ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 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 September 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 September 30, 2017
Beginning balance, July 1	$ 20,219	$ 13,775	$ 3,870	$ 568	$ 2,689	$ 389	$ 3,053	$ 44,563
Provision for loan losses	(612)	426	425	108	30	15	58	450
Loans charged-off	(44)	0	0	0	(40)	(86)	0	(170)
Recoveries	364	246	7	0	11	26	0	654
Net loan recoveries	320	246	7	0	(29)	(60)	0	484
Ending balance	$ 19,927	$ 14,447	$ 4,302	$ 676	$ 2,690	$ 344	$ 3,111	$ 45,497

		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 September 30, 2016
Beginning balance, July 1	$ 20,935	$ 12,637	$ 3,047	$ 365	$ 2,934	$ 333	$ 2,996	$ 43,247
Provision for loan losses	(715)	650	56	18	72	70	(151)	0
Loans charged-off	(168)	(331)	0	0	(224)	(50)	0	(773)
Recoveries	268	17	5	0	69	20	0	379
Net loans charged-off	100	(314)	5	0	(155)	(30)	0	(394)
Ending balance	$ 20,320	$ 12,973	$ 3,108	$ 383	$ 2,851	$ 373	$ 2,845	$ 42,853

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 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
Nine Months Ended September 30, 2017
Beginning balance, January 1	$ 20,272	$ 13,452	$ 3,532	$ 461	$ 2,827	$ 387	$ 2,787	$ 43,718
Provision for loan losses	(791)	744	753	215	(170)	75	324	1,150
Loans charged-off	(430)	(259)	0	0	(53)	(192)	0	(934)
Recoveries	876	510	17	0	86	74	0	1,563
Net loan recoveries	446	251	17	0	33	(118)	0	629
Ending balance	$ 19,927	$ 14,447	$ 4,302	$ 676	$ 2,690	$ 344	$ 3,111	$ 45,497

		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
Nine Months Ended September 30, 2016
Beginning balance, January 1	$ 21,564	$ 12,473	$ 2,445	$ 574	$ 3,395	$ 319	$ 2,840	$ 43,610
Provision for loan losses	(1,057)	771	649	(191)	(295)	118	5	0
Loans charged-off	(542)	(499)	0	0	(354)	(140)	0	(1,535)
Recoveries	355	228	14	0	105	76	0	778
Net loans charged-off	(187)	(271)	14	0	(249)	(64)	0	(757)
Ending balance	$ 20,320	$ 12,973	$ 3,108	$ 383	$ 2,851	$ 373	$ 2,845	$ 42,853

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, 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
September 30, 2017
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 2,750	$ 688	$ 0	$ 0	$ 320	$ 43	$ 0	$ 3,801
Collectively evaluated for impairment	17,177	13,759	4,302	676	2,370	301	3,111	41,696
Total ending allowance balance	$ 19,927	$ 14,447	$ 4,302	$ 676	$ 2,690	$ 344	$ 3,111	$ 45,497

Loans:
Loans individually evaluated for impairment	$ 7,859	$ 6,896	$ 310	$ 0	$ 1,563	$ 51	$ 0	$ 16,679
Loans collectively evaluated for impairment	1,354,186	1,401,366	317,647	114,705	363,361	67,308	0	3,618,573
Total ending loans balance	$ 1,362,045	$ 1,408,262	$ 317,957	$ 114,705	$ 364,924	$ 67,359	$ 0	$ 3,635,252

		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, 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 September 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	$ 18	$ 18	$ 0
Non-working capital loans	2,689	1,295	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	88	88	0
Owner occupied loans	2,447	2,200	0
Nonowner occupied loans	2,778	2,778	0
Agri-business and agricultural loans:
Loans secured by farmland	630	310	0
Consumer 1-4 family loans:
Closed end first mortgage loans	424	356	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,515	2,514	1,072
Non-working capital loans	4,032	4,032	1,678
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,830	1,830	688
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	963	964	278
Open end and junior lien loans	243	243	42
Other consumer loans	51	51	43
Total	$ 18,708	$ 16,679	$ 3,801

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 September 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	$ 315	$ 14	$ 11
Non-working capital loans	1,321	18	18
Commercial real estate and multi-family residential loans:
Construction and land development loans	100	3	3
Owner occupied loans	2,222	2	2
Nonowner occupied loans	2,784	152	152
Agri-business and agricultural loans:
Loans secured by farmland	301	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	342	3	3
Open end and junior lien loans	101	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,529	22	22
Non-working capital loans	5,700	74	74
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,714	9	9
Agri-business and agricultural loans:
Loans secured by farmland	10	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	969	13	13
Open end and junior lien loans	81	0	0
Other consumer loans	52	1	1
Total	$ 18,541	$ 311	$ 308

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 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	$ 387	$ 8	$ 0
Non-working capital loans	1,473	8	5
Commercial real estate and multi-family residential loans:
Construction and land development loans	275	0	0
Owner occupied loans	2,475	2	2
Nonowner occupied loans	4,690	88	88
Multifamily loans	17	0	0
Agri-business and agricultural loans:
Loans secured by farmland	346	0	0
Loans for ag production	676	0	0
Other commercial loans	4	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	82	0	0
Open end and junior lien loans	52	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,336	11	11
Non-working capital loans	4,538	35	33
Commercial real estate and multi-family residential loans:
Construction and land development loans	55	1	3
Owner occupied loans	1,150	0	0
Multifamily loans	254	2	1
Other commercial loans	8	0	1
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,378	5	4
Open end and junior lien loans	247	0	0
Other consumer loans	57	1	1
Total	$ 19,500	$ 161	$ 149

