The following table presents the activity of the allowance for loan losses by portfolio segment for the three months

ended September 30.



Allowance for Loan Losses:	September 30, 2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	10,244		$	1,595		$	5,258		$	2,407		$	19,504
Provision for loan losses	571			40			1,275			(795		)	1,091
Loans charged -off	(1,029		)	(211		)	(1,484		)	—			(2,724		)
Recoveries	479			154			570			—			1,203
Ending Balance	$	10,265		$	1,578		$	5,619		$	1,612		$	19,074



Allowance for Loan Losses:	September 30, 2015
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	10,931		$	1,760		$	4,678		$	2,492		$	19,861
Provision for loan losses	1,338			158			1,052			(1,498		)	1,050
Loans charged -off	(1,874		)	(220		)	(1,201		)	—			(3,295		)
Recoveries	1,694			196			419			—			2,309
Ending Balance	$	12,089		$	1,894		$	4,948		$	994		$	19,925

The following table presents the activity of the allowance for loan losses by portfolio segment for the nine months

ended September 30.



Allowance for Loan Losses:	September 30, 2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	11,482		$	1,834		$	4,945		$	1,685		$	19,946
Provision for loan losses	(520		)	143			2,811			(73		)	2,361
Loans charged -off	(1,851		)	(682		)	(3,673		)	—			(6,206		)
Recoveries	1,154			283			1,536			—			2,973
Ending Balance	$	10,265		$	1,578		$	5,619		$	1,612		$	19,074



Allowance for Loan Losses:	September 30, 2015
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	10,915		$	1,374		$	4,370		$	2,180		$	18,839
Provision for loan losses	1,505			811			2,520			(1,186		)	3,650
Loans charged -off	(2,482		)	(626		)	(3,489		)	—			(6,597		)
Recoveries	2,151			335			1,547			—			4,033
Ending Balance	$	12,089		$	1,894		$	4,948		$	994		$	19,925

The following table presents the allocation of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method at September 30, 2016 and December 31, 2015.



Allowance for Loan Losses	September 30, 2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	748	$	109	$	—	$	—	$	857
Collectively evaluated for impairment	9,369		1,469		5,619		1,612		18,069
Acquired with deteriorated credit quality	148		—		—		—		148
Ending Balance	$	10,265	$	1,578	$	5,619	$	1,612	$	19,074



Loans:	September 30, 2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	$	10,073	$	571	$	—	$	10,644
Collectively evaluated for impairment	1,076,103		429,413		306,065		1,811,581
Acquired with deteriorated credit quality	3,760		1,489		—		5,249
Ending Balance	$	1,089,936	$	431,473	$	306,065	$	1,827,474



Allowance for Loan Losses:	December 31, 2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	953		206		—		—		1,159
Collectively evaluated for impairment	10,342		1,628		4,945		1,685		18,600
Acquired with deteriorated credit quality	187		—		—		—		187
Ending Balance	$	11,482	$	1,834	$	4,945	$	1,685	$	19,946



Loans	December 31, 2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	8,823		902		—		9,725
Collectively evaluated for impairment	1,037,086		443,224		274,134		1,754,444
Acquired with deteriorated credit quality	4,092		1,529		—		5,621
Ending Balance	$	1,050,001	$	445,655	$	274,134	$	1,769,790

The following tables present loans individually evaluated for impairment by class of loans.



					September 30, 2016
	Unpaid Principal		Recorded		Allowance for Loan Losses		Average Recorded		Interest Income		Cash Basis Interest
(Dollar amounts in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,202	$	1,202	$	—	$	931	$	—	$	—
Farmland	1,560		1,561		—		757		—		—
Non Farm, Non Residential	3,415		3,043		—		3,121		—		—
Agriculture	635		635		—		318		—		—
All Other Commercial	1,395		1,395		—		1,504		—		—
Residential
First Liens	26		26		—		28		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	966		966		226		890		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	701		701		193		1,105		—		—
Agriculture	635		571		329		143		—		—
All Other Commercial	—		—		—		56		—		—
Residential
First Liens	544		544		109		677		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	11,079	$	10,644	$	857	$	9,530	$	—	$	—



					December 31, 2015
	Unpaid Principal		Recorded		Allowance for Loan Losses		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,516	$	1,223	$	—	$	1,796	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	3,202		3,202		—		2,080		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,760		1,760		—		1,175		—		—
Residential
First Liens	29		29		—		18		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	998		998		212		3,463		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,415		1,415		741		3,682		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	225		225		—		483		—		—
Residential
First Liens	873		873		206		460		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	10,018	$	9,725	$	1,159	$	13,157	$	—	$	—



	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016
	Average Recorded		Interest Income		Cash Basis Interest Income		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:

