ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

6 Months Ended

Jun. 30, 2017

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 June 30, 2017 and 2016:

		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
Three Months Ended June 30, 2017
Beginning balance, April 1	$19,781	$13,718	$3,459	$545	$2,790	$379	$3,102	$43,774
Provision for loan losses	160	61	405	23	(123)	23	(49)	500
Loans charged-off	(11)	(211)	0	0	(6)	(33)	0	(261)
Recoveries	289	207	6	0	28	20	0	550
Net (charge-offs)/recoveries	278	(4)	6	0	22	(13)	0	289
Ending balance	$20,219	$13,775	$3,870	$568	$2,689	$389	$3,053	$44,563

		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
Three Months Ended June 30, 2016
Beginning balance, April 1	$20,465	$12,752	$2,454	$559	$3,586	$344	$3,124	$43,284
Provision for loan losses	605	(315)	589	(194)	(563)	6	(128)	0
Loans charged-off	(160)	0	0	0	(92)	(45)	0	(297)
Recoveries	25	200	4	0	3	28	0	260
Net (charge-offs)/recoveries	(135)	200	4	0	(89)	(17)	0	(37)
Ending balance	$20,935	$12,637	$3,047	$365	$2,934	$333	$2,996	$43,247

The following tables present the activity in the allowance for loan losses by portfolio segment for the six-month periods ended June 30, 2017 and 2016:

		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
Six Months Ended June 30, 2017
Beginning balance, January 1	$20,272	$13,452	$3,532	$461	$2,827	$387	$2,787	$43,718
Provision for loan losses	(179)	318	328	107	(200)	60	266	700
Loans charged-off	(386)	(259)	0	0	(13)	(106)	0	(764)
Recoveries	512	264	10	0	75	48	0	909
Net (charge-offs)/recoveries	126	5	10	0	62	(58)	0	145
Ending balance	$20,219	$13,775	$3,870	$568	$2,689	$389	$3,053	$44,563

		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
Six Months Ended June 30, 2016
Beginning balance, January 1	$21,564	$12,473	$2,445	$574	$3,395	$319	$2,840	$43,610
Provision for loan losses	(342)	121	593	(209)	(367)	48	156	0
Loans charged-off	(374)	(168)	0	0	(130)	(90)	0	(762)
Recoveries	87	211	9	0	36	56	0	399
Net (charge-offs)/recoveries	(287)	43	9	0	(94)	(34)	0	(363)
Ending balance	$20,935	$12,637	$3,047	$365	$2,934	$333	$2,996	$43,247

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 June 30, 2017 and December 31, 2016:

		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
June 30, 2017
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,734	$561	$0	$0	$286	$44	$0	$4,625
Collectively evaluated for impairment	16,485	13,214	3,870	568	2,403	345	3,053	39,938
Total ending allowance balance	$20,219	$13,775	$3,870	$568	$2,689	$389	$3,053	$44,563

Loans:

Loans individually evaluated for impairment	$11,192	$6,661	$283	$0	$1,391	$53	$0	$19,580
Loans collectively evaluated for impairment	1,353,075	1,334,473	331,173	116,493	353,809	68,401	0	3,557,424
Total ending loans balance	$1,364,267	$1,341,134	$331,456	$116,493	$355,200	$68,454	$0	$3,577,004

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multi-family	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
December 31, 2016
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,191	$576	$0	$0	$296	$51	$0	$4,114
Collectively evaluated for impairment	17,081	12,876	3,532	461	2,531	336	2,787	39,604
Total ending allowance balance	$20,272	$13,452	$3,532	$461	$2,827	$387	$2,787	$43,718

Loans:
Loans individually evaluated for impairment	$9,776	$9,151	$283	$0	$1,427	$55	$0	$20,692
Loans collectively evaluated for impairment	1,258,682	1,290,131	394,621	98,265	347,408	61,128	0	3,450,235
Total ending loans balance	$1,268,458	$1,299,282	$394,904	$98,265	$348,835	$61,183	$0	$3,470,927

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2017:

	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	$515	$515	$0
Non-working capital loans	3,052	1,303	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	126	126	0
Owner occupied loans	2,515	2,267	0
Nonowner occupied loans	2,797	2,797	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	341	260	0
Open end and junior lien loans	366	154	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,839	2,536	1,212
Non-working capital loans	6,839	6,838	2,522
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,472	1,471	561
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	976	977	286
Other consumer loans	53	53	44
Total	$22,494	$19,580	$4,625

