The following table presents the activity of the allowance for loan losses by portfolio segment for the years ended December 31, 2017, 2016 and 2015.



Allowance for Loan Losses:				December 31, 2017
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated			Total
Beginning balance	$	9,731		$	1,553		$	5,767		$	1,722		$	18,773
Provision for loan losses	745			(179		)	4,987			(258		)	5,295
Loans charged -off	(1,572		)	(761		)	(6,429		)	—			(8,762		)
Recoveries	1,377			842			2,384			—			4,603
Ending Balance	$	10,281		$	1,455		$	6,709		$	1,464		$	19,909



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

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, 2017 and 2016:



Allowance for Loan Losses:			December 31, 2017
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	619	$	6	$	—	$	—	$	625
Collectively evaluated for impairment	9,662		1,449		6,709		1,464		19,284
Acquired with deteriorated credit quality	—		—		—		—		—
BALANCE AT END OF YEAR	$	10,281	$	1,455	$	6,709	$	1,464	$	19,909
Loans
(Dollar amounts in thousands)	Commercial		Residential		Consumer				Total
Individually evaluated for impairment	$	9,619	$	463	$	—			$	10,082
Collectively evaluated for impairment	1,134,701		436,944		329,435				1,901,080
Acquired with deteriorated credit quality	1,860		—		—				1,860
BALANCE AT END OF YEAR	$	1,146,180	$	437,407	$	329,435			$	1,913,022



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

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



December 31, 2017					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	$	802	$	802	$	—	$	971	$	—	$	—
Farmland	930		930		—		1,265		—		—
Non Farm, Non Residential	2,461		2,461		—		2,781		—		—
Agriculture	123		123		—		239		—		—
All Other Commercial	1,238		1,238		—		1,308		—		—
Residential
First Liens	21		21		—		23		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	493		493		146		514		—		—
Farmland	3,035		3,035		268		669		—		—
Non Farm, Non Residential	—		—		—		131				—
Agriculture	738		537		205		279		—		—
All Other Commercial	—		—		—		—		—		—
Residential
First Liens	442		442		6		483		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	10,283	$	10,082	$	625	$	8,663	$	—	$	—



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					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,796	$	—	$	—
Farmland	—		—		—
Non Farm, Non Residential	2,080		—		—
Agriculture	—		—		—
All Other Commercial	1,175		—		—
Residential
First Liens	18		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	3,463		—		—
Farmland	—		—		—
Non Farm, Non Residential	3,682				—
Agriculture	—		—		—
All Other Commercial	483		—		—
Residential
First Liens	460		—		—
Home Equity	—		—		—
Junior Liens			—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
TOTAL	$	13,157	$	—	$	—

The following tables present the recorded investment in nonperforming loans by class of loans.



	December 31, 2017
	Loans Past		Troubled Debt
	Due Over 90 Day Still		Restructured
(Dollar amounts in thousands)	Accruing		Accrual		Non-accrual		Non-accrual
Commercial
Commercial & Industrial	$	41	$	2	$	212	$	1,679
Farmland	19		—		—		4,141
Non Farm, Non Residential	—		56		2,440		172
Agriculture	—		—		—		707
All Other Commercial	—		—		—		1,236
Residential
First Liens	1,011		3,105		575		3,972
Home Equity	8		—		—		249
Junior Liens	137		—		—		134
Multifamily	—		—		—		—
All Other Residential	—		—		—		90
Consumer
Motor Vehicle	268		9		—		242
All Other Consumer	—		177		527		623
TOTAL	$	1,484	$	3,349	$	3,754	$	13,245



	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

Covered loans included in loans past due over 90 days still on accrual are $88 thousand at December 31, 2017 and $80 thousand at December 31, 2016. Covered loans included in non-accrual loans are $62 thousand at December 31, 2017 and $112 thousand at December 31, 2016. No covered loans are deemed impaired at December 31, 2017 and 2016. 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, 2017, 2016, and 2015 the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's.



										2017
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
January 1,	$	3,386		$	4,447		$	732		$	8,565
Added	—			227			386			613
Charged Off	—			(289		)	(141		)	(430		)
Payments	(677		)	(774		)	(263		)	(1,714		)
December 31,	$	2,709		$	3,611		$	714		$	7,034



										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

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 2017, 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.

During the years ended December 31, 2017, 2016 and 2015 the Corporation modified 43, 42, and 57 loans respectively as troubled debt restructurings. All of the loans modified were smaller balance residential and consumer loans. There were no loans that were charged off within 12 months of the modification for 2017, 2016, or 2015.

The Corporation had no allocation of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at both December 31, 2017 and 2016 and $25 thousand of specific reserves at December 31, 2015. The Corporation has not committed to lend additional amounts as of December 31, 2017 and 2016 to customers with outstanding loans that are classified as troubled debt restructurings.

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



					Greater
December 31, 2017	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	$	372	$	80	$	640	$	1,092	$	474,709	$	475,801
Farmland	341		—		3,671		4,012		104,457		108,469
Non Farm, Non Residential	141		—		—		141		200,804		200,945
Agriculture	141		—		561		702		152,388		153,090
All Other Commercial	—		—		—		—		207,875		207,875
Residential
First Liens	5,467		1,317		1,434		8,218		247,029		255,247
Home Equity	310		46		8		364		35,752		36,116
Junior Liens	274		106		194		574		41,688		42,262
Multifamily	—		—		—		—		90,141		90,141
All Other Residential	300		—		12		312		13,329		13,641
Consumer
Motor Vehicle	4,770		697		294		5,761		298,211		303,972
All Other Consumer	107		22		—		129		25,334		25,463
TOTAL	$	12,223	$	2,268	$	6,814	$	21,305	$	1,891,717	$	1,913,022



					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

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, 2017 and 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:



December 31, 2017			Special
(Dollar amounts in thousands)	Pass		Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	430,015	$	19,889	$	18,611	$	38	$	5,947	$	474,500
Farmland	88,338		10,782		7,466		—		10		106,596
Non Farm, Non Residential	179,181		7,689		13,632		—		—		200,502
Agriculture	111,724		17,482		21,388		—		342		150,936
All Other Commercial	194,170		2,723		7,459		—		2,604		206,956
Residential
First Liens	45,320		750		3,980		5		204,329		254,384
Home Equity	319		—		64		—		35,653		36,036
Junior Liens	1,882		76		342		100		39,755		42,155
Multifamily	89,936		—		—		—		36		89,972
All Other Residential	—		—		67		—		13,529		13,596
Consumer
Motor Vehicle	—		—		731		—		301,900		302,631
All Other Consumer	—		—		44		—		25,301		25,345
TOTAL	$	1,140,885	$	59,391	$	73,784	$	143	$	629,406	$	1,903,609



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