,055 and $595 for the three-month periods ended March 31, 2020 and March 31, 2019, respectively
   
5,096
     
1,478
 
Less: reclassification adjustment due to gains realized on sales of securities, net of tax effect of $(11) and $0 for the three-month periods ended March 31, 2020 and March 31, 2019, respectively
   
(27
)
   
 
Other comprehensive income
 
$
5,069
   
$
1,478
 
Comprehensive income
 
$
7,748
   
$
5,463
 

See notes to unaudited condensed consolidated financial statements.

5

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share data)
 
 
Common Stock
                     
 
 
Shares
   
Amounts
   
Additional
Paid-in
Capital
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Total
 
 
                                   
Balance at December 31, 2018
   
12,253,812
   
$
92,618
   
$
977
   
$
23,902
   
$
(5,036
)
 
$
112,461
 
Net income
                           
3,985
             
3,985
 
Other comprehensive income, net of tax
                                   
1,478
     
1,478
 
Stock dividend adjustment
   
1,401
     
330
             
(330
)
           
 
Cash in lieu of fractional shares
   
(116
)
                   
(8
)
           
(8
)
Stock-based compensation
           
111
                             
111
 
Common shares issued related to restricted stock grants
   
40,258
     
                             
 
Balance at March 31, 2019
   
12,295,355
   
$
93,059
   
$
977
   
$
27,549
   
$
(3,558
)
 
$
118,027
 
                                                 
Balance at December 31, 2019
   
12,919,132
    $
100,187
    $
977
     $
31,617
     $
134
     $
132,915
 
Net income
                           
2,679
             
2,679
 
Other comprehensive income, net of tax
                                   
5,069
     
5,069
 
Stock dividend adjustment
   
1,310
     
348
             
(348
)
           
 
Cash in lieu of fractional shares
   
(166
)
                   
(8
)
           
(8
)
Stock-based compensation
           
134
                             
134
 
Common shares issued related to restricted stock grants, net of reversals
   
38,224
     
                             
 
Stock options exercised, net
   
10,067
     
4
                             
4
 
Balance at March 31, 2020
   
12,968,567
   
$
100,673
   
$
977
   
$
33,940
   
$
5,203
   
$
140,793
 

See notes to unaudited condensed consolidated financial statements.

6

FIRST NORTHERN COMMUNITY BANCORP
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
 
(in thousands)
 
 
 
Three months ended
March 31, 2020
   
Three months ended
March 31, 2019
 
Cash Flows From Operating Activities
           
Net income
 
$
2,679
   
$
3,985
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation
   
239
     
168
 
Accretion and amortization of investment securities premiums and discounts, net
   
404
     
425
 
Increase (decrease) in deferred loan origination fees and costs, net
   
22
     
(23
)
Provision for loan losses
   
650
     
 
Stock-based compensation
   
134
     
111
 
Gain on sale of fixed assets
   
     
(281
)
Gains on sales/calls of available-for-sale securities
   
(38
)
   
 
Amortization of operating lease right-of-use asset
   
254
     
192
 
Gain on sales of loans held-for-sale
   
(164
)
   
(115
)
Proceeds from sales of loans held-for-sale
   
7,870
     
6,173
 
Originations of loans held-for-sale
   
(10,040
)
   
(6,170
)
Changes in assets and liabilities:
               
(Increase) decrease in interest receivable and other assets
   
(4,908
)
   
789
 
Net decrease in interest payable and other liabilities
   
(2,671
)
   
(2,259
)
Net cash (used in) provided by operating activities
   
(5,569
)
   
2,995
 
 
               
Cash Flows From Investing Activities
               
Proceeds from calls or maturities of available-for-sale securities
   
9,700
     
17,000
 
Proceeds from sales of available-for-sale securities
   
10,344
     
 
Principal repayments on available-for-sale securities
   
14,333
     
11,564
 
Purchase of available-for-sale securities
   
(39,683
)
   
(10,928
)
Net increase in certificates of deposit
   
(10,045
)
   
(2,450
)
Net decrease in loans
   
9,943
     
31,811
 
Net (purchases) sales/disposals of premises and equipment
   
(49
)
   
462
 
Net cash (used in) provided by investing activities
   
(5,457
)
   
47,459
 
 
               
