The following table presents the activity of the allowance for loan losses by portfolio segment for the three months

ended March 31.



Allowance for Loan Losses:	March 31, 2014
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	12,450		$	1,585		$	3,650		$	2,383	$	20,068
Provision for loan losses*	732			66			800			127		1,725
Loans charged -off	(936		)	(172		)	(1,053		)	—		(2,161		)
Recoveries	207			102			467			—		776
Ending Balance	$	12,453		$	1,581		$	3,864		$	2,510	$	20,408

* Provision before increase of $235 thousand in 2014 for decrease in FDIC indemnification asset



Allowance for Loan Losses:	March 31, 2013
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	10,987		$	5,426		$	3,879		$	1,666	$	21,958
Provision for loan losses*	1,264			197			233			581		2,275
Loans charged -off	(450		)	(272		)	(1,026		)	—		(1,748		)
Recoveries	2,343			49			395			—		2,787
Ending Balance	$	14,144		$	5,400		$	3,481		$	2,247	$	25,272

* Provision before increase of $746 thousand in 2013 for decrease in FDIC indemnification asset

The following table presents the allocation of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method at March 31, 2014 and December 31, 2013.



Allowance for Loan Losses	March 31, 2014
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	3,223	$	—	$	—	$	—	$	3,223
Collectively evaluated for impairment	8,376		1,419		3,864		2,510		16,169
Acquired with deteriorated credit quality	854		162		—		—		1,016
Ending Balance	$	12,453	$	1,581	$	3,864	$	2,510	$	20,408



Loans:	March 31, 2014
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	$	16,768	$	36	$	—	$	16,804
Collectively evaluated for impairment	1,018,111		480,682		266,615		1,765,408
Acquired with deteriorated credit quality	7,839		2,393		—		10,232
Ending Balance	$	1,042,718	$	483,111	$	266,615	$	1,792,444



Allowance for Loan Losses:	December 31, 2013
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	3,158		—		—		—		3,158
Collectively evaluated for impairment	8,421		1,408		3,650		2,383		15,862
Acquired with deteriorated credit quality	871		177		—		—		1,048
Ending Balance	$	12,450	$	1,585	$	3,650	$	2,383	$	20,068



Loans	December 31, 2013
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	18,825		37		—		18,862
Collectively evaluated for impairment	1,020,771		481,439		269,352		1,771,562
Acquired with deteriorated credit quality	8,001		2,397		—		10,398
Ending Balance	$	1,047,597	$	483,873	$	269,352	$	1,800,822

The following tables present loans individually evaluated for impairment by class of loans.



					March 31, 2014
	Unpaid Principal		Recorded		Allowance for Loan Losses		Average Recorded		Interest Income		Cash Basis Interest
(Dollar amounts in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	2,096	$	1,894	$	—	$	1,906	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	268		102		—		104		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	—		—		—		—		—		—
Residential
First Liens	—		—		—		—		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	9,064		7,550		2,032		8,085		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	6,276		6,276		1,075		6,740		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,030		1,030		116		1,046		—		—
Residential
First Liens	36		36		—		37		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	18,770	$	16,888	$	3,223	$	17,918	$	—	$	—



					December 31, 2013
	Unpaid Principal		Recorded		Allowance for Loan Losses		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	2,120	$	1,918	$	—	$	1,555	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	271		105		—		26		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	—		—		—		—		—		—
Residential
First Liens	—		—		—		7		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	10,134		8,620		1,612		13,029		217		217
Farmland	—		—		—		356		113		113
Non Farm, Non Residential	7,664		7,204		1,500		7,921		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,062		1,062		46		2,979		—		—
Residential
First Liens	37		37		—		524		—		—
Home Equity	—		—		—		113		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		2,216		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	21,288	$	18,946	$	3,158	$	28,726	$	330	$	330

The table below presents the recorded investment in non-performing loans.



	March 31, 2014						December 31, 2013
	Loans Past Due Over 90 Day Still		Troubled Debt				Loans Past Due Over 90 Day Still		Troubled Debt
(Dollar amounts in thousands)	Accruing		Restructurings		Nonaccrual		Accruing		Restructurings		Nonaccrual
Commercial
Commercial & Industrial	$	—	$	4,774	$	7,343	$	240	$	6,578	$	6,861
Farmland	—		—		92		—		—		99
Non Farm, Non Residential	14		4,569		4,417		489		5,687		4,918
Agriculture	—		—		121		—		—		134
All Other Commercial	—		—		1,375		—		—		1,412
Residential
First Liens	781		4,318		4,254		1,100		4,283		4,047
Home Equity	142		—		194		40		—		195
Junior Liens	195		—		344		147		—		390
Multifamily	—		58		404		—		61		433
All Other Residential	2		—		124		1		—		130
Consumer
Motor Vehicle	142		16		191		187		626		186
All Other Consumer	1		604		939		3		17		974
TOTAL	$	1,277	$	14,339	$	19,798	$	2,207	$	17,252	$	19,779

Loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual are $25 thousand at March 31, 2014 and $580 thousand at December 31, 2013. Covered loans included in non-accrual loans are $1.0 million at March 31, 2014 and $1.1 million at December 31, 2013. Covered loans of $84 thousand at March 31, 2014 and December 31, 2013 are deemed impaired and have no allowance for loan loss allocated to them, respectively for March 31, 2014 and December 31, 2013. Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The commercial and industrial loans and non farm, non residential loans included in restructured loans above are also on non-accrual.

Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the aging of the recorded investment in loans by past due category and class of loans.



