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LOANS AND ALLOWANCE FOR LOAN LOSSES
 12 Months Ended
Dec. 31, 2013
LOANS AND ALLOWANCE FOR LOAN LOSSES  
LOANS AND ALLOWANCE FOR LOAN LOSSES

NOTE 5 — LOANS AND ALLOWANCE FOR LOAN LOSSES

       Loans were as follows:

 
   December 31,
2013
   December 31,
2012
  
   

Commercial

              

Commercial and industrial

   $ 180,378   $ 134,156  

Agricultural

     30,323     22,355  

Commercial Real Estate

              

Farm

     76,082     66,119  

Hotel

     108,226     131,495  

Construction and development

     35,731     25,208  

Other

     546,970     507,231  

Residential

              

1-4 family

     403,733     394,195  

Home equity

     244,277     224,329  

Consumer

              

Direct

     45,129     45,844  

Indirect

     1,077     2,451  
       
​ ​ ​ ​ ​ ​ ​ ​

Total loans

     1,671,926     1,553,383  

Allowance for loan losses

     (27,609 )   (32,227 )
       
​ ​ ​ ​ ​ ​ ​ ​

Net loans

   $ 1,644,317   $ 1,521,156  
       
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
       

       The following tables presents the activity in the allowance for loan losses by portfolio segment for the years ending December 31, 2013, 2012, and 2011:

2013
   Commercial
   Commercial
Real Estate
   Residential
   Consumer
   Total
  
   

Allowance for loan losses

                                

Balance, January 1

   $ 3,894   $ 24,157   $ 3,180   $ 996   $ 32,227  

Provision charged to expense

     208     1,319     1,928     1,079     4,534  

Losses charged off

     (1,152 )   (6,353 )   (2,349 )   (2,648 )   (12,502 )

Recoveries

     341     1,087     650     1,272     3,350  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31

   $ 3,291   $ 20,210   $ 3,409   $ 699   $ 27,609  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

2012
   Commercial
   Commercial
Real Estate
   Residential
   Consumer
   Total
  
   

Allowance for loan losses

                                

Balance, January 1

   $ 5,562   $ 30,476   $ 2,972   $ 879   $ 39,889  

Provision charged to expense

     (265 )   4,802     3,490     1,823     9,850  

Losses charged off

     (1,946 )   (13,553 )   (3,547 )   (3,286 )   (22,332 )

Recoveries

     543     2,432     265     1,580     4,820  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31

   $ 3,894   $ 24,157   $ 3,180   $ 996   $ 32,227  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

2011
   Commercial
   Commercial
Real Estate
   Residential
   Consumer
   Total
  
   

Allowance for loan losses

                                

Balance, January 1

   $ 6,386   $ 32,653   $ 2,281   $ 1,285   $ 42,605  

Provision charged to expense

     215     13,406     3,136     1,043     17,800  

Losses charged off

     (2,211 )   (16,954 )   (3,093 )   (2,636 )   (24,894 )

Recoveries

     1,172     1,371     648     1,187     4,378  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31

   $ 5,562   $ 30,476   $ 2,972   $ 879   $ 39,889  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method as of December 31, 2013 and 2012:

December 31, 2013
   Commercial
   Commercial
Real Estate
   Residential
   Consumer
   Total
  
   

Allowance for loan losses

                                

Ending Balance individually evaluated for impairment

   $ 13   $ 1,167   $ 105   $ 2   $ 1,287  

Ending Balance collectively evaluated for impairment

     3,278     19,043     3,304     697     26,322  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total ending allowance balance

   $ 3,291   $ 20,210   $ 3,409   $ 699   $ 27,609  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

Loans

                                

Ending Balance individually evaluated for impairment

   $ 300   $ 21,240   $ 10,797   $ 785   $ 33,122  

Ending Balance collectively evaluated for impairment

     210,401     745,769     637,213     45,421   $ 1,638,804  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total ending loan balance excludes $5,043 of accrued interest

   $ 210,701   $ 767,009   $ 648,010   $ 46,206   $ 1,671,926  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2012
   Commercial
   Commercial
Real Estate
   Residential
   Consumer
   Total
  
