LOANS AND ALLOWANCE (Tables)

9 Months Ended

Sep. 30, 2016

LOANS AND ALLOWANCE FOR LOAN LOSSES

Schedule of loans

	September 30,		December 31,
	2016		2015
Commercial
Commercial and industrial	$	422,614	$	380,960
Agricultural		67,745		64,704
Commercial Real Estate
Farm		109,507		97,916
Hotel		90,929		72,193
Construction and development		87,722		77,394
Other		837,838		678,381
Residential
1-4 family		621,259		438,808
Home equity		286,266		288,265
Consumer
Direct		60,675		56,312
Indirect		352		459
Total loans		2,584,907		2,155,392
Allowance for loan losses		(21,828)		(22,020)
Net loans	$	2,563,079	$	2,133,372

Schedule of loans acquired through purchase

	September 30,		December 31,
	2016		2015
Commercial and industrial	$	16,337	$	9,406
Agricultural		1,025		—
Construction and development		14,136		3,666
Farm real estate		221		—
Hotel		1,615		—
Other real estate		175,387		81,831
1-4 family		216,057		46,967
Home equity		14,959		19,076
Direct		2,858		2,818
	$	442,595	$	163,764

Schedule of activity in the allowance for loan losses

Activity in the allowance for loan losses for the three months ended September 30, 2016 and 2015 was as follows:

			Commercial
2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, July 1	$	6,940	$	8,780	$	4,677	$	1,071	$	21,468
Provision charged to expense		1,525		(1,225)		(257)		107		150
Losses charged off		(23)		(33)		(122)		(1,031)		(1,209)
Recoveries		148		398		106		767		1,419
Balance, September 30	$	8,590	$	7,920	$	4,404	$	914	$	21,828

			Commercial
2015	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, July 1	$	5,394	$	12,689	$	3,264	$	1,126	$	22,473
Provision charged to expense		1,331		(1,349)		154		664		800
Losses charged off		(773)		(101)		(401)		(1,076)		(2,351)
Recoveries		246		307		71		477		1,101
Balance, September 30	$	6,198	$	11,546	$	3,088	$	1,191	$	22,023

Activity in the allowance for loan losses for the nine months ended September 30, 2016 and 2015 was as follows:

			Commercial
2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, January 1	$	6,511	$	10,702	$	3,859	$	948	$	22,020
Provision charged to expense		2,352		(3,314)		1,214		603		855
Losses charged off		(650)		(614)		(967)		(2,748)		(4,979)
Recoveries		377		1,146		298		2,111		3,932
Balance, September 30	$	8,590	$	7,920	$	4,404	$	914	$	21,828

			Commercial
2015	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, January 1	$	2,977	$	15,605	$	3,501	$	1,167	$	23,250
Provision charged to expense		3,822		(5,298)		927		1,349		800
Losses charged off		(900)		(538)		(1,606)		(2,576)		(5,620)
Recoveries		299		1,777		266		1,251		3,593
Balance, September 30	$	6,198	$	11,546	$	3,088	$	1,191	$	22,023

Schedule of balance in the allowance for loan losses and the recorded investment by portfolio segment and impairment method

			Commercial
September 30, 2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Ending Balance individually evaluated for impairment	$	454	$	650	$	148	$	—	$	1,252
Ending Balance collectively evaluated for impairment		8,136		7,270		4,256		914		20,576
Total ending allowance balance	$	8,590	$	7,920	$	4,404	$	914	$	21,828
Loans
Ending Balance individually evaluated for impairment	$	2,329	$	7,870	$	10,092	$	121	$	20,412
Ending Balance collectively evaluated for impairment		488,030		1,118,126		897,433		60,906		2,564,495
Total ending loan balance excludes $6,911 of accrued interest	$	490,359	$	1,125,996	$	907,525	$	61,027	$	2,584,907