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2016:

	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	$951	$494	$0
Non-working capital loans	3,007	1,358	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	126	126	0
Owner occupied loans	2,868	2,620	0
Nonowner occupied loans	4,632	4,633	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	161	147	0
Open end and junior lien loans	408	195	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,100	1,099	465
Non-working capital loans	6,827	6,825	2,726
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,773	1,772	576
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,152	1,085	296
Other consumer loans	55	55	51
Total	$23,663	$20,692	$4,114

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended June 30, 2017:

			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	$ 562	$ 8	$ 8
Non-working capital loans	1,310	9	6
Commercial real estate and multi-family residential loans:
Construction and land development loans	126	1	1
Owner occupied loans	2,390	2	1
Nonowner occupied loans	2,803	70	59
Agri-business and agricultural loans:
Loans secured by farmland	283	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	213	2	2
Open end and junior lien loans	155	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,376	11	4
Non-working capital loans	6,855	42	30
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,544	3	2
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,028	5	2
Other consumer loans	53	1	0
Total	$ 19,698	$ 154	$ 115

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended June 30, 2016:

			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	$493	$0	$0
Non-working capital loans	557	0	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,536	0	0
Nonowner occupied loans	4,783	88	89
Agri-business and agricultural loans:
Loans secured by farmland	471	0	0
Loans for ag production	2,032	5	4
Consumer 1-4 family loans:
Closed end first mortgage loans	149	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	841	5	5
Non-working capital loans	4,077	33	34
Commercial real estate and multi-family residential loans:
Construction and land development loans	297	4	2
Owner occupied loans	975	0	0
Multifamily loans	383	5	5
Agri-business and agricultural loans:
Other commercial loans	12	2	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,363	10	14
Open end and junior lien loans	165	0	0
Other consumer loans	58	1	1
Total	$19,192	$153	$154

The following table presents loans individually evaluated for impairment by class of loans as of and for the six-month period ended June 30, 2017:

			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	$ 570	$ 15	$ 15
Non-working capital loans	1,345	17	14
Commercial real estate and multi-family residential loans:
Construction and land development loans	126	2	2
Owner occupied loans	2,481	3	2
Nonowner occupied loans	3,703	154	143
Agri-business and agricultural loans:
Loans secured by farmland	283	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	202	3	3
Open end and junior lien loans	156	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,870	22	17
Non-working capital loans	6,777	91	81
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,605	8	7
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,050	12	9
Other consumer loans	54	2	1
Total	$ 20,222	$ 329	$ 294

The following table presents loans individually evaluated for impairment by class of loans as of and for the six-month period ended June 30, 2016:

			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	$256	$0	$0
Non-working capital loans	615	0	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,630	0	0
Nonowner occupied loans	4,796	117	112
Agri-business and agricultural loans:
Loans secured by farmland	471	0	0
Loans for ag production	1,016	5	4
Consumer 1-4 family loans:
Closed end first mortgage loans	98	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,097	10	10
Non-working capital loans	4,356	67	68
Commercial real estate and multi-family residential loans:
Construction and land development loans	318	7	5
Owner occupied loans	959	0	0
Nonowner occupied loans	38	0	0
Multifamily loans	384	10	10
Agri-business and agricultural loans:
Other commercial loans	12	2	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,495	25	25
Open end and junior lien loans	208	0	0
Other consumer loans	58	2	2
Total	$18,807	$245	$236

Aging of the Recorded Investment in Past Due Loans

The following table presents the ageing of the recorded investment in past due loans as of June 30, 2017 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	$716,236	$0	$0	$1,614	$1,614	$717,850
Non-working capital loans	642,356	1	0	4,060	4,061	646,417
Commercial real estate and multi-family
residential loans:
Construction and land development loans	208,881	0	0	0	0	208,881
Owner occupied loans	507,600	48	0	3,471	3,519	511,119
Nonowner occupied loans	450,427	0	0	106	106	450,533
Multifamily loans	170,601	0	0	0	0	170,601
Agri-business and agricultural loans:
Loans secured by farmland	155,745	30	0	283	313	156,058
Loans for agricultural production	175,398	0	0	0	0	175,398
Other commercial loans	116,493	0	0	0	0	116,493
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	169,758	1,198	0	196	1,394	171,152
Open end and junior lien loans	173,646	156	0	154	310	173,956
Residential construction loans	10,092	0	0	0	0	10,092
Other consumer loans	68,325	129	0	0	129	68,454
Total	$3,565,558	$1,562	$0	$9,884	$11,446	$3,577,004