   

Allowance for loan losses

                                

Ending Balance individually evaluated for impairment

   $ 150   $ 3,067     —     —   $ 3,217  

Ending Balance collectively evaluated for impairment

     3,744     21,090     3,180     996     29,010  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total ending allowance balance

   $ 3,894   $ 24,157   $ 3,180   $ 996   $ 32,227  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

Loans

                                

Ending Balance individually evaluated for impairment

   $ 1,797   $ 33,499   $ 14,175   $ 1,083   $ 50,554  

Ending Balance collectively evaluated for impairment

     154,714     696,554     604,349     47,212     1,502,829  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total ending loan balance excludes $5,206 of accrued interest

   $ 156,511   $ 730,053   $ 618,524   $ 48,295   $ 1,553,383  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       Nonperforming loans were as follows:

December 31
   2013
   2012
  
   

Loans past due 90 days or more still on accrual

   $ 14   $ 565  

Troubled debt restructurings (accruing)

     4,188     15,102  

Non-accrual loans

     22,341     35,451  
       
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 26,543   $ 51,118  
       
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
       

       Nonperforming loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The decrease in troubled debt restructurings was due primarily to three credits totaling $6,814 that became performing loans in 2013.

       The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2013, 2012, and 2011. Performing troubled debt restructurings at December 31, 2013, totaling $6,593 were excluded as allowed by ASC 310-40.

December 31, 2013
   Unpaid
Principal
Balance
   Recorded
Investment
   Allowance
for Loan
Losses
Allocated
   Interest
Income
Recognized
   Cash Basis
Interest
Recognized
  
   

With an allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 194   $ 177   $ 13              

Agricultural

     —     —     —              

Commercial Real Estate

                                

Farm

     625     436     61              

Hotel

     —     —     —              

Construction and development

     —     —     —              

Other

     7,309     6,382     1,106              

Residential

                                

1-4 Family

     1,089     981     102              

Home Equity

     50     50     3              

Consumer

                                

Direct

     126     126     2              

Indirect

     —     —     —              
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with allowance recorded

     9,393     8,152     1,287              

With no related allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 204   $ 123         $ 12   $ 12  

Agricultural

     —     —           —     —  

Commercial Real Estate

                                

Farm

     767     657           11     11  

Hotel

     —     —           1     1  

Construction and development

     942     795           45     45  

Other

     8,651     6,377           72     72  

Residential

                                

1-4 Family

     8,931     8,007           15     15  

Home Equity

     1,860     1,759           13     13  

Consumer

                                

Direct

     675     649           17     17  

Indirect

     11     10           —     —  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with no allowance recorded

     22,041     18,377     —     186     186  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total impaired loans

   $ 31,434   $ 26,529   $ 1,287   $ 186   $ 186  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

December 31, 2012
   Unpaid
Principal
Balance
   Recorded
Investment
   Allowance
for Loan
Losses
Allocated
   Interest
Income
Recognized
   Cash Basis
Interest Recognized
  
   

With an allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 305   $ 305   $ 150              

Agricultural

     —     —     —              

Commercial Real Estate

                                

Farm

     922     922     442              

Hotel

                                

Construction and development

     742     644     240              

Other

     9,727     9,419     2,385              

Residential

                                

1-4 Family

                                

Home Equity

                                

Consumer

                                

Direct

                                

Indirect

                                
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with allowance recorded

     11,696     11,290     3,217              

With no related allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 2,115   $ 1,492         $ 76   $ 76  

Agricultural

     1     —                    

Commercial Real Estate

                                

Farm

     741     663           9     9  

Hotel

     6,257     5,968                    

Construction and development

     2,685     1,499           108     108  

Other

     20,047     14,384           129     129  

Residential

                                

1-4 Family

     13,110     11,548           3     3  

Home Equity

     2,801     2,627           17     17  

Consumer

                                

Direct

     1,083     1,066           9     9  

Indirect

     19     17           7     7  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with no allowance recorded