Cash Flows From Financing Activities
               
Net increase (decrease) in deposits
   
43,398
     
(38,384
)
Cash dividends paid in lieu of fractional shares
   
(8
)
   
(8
)
Stock options exercised
   
4
     
 
Net cash provided by (used in) financing activities
   
43,394
     
(38,392
)
 
               
Net increase in Cash and Cash Equivalents
   
32,368
     
12,062
 
Cash and Cash Equivalents, beginning of period
   
111,493
     
116,032
 
Cash and Cash Equivalents, end of period
 
$
143,861
   
$
128,094
 
 
               
Supplemental Disclosures of Cash Flow Information:
               
Cash paid during the period for:
               
Interest
 
$
517
   
$
355
 
Supplemental disclosures of non-cash investing and financing activities:
               
Stock dividend distributed
 
$
7,016
   
$
6,610
 
Unrealized holding gains on available for sale securities, net of taxes
 
$
5,069
   
$
1,478
 
 
See notes to unaudited condensed consolidated financial statements.
7


FIRST NORTHERN COMMUNITY BANCORP
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
March 31, 2020 and 2019 and December 31, 2019
 
1.
BASIS OF PRESENTATION
 
The accompanying unaudited condensed consolidated financial statements of First Northern Community Bancorp (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Articles 9 and 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  The results of operations for any interim period are not necessarily indicative of results expected for the full year.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission.  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenue and expense during the reporting period.  Actual results could differ from those estimates.  All material intercompany balances and transactions have been eliminated in consolidation.


2.
ACCOUNTING POLICIES

The most significant accounting policies followed by the Company are presented in Note 1 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, Management has identified the allowance for loan losses accounting to be the accounting area requiring the most subjective or complex judgments, and as such the accounting area that could be most subject to revision as new information becomes available. A discussion of the factors affecting accounting for the allowance for loan losses is included in the “Asset Quality” and “Allowance for Loan Losses” discussions below. Certain amounts in prior periods have been reclassified to conform to the current presentation.
Application of these principles requires the Company to make certain estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments. Certain accounting policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment writedown or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available.

Recently Issued Accounting Pronouncements:

In March 2020, the FASB issued ASU 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842).  This ASU adds an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 on loan losses to the FASB Codification Topic 326. This ASU also updates the SEC section of the Codification for the change in the effective date of Topic 842.  This ASU is effective upon addition to the FASB Codification.  The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2019.  ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) is effective on January 1, 2023 for smaller reporting companies with less than $250 million in public float as defined in the SEC's rules.  While the Company is currently unable to reasonably estimate the impact of adopting ASU 2016-13, it expects that the impact of adoption will be significantly influenced by the composition, characteristics and quality of the Company’s loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date.

8

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments.  The amendments in ASU 2020-03, make narrow-scope improvements to various aspects of the financial instruments guidance, including the current expected credit losses (CECL) standard issued in 2016.  The ASU is part of the FASB’s ongoing Codification improvement project aimed at clarifying specific areas of accounting guidance to help avoid unintended application. The items addressed in that project generally are not expected to have a significant effect on current accounting practice or create a significant administrative cost for most entities.  Effective dates for each amendment vary.  The Company does not expect the adoption of this update to have a significant impact on its financial statements.

9

3.  INVESTMENT SECURITIES
 
The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at March 31, 2020 are summarized as follows:
 
(in thousands)
 
Amortized
cost
   
Unrealized
gains
   
Unrealized
losses
   
Estimated
fair value
 
 
                       
Investment securities available-for-sale:
                       
U.S. Treasury Securities
 
$
37,702
   
$
1,422
   
$
   
$
39,124
 
Securities of U.S. government agencies and corporations
   
50,410
     
1,364
     
(3
)
   
51,771
 
Obligations of states and political subdivisions
   
26,713
     
934
     
(2
)
   
27,645
 
Collateralized mortgage obligations
   
88,390
     
2,402
     
     
90,792
 
Mortgage-backed securities
   
142,431
     
3,206
     
(19
)
   
145,618
 
Total debt securities
 
$
345,646
   
$
9,328
   
$
(24
)
 
$
354,950
 

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2019 are summarized as follows:
 
(in thousands)
 
Amortized
cost
   
Unrealized
gains
   
Unrealized
losses
   
Estimated
fair value
 
 
                       
Investment securities available-for-sale:
                       
