ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A PURCHASE

The acquired loans detailed in the tables below are included in NOTE 4. LOANS AND ALLOWANCE, in the Notes to Consolidated Condensed Financial Statements of this Quarterly Report on Form 10-Q. As described in NOTE 4, loans purchased after December 31, 2008 are recorded at the acquisition date fair value, which could result in a fair value discount or premium. Purchased loans with evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments are accounted for under ASC 310-30, Loans Acquired with Deteriorated Credit Quality. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable portion of the fair value discount or premium. The accretable portion of the fair value discount or premium is the difference between the expected cash flows and the net present value of expected cash flows, with such difference accreted into earnings over the term of the loans. All other loans not accounted for under ASC 310-30 are accounted for under ASC 310-20.

The following table includes the outstanding balance and carrying amount of all acquired loans which were included in the Corporation's balance sheet at March 31, 2016, and December 31, 2015.



	March 31, 2016
	Ameriana		C Financial		Community		CFS		SCB		Total
Commercial and industrial loans	$	23,363	$	99	$	7,224	$	50,476	$	4,351	$	85,513
Agricultural production financing and other loans to farmers					2,472				1,263		3,735
Real estate loans:
Construction	30,414		6,928		9,681		862				47,885
Commercial and farmland	131,371		25,729		47,190		175,692		12,494		392,476
Residential	116,116		52,720		19,212		113,633		5,645		307,326
Home Equity	13,390		8,824		7,445		30,705		13,000		73,364
Individuals' loans for household and other personal expenditures	1,433		8		306		348		43		2,138
Other commercial loans	1,840						70				1,910
Total	$	317,927	$	94,308	$	93,530	$	371,786	$	36,796	$	914,347

Carrying Amount	$	304,615	$	92,097	$	87,523	$	353,882	$	32,390	$	870,507
Allowance					105		50				155
Carrying Amount Net of Allowance	$	304,615	$	92,097	$	87,418	$	353,832	$	32,390	$	870,352



	December 31, 2015
	Ameriana		C Financial		Community		CFS		SCB		Total
Commercial and industrial loans	$	21,888	$	104	$	6,769	$	52,060	$	4,620	$	85,441
Agricultural production financing and other loans to farmers					1,761				1,288		3,049
Real estate loans:
Construction	23,365		6,214		10,436		976				40,991
Commercial and farmland	144,514		27,838		49,997		189,372		13,293		425,014
Residential	123,231		55,856		21,886		118,105		6,063		325,141
Home Equity	14,261		9,144		8,231		31,986		13,431		77,053
Individuals' loans for household and other personal expenditures	1,731		10		461		443		48		2,693
Other commercial loans	1,928						72				2,000
Total	$	330,918	$	99,166	$	99,541	$	393,014	$	38,743	$	961,382

Carrying Amount	$	319,664	$	96,829	$	93,355	$	373,649	$	34,092	$	917,589
Allowance					4		149				153
Carrying Amount Net of Allowance	$	319,664	$	96,829	$	93,351	$	373,500	$	34,092	$	917,436

The outstanding balance and related carrying amount of loans acquired and accounted for under ASC 310-30 as of March 31, 2016 were $84.5 million and $60.1 million, respectively. Additionally, the outstanding balance and related carrying amount of those loans as of December 31, 2015 were $95.8 million and $69.6 million, respectively.

As customer cash flow expectations improve, nonaccretable yield can be reclassified to accretable yield. The accretable yield, or income expected to be collected, and reclassifications from nonaccretable yield, are identified in the table below. The table reflects only purchased loans accounted for under ASC 310-30 and not the entire portfolio of purchased loans.



	Three Months Ended March 31, 2016
	Ameriana			C Financial			Community			CFS			SCB			Total
Beginning balance	$	2,160		$	114		$	1,508		$	1,188		$	642		$	5,612
Additions
Accretion	(40		)	(15		)	(63		)	(1,290		)	(88		)	(1,496		)
Reclassification from nonaccretable				1			11			1,135			36			1,183
Disposals
Ending balance	$	2,120		$	100		$	1,456		$	1,033		$	590		$	5,299



	Three Months Ended March 31, 2015
	Community			CFS			SCB			Total
Beginning balance	$	2,122		$	2,400		$	868		$	5,390
Additions
Accretion	(179		)	(1,341		)	(185		)	(1,705		)
Reclassification from nonaccretable	47			950			135			1,132
Disposals
Ending balance	$	1,990		$	2,009		$	818		$	4,817