NOTE 4 - ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

The following tables present the activity and balance in the allowance for loan losses by portfolio segment for the year ended December 31, 2013, 2012 and 2011:

				Commercial
				Real Estate
	Commercial			and			Agri-business					Consumer
	and			Multifamily			and			Other		1-4 Family			Other
(dollars in thousands)	Industrial			Residential			Agricultural			Commercial		Mortgage			Consumer			Unallocated		Total
December 31, 2013
Beginning balance	$	22,342		$	20,812		$	1,403		$	240	$	2,682		$	609		$	3,357	$	51,445
Provision for loan losses		(788	)		(564	)		267			151		620			162			152		0
Loans charged-off		(1,062	)		(2,069	)		(200	)		0		(382	)		(339	)		0		(4,052	)
Recoveries		513			377			212			0		126			176			0		1,404
Net loans charged-off		(549	)		(1,692	)		12			0		(256	)		(163	)		0		(2,648	)
Ending balance	$	21,005		$	18,556		$	1,682		$	391	$	3,046		$	608		$	3,509	$	48,797

				Commercial
				Real Estate
	Commercial			and			Agri-business					Consumer
	and			Multifamily			and		Other			1-4 Family			Other
(dollars in thousands)	Industrial			Residential			Agricultural		Commercial			Mortgage			Consumer			Unallocated		Total
December 31, 2012
Beginning balance	$	22,830		$	23,489		$	695	$	65		$	2,322		$	645		$	3,354	$	53,400
Provision for loan losses		1,814			(1,772	)		705		(11	)		1,552			258			3		2,549
Loans charged-off		(3,069	)		(1,108	)		0		0			(1,340	)		(405	)		0		(5,922	)
Recoveries		767			203			3		186			148			111			0		1,418
Net loans charged-off		(2,302	)		(905	)		3		186			(1,192	)		(294	)		0		(4,504	)
Ending balance	$	22,342		$	20,812		$	1,403	$	240		$	2,682		$	609		$	3,357	$	51,445

				Commercial
				Real Estate
	Commercial			and			Agri-business						Consumer
	and			Multifamily			and			Other			1-4 Family			Other
(dollars in thousands)	Industrial			Residential			Agricultural			Commercial			Mortgage			Consumer			Unallocated			Total
December 31, 2011
Beginning balance	$	21,479		$	15,893		$	1,318		$	270		$	1,694		$	682		$	3,671		$	45,007
Provision for loan losses		3,112			9,748			(520	)		(205	)		1,632			350			(317	)		13,800
Loans charged-off		(2,587	)		(2,514	)		(103	)		0			(1,050	)		(575	)		0			(6,829	)
Recoveries		826			362			0			0			46			188			0			1,422
Net loans charged-off		(1,761	)		(2,152	)		(103	)		0			(1,004	)		(387	)		0			(5,407	)
Ending balance	$	22,830		$	23,489		$	695		$	65		$	2,322		$	645		$	3,354		$	53,400

The recorded investment in loans does not include accrued interest.

The following tables present balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2013 and 2012:

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
December 31, 2013
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	4,144	$	4,598	$	38	$	0	$	479	$	57	$	0	$	9,316
Collectively evaluated for impairment		16,861		13,959		1,644		391		2,566		551		3,509		39,481
Total ending allowance balance	$	21,005	$	18,557	$	1,682	$	391	$	3,045	$	608	$	3,509	$	48,797

Loans:
Loans individually evaluated for impairment	$	16,196	$	22,204	$	1,114	$	0	$	3,594	$	119	$	0	$	43,227
Loans collectively evaluated for impairment		885,651		962,673		253,011		70,766		273,812		45,958		0		2,491,871
Total ending loans balance	$	901,847	$	984,877	$	254,125	$	70,766	$	277,406	$	46,077	$	0	$	2,535,098

			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
December 31, 2012
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	5,542	$	8,559	$	63	$	0	$	607	$	34	$	0	$	14,805
Collectively evaluated for impairment		16,800		12,253		1,340		240		2,075		575		3,357		36,640
Total ending allowance balance	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445