U.S. Treasury Securities
 
$
42,667
   
$
601
   
$
(13
)
 
$
43,255
 
Securities of U.S. government agencies and corporations
   
53,525
     
433
     
(46
)
   
53,912
 
Obligations of states and political subdivisions
   
26,311
     
749
     
(29
)
   
27,031
 
Collateralized mortgage obligations
   
79,470
     
349
     
(399
)
   
79,420
 
Mortgage-backed securities
   
138,733
     
999
     
(453
)
   
139,279
 
Total debt securities
 
$
340,706
   
$
3,131
   
$
(940
)
 
$
342,897
 
 
The Company had $20,529,000 and $17,000,000 proceeds from sales, calls and maturities of available-for-sale securities for the three months ended March 31, 2020 and March 31, 2019, respectively.  Gross realized gains on sales/calls of available-for-sale securities were $84,000 and $0 the three months ended March 31, 2020 and March 31, 2019, respectively.  Gross realized losses on sales of available-for-sale securities were $46,000 and $0 for the three months ended March 31, 2020 and March 31, 2019, respectively.

The amortized cost and estimated market value of debt and other securities at March 31, 2020, by contractual and expected maturity, are shown in the following table:
 
(in thousands)
 
Amortized
cost
   
Estimated
fair value
 
 
           
Maturity in years:
           
Due in one year or less
 
$
31,232
   
$
31,461
 
Due after one year through five years
   
57,494
     
59,843
 
Due after five years through ten years
   
14,087
     
14,868
 
Due after ten years
   
12,012
     
12,368
 
Subtotal 
   
114,825
     
118,540
 
MBS & CMO
   
230,821
     
236,410
 
Total
 
$
345,646
   
$
354,950
 


Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  In addition, factors such as prepayments and interest rates may affect the yield on the carrying value of mortgage-related securities.

10

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of March 31, 2020, follows:
 
 
Less than 12 months
 
12 months or more
 
Total
 
(in thousands)
Fair Value
 
Unrealized
losses
 
Fair Value
 
Unrealized
losses
 
Fair Value
 
Unrealized
losses
 
 
                       
Securities of U.S. government agencies and corporations
 
$
1,498
   
$
(3
)
 
$
   
$
   
$
1,498
   
$
(3
)
Obligations of states and political subdivisions
   
1,068
     
(2
)
   
     
     
1,068
     
(2
)
Mortgage-backed securities
   
     
     
4,230
     
(19
)
   
4,230
     
(19
)
Total
 
$
2,566
   
$
(5
)
 
$
4,230
   
$
(19
)
 
$
6,796
   
$
(24
)
 
No decline in value was considered “other-than-temporary” during the first three months of 2020.  Five securities, all considered investment grade, which had a fair value of $2,566,000 and a total unrealized loss of $5,000 have been in an unrealized loss position for less than twelve months as of March 31, 2020.  Five securities, all considered investment grade, which had a fair value of $4,230,000 and a total unrealized loss of $19,000 have been in an unrealized loss position for more than twelve months as of March 31, 2020.  The unrealized losses on the Company's investment securities were caused by market conditions for these types of investments, particularly changes in risk-free interest rates.  The Company does not intend to sell the securities and has concluded it is not more likely than not that we will be required to sell these securities prior to recovery of their anticipated cost basis. Therefore, the Company does not consider these investments to be other than temporarily impaired as of March 31, 2020.

The fair value of investment securities could decline in the future if the general economy deteriorates, inflation increases, credit ratings decline, the issuer's financial condition deteriorates, or the liquidity for securities declines. As a result, other than temporary impairments may occur in the future.  The coronavirus pandemic and the impact of governmental health measures in response thereto may increase the likelihood of such other than temporary impairments.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2019, follows:
 
 
 
Less than 12 months
   
12 months or more
   
Total
 
(in thousands)
 
Fair Value
   
Unrealized
losses
   
Fair Value
   
Unrealized
losses
   
Fair Value
   
Unrealized
losses
 
 
                                   
U.S. Treasury Securities
 
$
10,113
   
$
(8
)
 
$
2,015
   
$
(5
)
 
$
12,128
   
$
(13
)
Securities of U.S. government agencies and corporations
   
13,187
     
(44
)
   
1,998
     
(2
)
   
15,185
     
(46
)
Obligations of states and political subdivisions
   
4,645
     
(29
)
   
     
     
