The following table presents the activity of the allowance for loan losses by portfolio segment for the years ended December 31, 2014, 2013 and 2012.



Allowance for Loan Losses:				December 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*	1,053			134			3,401			(203		)	4,385
Loans charged -off	(3,522		)	(1,143		)	(4,785		)	—			(9,450		)
Recoveries	934			798			2,104			—			3,836
Ending Balance	$	10,915		$	1,374		$	4,370		$	2,180		$	18,839

* Provision before increase of $687 thousand in 2014 for decrease in FDIC indemnification asset



Allowance for Loan Losses:				December 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*	3,144			629			1,985			717		6,475
Loans charged -off	(4,830		)	(4,942		)	(3,615		)	—		(13,387		)
Recoveries	3,149			472			1,401			—		5,022
Ending Balance	$	12,450		$	1,585		$	3,650		$	2,383	$	20,068

* Provision before increase of $1.4 million in 2013 for increase in FDIC indemnification asset



Allowance for Loan Losses:				December 31, 2012
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	12,119		$	2,728		$	3,889		$	505	$	19,241
Provision for loan losses*	2,400			5,196			2,243			1,161		11,000
Loans charged -off	(4,176		)	(2,598		)	(3,640		)	—		(10,414		)
Recoveries	644			100			1,387			—		2,131
Ending Balance	$	10,987		$	5,426		$	3,879		$	1,666	$	21,958

* Provision before decrease of $2.2 million in 2012 for increase in FDIC indemnification asset

The following tables present the allocation of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method at December 31, 2014 and 2013:



Allowance for Loan Losses:			December 31, 2014
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	1,911	$	—	$	—	$	—	$	1,911
Collectively evaluated for impairment	8,733		1,365		4,370		2,180		16,648
Acquired with deteriorated credit quality	271		9		—		—		280
BALANCE AT END OF YEAR	$	10,915	$	1,374	$	4,370	$	2,180	$	18,839
Loans
(Dollar amounts in thousands)	Commercial		Residential		Consumer				Total
Individually evaluated for impairment	$	14,573	$	33	$	—			$	14,606
Collectively evaluated for impairment	1,030,949		468,872		267,880				1,767,701
Acquired with deteriorated credit quality	4,887		1,631		—				6,518
BALANCE AT END OF YEAR	$	1,050,409	$	470,536	$	267,880			$	1,788,825



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
BALANCE AT END OF YEAR	$	12,450	$	1,585	$	3,650	$	2,383	$	20,068
Loans
(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
BALANCE AT END OF YEAR	$	1,047,597	$	483,873	$	269,352			$	1,800,822

The following table presents loans individually evaluated for impairment by class of loan.



December 31, 2014					Allowance						Cash Basis
	Unpaid				for Loan		Average		Interest		Interest
	Principal		Recorded		Losses		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,200	$	926	$	—	$	2,589	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	—		—		—		58		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	292		292		—		58		—		—
Residential
First Liens	—		—		—		5		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	7,388		5,874		1,056		6,177		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	6,654		6,654		753		6,698				—
Agriculture	—		—		—		—		—		—
All Other Commercial	827		827		102		1,112		—		—
Residential
First Liens	33		33		—		35		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—				—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	16,394	$	14,606	$	1,911	$	16,732	$	—	$	—



December 31, 2013					Allowance						Cash Basis
	Unpaid				for Loan		Average		Interest		Interest
	Principal		Recorded		Losses		Recorded		Income		Income
	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



December 31, 2012					Cash Basis
	Average		Interest		Interest
	Recorded		Income		Income
	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,013	$	—	$	—
Farmland	—		—		—
Non Farm, Non Residential	1,679		—		—
Agriculture	—		—		—
All Other Commercial	—		—		—
Residential
First Liens	150		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	50		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	16,738		—		—
Farmland	891		—		—
Non Farm, Non Residential	5,000		179		—
Agriculture	—		—		—
All Other Commercial	1,362		—		—
Residential
First Liens	1,230		—		—
Home Equity	75		—		—
Junior Liens	176		—		—
Multifamily	2,216		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
TOTAL	$	30,580	$	179	$	—

The following table presents the recorded investment in nonperforming loans by class of loans.



