ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2014

In Allowance For Loan Losses and Recorded Investment In Loans By Portfolio Segment

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month periods ended September 30, 2014 and 2013:

			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
September 30, 2014
Beginning balance	$	20,922	$	15,975	$	1,404	$	234	$	3,275	$	487	$	3,308	$	45,605
Provision for loan losses		919		(1,274)		(34)		76		178		68		67		0
Loans charged-off		(147)		0		0		0		(60)		(62)		0		(269)
Recoveries		291		670		5		0		59		26		0		1,051
Net loans (charged-off)recovered		144		670		5		0		(1)		(36)		0		782
Ending balance	$	21,985	$	15,371	$	1,375	$	310	$	3,452	$	519	$	3,375	$	46,387

			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
September 30, 2013
Beginning balance	$	21,879	$	20,098	$	1,517	$	264	$	2,823	$	587	$	3,467	$	50,635
Provision for loan losses		138		(544)		(185)		(23)		409		179		26		0
Loans charged-off		(595)		(455)		0		0		(126)		(120)		0		(1,296)
Recoveries		75		73		201		0		71		45		0		465
Net loans (charged-off)recovered		(520)		(382)		201		0		(55)		(75)		0		(831)
Ending balance	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2014 and 2013:

			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
September 30, 2014
Beginning balance	$	21,005	$	18,557	$	1,682	$	391	$	3,045	$	608	$	3,509	$	48,797
Provision for loan losses		1,296		(1,334)		(323)		(81)		587		(11)		(134)		0
Loans charged-off		(660)		(2,553)		0		0		(282)		(180)		0		(3,675)
Recoveries		344		701		16		0		102		102		0		1,265
Net loans (charged-off)recovered		(316)		(1,852)		16		0		(180)		(78)		0		(2,410)
Ending balance	$	21,985	$	15,371	$	1,375	$	310	$	3,452	$	519	$	3,375	$	46,387

				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
September 30, 2013
Beginning balance	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445
Provision for loan losses		(569)		(627)		125		1		709		225		136		0
Loans charged-off		(738)		(1,361)		(200)		0		(315)		(257)		0		(2,871)
Recoveries		462		348		205		0		101		114		0		1,230
Net loans (charged-off)recovered		(276)		(1,013)		5		0		(214)		(143)		0		(1,641)
Ending balance	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2014 and December 31, 2013:

				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
September 30, 2014
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	4,017	$	1,875	$	15	$	0	$	539	$	74	$	0	$	6,520
Collectively evaluated for impairment		17,968		13,496		1,360		310		2,913		445		3,375		39,867
Total ending allowance balance	$	21,985	$	15,371	$	1,375	$	310	$	3,452	$	519	$	3,375	$	46,387

Loans:
Loans individually evaluated for impairment	$	16,771	$	12,970	$	486	$	0	$	3,785	$	132	$	0	$	34,144
Loans collectively evaluated for impairment		1,014,911		1,021,391		209,322		77,075		297,316		47,764		0		2,667,779
Total ending loans balance	$	1,031,682	$	1,034,361	$	209,808	$	77,075	$	301,101	$	47,896	$	0	$	2,701,923

				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

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2014:

	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	$	22	$	21	$	0
Non-working capital loans		1,679		285		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		528		528		0
Owner occupied loans		337		157		0
Nonowner occupied loans		323		323		0
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Loans for ag production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		706		708		0
Open end and junior lien loans		352		352		0
Residential construction loans		133		133		0
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,808		1,807		901
Non-working capital loans		16,821		14,658		3,116
Commercial real estate and multi-family residential loans:
Construction and land development loans		1,391		1,390		382
Owner occupied loans		4,452		4,411		867
Nonowner occupied loans		6,154		6,161		626
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		381		203		15
Loans for agricultural production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,640		2,544		534
Open end and junior lien loans		48		48		5
Residential construction loans		0		0		0
Other consumer loans		131		131		74
Total	$	38,510	$	34,144	$	6,520

