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, 2018
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	10,281		$	1,455		$	6,709		$	1,464	$	19,909
Provision for loan losses	8			(9		)	1,018			456		1,473
Loans charged -off	(315		)	(219		)	(1,539		)	—		(2,073		)
Recoveries	178			162			593			—		933
Ending Balance	$	10,152		$	1,389		$	6,781		$	1,920	$	20,242



Allowance for Loan Losses:	March 31, 2017
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Unallocated		Total
Beginning balance	$	9,731		$	1,553		$	5,767		$	1,722	$	18,773
Provision for loan losses	(514		)	51			1,593			466		1,596
Loans charged -off	(418		)	(261		)	(1,595		)	—		(2,274		)
Recoveries	578			153			569			—		1,300
Ending Balance	$	9,377		$	1,496		$	6,334		$	2,188	$	19,395

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, 2018 and December 31, 2017.



Allowance for Loan Losses	March 31, 2018
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	$	766	$	—	$	—	$	—	$	766
Collectively evaluated for impairment	9,386		1,389		6,781		1,920		19,476
Acquired with deteriorated credit quality	—		—		—		—		—
Ending Balance	$	10,152	$	1,389	$	6,781	$	1,920	$	20,242



Loans:	March 31, 2018
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	$	9,500	$	4,078	$	—	$	13,578
Collectively evaluated for impairment	1,131,154		433,270		333,505		1,897,929
Acquired with deteriorated credit quality	1,822		—		—		1,822
Ending Balance	$	1,142,476	$	437,348	$	333,505	$	1,913,329



Allowance for Loan Losses:	December 31, 2017
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Unallocated		Total
Individually evaluated for impairment	619		6		—		—		625
Collectively evaluated for impairment	9,662		1,449		6,709		1,464		19,284
Acquired with deteriorated credit quality	—		—		—		—		—
Ending Balance	$	10,281	$	1,455	$	6,709	$	1,464	$	19,909



Loans	December 31, 2017
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
Individually evaluated for impairment	9,619		463		—		10,082
Collectively evaluated for impairment	1,134,701		436,944		329,435		1,901,080
Acquired with deteriorated credit quality	1,860		—		—		1,860
Ending Balance	$	1,146,180	$	437,407	$	329,435	$	1,913,022

In the second quarter of 2017, the Corporation revised its historical loss period from four years to seven years as the Corporation believes the longer period is more appropriate as net charge-offs have been lower in recent years. The impact of this change was not material to the overall allowance for loan losses balance, however the unallocated portion was reduced by the change.

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



					March 31, 2018
	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	$	774	$	774	$	—	$	788	$	—	$	—
Farmland	930		930		—		930		—		—
Non Farm, Non Residential	2,423		2,423		—		2,442		—		—
Agriculture	109		109		—		116		—		—
All Other Commercial	1,198		1,198		—		1,218		—		—
Residential
First Liens	4,042		4,042		—		2,032		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	36		36		—		18		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	482		482		143		488		—		—
Farmland	3,047		3,047		418		3,041		—		—
Non Farm, Non Residential	—		—		—		—		—		—
Agriculture	738		537		205		537		—		—
All Other Commercial	—		—		—		—		—		—
Residential
First Liens	—		—		—		221		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	13,779	$	13,578	$	766	$	11,831	$	—	$	—



					December 31, 2017
	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	$	802	$	802	$	—	$	971	$	—	$	—
Farmland	930		930		—		1,265		—		—
Non Farm, Non Residential	2,461		2,461		—		2,781		—		—
Agriculture	123		123		—		239		—		—
All Other Commercial	1,238		1,238		—		1,308		—		—
Residential
First Liens	21		21		—		23		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	493		493		146		514		—		—
Farmland	3,035		3,035		268		669		—		—
Non Farm, Non Residential	—		—		—		131				—
Agriculture	738		537		205		279		—		—
All Other Commercial	—		—		—		—		—		—
Residential
First Liens	442		442		6		483		—		—
Home Equity	—		—		—		—		—		—
Junior Liens	—		—		—		—		—		—
Multifamily	—		—		—		—		—		—
All Other Residential	—		—		—		—		—		—
Consumer
Motor Vehicle	—		—		—		—		—		—
All Other Consumer	—		—		—		—		—		—
TOTAL	$	10,283	$	10,082	$	625	$	8,663	$	—	$	—