Loans:
Loans individually evaluated for impairment	$	18,281	$	36,919	$	797	$	0	$	2,853	$	92	$	0	$	58,942
Loans collectively evaluated for impairment		828,728		763,279		224,008		56,810		280,141		45,612		0		2,198,578
Total ending loans balance	$	847,009	$	800,198	$	224,805	$	56,810	$	282,994	$	45,704	$	0	$	2,257,520

The recorded investment in loans does not include accrued interest.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2013:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	63	$	63	$	0
Commercial real estate and multi-family residential loans:
Owner occupied loans		377		196		0
Agri-business and agricultural loans:
Loans secured by farmland		604		604		0
Consumer 1-4 family loans:
Closed end first mortgage loans		688		689		0
Open end and junior lien loans		81		81		0
Residential construction loans		150		150		0
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,251		2,641		984
Non-working capital loans		15,345		13,492		3,160
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,795		2,795		585
Owner occupied loans		5,553		4,681		723
Nonowner occupied loans		15,163		14,532		3,290
Agri-business and agricultural loans:
Loans secured by farmland		1,008		510		38
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,469		2,463		442
Open end and junior lien loans		211		211		37
Other consumer loans		118		118		57
Total	$	50,877	$	43,227	$	9,316

The recorded investment in loans does not include accrued interest.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	61	$	61	$	0
Commercial real estate and multi-family residential loans:
Owner occupied loans		754		574		0
Nonowner occupied loans		385		385		0
Multifamily loans		410		286		0
Agri-business and agricultural loans:
Loans secured by farmland		645		466		0
Consumer 1-4 family loans:
Closed end first mortgage loans		59		59		0
Open end and junior lien loans		41		41		0
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,833		3,224		1,516
Non-working capital loans		16,763		14,996		4,026
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,352		2,960		934
Owner occupied loans		5,869		5,869		1,476
Nonowner occupied loans		26,835		26,845		6,149
Agri-business and agricultural loans:
Loans secured by farmland		651		331		63
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,387		2,403		415
Open end and junior lien loans		379		350		192
Other consumer loans		91		91		34
Total	$	65,516	$	58,942	$	14,805

The recorded investment in loans does not include accrued interest.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2013:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	64	$	0	$	0
Non-working capital loans		8		0		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		482		0		0
Agri-business and agricultural loans:
Loans secured by farmland		512		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		379		0		0
Open end and junior lien loans		35		0		0
Residential construction loans		39
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		2,934		50		52
Non-working capital loans		13,957		540		544
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,537		84		92
Owner occupied loans		3,771		109		118
Nonowner occupied loans		20,108		337		344
Multifamily loans		48		0		0
Agri-business and agricultural loans:
Loans secured by farmland		442		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,488		56		68
Open end and junior lien loans		70		0		0
Other consumer loans		90		1		1
Total	$	48,965	$	1,177	$	1,219

The recorded investment in loans does not include accrued interest.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	10	$	0	$	0
Non-working capital loans		108		0		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		530		0		0
Nonowner occupied loans		259		17		17
Multifamily loans		83		0		0
Agri-business and agricultural loans:
Loans secured by farmland		307		0		0
Loans for ag production		51		0		0
Other commercial loans
Consumer 1-4 family loans:
Closed end first mortgage loans		339		0		0
Open end and junior lien loans		25		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		4,085		55		54
Non-working capital loans		17,062		667		681
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,145		48		48
Owner occupied loans		5,157		90		84
Nonowner occupied loans		27,830		363		380
Agri-business and agricultural loans:
Loans secured by farmland		410		0		0
Loans for agricultural production		68		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,870		36		50
Open end and junior lien loans		343		0		0
Other consumer loans		26		0		0
Total	$	60,708	$	1,276	$	1,314

The recorded investment in loans does not include accrued interest.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011:

					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Non-working capital loans	$	30	$	0	$	0
Commercial real estate and multi-family residential loans:
Nonowner occupied loans		425		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,649		23		25
Non-working capital loans		17,202		616		625
Commercial real estate and multi-family residential loans:
Construction and land development loans		1,319		0		0
Owner occupied loans		3,082		41		45
Nonowner occupied loans		24,108		246		252
Agri-business and agricultural loans:
Loans secured by farmland		610		0		0
Loans for agricultural production		410		0		0
Other commercial loans		129		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,872		44		48
Open end and junior lien loans		118		0		0
Total	$	54,954	$	970	$	995

The recorded investment in loans does not include accrued interest.

Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 by class of loans:

			30-89		Greater than
	Loans Not		Days		90 Days				Total
(dollars in thousands)	Past Due		Past Due		Past Due		Nonaccrual		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	456,136	$	0	$	0	$	1,819	$	1,819	$	457,955
Non-working capital loans		440,050		46		0		3,796		3,842		443,892
Commercial real estate and multi-family residential loans:
Construction and land development loans		156,594		0		0		544		544		157,138
Owner occupied loans		366,955		0		0		3,156		3,156		370,111
Nonowner occupied loans		382,478		0		0		11,758		11,758		394,236
Multifamily loans		63,392		0		0		0		0		63,392
Agri-business and agricultural loans:
Loans secured by farmland		132,347		0		0		1,113		1,113		133,460
Loans for agricultural production		120,665		0		0		0		0		120,665
Other commercial loans		70,766		0		0		0		0		70,766
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		122,370		1,645		0		1,165		2,810		125,180
Open end and junior lien loans		147,123		135		46		291		472		147,595
Residential construction loans		4,481		0		0		150		150		4,631
Other consumer loans		45,826		145		0		106		251		46,077
Total	$	2,509,183	$	1,971	$	46	$	23,898	$	25,915	$	2,535,098

The recorded investment in loans does not include accrued interest.

The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:

			30-89		Greater than
	Loans Not		Days		90 Days				Total
(dollars in thousands)	Past Due		Past Due		Past Due		Nonaccrual		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	437,705	$	233	$	0	$	1,899	$	2,132	$	439,837
Non-working capital loans		402,262		48		50		4,812		4,910		407,172
Commercial real estate and multi-family residential loans:
Construction and land development loans		80,954		998		0		398		1,396		82,350
Owner occupied loans		354,921		1,023		0		2,461		3,484		358,405
Nonowner occupied loans		295,243		38		0		19,200		19,238		314,481
Multifamily loans		44,676		0		0		286		286		44,962
Agri-business and agricultural loans:
Loans secured by farmland		108,359		0		0		797		797		109,156
Loans for agricultural production		115,649		0		0		0		0		115,649
Other commercial loans		56,810		0		0		0		0		56,810
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		107,583		1,475		0		504		1,979		109,562
Open end and junior lien loans		161,172		361		0		391		752		161,924
Residential construction loans		11,508		0		0		0		0		11,508
Other consumer loans		45,546		81		0		77		158		45,704
Total	$	2,222,388	$	4,257	$	50	$	30,825	$	35,132	$	2,257,520

The recorded investment in loans does not include accrued interest.

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $8.3 million and $12.5 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2013 and 2012. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

(dollars in thousands)	2013		2012

Accruing troubled debt restructured loans	$	17,714	$	22,332

Nonaccrual troubled debt restructured loans		18,531		28,506

Total troubled debt restructured loans	$	36,245	$	50,838

During the year ending December 31, 2013 certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a reduction in the interest rate on a loan to one that would not be readily available in the marketplace for borrowers with a similar risk profile; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

There were renewal terms offered on various loans to borrowers under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In these instances, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The renewals during the first three months of 2013 were to one borrower engaged in land development, where the aggregate recorded investment totaled $763,000. No renewals during the three months ended June 30, 2013 were determined to be troubled debt restructures. During the three months ended September 30, 2013, the Bank renegotiated terms on a loan totaling $75,000 where the collateral and cash flow did not support the loan. During the three months ending December 31, 2013 one loan totaling $524,000 was granted an extension although the borrower was not in complete compliance with the terms of the previous agreements financial reporting requirements.

Renegotiated interest rates include loans with a reduction in rate for the remaining life of the loan. There were modifications to borrowers at rates that were not readily available in the marketplace that were considered concessions.