	December 31, 2014
	Loans Past		Troubled Debt
	Due Over 90 Day Still		Restructured
(Dollar amounts in thousands)	Accruing		Accrual		Non-accrual		Non-accrual
Commercial
Commercial & Industrial	$	—	$	7	$	4,961	$	3,720
Farmland	—		—		—		79
Non Farm, Non Residential	—		10		3,987		3,388
Agriculture	—		—		—		767
All Other Commercial	—		—		—		1,258
Residential
First Liens	603		4,357		842		3,861
Home Equity	88		—		—		404
Junior Liens	12		—		—		275
Multifamily	—		—		—		—
All Other Residential	5		—		—		111
Consumer
Motor Vehicle	162		257		83		210
All Other Consumer	3		1		269		961
TOTAL	$	873	$	4,632	$	10,142	$	15,034



	December 31, 2013
	Loans Past		Troubled Debt
	Due Over 90 Day Still		Restructured
(Dollar amounts in thousands)	Accruing		Accrual		Non-accrual		Non-accrual
Commercial
Commercial & Industrial	$	240	$	—	$	6,578	$	6,861
Farmland	—		—		—		99
Non Farm, Non Residential	489		11		5,676		4,918
Agriculture	—		—		—		134
All Other Commercial	—		—		—		1,412
Residential
First Liens	1,100		3,752		531		4,047
Home Equity	40		—		—		195
Junior Liens	147		—		—		390
Multifamily	—		—		61		433
All Other Residential	1		—		—		130
Consumer
Motor Vehicle	187		370		256		186
All Other Consumer	3		17		—		974
TOTAL	$	2,207	$	4,150	$	13,102	$	19,779

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

Covered loans included in loans past due over 90 days still on accrual are $37 thousand at December 31, 2014 and $580 thousand at December 31, 2013. Covered loans included in non-accrual loans are $274 thousand at December 31, 2014 and $1.1 million at December 31, 2013. No covered loans are deemed impaired at December 31, 2014. On December 31, 2013 there were $84 thousand of covered loans deemed impaired that had no allowance for loan loss allocated to them. Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

During the years ending December 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	441			1,523			347			2,311
Charged Off	(1,069		)	(93		)	(109		)	(1,271		)
Payments	(2,744		)	(571		)	(268		)	(3,583		)
December 31,	$	8,955		$	5,189		$	614		$	14,758



										2013
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
January 1,	$	16,474		$	4,107		$	704		$	21,285
Added	1,561			841			270			2,672
Charged Off	—			(32		)	(50		)	(82		)
Payments	(5,708		)	(586		)	(280		)	(6,574		)
December 31,	$	12,327		$	4,330		$	644		$	17,301

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 years ended December 31, 2014 and 2013 the Corporation modified 69 and 32 loans respectively. In 2014 there were 40 of the 69 loans modified that were smaller balance consumer loans and in 2013 there were 30 of the 32 loans modified that were consumer in nature. There were 2 loans that were charged off within 12 months of the modification for the 2013 that were insignificant to the allowance for loans losses and had no impact on the provision for loan losses. There were no loans that were charged off within 12 months of the modification for the 2014.

The Corporation has allocated $0.7 million and $2.6 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at both December 31, 2014 and 2013, respectively. The Corporation has not committed to lend additional amounts as of December 31, 2014 and 2013 to customers with outstanding loans that are classified as troubled debt restructurings.

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



					Greater
December 31, 2014	30-59 Days		60-89 Days		than 90 days		Total
(Dollar amounts in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial
Commercial & Industrial	$	574	$	416	$	3,046	$	4,036	$	451,549	$	455,585
Farmland	—		—		—		—		95,452		95,452
Non Farm, Non Residential	1,528		68		202		1,798		232,440		234,238
Agriculture	246		18		502		766		149,099		149,865
All Other Commercial	255		—		—		255		115,014		115,269
Residential
First Liens	6,011		963		1,522		8,496		308,068		316,564
Home Equity	141		33		310		484		40,043		40,527
Junior Liens	270		83		217		570		31,487		32,057
Multifamily	—		—		—		—		72,310		72,310
All Other Residential	112		—		5		117		8,961		9,078
Consumer
Motor Vehicle	3,026		557		180		3,763		242,406		246,169
All Other Consumer	114		7		3		124		21,587		21,711
TOTAL	$	12,277	$	2,145	$	5,987	$	20,409	$	1,768,416	$	1,788,825



					Greater
December 31, 2013	30-59 Days		60-89 Days		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

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 December 31, 2014 and 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:



December 31, 2014			Special
(Dollar amounts in thousands)	Pass		Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	393,449	$	29,081	$	24,013	$	2,900	$	4,717	$	454,160
Farmland	85,772		7,618		436		—		13		93,839
Non Farm, Non Residential	186,346		21,765		25,613		36		—		233,760
Agriculture	138,713		7,399		1,746		177		67		148,102
All Other Commercial	101,942		4,356		7,055		33		1,275		114,661
Residential
First Liens	104,854		5,929		7,733		1,035		196,008		315,559
Home Equity	12,592		375		1,374		6		26,116		40,463
Junior Liens	8,112		173		561		63		23,053		31,962
Multifamily	69,080		1,801		1,249		—		3		72,133
All Other Residential	1,799		—		28		—		7,228		9,055
Consumer
Motor Vehicle	11,135		402		224		—		233,302		245,063
All Other Consumer	3,169		141		87		21		18,175		21,593
TOTAL	$	1,116,963	$	79,040	$	70,119	$	4,271	$	509,957	$	1,780,350



December 31, 2013			Special
(Dollar amounts in thousands)	Pass		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