Commercial & Industrial	$	719	$	—	$	—	$	931	$	—	$	—
Farmland	1,513		—		—		757		—		—
Non Farm, Non Residential	3,064		—		—		3,121		—		—
Agriculture	635		—		—		318		—		—
All Other Commercial	1,410		—		—		1,504		—		—
Residential
First Liens	27		—		—		28		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	980		—		—		890		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	915		—		—		1,105		—		—
Agriculture	286		—		—		143		—		—
All Other Commercial	—		—		—		56		—		—
Residential
First Liens	576		—		—		677		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	10,125	$	—	$	—	$	9,530	$	—	$	—



	Three Months Ended September 30, 2015						Nine Months Ended September 30, 2015
	Average Recorded		Interest Income		Cash Basis Interest Income		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	3,290	$	—	$	—	$	1,939	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	3,599		—		—		1,800		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,785		—		—		1,029		—		—
Residential
First Liens	31		—		—		15		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	1,714		—		—		4,080		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,929		—		—		4,248		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	393		—		—		548		—		—
Residential
First Liens	565		—		—		357		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	13,306	$	—	$	—	$	14,016	$	—	$	—

The tables below presents the recorded investment in non-performing loans.



	September 30, 2016
	Loans Past Due Over 90 Day Still		Troubled Debt
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		Nonaccrual
Commercial
Commercial & Industrial	$	—	$	4	$	393	$	3,008
Farmland	—		—		—		1,638
Non Farm, Non Residential	—		54		2,985		1,376
Agriculture	—		—		—		1,755
All Other Commercial	—		—		—		1,514
Residential
First Liens	814		3,632		1,180		5,470
Home Equity	38		—		—		286
Junior Liens	107		—		—		192
Multifamily	—		—		—		—
All Other Residential	—		—		—		98
Consumer
Motor Vehicle	253		70		—		203
All Other Consumer	—		133		497		747
TOTAL	$	1,212	$	3,893	$	5,055	$	16,287



	December 31, 2015
	Loans Past Due Over 90 Day Still		Troubled Debt
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		Nonaccrual
Commercial
Commercial & Industrial	$	—	$	5	$	422	$	3,187
Farmland	—		—		—		219
Non Farm, Non Residential	—		6		3,152		2,545
Agriculture	—		—		—		378
All Other Commercial	—		—		—		1,817
Residential
First Liens	809		4,577		1,034		4,839
Home Equity	10		—		—		320
Junior Liens	45		—		—		211
Multifamily	—		—		—		—
All Other Residential	—		—		—		111
Consumer
Motor Vehicle	148		—		2		213
All Other Consumer	4		—		400		794
TOTAL	$	1,016	$	4,588	$	5,010	$	14,634

There were $216 thousand of loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual at September 30, 2016 and there were $37 thousand at December 31, 2015. There were $239 thousand of covered loans included in non-accrual loans at September 30, 2016 and there were $242 thousand at December 31, 2015. There were no covered loans at September 30, 2016 or December 31, 2015 that were deemed impaired.

Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following tables presents the aging of the recorded investment in loans by past due category and class of loans.



	September 30, 2016
	30-59 Days		60-89 Days		Greater than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	456	$	111	$	1,203	$	1,770	$	468,398	$	470,168
Farmland	23		—		45		68		111,938		112,006
Non Farm, Non Residential	—		5		190		195		197,119		197,314
Agriculture	78		1,031		218		1,327		144,571		145,898
All Other Commercial	109		—		30		139		164,411		164,550
Residential
First Liens	601		1,109		1,976		3,686		274,734		278,420
Home Equity	133		24		119		276		36,427		36,703
Junior Liens	253		54		262		569		35,287		35,856
Multifamily	—		—		—		—		70,517		70,517
All Other Residential	—		—		—		—		9,977		9,977
Consumer
Motor Vehicle	3,315		554		295		4,164		277,488		281,652
All Other Consumer	77		12		6		95		24,318		24,413
TOTAL	$	5,045	$	2,900	$	4,344	$	12,289	$	1,815,185	$	1,827,474



	December 31, 2015
	30-59 Days		60-89 Days		Greater than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	326	$	274	$	1,405	$	2,005	$	476,984	$	478,989
Farmland	135		—		—		135		106,725		106,860
Non Farm, Non Residential	1,824		90		310		2,224		206,844		209,068
Agriculture	65		38		324		427		143,116		143,543
All Other Commercial	25		32		—		57		111,484		111,541
Residential
First Liens	4,960		1,181		1,671		7,812		285,913		293,725
Home Equity	85		23		114		222		37,502		37,724
Junior Liens	179		29		177		385		32,876		33,261
Multifamily	—		—		—		—		70,735		70,735
All Other Residential	15		—		—		15		10,195		10,210
Consumer
Motor Vehicle	3,212		568		181		3,961		247,882		251,843
All Other Consumer	38		10		5		53		22,238		22,291
TOTAL	$	10,864	$	2,245	$	4,187	$	17,296	$	1,752,494	$	1,769,790

During the three and nine months ended September 30, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's.



