The following table presents the activity of the allowance for loan losses by portfolio segment for the years ended December 31, 2016, 2015 and 2014.



Allowance for Loan Losses:				December 31, 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	(755		)	54			3,964			37		3,300
Loans charged -off	(2,659		)	(1,011		)	(5,279		)	—		(8,949		)
Recoveries	1,663			676			2,137			—		4,476
Ending Balance	$	9,731		$	1,553		$	5,767		$	1,722	$	18,773



Allowance for Loan Losses:				December 31, 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	990			874			3,331			(495		)	4,700
Loans charged -off	(2,852		)	(866		)	(4,810		)	—			(8,528		)
Recoveries	2,429			452			2,054			—			4,935
Ending Balance	$	11,482		$	1,834		$	4,945		$	1,685		$	19,946



Allowance for Loan Losses:				December 31, 2014
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	12,450		$	1,585		$	3,650		$	2,383		$	20,068
Provision for loan losses*	1,053			134			3,401			(203		)	4,385
Loans charged -off	(3,522		)	(1,143		)	(4,785		)	—			(9,450		)
Recoveries	934			798			2,104			—			3,836
Ending Balance	$	10,915		$	1,374		$	4,370		$	2,180		$	18,839

* Provision before increase of $687 thousand in 2014 for decrease in FDIC indemnification asset

The following tables present the allocation of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method at December 31, 2016 and 2015:



Allowance for Loan Losses:			December 31, 2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	242	$	89	$	—	$	—	$	331
Collectively evaluated for impairment	9,489		1,464		5,767		1,722		18,442
Acquired with deteriorated credit quality	—		—		—		—		—
BALANCE AT END OF YEAR	$	9,731	$	1,553	$	5,767	$	1,722	$	18,773
Loans
(Dollar amounts in thousands)	Commercial		Residential		Consumer				Total
Individually evaluated for impairment	$	8,051	$	549	$	—			$	8,600
Collectively evaluated for impairment	1,101,269		423,099		307,226				1,831,594
Acquired with deteriorated credit quality	3,415		1,431		—				4,846
BALANCE AT END OF YEAR	$	1,112,735	$	425,079	$	307,226			$	1,845,040



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
BALANCE AT END OF YEAR	$	11,482	$	1,834	$	4,945	$	1,685	$	19,946
Loans
(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
BALANCE AT END OF YEAR	$	1,050,001	$	445,655	$	274,134			$	1,769,790

The following table presents loans individually evaluated for impairment by class of loan.



December 31, 2016					Allowance						Cash Basis
	Unpaid				for Loan		Average		Interest		Interest
	Principal		Recorded		Losses		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,181	$	1,181	$	—	$	981	$	—	$	—
Farmland	826		826		—		770		—		—
Non Farm, Non Residential	3,368		2,996		—		3,096		—		—
Agriculture	622		487		—		351		—		—
All Other Commercial	1,367		1,367		—		1,477		—		—
Residential
First Liens	25		25		—		27		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	537		537		36		819		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	657		657		206		1,016				—
Agriculture	—		—		—		114		—		—
All Other Commercial	—		—		—		45		—		—
Residential
First Liens	524		524		89		647		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	9,107	$	8,600	$	331	$	9,343	$	—	$	—



December 31, 2015					Allowance						Cash Basis
	Unpaid				for Loan		Average		Interest		Interest
	Principal		Recorded		Losses		Recorded		Income		Income
	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	$	—	$	—



December 31, 2014					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	2,589	$	—	$	—
Farmland	—		—		—
Non Farm, Non Residential	58		—		—
Agriculture	—		—		—
All Other Commercial	58		—		—
Residential
First Liens	5		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	6,177		—		—
Farmland	—		—		—
Non Farm, Non Residential	6,698		—		—
Agriculture	—		—		—
All Other Commercial	1,112		—		—
Residential
First Liens	35		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
TOTAL	$	16,732	$	—	$	—

The following table presents the recorded investment in nonperforming loans by class of loans.