     48,859     39,264     —     358     358  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total impaired loans

   $ 60,555   $ 50,554   $ 3,217   $ 358   $ 358  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2011
   Unpaid
Principal
Balance
   Recorded
Investment
   Allowance
for Loan
Losses
Allocated
   Interest
Income
Recognized
   Cash Basis
Interest
Recognized
  
   

With an allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 3,130   $ 3,057   $ 1,193              

Agricultural

     —     —     —              

Commercial Real Estate

                                

Farm

     486     486     193              

Hotel

     5,385     5,385     100              

Construction and development

     5,558     5,476     2,371              

Other

     14,400     14,322     2,812              

Residential

                                

1-4 Family

                                

Home Equity

                                

Consumer

                                

Direct

                                

Indirect

                                
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with allowance recorded

     28,959     28,726     6,669              

With no related allowance recorded

                                

Commercial

                                

Commercial and industrial

   $ 2,720   $ 2,030         $ 22   $ 22  

Agricultural

     351     57           —     —  

Commercial Real Estate

                                

Farm

     579     531           —     —  

Hotel

     876     384                    

Construction and development

     2,996     1,839           1     1  

Other

     16,325     12,726           135     135  

Residential

                                

1-4 Family

     12,344     12,045           8     8  

Home Equity

     2,548     2,477           8     8  

Consumer

                                

Direct

     1,096     1,083           9     9  

Indirect

     35     33           5     5  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Subtotal — impaired with no allowance recorded

     39,870     33,205     —     188     188  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total impaired loans

   $ 68,829   $ 61,931   $ 6,669   $ 188   $ 188  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       The following table presents the average recorded investment of impaired loans in 2013, 2012, and 2011.

 
   2013
   2012
   2011
  
   

Commercial

                    

Commercial and industrial

   $ 997   $ 4,401   $ 6,438  

Agricultural

     —     23     103  

Commercial Real Estate

                    

Farm

     1,360     1,180     1,110  

Hotel

     1,194     2,388     7,271  

Construction and development

     1,514     4,751     9,467  

Other

     18,150     25,716     29,079  

Residential

                    

1-4 family

     10,372     11,778     11,825  

Home equity

     2,420     2,719     1,974  

Consumer

                    

Direct

     893     1,041     1,143  

Indirect

     14     41     58  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total loans

   $ 36,914   $ 54,038   $ 68,468  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2013 and 2012.

 
   Non-accrual
   Past due over
90 days and
still accruing
  
 
      
December 31,
   2013
   2012
   2013
   2012
  
   

Commercial

                          

Commercial and industrial

   $ 159   $ 1,777   $ 14   $ —  

Agricultural

     —     —     —     —  

Commercial Real Estate

                          

Farm

     1,093     1,584     —     —  

Hotel

     —     —     —     —  

Construction and development

     329     1,657     —     565  

Other

     11,489     17,442     —     —  

Residential

                          

1-4 Family

     7,635     10,392     —     —  

Home Equity

     1,452     2,216     —     —  

Consumer

                          

Direct

     174     366     —     —  

Indirect

     10     17     —     —  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 22,341   $ 35,451   $ 14   $ 565  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 and 2012 by class of loans:

December 31, 2013
   Total
Loans
   30-59 Days
Past Due
   60-89 Days
Past Due
   Greater than
90 Days
Past Due
   Total
Past Due
   Loans Not
Past Due
  
   

Commercial

                                      

Commercial and industrial

   $ 180,378   $ 64   $ 24   $ 72   $ 160   $ 180,218  

Agricultural

     30,323     —     —     —     —     30,323  

Commercial Real Estate

                                      

Farm

     76,082     —     —     697     697     75,385  

Hotel

     108,226     —     —     —     —     108,226  

Construction and development

     35,731     466     —     329     795     34,936  

Other

     546,970     984     187     5,944     7,115     539,855  

Residential

                                      

1-4 Family

     403,733     7,381     1,969     4,936     14,286     389,447  

Home Equity

     244,277     646     313     1,025     1,984     242,293  

Consumer

                                      