4,645
     
(29
)
Collateralized Mortgage obligations
   
21,763
     
(129
)
   
21,132
     
(270
)
   
42,895
     
(399
)
Mortgage-backed securities
   
11,970
     
(28
)
   
44,433
     
(425
)
   
56,403
     
(453
)
Total
 
$
61,678
   
$
(238
)
 
$
69,578
   
$
(702
)
 
$
131,256
   
$
(940
)
 
Investment securities carried at $39,091,000 and $37,943,000 at March 31, 2020 and December 31, 2019, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.
11


4.  LOANS

The composition of the Company’s loan portfolio, by loan class, as of March 31, 2020 and December 31, 2019 was as follows:
 
($ in thousands)
 
March 31, 2020
   
December 31, 2019
 
 
           
Commercial
 
$
113,346
   
$
106,140
 
Commercial Real Estate
   
452,611
     
451,774
 
Agriculture
   
94,303
     
115,751
 
Residential Mortgage
   
66,184
     
64,943
 
Residential Construction
   
19,086
     
15,212
 
Consumer
   
25,035
     
26,825
 
 
   
770,565
     
780,645
 
Allowance for loan losses
   
(12,869
)
   
(12,356
)
Net deferred origination fees and costs
   
562
     
584
 
Loans, net
 
$
758,258
   
$
768,873
 

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans and delinquencies, with particular attention to portfolio dynamics and loan mix.  The Company strives to identify loans experiencing difficulty early enough to correct the problems, to record charge-offs promptly based on realistic assessments of collectability and current collateral values and to maintain an adequate allowance for loan losses at all times.   Asset quality reviews of loans and other non-performing assets are administered using credit risk rating standards and criteria similar to those employed by state and federal banking regulatory agencies.

Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses.  These loans are generally secured by the receivables, equipment, and other real property of the business and are susceptible to the related risks described above.  Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower.  Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.  Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied.  Loans secured by owner-occupied real estate are primarily susceptible to changes in the market conditions of the related business.  This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles. These same risks apply to Commercial loans whether secured by equipment, receivables or other personal property or unsecured.  Problem commercial real estate loans are generally identified by periodic review of financial information that may include financial statements, tax returns, payment history of the borrower, and site inspections.  Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.  Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral.  When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default.  Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resulting over-supply of space.  Losses are dependent on the value of underlying collateral at the time of default.  Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs.  Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means.

Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock.  Repayment is primarily from the sale of an agricultural product or service.  Agricultural loans are generally secured by inventory, receivables, equipment, and other real property.  Agricultural loans primarily are susceptible to changes in market demand for specific commodities.  This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as adverse weather conditions such as drought or floods.  Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections.  Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.

12

Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks; non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfalls in collateral value.  In general, non-payment is usually due to loss of employment and follows general economic trends in the economy, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts.

Construction loans, whether owner-occupied or non-owner occupied residential development loans, are not only susceptible to the related risks described above but the added risks of construction, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion.  Losses are primarily related to underlying collateral value and changes therein as described above.  Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower.  Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral.  Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Consumer loans, whether unsecured or secured, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfall in collateral value.  In general, non-payment is usually due to loss of employment and will follow general economic trends in the economy, particularly the upward movements in the unemployment rate, loss of collateral value, and demand shifts.  

Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.  Collateral valuations are obtained at origination of the credit and periodically thereafter (generally annually but may be more frequent depending on the collateral type), once repayment is questionable, and the loan has been deemed classified.

As of March 31, 2020, approximately 15% in principal amount of the Company's loans were for general commercial uses, including professional, retail and small businesses.  Approximately 59% in principal amount of the Company’s loans were secured by commercial real estate, consisting primarily of loans secured by commercial properties and construction and land development loans.  Approximately 12% in principal amount of the Company's loans were for agriculture, approximately 9% in principal amount of the Company’s loans were residential mortgage loans, approximately 2% in principal amount of the Company’s loans were residential construction loans and approximately 3% in principal amount of the Company’s loans were consumer loans.