	March 31, 2014
	30-59 Days		60-89 Days		Greater than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	634	$	428	$	3,929	$	4,991	$	480,103	$	485,094
Farmland	225		—		—		225		91,629		91,854
Non Farm, Non Residential	91		731		780		1,602		237,360		238,962
Agriculture	192		33		—		225		107,137		107,362
All Other Commercial	163		168		293		624		118,822		119,446
Residential
First Liens	4,751		543		1,829		7,123		319,636		326,759
Home Equity	134		8		142		284		40,396		40,680
Junior Liens	210		159		312		681		32,013		32,694
Multifamily	—		—		419		419		73,532		73,951
All Other Residential	138		—		2		140		8,887		9,027
Consumer
Motor Vehicle	1,541		409		142		2,092		243,903		245,995
All Other Consumer	117		30		1		148		20,472		20,620
TOTAL	$	8,196	$	2,509	$	7,849	$	18,554	$	1,773,890	$	1,792,444



	December 31, 2013
	30-59 Days		60-89 Days		Greater than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	1,076	$	266	$	7,900	$	9,242	$	459,076	$	468,318
Farmland	—		—		—		—		92,602		92,602
Non Farm, Non Residential	362		—		2,042		2,404		239,183		241,587
Agriculture	31		32		—		63		136,388		136,451
All Other Commercial	50		217		188		455		108,184		108,639
Residential
First Liens	5,594		1,513		1,701		8,808		324,141		332,949
Home Equity	307		7		40		354		41,350		41,704
Junior Liens	392		170		471		1,033		32,269		33,302
Multifamily	103		19		400		522		66,138		66,660
All Other Residential	88		—		1		89		9,169		9,258
Consumer
Motor Vehicle	3,579		612		227		4,418		243,146		247,564
All Other Consumer	123		22		7		152		21,636		21,788
TOTAL	$	11,705	$	2,858	$	12,977	$	27,540	$	1,773,282	$	1,800,822

During the three months ended March 31, 2014 and 2013, the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's.



			2014
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	12,327		4,330		644		17,301
Added	—		133		68		201
Charged Off	(1,069	)	—		(20	)	(1,089	)
Payments	(1,915	)	(101	)	(72	)	(2,088	)
March 31,	9,343		4,362		620		14,325



			2013
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	16,474		4,107		704		21,285
Added	—		780		73		853
Charged Off	—		—		(9	)	(9	)
Payments	(404	)	(140	)	(68	)	(612	)
March 31,	16,070		4,747		700		21,517

Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modification in 2014 or 2013 resulted in the permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from twelve months to five years. Modifications involving an extension of the maturity date were for periods ranging from twelve months to ten years.

During the three months ended March 31, 2014 and 2013 the Corporation modified 12 and 8 loans respectively. In both of these periods all of the loans modified were smaller balance consumer and residential loans.

The Corporation has allocated $1.1 million and $3.1 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at both March 31, 2014 and 2013, respectively. The Corporation has not committed to lend additional amounts as of March 31, 2014 and 2013 to customers with outstanding loans that are classified as troubled debt restructurings

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial loans, with an outstanding balance greater than $100 thousand. Any consumer loans outstanding to a borrower who had commercial loans analyzed will be similarly risk rated. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and debt service capacity of the borrower or of any pledged collateral. These loans have a well-defined weakness or weaknesses which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the institution will sustain some future loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those graded substandard, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values.

Furthermore, non-homogeneous loans which were not individually analyzed, but are 90+ days past due or on non-accrual are classified as substandard. Loans included in homogeneous pools, such as residential or consumer may be classified as substandard due to 90+ days delinquency, non-accrual status, bankruptcy, or loan restructuring.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 thousand or are included in groups of homogeneous loans. As of March 31, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans are as follows:



	March 31, 2014
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	431,610	$	18,977	$	26,280	$	3,780	$	3,290	$	483,937
Farmland	86,493		3,699		325		—		20		90,537
Non Farm, Non Residential	200,698		15,687		21,641		426		—		238,452
Agriculture	100,036		5,598		103		—		33		105,770
All Other Commercial	99,580		8,064		10,165		41		972		118,822
Residential
First Liens	111,840		3,987		9,563		974		199,320		325,684
Home Equity	12,470		331		1,326		111		26,373		40,611
Junior Liens	8,649		57		517		66		23,296		32,585
Multifamily	70,235		2,075		1,469		—		—		73,779
All Other Residential	3,269		—		31		—		5,704		9,004
Consumer
Motor Vehicle	11,043		283		428		—		233,196		244,950
All Other Consumer	3,347		48		66		22		16,995		20,478
TOTAL	$	1,139,270	$	58,806	$	71,914	$	5,420	$	509,199	$	1,784,609



	December 31, 2013
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	406,650	$	18,968	$	30,986	$	4,069	$	6,426	$	467,099
Farmland	86,633		3,631		347		—		445		91,056
Non Farm, Non Residential	207,115		13,408		19,719		809		—		241,051
Agriculture	128,137		6,482		105		—		71		134,795
All Other Commercial	93,515		2,297		10,038		44		2,243		108,137
Residential
First Liens	114,074		3,834		8,498		995		204,416		331,817
Home Equity	12,883		274		1,071		113		27,295		41,636
Junior Liens	8,858		60		550		67		23,654		33,189
Multifamily	63,073		1,908		1,482		48		—		66,511
All Other Residential	3,643		—		31		—		5,550		9,224
Consumer
Motor Vehicle	11,447		219		510		9		234,210		246,395
All Other Consumer	3,507		46		79		22		17,984		21,638
TOTAL	$	1,139,535	$	51,127	$	73,416	$	6,176	$	522,294	$	1,792,548