				2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
July 1,	$	3,453		$	5,033		$	669		$	9,155
Added	—			—			109			109
Charged Off	—			—			(13		)	(13		)
Payments	(71		)	(239		)	(55		)	(365		)
September 30,	$	3,382		$	4,794		$	710		$	8,886



			2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	3,584		5,593		683		9,860
Added	—		123		259		382
Charged Off	—		(181	)	(39	)	(220	)
Payments	(202	)	(741	)	(193	)	(1,136	)
September 30,	3,382		4,794		710		8,886



			2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
July 1,	8,705		5,589		657		14,951
Added	—		16		50		66
Charged Off	—		—		(4	)	(4	)
Payments	(5,081	)	(63	)	(41	)	(5,185	)
September 30,	3,624		5,542		662		9,828



			2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	8,955		5,189		614		14,758
Added	—		668		239		907
Charged Off	—		(62	)	(44	)	(106	)
Payments	(5,331	)	(253	)	(147	)	(5,731	)
September 30,	3,624		5,542		662		9,828

Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modification in 2016 or 2015 resulted in the permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from twelve months to five years. Modifications involving an extension of the maturity date were for periods ranging from twelve months to ten years. Troubled debt restructurings during the three and nine months ended September 30, 2016 and 2015 did not result in any material charge-offs or additional provision expense.

The Corporation has no allocation of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at September 30, 2016 and $36 thousand allocated at September 30, 2015. The Corporation has not committed to lend additional amounts as of September 30, 2016 and 2015 to customers with outstanding loans that are classified as troubled debt restructurings. The charge-offs during the three and nine months ended September 30, 2016 and 2015 were not of any restructurings that had taken place in the previous 12 months. The impact on the provision for new troubled debt restructurings was immaterial.

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial loans, with an outstanding balance greater than $100 thousand. Any consumer loans outstanding to a borrower who had commercial loans analyzed will be similarly risk rated. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and debt service capacity of the borrower or of any pledged collateral. These loans have a well-defined weakness or weaknesses which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the institution will sustain some future loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those graded substandard, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values.

Furthermore, non-homogeneous loans which were not individually analyzed, but are 90+ days past due or on non-accrual are classified as substandard. Loans included in homogeneous pools, such as residential or consumer may be classified as substandard due to 90+ days delinquency, non-accrual status, bankruptcy, or loan restructuring.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 thousand or are included in groups of homogeneous loans. Beginning in July 2016, the Company’s loan rating process no longer includes all loans in a loan relationship. Therefore, certain first lien mortgage loans and consumer loans that were previously rated in a loan relationship have been included in the not rated category as of September 30, 2016. As of September 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans are as follows:



	September 30, 2016
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	419,984	$	17,988	$	23,935	$	450	$	6,481	$	468,838
Farmland	91,237		12,274		6,138		—		233		109,882
Non Farm, Non Residential	172,972		6,523		17,350		—		—		196,845
Agriculture	117,386		13,587		12,526		24		319		143,842
All Other Commercial	150,953		661		10,367		76		1,665		163,722
Residential
First Liens	43,308		1,280		5,746		23		227,234		277,591
Home Equity	357		—		183		—		36,108		36,648
Junior Liens	1,888		86		432		26		33,342		35,774
Multifamily	68,051		2,117		15		—		198		70,381
All Other Residential	—		—		22		—		9,930		9,952
Consumer
Motor Vehicle	—		—		344		—		280,188		280,532
All Other Consumer	—		—		25		—		24,283		24,308
TOTAL	$	1,066,136	$	54,516	$	77,083	$	599	$	619,981	$	1,818,315



	December 31, 2015
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	417,880	$	20,422	$	32,778	$	757	$	5,638	$	477,475
Farmland	93,418		6,387		5,208		—		16		105,029
Non Farm, Non Residential	180,659		8,114		19,857		—		—		208,630
Agriculture	121,244		11,964		8,419		27		170		141,824
All Other Commercial	95,850		2,649		10,887		101		1,535		111,022
Residential
First Liens	96,146		4,594		8,598		699		182,791		292,828
Home Equity	11,701		387		669		10		24,895		37,662
Junior Liens	7,493		86		505		58		25,033		33,175
Multifamily	68,972		1,602		—		—		23		70,597
All Other Residential	886		—		24		—		9,275		10,185
Consumer
Motor Vehicle	10,287		356		534		—		239,543		250,720
All Other Consumer	2,930		77		125		14		19,030		22,176
TOTAL	$	1,107,466	$	56,638	$	87,604	$	1,666	$	507,949	$	1,761,323