The following table presents loans by class modified as troubled debt restructurings that occurred during the period ending December 31, 2013:

	All Modifications						Interest Rate Reductions
			Pre- Modification		Post- Modification				Interest at		Interest at
			Outstanding		Outstanding				Pre-		Post-
	Number of		Recorded		Recorded		Number of		Modification		Modification
(dollars in thousands)	Loans		Investment		Investment		Loans		Rate		Rate
Troubled Debt Restructurings Commercial real estate and multi- family residential loans:
Construction and land development loans		6	$	2,197	$	2,197		6	$	84	$	63
Owner occupied loans		1		524		524		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		4		317		327		2		142		158
Total		11	$	3,038	$	3,048		8	$	226	$	221

	Principal and Interest Forgiveness
			Principal at		Principal at		Interest at		Interest at
	Number of		Pre- Modification		Post- Modification		Pre- Modification		Post- Modification
(dollars in thousands)	Loans		Rate		Rate		Rate		Rate
Troubled Debt Restructurings
Consumer 1-4 family loans:
Closed end first mortgage loans		2	$	156	$	161	$	164	$	149
Total		2	$	156	$	161	$	164	$	149

For the period ending December 31, 2013, the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $405,000 and the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $56,000. Five of the commercial real estate and multi-family residential loan that decreased the provision during 2013 had modifications during the first month of the year and had improved their positions during the remainder of the year, which warranted the decrease in allocation.

One of the commercial real estate and multi-family residential loan troubled debt restructurings described above had a charge-off of $365,000 during the period ending December 31, 2013.

During the year ending December 31, 2012, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a reduction in the interest rate on a loan to one that would not be readily available in the marketplace for borrowers with a similar risk profile; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

There were renewal terms on several loans offered for loans to borrowers under financial distress which did not require additional compensation or consideration and would not have been readily available in the marketplace for loans bearing similar risk profiles. In these instances, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The renewals during the first three months of 2012 were to one borrower engaged in construction and land development, where the aggregate recorded investment totaled $1.6 million. The renewal during the three months ended June 30, 2012, was a non-working capital term loan with a recorded investment of $1.1 million. During the three months ended September 30, 2012, the Bank renegotiated terms on a loan where the collateral securing the original note was sold for an amount that did not satisfy the balance. The Bank agreed to release its collateral interest to facilitate the sale, and renegotiated a new consumer loan with a recorded investment of $17,000 for the remaining balance of the loan. The terms offered in the renegotiated unsecured loan were an exception to bank policy; therefore, it was determined that a concession had been granted. These loans are included in the table of all troubled debt restrucurings below.

Renegotiated interest rates include loans with a reduction in rate for a short-term (part of the remaining life of the loan) or long-term (life of loan). There were modifications to borrowers at rates that were readily available in the market but who would not have otherwise qualified for the market terms offered in the modification without a concession being granted. Also included are borrowers who received interest rate concessions that were below market rates.

Delays in principal repayment include loans which were intended to be amortizing during the period, but due to financial hardship the borrowers under these loans were unable to meet the original or intended repayment terms. These include loans with principal deferrals for a prolonged period or those with modified payments which are an exception to bank policy.

The following tables present loans by class modified as troubled debt restructurings that occurred during the period ending December 31, 2012:

	All Modifications						Interest Rate Reductions						Modified Repayment Terms
			Pre- Modification		Post- Modification										Extension
	Number		Outstanding		Outstanding		Number		Interest at		Interest at				Period or
	of		Recorded		Recorded		of		Pre-Modification		Post-Modification		Number of		Range
(dollars in thousands)	Loans		Investment		Investment		Loans		Rate		Rate		Loans		(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans		1	$	942	$	1,060		0	$	0	$	0		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		5		1,638		1,638		0		0		0		0		0
Owner occupied loans		2		2,260		2,260		1		440		117		1		18
Nonowner occupied loans		1		385		385		0		0		0		1		14
Consumer 1-4 family loans:
Closed end first mortgage loans		5		317		316		5		403		381		0		0
Other consumer loans		1		17		17		0		0		0		0		0
Total		15	$	5,559	$	5,676		6	$	843	$	498		2		14-18

All of the commercial and industrial loan troubled debt restructurings described above also had additional collateral that was inadequate compensation as part of the restructuring.

