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

ended June 30.



Allowance for Loan Losses:	June 30, 2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	11,168		$	1,769		$	5,106		$	1,883	$	19,926
Provision for loan losses	(816		)	(22		)	749			524		435
Loans charged -off	(555		)	(232		)	(1,055		)	—		(1,842		)
Recoveries	447			80			458			—		985
Ending Balance	$	10,244		$	1,595		$	5,258		$	2,407	$	19,504



Allowance for Loan Losses:	June 30, 2015
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	10,818		$	1,622		$	4,494		$	2,417	$	19,351
Provision for loan losses	160			277			638			75		1,150
Loans charged -off	(272		)	(181		)	(1,026		)	—		(1,479		)
Recoveries	225			42			572			—		839
Ending Balance	$	10,931		$	1,760		$	4,678		$	2,492	$	19,861

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

ended June 30.



Allowance for Loan Losses:	June 30, 2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	11,482		$	1,834		$	4,945		$	1,685	$	19,946
Provision for loan losses	(1,091		)	103			1,536			722		1,270
Loans charged -off	(822		)	(471		)	(2,189		)	—		(3,482		)
Recoveries	675			129			966			—		1,770
Ending Balance	$	10,244		$	1,595		$	5,258		$	2,407	$	19,504



Allowance for Loan Losses:	June 30, 2015
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	10,915		$	1,374		$	4,370		$	2,180	$	18,839
Provision for loan losses	167			653			1,468			312		2,600
Loans charged -off	(608		)	(406		)	(2,288		)	—		(3,302		)
Recoveries	457			139			1,128			—		1,724
Ending Balance	$	10,931		$	1,760		$	4,678		$	2,492	$	19,861

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 June 30, 2016 and December 31, 2015.



Allowance for Loan Losses	June 30, 2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	786	$	132	$	—	$	—	$	918
Collectively evaluated for impairment	9,307		1,463		5,258		2,407		18,435
Acquired with deteriorated credit quality	151		—		—		—		151
Ending Balance	$	10,244	$	1,595	$	5,258	$	2,407	$	19,504



Loans:	June 30, 2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	$	8,967	$	635	$	—	$	9,602
Collectively evaluated for impairment	1,074,936		429,103		288,553		1,792,592
Acquired with deteriorated credit quality	3,878		1,502		—		5,380
Ending Balance	$	1,087,781	$	431,240	$	288,553	$	1,807,574



Allowance for Loan Losses:	December 31, 2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	953		206		—		—		1,159
Collectively evaluated for impairment	10,342		1,628		4,945		1,685		18,600
Acquired with deteriorated credit quality	187		—		—		—		187
Ending Balance	$	11,482	$	1,834	$	4,945	$	1,685	$	19,946



Loans	December 31, 2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	8,823		902		—		9,725
Collectively evaluated for impairment	1,037,086		443,224		274,134		1,754,444
Acquired with deteriorated credit quality	4,092		1,529		—		5,621
Ending Balance	$	1,050,001	$	445,655	$	274,134	$	1,769,790

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



					June 30, 2016
	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	$	529	$	236	$	—	$	841	$	—	$	—
Farmland	1,465		1,465		—		488		—		—
Non Farm, Non Residential	3,084		3,084		—		3,147		—		—
Agriculture	635		635		—		212		—		—
All Other Commercial	1,424		1,424		—		1,540		—		—
Residential
First Liens	27		27		—		28		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	994		994		88		864		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,129		1,129		698		1,240		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	—		—		—		75		—		—
Residential
First Liens	608		608		132		722		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	9,895	$	9,602	$	918	$	9,157	$	—	$	—



					December 31, 2015
	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	$	1,516	$	1,223	$	—	$	1,796	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	3,202		3,202		—		2,080		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,760		1,760		—		1,175		—		—
Residential
First Liens	29		29		—		18		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	998		998		212		3,463		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,415		1,415		741		3,682		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	225		225		—		483		—		—
Residential
First Liens	873		873		206		460		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	10,018	$	9,725	$	1,159	$	13,157	$	—	$	—



	Three Months Ended June 30, 2016						Six Months Ended June 30, 2016
	Average Recorded		Interest Income		Cash Basis Interest Income		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:

Commercial & Industrial	$	650	$	—	$	—	$	841	$	—	$	—
Farmland	733		—		—		488		—		—
Non Farm, Non Residential	3,119		—		—		3,147		—		—
Agriculture	318		—		—		212		—		—
All Other Commercial	1,431		—		—		1,540		—		—
Residential
First Liens	28		—		—		28		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	797		—		—		864		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,153		—		—		1,240		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	—		—		—		75		—		—
Residential
First Liens	646		—		—		722		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	8,875	$	—	$	—	$	9,157	$	—	$	—



	Three Months Ended June 30, 2015						Six Months Ended June 30, 2015
	Average Recorded		Interest Income		Cash Basis Interest Income		Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	2,779	$	—	$	—	$	2,161	$	—	$	—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	1,978		—		—		1,318		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	1,025		—		—		780		—		—
Residential
First Liens	16		—		—		10		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	4,413		—		—		4,900		—		—
Farmland	—		—		—		—		—		—
Non Farm, Non Residential	4,417		—		—		5,162		—		—
Agriculture	—		—		—		—		—		—
All Other Commercial	566		—		—		653		—		—
Residential
First Liens	246		—		—		175		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	15,440	$	—	$	—	$	15,159	$	—	$	—

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



	June 30, 2016
	Loans Past Due Over 90 Day Still		Troubled Debt
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		Nonaccrual
Commercial
Commercial & Industrial	$	—	$	4	$	403	$	1,961
Farmland	48		—		—		1,520
Non Farm, Non Residential	—		5		3,041		1,828
Agriculture	—		—		—		1,107
All Other Commercial	—		—		—		1,329
Residential
First Liens	744		3,894		1,157		5,339
Home Equity	99		—		—		207
Junior Liens	86		—		—		206
Multifamily	—		—		—		—
All Other Residential	—		—		—		102
Consumer
Motor Vehicle	133		84		1		171
All Other Consumer	—		109		470		756
TOTAL	$	1,110	$	4,096	$	5,072	$	14,526



	December 31, 2015
	Loans Past Due Over 90 Day Still		Troubled Debt
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		Nonaccrual
Commercial
Commercial & Industrial	$	—	$	5	$	422	$	3,187
Farmland	—		—		—		219
Non Farm, Non Residential	—		6		3,152		2,545
Agriculture	—		—		—		378
All Other Commercial	—		—		—		1,817
Residential
First Liens	809		4,577		1,034		4,839
Home Equity	10		—		—		320
Junior Liens	45		—		—		211
Multifamily	—		—		—		—
All Other Residential	—		—		—		111
Consumer
Motor Vehicle	148		—		2		213
All Other Consumer	4		—		400		794
TOTAL	$	1,016	$	4,588	$	5,010	$	14,634

There were $178 thousand of loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual at June 30, 2016 and there were $37 thousand at December 31, 2015. There were $237 thousand of covered loans included in non-accrual loans at June 30, 2016 and there were $242 thousand at December 31, 2015. There were no covered loans at June 30, 2016 or December 31, 2015 that were deemed impaired.

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

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



	June 30, 2016
	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	$	615	$	112	$	1,027	$	1,754	$	484,840	$	486,594
Farmland	141		1,005		48		1,194		114,079		115,273
Non Farm, Non Residential	12		450		130		592		203,394		203,986
Agriculture	582		—		381		963		139,490		140,453
All Other Commercial	9		—		—		9		141,466		141,475
Residential
First Liens	981		520		1,990		3,491		277,145		280,636
Home Equity	64		32		115		211		35,745		35,956
Junior Liens	261		23		230		514		34,479		34,993
Multifamily	—		—		—		—		71,883		71,883
All Other Residential	—		—		—		—		7,772		7,772
Consumer
Motor Vehicle	2,822		452		229		3,503		261,607		265,110
All Other Consumer	102		98		1		201		23,242		23,443
TOTAL	$	5,589	$	2,692	$	4,151	$	12,432	$	1,795,142	$	1,807,574