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
Other commercial loans
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 and for the three-month period ended September 30, 2014:

					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	$	22	$	0	$	0
Non-working capital loans		290		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		533		0		0
Owner occupied loans		160		0		0
Nonowner occupied loans		327		0		0
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		284		0		0
Loans for ag production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		695		0		0
Open end and junior lien loans		286		0		0
Residential construction loans		135		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,680		22		18
Non-working capital loans		13,662		127		126
Commercial real estate and multi-family residential loans:
Construction and land development loans		1,679		7		5
Owner occupied loans		3,241		26		29
Nonowner occupied loans		6,485		35		36
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		203		0		0
Loans for agricultural production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,568		17		17
Open end and junior lien loans		48		0		0
Residential construction loans		0		0		0
Other consumer loans		89		1		1
Total	$	32,388	$	235	$	232

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 and for the three-month period ended September 30, 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		0		0		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		616		0		0
Agri-business and agricultural loans:
Loans secured by farmland		479		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		719		0		0
Open end and junior lien loans		27		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		2,988		12		14
Non-working capital loans		14,017		120		126
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,848		11		20
Owner occupied loans		3,707		20		20
Nonowner occupied loans		19,183		87		86
Multifamily loans		0		0		0

Agri-business and agricultural loans:
Loans secured by farmland		536		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,347		5		6
Open end and junior lien loans		22		0		0
Other consumer loans		99		0		0
Total	$	47,653	$	255	$	272

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 and for the nine-month period ended September 30, 2014:

						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	$	186	$	1	$	1
Non-working capital loans		133		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		178		0		0
Owner occupied loans		215		0		0
Nonowner occupied loans		341		0		0
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		226		0		0
Loans for ag production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		691		0		0
Open end and junior lien loans		170		0		0
Residential construction loans		141		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,893		55		47
Non-working capital loans		13,762		387		388
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,341		37		36
Owner occupied loans		2,956		45		43
Nonowner occupied loans		8,507		104		105
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		411		0		0
Loans for agricultural production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,740		50		53
Open end and junior lien loans		66		0		0
Residential construction loans		0		0		0
Other consumer loans		87		1		1
Total	$	35,045	$	680	$	674

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 and for the nine-month period ended September 30, 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	$	65	$	0	$	0
Non-working capital loans		11		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans		575		0		0
Agri-business and agricultural loans:
Loans secured by farmland		480		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		275		0		0
Open end and junior lien loans		23		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		3,019		39		41
Non-working capital loans		14,081		391		402
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,860		63		67
Owner occupied loans		3,592		88		96
Nonowner occupied loans		20,960		255		258
Multifamily loans		64		0		0
Agri-business and agricultural loans:
Loans secured by farmland		418		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,461		28		43
Open end and junior lien loans		40		0		0
Other consumer loans		86		1		1
Total	$	50,010	$	865	$	908

Aging of the recorded investment in past due loans

The following table presents the aging of the recorded investment in past due loans as of September 30, 2014 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	$	517,009	$	0	$	0	$	1,105	$	1,105	$	518,114
Non-working capital loans		508,354		102		0		5,112		5,214		513,568
Commercial real estate and multi-family
residential loans:
Construction and land development loans		152,197		0		0		529		529		152,726
Owner occupied loans		393,498		414		0		2,013		2,427		395,925
Nonowner occupied loans		397,246		0		0		3,732		3,732		400,978
Multifamily loans		84,732		0		0		0		0		84,732
Agri-business and agricultural loans:
Loans secured by farmland		131,034		0		0		485		485		131,519
Loans for agricultural production		78,289		0		0		0		0		78,289
Other commercial loans		77,075		0		0		0		0		77,075
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		140,719		1,699		0		1,204		2,903		143,622
Open end and junior lien loans		151,229		139		0		399		538		151,767
Residential construction loans		5,579		0		0		133		133		5,712
Other consumer loans		47,758		83		0		55		138		47,896
Total	$	2,684,719	$	2,437	$	0	$	14,767	$	17,204	$	2,701,923

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, 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.