			Commercial
December 31, 2015	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Ending Balance individually evaluated for impairment	$	92	$	1,166	$	171	$	—	$	1,429
Ending Balance collectively evaluated for impairment		6,419		9,536		3,688		948		20,591
Total ending allowance balance	$	6,511	$	10,702	$	3,859	$	948	$	22,020
Loans
Ending Balance individually evaluated for impairment	$	812	$	8,909	$	9,155	$	113	$	18,989
Ending Balance collectively evaluated for impairment		444,852		916,975		717,918		56,658		2,136,403
Total ending loan balance excludes $5,878 of accrued interest	$	445,664	$	925,884	$	727,073	$	56,771	$	2,155,392

Schedule of loans individually evaluated for impairment by class of loans

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
September 30, 2016	Balance		Investment		Allocated
With an allowance recorded
Commercial
Commercial and industrial	$	371	$	344	$	85
Agricultural		1,450		1,450		369
Commercial Real Estate
Farm		1,106		1,105		282
Hotel		—		—		—
Construction and development		—		—		—
Other		1,788		1,682		368
Residential
1-4 Family		1,100		1,059		147
Home Equity		107		107		1
Consumer
Direct		—		—		—
Indirect		—		—		—
Subtotal — impaired with allowance recorded		5,922		5,747		1,252
With no related allowance recorded
Commercial
Commercial and industrial	$	1,078	$	352	$	—
Agricultural		183		183		—
Commercial Real Estate
Farm		501		246		—
Hotel		64		64		—
Construction and development		158		84		—
Other		3,872		2,736		—
Residential
1-4 Family		8,984		7,040		—
Home Equity		2,127		1,886		—
Consumer
Direct		127		120		—
Indirect		—		—		—
Subtotal — impaired with no allowance recorded		17,094		12,711		—
Total impaired loans	$	23,016	$	18,458	$	1,252

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
December 31, 2015	Balance		Investment		Allocated
With an allowance recorded
Commercial
Commercial and industrial	$	150	$	150	$	92
Agricultural		—		—		—
Commercial Real Estate
Farm		—		—		—
Hotel		—		—		—
Construction and development		—		—		—
Other		2,480		2,363		1,166
Residential
1-4 Family		1,357		1,309		167
Home Equity		159		159		4
Consumer
Direct		—		—		—
Indirect		—		—		—
Subtotal — impaired with allowance recorded		4,146		3,981		1,429
With no related allowance recorded
Commercial
Commercial and industrial	$	676	$	655	$	—
Agricultural		7		7		—
Commercial Real Estate
Farm		496		309		—
Hotel		—		—		—
Construction and development		189		186		—
Other		4,429		3,291		—
Residential
1-4 Family		6,718		5,391		—
Home Equity		2,589		2,296		—
Consumer
Direct		126		113		—
Indirect		—		—		—
Subtotal — impaired with no allowance recorded		15,230		12,248		—
Total impaired loans	$	19,376	$	16,229	$	1,429

Schedule of average balance of impaired loans and interest income and cash basis interest recognized

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the nine months ending September 30, 2016 and September 30, 2015, excluding performing troubled debt restructurings as allowed by ASC 310-40.

	Average		Interest		Cash Basis
	Balance		Income		Income
Nine months ended September 30, 2016	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	753	$	43	$	43
Agricultural		824		—		—
Commercial Real Estate
Farm		830		—		—
Hotel		16		—		—
Construction and development		155		—		—
Other		4,898		152		152
Residential
1-4 family		7,433		44		44
Home equity		2,270		20		20
Consumer
Direct		121		9		9
Indirect		—		1		1
Total loans	$	17,300	$	269	$	269

	Average		Interest		Cash Basis
	Balance		Income		Income
Nine months ended September 30, 2015	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	1,256	$	12	$	12
Agricultural		38		—		—
Commercial Real Estate
Farm		424		4		4
Hotel		3,563		—		—
Construction and development		20		47		47
Other		5,753		141		141
Residential
1-4 family		7,527		43		43
Home equity		2,221		10		10
Consumer
Direct		134		14		14
Indirect		2		5		5
Total loans	$	20,938	$	276	$	276

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the three months ending September 30, 2016 and September 30, 2015, excluding performing troubled debt restructurings as allowed by ASC 310-40.