Once a loan becomes delinquent or repayment becomes questionable, a Company collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral or a principal payment.  If this is not forthcoming and payment of principal and interest in accordance with the contractual terms of the loan agreement becomes unlikely, the Company will consider the loan to be impaired and will estimate its probable loss, using the present value of future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of the collateral if the loan is collateral dependent.  For collateral dependent loans, the Company will utilize a recent valuation of the underlying collateral less estimated costs of sale, and charge-off the loan down to the estimated net realizable amount.  Depending on the length of time until final collection, the Company may periodically revalue the estimated loss and take additional charge-offs or specific reserves as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values.  Final charge-offs or recoveries are taken when the collateral is liquidated and the actual loss is confirmed.  Unpaid balances on loans after or during collection and liquidation may also be pursued through legal action and attachment of wages or judgment liens on the borrower's other assets.

At March 31, 2020 and December 31, 2019, all loans were pledged under a blanket collateral lien to secure actual and potential borrowings from the Federal Home Loan Bank (“FHLB”).

13

Non-accrual and Past Due Loans

The Company’s loans by delinquency and non-accrual status, as of March 31, 2020 and December 31, 2019, were as follows:
   
($ in thousands)
 
Current & Accruing
   
30-59 Days Past Due & Accruing
   
60-89 Days Past Due & Accruing
   
90 Days or
more Past Due & Accruing
   
Nonaccrual
   
Total Loans
 
March 31, 2020
                                   
Commercial
 
$
112,774
   
$
274
   
$
   
$
40
   
$
258
   
$
113,346
 
Commercial Real Estate
   
451,868
     
     
234
     
     
509
     
452,611
 
Agriculture
   
91,503
     
     
2,800
     
     
     
94,303
 
Residential Mortgage
   
65,536
     
477
     
     
     
171
     
66,184
 
Residential Construction
   
19,086
     
     
     
     
     
19,086
 
Consumer
   
24,637
     
47
     
     
100
     
251
     
25,035
 
Total
 
$
765,404
   
$
798
   
$
3,034
   
$
140
   
$
1,189
   
$
770,565
 
 
                                               
December 31, 2019
                                               
Commercial
 
$
105,741
   
$
   
$
133
   
$
   
$
266
   
$
106,140
 
Commercial Real Estate
   
451,215
     
     
93
     
     
466
     
451,774
 
Agriculture
   
115,751
     
     
     
     
     
115,751
 
Residential Mortgage
   
64,771
     
     
     
     
172
     
64,943
 
Residential Construction
   
15,212
     
     
     
     
     
15,212
 
Consumer
   
26,472
     
100
     
     
     
253
     
26,825
 
Total
 
$
779,162
   
$
100
   
$
226
   
$
   
$
1,157
   
$
780,645
 
 
Non-accrual loans amounted to $1,189,000 at March 31, 2020 and were comprised of three commercial loans totaling $258,000, three commercial real estate loans totaling $509,000, one residential mortgage loan totaling $171,000 and four consumer loans totaling $251,000.  The Company had one commercial loan totaling $40,000 and one consumer loan totaling $100,000 that were 90 days or more past due and still accruing at March 31, 2020.  Non-accrual loans amounted to $1,157,000 at December 31, 2019 and were comprised of three commercial loans totaling $266,000, two commercial real estate loans totaling $466,000, one residential mortgage loan totaling $172,000 and four consumer loans totaling $253,000.  All non-accrual loans are measured for impairment based upon the present value of future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of collateral, if the loan is collateral dependent.  If the measurement of the non-accrual loan is less than the recorded investment in the loan, an impairment is recognized through the establishment of a specific reserve sufficient to cover expected losses and/or a charge-off against the allowance for loan losses. If the loan is considered to be collateral dependent, it is generally the Company's policy to charge-off the portion of any non-accrual loan that the Company does not expect to collect by writing the loan down to the estimated net realizable value of the underlying collateral.  There were no commitments to lend additional funds to borrowers whose loans were on non-accrual status at March 31, 2020.
 
14

Impaired Loans
 
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments.  Loans to be considered for impairment include non-accrual loans, troubled debt restructurings and loans with a risk rating of 5 (special mention) or worse and an aggregate exposure of $500,000 or more.  Once identified, impaired loans are measured individually for impairment using one of three methods:  present value of expected cash flows discounted at the loan's effective interest rate; the loan's observable market price; or fair value of collateral if the loan is collateral dependent.  In general, any portion of the recorded investment in a collateral dependent loan in excess of the fair value of the collateral that can be identified as uncollectible, and is, therefore, deemed a confirmed loss, is promptly charged-off against the allowance for loan losses.

