ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2019

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

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, 2019 and 2018:

			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, 2019
Beginning balance, July 1	$	25,024	$	15,492	$	3,906	$	355	$	2,153	$	289	$	3,345	$	50,564
Provision for loan losses		943		474		(4)		28		(93)		67		(415)		1,000
Loans charged-off		(1,123)		0		0		0		(23)		(75)		0		(1,221)
Recoveries		133		44		2		0		83		23		0		285
Net loans charged-off		(990)		44		2		0		60		(52)		0		(936)
Ending balance	$	24,977	$	16,010	$	3,904	$	383	$	2,120	$	304	$	2,930	$	50,628

			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, 2018
Beginning balance, July 1	$	22,524	$	14,954	$	4,585	$	464	$	1,953	$	266	$	2,960	$	47,706
Provision for loan losses		952		140		(506)		(23)		321		62		154		1,100
Loans charged-off		(474)		0		0		0		(24)		(83)		0		(581)
Recoveries		69		7		5		0		6		31		0		118
Net loans charged-off		(405)		7		5		0		(18)		(52)		0		(463)
Ending balance	$	23,071	$	15,101	$	4,084	$	441	$	2,256	$	276	$	3,114	$	48,343

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2019 and 2018:

			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, 2019
Beginning balance, January 1	$	22,518	$	15,393	$	4,305	$	368	$	2,292	$	283	$	3,294	$	48,453
Provision for loan losses		3,260		461		(407)		15		(172)		192		(364)		2,985
Loans charged-off		(1,223)		0		0		0		(110)		(256)		0		(1,589)
Recoveries		422		156		6		0		110		85		0		779
Net loans charged-off		(801)		156		6		0		0		(171)		0		(810)
Ending balance	$	24,977	$	16,010	$	3,904	$	383	$	2,120	$	304	$	2,930	$	50,628

			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, 2018
Beginning balance, January 1	$	21,097	$	14,714	$	4,920	$	577	$	2,768	$	379	$	2,666	$	47,121
Provision for loan losses		6,246		855		(850)		(136)		(541)		78		448		6,100
Loans charged-off		(4,891)		(491)		0		0		(31)		(273)		0		(5,686)
Recoveries		619		23		14		0		60		92		0		808
Net loans charged-off		(4,272)		(468)		14		0		29		(181)		0		(4,878)
Ending balance	$	23,071	$	15,101	$	4,084	$	441	$	2,256	$	276	$	3,114	$	48,343

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, 2019 and December 31, 2018:

			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, 2019
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	9,231	$	702	$	90	$	0	$	405	$	0	$	0	$	10,428
Collectively evaluated for impairment		15,746		15,308		3,814		383		1,715		304		2,930		40,200
Total ending allowance balance	$	24,977	$	16,010	$	3,904	$	383	$	2,120	$	304	$	2,930	$	50,628
Loans:
Loans individually evaluated for impairment	$	20,123	$	4,919	$	430	$	0	$	2,608	$	0	$	0	$	28,080
Loans collectively evaluated for impairment		1,412,274		1,673,467		329,642		99,969		389,415		90,374		0		3,995,141
Total ending loans balance	$	1,432,397	$	1,678,386	$	330,072	$	99,969	$	392,023	$	90,374	$	0	$	4,023,221

			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, 2018
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	8,552	$	921	$	73	$	0	$	457	$	26	$	0	$	10,029
Collectively evaluated for impairment		13,966		14,472		4,232		368		1,835		257		3,294		38,424
Total ending allowance balance	$	22,518	$	15,393	$	4,305	$	368	$	2,292	$	283	$	3,294	$	48,453
Loans:
Loans individually evaluated for impairment	$	19,734	$	4,266	$	433	$	0	$	2,240	$	44	$	0	$	26,717
Loans collectively evaluated for impairment		1,385,604		1,562,899		370,174		95,520		388,053		85,778		0		3,888,028
Total ending loans balance	$	1,405,338	$	1,567,165	$	370,607	$	95,520	$	390,293	$	85,822	$	0	$	3,914,745

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2019:

	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	$	251	$	250	$	0
Non-working capital loans		4,189		2,110		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,424		3,244		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		290		209		0
Open end and junior lien loans		137		137		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,208		6,208		3,056
Non-working capital loans		11,547		11,555		6,175
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,675		1,675		702
Agri-business and agricultural loans:
Loans secured by farmland		147		147		90
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,618		1,622		352
Open end and junior lien loans		641		640		53
Total	$	30,730	$	28,080	$	10,428

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2018:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Non-working capital loans	$	3,284	$	1,889	$	0
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,773		1,527		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		583		502		0
Open end and junior lien loans		220		220		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		9,691		6,694		2,602
Non-working capital loans		11,099		11,151		5,950
Commercial real estate and multi-family residential loans:
Construction and land development loans		291		291		142
Owner occupied loans		2,938		2,448		779
Agri-business and agricultural loans:
Loans secured by farmland		150		150		73
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,517		1,518		457
Other consumer loans		45		44		26
Total	$	32,194	$	26,717	$	10,029

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2019:

					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	$	165	$	2	$	2
Non-working capital loans		1,394		1		1
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,266		7		7
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		211		0		0
Open end and junior lien loans		137		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,313		0		0
Non-working capital loans		12,088		96		96
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,676		8		8
Agri-business and agricultural loans:
Loans secured by farmland		147		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,625		10		9
Open end and junior lien loans		433		0		0
Total	$	27,738	$	124	$	123

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 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	$	955	$	13	$	7
Non-working capital loans		2,027		19		17
Commercial real estate and multi-family residential loans:
Construction and land development loans		41		1		1
Owner occupied loans		1,903		9		11
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		503		3		3
Open end and junior lien loans		244		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		4,019		6		6
Non-working capital loans		6,385		37		19
Commercial real estate and multi-family residential loans:
Construction and land development loans		307		5		8
Owner occupied loans		2,183		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,374		14		13
Other consumer loans		46		1		0
Total	$	20,270	$	108	$	85

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2019:

					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	$	203	$	7	$	8
Non-working capital loans		1,292		39		29
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,112		28		28
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		251		2		3
Open end and junior lien loans		141		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		6,375		143		81
Non-working capital loans		11,536		355		326
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,840		37		31
Agri-business and agricultural loans:
Loans secured by farmland		147		3		1
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,634		35		34
Open end and junior lien loans		145		0		0
Other consumer loans		24		2		1
Total	$	25,983	$	651	$	542

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 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	$	992	$	26	$	23
Non-working capital loans		1,831		50		48
Commercial real estate and multi-family residential loans:
Construction and land development loans		77		4		4
Owner occupied loans		2,443		25		25
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		526		7		7
Open end and junior lien loans		194		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		2,878		10		9
Non-working capital loans		4,371		42		25
Commercial real estate and multi-family residential loans:
Construction and land development loans		506		22		26
Owner occupied loans		1,473		1		1
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,112		29		27
Open end and junior lien loans		51		0		0
Other consumer loans		48		2		2
Total	$	16,785	$	218	$	197

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, 2019 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	$	724,404	$	0	$	0	$	6,309	$	6,309	$	730,713
Non-working capital loans		695,127		42		0		6,515		6,557		701,684
Commercial real estate and multi-family residential loans:
Construction and land development loans		318,369		0		0		0		0		318,369
Owner occupied loans		552,276		0		0		3,952		3,952		556,228
Nonowner occupied loans		544,778		0		0		0		0		544,778
Multifamily loans		259,011		0		0		0		0		259,011
Agri-business and agricultural loans:
Loans secured by farmland		175,604		6		0		430		436		176,040
Loans for agricultural production		154,017		15		0		0		15		154,032
Other commercial loans		99,969		0		0		0		0		99,969
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		185,219		850		307		675		1,832		187,051
Open end and junior lien loans		192,365		101		0		777		878		193,243
Residential construction loans		11,677		52		0		0		52		11,729
Other consumer loans		90,236		138		0		0		138		90,374
Total	$	4,003,052	$	1,204	$	307	$	18,658	$	20,169	$	4,023,221