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  September 30, 2016	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	725	$	12	$	12
Agricultural		1,640		—		—
Commercial Real Estate
Farm		1,357		—		—
Hotel		32		—		—
Construction and development		124		—		—
Other		4,791		35		35
Residential
1-4 family		8,299		17		17
Home equity		2,083		4		4
Consumer
Direct		126		3		3
Indirect		—		—		—
Total loans	$	19,177	$	71	$	71

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  September 30, 2015	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	1,677	$	6	$	6
Agricultural		—		—		—
Commercial Real Estate
Farm		405		—		—
Hotel		—		—		—
Construction and development		—		—		—
Other		6,298		86		86
Residential
1-4 family		7,343		8		8
Home equity		2,707		2		2
Consumer
Direct		162		4		4
Indirect		—		1		1
Total loans	$	18,592	$	107	$	107

Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans

					Past due over
					90 days and
	Non-accrual				still accruing
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Commercial
Commercial and industrial	$	569	$	654	$	—	$	—
Agricultural		1,548		7		—		—
Commercial Real Estate
Farm		1,352		308		—		—
Hotel		63		—		—		—
Construction and development		44		144		—		—
Other		3,219		4,791		—		—
Residential
1-4 Family		6,810		5,211		—		—
Home Equity		1,242		1,639		—		—
Consumer
Direct		97		89		—		—
Indirect		—		—		—		—
Total	$	14,944	$	12,843	$	—	$	—

Schedule of aging of the recorded investment in past due loans

							Greater than
	Total		30-59 Days		60-89 Days		90 Days		Total		Loans Not
September 30, 2016	Loans		Past Due		Past Due		Past Due		Past Due		Past Due
Commercial
Commercial and industrial	$	422,614	$	172	$	98	$	209	$	479	$	422,135
Agricultural		67,745		17		49		1,548		1,614		66,131
Commercial Real Estate
Farm		109,507		—		316		933		1,249		108,258
Hotel		90,929		—		—		64		64		90,865
Construction and development		87,722		—		23		44		67		87,655
Other		837,838		445		344		1,592		2,381		835,457
Residential
1-4 Family		621,259		1,795		1,766		4,039		7,600		613,659
Home Equity		286,266		586		206		762		1,554		284,712
Consumer
Direct		60,675		42		20		67		129		60,546
Indirect		352		—		—		—		—		352
Total — excludes $6,911 of accrued interest	$	2,584,907	$	3,057	$	2,822	$	9,258	$	15,137	$	2,569,770

							Greater than
	Total		30-59 Days		60-89 Days		90 Days		Total		Loans Not
December 31, 2015	Loans		Past Due		Past Due		Past Due		Past Due		Past Due
Commercial
Commercial and industrial	$	380,960	$	93	$	—	$	249	$	342	$	380,618
Agricultural		64,704		20		—		7		27		64,677
Commercial Real Estate
Farm		97,916		—		—		119		119		97,797
Hotel		72,193		—		13		—		13		72,180
Construction and development		77,394		—		67		144		211		77,183
Other		678,381		873		102		2,601		3,576		674,805
Residential
1-4 Family		438,808		3,726		1,904		2,771		8,401		430,407
Home Equity		288,265		410		446		1,133		1,989		286,276
Consumer
Direct		56,312		40		65		68		173		56,139
Indirect		459		2		—		—		2		457
Total — excludes $5,878 of accrued interest	$	2,155,392	$	5,164	$	2,597	$	7,092	$	14,853	$	2,140,539

Schedule of loans by class modified as troubled debt restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2016:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the nine months ended September 30, 2016	Number of Loans	Investment		Investment
Commercial
Agricultural	1	$	89	$	89
Commercial Real Estate
Other	2		298		298
Residential
1-4 Family	1		124		124
Home Equity	4		76		76
Total	8	$	587	$	587

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ending September 30, 2015:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the nine months ended September 30, 2015	Number of Loans	Investment		Investment
Commercial
Commercial and industrial	3	$	216	$	216
Commercial real estate
Other	8		1,610		1,349
Residential
1-4 Family	3		215		215
Home Equity	2		44		44
Total	16	$	2,085	$	1,824