Impaired loans, segregated by loan class, as of March 31, 2020 and December 31, 2019 were as follows:
 
($ in thousands)
 
Unpaid Contractual
Principal Balance
   
Recorded
Investment with no
Allowance
   
Recorded
Investment with
Allowance
   
Total Recorded
Investment
   
Related Allowance
 
March 31, 2020
                             
Commercial
 
$
1,524
   
$
258
   
$
1,204
   
$
1,462
   
$
21
 
Commercial Real Estate
   
783
     
509
     
247
     
756
     
19
 
Agriculture
   
     
     
     
     
 
Residential Mortgage
   
1,144
     
171
     
904
     
1,075
     
168
 
Residential Construction
   
713
     
     
681
     
681
     
49
 
Consumer
   
336
     
251
     
79
     
330
     
2
 
Total
 
$
4,500
   
$
1,189
   
$
3,115
   
$
4,304
   
$
259
 
 
                                       
December 31, 2019
                                       
Commercial
 
$
1,694
   
$
266
   
$
1,385
   
$
1,651
   
$
26
 
Commercial Real Estate
   
715
     
466
     
250
     
716
     
19
 
Agriculture
   
     
     
     
     
 
Residential Mortgage
   
1,152
     
172
     
912
     
1,084
     
171
 
Residential Construction
   
724
     
     
691
     
691
     
56
 
Consumer
   
340
     
253
     
80
     
333
     
1
 
Total
 
$
4,625
   
$
1,157
   
$
3,318
   
$
4,475
   
$
273
 
 
The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the three months ended March 31, 2020 and March 31, 2019 was as follows:
 
($ in thousands)
 
Three Months Ended
March 31, 2020
   
Three Months Ended
March 31, 2019
 
 
 
Average
Recorded
Investment
   
Interest
Income
Recognized
   
Average
Recorded
Investment
   
Interest
Income
Recognized
 
Commercial
 
$
1,557
   
$
21
   
$
2,538
   
$
42
 
Commercial Real Estate
   
735
     
4
     
634
     
4
 
Agriculture
   
     
     
4,804
     
 
Residential Mortgage
   
1,079
     
9
     
1,451
     
12
 
Residential Construction
   
686
     
9
     
652
     
9
 
Consumer
   
332
     
1
     
386
     
3
 
Total
 
$
4,389
   
$
44
   
$
10,465
   
$
70
 
 
15

Troubled Debt Restructurings
 
The Company's loan portfolio includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), which are loans on which concessions in terms have been granted because of the borrowers' financial difficulties and, as a result, the Company receives less than the current market-based compensation for the loan.  These concessions may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.  Certain TDRs are placed on non-accrual status at the time of restructure and may be returned to accruing status after considering the borrower's sustained repayment performance for a reasonable period, generally six months.
 
When a loan is modified, it is measured based upon the present value of future cash flows discounted at the contractual interest rate of the original loan agreement, or the fair value of collateral less selling costs if the loan is collateral dependent.  If the value of the modified loan is less than the recorded investment in the loan, impairment is recognized through a specific allowance or a charge-off of the loan.
 
The Company had $3,202,000 and $3,413,000 in TDR loans as of March 31, 2020 and December 31, 2019, respectively.  Specific reserves for TDR loans totaled $259,000 and $273,000 as of March 31, 2020 and December 31, 2019, respectively.  TDR loans performing in compliance with modified terms totaled $3,115,000 and $3,318,000 as of March 31, 2020 and December 31, 2019, respectively.  There were no commitments to advance additional funds on existing TDR loans as of March 31, 2020.

There were no loans modified as TDRs during the three months ended March 31, 2020.

Loans modified as TDRs during the three months ended March 31, 2019 were as follows:

 
Three Months Ended March 31, 2019
 
 
Number of Contracts
 
Pre-modification outstanding recorded investment
 
Post-modification outstanding recorded investment
 
Residential Construction
   
2
   
$
189
   
$
189
 
Total
   
2
   
$
189
   
$
189
 


  
Loan modifications generally involve reductions in the interest rate, payment extensions, forgiveness of principal, or forbearance.  There were no loans modified as a TDR within the previous twelve months and for which there was a payment default during the three months ended March 31, 2020 and March 31, 2019.