Direct

     45,129     192     32     126     350     44,779  

Indirect

     1,077     2     4     —     6     1,071  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total — excludes $5,043 of accrued interest

   $ 1,671,926   $ 9,735   $ 2,529   $ 13,129   $ 25,393   $ 1,646,533  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2012
   Total
Loans
   30-59 Days
Past Due
   60-89 Days
Past Due
   Greater than
90 Days
Past Due
   Total
Past Due
   Loans Not
Past Due
  
   

Commercial

                                      

Commercial and industrial

   $ 134,156   $ 1,421   $ 311   $ 1,094   $ 2,826   $ 131,330  

Agricultural

     22,355     —     —     —     —     22,355  

Commercial Real Estate

                                      

Farm

     66,119     158     —     1,417     1,575     64,544  

Hotel

     131,495     —     —     —     —     131,495  

Construction and development

     25,208     —     —     2,121     2,121     23,087  

Other

     507,231     2,516     1,208     10,607     14,331     492,900  

Residential

                                      

1-4 Family

     394,195     7,788     2,605     5,492     15,885     378,310  

Home Equity

     224,329     1,170     357     1,428     2,955     221,374  

Consumer

                                      

Direct

     45,844     182     49     242     473     45,371  

Indirect

     2,451     33     12     5     50     2,401  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total — excludes $5,206 of accrued interest

   $ 1,553,383   $ 13,268   $ 4,542   $ 22,406   $ 40,216   $ 1,513,167  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

  • Troubled Debt Restructurings

       During the years ending December 31, 2013 and 2012, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk.

       Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 60 months to 30 years. Modifications involving an extension of the maturity date were for periods ranging from 6 months to 14 months.

       The total of troubled debt restructurings at December 31, 2013 and 2012 was $14,347 and $18,932 respectively. Included in the TDR totals are non-accrual loans of $3,566 and $3,829 at December 31, 2013 and 2012 and performing loans of $6,593 at December 31, 2013 and $0 at December 31, 2012. The Company has allocated $534 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2013. The Company has committed to lend additional amounts totaling $0 to customers with outstanding loans that are classified as troubled debt restructurings. At December 31, 2012, the comparable numbers were $567 of specific reserves and $0 of commitments.

       The following tables present loans by class modified as troubled debt restructurings that occurred during the year ending December 31, 2013 and 2012:

2013
   Number of Loans
   Pre-Modification
Outstanding Recorded
Investment
   Post-Modification
Outstanding Recorded
Investment
  
   

Commercial

                    

Commercial and industrial

     1   $ 28   $ 28  

Commercial Real Estate

                    

Other real estate

     3     344     344  

Residential

                    

1-4 Family

     7     359     359  

Home Equity

     1     20     20  

Consumer

                    

Direct

     1     30     30  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

     13   $ 781   $ 781  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

2012
   Number of Loans
   Pre-Modification
Outstanding Recorded
Investment
   Post-Modification
Outstanding Recorded
Investment
  
   

Commercial

                    

Commercial and industrial

     2   $ 179   $ 179  

Commercial Real Estate

                    

Hotel

     2     7,727     5,968  

Other

     7     6,241     5,367  

Residential

                    

1-4 Family

     1     91     91  

Home Equity

     1     70     70  

Consumer

                    

Direct

     1     4     4  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

     14   $ 14,312   $ 11,679  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       The troubled debt restructurings described above increased the allowance for loan losses by $30 and $10 and resulted in charge offs of $442 and $2,477 during the years ending December 31, 2013 and 2012 respectively.

       The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the years ending December 31, 2013 and 2012:

2013
   Number of Loans
   Recorded Investment
  
   

Residential

              

1-4 Family

     2   $ 89  

Home Equity

     1     15  

Consumer

              

Direct

     1     4  
       
​ ​ ​ ​ ​ ​ ​ ​

Total

     4   $ 108  
       
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
       


 

2012
   Number of Loans
   Recorded Investment
  
   

Commercial

              

Commercial and industrial

     3   $ 2,195  

Commercial real estate:

              

Development

     1     323  

Other

     9     3,332  

Residential

              

1-4 Family

     2     125  

Home Equity

     1     12  
       
​ ​ ​ ​ ​ ​ ​ ​

Total

     16   $ 5,987  
       
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
       

       A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. The troubled debt restructurings that subsequently defaulted described above increased the allowance for loan losses by $0 and $256 and resulted in charge offs of $0 and $1,192 during the years ending December 31, 2013 and 2012 respectively.