The following table presents the aging of the recorded investment in past due loans as of December 31, 2018 by class of loans:

					Greater than
			30‑89		90 Days Past				Total Past
	Loans Not		Days		Due and Still				Due and
(dollars in thousands)	Past Due		Past Due		Accruing		Nonaccrual		Nonaccrual		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	684,191	$	4,328	$	0	$	2,245	$	6,573	$	690,764
Non-working capital loans		709,629		3,368		0		1,577		4,945		714,574
Commercial real estate and multi-family residential loans:
Construction and land development loans		265,544		0		0		0		0		265,544
Owner occupied loans		583,214		486		0		2,269		2,755		585,969
Nonowner occupied loans		520,431		57		0		0		57		520,488
Multi-family loans		195,164		0		0		0		0		195,164
Agri-business and agricultural loans:
Loans secured by farmland		177,080		150		0		283		433		177,513
Loans for agricultural production		193,094		0		0		0		0		193,094
Other commercial loans		95,520		0		0		0		0		95,520
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		183,420		1,370		0		671		2,041		185,461
Open end and junior lien loans		188,320		98		0		220		318		188,638
Residential construction loans		16,194		0		0		0		0		16,194
Other consumer loans		85,654		168		0		0		168		85,822
Total	$	3,897,455	$	10,025	$	0	$	7,265	$	17,290	$	3,914,745

Troubled Debt Restructuring

	September 30		December 31
(dollars in thousands)	2019		2018
Accruing troubled debt restructured loans	$	5,975	$	8,016
Nonaccrual troubled debt restructured loans		3,422		4,384
Total troubled debt restructured loans	$	9,397	$	12,400

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 nine months ended September 30, 2019:

						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		35		35	1	0
Total	1	$	35	$	35	1	0

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

						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	$	824	$	824	2	0-6
Total	2	$	824	$	824	2	0-6

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

						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	4		2,244		2,244	4	0-6
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	8	$	4,253	$	4,252	8	0‑239

Credit Quality Indicators

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	635,786	$	56,133	$	38,538	$	0	$	256	$	730,713
Non-working capital loans		655,100		19,066		22,364		0		5,154		701,684
Commercial real estate and multi-family residential loans:
Construction and land development loans		318,369		0		0		0		0		318,369
Owner occupied loans		516,448		16,162		23,618		0		0		556,228
Nonowner occupied loans		542,717		1,456		605		0		0		544,778
Multifamily loans		259,011		0		0		0		0		259,011
Agri-business and agricultural loans:
Loans secured by farmland		163,731		11,055		1,254		0		0		176,040
Loans for agricultural production		143,123		10,909		0		0		0		154,032
Other commercial loans		99,969		0		0		0		0		99,969
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		49,839		0		1,830		0		135,382		187,051
Open end and junior lien loans		11,067		0		777		0		181,399		193,243
Residential construction loans		0		0		0		0		11,729		11,729
Other consumer loans		16,036		0		0		0		74,338		90,374
Total	$	3,411,196	$	114,781	$	88,986	$	0	$	408,258	$	4,023,221

			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	618,612	$	43,240	$	28,563	$	0	$	349	$	690,764
Non-working capital loans		664,787		15,992		27,548		0		6,247		714,574
Commercial real estate and multi-family residential loans:
Construction and land development loans		264,900		353		291		0		0		265,544
Owner occupied loans		541,734		21,864		22,371		0		0		585,969
Nonowner occupied loans		517,356		2,491		641		0		0		520,488
Multifamily loans		194,948		216		0		0		0		195,164
Agri-business and agricultural loans:
Loans secured by farmland		166,623		9,107		1,783		0		0		177,513
Loans for agricultural production		183,189		8,155		1,750		0		0		193,094
Other commercial loans		95,516		0		0		0		4		95,520
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		54,879		0		2,021		0		128,561		185,461
Open end and junior lien loans		8,810		0		220		0		179,608		188,638
Residential construction loans		0		0		0		0		16,194		16,194
Other consumer loans		12,700		0		44		0		73,078		85,822
Total	$	3,324,054	$	101,418	$	85,232	$	0	$	404,041	$	3,914,745