On March 22, 2020, the federal bank regulatory agencies issued joint guidance advising that the agencies have confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to relief, are not TDRs.
16

Credit Quality Indicators
 
All loans are rated using the credit risk ratings and criteria adopted by the Company.  Risk ratings are adjusted as future circumstances warrant.  All credits risk rated 1, 2, 3 or 4 equate to a Pass as indicated by Federal and State bank regulatory agencies; a 5 equates to a Special Mention; a 6 equates to Substandard; a 7 equates to Doubtful; and an 8 equates to a Loss.  For the definitions of each risk rating, see Note 4 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.
 
The following table presents the risk ratings by loan class as of March 31, 2020 and December 31, 2019:
 
($ in thousands)
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Loss
   
Total
 
March 31, 2020
                                   
Commercial
 
$
109,462
   
$
3,298
   
$
586
   
$
   
$
   
$
113,346
 
Commercial Real Estate
   
429,125
     
19,101
     
4,385
     
     
     
452,611
 
Agriculture
   
82,755
     
     
11,548
     
     
     
94,303
 
Residential Mortgage
   
65,847
     
     
337
     
     
     
66,184
 
Residential Construction
   
19,086
     
     
     
     
     
19,086
 
Consumer
   
24,147
     
     
888
     
     
     
25,035
 
Total
 
$
730,422
   
$
22,399
   
$
17,744
   
$
   
$
   
$
770,565
 
 
                                               
December 31, 2019
                                               
Commercial
 
$
104,944
   
$
428
   
$
768
   
$
   
$
   
$
106,140
 
Commercial Real Estate
   
427,991
     
17,739
     
6,044
     
     
     
451,774
 
Agriculture
   
105,573
     
7,823
     
2,355
     
     
     
115,751
 
Residential Mortgage
   
64,596
     
     
347
     
     
     
64,943
 
Residential Construction
   
15,212
     
     
     
     
     
15,212
 
Consumer
   
25,933
     
500
     
392
     
     
     
26,825
 
Total
 
$
744,249
   
$
26,490
   
$
9,906
   
$
   
$
   
$
780,645
 
 
17

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses and the amount allocated to individually and collectively evaluated for impairment by loan class for the three months ended March 31, 2020 and March 31, 2019:

Three months ended March 31, 2020
 
($ in thousands)
 
Commercial
   
Commercial
Real Estate
   
Agriculture
   
Residential
Mortgage
   
Residential
Construction
   
Consumer
   
Unallocated
   
Total
 
Balance as of December 31, 2019
 
$
2,354
   
$
6,846
   
$
2,054
   
$
466
   
$
201
   
$
236
   
$
199
   
$
12,356
 
Provision for (reversal of) loan losses
   
386
     
560
     
(266
)
   
70
     
59
     
18
     
(177
)
   
650
 
 
                                                               
Charge-offs
   
(145
)
   
     
     
     
     
(9
)
   
     
(154
)
Recoveries
   
11
     
     
     
     
     
6
     
     
17
 
Net charge-offs
   
(134
)
   
     
     
     
     
(3
)
   
     
(137
)
Balance as of March 31, 2020
 
$
2,606
   
$
7,406
   
$
1,788
   
$
536
   
$
260
   
$
251
   
$
22
   
$
12,869
 
Period-end amount allocated to:
                                                               
Loans individually evaluated for impairment
   
21
     
19
     
     
168
     
49
     
2
     
     
259
 
Loans collectively evaluated for impairment
   
2,585
     
7,387
     
1,788
     
368
     
211
     
249
     
22
     
12,610
 
Balance as of March 31, 2020
 
$
2,606
   
$
7,406
   
$
1,788
   
$
536
   
$
260
   
$
251
   
$
22
   
$
12,869
 
 
Three months ended March 31, 2019
 
($ in thousands)
 
Commercial
   
Commercial
Real Estate
   
Agriculture
   
Residential
Mortgage
   
Residential
Construction
   
Consumer
   
Unallocated
   
Total
 
Balance as of December 31, 2018
 
$
3,198
   
$
5,890
   
$
1,632
   
$
643
   
$
318
   
$
279
   
$
862
   
$
12,822
 
Provision for (reversal of) loan losses
   
(568
)
   
496
     
202
     
(197
)
   
(102
)
   
     
169
     
 
 
                                                               
Charge-offs
   
(150
)
   
     
     
     
     
(7
)
   