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 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	$ 485	$ 22	$ 19
Non-working capital loans	1,337	27	27
Commercial real estate and multi-family residential loans:
Construction and land development loans	117	4	4
Owner occupied loans	2,395	4	4
Nonowner occupied loans	3,397	222	222
Agri-business and agricultural loans:
Loans secured by farmland	289	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	249	5	5
Open end and junior lien loans	137	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,090	33	33
Non-working capital loans	6,418	116	116
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,641	12	11
Agri-business and agricultural loans:
Loans secured by farmland	3	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,023	18	16
Open end and junior lien loans	27	0	0
Other consumer loans	53	2	2
Total	$ 19,661	$ 465	$ 459

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 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	$ 300	$ 8	$ 8
Non-working capital loans	901	8	5
Commercial real estate and multi-family residential loans:
Construction and land development loans	92	0	0
Owner occupied loans	2,578	2	2
Nonowner occupied loans	4,760	205	200
Multifamily loans	6	0	0
Agri-business and agricultural loans:
Loans secured by farmland	429	0	0
Loans for ag production	902	5	4
Other commercial loans	1	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	93	0	0
Open end and junior lien loans	17	0	0

With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,176	21	21
Non-working capital loans	4,417	103	101
Commercial real estate and multi-family residential loans:
Construction and land development loans	230	8	8
Owner occupied loans	1,023	0	0
Nonowner occupied loans	26	0	0
Multifamily loans	341	12	11
Other commercial loans	10	0	1
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,456	31	29
Open end and junior lien loans	221	0	0
Other consumer loans	58	3	3
Total	$ 19,037	$ 406	$ 393

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 September 30, 2017 by class of loans:

					Total
		30-89	Greater than		Past Due
	Loans Not	Days	90 Days		And
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Nonaccrual	Total
Commercial and industrial loans:
Working capital lines of credit loans	$ 701,635	$ 475	$ 0	$ 1,883	$ 2,358	$ 703,993
Non-working capital loans	653,885	310	0	3,857	4,167	658,052
Commercial real estate and multi-family
residential loans:
Construction and land development loans	286,895	0	0	0	0	286,895
Owner occupied loans	495,576	0	0	3,753	3,753	499,329
Nonowner occupied loans	456,451	0	0	98	98	456,549
Multifamily loans	165,489	0	0	0	0	165,489
Agri-business and agricultural loans:
Loans secured by farmland	161,248	0	0	311	311	161,559
Loans for agricultural production	156,398	0	0	0	0	156,398
Other commercial loans	114,705	0	0	0	0	114,705
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	170,467	920	73	134	1,127	171,594
Open end and junior lien loans	182,394	189	0	243	432	182,826
Residential construction loans	10,504	0	0	0	0	10,504
Other consumer loans	67,314	45	0	0	45	67,359
Total	$ 3,622,961	$ 1,939	$ 73	$ 10,279	$ 12,291	$ 3,635,252

The following table presents the ageing of the recorded investment in past due loans as of December 31, 2016 by class of loans:

					Total
		30-89	Greater than		Past Due
	Loans Not	Days	90 Days		And
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Nonaccrual	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
Multifamily 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

	September 30	December 31
(dollars in thousands)	2017	2016
Accruing troubled debt restructured loans	$ 5,601	$ 10,351
Nonaccrual troubled debt restructured loans	7,946	5,633
Total troubled debt restructured loans	$ 13,547	$ 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 three months ended September 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:
Working capital lines of credit loans	1	$ 1,324	$ 1,324	1	9
Non-working capital loans	2	210	210	2	0-6
Consumer 1-4 family loans:
Closed end first mortgage loans	1	76	76	1	198
Total	4	$ 1,610	$ 1,610	4	0-198

The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 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:
Working capital lines of credit loans	1	$ 1,324	$ 1,324	1	9
Non-working capital loans	4	1,922	1,922	4	0-6
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	2	120	122	2	198-350
Total	8	$ 3,852	$ 3,854	8	0-350

The following table presents loans by class modified as new troubled debt restructurings that occurred during the three months ended September 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:
Working capital lines of credit loans
Non-working capital loans	2	$ 1,066	$ 1,066	2	60-356
Total	2	$ 1,066	$ 1,066	2	60-356

The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 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	5	$ 1,841	$ 1,842	5	9-356
Commercial real estate and multi-
family residential loans:
Owner occupied loans	2	640	640	2	13-15
Total	7	$ 2,481	$ 2,482	7	9-356

Credit Quality Indicators

As of September 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	$ 652,780	$ 30,041	$ 20,997	$ 0	$ 175	$ 703,993
Non-working capital loans	612,991	14,922	26,041	0	4,098	658,052
Commercial real estate and multi-
family residential loans:
Construction and land development loans	285,629	1,266	0	0	0	286,895
Owner occupied loans	459,858	15,124	24,347	0	0	499,329
Nonowner occupied loans	451,049	4,697	803	0	0	456,549
Multifamily loans	165,243	246	0	0	0	165,489
Agri-business and agricultural loans:
Loans secured by farmland	149,474	7,682	4,403	0	0	161,559
Loans for agricultural production	146,190	9,293	915	0	0	156,398
Other commercial loans	114,700	0	0	0	5	114,705
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	45,220	0	1,320	0	125,054	171,594
Open end and junior lien loans	8,265	0	243	0	174,318	182,826
Residential construction loans	(1)	0	0	0	10,505	10,504
Other consumer loans	14,820	0	51	0	52,488	67,359
Total	$ 3,106,218	$ 83,271	$ 79,120	$ 0	$ 366,643	$ 3,635,252

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
Multifamily 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