For the period ending December 31, 2012, the commercial and industrial loan troubled debt restructurings described above decreased the allowance for loan losses by $853,000, the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $67,000, the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $48,000 and the other consumer loan troubled debt restructurings described above increased the allowance for loan losses by $4,000. The commercial and industrial loan and one commercial real estate and multi-family residential loan that decreased the provision during 2012 had modifications during the first five months of the year and had improved their positions during the remainder of the year, which warranted the decrease in allocation.

No charge - offs resulted from any troubled debt restructurings described above during the period ending December 31, 2012.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ending December 31:

	2013				2012
	Number of		Recorded		Number of		Recorded
(dollars in thousands)	Loans		Investment		Loans		Investment
Troubled Debt Restructurings that Subsequently Defaulted
Commercial real estate and multi-family residential loans:
Construction and land development loans		1	$	763		0	$	0

Consumer 1-4 family loans:
Closed end first mortgage loans		0		0		1		63

Total		1	$	763		1	$	63

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The troubled debt restructurings that subsequently defaulted, as described above, decreased the allowance for loan losses by $170,000 and did not result in any charge - offs during the period ending December 31, 2013. The troubled debt restructurings that subsequently defaulted, as described above, increased the allowance for loan losses by $16,000 and did not result in any charge - offs during the period ending December 31, 2012.

Credit Quality Indicators:

The Company 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 Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.

The Company 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 paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized as the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be Pass rated loans with the exception of consumer troubled debt restructurings which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with Not Rated loans. Loans listed as not rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. As of December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	431,069	$	15,212	$	11,674	$	0	$	0	$	457,955
Non-working capital loans		384,415		37,727		19,659		0		2,091		443,892
Commercial real estate and multi- family residential loans:
Construction and land development loans		148,338		763		8,037		0		0		157,138
Owner occupied loans		333,795		23,687		12,629		0		0		370,111
Nonowner occupied loans		367,108		9,180		17,948		0		0		394,236
Multifamily loans		63,392		0		0		0		0		63,392
Agri-business and agricultural loans:
Loans secured by farmland		132,331		0		1,113		0		16		133,460
Loans for agricultural production		120,665		0		0		0		0		120,665
Other commercial loans		70,766		0		0		0		0		70,766
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		29,092		0		2,316		0		93,772		125,180
Open end and junior lien loans		8,291		1,863		0		0		137,441		147,595
Residential construction loans		0		0		0		0		4,631		4,631
Other consumer loans		10,722		416		291		0		34,648		46,077
Total	$	2,099,984	$	88,848	$	73,667	$	0	$	272,599	$	2,535,098

The recorded investment in loans does not include accrued interest.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be Pass rated loans with the exception of consumer troubled debt restructurings which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with Not Rated loans. Loans listed as not rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. As of December 31, 2012, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	403,778	$	22,591	$	13,468	$	0	$	0	$	439,837
Non-working capital loans		355,772		23,192		26,857		66		1,285		407,172
Commercial real estate and multi- family residential loans:
Construction and land development loans		67,002		4,595		10,753		0		0		82,350
Owner occupied loans		315,672		24,589		18,144		0		0		358,405
Nonowner occupied loans		282,108		6,345		26,028		0		0		314,481
Multifamily loans		43,425		345		1,192		0		0		44,962
Agri-business and agricultural loans:
Loans secured by farmland		107,734		0		1,404		0		18		109,156
Loans for agricultural production		115,649		0		0		0		0		115,649
Other commercial loans		56,692		0		118		0		0		56,810
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		18,685		343		729		0		89,805		109,562
Open end and junior lien loans		7,932		300		0		0		153,692		161,924
Residential construction loans		0		0		0		0		11,508		11,508
Other consumer loans		10,168		378		497		0		34,661		45,704
Total	$	1,784,617	$	82,678	$	99,190	$	66	$	290,969	$	2,257,520

The recorded investment in loans does not include accrued interest.