	Three Months Ended March 31, 2017
	Average Recorded		Interest Income		Cash Basis Interest Income
(Dollar amounts in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial
Commercial & Industrial	$	1,135	$	—	$	—
Farmland	413		—		—
Non Farm, Non Residential	3,005		—		—
Agriculture	429		—		—
All Other Commercial	1,353		—		—
Residential
First Liens	25		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
With an allowance recorded:
Commercial
Commercial & Industrial	531		—		—
Farmland	—		—		—
Non Farm, Non Residential	329		—		—
Agriculture	—		—		—
All Other Commercial	—		—		—
Residential
First Liens	514		—		—
Home Equity	—		—		—
Junior Liens	—		—		—
Multifamily	—		—		—
All Other Residential	—		—		—
Consumer
Motor Vehicle	—		—		—
All Other Consumer	—		—		—
TOTAL	$	7,734	$	—	$	—

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



	March 31, 2018
	Loans Past Due Over 90 Day Still		Troubled Debt				Nonaccrual Excluding
			Restructured
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		TDR
Commercial
Commercial & Industrial	$	—	$	2	$	209	$	1,638
Farmland	—		—		—		4,150
Non Farm, Non Residential	—		—		2,461		184
Agriculture	—		—		—		761
All Other Commercial	—		—		—		1,211
Residential
First Liens	139		3,103		498		4,180
Home Equity	29		—		—		221
Junior Liens	57		36		—		78
Multifamily	—		—		—		—
All Other Residential	—		—		—		86
Consumer
Motor Vehicle	430		7		—		197
All Other Consumer	5		246		425		500
TOTAL	$	660	$	3,394	$	3,593	$	13,206



	December 31, 2017
	Loans Past Due Over 90 Day Still		Troubled Debt				Nonaccrual Excluding
			Restructured
(Dollar amounts in thousands)	Accruing		Accruing		Nonaccrual		TDR
Commercial
Commercial & Industrial	$	41	$	2	$	212	$	1,679
Farmland	19		—		—		4,141
Non Farm, Non Residential	—		56		2,440		172
Agriculture	—		—		—		707
All Other Commercial	—		—		—		1,236
Residential
First Liens	1,011		3,105		575		3,972
Home Equity	8		—		—		249
Junior Liens	137		—		—		134
Multifamily	—		—		—		—
All Other Residential	—		—		—		90
Consumer
Motor Vehicle	268		9		—		242
All Other Consumer	—		177		527		623
TOTAL	$	1,484	$	3,349	$	3,754	$	13,245

There were $46 thousand of loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual at March 31, 2018 and there were $88 thousand at December 31, 2017. There were $59 thousand of covered loans included in non-accrual loans at March 31, 2018 and there were $62 thousand at December 31, 2017. There were no covered loans at March 31, 2018 or December 31, 2017 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.



	March 31, 2018
	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	$	538	$	431	$	620	$	1,589	$	490,558	$	492,147
Farmland	143		—		3,976		4,119		100,979		105,098
Non Farm, Non Residential	69		61		2,462		2,592		197,476		200,068
Agriculture	23		25		631		679		133,311		133,990
All Other Commercial	50		17		—		67		211,106		211,173
Residential
First Liens	4,160		533		776		5,469		242,629		248,098
Home Equity	191		—		29		220		35,751		35,971
Junior Liens	95		56		57		208		42,833		43,041
Multifamily	—		—		—		—		97,104		97,104
All Other Residential	53		—		12		65		13,069		13,134
Consumer
Motor Vehicle	3,438		611		430		4,479		304,384		308,863
All Other Consumer	102		24		5		131		24,511		24,642
TOTAL	$	8,862	$	1,758	$	8,998	$	19,618	$	1,893,711	$	1,913,329