The following table presents the ageing of the recorded investment in past due loans as of December 31, 2016 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	$624,213	$9	$0	$140	$149	$624,362
Non-working capital loans	642,014	0	0	2,082	2,082	644,096
Commercial real estate and multi-family
residential loans:
Construction and land development loans	244,411	0	0	0	0	244,411
Owner occupied loans	465,789	0	0	3,598	3,598	469,387
Nonowner occupied loans	457,880	0	0	122	122	458,002
Multi-family loans	127,482	0	0	0	0	127,482
Agri-business and agricultural loans:
Loans secured by farmland	172,349	0	0	283	283	172,632
Loans for agricultural production	222,272	0	0	0	0	222,272
Other commercial loans	98,265	0	0	0	0	98,265
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	161,499	1,072	53	213	1,338	162,837
Open end and junior lien loans	170,372	448	0	195	643	171,015
Residential construction loans	14,983	0	0	0	0	14,983
Other consumer loans	61,119	64	0	0	64	61,183
Total	$3,462,648	$1,593	$53	$6,633	$8,279	$3,470,927

Troubled Debt Restructuring

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

	June 30	December 31
(dollars in thousands)	2017	2016
Accruing troubled debt restructured loans	$8,425	$10,351
Nonaccrual troubled debt restructured loans	6,852	5,633
Total troubled debt restructured loans	$15,277	$15,984

Loans by Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as new troubled debt restructurings that occurred during the six months ended June 30, 2017:

				Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	2	$1,712	$1,712	2	6
Commercial real estate and multi-
family residential loans:
Owner occupied loans	1	486	486	1	6
Consumer 1-4 family loans:
Closed end first mortgage loans	1	44	46	1	350
Total	4	$2,242	$2,244	4	6-350

The following table presents loans by class modified as new troubled debt restructurings that occurred during the three months ended June 30, 2016:

				Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	3	$775	$775	3	9-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	1	305	305	1	13
Total	4	$1,080	$1,080	4	9-15

The following table presents loans by class modified as new troubled debt restructurings that occurred during the six months ended June 30, 2016:

				Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	3	$775	$775	3	9-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	2	640	640	2	13-15
Total	5	$1,415	$1,415	5	9-15

Credit Quality Indicators

As of June 30, 2017, 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	$660,503	$30,547	$26,602	$0	$198	$717,850
Non-working capital loans	596,679	23,539	22,546	0	3,653	646,417
Commercial real estate and multi-
family residential loans:
Construction and land development loans	207,566	1,315	0	0	0	208,881
Owner occupied loans	483,925	14,384	12,810	0	0	511,119
Nonowner occupied loans	445,235	4,475	823	0	0	450,533
Multifamily loans	170,349	252	0	0	0	170,601
Agri-business and agricultural loans:
Loans secured by farmland	146,607	7,051	2,400	0	0	156,058
Loans for agricultural production	170,484	4,209	705	0	0	175,398
Other commercial loans	116,489	0	0	0	4	116,493
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	45,974	0	1,237	0	123,941	171,152
Open end and junior lien loans	7,275	0	0	0	166,681	173,956
Residential construction loans	0	0	0	0	10,092	10,092
Other consumer loans	19,612	0	53	0	48,789	68,454
Total	$3,070,698	$85,772	$67,176	$0	$353,358	$3,577,004

As of December 31, 2016, 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	$577,208	$17,636	$29,396	$0	$122	$624,362
Non-working capital loans	583,135	32,587	24,405	0	3,969	644,096
Commercial real estate and multi-
family residential loans:
Construction and land
development loans	242,964	1,447	0	0	0	244,411
Owner occupied loans	444,143	10,285	14,959	0	0	469,387
Nonowner occupied loans	451,390	4,550	2,062	0	0	458,002
Multi-family loans	127,219	263	0	0	0	127,482
Agri-business and agricultural loans:
Loans secured by farmland	168,660	3,689	283	0	0	172,632
Loans for agricultural production	218,581	3,691	0	0	0	222,272
Other commercial loans	98,261	0	0	0	4	98,265
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	44,687	126	1,232	0	116,792	162,837
Open end and junior lien loans	7,028	0	0	0	163,987	171,015
Residential construction loans	0	0	0	0	14,983	14,983
Other consumer loans	17,717	0	55	0	43,411	61,183
Total	$2,980,993	$74,274	$72,392	$0	$343,268	$3,470,927