       In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the company's internal underwriting policy.

       The terms of certain other loans were modified during years ending December 31, 2013 and 2012 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2013 and 2012 of $0 and $18,612. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

  • Credit Quality Indicators:

       The Company categorizes loans into risk categories based on relevant information about the ability of the borrower to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial and commercial real estate loans individually by classifying the loans as to credit risk. This analysis includes credit relationships with an outstanding balance greater than $1 million on an annual basis. The Company uses the following definitions for risk ratings:

       Special Mention — Loans classified as special mention have above average risk that requires management's ongoing attention. The borrower may have demonstrated inability to generate profits or to maintain net worth, chronic delinquency and /or a demonstrated lack of willingness or capacity to meet obligations.

       Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are classified by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

       Non-accrual — Loans classified as non-accrual are loans where the further accrual of interest is stopped because payment in full of principal and interest is not expected. In most cases, the principal and interest has been in default for a period of 90 days or more.

       As of December 31, 2013 and 2012, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

December 31, 2013
   Pass
   Special
Mention
   Substandard
   Non-accrual
  
   

Commercial

                          

Commercial and industrial

   $ 174,408   $ 4,561   $ 1,250   $ 159  

Agricultural

     30,323     —     —     —  

Commercial Real Estate

                          

Farm

   $ 74,884     105     —     1,093  

Hotel

     61,195     31,401     15,630     —  

Construction and development

     34,936     —     466     329  

Other

     504,657     20,893     9,931     11,489  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 880,403   $ 56,960   $ 26,277   $ 13,070  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2012
   Pass
   Special
Mention
   Substandard
   Non-accrual
  
   

Commercial

                          

Commercial and industrial

   $ 119,755   $ 9,824   $ 2,800   $ 1,777  

Agricultural

     22,350     —     5     —  

Commercial Real Estate

                          

Farm

     63,294     1,094     147     1,584  

Hotel

     83,522     47,973     —     —  

Construction and development

     18,719     1,465     3,367     1,657  

Other

     439,702     27,621     22,466     17,442  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 747,342   $ 87,977   $ 28,785   $ 22,460  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       

       Loans not analyzed individually as part of the above described process are classified by delinquency. These loans are primarily residential mortgage and consumer loans. All consumer loans fully or partially secured by 1-4 family residential real estate that are 60-89 days will be classified as Watch. If loans are greater than 90 days past due, they will be classified as Substandard. Consumer loans not secured by 1-4 family residential real estate that are 60-119 days past due will be classified Substandard while loans greater than 119 days will be classified as Loss. As of December 31, 2013 and 2012, the performing/non performing loans by category of loans is as follows:

December 31, 2013
   Performing
   Watch
   Substandard
  
   

Residential

                    

1-4 Family

   $ 396,836   $ 1,965   $ 4,932  

Home Equity

     242,934     315     1,028  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 639,770   $ 2,280   $ 5,960  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2013
   Performing
   Substandard
   Loss
  
   

Consumer

                    

Direct

   $ 44,970   $ 32   $ 127  

Indirect

     1,073     4     —  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 46,043   $ 36   $ 127  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2012
   Performing
   Watch
   Substandard
  
   

Residential

                    

1-4 Family

   $ 386,098   $ 2,605   $ 5,492  

Home Equity

     222,544     357     1,428  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 608,642   $ 2,962   $ 6,920  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
       


 

December 31, 2012
   Performing
   Substandard
   Loss
  
   

Consumer

                    

Direct

   $ 45,553   $ 195   $ 96  

Indirect

     2,434     12     5  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 47,987   $ 207   $ 101  
       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​