Troubled debt restructuring

The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

		September 30,		December 31,
(dollars in thousands)		2014		2013
Accruing troubled debt restructured loans	$	17,650	$	17,714
Nonaccrual troubled debt restructured loans		9,841		18,531
Total troubled debt restructured loans	$	27,491	$	36,245

Loans by class modified as troubled debt restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the three-months ending September 30, 2014:

All Modifications

Modified Repayment Terms

Pre-Modification

Post-Modification

Extension

Outstanding

Period or

Number of

Recorded

Number of

Range

(dollars in thousands)

Loans

Investment

Loans

(in months)

Troubled Debt Restructurings

Commercial real estate and

Multi-family residential loans:

Owner occupied loans

929

1,000

Total

929

1,000

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-months ending September 30, 2014:

	All Modifications					Interest Rate Reductions					Modified Repayment Terms
			Pre-Modification		Post-Modification							Extension
			Outstanding		Outstanding			Interest at		Interest at		Period or
	Number of		Recorded		Recorded	Number 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	2	$	433	$	433	0	$	0	$	0	2	12-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	3		2,639		2,710	1		89		95	2	12-24
Total	5	$	3,072	$	3,143	1	$	89	$	95	4	12-24

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ending September 30, 2013:

	All Modifications					Interest Rate Reductions
			Pre-Modification		Post-Modification
			Outstanding		Outstanding			Interest at		Interest at
	Number of		Recorded		Recorded	Number of		Pre-Modification		Post-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	$	2,198	$	2,198	6	$	85	$	63
Consumer 1-4 family loans:
Closed end first mortgage loans	4		317		328	2		142		158
Total	10	$	2,515	$	2,526	8	$	227	$	221

	Principal and Interest Forgiveness
							Interest at		Interest at
	Number of		Principal at		Principal at		Pre-Modification		Post-Modification
(dollars in thousands)	Loans		Pre-Modification		Post-Modification		Rate		Rate
Troubled Debt Restructurings
Commercial real estate and
multi-family residential loans:
Construction and land development loans	0	$	0	$	0	$	0	$	0
Consumer 1-4 family loans:
Closed end first mortgage loans	2		156		161		164		149
Total	2	$	156	$	161	$	164	$	149

Troubled debt restructurings subsequently defaulted

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 which occurred during the three month and nine month periods ending September 30, 2013:

	Modifications
	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	Number of		Recorded	Number of		Recorded
	Loans		Investment	Loans		Investment
Troubled Debt Restructurings that Subsequently Defaulted

Consumer 1-4 family loans:
Closed end first mortgage loans	0	$	0	1	$	912

Total	0	$	0	1	$	912

Credit quality indicators

As of September 30, 2014, 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	$	477,113	$	28,236	$	12,765	$	0	$	0	$	518,114
Non-working capital loans		458,676		31,335		21,199		0		2,358		513,568
Commercial real estate and multi-
family residential loans:
Construction and land development loans		145,217		558		6,951		0		0		152,726
Owner occupied loans		361,482		21,638		12,805		0		0		395,925
Nonowner occupied loans		382,386		12,616		5,976		0		0		400,978
Multifamily loans		84,732		0		0		0		0		84,732
Agri-business and agricultural loans:
Loans secured by farmland		131,034		0		485		0		0		131,519
Loans for agricultural production		78,289		0		0		0		0		78,289
Other commercial loans		77,042		0		30		0		3		77,075
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		39,956		0		2,213		0		101,453		143,622
Open end and junior lien loans		9,336		225		2,014		0		140,192		151,767
Residential construction loans		0		0		0		0		5,712		5,712
Other consumer loans		13,399		540		77		0		33,880		47,896
Total	$	2,258,662	$	95,148	$	64,515	$	0	$	283,598	$	2,701,923

The recorded investment in loans does not include accrued interest.

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.