ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

6 Months Ended

Jun. 30, 2018

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, 2018 and 2017:

		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, 2018
Beginning balance, April 1	$20,725	$14,438	$4,848	$510	$2,018	$245	$2,843	$45,627
Provision for loan losses	1,392	508	(268)	(46)	(68)	65	117	1,700
Loans charged-off	(57)	0	0	0	0	(71)	0	(128)
Recoveries	464	8	5	0	3	27	0	507
Net loans charged-off	407	8	5	0	3	(44)	0	379
Ending balance	$22,524	$14,954	$4,585	$464	$1,953	$266	$2,960	$47,706

		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 loans charged-off	278	(4)	6	0	22	(13)	0	289
Ending balance	$20,219	$13,775	$3,870	$568	$2,689	$389	$3,053	$44,563

The following tables present the activity in the allowance for loan losses by portfolio segment for the six-month periods ended June 30, 2018 and 2017:

		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, 2018
Beginning balance, January 1	$21,097	$14,714	$4,920	$577	$2,768	$379	$2,666	$47,121
Provision for loan losses	5,294	715	(344)	(113)	(862)	16	294	5,000
Loans charged-off	(4,417)	(491)	0	0	(7)	(190)	0	(5,105)
Recoveries	550	16	9	0	54	61	0	690
Net loans charged-off	(3,867)	(475)	9	0	47	(129)	0	(4,415)
Ending balance	$22,524	$14,954	$4,585	$464	$1,953	$266	$2,960	$47,706

		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 loans charged-off	126	5	10	0	62	(58)	0	145
Ending balance	$20,219	$13,775	$3,870	$568	$2,689	$389	$3,053	$44,563

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, 2018 and December 31, 2017:

		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, 2018
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$2,046	$536	$0	$0	$205	$26	$0	$2,813
Collectively evaluated for impairment	20,478	14,418	4,585	464	1,748	240	2,960	44,893
Total ending allowance balance	$22,524	$14,954	$4,585	$464	$1,953	$266	$2,960	$47,706

Loans:
Loans individually evaluated for impairment	$10,603	$4,291	$283	$0	$1,712	$47	$0	$16,936
Loans collectively evaluated for impairment	1,461,326	1,503,794	304,033	120,395	372,394	79,835	0	3,841,777
Total ending loans balance	$1,471,929	$1,508,085	$304,316	$120,395	$374,106	$79,882	$0	$3,858,713

		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, 2017
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$2,067	$795	$0	$0	$310	$44	$0	$3,216
Collectively evaluated for impairment	19,030	13,919	4,920	577	2,458	335	2,666	43,905
Total ending allowance balance	$21,097	$14,714	$4,920	$577	$2,768	$379	$2,666	$47,121

Loans:
Loans individually evaluated for impairment	$6,979	$4,802	$283	$0	$1,756	$50	$0	$13,870
Loans collectively evaluated for impairment	1,411,648	1,438,219	382,643	123,922	374,013	74,144	0	3,804,589
Total ending loans balance	$1,418,627	$1,443,021	$382,926	$123,922	$375,769	$74,194	$0	$3,818,459

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2018:

	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	$491	$491	$0
Non-working capital loans	3,006	1,611	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	88	88	0
Owner occupied loans	2,928	2,548	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	579	500	0
Open end and junior lien loans	243	244	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	7,282	4,594	707
Non-working capital loans	4,857	3,907	1,339
Commercial real estate and multi-family residential loans:
Construction and land development loans	325	324	124
Owner occupied loans	1,689	1,331	412
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	967	968	205
Other consumer loans	47	47	26
Total	$23,105	$16,936	$2,813

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 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	$ 491	$ 491	$ 0
Non-working capital loans	2,973	1,579	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	88	88	0
Owner occupied loans	2,558	2,310	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	636	570	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,617	1,617	667
Non-working capital loans	3,292	3,292	1,400
Commercial real estate and multi-family residential loans:
Construction and land development loans	827	827	350
Owner occupied loans	1,577	1,577	445
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	950	950	269
Open end and junior lien loans	235	236	41
Other consumer loans	50	50	44
Total	$ 15,897	$ 13,870	$ 3,216

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended June 30, 2018:

			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	$1,011	$6	$14
Non-working capital loans	1,738	16	26
Commercial real estate and multi-family residential loans:
Construction and land development loans	88	2	3
Owner occupied loans	2,868	9	12
Agri-business and agricultural loans:
Loans secured by farmland	283	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	533	2	3
Open end and junior lien loans	247	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	3,005	2	2
Non-working capital loans	3,513	3	6
Commercial real estate and multi-family residential loans:
Construction and land development loans	491	6	13
Owner occupied loans	1,041	1	1
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	993	8	10
Other consumer loans	48	0	2
Total	$15,859	$55	$92

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 six-month period ended June 30, 2018:

			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	$1,011	$13	$16
Non-working capital loans	1,733	31	31
Commercial real estate and multi-family residential loans:
Construction and land development loans	95	3	3
Owner occupied loans	2,712	16	14
Agri-business and agricultural loans:
Loans secured by farmland	283	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	538	4	4
Open end and junior lien loans	169	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	2,307	4	3
Non-working capital loans	3,365	5	6
Commercial real estate and multi-family residential loans:
Construction and land development loans	606	17	18
Owner occupied loans	1,117	1	1
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	981	15	14
Open end and junior lien loans	77	0	0
Other consumer loans	48	1	2
Total	$15,042	$110	$112

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

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, 2018 by class of loans:

		30-89	Greater than		Total Past
	Loans Not	Days	90 Days		Due and
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Nonaccrual	Total
Commercial and industrial loans:
Working capital lines of credit loans	$776,348	$30	$0	$4,611	$4,641	$780,989
Non-working capital loans	686,853	0	0	4,087	4,087	690,940
Commercial real estate and multi-family
residential loans:
Construction and land development loans	199,046	324	0	0	324	199,370
Owner occupied loans	565,838	0	0	3,242	3,242	569,080
Nonowner occupied loans	518,475	0	0	0	0	518,475
Multifamily loans	221,160	0	0	0	0	221,160
Agri-business and agricultural loans:
Loans secured by farmland	148,118	0	0	283	283	148,401
Loans for agricultural production	155,915	0	0	0	0	155,915
Other commercial loans	120,395	0	0	0	0	120,395
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	178,347	1,084	0	310	1,394	179,741
Open end and junior lien loans	180,860	66	0	244	310	181,170
Residential construction loans	13,138	57	0	0	57	13,195
Other consumer loans	79,828	54	0	0	54	79,882
Total	$3,844,321	$1,615	$0	$12,777	$14,392	$3,858,713

The following table presents the ageing of the recorded investment in past due loans as of December 31, 2017 by class of loans:

		30-89	Greater than		Total Past
	Loans Not	Days	90 Days		Due and
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Nonaccrual	Total
Commercial and industrial loans:
Working capital lines of credit loans	$742,205	$11	$0	$1,459	$1,470	$743,675
Non-working capital loans	671,490	0	0	3,462	3,462	674,952
Commercial real estate and multi-family
residential loans:
Construction and land development loans	215,713	8,000	0	0	8,000	223,713
Owner occupied loans	534,648	0	0	3,620	3,620	538,268
Nonowner occupied loans	507,696	0	0	0	0	507,696
Multifamily loans	173,100	244	0	0	244	173,344
Agri-business and agricultural loans:
Loans secured by farmland	186,160	0	0	283	283	186,443
Loans for agricultural production	196,483	0	0	0	0	196,483
Other commercial loans	123,922	0	0	0	0	123,922
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	177,410	1,183	6	342	1,531	178,941
Open end and junior lien loans	183,056	89	0	236	325	183,381
Residential construction loans	13,447	0	0	0	0	13,447
Other consumer loans	74,102	92	0	0	92	74,194
Total	$3,799,432	$9,619	$6	$9,402	$19,027	$3,818,459

Troubled Debt Restructuring

	June 30	December 31
(dollars in thousands)	2018	2017
Accruing troubled debt restructured loans	$3,402	$2,893
Nonaccrual troubled debt restructured loans	7,666	7,750
Total troubled debt restructured loans	$11,068	$10,643

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 June 30, 2018:

	All Modifications			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	1	$20	$20	1	0
Total	1	$20	$20	1	0

The following table presents loans by class modified as new troubled debt restructurings that occurred during the six months ended June 30, 2018:

	All Modifications			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	$600	$600	1	0
Non-working capital loans	2	1,420	1,420	2	0
Commercial real estate and multi-
family residential loans:
Construction and land
development loans	1	824	824	1	12
Owner occupied loans	1	387	387	1	12
Consumer 1-4 family loans:
Closed end first mortgage loans	1	198	197	1	239
Total	6	$3,429	$3,428	6	0-239

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

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification
		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

Credit Quality Indicators

As of June 30, 2018, 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	$692,253	$64,679	$23,698	$0	$359	$780,989
Non-working capital loans	634,295	27,890	23,657	0	5,098	690,940
Commercial real estate and multi-
family residential loans:
Construction and land development loans	198,605	441	324	0	0	199,370
Owner occupied loans	523,574	23,609	21,897	0	0	569,080
Nonowner occupied loans	515,925	1,883	667	0	0	518,475
Multifamily loans	220,931	229	0	0	0	221,160
Agri-business and agricultural loans:
Loans secured by farmland	136,465	8,358	3,578	0	0	148,401
Loans for agricultural production	144,728	9,287	1,900	0	0	155,915
Other commercial loans	120,391	0	0	0	4	120,395
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	52,761	0	1,467	0	125,513	179,741
Open end and junior lien loans	8,306	0	244	0	172,620	181,170
Residential construction loans	0	0	0	0	13,195	13,195
Other consumer loans	13,832	0	47	0	66,003	79,882
Total	$3,262,066	$136,376	$77,479	$0	$382,792	$3,858,713

As of December 31, 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	$688,748	$33,337	$21,350	$0	$240	$743,675
Non-working capital loans	624,275	20,171	25,834	0	4,672	674,952
Commercial real estate and multi-
family residential loans:
Construction and land development loans	222,445	441	827	0	0	223,713
Owner occupied loans	496,231	19,361	22,676	0	0	538,268
Nonowner occupied loans	505,033	1,970	693	0	0	507,696
Multifamily loans	173,100	244	0	0	0	173,344
Agri-business and agricultural loans:
Loans secured by farmland	174,118	7,988	4,337	0	0	186,443
Loans for agricultural production	185,772	9,716	995	0	0	196,483
Other commercial loans	123,917	0	0	0	5	123,922
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	52,301	0	1,520	0	125,120	178,941
Open end and junior lien loans	8,259	0	236	0	174,886	183,381
Residential construction loans	0	0	0	0	13,447	13,447
Other consumer loans	18,642	0	50	0	55,502	74,194
Total	$3,272,841	$93,228	$78,518	$0	$373,872	$3,818,459