	December 31, 2016
	Loans Past		Troubled Debt
	Due Over 90 Day Still		Restructured
(Dollar amounts in thousands)	Accruing		Accrual		Non-accrual		Non-accrual
Commercial
Commercial & Industrial	$	45	$	3	$	383	$	2,405
Farmland	—		—		—		978
Non Farm, Non Residential	—		60		2,941		1,027
Agriculture	—		—		—		744
All Other Commercial	—		—		—		1,380
Residential
First Liens	276		3,525		995		5,496
Home Equity	—		—		—		285
Junior Liens	55		—		—		202
Multifamily	—		—		—		—
All Other Residential	—		—		—		94
Consumer
Motor Vehicle	293		60		—		140
All Other Consumer	—		150		517		741
TOTAL	$	669	$	3,798	$	4,836	$	13,492



	December 31, 2015
	Loans Past		Troubled Debt
	Due Over 90 Day Still		Restructured
(Dollar amounts in thousands)	Accruing		Accrual		Non-accrual		Non-accrual
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

Covered loans included in loans past due over 90 days still on accrual are $80 thousand at December 31, 2016 and $37 thousand at December 31, 2015. Covered loans included in non-accrual loans are $112 thousand at December 31, 2016 and $242 thousand at December 31, 2015. No covered loans are deemed impaired at December 31, 2016 and 2015. Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

During the years ending December 31, 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
January 1,	$	3,584		$	5,593		$	683		$	9,860
Added	—			123			369			492
Charged Off	—			(321		)	(70		)	(391		)
Payments	(198		)	(948		)	(250		)	(1,396		)
December 31,	$	3,386		$	4,447		$	732		$	8,565



										2015
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
January 1,	$	8,955		$	5,189		$	614		$	14,758
Added	—			748			342			1,090
Charged Off	—			(65		)	(52		)	(117		)
Payments	(5,371		)	(279		)	(221		)	(5,871		)
December 31,	$	3,584		$	5,593		$	683		$	9,860



										2014
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
January 1,	$	12,327		$	4,330		$	644		$	17,301
Added	441			1,523			347			2,311
Charged Off	(1,069		)	(93		)	(109		)	(1,271		)
Payments	(2,744		)	(571		)	(268		)	(3,583		)
December 31,	$	8,955		$	5,189		$	614		$	14,758

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, 2015 or 2014 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.

During the years ended December 31, 2016, 2015 and 2014 the Corporation modified 42, 57 and 69 loans respectively as troubled debt restructurings. In 2016 and 2015 all of the loans modified were smaller balance residential and consumer loans. In 2014 there were 40 of the 69 loans that were modified were consumer in nature. There were no loans that were charged off within 12 months of the modification for 2016, 2015 or 2014.

The Corporation had no allocation of specific reserves and $25 thousand and $742 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at both December 31, 2016, 2015 and 2014, respectively. The Corporation has not committed to lend additional amounts as of December 31, 2016 and 2015 to customers with outstanding loans that are classified as troubled debt restructurings.

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



					Greater
December 31, 2016	30-59 Days		60-89 Days		than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	370	$	114	$	1,199	$	1,683	$	474,406	$	476,089
Farmland	235		22		46		303		110,897		111,200
Non Farm, Non Residential	153		—		215		368		195,120		195,488
Agriculture	246		—		467		713		151,059		151,772
All Other Commercial	15		—		—		15		178,171		178,186
Residential
First Liens	3,862		954		1,516		6,332		264,446		270,778
Home Equity	186		64		27		277		35,782		36,059
Junior Liens	271		—		224		495		36,912		37,407
Multifamily	—		—		—		—		67,799		67,799
All Other Residential	42		12		—		54		12,982		13,036
Consumer
Motor Vehicle	4,048		732		313		5,093		277,604		282,697
All Other Consumer	143		22		3		168		24,361		24,529
TOTAL	$	9,571	$	1,920	$	4,010	$	15,501	$	1,829,539	$	1,845,040



					Greater
December 31, 2015	30-59 Days		60-89 Days		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

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 December 31, 2016. As of December 31, 2016 and 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:



December 31, 2016			Special
(Dollar amounts in thousands)	Pass		Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	427,262	$	16,286	$	25,177	$	449	$	5,730	$	474,904
Farmland	95,115		8,300		5,238		—		532		109,185
Non Farm, Non Residential	172,739		5,745		16,601		—		—		195,085
Agriculture	121,983		13,885		12,301		—		1,366		149,535
All Other Commercial	163,492		596		10,058		76		3,251		177,473
Residential
First Liens	43,674		1,541		4,466		18		220,249		269,948
Home Equity	363		—		86		—		35,554		36,003
Junior Liens	1,826		85		401		26		34,977		37,315
Multifamily	66,133		1,430		15		—		65		67,643
All Other Residential	—		—		—		—		13,002		13,002
Consumer
Motor Vehicle	—		—		331		—		281,134		281,465
All Other Consumer	—		—		25		—		24,391		24,416
TOTAL	$	1,092,587	$	47,868	$	74,699	$	569	$	620,251	$	1,835,974



December 31, 2015			Special
(Dollar amounts in thousands)	Pass		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