	December 31, 2015
	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	$	326	$	274	$	1,405	$	2,005	$	476,984	$	478,989
Farmland	135		—		—		135		106,725		106,860
Non Farm, Non Residential	1,824		90		310		2,224		206,844		209,068
Agriculture	65		38		324		427		143,116		143,543
All Other Commercial	25		32		—		57		111,484		111,541
Residential
First Liens	4,960		1,181		1,671		7,812		285,913		293,725
Home Equity	85		23		114		222		37,502		37,724
Junior Liens	179		29		177		385		32,876		33,261
Multifamily	—		—		—		—		70,735		70,735
All Other Residential	15		—		—		15		10,195		10,210
Consumer
Motor Vehicle	3,212		568		181		3,961		247,882		251,843
All Other Consumer	38		10		5		53		22,238		22,291
TOTAL	$	10,864	$	2,245	$	4,187	$	17,296	$	1,752,494	$	1,769,790

During the three and six months ended June 30, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's.



				2016
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
April 1,	$	3,529		$	5,285		$	695		$	9,509
Added	—			43			62			105
Charged Off	—			(125		)	(6		)	(131		)
Payments	(76		)	(170		)	(82		)	(328		)
June 30,	$	3,453		$	5,033		$	669		$	9,155



			2016
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	3,584		5,593		683		9,860
Added	—		123		150		273
Charged Off	—		(181	)	(26	)	(207	)
Payments	(131	)	(502	)	(138	)	(771	)
June 30,	3,453		5,033		669		9,155



			2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
April 1,	8,835		5,618		614		15,067
Added	—		73		189		262
Charged Off	—		—		(40	)	(40	)
Payments	(130	)	(102	)	(106	)	(338	)
June 30,	8,705		5,589		657		14,951



			2015
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	8,955		5,189		614		14,758
Added	—		652		189		841
Charged Off	—		(62	)	(40	)	(102	)
Payments	(250	)	(190	)	(106	)	(546	)
June 30,	8,705		5,589		657		14,951

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 2016 or 2015 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. Troubled debt restructurings during the three and six months ended June 30, 2016 and 2015 did not result in any material charge-offs or additional provision expense.

The Corporation has allocated $7 thousand and $47 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at both June 30, 2016 and 2015, respectively. The Corporation has not committed to lend additional amounts as of June 30, 2016 and 2015 to customers with outstanding loans that are classified as troubled debt restructurings. The charge-offs during the three months ended June 30, 2016 and 2015 were not of any restructurings that had taken place in the previous 12 months. The impact on the provision for new troubled debt restructurings was immaterial.

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 June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans are as follows:



	June 30, 2016
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	433,878	$	19,378	$	27,153	$	470	$	4,471	$	485,350
Farmland	93,903		13,172		6,602		—		14		113,691
Non Farm, Non Residential	176,105		9,401		18,006		—		—		203,512
Agriculture	111,776		16,887		10,242		24		180		139,109
All Other Commercial	128,842		121		10,995		76		765		140,799
Residential
First Liens	93,910		3,669		7,607		603		173,986		279,775
Home Equity	10,125		213		912		9		24,646		35,905
Junior Liens	7,690		241		542		27		26,407		34,907
Multifamily	70,130		1,574		15		—		24		71,743
All Other Residential	522		—		23		—		7,207		7,752
Consumer
Motor Vehicle	10,563		274		517		10		252,612		263,976
All Other Consumer	2,799		45		103		14		20,371		23,332
TOTAL	$	1,140,243	$	64,975	$	82,717	$	1,233	$	510,683	$	1,799,851



	December 31, 2015
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	417,880	$	20,422	$	32,778	$	757	$	5,638	$	477,475
Farmland	93,418		6,387		5,208		—		16		105,029
Non Farm, Non Residential	180,659		8,114		19,857		—		—		208,630
Agriculture	121,244		11,964		8,419		27		170		141,824
All Other Commercial	95,850		2,649		10,887		101		1,535		111,022
Residential
First Liens	96,146		4,594		8,598		699		182,791		292,828
Home Equity	11,701		387		669		10		24,895		37,662
Junior Liens	7,493		86		505		58		25,033		33,175
Multifamily	68,972		1,602		—		—		23		70,597
All Other Residential	886		—		24		—		9,275		10,185
Consumer
Motor Vehicle	10,287		356		534		—		239,543		250,720
All Other Consumer	2,930		77		125		14		19,030		22,176
TOTAL	$	1,107,466	$	56,638	$	87,604	$	1,666	$	507,949	$	1,761,323