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2016:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the three months ended September 30, 2016	Number of Loans	Investment		Investment
Commercial real estate
Other	2	$	298	$	298
Total	2	$	298	$	298

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending September 30, 2015:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the three months ended September 30, 2015	Number of Loans	Investment		Investment
Commercial real estate
Other	1	$	42	$	42
Residential
1-4 Family	3		215		215
Home Equity	1		38		38
Total	5	$	295	$	295

Schedule of loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the nine month period ending September 30, 2016:

For the nine months ended September 30, 2016	Number of Loans	Recorded Investment
Commercial real estate
Other	1	$	125
Residential
1-4 Family	2		250
Total	3	$	375

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the nine month period ending September 30, 2015:

For the nine months ended September 30, 2015	Number of Loans	Recorded Investment
Commercial real estate
Other	3	$	863
Residential
1-4 Family	1		152
Home Equity	1		47
Total	5	$	1,062

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three month period ending September 30, 2016:

For the three months ended September 30, 2016	Number of Loans	Recorded Investment
Residential
1-4 Family	1	$	104
Total	1	$	104

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three month period ending September 30, 2015:

For the three months ended September 30, 2015	Number of Loans	Recorded Investment
Commercial real estate:
Other	2	$	835
Residential
1-4 Family	1		152
Home Equity	1		47
Total	4	$	1,034

Schedule of risk category of loans by class of loans

As of September 30, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special
September 30, 2016	Pass		Mention		Substandard		Non-accrual
Commercial
Commercial and industrial	$	376,585	$	2,526	$	5,845	$	507
Agricultural		55,797		2,461		—		1,450
Commercial Real Estate
Farm		86,685		2,238		696		1,352
Hotel		87,883		—		2,983		—
Construction and development		61,333		3,596		2,344		31
Other		729,149		9,229		7,937		2,417
Total	$	1,397,432	$	20,050	$	19,805	$	5,757

At December 31, 2015, the risk category of loans by class of loans was as follows:

			Special
December 31, 2015	Pass		Mention		Substandard		Non-accrual
Commercial
Commercial and industrial	$	338,436	$	8,324	$	636	$	555
Agricultural		58,253		—		—		—
Commercial Real Estate
Farm		75,924		328		713		308
Hotel		72,193		—		—		—
Construction and development		60,246		—		2,499		113
Other		576,619		10,367		3,309		3,811
Total	$	1,181,671	$	19,019	$	7,157	$	4,787

Schedule of performing/non performing loans by category of loans

September 30, 2016	Performing		Watch		Substandard
Commercial
Commercial and industrial	$	37,072	$	17	$	62
Agricultural		7,929		10		98
Commercial Real Estate
Construction and development		20,391		14		13
Farm		18,536		—		—
Hotel		—		—		63
Other		87,844		460		802
Total	$	171,772	$	501	$	1,038

December 31, 2015	Performing		Watch		Substandard
Commercial
Commercial and industrial	$	32,910	$	—	$	99
Agricultural		6,444		—		7
Commercial Real Estate
Construction and development		14,438		67		31
Farm		20,643		—		—
Other		83,193		102		980
Total	$	157,628	$	169	$	1,117

September 30, 2016	Performing		Watch		Substandard
Residential
1-4 family	$	615,454	$	1,766	$	4,039
Home equity		285,298		206		762
Total	$	900,752	$	1,972	$	4,801

September 30, 2016	Performing		Substandard		Loss
Consumer
Direct	$	60,588	$	20	$	67
Indirect		352		—		—
Total	$	60,940	$	20	$	67

December 31, 2015	Performing		Watch		Substandard
Residential
1-4 family	$	434,133	$	1,904	$	2,771
Home equity		286,686		446		1,133
Total	$	720,819	$	2,350	$	3,904

December 31, 2015	Performing		Substandard		Loss
Consumer
Direct	$	56,179	$	101	$	32
Indirect		459		—		—
Total	$	56,638	$	101	$	32