     
(157
)
Recoveries
   
19
     
     
     
56
     
1
     
5
     
     
81
 
Net charge-offs
   
(131
)
   
     
     
56
     
1
     
(2
)
   
     
(76
)
Balance as of March 31, 2019
 
$
2,499
   
$
6,386
   
$
1,834
   
$
502
   
$
217
   
$
277
   
$
1,031
   
$
12,746
 
Period-end amount allocated to:
                                                               
Loans individually evaluated for impairment
   
37
     
21
     
     
267
     
48
     
2
     
     
375
 
Loans collectively evaluated for impairment
   
2,462
     
6,365
     
1,834
     
235
     
169
     
275
     
1,031
     
12,371
 
Balance as of March 31, 2019
 
$
2,499
   
$
6,386
   
$
1,834
   
$
502
   
$
217
   
$
277
   
$
1,031
   
$
12,746
 
 
18

The following table details activity in the allowance for loan losses and the amount allocated to loans individually and collectively evaluated for impairment by loan class as of and for the period ended December 31, 2019.
 
Year ended December 31, 2019
 
($ in thousands)
 
Commercial
   
Commercial
Real Estate
   
Agriculture
   
Residential
Mortgage
   
Residential
Construction
   
Consumer
   
Unallocated
   
Total
 
Balance as of December 31, 2018
 
$
3,198
   
$
5,890
   
$
1,632
   
$
643
   
$
318
   
$
279
   
$
862
   
$
12,822
 
Provision for (reversal of) loan losses
   
(415
)
   
956
     
520
     
(251
)
   
(138
)
   
(9
)
   
(663
)
   
 
 
                                                               
Charge-offs
   
(638
)
   
     
(98
)
   
     
     
(43
)
   
     
(779
)
Recoveries
   
209
     
     
     
74
     
21
     
9
     
     
313
 
Net charge-offs
   
(429
)
   
     
(98
)
   
74
     
21
     
(34
)
   
     
(466
)
Ending Balance
   
2,354
     
6,846
     
2,054
     
466
     
201
     
236
     
199
     
12,356
 
Period-end amount allocated to:
                                                               
Loans individually evaluated for impairment
   
26
     
19
     
     
171
     
56
     
1
     
     
273
 
Loans collectively evaluated for impairment
   
2,328
     
6,827
     
2,054
     
295
     
145
     
235
     
199
     
12,083
 
Balance as of December 31, 2019
 
$
2,354
   
$
6,846
   
$
2,054
   
$
466
   
$
201
   
$
236
   
$
199
   
$
12,356
 
 
The Company’s investment in loans as of March 31, 2020, March 31, 2019, and December 31, 2019 related to each balance in the allowance for loan losses by loan class and disaggregated on the basis of the Company’s impairment methodology was as follows:
 
($ in thousands)
 
Commercial
   
Commercial
Real Estate
   
Agriculture
   
Residential
Mortgage
   
Residential
Construction
   
Consumer
   
Total
 
March 31, 2020
 
Loans individually evaluated for impairment
 
$
1,462
   
$
756
   
$
   
$
1,075
   
$
681
   
$
330
   
$
4,304
 
Loans collectively evaluated for impairment
   
111,884
     
451,855
     
94,303
     
65,109
     
18,405
     
24,705
     
766,261
 
Ending Balance
 
$
113,346
   
$
452,611
   
$
94,303
   
$
66,184
   
$
19,086
   
$
25,035
   
$
770,565
 
 
                                                       
March 31, 2019
 
Loans individually evaluated for impairment
 
$
2,174
   
$
625
   
$
4,779
   
$
1,351
   
$
743
   
$
383
   
$
10,055
 
Loans collectively evaluated for impairment
   
111,401
     
418,915
     
104,970
     
50,331
     
16,883
     
31,052
     
733,552
 
Ending Balance
 
$
113,575
   
$
419,540
   
$
109,749
   
$
51,682
   
$
17,626
   
$
31,435
   
$
743,607
 
 
                                                       
December 31, 2019
 
Loans individually evaluated for impairment
 
$
1,651
   
$
716
   
$
   
$
1,084
   
$
691
   
$
333
   
$
4,475
 
Loans collectively evaluated for impairment
   
104,489
     
451,058
     
115,751
     
63,859
     
14,521
     
26,492
     
776,170
 
Ending Balance
 
$
106,140