	December 31, 2017
	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	$	372	$	80	$	640	$	1,092	$	474,709	$	475,801
Farmland	341		—		3,671		4,012		104,457		108,469
Non Farm, Non Residential	141		—		—		141		200,804		200,945
Agriculture	141		—		561		702		152,388		153,090
All Other Commercial	—		—		—		—		207,875		207,875
Residential
First Liens	5,467		1,317		1,434		8,218		247,029		255,247
Home Equity	310		46		8		364		35,752		36,116
Junior Liens	274		106		194		574		41,688		42,262
Multifamily	—		—		—		—		90,141		90,141
All Other Residential	300		—		12		312		13,329		13,641
Consumer
Motor Vehicle	4,770		697		294		5,761		298,211		303,972
All Other Consumer	107		22		—		129		25,334		25,463
TOTAL	$	12,223	$	2,268	$	6,814	$	21,305	$	1,891,717	$	1,913,022

During the three months ended March 31, 2018 and 2017, the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's.



				2018
(Dollar amounts in thousands)	Commercial			Residential			Consumer			Total
January 1,	$	2,709		$	3,611		$	714		$	7,034
Added	—			107			74			181
Charged Off	—			(16		)	(36		)	(52		)
Payments	(37		)	(134		)	(73		)	(244		)
March 31,	$	2,672		$	3,568		$	679		$	6,919



			2017
(Dollar amounts in thousands)	Commercial		Residential		Consumer		Total
January 1,	3,386		4,447		732		8,565
Added	—		—		168		168
Charged Off	—		(33	)	(23	)	(56	)
Payments	(84	)	(346	)	(89	)	(519	)
March 31,	3,302		4,068		788		8,158

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 2018 or 2017 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 months ended March 31, 2018 and 2017 did not result in any material charge-offs or additional provision expense.

The Corporation has no allocations of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2018 and 2017. The Corporation has not committed to lend additional amounts as of March 31, 2018 and 2017 to customers with outstanding loans that are classified as troubled debt restructurings. None of the charge-offs during the three months ended March 31, 2018 and 2017 were of restructurings that had occurred in the previous 12 months.

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 those with an outstanding balance less than $100 thousand or are included in groups of homogeneous loans. As of March 31, 2018 and December 31, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans are as follows:



	March 31, 2018
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	442,274	$	20,830	$	19,425	$	38	$	8,119	$	490,686
Farmland	88,302		7,774		7,651		—		18		103,745
Non Farm, Non Residential	179,010		7,133		13,491		—		—		199,634
Agriculture	101,608		11,371		18,240		—		444		131,663
All Other Commercial	200,197		2,664		7,290		—		48		210,199
Residential
First Liens	44,982		736		3,215		3		198,326		247,262
Home Equity	506		—		78		—		35,324		35,908
Junior Liens	1,664		114		194		76		40,894		42,942
Multifamily	96,880		—		—		—		34		96,914
All Other Residential	—		—		29		—		13,064		13,093
Consumer
Motor Vehicle	—		—		957		—		306,623		307,580
All Other Consumer	—		—		58		—		24,477		24,535
TOTAL	$	1,155,423	$	50,622	$	70,628	$	117	$	627,371	$	1,904,161



	December 31, 2017
(Dollar amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
Commercial
Commercial & Industrial	$	430,015	$	19,889	$	18,611	$	38	$	5,947	$	474,500
Farmland	88,338		10,782		7,466		—		10		106,596
Non Farm, Non Residential	179,181		7,689		13,632		—		—		200,502
Agriculture	111,724		17,482		21,388		—		342		150,936
All Other Commercial	194,170		2,723		7,459		—		2,604		206,956
Residential
First Liens	45,320		750		3,980		5		204,329		254,384
Home Equity	319		—		64		—		35,653		36,036
Junior Liens	1,882		76		342		100		39,755		42,155
Multifamily	89,936		—		—		—		36		89,972
All Other Residential	—		—		67		—		13,529		13,596
Consumer
Motor Vehicle	—		—		731		—		301,900		302,631
All Other Consumer	—		—		44		—		25,301		25,345
TOTAL	$	1,140,885	$	59,391	$	73,784	$	143	$	629,406	$	1,903,609